Raymond Lifestyle Limited (GODREJCP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Godrej Consumer Products Limited Analyst and Investor Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the management. Thank you, and over to you.

Hi, everyone. This is Sudhir here. A very good morning to all of you. A quick presentation from our side on what we think is a hidden jewel, which is RCCL and why GCPL bought RCCL. There's been a lot of curiosity among the analysts and investor community on why we made this move. So I thought we'd spend about 25 to 30 minutes explaining our rationale and then I'll be happy along with Sameer, we start to take on any questions that you all have. Yes. Having a quick reminder before we start off on GCPL on what is our strategy. And I just go back to this step from Circa December '21, where we said that this is a business that we would like to move to double-digit volume growth as an aspiration. Certainly, a high aspiration and one that the first 2 quarters of last year, we were by far away from, but it still remains our aspiration. And we said you would do it through 2 things. We would develop the categories we are present in and fund this development of categories through simplifying our business. So this was a one slide deck on our strategy for the next few years. I think over the last 2 years now or 1.5 years, we feel that our category development capability has got a lot better. I think our insights on category development are sharper. We have launched a lot of innovations which democratize categories. One of the big levers for category development is access. We have invested media even when the going was stock in the first half of last year and are also using proprietary algorithms to make sure that the return on investment on media is at its best. And we also have an army on-ground. To give you a perspective, we are doing close to 10 million calls this year on home to home. At any point in time, we have about 4,000 people on the ground doing on-ground marketing for GCPL. So over the last 1.5 years, along with a lot of talent boosting and talent capability, we find that our marketing capability and category development capability has significantly improved. Next slide. And I think we are increasingly feeling more and more confident that if we look at GCPL's portfolio, which is India international, high penetration categories and low penetration categories, that the set of low penetration categories in India really are bullseye. And we'd like to increase the salience of India-based low penetration categories because ultimately, penetration is the biggest driver of volume growth. And we feel confident that we can probably develop a few more underpenetrated categories. And when we were going to present to the -- to analysts and the Board in these next few opportunities, we were probably going to say that we feel ready, next chart, we feel ready that along with developing existing portfolios we could probably develop a few more underpenetrated categories in India, some perhaps organic, some perhaps inorganic, and we were really running over what are the categories that we should develop organically, what are the categories we should develop inorganically. Deodorants has always been a category that has been quite on top of my mind personally. I kind of have known it at a distance for many years. And it's one of those categories which is surprisingly attractive in many parts of the world, where deodorants becomes like an oral care category, where people don't leave home without deodorants, especially in Latin America and so on we at and where category development has been very good, it becomes a basic necessity category for those countries. And I kept wondering why this category hasn't developed, but it was kind of slightly recessive because many things to do and also deodorants in India, I wasn't sure, is it too fragmented? Is the category really a high-margin category in India has it gone down a part and do we have other problems to fix when really we got this phone call from the bankers for Raymond same-area assets available. And when the call came, I said, yes, I mean good, but probably not for us, not at this time, not sure about deodorants, not sure about sexual business. And I sort of ask thought and didn't really take it forward for a few days when the call can also know this has been around for some time. So I mean a few days later, I was in Pune market where I just happened to be in one of these retail outlets, and I saw this beer brand of Park Avenue, which I've seen in the past had thought the packaging was quite interesting. -- never tried it. And I just picked this up, and I said because I've spoken about Park Avenue a few days ago, I said, let me just try this product, feeling my mind. And I have a pretty -- despite my income levels, I operate pretty close to the median of the consumer in terms of personal care. So this is roughly my personal care and ever pour out in my bathroom. There has been fond soap, which I've been using for many years. I lay it on the closet, but right now, I use it openly. And secondly, what has now replaced my shampoo has been this beer shampoo because I really like the product. And that got me curious about the company Park Avenue and then we did a few visits to go and visit retailers to check out their main line of business, which is deodorants. And one of the interesting things we found about deodorants when we went to the shop was unlike many other brands of deodorants this was centered around a few key SKUs. They had Park Avenue Good morning, Park Avenue Voyage and Kama Sutra Spark, which itself tells you that people are buying products and not brands. And then I visited a Good morning consumer who really [indiscernible]. He was using it every day the way deodorants are used in many countries in the world, spraying it on the body and going to office every day and say, I can't go to office without using Good morning. So I think that really think curiosity about the fact that perhaps this was a slightly different company in the deodorant space because that really was our primary interest. And we said, okay, let's have a look a little bit more at this business a little bit more closely at this business. And so what we thought was a couple of things about the RCCL business. The first is that the brand of Park Avenue when comes to trying men's deodorants, it was #2 in men's and men's is about 75% of the deodorants market in India. And surprisingly, the market share can be rock steady for as long as we could find market share in the '18 to '19 range of shares. It was #3 in commercial condoms, had lost a bit of share and then had stabilized. But deodorants was the rock steady market share. And we look at sales mix, it was 60% deodorants, 20% condoms, another 6%, 7% of soaps and shampoo region, another 7% of other things. So predominantly deodorants business, deodorants, of course, is both Kama Sutra and Park Avenue, and condoms is only Kama Sutra. But majority of the deodorants, 2/3 of the deodorants is Park Avenue. We then said, okay, look, this is looking interesting. The products seem to be good. Consumers seem to like it, stable share over long periods, and we know that this hasn't been a company that's invested too much in advertising. So we said, okay, let's look at these numbers a little bit more in detail. And we saw that the growth prior to COVID of this business was double digit, about 10% for many years actually. Overlie many businesses, the business dipped post-COVID. It has come back on pre-COVID levels pretty rapidly. Again, indicating that Park Avenue in deodorants is a strong brand. All these sort of indicates that we're really talking about a strong brand, incident Park Avenue was launched in India in 1964. So it's been around for a long time in the [indiscernible] space. When we then look a little deeper in the financials, we went to the next step saying, "Hey, this is an exciting category. This does look like a strong brand on the making of a strong brand, loyal product. Some of whom surprised us when we looked at the P&L." The first was that the gross margin was largely in line with the GCPL gross margin, and this was despite the fact that the MRP to NSV leakage was in the 50s. To give you a perspective, GCPL, MRP to NSV leakages is over 30s so there was about 1,000 bps more. That was the gap between MRP and NSV part of this can be explained by category, but most of this gets explained by distribution and direct distribution and distribution discipline and efficiency companies that have better direct distribution tend to have a lower leakage from MRP to NSV. We also saw that the advertising and publicity was in mid-single digits, which seemed a bit lower. Even GCPL has advertising in Publicity India and talking all India here, is 10%. And the other one, which was bit staggering was that the employee and other expenses were in the late 30s. GCPL, India as employee and other expenses are 18%. So what we saw was that there was clearly huge -- and therefore, the gross margin that was similar to GCPL was resulting in EBITDA of high single digits where GCPL runs mid-20s EBITDA. So what we were seeing is that a lot of loss from MRP to NSV and then from NSV and GM down to EBITDA, a lot of loss that consumers don't really see. Consumers don't really see employees and other expenses. They only see gross margin and advertising publicity. So it did look to us that there seems to be a lot of scope in the P&L for value creation. And we said, okay, now let's study this business a little bit more carefully. So this is just a portfolio of the star SKUs that they have. Good morning, Voyage, Spark and Kama Sutra. I think there are 3 reasons why we bought the business. So once we sort of got the preliminary check on product trends starting brand strength next, margin expansion possibilities go back. We said that there are 3 key reasons why this is an exciting business. Fundamentally, in countries like India want us to take a step back because in the HPC PCC game, indeed of the HPC PCC game, we have very, very low out and one has to take a long view of categories in both deodorants and sexual wellness, we think, have long growth runway. It depends a lot on how our leaders manage it. But fundamentally, long runways. These are powerful and underleveraged brands; and 3, we saw significant cost synergies in the deal. Next chart. Let me first talk about categories having strong growth run rate. So deodorants is a super exciting category across the world. As I was just talking about it now and how many countries, deodorant is being developed the way oral care has been developed. It's not -- it's acute oral care rather than Q2. So if you take India, for example, if per capita consumption is excess about $0.40, Vietnam, which is 1.5x the income of India that's 2.5x the per capita consumption. Indonesia, with 3x, it's about a $4,000 economy has 3x. Thailand is a $6,000 economy, so about 3.5x India per capita income has 7x and Mexico, which is about $9,000 to about 4.5x has 14x lead per capita consumption of deodorants. If you see almost all countries that have a per capita -- have GDP of greater than $10,000, deodorants and fragrances is the largest HPC categories, except the U.S., where it becomes a second occur, but almost all other countries, so unless you go to really high per capita income like Scandinavia, et cetera, and other, 1 or 2 more HPC categories come. But anywhere between $10,000 and $35,000 deodorants fragrances is the largest HPC category and both consumption and penetration. So income goes up, consumption goes up, it becomes a regular use category. I cannot go to office without deodorants. But in Interome we not only have massive consumption gap, we also have massive penetration gap. And we let them -- we can draw a curve of how per capita consumption of deodorant will go up with income. We reckon that this should be at dollar and this is all in dollars. On volume, whichever you look at it, a 13% to 14% CAGR is what logically speaking, the strategy should be. A lot of it depends on what companies and marketers do. And so if this is the dollar number we talked to, the rupee number that's higher than this. So that's the real destiny of the strategy, the way we look at it. So firstly, this is one of those categories that we've become huge in India and is structurally a very attractive trading. Yes, we just go to the next chart for us to then come back to this. Got perception and a lot of analysts have asked us the question on whether -- is this category a lot of people I speak to, and even I, myself, though I kind of know deodorants quite well, kind of say, "Oh, this is just not an exciting. There's too many players margins. It's too fragmented. But actually, when you put pen to paper, right, because what appears in the market is a long tail, which typically happens with the site under investments in the category." But if you look at the data and we got want do a piece of work for us, that the number of brands purchased for household per year in deodorants is less than soaps and a little bit more than shampoo and washing power. So they are all in this kind of 3.5 to 5 range of number of brands used. And secondly, the number of brands that contribute to 2/3 of the category is not different in deodorants than it is for the other categories or it's not materially different. So everybody seems to have most of the big category seem to have about 4 brands for using categories. And about 5 to 6 brands account for 2/3 of the cabin. So this is not an outlier either in terms of loyalty of fragmentation. And we also saw that if it was a super fragmented despite category start to make high gross margins here. So the fact that it's making high gross margins even at the size at which [indiscernible] freedom to this, but this is kind of more rigorous work based on panel data and our consumer work that we did go back to the earlier one. I think there has been a question that a lot of people have asked. One question is, is this really an exciting category? I want to say that if you take a long view of this, and that's how we've got to really look at a market like India, it most certainly is. But even if one takes a short view of it, it's got -- it appears more discerned and fragmented than it really is. It really is a long tail. It really is a few brands occupying 50 shares. So there's been a question saying, you guys are simply you believe into such a big play, why not play into? I got a few questions last night, I read 1 or 2 analysts reports. So in my bookshelf, in my office, I have this book, which if you haven't read it, is one of those books that you must read as FMCG analysts book or 22 immutable laws of marketing. And the very first law that recent proud say it is better to be first when it is to be better. The first power advantage and the reason is when you enter a category, you have a bit of mind space and it's very easy to take the mind space. So the second person takes a little bit of it. The third takes it. After that, mind space gets occupied for the category. And the second law of the book of the 22 laws, which just tells you how it bond is it. And if you can one first in a category, you set up a new category where you can be questioned. So what recent roar saying, which is my experience as if you're not among the first few entrants in the mind, you can only enter a category to have a seriously disruptive product. So Cinthol entering is another deodorant will be very hard when there are 5 or 6 brands that have already occupied the mind space of deodorants. It's important to understand that mind space with a different concept to market space. And while the market is underdeveloped mind, when you say deodorants have already got a few brands that consumers have that have taken ownership. And if we want to play deodorants, it is important that we first take 1 or 2 of these brands that have already taken that real estate in the mind. So that's probably why we may still have a view of Cinthol not thought about it, but it's important that if we want to enter deodorants, we enter with brands that have already established and developed the category. So thinking about deodorants on why it's an exciting market while the characteristics of deodorant market in India complete a popular perception are not different from other HPC and why it's important for us to enter inorganically and hard for us to enter organically. I mean, content is the other category, which is to be perfectly honest, not the first reason why we were looking at this acquisition, but as we started studying condom, we felt that there is a big growth runway here as well. The global leader in condoms series and FMCG player, which is similar to us. The channels are quite similar. It is a heavily marketed and distributed category. What we also realized in India is that 2/3 of this market is noncommercial condoms in terms of volumes. So another 25% of it is mass commercial, but really, a lot of the action is happening in premium commercial, which is our drug in long-lasting, et cetera. And that market has been consistently growing for 5 years at 20%. Kama Sutra plays already in kind of the lower end of premium commercial and can certainly write this trend. It has a strong equity. There seems to be one player playing premium commercial today. And certainly, there seems to be scope for a second one with a very, very large upgradation of premiumization value drivers. So you have one category deodorants, which has a penetration and consumption value driver and another category which has a very large premiumization value driver. So that's really why I think categories are fundamentally attractive to us. And I guess the question is that the categories may be attractive, but what about the brands? And anecdotally, I told you right, we got interested in this acquisition because we found a lot of people, not all that many people were using this or is not to most famous brands, but to were swearing by these products. So I think if you look at Park Avenue, deodorant share of RCCL has been rock steady despite pretty much not spending media investment. So it's been a pretty absent in media. It has been under distributed even compared to the market leader. We will own the fact that, as I'll show you in the next chart, we actually think that deodorant category itself can be better distributed. So it's a low media investment, average distribution. But when we did an NPS score, which is [ look at ] users and net promoter scores of users, we actually found that Park Avenue was pretty much at the top of the category. So it was -- and again, it's all this sort of makes sense, right, strong brand, few variants, high-margin, stable market share because pan existing base of loyal users who really like the product or not. And apart from the underleveraged equity of Park Avenue itself, we feel that the category itself with a player like GCPL, who are, let's say, 4x the direct distribution reach of Park Avenue, we feel that we can go well beyond the category in terms of distribution. And at the same time, Kama Sutra has an excellent chemist footprint. Similar chemist footprint to us do not all intersecting. So some unique aspect for Kama Sutra some unique aspect for us. But I think the interesting thing is quantum are a necessity for a chemist, household insecticides and air fresheners are a nice optional. I mean they'll keep it if you go to them, but they're not going to go and necessarily buy these categories. So if you have a necessary product for chemists, we will be able to probably improve the distribution of household insecticides and air care in chemist as well. So that was really the point on brand strengths and leverage. Finally, coming to this point on significantly, which is probably when you're looking at the stars on what these categories can do, the one has to have one speed firmly on the ground in terms of what we can deliver in the next 12 to 15 months because otherwise, [indiscernible] having this kind of acquisitions with all the bets in the future. And I think the cost synergies are something that we are 100% or we can never say 100%, but very, very confident of. There's definitely a large scope to reduce MRP to NSV leakage. And there are very simple things. For example, the urban distributors in RCCL makes 6.5% distributor margins, ours are 5%. The rural channel there is a 10%, 11% distribution for the distributor, leave the retailers aside, ours is 7%. So there is just very low-hanging fruit, and then there are lots more that we can do. The second one is really on fixed overheads, as I told you, fixed overheads and other expenses on the late 30s versus 18% for us. So you can just imagine what it is that we can get out of this. Then a bunch of smaller ones. One is stopes, small business, but there's significant savings. Procurement, we are a large buyer of aerosols, both in household insecticide and in air fresheners. So palm oil derivatives as well. So aerosols, in particular, is a category that we will now probably be the largest aerosols buyer in India and give us significant scale. And we also intend to radically simplify our business, we radically simplified our Indian business. I think it kind of halved our SKUs over the last 1 year. And what we're going to do and what we do here is to kind of rationalize the noncore or whatever we need to take in the first year, we will take whatever corrections, remove the low-margin SKUs, bring the blockbusters into player. And that also ultimately leads to significant cost synergies. A lot of overheads get spent on the long tail, and one doesn't really understand the cost. So once you cut off the long tail, you'll find a lot of cost savings coming as we've seen in India. So cross synergies is something we are -- one spectrum, we're very confident of the product and the brand and the other end of the spectrum we're very confident of the cost that we can remove. So I think with that, I'll probably hand over to Sameer to just talk you through the business case and the valuation of this business.

Thanks, Sudhir. and Good morning to all of you. So let me try to sort of obtain what defer in terms of outlook and numbers. So to begin with FY '23, the revenue of the business is close to around INR 622 crore and the margins are somewhere in renew mid- to high single digits. To begin with an FY '24 revenue trend, we will drive simplification. We will see SKU rationalization and also focus on more we will also see marketing investments drive market development, which we lag in terms of investments to the growth actually being very short term. And hence, we do expect, I mean, in FY '24, the revenues to be more of the same in absolute terms as compared to FY '23 and margins to be relatively better as compared to FY '20, but not overlook. Obviously, I mean, simple ligand suggests that in FY '24, the position is going to be EPS value to. But come FY '25, we remain extremely confident of talking low double digits to mid-teens growth in this portfolio, driven by cost synergies, scale driven by revenue growth drivers. We do expect overall EBITDA margins to go up to mid-20s from FY '25 onwards. And that's not just a year outlook. It's onwards. And we expect, I mean, this trend to continue, both in terms of growth in margins in the up business from FY '25 onwards. EPS would be largely neutral. I mean, in FY '25 is what we believe at this point in time. If you move to the next slide, which is on valuation and funding. So let's break this into 2 parts, let's start with the valuation. There have been a lot of questions in terms of what's the gross, what's the net valuation. I think a couple of clarifications will go. If you look at the gross valuation, it's INR 20 crore, INR 25 crore, which got released in the stat filing, but that includes INR 100 crore of cash in the balance sheet, which we will acquire. So the net valuation is around INR 2,725 crores. So that's point number one. The other thing to note here is that we structured this transaction, which is a Slump Sale as a result of which we acquired brands. And these brands then depreciated in tax books, in statutory books, these brands, we have been then useful life. So there will be no depreciation, no P&L impact and no EPS impact. But in tax books, the brands will be depreciated as a result of which, the tax profits will be over. And very importantly, the cash tax outflow for the period of the next 7 to 8 years will be significantly lower. This, from an NPV perspective, roughly aggregates to INR 400 crores, and this was quite an important aspect in terms of the overall value which we paid for the business because the way we look at this transaction, net from a valuation perspective is not INR 2,725, but close to around INR 2,325 crores, adjusting the cash tax savings, which we get from the structured this transaction, and that implies close to around 3.75x of FY '23 steel value. On funding front, a couple of things. We are going to evaluate short-term financing to begin with. At this point in time, as we speak sales of March end, we are net cash, we will be net debt for the next 6 months, I think, episcleral and with the cash flow expected in FY '14, mid of FY '22, again, we will be net cash. So that's the piece on funding as well as how the net debt net cash will evolve over the next 6 to 8 months. Thanks for your patient hearing. We can open the floor for the Q&A.

[Operator Instructions] First question is from the line of Avi Mehta from Macquarie.

[Operator Instructions] The first question is from the line of Avi Mehta from Macquarie.

Sir, I just wanted to follow up the market split based on income for deos, is it similar to oral care with a large chunk at the basin, if you could kind of help understand that? And secondly, if you could also address, there is going to be the brand is going to be split between 2 parties in terms of FMCG being with you, especially about Park Avenue and the commenting business being with Raymond. So how do you kind of address the possible different chair in terms of brand positioning, which could find out?

In urban market, about comparative over in any other countries not in India is very different. Deodorant shares will be 20% penetrated in urban, roughly, it's about INR 200 of bottle for aerosol and even for the water-based. And of course, now they have a smaller part as well. So it's a very, very different dynamic from what deodorant is. I was really making a ton of order to see that what sales future if we develop the category -- that's what body would have begun as important a driver for consumers and oral aspect. I think on the question of the brand, I'll hand over to Nisa to…

Yes. So on that, I think we have been to delete fragments and on the things need in other countries. So a topical case definitely see that as we use the projects. I think a question on the brand of both in lifestyle analysis Consumer Care. I think reason, obviously, we have some weak side for it for all the consumer product cathodes, which you here as we to Park Avenue, you appreciated guest experience of having brand grow across many categories, the companies of the customer saving companies, so the whole brands for their caters. And we see even if orlistat roof from one category to the areas you more go into the category to bid that cater. So I think Park Avenue is very another line to open the necessary is because of the close brand. And obviously, I think as we go down over the next few years, we have the opportunity to enhance our family into the brand to our options that we will look at in the future, but we don't see this as a risk at all.

Perfect. And just fall bookkeeping, if you could give us a sense on the current market size for deals and condensate?

So I think we I mean estimate vary, but roughly, I think it's probably about INR 5,000 crores for deodorant about INR 1,200 crores for commercial contacts. That's probably the tie today. Deodorant probably is a little bit more difficult because the huge amount of non-promotion that's the ballpark of the marketplace.

From when did they not here? I think we can just [indiscernible]. I think a lot of participants are not able to hear Sameer clearly. So maybe we've covered that slide once again.

Yes. What I was just trying to call out, I mean in the business, if you look at FY '13 to the on rate, revenue is up in other crores and the margins are mid to high India business. The regulator FY '22 revenue pace, we will drive anticipation given the rational ratio of GCPLs, we will reinvest and look at the return of cash. The most recent of that, we believe, will increase in FY the revenue would be the absolute and the loss would be a probably higher compared to what we added a fee. We like the position will be guiding in FY '23. However, or almost the period performance is something which we believe will be extremely robust. We expect good double-digit mid-teens. We also expect to cost revenues, you can [indiscernible] one PMD margin for 5 go. We also reduced the base acquisition in GDP from FY '25. If you go to the valuation in funding in part aggregation for sure most of you would have a lease a state of in that the value which we paid for the business is around INR 2,325 crores, but at sues INR 100 crores of cash, which is diving the balance sheet of our acquirer and then the net value is INR 2,725 crores. The other important often which total our valuation process believe that subset transaction is content result stage, we will create that for this did in the ag and we have indentation chart in CMS or EPS impact. We be able to get depreciation on this trend and the result of which the tactical process will come down and as a result of which more account tax will come down. If it depends the rural CapEx of like 7 to 8 million from an NPV per sector in terms of the net one valuation is of a but around INR 2,325 crores is turnout to be 3.75x of FY '23. On funding front, we will evaluate a very short-term financing we are look up as of last re-segment, tectonic services, business short-term financing, of FY, we should be at cash we have for the excitement will be late. But the midsole for cash.

The next question is from the line of Vivek from Jefferies.

Okay. Great. A few questions. First is Sudhir since you took over, the idea was to simplify and there has been a simplification journey, and we have seen results partially. One impression that I have is that in the context of where, let's say, Indian HI is or for that matter, Indonesia, do you not think that this acquisition is a bit ahead in time given that you still have had a job at hand in terms of turning around particularly the HI business, which is one of the larger categories for you in India?

Wanted complete acute timing of things like this, but we felt profited as the opportunity came up that we were in the right direction in terms of market development of our core categories. We have simplified our extended portfolio and all because of the German car on to make the use time and you now have -- so I would say the competition of the radio, the journey in 1.5 years. And I think we already set early reads on last quarter, we feel quite confident that our capability of market development has gone up quite a distant. I won't say honestly that we have fully insured the problem in some of our cities, but we've been posting a that -- and the logical next step for us to then ask the question that if you get better at something, then what is our next step. And the next time was clearly to move into focusing on India, again, you understand that we're focusing on our HPC, we are focusing on India, we are focused on our underpenetrated strategies. So we're not going out of focus. So we're building a DNA on market development in India, which is faring the most attractive market we operate in, and we are kind of expanding. Timing we continue to litigate in. So I'll just try to say one is either not reality function to it and one is reasonably costed and our opportunity to come up as an and the right value which we pinion.

And our India business is there to business and has complete capability of integrating the business be quite entity. So I don't think so much time from perspective, I think this category is in usually interesting on has a huge runway, and we only have it in organic opportunities. I don't think we wanted to leverage to a management bandwidth perspective, I think in the strength business we have in our leadership is integration successfully and it will be very tight do it now.

Got it. A couple of follow-ups to that one. Sudhir and Nisaba, deodorants over the last 20 years has always been a very, very exciting category on people. But if you look at, let's say, [ Russian by ] came back, which saw moved from 0% to 18% share, you need came from 0% to 56% with pocket to deodorant. Do you not think this -- while I -- the slide was revealing, but nonetheless, the brand loyalty still is low and if somebody comes up to your point, Sudhir any company or player comes up with something which is very differentiated, the loyalty still is really lower. Does that not worry on this category? And I have one more question to your response. But first, if you can answer this part.

Question that we started out when we did our new divisions of the other factor the state of the car. And I don't want to get you the car notice we put let a couple of facts on to 3 ways for about 5 years before category grew double digits for a 15 years prior to that, which is a 20% growth guidance. So in all of this, this has been a cattery that has been fundamentally a high-growth category. In this period of disruption in deodorants, the one company that has had market share is like not investing has been this year. Then they look at consumer and data and doesn't see this as being either a particularly retended category, those are at that presented to start, which is in the top 5 brand account for 65% of share is car. Not in a particularly deployed. Now I don't want to share what is our arose on the category not want to share at this stage. So I think that will be competitive is not fair share. But if you can lean the fact that it's a faster in category, RCCL and high gross margins. RCCL market shares have been stable. And if you take we track together, and the category is either this or not overtreated as it appears. I mean information how to get the data to look at it, sometimes acts look a bit difficult share than what they are. And I think the goal you have some patent as you look beyond an [ Pareto ]. So when you look at the fashion the announce, we're not worried, alone massive upside, which is if somebody can get it strategy right and some of the meters over deodorants in terms of being a regularly hygiene products, conveners award, which we use when you go for a part. I like the consumer a better gold maneuver on was going to offer then you have a really large time to pay. So no, I think we downsized that very generic and the upsides are very high.

Got it. The other follow-up, Sudhir, was quite a few investors have asked this question. Does this acquisition also reflect in some ways, your views on HI being a very tough category and difficult to see acceleration ahead. And that's why the idea is to diversify into something which is more attractive. Can you clarify on that bit and your position on existing portfolio?

No other all HI and aerosol are also some penetration categories. Those are categories that require the exact sales to that deodorant require which is market development in India. And HI certainly has a long runway of growth. As I showed in the chart there, we have a non-India portfolio. We have an India portfolio. And in India under benefited portfolio HI is very much part of that. If you also as we all know of exports is a 99% penetrated care. So we would like to increase the wages of categories like HI hair color and air fresheners. In India, that talent and only one step we take several steps. But our game plan in Q3 increase those nature of those kinds of categories in our overall category portfolio part. If I remain far and away, if you look at the next decade or 2 decades, the last guide creation opportunity for [indiscernible] India. I'll give you a perspective on. I mean, since we're talking about our tax actually looking at the per capita consumption, India is again at about $0.50, which I categories than $0.5 -- this $2.5. I mean each doesn't have a 20-year plus unbated there's still a higher potential growth in HI go to the mid-500s.

And I think the happens outside perspective from outside of India, this is a huge category and with the opportunity at the in more in 2016 in England, and we got influence around that time to use deodorant as it -- and it's all side having a lot in a. So I think for us, capital you elicit we can look at it's a long run rate growth. And when we look the de business is enacting inorganic opportunity, very strong, perhaps under invested. And the one also should make what we see to the business of road opportunity. And I think given our India businesses, the addition in a bigger of GCPL in India. So 2 more capital is strategic for us over the [indiscernible].

Got it. I have a couple of more, if I may. One is, Sudhir, why in media interaction, you have mentioned a 10% growth for this business. You'll be satisfied if it grows at 10%. Can you clarify on that comment as well?

No, I won't be satisfied with the business growth can the business sees 10% simply let the cost in -- so I think we've got to separate the individual on the business case and say okay to it is late there's no way the strategy or not very unlike strategy is going to grow less than 10%. Even in the growth still and we have mid-20s EBITDA, which we feel quite plant, which will be a really good business case. But the life potential of this business as the right one to start in the bottom line in what has been in the past in bottom line what predict. Talk about because a lot of runway, we have done a long game on top line. And then because top line dependent both on category but also what companies do. So I just say the business case are but are managed.

Got it. And you are not buying manufacturing footprint along with -- in this transaction, right?

No, it's an asset-wide transaction, we anyway this year is deodorants third party, and we are a big rental suppliers. And we have -- the condom manufacturing will remain artists here, who will supply to us as the contract manufacturer.

Got it. And this INR 400 crore tax, what you're you are talking about, Sameer, are there any carryforward losses also? Or this is just the intangible write-off that you're talking about?

This is the application relate in line, which is largely driven to the continue [indiscernible].

[Operator Instructions] The next question is from the line of Abneesh Roy from Nuvama Institutional Equity.

A lot of questions have been asked on deodorant. So my first question will be on the men wellness. Do you see GCPL continuing with this says down the line? Why I'm asking this is one comment in your commentary was this was not the first reason for buying this product portfolio? And second, you see in terms of the size also as a percentage of the total business, which you have bought is a small size. And third is digital currently has no presence there, and we also mentioned that there are noncommercial products by other companies also and maybe even the NGOs, et cetera. So do you see that you will continue to exist 5 years down the line or you would focus only on the DO essentially in the medium term?

I think low case was definitely something that we had outlined as a very interesting as the GCPL for the future. So I think when we look at the sort of essential wellness business, I think we find that category very interesting also, but I think the major was on those. But we can't omit into almost 4, 5 year later of what we will do. But I think for now it's committed to train those cases.

Sure. My second question is on the overall leakage, et cetera, which you explained in terms of the MRP to NSV. So now when I see your guidance for FY '24 in terms of flattish sales, flattish EBITDA, I wanted to understand that because clearly in some of the acquisition by other companies, we have seen that the first year in terms of sales is a bit tough because there's normally easy to sales comedown methodology being used in terms of acquisition. So there is a push model by the are company, which is used. So is that one reason -- a big reason why you expect same to flattish? You did mention that you rationalize the noncore and the tail. So why would you want to start with noncore and tail rationalization in the first year? Why don't you do it later? Because ultimately, when you're starting it better to start with a bigger revenue and then also do a higher advertising spend. So could you explain that a bit?

I think Abneesh, there are several reasons why Yes, I don't exactly know teams been quite soon in acting or how we will do this. But I'll roughly tell you what we will probably do in noncore, you want to rationalize the long reasons. One of the noncore tend to be lower gross margin, they tend to occupy a lot of overhead, for instance, we can easily lap this for a are decided in the top 50, 60 cost under existing sales monsoon no added cost. So it's important for us the right structures and to be strategic right from the beginning. So that's why it's important for us to remove noncore SKUs in the beginning in sale. There's also inventory the business rather to much higher inventory than run. We run 10 days of inventory at our distributors. They have to inventory and distributors. So all the costs MRP to NSV right, there's all these are last things that we will have to bring to our own level. The distribution gains where we see will not come in, in the first 2 months. We have this because we'll have to figure out how we -- what part can we retain, what part is always not happen immediately. So I think for a combination of the fact that the benefit won't come immediately, we need a little bit of time to plan. We have to reduce the inventory and complexity has to be reduced if we have really focused on global sexual wellness categories and really propel them. These are the likely reason that revenue will be flattish. There will be some natural growth as well because the strategy will go. I think it will grow over the last few years, it worse. Those will get counteracted by some of these had to give an exact number. I think what we're saying is give us 9, 10 months is figure anything we start the new year, we will definitely really kick action.

Sir, one clarification on the flat at margins which you mentioned. So when I see your centers said the distributor margin can easily say 150 to 200 bps because of low distribution system. And second, you also mentioned we'll save 12% employee cost, 30% versus 18%. So would it be fair to say that as spend will commensurate increase because you're guiding towards flattish EBITDA margin? And second is when you mentioned the leakage in terms of MRP to NFV, I think you are comparing your whole company to this small company. My question is on the overall Gopak, won't the leakage be very similar. Will it be inside some the digital, which is a much larger company ocean and haircare strong market share. While deals very decent consumer behavior very de buying dear also. So can you comment on what's the leakage between MRP and NSV in the deo category?

Yes, at asked a question to see fee that the MRP to NSV even within the order has higher leakage spend and benchmark. While MRP to NSV lease why at some category we are in an aerosol category so as auto respected side. Whilst we have different MRP to NSV decades, which has a lot to do with the direct distribution and the command of channels that the market either has -- so yes, the nature of the category. We did like this one to except MRP to NSV the directory come on like us with a lot of direct distribution and a large player comes in, we will speak further on the reason may or may not act on in a nice thing to say that these guys are mitral have certain is to show that we are at that sub-acre -- similarly on the central plus other expenses, which is what we call overhead is in the late, we have to in the late 30s and we are 18%. So there's a very large gap or completely internal that is what stays company gets a small -- so I think that we were confident of -- what was your pipestone, -- this is the second question.

No. So... Adding..

Yes. I mean you saw the chart on our belief in advertising we've seen over the last year a is. You've seen the amount that the brand spends on advertising when compared to MPR's a mid-single-digit NSV advertising company, GCPL with our kind of portfolio with a large amount of store and all double-digit. So senile certainly an area that we will look at.

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

Just add 2 quick questions. One is there -- if you look at gross margin tier for the 3 segments, which is 60% of the business deos is sector other, what would be the gross margin clearing from the 50% gross margin that you have? So my assumption is that actually we should be highest followed by deos and followed by the others. Would that be a fair way to look at it?

I don't think we want to share the exact number, but actually see our grace is the highest for a part is a test, this is a hail.

Got it. Got it. And the second one is, is there any kind of a brand royalty arrangement, et cetera, between payment and GCPL…

Sorry, I could hear other than…

Yes. Is there any kind of brand all the arrangements between Raymond and GCPL for the Park Avenue brand? Or is it a clean-cut apparel Raymond and FMCG?

There is no protection earlier have over down category and capital on the right type of period [indiscernible].

Got it. And the last quick one was obviously is it a fair assumption to make that the bulk of this business is urban. So you are -- you guys are 70-30 in terms of urban split at GCPL India stand-alone, would this be much higher in terms of urban, maybe 80%, 90%?

Yes. I think the business will have a reason high on to go on between as well than level for us.

So significantly more than the India GCPL business.

Yes, at this point or...

Got it. Those are my 3 questions.

The next question is from the line of Sheela Rathi from Morgan Stanley.

So my first question was at the time when we were evaluating this transaction, was there any mindset that instead of going and acquiring why don't we go ahead and build such a business? Because, yes, the next extension for you would be getting deeper in the personal care space. But why not choose the other route of building it on our own. What is it that this rate shrinks versus the past acquisitions we have done?

As I told you, the now need to build new brands in categories which are established in the mine for a long period of time that are very -- if you can bring new cities or new brands to existing categories, we have disruptive products. For example, we have been magically had was to the disruption products. When we demanded product and expect to succeed in high work. So these are the 2 criteria in which you can really the new products, new brands under categories. In the order was not a strategy that it is obvious to assess really in a thing, but it's not the obvious thing right now for us to enter another deodorants and limits. There were 2 persons to when we look at the [ pertating ] category, which we see under be appropriate for us to enter a define disruption but we did in Matalan we enter of them. You all may find that the large number of brands for the category is under proved and have a lot of run rate. So the brands are found the crackers and the total case we should buy rate and develop the category.

Yes. I think we think shares that [ telestration ] like we did it as there's nothing actually to painting. But when you are a slightly higher penetration in that when you do the math also business quite for in the one or to financially work out in the auto billion of that. Testing is strong that.

Understood. And would we really have plans of rebranding these products going ahead? I think this question was asked earlier also, but I just want to be very clear on that bit.

No, we have renegotiate because the brands are strong, so it's absolutely.

And my final question is what is the salience of online penetration for this category?

I don't get over to the wrong number, but I think it's about 10%.

Okay. Okay. So that is also in. Yes. So probably the distribution strategy will be very different from our usual product offerings?

I mean no actual revenue will rely be different because most of the sectoral level comes to [ Telex ]. And we are selling higher in fiber it's data channel.

Next question is from the line of Arnab Mitra from Goldman Sachs.

My first question was again on the competitive landscape though you have, I think, touched upon a lot of aspects there. But the consolidation of the top 5 brands that you mentioned, has that consolidation increased over the last 5, 6 years because we do remember a very high clutter in the category 7, 8 years back. So I just wanted to know, as a trend line, has that changed towards more consolidation? And an added question to that would be then for came with the no aerosol kind of play. There was a big move in the market towards that. Has that trend reversed or at least stabilized? Or is the market still moving towards that form of deodorant?

I can answer the second question more. The first question I can answer impressionistic, which this was a very consolidated category we had a number in the impractical, but I don't know humanity may have maintained, but it certainly is consolidated or consolidated today. So it is pretty consolidated today. So it's posters, but I totally need to look at the numbers from 2010 to 15 months acutely, whether the good way of looking at normally brands prosecute the top pet category. It may be what you said, but I'm not sure about it, but it certainly is the transportation will be excessive in the category has been a short list piece. It's neither primate today. A lot of the segments when I remember it in many times in many districts when you do a rotator -- it happened in the case even happen in across many categories. I think almost after has said top of mind does happening across categories.

Got it. And my second question was on the distribution. So if you could help us with what is the current distribution of the Raymond FMCG business? And how is the distribution of Park Avenue different from, let's say, the market leader in terms of direct plus indirect -- just to understand how much of benefit can happen when the distribution expansion plays out?

Yes, I could the market leader is at in terms of direct or indirect of Park Avenue. And our direct distribution is core of what Park Avenue is a happy beta.

Okay. Got it.

We will distribution...

Understood. And if I could just ask on seasonality, any sense if you could help us with how the category seasonality is between the 4 quarters? Is it very seasonal towards summer? And therefore, is that going to be a bit of a challenge as you transition this year in the middle of the season.

I don't exactly on how seasonal exactly here. I don't think it's actions. There is certainly some seasonality, but I'll get back to you on the exact numbers. And I don't think it's -- certainly, globally, it is not hugely will be seasonal because of -- becomes a habit, and I in become habits in India, I'll get back to you on the data.

[Operator Instructions] The next question is from the line of Latika Chopra from JPMorgan.

My first question was if you benchmark the product portfolio on average naturalization to the company, it could get in sense from the channel mix that you have versus the top 3 brands in the U.S. Where do you -- where does the Park Avenue brand stand? And partly, I'm asking this question also is that if you're going to reduce the gross price to MRP to net price differential down from 50% don't you think it poses a risk to market share, which Park Avenue enjoys today. Any thoughts?

So there are 2 15 years at is a shop. There are -- some of this is relatively lower. Some of it is we have to happen in customers and aspect. What is relatively distributed margins primarily distribute the market are relatively lower than just has to do with scale. What is relatively lower is the gap of gross to net between Park Avenue and other players in the market, which we have to distribution a relatively rich will happen with a series of actually goes up. Dealers look not at margins but have returned at less. So you have to have 2 pits that have very high retinopathy. That will come a little later to block net man not going to go overnight from the 50s to GCPL. There is some part of that is very low risk, which we can do immediately if we get the content clan some part of it, we'll get, I hope, over the next 3, 4 years, the consecutive started.

Sudhir, I was asking more from the net end consumer price. Is it very different from the top 3, 4 players in the category? Is it like the -- why people buy Park Avenue? Is it like if you increase the final lattice to the end consumer, does that affect the growth for the brand? Any sense if you look at the numbers for the last couple of years?

Is about INR 20 to wait for most brands. Price it is retailer by is ever between 120 and 140. There is a gap between 120 and 140 between various companies, which is a relatively easy bridge. Between the 2 140 is significantly higher than other categories in at a longer again. So as I told you, there is a short-term benefit, which is lower is in a long-term thing, which we won't go in. We will only be able to bid the gap between, let's say, 140 and 220, which is we 20 the next selling prices we bring in the equity becomes gen [ tailers ]. -- about 120 and -- that's gap to be reached.

Okay. And the second part was the M&A strategy of the company. We have seen this transaction. Should we expect that we will be more aggressive to look out for more M&A opportunities in the HPC space. And if you could also elaborate the process that the company follows, -- is there a committee and so the numbers are when such opportunities are presented to the board?

One of the things that we see here in the company that is tied less to have a very good position in India and very strong capability in India. And certainly, we would like to increase our plan, and we'd like to increase our TAM, not because there are no with the strategies that we are presently and we're very happy with those strategies. But because we feel that we have the capability of addressing a larger paid well in India. Our staff will come to organic. We have the person the priority is to get our existing businesses going. So I don't want to move focus away. That is the biggest job. But we will keep evaluating new categories in terms of whether we can do an organic entry, if it's an underdeveloped strategy or we have a disruptive innovation. We will do all that and if the trade meets certain set of criteria of broad-speaking still there in the HPC speed have to be relatively high-margin businesses, relatively other penetrated categories, but not so underpenetrated. -- going forward, I think the opportunity presents itself at the right prior valuation. We may go into in our end. But I think the main point is that we strengthen our existing strategies. And as we get more and more confident of our existing gravities, we will certainly look towards expanding the TAM of GCPL. I mean if you look at the most [ valuable ] company, they operated very well both in FMCG and outside FMCG operations in very, very large addressable markets. And that is certainly going to be in an we go for is a fact.

The occupancy also happen we didn't ages. So I don't think we do is in the India business to say it strongly, but organic based on 1 priority, but a very interesting opportunities come teetering at them over the last few years ago to some case happens, we do very late we may be tougher question the process on M&A. I think we have anything held who's benefited to M&A. And like all companies, we have a process where we have had scouts and identified opportunities. There is a few of us the management committee, we side stream across the board. These are acquisitions that have put by the board.

Sure. There's only one feedback because we have been hearing from investors, obviously, is that on the valuation bit, and I know there were some answers to it, but was it a very tightly fought asset for? Or anything that you can share or.

I don't think that's something we can really comment on. But we have a very strong financial posting has been sales and financials and to our follow-up we can't really comment on what that process of U.S. was in the…

The next question is from the line of Percy Panthaki from IIFL.

So my first question is on the sexual wellness category. While you mentioned that's not the first category, which drew you into this acquisition. But just wanted to know your thoughts on this. I mean, right now, the category is synonymous with condoms, as far as this business is concerned, would you like to expand and go into subcategories of sexual wellness at some point of time? Or that's not something that you've thought about at all?

So think about [ ataluren ] notions. I don't know what our future back at and how growth at share. But I think the million term we find 2 billion problem selling India, 2 billion of them are not commercial, another $1 billion as the $200 million seen. So there is a huge runway for and the itemization journey has begun its sound like it's not taken in India. That segment is growing at 20%. So there's a pretty huge and exiting generation journey within problems track for us. I suppose the 4 vision sectors when we're thinking about our categories and so on there are, of course, we will litigation, et cetera. But I would still say that our common focus in the next few years will be upgradation within patents.

Okay. Got it. Secondly, just wanted to know on the funding of this acquisition. If you can give some more clarity on exactly how much do you plan to use from the existing cash balance and how much of debt do you plan to take?

I think the beginning of looking at Solar will be the kind of over because our existing cash is also -- I mean we have in terms of retabling costs from increasing and getting other investments retentive yore share. And the formal ones cash which was in the cost forecast may FY '24 and cash.

Right. And last question is on the cost synergies. As you mentioned, the costs are in the late 30s. We are at 18%. I think that gap should be bridged pretty quickly. I mean, as soon as you take over, why is the margin expansion happening only in FY '25 as per your estimates?

In pretty quick transaction. So we'll have to figure out where anymore execute. There are also onetime costs at hitting the purse of the acquisition, whatever we decide to do. So if my central experience on these matters has been that the questions unpredictable and fluid and often not be to really exactly import is much easier to use a little bit more time overnight or of some of these costs. If it has to take a little bit of time for us to get going on this. I don't think 10 months particularly downtime.

Okay. Okay. That's all for me. Right. That's all I have a couple of hygiene questions, which I'll connect with separately with [ Pat ].

Next question is from the line of Shirish Pardeshi from Centrum Broking.

Just one curious question. In terms of channel sales, if you have any data you can share at this time. The reason why I'm asking because whenever you get into Raymond store, they try and push the rand I would even understand that part is also higher. So I was more keen on understanding how the channel selling and what is the Raymond store contribution in the entire sales?

Will be called out after the order of channel between side what percentage of portfolio would be a part out to in a GCPL distribution of cost for half of those in a like relation market distribution italic we have in kickstarting to speak.

Okay. And second and last question was the consolidation be?

Yes, go ahead.

Yes. So second and last question on -- by when you think the consolidation will start and we will try and report the numbers. Is it from this quarter onwards or after the quarter, we will do concern start putting the numbers?

This quarter, I would I think retail part question about it day aeration is as to.

All the best to you and the team.

The next question is from the line of Pranav. I think we have no response from the line of Pranav. We will move to the next question. That is from the line of Kunal Vora from BNP Paribas.

My question is on the historical revenue growth. While the 2-year number looks good. If I look at 3-year CAGR, it's only about 2% with flat sales in FY '24, even 4-year CAGR will be 12%. Just wanted to understand if FY '20 is the right number to look at? Or how do we look at the historical growth rate of this business?

Yes. Kunal, I can see taking look at it, many categories that were affected during over have been covered a few dates partly depending on what companies' investors are coming -- so I have to look at the trajectory of whether it's a recovery, which the answer is there. And 2 is to really look at the secular growth of the strategy. One is to look at a 5-year period or where company grew at 10% and so is the category and the year report that the category grew at 20%. I basically, therefore, it gives me -- I mean having seen a lot of core strategies with disappeared outside. I know that categories will recover. And this -- one of the things we asked the question is both problem. And the answer is which has recovered to breakover. I would be very surprised that even other things we equal go back to even the growth from on.

Understood. Second and last question, on the margin improvement from high single digit to mid-20s with potential increase in adds mined. What are the risks? And what are the key assumptions which you're building in? What are the low-hanging fruits in terms of margin uplift?

I already showed you ride the 2 biggest several cost deals, the 2 biggest of them are cross the net. Some of the gross nets are pretty easy for us to do. I won't say the hires. And really overhead expenses, which is all expenses outside of margins and outside costs and advertising. There seems to be almost a 2,000 difference our time at this year. So some of it, of course, is in the age category and different assets. Between these 2, there seems to be a lot more than the high to digit to mid-double digits and leaving aside quite a lot of info increasing advertising.

The next question is from the line of Vivek from Jefferies.

So one is in terms of organizational structure. So would you be also having employees coming in from Raymond or this will be managed by GCPL team?

So we would certainly have employees coming in from our event we're working it, and there's a lot of category knowledge that were designed within inventory. What on the finer offset view of this unit and how much of that was absorbed in other parts of Call that is to be -- but all companies certainly have a large number of people who have a lot of expertise in the category, and that is not something we...

Okay. Got it. And the other thing, Sudhir, you started with the story on the shampoo bit. So here, the focus is primarily going to be deals and condoms or you are thinking already about Park Avenue as a mother brand and doing a few more things beyond?

Shampoo just an added thought on what to be interested. I think the profit on the I think shampoo and the categories we know that the INR 50 crores. I think that some cost lens, et cetera, but I do not to very deep about it also. That's not in the basis for its development there. Maybe we will…

I think about I think last thing we always the prices and the quality of a and come to the pain the market with steady market share over the many years, even though it's the most under-invested brand and category and I think sometimes we're sharing the tooling to do today morning. They congratulated me for the fantastic brand and that she keeps in order in overt and customers to -- so I think the product is in an aerosol I mean we see in other cases also that we've seen in a comes to the in the.

The next question is from the line of Amit Sachdeva from HSBC.

Sir, my question is that do category seems like very attractive when you look at the past historical growth rate. And it seems like it's a category to be in. But theoretically, so has succeeded even many leaders have been to sort of monetize that category growth. And in part, it's very mass market, very [ AMT ] Hungary and maybe 1 or 2 leaders take all and other semi fragmented. But if I interestingly compare China market was India market. Now China market, deodorant is a very small category. And China is about 15 years ahead of the consumption journey or BTC evolution of China is way ahead -- now China, basically do is very small. In fact, India is 4x the deo market of China. And if I look at the fragrance market of China is way larger than the deo market. And if I look at next, say, 20 years when India's economic incomes will be rising, consumer preferences will be shifting from mass market to maybe more evolved categories such as fragrances. Do you see a risk that category faces some amount of project headwind rather than a tailwind when consumer preimmunizes and people who do mass market diode may not have a right to win and say, for example, the premium side, it is fragrances and more evolved consumer as it becomes. So do you see that category while also have some tailwinds in the past and with some challenges of mass market being mass market evented. -- but looking at the future, it might be actually a bit of a theoretically challenged category where it would be transitioning to something else?

It depends on a lot on how marketers make it from a want to lease. China even help fire. If you look at results, for example, at the same income level as China has $10 per capita on of users, and that will be because of some fantastic category developers work done in Latin America. So I would say China is the outside. India is below the curve, but still are very far away in the glove. Indonesia, et cetera, Latin America goes above the core. So what have we shared DC consumption and per capita income, it's a line that driving exponentially to a $20,000 and then also one for. The countries that are above the between mathematical has done extremely well making deodorant into oral that we need to use the house. The last one I'll try it below the line in China where it's no work has been done in that area at all. India slightly did all occur in most of Southeast Asia on the top. So I would rather look at companies on the do like Indonesia, which we know Vietnam, Thailand, et cetera, et cetera, in a not China. You are right about one thing, which is that our countries develop or to also do become larger. So a few things we are patenting market is also correct. -- don't tend to be in the market. I mean the definition of downside order apostatic makes you sell duration. So that then moved to work both as a problem both grow quite exponentially as countries develop. Start by where [indiscernible] go up high agency go right at $50, which is what the U.S., for example, is at. So there's no end to become an alert smaller eliminate the focus. But that's a more attractive market. It's a more consolidated more loyal market.

Sure. Sure. That's very useful perspective, Sudhir. And if I may stretch a little bit on one more thing that the kind of comment you made that despite very low A&P spend, the Park Avenue has been still retaining its market share quite well. And that increased me because what is that value proposition is such a market where even Unilever has staggered with all the might of distribution and branding and capabilities or market development. While Park Avenue silently could manage it without spending much -- what is that value proposition that you discovered that the brand has been able to put together that others couldn't? And so I'm sort of interested when you increase the A&P spends and how do you monetize that capability even further? I mean I just want to understand from your perspective that why this has happened that despite being low spenders, they are able to maintain their spend -- or sorry, market shares.

As affiliated but I reckon that the products are other is a focus on 1 or 2 SKUs. I told you like Park Avenue is at Park Avenue Bosman and voyage 70%, 75% of our outmost 2 SKUs, over it's not -- they have gone down the path of building a abetting how there should moderate where you go to different tactics may discuss. And that's one way of really the rate. The way a avenue is initially close and it's not done to advertising, but we got 2 excellent businesses -- Good morning and Voyage, which can have in the morning to say a bonding to work. And you want to the so that we use become a part of our identity. We sell that way. So that linearly what has happened to Park Avenue. That is why Park Avenue has managed to be pretty resilient in the face of a lot of ups and downs catering and filing. That's why I think dual -- we make a discovered India strategy, a brand that has got the meetings of what can be a real case on an inter.

Sure. Thank you so much for your perspective. I really appreciate -- thanks a lot.

Ladies and gentlemen, this past our time. We'll be taking our last question further. That is from the line of Chanchal Khandelwal.

Some of my questions have been answered. But Sudhir, just to understand the brand structure. Now power revenue as a brand will be managed by 2 entities. Goodrich a brand, as you highlight, highlighted, within Goodrich fatality we got this consumer, Goodrich properties, would this lock is a brand which is within the Goodrich -- but I mean, can you give examples of where the brands are handled by 2 different entities and brand the doesn't get differentiated?

Last or maybe there's a little uterine -- so live the aware starting on however when you advertise on capital is sort of affect the other category a crisis in catalyst. And we see the take wisely separates. So when I think in India intrathecal one to the jargon New York finance the jobs. And I do that at a you have a conversation on this talent not beta -- so legally, we talk or in or the teammates and initially, you might have taken of value, we know that going up in one casino go. So there that advertising and the quality of the product in that car.

That answers your question. But still, I mean, on a positive side, the brand has a positive levered the problem is in the negative side also does something wrong, then we may have a negative above it. That's the only worry. Otherwise, I think the structure, if you have a right, it can play out.

Yes. As part of the contract, I think we have some guidelines for example, to let categories that Barbara could end up, for instance, on the age and so on and so forth. So we have some kind of run way we're starting off a position where the brands are both kind of on expiring man. But as Nisa said, there are plenty of brands that have started off some common position, they have some things that mean the sales of parameter is a maximum brand in both sides. But then we go in different journeys and then they understand their own grows in China. -- in our have and the oil. So as I can give to in anything that probably some of this is I don't see anything material, but we are even develop Park Avenue going forward. We have the opportunity also how do we use the going brand on the fact and that association of is available to differentiate as well.

So wish you all the best.

Ladies and gentlemen, that would be our last question for today. On behalf of Godrej Consumer Production Limited. That concludes today's call. Thank you all for joining us, and you may now disconnect your lines.