Bajaj Consumer Care Ltd (NSE: BAJAJCORP) Q3 2025 Earnings Call dated Feb. 14, 2025
Corporate Participants:
Jaideep Nandi — Managing Director
Analysts:
Karan Bhuwania — Analyst
Unidentified Participant
Vaibhav Badjatya — Analyst
Kaushik Poddar — Analyst
Gaurav Gandhi — Analyst
Raaj Macwan — Analyst
Amit Agicha — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 and Nine Months FY ’25 Results Conference Call of Bajaj Consumer hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Karan Bhuvania from ICICI Securities. Thank you, and over to you, sir.
Karan Bhuwania — Analyst
Thank you. Thank you, Larik. Good evening, everyone. It’s our pleasure at ICICI Securities to host Q3 FY ’25 results conference call of Bajaj Consumer Call. From the management, we have Mr Jaide Landhi, Managing Director; Mr Kumar Mahlu, Chief Financial Officer; and Mr Richard, EUP Finance. I’ll hand over the call to management for the opening remarks, post which we can open for Q&A. Thank you, sir.
Jaideep Nandi — Managing Director
So thank you, Karan, and good afternoon, everyone, and thank you for participating in this Q3 FY ’25 earnings call. First, let me apologize for this delay of half an hours. Actually, the Board meeting got a little delayed because the Board was deliberating on a special matter and I’ll cover this in the later part of my opening remarks.
So before that, let me take you through the company’s performance for the 3rd-quarter and the nine months ended December 31, 2024, before we open the floor for questions. The consolidated sales for the company stood at INR230.7 crores for the 3rd-quarter and INR703 crores for the nine months ended FY ’25. Consolidated sales declined by 2.4% in the quarter and 4.2% for the nine months. Gross margin for Q3 FY ’24 on a standalone basis stood at 61.8%, lower by 150 basis-points. Year-on-year, while on Nine-Month the margin stood at 53.2%, lower by 97 basis-points.
The contraction in gross margin was partially on account of lower margins in coconut oil portfolio. While we took a price increase in Q3 in coconut oil portfolio of about 5%, it could not completely offset the Copra price inflation during the quarter. Subsequently, we have taken another prior round of price increase in high-single-digits in the portfolio in January ’25 to mitigate cost inflation and we plan to take further price increase to cross the inflation that has been seeing in the copra prices. Also, higher saliency of coconut oil also resulted in a little bit of gross margin dilution.
The standalone EBITDA for the quarter stood at INR29.3 crores, while for the nine months EBITDA stood at INR102 crores — INR102.5 crores with margins of 13% and 15% respectively. The EBITDA margins for the quarter was impacted were year-on-year on account of combination of specific factors like gross margin dilution as explained above, investments in project R1 for improving our representation reach and ways of working in GT channel, one-time investments in IT infrastructure in Q3 for improving our technology enablement and increase in number of ISRs to increase retail coverage. The standalone profit after — after tax stood at INR27.5 crores for Q3 FY ’25 and INR98.7 crores for nine months FY ’25. GT channel registered a single-digit decline in Q3 FY ’25 and Nine-Month FY ’25. On a sequential basis, secondary sales grew by 4% driven by marginal growth in retail and double-digit growth in wholesale channel and we see wholesale stabilizing now as a result.
Initiatives was taken to reduce inventory levels also of distributors by four days in the quarter to improve ROI. The secondary sales for the quarter was higher than primary by INR7 crores. Our retail loyalty program registered a growth of 27% for Q3 FY ’25 and 35% for Nine-Month FY ’25. The program contribution now stands at 11% for Q3 and nine months FY ’25. And this will continue to remain a focus area for the company. We have been streamlining our distribution network to improve efficiency and reach our one VAN network during COVID period, which was for reaching remote rural markets is now being optimized to also optimize cost. High-throughput vans have been converted into direct coverage through sub-sockets based on project recommendations.
Further rationalization vans are expected to be done in Phase-2 of Project R1, which would lead to further optimization of costs. While van rationalization has resulted in some temporary disruption business, we expect the rural subs office business to streamline and deliver strong performance going-forward with rationalized cost to save. In relation to improving quality of distributor channel, we have automated appointment and separation process via new workflows through technology and development where we had incurred the IT cost. The RTM revamp project R1 has made significant progress as of December ’24 and is now operational across entire states of UP and NP.
The present changes have been identified in terms of subDV to direct DV, VAN and satellite coverage to sub-DV. Nearly 90% of these identified changes have already been actioned upon in both states of UP and. Similarly, a large number of previously unrepresented towns have been brought under coverage. Direct reach has also expanded substantially with UP coverage increasing from 42.4,000 to about 58.6,000 outlets, which is about 1.4 times and MP from 15 to 24K outlets, which is about an increase of 1.6. These changes are expected to increase sales significantly in the near-to-medium term. In the Phase-2 of Project R1, we plan to cover all major other major states in India over the next four years, four quarters. Our geotagging initiative has been significant — has made significant progress with all 3.3 lakh urban outlets now Geotech and. This initiative will help us to enhance sales force efficiency and optimize cost to sales in coming quarters.
The organized business continues to register a robust growth of 22% year-on-year in Q3 and 14% for nine months FY ’25. Modern trade channels registered a growth of 10% led by Diali activations with ADH achieving an impressive 18% growth in that channel, while value-added hair oils in Dmart saw a decline, Bajaz was the only brand to record growth 300 basis-point share. The launch of 575 MLSQ of Bajay 100% pure coconut in resulted in 44% growth in Q3 FY ’25. Trade B2B posted a 40% growth driven by addition of 175 new stores in metro cash and trade.
E-commerce channel continued to witness robust growth of 39% in Q3 year-on-year and 28% in nine months FY ’25. Quick commerce, which has been a focus area for the company grew by 72% year-on-year contributing to 10% of the business compared to 7% last year with and Zepto recording their highest-ever secondary sales. Bajaj 100% pure coconut registered a growth of 40% year-on-year. Lotion achieved its highest secondary sales in Q3 FY ’25. Recorded its highest-ever offtake in Q3 — Q3, driven by ADHO and NPDs. CPC and CSG institution sales grew by 25% in the quarter. Growth in institution was enhanced by cross-category consumer promotion activations.
International business on a consolidated basis registered a growth of 23% in the quarter and 19% for Nine-Month FY ’25 year-on-year. Bangladesh doubled its top-line in Q3 Y-on-year and registered 49% growth for nine months ’25 despite political challenges in the country. Digital engagement activities generated significant reach with 7 million engagement and 13.7 million in Q3 FY ’25. Steady growth was witnessed in GCC and Africa, UAE and lower Gulf saw a healthy growth of 21% for nine months, opening of new markets in Iraq, Pakistan and Angola this growth.
We launched our first-ever ATL company in UA to raise awareness about reduction reaching about 2.3 million consumers with GPIs of 65% across U2B and meta platforms. The rest-of-world registered a growth of 12% year-on-year and 26% on nine months. This was broad-based across countries with top-five countries, Australia, Canada, Malaysia, and US 73% of the business, growing at 35 percentage year-on-year. Nepal grew by 5% in Q3 Y-on-year and 28% for nine months, supported by launch of NPD’s outdoor visibility and indoor promotion for CNO, Virgin CNO and.
The digital infrastructure engagement for Virgin CNO achieved a reach of 5 lakhs with 7% engagement. During the quarter, we launched our new ADHO campaign featuring Para Advani, the launch campaign delivered 840 GRCs with a 21% share of voice in the HSM market for Q3 FY ’25. This comes from the backdrop of overall lower TV spends by hair oil companies in the quarter. In digital, we reached a reach of about INR2.5 crores on key OTT platforms. ASP was increased 190% sequentially on account of the new TV media ad. ADHO witnessed a single-digit decline year-on-year, while on a sequential basis, which remained flat. Large and mid packs continue to perform better than the small packs.
New consumer office resulted in good traction in large markets. This quarter, we also introduced a 24 ml pack of INR10, which is with an improved value proposition and size per session for consumers. This will help in recruitment of new consumers for. The AD Hair and skin range is scaling up well, registered a strong growth of 50% in the quarter and 39% growth for nine months FY ’25, led by growth across major platforms. Regime Kits introduced for ADs and shampoo and conditioners saw positive momentum from activation in large e-commerce players during the festive season. AD body lotion sales on e-commerce were boosted by a new path launch and influencer marketing campaign.
Soap grew by 14% in RoT and brand is performing well on card. Serum saw a high single-digit growth in Q3 and 16% overall. Yeah, 100% Pure Oil registered a growth of 8% in Q3, 19% for nine months FY ’25. The project has been scaling up well and has reached an already a market-share of 2%. The brand has attained strong close to double-digit market-share in traditional in Bajaj, stronghold states of Punjab, Rajan and MP. Maharasht has also been seeing a growth in-market share. We also launched, as we had mentioned, 525 ML in Apollo, which has boosted offtake by about 25%.
Moving on to input costs, our LLP continued its downward trend in Q3 due to reduced demand and lower crude oil prices. However, it is getting offset by refined mastard oil, which has increased due to higher import duties on edible oils. The global edible oil also saw price increases. Price has increased substantially over the past few quarters. The company is taking steps to improve gross margins and profitability structurally, while we have taken rounds of price increases in CNO, including in this quarter, we’ll keep taking further price increases for the same proactively going-forward.
Also, we are planning to take graded price increases in aviation in the coming quarters to further improve margins on the same. Structurally, we are also rationalizing our trade inputs and incentive structure as well to make them optimal. These measures will improve our overall profitability going-forward. Multiple initiatives have also been taken to reduce material cost and structurally, which will give us sustained benefit in the long-term. The initiatives taken during the year have resulted in a saving of INR3.3 crores in the first-nine months of the financial year.
Our focus on increasing productivity through smart manufacturing use of technology has resulted in improvement in productivity by about 5% in-plant and about 13% in. RCSR activity also continues to do well with 12,000 families impacted over 600. As part of our ESG commitment, we are on-track to meet the short and long-term — short and mid-term targets with — in all the key resources, both from the demand and supply-side. Greenwater harvesting has been done for the last few quarters, resulting in replenishment of groundwater to the extent of 500% of our water.
We are confident that our investment in expanding and rationalizing our distribution network to project our own continued thought on diversifying our portfolio and scaling up of organized data and international business will be strong growth levers for the organization for sustainable growth for the near to mid-term. So while urban demand remains sluggish, rural demand has been showing some improvements, the recent union budget tax relief for middle-class is expected to increase disposable income leading to higher consumption, consumer spending on essentials and discretionary products. Focus on rural development for agriculture with enhanced cost is also expected to improve rural income, which augurs well for the industry as well as for the large consumer care.
Now to share some exciting development, we have just signed a share purchase and shareholders agreement, which is SPSA — SHK or with a 100% stake in Vishal Personal Care Private Limited, a leading personal care company with presence in all Southern states of India having their flagship brand turns arrive. The company was established in 1991 is a trusted brand with strong presence in natural space in the hair and skincare range in South India. The brand offers a wide range of high-quality products is built on strong business fundamentals and consumer liking. Has demonstrated a strong performance with 14% revenue CAGR over the past four years, coupled with high gross margin, healthy EBITDA margins and a debt-free balance sheet with positive cash flows. Now let me take you through the rationale of this acquisition. Firstly, the market of natural products in the BPC products space is significant and is expanding rapidly. Natural BPC products make-up about 40% of the total BPC market and is growing 1.5 times faster than the overall market. This bodes well with BCCL’s traditional and Indian heritage brand credit.
Secondly, Banjara’s generate distribution reached through cosmetic stores, pharmacies and groceries all across five states substantially adds to BCCL country — current distribution in Southern states, thereby increasing our distribution to near threefold for our existing banks as well. Thirdly, with a wider portfolio offering from Manjaras, we’ll be also able to exploit BCCL distribution in HSM markets for the same. And finally, another potential revenue upside will be leveraging expertise with Punjara’s products in the organized trade as well as in international markets.
In both of them, do not have any significant of any kind. So now let me move on to the deal structure. The first year’s condition — consideration for the deal is estimated at about — is about INR120 crores at a pre-money enterprise value of INR108 crores, which is a multiple of 2x on a trailing 12-month revenue basis on a yearly basis. So it’s a multiple of 2x on the revenue. In the first tranche, we’ll be acquiring 49% stake in the company. The balance 51% will be acquired in the next — in the coming three, four months subject completion of the closing conditions. So we are delighted and very happy to welcome Manjaras within the DC family and are excited to unlock the next phase of growth system.
With this, I end the opening remarks and open the session for questions.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star on their touchstone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to use handsets while asking a question a request to participants, please restrict yourself to two questions so that the management can address as many participants as possible. If you have more questions, kindly rejoin the queue.
The first question comes from the line of Rajna from Simple. Please go-ahead.
Unidentified Participant
Okay. Am I audible?
Jaideep Nandi
Yes, you are.
Unidentified Participant
Yes. Sir, in our previous calls of FY ’23 and FY ’24, we have mentioned to achieve high-single-digit to double-digit growth in the near-term, but that’s not visible. So can you explain us in detail what challenges we have faced and what is stopping us to generate good sales growth? Second is other expenses are increasing, even though the sales. So what are those expenses? And you also mentioned we have been taking some cost reductions. So please explain that in detail what measures are we taking? Third is with respect to the Banzara acquisition.
Jaideep Nandi
Two questions, please. So just prioritize the two questions that you want, please.
Unidentified Participant
Okay. But please tell us about the low sales growth and while the other expenses are high, and what cost-reduction measures will be taking?
Jaideep Nandi
Thank you. So as far as the sales growth is concerned, very clearly, as you have seen the hair oil industry, especially the value-added hair oil segment, if you read the commentary of other companies as well. While the only product that has been growing in the hair oil category is in that category, all of the hair oils, if you see commentaries from other companies also have been under stress. Almond Ros is a premium hair oil in the value-added hair oil category, so obviously has faced headwinds. We have taken enough corrective measures. We are further taking corrective measures in terms of increasing our advertising spends on the brand, et-cetera, while we will also take some price increases and rationalize the cost to ensure that our EBITDA margins are protected. So this is a step that we are taking.
The other thing that we have already done, as you would be hearing is in terms of project R1, we have been continuously working to ensure that our entire RTM for general trade because all the pressure that is there is only on general trade. We have corrected the wholesale, wholesale is slowly coming back. We had seen now these are changes that take some time to adopt. It cannot happen overnight. So we wanted to ensure that the large wholesalers are controlled. I think a lot of good hygiene work has happened. Now we are seeing both in terms of number of wholesalers as well as in terms of wholesale itself going back. It does take time, but now it is already on-track.
Similarly for — in terms of retail presence, we had already had a aim that we wanted to take it. Now we have structurally partnered with a consultant, which will be doing for the next four quarters as well and there is already some positive signs we are seeing in UP and NPA and now we are going to extend it to 30 odd states. Coming to your cost structures, yes, you’re absolutely right. Certain costs have gone up, especially if you look at — if you break it up in certain areas, the cost will look the same. One is in terms of employee cost because there has been no increase in terms of employees, etc. It’s just that there is a bit of higher percentage scale as far as employees are concerned, which is making a little bit of a difference. But the bigger difference is obviously a deleveraging where the sales has not grown and the employee cost has had an annual improvement. That is what has taken a blip at this current moment. This will get corrected as the sales neutral — naturalize and come back-in the next few quarters.
The other area you will see is in the other expenses, admin expenses especially. So as I had mentioned. So two things are going on. One is a continuous thing where project RON is going on, so there are some additional investments as far as project RON is concerned. So this will continue for some more two, 3/4 more. Specifically, a one-time investment has been made in IT, certain things like e-invoicing and e-way bill, cloud application protection, geofencing, central managed and deduction response and higher DMS support. All of this we had done in this way. We had to do these corrections. We have done it in this quarter. We could have — we could have across quarters. We have taken this. This has also resulted in. This will — this will normalize in the next quarter and we will see this coming back. Thank you.
Unidentified Participant
Hello?
Operator
Yes, Rashna. Those were your two questions. If you have any further questions, please rejoin the queue.
Unidentified Participant
Okay.
Operator
Thank you. The next question comes from the line of Vaibav from Honest and Integrity Investments. Please go-ahead.
Vaibhav Badjatya
Yeah, hi, sir. Thanks for providing the opportunity and congratulations for the new acquisition. I hope it works out well. So I have a question on — so if we look at — look at FY ’20, you had EBITDA of around INR200 crore and now we are on run-rate of around INR140 crore INR150 crores. So there is a delta of INR50 crore. Now if I want to look at it that way that between almonds and the new and portfolio, do you think that it is majority majorly contributed by decline in profitability of the almond portfolio or the — if you can just broadly give us the breakup as this INR50 crore decline that has happened, is it because of the almond oil decline in profitability or due to other products?
Jaideep Nandi
Fair, fair question. So if you look at in terms of structurally, if you are investing in a consumer product, if you’re looking at either a new product range or an acquisition or into your markets or modern trade, international, wherever, where you are investing, you will typically go through a full five, five-year cycle before they start yielding results. So these are the investments that have been made. So there are two-parts of your — two-parts to answer — two-part answer to your question.
The first part is investments for growth that we had made. And if you would have seen, we have made significant progress in all the growth levers that we have pushed, whether be it in-product diversification, it in channel diversification or whether be it in international markets. Wherever all of these places we have invested for growth and now the growth has slowly coming in, some of the products like coconuta have been doing very well. I mean, now it’s just a question of as the business bulks up and then have a little better pricing — pricing power as well, which already we are seeing a bit of it.
Only thing is we need to be a little smarter in taking the price increases on-time as the commodity prices keep going because a commodity product, we need to just be a little more smarter. That’s about it as far as the products are concerned. So some bit of investment has gone into that. So there has been a dilution as far as this, but this was a plant thing. If you really want to make it a company from a single-product to a multi-category, multi-multi-channel, multicountry product, this is where it was. So this acquisition is also fitted exactly in that sense where you wanted to get into a market which is unrepresented as far as we are concerned.
Earlier, we never had a product range, which could really cater to the South market. Now we have enough products, including other good brand that we have established, which will go through the southern market with our that we have in the market is about 27,000 28,000 in the entire five states of South. With this, it will straight away go up to 80-odd, 80-odd thousands. So we have an advantage of having a far larger distribution to sell our products. So clearly, so those actions have happened. As far as ADHO is concerned, yes, you are absolutely right. But if you look at the trends as far as the last five years is concerned, the value-added hair oil category has faced headwinds. So there has been lot of — a lot of bloodbath in the marketplace in terms of in this value-added hair oil category and you would see that from commentary of most companies as well.
So hence, we being a single-product dominated in that hair oil category, obviously, our looks directly flows into our P&L directly like that. If there was a companies where there are multi-brands, multi-categories, this part of the portfolio gets a little hidden. But if you were to cut it out and look at this thing, none of them would be sharing any better. So yes, we were in the downs — downward cycle of demand as far as this product is concerned. But now as we feel that the cycles are slowly starting to turn, maybe not yet, but with the government budgets, et-cetera, as we see turning, all these investments that we have made, we’ll now be able to see. And also we’ll be able to see the results slowly coming out. And also we — as I had also mentioned during my presentation that we are also looking at some structural corrections as far as Almond is concerned in terms of price increase and investment back into the business. So that is also the other strategic direction we’ll take.
Vaibhav Badjatya
Yeah. Yeah, yeah. So I understand that you have invested and a part of the decline in EBITDA in absolute terms would be because of that. But I was just trying to get a sense on the — on the fact that how much is it majority because of the decline in gross margin of the portfolio or EBITDA.
Jaideep Nandi
Almond Rock portfolio would have declined a bit, not really much. It is more the investments for the future.
Vaibhav Badjatya
Thank you. Got it. Understood. That’s it from my side. Thank you.
Operator
Thank you. The next question comes from the line of Podar from KB Capital Markets Private Limited. Please go-ahead.
Kaushik Poddar
When can you get back to that 15% to 17% margin that you have spoken about in the previous con-calls?
Jaideep Nandi
So the 15% to 17% margin was just an average in this quarter itself. Till last quarter, you would have seen that consistently we have delivered INR50. I don’t think this was just an aberration. You should be — as I said, we had made — it was in a downward cycle for both, both in terms of the corrections that we have made. Some of the results coming in have slowly started to trickling in, whether it’s a wholesale corrections, whether it’s the investments in terms of feet on-ground that we have increased, whether the rationalization of vans, which are now being converted in. So cost structurally, we have done all these corrections.
So the results will obviously slowly slow in the next quarter or two, but these are the investments. Plus we made those one-time investments as far as the IT requirement and is concerned. So this is a blip that has happened. You will see this coming back quickly. So that we should be around 15% from this quarter onwards and progressing further. That’s what you are suggesting. I would like to give any — any forward guidance on that, but you can assume from the structural direction that we have taken, that is where we should be looking at even more going-forward, yes.
Kaushik Poddar
Okay. And this value-added hairwell being a substantial part of your portfolio and that category having not done well for the last few quarters, do you see the challenge there is the market landscape changing for this value-added hair oil.
Jaideep Nandi
If you look at in the last few quarters, I mean, slowly we are seeing the demand cycle slowly coming back, while it was quite — quite under stress last year. Slowly, we are seeing the hair oil category itself coming back-in terms of growth as far as and numbers are concerned. Obviously, it is still led very much by coconut, but we can also see value-added coconut slowly judging back. And given that this kind of announcement has happened from the budget where we feel that there’ll be more participation as far as discretionary spends are concerned, we feel we are quite that Almond also should be able to see a benefit out-of-the demand cycle reversal.
Kaushik Poddar
Okay. And what is the timeline for this new acquisition being consolidated in your accounts?
Jaideep Nandi
So this acquisition, as I said, 49% will go with the first tranche this quarter itself. And by the next quarter, I mean, we have announced next financial year, but we’ll aim to finish it by three to four months the entire acquisition.
Kaushik Poddar
Okay. Thank you. I’ll ask my questions later. Okay?
Jaideep Nandi
Thank you.
Operator
Thank you. The next question comes from the line of Gaurav Gandhi from Glow Retail Capital Management. Please go-ahead.
Gaurav Gandhi
Yeah, thanks for the opportunity. Just one question. Sir, on this new acquisition of Banjara, which is more into Southern market, what are your plans to take it pan-India? How are you looking at it to grow?
Jaideep Nandi
So as I said, there’ll be four-pronged to the strategy. The first and foremost is where we see synergies coming in as far as our concerned — our company is concerned, we feel that we ourselves can substantially add value to the make it much larger in terms of just in terms of share, let’s say, all the other back-end benefits that we can provide as a much larger company to the company. So in itself, we feel that from the INR50 crores INR55 crores of annual revenue that they do in the next two years that can be scaled-up substantially. Banjara in Banjara, certain markets.
The second benefit we see clearly is where the Bajaj brands that are today available can go into the five Southern states where our distribution scale-up can straight away go to about three times. I mean that is the kind of numbers that are looking at. And clearly, there are some products which can go into that market. So that clearly is the second growth lever that we see.
The third growth lever, obviously as we see is that in terms of modern trade and e-commerce, I just told you that we have now a 30% filience as far as modern tradies and this thing, which was about 5%, 6% about five years back. This is exactly where Banjaras are or even lower and that clearly we have the expertise now in modern trade e-commerce with our full team and Banjaras are also — they are also very excited that we can add value to their product range in that market because as you are aware, South is a large modern trade salient market and e-commerce large players set-out of Bangalore.
So lot of lot of benefit can come out of modern trade and e-commerce as well as well as the international markets, we see there is some scope as far as the Banjaras product is. The last and last and is where your question is specifically. We also see some of the products like Miti, etc., these are products which are face packs, etc., these are basically northern products more — more suited for the northern markets which are now going into the Manjala. We are also looking at how that can be scaled-up in the northern market as well. So a four-prong strategy, we see there is a large opportunity for growth upside as far as all these are concerned.
Gaurav Gandhi
So okay. Great effort, sir. Hope to see the results in the revenue growth soon. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question.
The next question comes from the line of Rajra from Simple. Please go-ahead.
Unidentified Participant
Okay. So sir, the acquisition that we have made, the Balgara acquisition, what gross margin level is it operating at? And how are the ad spends compared to our ad spend? So if you could quantify them?
Jaideep Nandi
Yeah okay. So the gross margin that this company has consistently operated for the last four years is about 60%. So it has remained between 59.5% or 59-ish to about 60.5ish. So they have consistently maintained that. They have a large range of product categories that they operate and all of them operate at these kind of. So they have a face pack range, they have rose waters, they have other skincare products, they have black, natural and other hair-care products. That is roughly where it is and all of them are between, let’s say, 15% to 25% kind of a margin. So very well distributed and very well-controlled now.
So coming to the… Sorry?
Unidentified Participant
Please continue.
Jaideep Nandi
So coming to our ATL cost, so we had — this company had made large ATL investments in FY ’22 and after that they have scaled it down. So now they operate with the mix of ATL and BTL where the ATL is substantially lower, but BTL is much more. They also — you have to also remember they have beauty advisers at their places. So a lot of it is also sold at the beauty — the way the beauty advisors sell at the shop at the point-of-purchase conversion. So they are extremely adept at that and they are also very, very efficient in terms of churn of the new products. So they — with their beauty advisors, they are able to monitor what kind of trends are happening as far as the new products and new in the various categories and they are able to churn out newer products and also scale-up the older products.
The other great advantage of this company is this is a completely secondary sales focused company. So only when the distributor — so they only do replenishment of stocks of distributors. So in that manner, they are actually even better than a company like Bajaj, where this is a very well-managed efficient company in terms of stocks, etc. So they have a complete channel management in that sense to ensure that there is no — not too much of, let’s say, bad stocks on that or obsolete stocks that happen. So great NPD work and as well as great inventory management.
Unidentified Participant
Yeah. Okay. So how are these products as positioned as compared to Bajaj?
Jaideep Nandi
So they are not comparable to Bajaj instance because that’s not a category we are really into. But if you look at, they are more in the Himalaya — Himalaya range of kind of a pricing adjusts a little lower, but considered to be, let’s say, premium, not the super-premium, but just a little higher than the local ranges, etc. So that’s where they are. That’s why they are on 60% gross margin.
Operator
Does that answer your question, Rachna?
Unidentified Participant
Yes.
Operator
Thank you. A reminder to all participants, please press time one to ask a question. The next question comes from the line of Karan from ICICI Securities. Please go-ahead.
Karan Bhuwania
Hi, good evening, sir. Sir, firstly, I wanted to ask on project ROhan, right? So we have already implemented in a couple of states UP and MP, right? So just wanted to understand what are the green shoots we’re seeing in terms of, say, I understand we have expanded distribution or presence, etc. But what do you see — what are the green shoots are we seeing in terms of sales as to how has it trended over the last couple of quarters if that could — if you could share that, that was a healthy.
Jaideep Nandi
So good question,. I mean, I think we started the project R1 quite some time back and we implemented in a phased manner in both UP and MP. We did not take full EP, UP and MP in the beginning because we wanted to ensure that all of it is monitored. So we have a project R1 team of our own and there is a steering co there as well as well as we have a project manager of project R1, while PWC’s own people are also fully involved. So now the entire states of UP and MP are covered. The objective was to ensure that we — we ensure that everything that is required as far as the improvement in the fruit to-market is in putting place.
So in terms of rationalization of distributors, in terms of conversions of sub-DBs to direct DB satellites to sub-DBs, rationalizing of vans, which we knew that would result in reduction of sales or cost-of-sales will improve. Neither will happen immediately, but all of them will over-time as you convert the rationalize the vans and add them into the subdivery network as it stabilizes, it will give you advantages. So all of these actions as far as both UP and MP is now about 90% completed, 90% as in what was identified as project Rohan and not agreed by Bajaj. Project say and which we had presented and we see saw and then finally said, okay, these are something that we’ll take-up. 90% of those have been already implemented. So just to give you a certain numbers, let’s say, the number of unrepresented towns, etc has gone into 658 towns that we have now taken into coverage.
As far as UP is concerned, from 92 about 112 as far as Madhya Pradesh is concerned. I talked about coverage expansion of direct reach of UP and MP. UP went from 42.4 outlets to 58.6 outlets. That’s about 1.4x and MP from 15 outlets — 15,000 outlets to about 24,000 outlets. So we see great progress that is happening. Obviously, numbers will not immediately show because these are all-in the stabilization process. So now all the investments are happening. So we have put feet on-ground — foot on-ground because to service this larger number of towns and this thing, et-cetera, you will require more people. But as they stabilize and as they see, you will start seeing the numbers slowly and strongly flowing in.
And given this, as we see and as we are so confident that this has been a successful path going-forward, we are now extending into five more states now, eight more states now and a few more we will add at the end-of-the 3rd-quarter. So for the next four quarters, we will aggressively push this so that then this entire attempt where we were trying to ensure our retailing initiatives become stronger, whereby we are program outlets, etc., that programs, retail loyalty programs, etc. Now we are structuring it within our own with a project managed by a consultant. So we wanted more on-ground execution project rather than a strategy project because I think as a company, we required this intervention more than a strategy project. And I think we have had fantastic results coming out of this. And going-forward, we feel that as it scales up in the other states, we will see very good results coming.
Karan Bhuwania
So thank you. That’s very helpful. I’ll come back-in the queue.
Operator
Thank you.
Jaideep Nandi
Thank you.
Operator
Thank you. The next question comes from the line of Raj from Araja Partners. Please go-ahead.
Raaj Macwan
Hello, am I audible?
Jaideep Nandi
Yes, you are.
Raaj Macwan
Sir, how much growth are we expecting for the full-year FY ’26 and FY ’27? Looking at the initiatives which we have done.
Jaideep Nandi
Two things. One is, first and foremost, I wouldn’t be able to give you forward — forward-statements like this. But I can tell you all the growth levers that we have pushed and the kind of interventions further we are taking. See, the — if you look at the overall picture because of the market conditions, et-cetera, the main area where — and obviously that is not only a main area, that’s where the large fall has happened is basically ADHO engineering trade. Other than that, every other lever that we have pushed is working well, including ATHO in the modern trade e-commerce as well as international market.
So one of the biggest focus now we have is to ensure that the core becomes far stronger. One is — so one exercise is ensuring that the wholesale destabilization that was there is slowly coming — is slowly taken-up. We knew 3/4 back itself that it will have a long — little mid-term-ish pain area. So two, 3/4, we’ll have to suffer before wholesale slowly starts coming back. It was not unknown to us, but you have to make this intervention to ensure that in the long-term the company benefits. So now that has happened and that’s why you have seen this Q2 to Q3 wholesale has already had a double-digit growth.
On the other side, retail, which has been not a very strong area for the company. We have been taking initiatives at the company-level itself and a lot of work has happened, but we have really not ever done it to a structural manner. It was more internal data. So structurally, this was identified and that is what has been going on. So we feel that is also going to be a good lever. So as far as GT is concerned, lot of good work is happening. ADHO itself, we are looking at intervention in terms of increase our investments as well as ADH is concerned, how we’ll fund it, maybe we will have to take price increases in ADHO a little more rapidly to ensure that we are able to fund it. That’s the path we are planning to take going-forward. So as a result, you will see ADHO and general trade and obviously you will require some kind of a turn as far as the demand conditions are concerned. As long as that is concerned, that happens and all the other growth are pushed, I think we are in for a good — I cannot obviously promise any number or I can’t even give any forward guidance, but clearly, ’26-27, we should be seeing some good numbers.
Raaj Macwan
All right. I was just trying to understand all these initiatives which we are taking. So when all these initiatives will get converted into numbers, so you are saying FY ’27 will be the year when we can see some good growth in numbers, right?
Jaideep Nandi
So I playing any commentary on that because all of these are initiatives which take time. These corrections maybe you will see results a little more earlier in terms of the initiatives as far as RTN is concerned and some of the others. But in terms of developing brands, et-cetera, you’ve seen coconut already go beyond IN 100 crores, etc. So those kind of — those kind of products will slowly take time and we are in the right path. I mean, you will see in the last five years, there are no products which have been launched by companies which have scaled-up to INR100 crores plus in the personal care space.
I mean, obviously, there’ll be my some this is my thing, but I think some work has happened. And I think those will have to give it time now slowly time is coming, slowly to mature and fructify. We keep investing in these. I think we should see results. I mean, international market has been doing very well. This can give us good growth. So in terms of the control numbers, you should see good numbers coming up. It will require some investment yes, but I think we should see growth. So I will not say go to FY ’24, let’s look at even FY ’26 positively.
Raaj Macwan
Yes. Understood. Because overall, it is a consumer, the investors because the sales have been flat for last couple of years. And if you compare your peers, so they have grown well, only we haven’t been able to scale-up. That’s why I’ve been asking about.
Jaideep Nandi
As I explained, you will have to look at it a little more cut it into categories and see how the growth are with a multi-category company selling multi-care, multi-segment — in multi-category, multi-segment companies versus a single category, single segment, you will have to — if you want to do a like-to-like comparison, then you will have to look at how this particular brand, which is in a single category, single segment has operated against their peers. And I would like to think overall in that sense, we have done pretty well. Yes, there’ll be some misses here and there, which is so for the others as well. So that’s very — it’s a fine balance and I think we are coming out of that balance and now looking at growth getting delivered in the future.
Raaj Macwan
All right. Okay. All the best. Thank you.
Jaideep Nandi
Thank you.
Operator
Thank you. The next question comes from the line of Amit Agija from Hawa & Company. Please go-ahead.
Amit Agicha
Good evening. Am I audible?
Operator
Yes.
Amit Agicha
Thank you for the opportunity. Sir, my question was connected to international business. Like what are your top markets and how do you plan to expand further?
Jaideep Nandi
S international market has been, as we have said about five years back that we wanted to take on the international market after we had got into modern trade, e-commerce, newer products, etc. So we got into this journey about three, three and a half years back and initially we had a small operation in Dubai and in Nepal and that’s about it. And Bangladesh, we are doing some idea. We had closed down our operations. We started our operations in Bangladesh. Bangladesh has been scaling up very well.
We feel there is a huge potential as Bangladesh is concerned because demographically as well as usage wise, it’s very similar to India. They have a higher preference, not for sure, but there is a clear opportunity as far as ethnically, there is a clear. The Middle-East market is another focus market for us and Middle-East is not only just UAE or neither GCC, Middle-East is Middle-East, which would mean all the other surrounding markets, whether it be America extended Middle-East of Afghanistan, Africa and parts of, let’s say, North Africa, et-cetera. So I think that is a market which is a great potential for us.
The third market, which I am personally and we had mentioned it in the last-time is the US market itself. That’s a large export market, huge diaspora. Most of our competitor, huge amount of business. We have tied-up with one of the largest FMCG distributors in the US in the last quarter or last 1.5 quarters or so. And I think that I personally think is a large opportunity as for us. In fact, it has come to a certain stage where now we are looking at using digital advertisement in the US market to ensure that we can create further demand other than organic whatever demand is there. Another market which is of important or of our interest to us is Malaysia where that’s another market where there is an ethnic Indian.
So they are not Indian-Indian sense, but at least there is an Indian diaspora — not as for ethnic Indians out there. So that is a market also of focus, which is what we are also looking. Quite a few more markets and levers we are pushing other than our standard Nepals and all of the world which has found also. We clearly think that international, if we play-out well for the next three, four years can easily go to good low-teens, high-teens even to the 20s percentage of our contribution. But we need to play it well but that is clearly an opportunity and easily doable thing, which we have also demonstrated in the last few weeks.
Amit Agicha
So what is the present contribution of the international business?
Jaideep Nandi
It is higher than it is close to 7% and we have taken it up from about 2.5% to about 7% in and percent I think that we can really continue to scale-up. The growth of international markets 37% in the last three years of CAGR. Obviously, CAGRs are — CAGRs are not that strongly relevant because the bases are low, but I think this is the direction that we have. But more interestingly, more comfort-wise, I think I would like to say two things. One is sequentially as well as in terms of CAGR, ROI in terms of on a continuous basis, the growth have been very healthy.
The other thing is geographically the growth are healthy. It is not driven by one geography, but across all the geographies that you see and it’s part of the presentation as well. All of them have been doing well. We have been working on each of the geographies, new products markets and they have been doing well. So that gives us confidence that going-forward international markets can deliver business.
Amit Agicha
Sir, my last question was connected to like is the company coming up any product innovations in the pipeline like connected to other thing other than the personal care?
Jaideep Nandi
At this moment, we would like to consolidate our position in personal care, personal care market itself is so large, we would like to focus on that. And plus with this acquisition of Banjaras, we have a large number of newer products that comes into our portfolio. That is something that we would also like to exploit and explore across the country as well. So there is enough in the pipeline. Yes, we’ll continue to — our R&D function is pretty robust.
They’ll continue to innovate, continue to look at newer ranges, whether be it in terms of almond drops itself, what can we do on almond drop or some of the other ranges? Yes, that work will happen, but we’ll also look to consolidate the kind of products that we have already launched, balance or look at the new member that we have gone into our fold now look at how we can exploit that. So our focus will be more of the day and also looking at some opportunistic work. Innovation work will continue, but focus will be to ensure the existing range is more put into.
Amit Agicha
Thank you for the explanation, sir, and all the best for the future.
Jaideep Nandi
Thank you.
Operator
The next question comes from the line of Podar from KB Capital Markets Private Limited. Please go-ahead. Go-ahead.
Kaushik Poddar
Yeah. See, you started the present — started this con-call with the statement that your GT trade has gone down by high-single-digit. When do you think that it will come to the neutral level with all the initiatives you have initiated?
Jaideep Nandi
So, as I said, I mean, I think you should see that have — in fact, I mean, in January itself, we have seen good progress happening there. Two things as I said, there are two — there are three parts of this business. One is obviously the wholesale — wholesale, which we had said at the first-quarter itself that we have taken this correction in wholesale. It’s a pain area, it will take time to recover and now we have already seen the recovery happening as far as wholesale is concerned.
So wholesalers already, as I told you, quarter-on-quarter has already grown by about 14%. So — and the number of wholesalers has gone up, which is a good sign that is slowly coming back to normalcy and it will maybe take another quarter or so and then we’d see that coming back. As far as retail is concerned, which is one of the weak areas, urban retail, one of the peak areas is something that work has been going on for the last two, three years. Now structural work is going on in terms of our entire coverage as far as the royalty outlets are concerned, loyalty program outlets are concerned, how do we structure them, how do we make it more attractive to them, how do we ensure attractive US asset. A lot of work is happening on that. So that we feel is going well.
And it’s the rural markets, which is part of that project R1 as well, which is where all this work that we are talking about has been happening in terms of representation improvement, number of coverage, number of feet on-street, et-cetera. So I think you will see good numbers coming in the next quarter. I don’t want to commit any number, but I think most of this work has already happened. Now we should see benefit flowing out of that.
Kaushik Poddar
You said wholesale had grown 14% quarter-on-quarter and this quarter it is growing.
Jaideep Nandi
That is correct quarter-on-quarter. So over Q2, wholesale has grown by 14% in Q3.
Kaushik Poddar
But why didn’t it show-up in numbers?
Jaideep Nandi
No, because the share in Q1 and Q2. So in numbers, it is showing up. Sequentially look at it has actually by numbers, it has gone up. If you look at against last year, etc., still it is coming back because that’s where the number — that’s where in Q1, the drop had happened. So slowly it is recovering. But clearly between Q1, Q2, Q3, clearly we are seeing the. Q1 anywhere was a drop, so because that was a correction that was made. Q2, it has still been coming back, not yet completely come back. Q3, we see substantial coming back has happened. Further — it will continue to continuously stabilize.
Operator
Thank you. Ladies and gentlemen, that brings us to the end-of-the question-and-answer session. I would now like to hand the conference over to the management for the closing comments.
Jaideep Nandi
Thank you so much for attending this call. And once again, apologies for delaying this con-call for by half-an-hour, as you are aware because of this extraordinary item that we have to place. We are extremely happy that we are able to welcome Manjaras to our fold. This is a fantastic valuation that we have been — we have got from the business. And also more than valuation itself, it is also in terms of fitment to our business, this perfectly fits in because it opens up the southern market where our distribution has always been weak. It increases our distribution reach by about close to 3x and all the benefits that we feel can accrue will come from that.
So from that perspective, it’s a great acquisition. We are very, very hopeful that this will give us great positive momentum going-forward. On the other side, as far as the business corrections that we have taken, we have taken a lot of these business corrections and slowly some of them are bearing fruit. So I think going-forward, both through the Panjaraj acquisition as well as our internal work, we will see good performances coming up in the coming quarters, both in terms of top-line as well as bottom-line and we’ll keep balancing both. So thank you once again for coming and joining on this call and best of luck and good evening.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. You may now disconnect your lines.