Jyothy Labs Limited (532926) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '22 Earnings Conference Call of Jyothy Laboratories hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon, from ICICI Securities. Thank you, and over to you, sir.

Hi, everyone. It's a good morning, good afternoon, good evening, depending on the part of the world you are joining this conference call from. At ICICI Securities, it's our absolute pleasure to host the management of Jyothy Labs Limited for the 2Q FY '22 results conference call. The company is represented today by the management Ms. M.R. Jyothy, Managing Director; Mr. Ullas Kamath, Joint Managing Director; and Mr. Sanjay Agarwal, Chief Financial Officer. Before I hand over the call to the management for their opening remarks, just a little [indiscernible] stance on Jyothy Labs of our strong constructive view on Jyothy Labs for a long period of time, and we are absolutely intact in that [indiscernible] currently. On the current quarter, based on the first cut observation what we had in the last [indiscernible] of the business, is extremely pleasing on a 2-year CAGR basis of double-digit volume growth. And as analysts, covering the stock for a long time, we are very happy about this performance. Thank you, and over to you, management.

Thank you, Manoj, and good afternoon, everyone, and thank you all for taking the time to be with us on this call today. Friends, we had a strong start to the year in Q1 with 21% revenue growth. And the same momentum has been achieved in Q2, where we have delivered 16% revenue growth, closing our first half FY '22 at 18.5% top line growth. Even if we analyze on a 2-year -- both Q1 and Q2 of FY '22, both the quarters has a CAGR of 11% plus. So all our portfolios are scaling well, and we are gaining market share. Talk in terms it's specific about the market scenario and our strategy. Overall, in this quarter, our portfolio, which is more essential and day-to-day household consumption, we have witnessed stable consumer demand across India. In terms of channels, relaxation of lockdowns and increased mobility, modern trade and CSD channels, which were a challenge for the last 18 months, they have started coming back. And more or less, we are back to pre-COVID levels. So hence, there is a stabilization in all the distribution channels now. Both rural and urban continues to do well. And broadly, we are of the belief that the fundamentals of our consumption story is intact. And we are witnessing growth more in the new users participating in the lower penetration categories, especially for us in Dish Wash and household. Hence, we continue to focus on distribution marketing, relevant innovation to service these new consumers in newer geographies and first-time consumers. And to focus on our rural, we have been focusing on LUP, van operations, appointment of sub stockists. And all this thing is giving us sustainable advantage. So overall, our impact focus is on execution, which is basically building up scale by driving consumer engagement and making sure that the product is available. Our focus on the 6 power brand has gained substantial market share. I'm sure all of you would have glanced through in our investor presentation and which has happened with a lot of focus on innovation, a lot of focus on tech-led distribution and higher marketing spend. I mean, these trying times also, we have continued doing higher D&C spend so that we can deliver better than the industry volume growth. However, the core concern currently is on high interest prices, which is impacting our margins in spite of we taking selective price increases, rationalization of trade schemes, cost optimization measures. But overall, a message from our side, we will be walking a fine balance between consistent volume growth, EBITDA margin and market share. Spending some time on now on our financial performance, as you would have glanced through our results. For this quarter, September 2021, we have grown in high double digits at 16%. This has been achieved on back of positive 6.2% and 8.7% growth we had in quarter 2 of FY '21 and quarter 2 of FY '20. So it's built on a base of 8.7%, then 6.2% in this quarter, 16%. So if you look at it on a 2-year quarterly CAGR, we were 11%. If we double-click on our categories, again, all the categories also has delivered a double-digit growth on a 2-year CAGR basis. I mean this is just to -- because there could have been some basis where we were weak or high, but if we look at it on a 2-year CAGR basis, all categories and overall basis, also, there is a double-digit healthy growth for us. However, as I mentioned earlier, the margins have declined primarily due to increase in unprecedented input cost, which has impacted EBITDA too. So from our historical EBITDA of 15%, 16%, we have 11.4% this quarter. And to be frank, this is an anomaly. We are mitigating it through scale leverage, through cost optimization and selective price increases. And also, as highlighted in our presentation, all input prices, whether it is palm oil, whether it's LABSA, whether it is HDPE, paper cost. I mean this is the first time when we are seeing all raw material prices are going up. I mean it's not that the first time we are seeing crude going up to $80. But in those situations, palm oil would not have gone up, or packaging costs would not have gone up. But as we see today, all raw material prices are going in tandem at the same time. So we have seen broadly 60% to 80% price increases. If we look at it from currently from October, November to March '20, which is pre COVID. So there is a concern, and we are trying to mitigate that. How we are doing the mitigation. If we look at it from this quarter perspective, our input prices have increased as a percentage of turnover by 12%. So sequentially, last year, we -- last quarter, we were at 10%, which has now increased to 12%. However, we have mitigated it with -- we've taken price increases to the extent of 4% to 5%. And because of our scale, we have got efficiencies of 2%. However, this quarter, if you see our Fabric Care sales are higher, which is a 25% increase, so -- which has a higher impact of purchase price increase, which is last half. And hence, our gross margin has declined by 7%. So in summary or in simple terms, 12% increase in raw material prices, 4%, 5% price increases have been taken and 7% has been impact on the GM. We'll try to see how best we can offset this material cost pressure going forward, by even selling more higher-margin products, which could be personal care, liquid vaporizers, Fabric Care, post wash sales and so on. But in all this thing, we have seen a good demand for our products and a strong market share gains, what we have got. And we don't want to break that momentum, which we are building up with a lot of hard work. Our advertisement and promotion expenses, I mean, investments have increased by 35%. We are not tinkering with the media spend and staff hiring as they will lead us in long-term growth. We continue to have a strong balance sheet with network -- net working capital at 12 days and a debt-free position. And this will help us in taking required tactical calls to strengthen our business for long term. In terms of our category wide performance, we'll start with Fabric Care. It has done well primarily because modern trade and CSD were not doing well in the last -- in the same quarter last year. And with now, I mean, large-format stores operating well Fabric Care is doing well. Post Wash, which is Ujala Fabric Whitener, it has achieved pre COVID levels broadly. While Crisp & Shine is still to achieve normal growth, we expect it in the next 1, 2 quarters once mobility increases, things become more normal. And with Crisp & Shine our expansion into all southern states, it should also do well in the next 1 to 2 quarters. In terms of our Post Wash, main wash, Ujala IDD has been doing well. I think to report that our market share has increased from 19.2% to 21.1% in this September quarter. So a substantial increase in our market shares, and that shows the quality of the brand, what we have. Second category is Dish Wash. Both Exo and Pril continues to do well. With focus on hygiene and the entire brand positioning what we have. We have increased our marketing spend, both in Pril and Exo because for a long period of time, we are seeing a good high double-digit growth in the Dish Wash category for us. We've got a new brand ambassador for Pril Riteish and Genelia Deshmukh. You may have seen our new communication as well. And most importantly, in Exo, our market share has improved from 12.5% to 13.4% on all India basis, which is quite a significant improvement given the competition and the category size. So Dish wash as a category is doing well. In HI, again, as you all know, our focus is more on liquid vaporizer, and that's been picking well across different markets. And here, again, our market share has almost now reached to double digit, which is 9.8% on a pan India basis versus 8.5% what we had in calendar year '20. So this confirms that our efforts on liquid vaporizer are in the right direction. All the investment, what we have been doing in liquid vaporizer is going in the right direction, and consumers are seeing a value in our product. We do appreciate and understand that the portfolio on HI on the EBIT level is still -- has to still on a -- shows a loss post ad media spend, but pre media spends, it makes money. And as the proportion of a liquid vaporizer LV to coil improves, we see a long-term value in this portfolio for us. Finally, Personal Care segment, which is primarily Margo franchise. A lot of ground activities are underway. We are celebrating 100 years of Margo, which is advocating the natural benefits of neem and is doing quite well. So in summary, with the aid of tech-led distribution, all the work which we've been doing for the last 2, 3 years and increased media spends. We are focused on building volume led growth, which will achieve higher scale and which is evident actually in our revenue growth. If we look at it for the last 6 quarters, the first quarter of FY '21 post -- not post COVID. But when the COVID started, we were in Q1, 4%; Q2, 8%; Q3, 15%; Q4, 27%; Q1 of this financial year at 22%; and now we are 16%. So all in all, last 6 quarters, a very healthy revenue growth and the LV market share gains. And we will continue to focus on brand building, strengthening our distribution and additional manpower to enhance market execution. So that's broadly our strategy and the performance what we have for this quarter. With this, I finish my opening remarks, and we are happy to answer any questions and clarifications you may have. Thank you.

[Operator Instructions] The first question is from the line of Manoj Menon from ICICI Securities.

Just 2, 3 questions upfront, I just thought we'll just straightaway clarify. I'll ask one at a time. One, given that you've got an 85% market share in Ujala currently, is it the time to think about a higher than historical growth -- price increases rate into the medium-term -- medium and even long term. Because from a consumer point of view, does the consumer really has got a choice. So 84% is practically monopoly. So can the price growth lever for Ujala be exercised a little more aggressively into the next 5 and 10 years? That's question number one.

Yes. Thank you for the question, Manoj. The thing is, we have taken price increase in a small way on all the SKUs. The thing is, last year, like you know, the pandemic had hit and it had the post wash segment severely. And the category, as such, has shown some decline there because of the nonmovement of people in general. So since the category is coming back, we would want to give that kind of benefit, though we have taken some sort of price increase as such. So going forward, that also seems a possibility, but we want to wait for some time. And then once people are back and they start using the category even more, we'll try and do that as well.

So if I understood it correctly, the ability to -- so this is 2 things about a price increase, right? So for example, in a very different way if I'm to think about it, right? Let's say in Asian Paints in the last 6 months. In our view, it's all about the ability versus willingness. So they have the ability to take a price increase, but then probably the willingness was low, maybe for different reasons, which resulted in, let's say, 10% gross margin decline for that company. I'm only trying to understand that in Ujala, let's say, in my DCF, can consensus assume a higher price increase led revenue growth for the, let's say, next 5 and 10 years?

Yes, next 5, 10 years, yes, but may not be in the immediate future. Maybe we'll see after maybe 2, 3 quarters. We want the entire consumers to come back completely and start using the brand, which they had kind of left out last year. So we want to give the consumers that time, but definitely, we can increase. And we will be also investing on the brand going forward. So those things will also happen.

Just a small subsection question on this. In the presentation, I did find Ujala with a INR 5 Exo free, should I think this as a price promotion for Ujala or is it sampling for Exo.

It works both ways. So it is also, like I told you, last year, the brand has suffered, and this is also to induce -- since [ Deshmukh ] also had gone up. So this was one other method to bring back and to remind consumers of that. It also works for us in the rural and other areas, where it also works as sampling for us.

So 2 questions. I'll go one, Sanjay, you mentioned a couple of times in the presentation about the tech led distribution. If you can help us understand what exactly is this? And the second question, unrelated, is the good performance in working capital at about plus 12 days. I mean, when do you -- or is it even realistic to think about you being 0 or negative working capital?

Okay, Manoj. I'll take the second question first, definitely we'll not be in the negative working capital. I think we are happy with the 12, 15 days what we have as of now and we'll just to aim to be just sticking on this number. On the first part of it, I think it's -- what we are trying to do, I guess, is something which every organization is trying to do with the aid of technology, you can manage your business much sharper. And as you know, all our sales people are on SFA. And the objective is to get as much analytical data to guide them on doing their beat, and in us reaching out to shops more productively. So I think it's all driven through analytical way of doing business. And I mean, these are newer technologies, which or newer ways of reaching out to consumers, which we are spending time, and it's giving us results in the last few quarters what we have seen.

The next question is from the line of Abneesh Roy from Edelweiss.

Congrats for the good set of numbers. So my question is on the overall volume growth, was there some benefit because of Kerala coming back to this normalcy in both Q1 and Q2, Kerala was one of the most impacted states in terms of COVID. So have you already got some benefit in terms of refiling? Or you will get that in Q3, given the dividend in Q2, Kerala COVID cases were one of the highest and predominant in terms of market share on a pan-India basis?

Yes, Abneesh, it's unfortunate, Kerala is still having a higher number of COVID cases. But however, if you look at it, the state is managing their economy well, in the sense, there is no lockdown and the mobility of people has been ensured. And with the good health care facilities, I think the state is doing okay on that. So coming back to our business, there is a minor issue here and there, which we see. But overall, there's no refilling and stoppage. And therefore, there's no onetime sales which are [ happening ] either in Q1 or in Q2, so it's pretty normal as what we see in other parts of India also.

My second question is when I see your Q1 and Q2 growth rate for HI, there is a slower growth, and we understand the seasonality. But do you think that in Q3, the growth rates could bounce back? And in calls, there is specific question, you have done quite well in terms of market share. But against the illegal incense stick, are you looking at active molecule ingredient kind of, so more disruptive products against that?

So the thing is, like you said, there was a seasonal issue from our coils per se, but liquid vaporizer, as you see, is something which is almost a year-long consistent segment. So it's the season that impacts the coil. Now coming to this current quarter, it's not a very coil favoring season as such. Our seasons are usually from July to September and then from Feb to mid-April sort of a thing. So that's when the biggest of seasons are for mosquito coil as such. And liquid vaporizer here is almost a year-long phenomenon. Now when the dengue cases and things are going up, as such if you see across, I think that also should benefit our liquid vaporizer segment. Yes. And in incense sticks, right now, there is no plan as such. It is -- we'll have to see when some breakthrough happens in that.

Last question, when I see your 2 brands in Dish Wash in terms of market share, Exo has gained around 90 bps market share versus CY '20, but Pril has lost almost 2/3 bps versus CY '20. So could you explain why the divergence? And what is the specific issue in Pril?

There is no as such in Pril. In fact, it has maintained the market share. What has happened is, if you see through modern trade, as such, when it was impacted and some of the offers that was running, we didn't want to give or play at that level. But in my opinion, it's not a big issue. The brand is doing well.

The next question is from the line of Harit Kapoor from Investec.

So first question was on the distribution side. So do we look at the improvement in sales growth led driven by distribution to be only a function of higher throughput? Or have you also added outlets? So I remember you're talking about 2.8 million overall outlets. Where are we in that? Are we looking at addition there? Or is it just better effectiveness of this distribution through tech, et cetera?

So definitely, Harit, it's a function of both numeric distribution and increasing the throughput. So we are increasing our outlets every month and with the help of a lot of data which we are collating. So I mean, as we speak, there will be both increase in the direct reach and increasing the throughput. And that is what you're seeing both the market shares and the top line growth coming in. We're also adding people wherever required. And so a bunch of things together. And we are increasing the direct reach and overall increase obviously happens with the addition of sub stockists or wholesalers. So that's where -- so at the end of the day, we have to reach out to a large number of consumers where we see a potential for us. And rural India is one place where we are spending a lot of time. And we will be able to share more numbers maybe on a yearly basis, how our direct reach is increasing on a yearly basis.

The second thing was on the innovation side. So while that is one of your strategic pillars, you've kind of mentioned Maxo Genius in that. There's no real mention of T-Shine or any other thing which is done. I was just wondering, over the next, say, 6 months or so, where the inflationary pressures continue to be so high. You don't want to take price increases in Ujala disproportionately because you want the brand to come back to the consumer, you want the salience to continue. So do we look at it at the innovation cost, new things which you're going to do might be slightly more delayed rather than upfronted given the cost pressure that's there? Is that a better way to look at it, at least for the near term?

So the thing is we would want to carefully choose and invest behind brands where we are currently operating, and we have launched the Ujala IDD liquid detergents already in this quarter and in the southern space, and it's doing pretty well. And the thing is we would want to invest there, you would also see 1 or 2 more innovations coming in, in the subsequent quarter.

If I can ask that too would be in the laundry segment only? Or you're saying the 1 or 2 innovations will be outside that?

It could be outside that as well.

The last question was on the margin profile now. See, if you look at the home care business, I understand Ujala, you don't want to take up pricing to this sharp [ label ]. We've seen sharp contractions in Dish Wash as well, and I'm assuming even the base detergent business, whether it's Ujala IDD or Henko would have seen a sharp impact. By when do you see some of this returning? Do you see competitors and yourself kind of looking at sharp price hikes in that space at least over the next 3 to 6 months because the inflation is unprecedented? And I don't think this 4%, 4.5% kind of increase will cut it, right? So I just wanted to get your sense on when do you see materially higher price hikes for the industry in Dish Wash and base laundry?

So Harit, I mean, you are also observing and watching how the commodity prices and packaging material prices are going up.

Yes.

Now if this level of high input prices continue, definitely, we will take series of further action. But as we speak, we are managing, as I said earlier, the volume growth, the market share and the margin. So it's a balance which we are trying to do. If it goes furthermore from here, obviously, a bunch of series of actions will be taken. And -- but we don't want a situation where we keep increasing prices in a manner where it just breaks down the volume growth. And I mean, there are price increases, which can be taken on larger packs; on the smaller packs, price will be INR 10, prices can't be taken up. So it's anybody guess, as of now, how much we'll be able to increase the prices. It's all depends on how the environment throws us the challenges, and we'll accordingly react on it.

The next question is from the line of Shantanu Basu from SMIFS Limited.

I have 2 questions. So firstly, would like to understand from you, I mean, what would be your outlook on raw material prices, gross margins and EBITDA margin going forward for the next 2 quarters? And I would also like to know your thoughts on ad spend as a percentage of sales going forward. So how would the annual percentage look like in terms of as a percentage of sales? And next is, I mean, do you plan to own -- I mean, do you plan to launch a company-owned e-commerce channel in the last quarter, you said that you may -- you said it's still on an -- in an evaluation stage. So your thoughts on that. And lastly, if you can focus on -- I mean, if you can tell me your modern trade growth during this quarter as well as the e-commerce growth and general trade growth these 3 channels' growth.

So there are many questions. So I'll take the last question first. Again, modern trade e-commerce, again, is doing well. E-commerce, it used to be, say, 2% of our overall sales is now around 4%. So that's doing well. Modern trade is doing well. It's a high double-digit number because maybe in the past the base was lower, but modern trade is doing much better, and we are seeing more stabilization in modern trade now. In terms of the A&P, we continue to spend, say, like this quarter, it was around 7% of our top line. It will remain -- we will be continuing to invest further more in our media spend because we can see the results coming through to us. And it will be wise only for us to make those investments or enhance the investment to get a better ROI on those investments. So yes, you will see, in spite of all the other challenges what we are facing we will continue to increase our spend and not tinker or cut down on the media spend. In terms of your first question?

Yes.

What's your first -- yes, yes.

Yes. So on the A&P spend, just what would be the annualized percentage on sales?

See, as we are tracking, we have around 7% for the half year, we have 7.5% of our A&P to sales ratio, and you can definitely expect more or less in the same line. And in terms of the guidance for GM, it's definitely difficult at this point of time because the way price increases or input prices are going up. And so as we said, it's difficult to give a -- we would definitely take all steps which are possible to bring back our EBITDA levels of past, which was at 16%, 17%. But in immediate, maybe in the 1 or 2, 2 quarters, difficult to expect to bring back to those numbers.

And the last question was on any plans of launching a company owned e-commerce channel?

Not immediately, as of now, this is something which we are evaluating, and we'll definitely get back to you and as and when we make our plans formed up on that.

[Operator Instructions] The next question is from the line of Percy Panthaki from IIFL.

I just wanted to understand your sense on the margins once more. So how I look at it is temporary ups and down in margins depending on input cost inflation, that's par for the course in FMCG. It happens to all companies. Maybe in your case, it is on the higher side in terms of intensity. But as long as it is temporary, it should not be an issue. So I recall earlier, we used to have like a 15%, 16% kind of margin range. And then the expectation was that we would build on that, let's say, every year, 50 to 100 basis points going up on that base. So if I, let's say, look 2 years down the line, let's not talk about a very short-term horizon. If I -- let's take 2 years down the line and look at your margins, assuming that input costs remain high, do you think that you would be able to go back to what your estimates for, let's say, FY '24 would have been before all this cost inflation hit? Or is there a permanent sort of diminution in your margins that this disruption has caused?

So firstly, definitely, if you're looking at a 2-year horizon, and I'm assuming that this volatility in the raw material prices will cool off as everything comes to mean in life. So if it comes back to mean, which is what we have historically seen, definitely, we will be more than our EBITDA margins, what we had reported earlier, simply on the logic that our base has now increased. In the sense, our volumes for the last 4, 5, 6 quarters, all have been growing in double digits, volume growth I'm saying. So definitely, we'll get far more scale advantage. And as you know, we have our own factories, we have our own sales staff. So all these things will give us a lot of operating leverage. I'm very confident that we will be doing much better than our historical margins for sure. And is this a permanent thing, whatever numbers we have reported, as I said earlier, this is definitely an anomaly. No one has seen these levels of raw material input prices. And if I put it in a lighter side, this may be just a short bad patch on the Mumbai Pune Expressway. So we have to just pass through this. And hopefully, the destination is going to be very soon. I mean, coming through. So we have to pass through this. I think the only good thing for us is that we are able to get volume growth and getting market share from very strong competitors. In that way, we look forward that we keep growing our -- we keep focusing on brand investments and keep growing our portfolio to get the benefit, as you said, of the margins when the raw prices and overall economy overall or these commodity prices goes off.

But Sanjay, what happens if commodity prices stay where they are. See, you are right in saying that they might come off, right? But as an FMCG company, we cannot be dependent on commodity prices for our margins, at least in the medium term. In the short term, yes, I understand. But in the medium term, you should be able to get a decent margin, irrespective of what the commodity prices are. So let's take an assumption that they stay where they are, then what is the plan? And how much of price increase would you need to go back to your initial sort of margin estimates of, let's say, 16%, 17% versus the fall in levels right now. Would you require, let's say, 8%, 10%, what kind of total price increase would be required?

So Percy, definitely, if it continues like this, we will not shy away from taking any further price increases and take any further course of action, whether it is reducing trade schemes, whether it is taking MRP increases, simple, mathematically, if we look at it today, if we take additional 5% price increases, we will be back to our previous EBITDA margin. So there's a 6%, 7% GM decline. And if we take those level of price increases, definitely, we'll be back to the same margins. So it's not something which we are overly worried about it. If time requires us to do it, definitely, we'll do it. And it's in our hands, we'll definitely do it. If that is where, for a long-term, if we are seeing the prices or input prices to remain at those levels.

Sorry to belabor this point, but just one sub-question on this. See, apart from Ujala in most of the other segments, we are not the market leaders, and we have a rather sort of #2, #3 position, our market share of 15%, 20%, et cetera. So if -- for whatever reason, the large players in these segments decide that they want to play the portfolio and they want to take price increase in other areas and not touch these segments into which we are present. Then do you think that we will be able to independently take the price increases necessary to restore the margins? Do we have that kind of a confidence?

So Percy, I think why that confidence is there, which I answered you earlier, is if I -- if our market share from Exo from 11% to 12% is going to 13.5%. If our LV market share from 7%, 8% is going to 10%. Now -- and these are all pan-India numbers by the way. And there are certain states where we are very high market shares. Of course, that's why it makes up to a pan India number of 13.5% or pan India number of 10%; coils is 24%. So we may be a follower in that way, but we ourselves have a decent stay, I mean, state to take any price increases or take our independent decisions at that point of time.

The next question is from the line of Gaurav Jogani from Axis Capital.

So my question is with regard to your strong performance in the Dish Wash it's been recommendable that on a year-to-year period basis, the growth rates have been quite good. So would you like to highlight what are the key actions that we have been able to drive growth in this segment and how sustainable is this going forward with the COVID now coming down and in terms of then certain categories is coming down. So any impact that you see ahead in this category?

So the segment has been doing well. Both in terms of bars and liquid both have been [indiscernible] and the thing that modern trade has come back, we also see some additional growth happening there, which was not so much it is seen in the last -- last year and last quarter. Channels are also coming back. We expect the Dish Wash to do well. And we also have -- if you see Exo market share that has gone up. It is also on the basis that our lower unit tax has gained assistance, which also means rural has [indiscernible]. And we see that these consumers in the long-run will also upgrade to a higher pack. And we see the -- we have been investing on the brand, both the brands, we have taken in celebrities, there are celebrities on both the brands. And we continue to invest at all levels through all media, be it TV, print and social media. So all of these are on. And we don't see any problem coming in the future. So they are poised to grow.

And in terms of the household insecticide those were -- while the near term performance may getting back to the seasonality here and there. But what is your broader outlook on the category growth as such? Bit LV [ films ] are heavily increasing for you. What kind of consistent growth that you as a company target over a 3, 4, 5-year period. And what would be the levers here?

So see, this is again, one category, which has a lower penetration, both in urban and rural. And with the focus on health and hygiene, it is natural that this category will grow, should grow in double digits. Obviously, there are some seasonal challenges, which one keeps observing every now and then. So barring these seasonal challenges, we definitely look forward to have a double-digit growth in HI as a category.

And so if you can just help us, what will be the share of the coils and LV now versus a year back?

So 60% coils and 40% liquids.

And what will be -- around with a year back? I mean the only point here is -- has the LV side increased over the last 1.5 years?

Yes. So maybe 18 months back, it used to be 35% liquid and 65% coils.

[Operator Instructions] The next question is from the line of Shirish Pardeshi from Centrum Capital.

Just 2, 3 questions. The first question is that incrementally, most of the companies who have declared the result and we saw confusion started from recent numbers saying predicting rural slowdown. You have a significant portfolio, which is rural. So in your lens, how do you see rural and is there any truth and in your business, is there is an impact on rural sale?

Shirish, more of an intellectual question because see, at a broad level, we are undeterred by this noise on rural India. However it's the -- however at the same level of late, we have seen there has been some moderation in rural India, rural growth. Now this could be because of inflation. This could be because of normalization of economy post COVID normalizing. And obviously, there's been slight higher base as well. So a bunch of things as of now. And we didn't see much of an impact in Q2. But as we stepped into Q3, there is something visible, but we'll have to run the course to see 1, 2 quarters, whether it is anything structural. I mean we, as -- I mean, we -- for us, in all of our portfolio, we are strategically looking to grow our focus on rural India for the long-term growth. So it may be possible. It may impact us in the next 1 or 2 quarters, and therefore, we'll be able to predict much sharper at that point of time.

My second question is that, if I understand correctly, you said you have taken 5% price increase. And to answer one of the participant's question, you said another 5% to negate the inflation. So does that mean your current inflation is in the range of about 10%, 11%?

Yes, that's right, Shirish.

My last question is that what we gather and what we see that. Most of the companies are talking high decibel campaign and a focus on the B2C brand. Is Jyothy has been trying or is there any position which you can share? What are the efforts we are making on this?

So definitely, we are not saying that this is a no-go area for us. And as of now, we do not have any product, which is going to be launched on a B2C platform in the immediate future. But as we move along, yes, there will be brands which we think can do much better on B2C, definitely, we'll do that.

See the reason -- I mean one follow-up here that is the reason that we have been representing in the last category. And is that -- if we focus on the company and that's why we are not looking at -- because most of the products what we see in the B2C space is we are trying to premiumize maybe 2%, 2.3%, 2.5%, 2, 2.5x higher than the mass segment. So is that a limitation which you guys are facing or is that the opportunity, which definitely enticing in the current portfolio of the scheme of the thing?

No, there is no limitation. Our minds are not closed, and we do see an opportunity, and we will handle that as we go along. And we will identify in which personal care, which brand, we should only position in B2C, so that both the B2C and the GT market, they are not cannibalized. But it is an area for us to work in future, and we will -- I mean, it's a matter of time. If it's something which we think will give us growth, a consistent and a profitable growth, we'll definitely do that.

Thank you. I now hand the conference over to the management for their closing comments. Over to you, sir.

So thank you all. Thank you very much. It was really great interacting with all of you. And again, taking time -- all your time and giving trust and confidence to Jyothy Labs' story. Any questions, any clarifications you need, please reach out to us. And finally, wishing you all Happy Dhanteras and Happy Diwali. We look forward to seeing you all very soon. Thank you very much.

Thank you. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.