Britannia Industries Ltd (BRITANNIA) Q4 FY22 Earnings Concall Transcript

Britannia Industries Limited  (NSE:BRITANNIA) Q4 FY22 Earnings Concall dated May. 04, 2022

Corporate participants:

Mayank Mundra — Investor Relations

Varun Berry — Managing Director

N. Venkataraman — Executive Director & Chief Financial Officer

Amit Doshi — Chief Marketing Officer

Analyst:

Abneesh Roy — Edelweiss Securities — Analyst

Percy Panthaki — IIFL — Analyst

Kunal Vora — BNP Paribas — Analyst

Shirish Pardeshi — Centrum Capital — Analyst

Vishal Gupta — PhillipCapital — Analyst

Manoj Menon — ICICI Securities — Analyst

Alok Shah — Ambit Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q4 FY ’22 Earnings Conference Call of Britannia Industries Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Mundra. Thank you, and over to you, sir.

Mayank Mundra — Investor Relations

Thanks, Margaret. Hello, everyone. This is Mayank from the Investor Relations team. I welcome you all to the Britannia earnings call to discuss the financial results of Q4 ’21-’22. Joining us today on the earnings call is our Managing Director, Mr. Varun Berry; Executive Director and CFO, Mr. N. Venkataraman; Chief Marketing Officer, Mr. Amit Doshi; Chief Procurement Officer, Mr. Manoj Balgi; and Chief Development and Quality Officer, Mr. Sudhir Nema. The analyst deck is uploaded on our website. Before I pass it on to Mr. Varun Berry, I would like to draw your attention to the Safe Harbor statement in the presentation. Over to Mr. Varun Berry with remarks on the performance.

Varun Berry — Managing Director

Good afternoon, everyone. I’m very happy to be here with you. I’m taking this call from Cochin where we are having a sales and marketing conference for the year as we go through. So moving to the analyst deck, if you were to move to page number 3, all of us are aware of what we’ve gone through. So we’ve seen many, many new things coming our way, whether it was COVID 1, 2, 3, inflation geopolitical factors, etc. Everyone is aware of that, so I’m not going to stress any of these points. It is a very challenging environment. However, in this environment, we continue to drive our revenue growth and we’ve been reasonably been able to sustain our profitability as well.

Next slide which gives what we’ve achieved in the fourth quarter as well as the full year ’21, ’22. So if you were to look at revenues from operation, the 12-month growth is 15% for the fourth quarter and the 24-month growth is 25% which is fairly healthy. Similarly, if you were to look at full year, our 12-month growth is 8% and the 24-month growth is 22%. Profitability similarly, operating profit 10% growth for Q4 in the 12-month growth and 23% for 24 months growth and for the full year negative 13% in 12 months but for the last 24 months, it’s 21% growth. So I would say reasonably healthy growth.

Moving on to the next slide. This gives us the share numbers. As you will see we’ve broadened the gap with our largest competitor this year. So we’ve continued to make progress as far as market share is concerned. We’ve gained, this is our tenth year of continuous share growth, which I think for any company is a great performance and I am very proud of this factor.

Moving to the next slide. Again same strategic planks; distribution and marketing, cost leadership, innovation, adjacent businesses and sustainability. Now drive — next slide. Driving efficiency in distribution. This year, we made progress. Our rural distribution has gone up from 23,000 rural distributors to 26,000 rural distributors. We’ve made steady progress in our direct reach as well. This had stymied during COVID times but it’s come back and in March 2002, we are up to almost 25 lakh outlets. Hindi belt is growing 20% faster than our rest of India. However, I must say that there are a few states which are emerging as states which need more attention. These are the smaller Hindi states and we are making sure that we work on it so that we can make these grow even faster. Our channels are back. As you know that the modern trade channel had taken a little bit of a step backwards during COVID as people were afraid to go to large stores, etc. but this has come back in ’21, ’22 and the growth is 20% higher than what it used to be pre-COVID in ’19, ’20. We’ve had some very interesting marketing activities. We had relaunched Good Day. We had the Multiple Smiles campaign, which has done very well for us. We have a Good Day Chocolate Chip TVC as well as the relaunch which is doing very well for us. Winkin Cow has become a 100 crore brand for us and we use the TVC for Winkin Cow during this quarter because this was season. Our Milk Bikis Atta is doing well in rest of India. Jim Jam, we had a thematic, that brand is showing a lot of promise for us. We’ve re-launched our dahi brand under the Come Alive brand name and similarly TVC and other brands as well. On cheese, we’ve taken a Protein Promise, which seems to be holding up quite well for us and we hope to scale this up as we go forward.

On our cost leadership program, again, the team has done a fantastic job of creating opportunities and reducing costs. So if you were to look at it in ’21, ’22, we were 5 times cost savings than what we were in ’13 and ’14 and in ’22, ’23 where the situation is looking fairly grim from an inflation standpoint we are doubling up to make sure that we continue to take this trajectory even better than what it has been in ’21, ’22. The cost levers are fairly familiar to all of you. So from a supply chain standpoint, it’s the process automations to improve productivity reducing distance to market, which helps us reduce cost and also provide fresh product to our consumers reducing wastages which happen either in the factory or in the marketplace. Alternate sources of energy, which we are looking at a target of getting to 60% renewable energy. So that’s working quite well. From a material standpoint, our sourcing strategy is focused towards making sure that we get the best bang out of our buck. Backward integration, to whatever extent possible, wherever we have some expertise within the system. We’re also working on reverse auctions for all of our products that we purchase and then optimization of the packaging specifications as the packaging material costs are going through the roof. Other areas are market returns, fiscal incentives, treasury returns as well as reducing commitment charges to some of our contract packers by making sure that our forecasts are very, very close to what our achievements are.

Moving on to the next slide, we’ve had some innovations during this quarter. Good Day Harmony which is a very interesting product is doing really well for us. 50-50 we’ve launched a product called GolMaal in the East. Again, a very promising product. Initial response is extremely good. Then we did a Jeera Marie launch, which was done in collaboration with our consumers. Again, doing very, very good initial responses and we are hoping that this could become a blockbuster in the South. We also did 2 new additions to our Winkin Cow brand which was Kesar and Badam. We’ve re-launched Croissant with the new marketing mix. It’s been relaunched in the South region as of 2 days ago but before that we’d launched a product called Croissant with mixed fruit in it and this has been doing quite well for us and a coconut wafer which is also just getting into the market in the last one month or so. So very interesting innovations and seeing a very good response from the market on all of these.

Our adjacent business, you are going to see some real excitement from Britannia as far as the adjacent businesses are concerned. We have had some learning phase in this area but I think today we are structured very well. We’ve got a very solid team which is handling each one of our verticals, and I feel very about where we are at with our product, some of our partnerships that we are looking at, etc. So, I feel that this is an area, which we are going to ratchet up on certainly this year. So if you look at bakery adjacencies, we’ve seen a high double-digit growth across our divisions. We’ve also seen a healthy consistent margin delivery in Bread & Rusk. As far as Croissant is concerned, as I was telling you, we finally cracked the code on the product. We’ve started to relaunch it. We don’t have — we didn’t want to do it one shot across the country because we want to make sure that we give enough product to the regions before we move it across the country. But I would say that with the South launch we’ve sort of started this process and in the next couple of months, it’s going to be across the country. It’s taken us some time but we are very, very happy with what we have as our final marketing mix.

On the dairy part, strong quarter. We’ve had a robust double-digit growth. As I told you Winkin Cow is now in the 100 crore club. In the international business some challenges in the Middle East because of a distributor change that we did in UAE but Nepal where we’d set up our own distribution and our own manufacturing has given us very, very good results and again Nepal now joins the 100 crore club for Britannia.

Moving on to our sustainability programs and the journey thus far, so as you know we’ve got 4 pillars. One is the people pillar and the programs under this are, we want 50% of women workforce at facility level by March 2024 and we are on track for this. We are looking at 1 lakh plus beneficiaries to be raised through our Britannia Nutrition Foundation. We’ve already done this, we’ve achieved it and now onto a new landmark for ourselves. 60% renewable electricity by March 2024, again on track. Eliminating 20 lakh kilos of plastic trays by March 2023, completely on track. Water consumption to be reduced by 30% through recycling and reuse, absolutely on track. Growth, on the growth pillar, we’ve looked at sodium reduction and sugar reduction in our products by 6% and 8%, again on track on both of those. And on governance we are looking at targeting second or third quartile in the S&P Global DJSI in food product sector this year and as you know that we have moved our DJSI scores from 11% to I think 37% and we are looking at moving them even further. The 3 ESG policies, which is on sustainability, human rights and vendor code, we’ve got those policies documented and we are getting entire ESG targets integrated with the ExCom KPIs. ExCom is me and my direct reports. So, all of us carry those key performance indicators in our targets for the year. So that is where we are at. We are recognized amongst the top 40 of the India’s Most Sustainable Companies by Business World. So we are hoping that this again will become a very, very important plank for us and we will take this to the limit in the coming years.

The other areas, on sustainability identifying and implementing new programs to drive sustainable sourcing, publication of sustainable supply chain manual, which we are working on, continuing to improve that I’ve spoken about the DJSI score and finally development of sustainability report, which complies to all the International Standards of disclosure. So these are the ones that we are working on to make sure that we get completely up to speed.

Now coming to the financials. This is our quarter numbers for the last 12 quarters. So as you will see the last quarter has been INR3,508 crores and the full year has been 8% growth. If you look at the growth of quarter 4, it’s 15% and the 24-month growth is 25% which I had shared with you earlier as well. There have been geopolitical factors which are aggravating the inflationary scenario and I don’t think it’s abating in any way. So what is it done to us. We, because of our forward commitments, we have been able to control some of our costs however the commodities have still witnessed an inflation of 17% and 14% for the quarter and full year respectively. So flour is at 1%, sugar is at 7%, laminates at 20%, palm oil is at 26%, cashew at 35% and corrugated boxes at 21%. However, as I said, we had taken some forward positions which have helped us. What is our response to the inflationary pressures that we’re facing. Obviously, there’s nothing more important than taking the right amount of price increases and which is what we’ve been doing, I must say that we’ve not been able to keep pace with these inflation because we never estimated the kind of inflation that we’ve seen but we continue to take judicious price increases and the other 2 pillars are the value creation for consumers. One is on controlled discretionary spend. We’ve focused on our advertising and sales promotion spends. We’ve controlled our overheads and we’ve leveraged our fixed costs as much as we could and on cost efficiencies program, our cost efficiency programs I have already shared with you that we are now at 5 times the cost efficiencies that we were getting in ’13, ’14. So we’ve accelerated these programs and we’ve looked at IT transformations to make sure that we are completely on top of these as far as our savings are concerned. Our operating profits, you can see that our operating profits peaked during Q1 of 2021 which was a windfall because we’d optimized, we’ve only producing products. We’ve only producing the key brands and the spends were not there because we were running out of product at that point in time. So that was the peak. From there onwards, we’ve come to approximately 14.2% operating margin which is a growth of 10% for Q4 and a 24-month growth of 23% which is pretty similar to what it used to be pre-COVID. We have made sure that we remain handsomely profitable despite all the headwinds that we face.

Moving onto slide number 21 which will show you all of the details on our financials, which I’m sure you have gone through. So for Q4 15% growth on the net sales, 10% growth on operating profit. Profit before tax is growing by 5% and profit after tax at 4%. Similarly, for the full year, if you look at the numbers, it’s 8% on the topline and it’s a negative 18% from the peak that we’ve seen in the previous year. 24-month growth for the full year is still positive, 22% growth on net sales and a 21% growth on operating profit, which is a reasonably good performance. If you look at the ratios down below, profit from operation at 14.3% in ’21, ’22, profit before tax at almost 15% and profit after tax at 11%.

So that is it from me. I’ll open the house for questions. Mayank?

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Abneesh Roy from Edelweiss Securities, please go ahead.

Abneesh Roy — Edelweiss Securities — Analyst

Yeah, thanks. Congrats, Varun, on very good performance. My first question is on the small Hindi state comment and the focus states. You mentioned that more attention is needed for the small Hindi states. And when I see the growth in focus state slight slowdown is there at 1.2 times versus 1.3 times in previous quarter. So, is it more of rural slowdown or is there any specific issue in some of the smaller trades, any competitor intensity has increased there.

Varun Berry — Managing Director

No, so it’s not about competition, Abneesh. What’s happened is that during COVID there were multiple priorities. Obviously everyone was struggling to make sure that all of the KPIs are kept under track. So we did see that some of this — so UP is our largest state. It contributes approximately over 50% of our total Hindi state sales. So UP is blazing. UP is doing really well. There are some small states where we seem to have slipped namely Chattisgarh. MP is okay-ish. MP is not blazing the way I would wanted it to but Chattisgarh has slipped and so has Rajasthan. So those are opportunity areas where we will make sure as a team that we get back to speed. So, that is where I’m coming from. And it’s important that if there are some — and you know, you’ve got to remember that our brand strength in those states is not as strong as what it is in some of our stronger state. So a little bit of slippage, a little bit of less face time with our people because of COVID etc. it hampered our progress to an extent, but it’s a matter of time. We will definitely get back on those small states as well.

Abneesh Roy — Edelweiss Securities — Analyst

Sure. Thanks. My second question is on the price hike. Initial expectation was that FY23 will need around 7% price hike over and above the 10% hike which was already taken in ’22. Post that things have clearly turned more adverse currently. So what is the current expectation on price hikes and FY ’22 65% hike was coming through grammage cut. Will there be any change in that ratio.

Varun Berry — Managing Director

No, it will probably be — the grammage cut might end up being even higher than that. But see the point is sitting here, I don’t know where we are headed as far as inflation is concerned. Clearly, 2 or 3 concerns. One is the wheat production in the country has been lower than what we had expected. While there was a lot of noise about exports and we can feed the world etc., the point is that the crop has been poorer because of the severe heat. So the wheat grains have shriveled up a bit and even the production has been lower. So we don’t know where that is going to lead us and you know that between Russia and Ukraine, they produce almost 100 million tons of wheat which might not get harvested. That gets harvested as soon as the snow melts and in Ukraine, there are no meant to harvest it because they’re all involved in fighting the war. So there is going to be pressure on that front, both nationally and internationally. And similarly, palm oil, as you know, there are — Indonesia has stopped exports. So there are ships with 3 lakh tons of oil, which were about to sail and now they have been stopped. So where that will go, nobody seems to know. I’m sure it will get cleared up. It’s a matter of time. Luckily for us we are covered till things become better but I would think that this is a year where we’ll really have to be on our toes and take calls on a month-to-month basis and there is no way that any other activity can fulfill what the inflation, the pain that inflation is going to give us. It will have to be a price correction. So while we will try and be judicious about it and make sure that it doesn’t impact the consumer in a big way but we will have to take some tough calls.

Abneesh Roy — Edelweiss Securities — Analyst

So Varun, just one very small follow-up on this question only, and that will be my last question. So in Q3 you had minus 4% to minus 5% kind of impact on volume because of grammage cut, which I think will be fairly similar this quarter also but on a reported basis, you are seeing mid single-digit volume growth. So what would be the industry volume growth in your sense in Q4. And so your share gains, is it coming only from the number 2 player or even from the smaller player.

Varun Berry — Managing Director

So what happens, Abneesh, is you’ve got to understand that during severe inflationary times the smaller players are the ones who get impacted the most. So gains are coming from the smaller regional players and obviously from the number 2 player as well. So it’s a mix of both and the industry growths would be flattish to negative.

Abneesh Roy — Edelweiss Securities — Analyst

Thanks, Varun. That’s all from my side. Thanks.

Operator

Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead.

Percy Panthaki — IIFL — Analyst

Hi. Just continuing on what Abneesh was talking about in terms of the price increases, so I’ll make the question rather simple. Assuming that the current spot prices remain where they are for the next 12 months, what kind of additional price hikes do you need to take in your portfolio.

Varun Berry — Managing Director

That’s what I was trying to explain to Abneesh. It’s very difficult to call that because it’s such a dynamic environment, it will definitely be more than what we had estimated in the beginning but to what extent, only time will tell. If things on palm settled down, if the war gets over, if, if, if, it’s all about the if’s, Panthaki.

Percy Panthaki — IIFL — Analyst

Right, sir. That’s why I put a simplifying assumption there saying that if the spot prices as of today continue for the next 12–

Varun Berry — Managing Director

Did you say that, I’m sorry I missed that. If the spot prices continue it will probably be about a 10% increase, that would be required.

Percy Panthaki — IIFL — Analyst

Over and above what’s already taken.

Varun Berry — Managing Director

Yes.

Percy Panthaki — IIFL — Analyst

So 10 plus 10, a total of approximately 20.

Varun Berry — Managing Director

Right.

Percy Panthaki — IIFL — Analyst

Okay. Secondly, just to understand on sort of adjunct categories, what kind of slightly longer-term vision do you have over let’s say a 5-year horizon. Where do you see this adjunct categories, which one do you think will see the fastest growth or become the biggest and where do you see the biggest opportunity which can be sort of extracted over the next 5 years. That’s part of the question. The other part of the question is that the salty or savory snacks category, which you had sort of launched in South India under the name of Time Pass, what really needs to happen for that category to become really big for us because I mean ultimately that category is something which works on width and breadth of distribution, which is something that we already have with us. So we already have advantage at the starting point and what really is preventing us from becoming one of the bigger players in in this category.

Varun Berry — Managing Director

So let me answer your first question, I think obviously as I’ve said during the presentation, I feel very good about the way we are structured today. The way I am here with the sales team, the entire sales team from across the country is here. And this morning, we were talking about how we become a leader amongst more categories than just a few. And I think the sales team is very clear about what we can do and how we can move forward. I also think that we’ve got a fair amount of strength. We’ve got that threshold volume. We’ve got reasonable brands in most categories. So I would say obviously the big ones will continue to be the larger ones. Cake, I think we’ve got many initiatives. So I think cake will definitely — cake and rusk will definitely have the potential to become 2000 plus crore kind of businesses for us. We have a lot of hope in dairy and some very, very exciting initiatives there. We know that Amul is the Big Brother but I think we can do a lot more in the value added space. As you might or might not know we’ve we’ve crossed the 500 crore mark in dairy after many years of striving for it. We’ve had very good growth this year and we’ve got great plans on the backend. Croissant is something where I feel very excited about because one, it’s got entry barriers. It’s not a category that everyone can launch. It requires a lot of attention because it’s a new category to the Indian consumer. So you really have to fine-tune it to an extent where the consumer tells you that this is what I want. And I think we’ve reached that stage. It probably took us a little longer than I would have imagined but today I feel very, very good about where we’re at. And if you get an opportunity, please try our new product which should be in your markets in the next month or so. So, feel very good about that. And also, we are not shy to evaluate partnerships wherever required. We have been working on some, and there are definitely opportunities there, which could be very, very exciting. So I personally am working on this area to make sure that we come up trumps as far as the adjacency business is concerned. What was your second question, on salty. So on salty, see, you can’t do everything like you’ve got everything ready because finally it’s a little bit of sussing the markets, sussing the consumer, understanding, while I have run a salty business in the past, but you know that that business was run in multiple countries and it had been fine-tuned over millions of consumers and all of that. Brands had been constructed years years ago before Pepsi had bought that business, etc. So it takes a long time. So we are being very careful and we are really reading into what our consumers are telling us in our test markets. We don’t want to be in a situation where we go hell for leather. We launch it across the country, and then we realize that it’s a situation where we will have to take our products back. So it’s taking a bit of time. It took us a bit of time with Croissant as well but we’ve got to the finish line. Similarly, I would say I would rather be careful than aggressive in this area of adjacencies.

Percy Panthaki — IIFL — Analyst

Right, sir. That’s all from me. Thanks and all the best.

Varun Berry — Managing Director

Yes, thanks.

Operator

Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead.

Kunal Vora — BNP Paribas — Analyst

Yeah, thanks for the opportunity and congrats for a very good quarter. First question, how large is the contribution of lower unit pack and are you looking to vacate some of the price points, In our recent days, we heard that you would withdraw [Phonetic] on the price point in certain markets. I mean are these price points like meaningful for you and how do we see the impact of this.

Varun Berry — Managing Director

See, low unit price points in a country like India are impossible to vacate. Yes, over the year if you look at it, maybe 15 years ago, there used to be a large contribution of 2 rupee and 3 rupee packs which have become miniscule today. Parle used to sell a lot of 2 rupee and 3 rupee packs. We also used to have a reasonable contribution of 2 rupee, 3 rupee. It’s all migrated to 5 and 10 and thereafter. So I think, I don’t think we’re in any position to vacate the 5 rupee segment at this point in time, but as you know, as the world evolves, as the consumer evolves, and as we get through all of this inflation, time will tell when is the time to really press the pedal and move on from 5. But I don’t think we are in any position to do that right now. It’s about the price point packs, the 5 and 10 are approximately 50-55% of our total mix. So it’s fairly large and it continues to be in a country like this, where you have a lot of bottom of the pyramid consumers, it continues to be a staple for a lot of consumers in a lots — lot of parts of the country. So that’s where we are at and we will have to nurture that business.

Kunal Vora — BNP Paribas — Analyst

You still have 2 rupee price point, right, and like how large would that be.

Varun Berry — Managing Director

Our 2 rupee is very small. We don’t have anything to really ride about, maybe few back share here and a few packs there. It’s not like fixed segment at all.

Kunal Vora — BNP Paribas — Analyst

Okay, understood. Second and last question. You mentioned you crossed 500 crore mark in dairy. I believe you were at 500 crore mark even 2 years back. I mean I the contraction [Phonetic] in September ’20. You mentioned you were at 500 crore and you aspired to be at about 2000 crore by ’25. Where are you–

Varun Berry — Managing Director

We were never at 500. We might have aspired but we were around 400 crore mark.

Kunal Vora — BNP Paribas — Analyst

Correct, 400.

Varun Berry — Managing Director

400 crore mark and this year our growths have been good. So we have crossed the 500 which is no great achievement frankly. If you ask me, getting to 500 crores in so many years of launch is no great achievement but you’ve got to celebrate your small victories and that’s what we are doing.

Kunal Vora — BNP Paribas — Analyst

But that time you were aspiring to be about INR20 billion by in 5, 6 years. Are you on track for that or that looks difficult considering the changes in situation and also if you can update us about the Ranjangaon plant dairy [Indecipherable] now.

Varun Berry — Managing Director

So yes, we would want to be at least a 2000 crore business in dairy in the next 5 years. Maybe it’s a moving target. Maybe, I said that 2 years ago, and I’m saying it again. So don’t hold me on it but this time certainly we would want to get to INR2000 crores. The Ranjangaon plant is moving quite well. We’ve got all the equipment. The raw cheese manufacturing equipment should get commercialized in the next 2 or 3 months. We’ve got a yogurt line. We’ve got a powder line. We’ve got a drinks line. All of that should get commercialized in the next 3 to 4 months. The only one which will take at least 6 to 8 months is the process cheese line which should be done by December or January. So by January of next year we will be up and running. We’ve already moved up on milk collection pretty considerably and we will be — what we are trying to do is get our milk collection to the highest level possible because even if we have excess milk, we will consider making powder milk out of it and using it in our bakery facilities. So we are going to run that plant on full efficiency and we are feeling very excited about it. We’ve got some very exciting products as well. Possibly a few interesting partnerships as well. So we are feeling very good about where we’re at. And I think this year is going to be the year where we will take the turn as far as dairy is concerned as well this fiscal year.

Kunal Vora — BNP Paribas — Analyst

That’s it from my side. Thank you, sir.

Varun Berry — Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Shirish Pardeshi from Centrum Capital. Please go ahead.

Shirish Pardeshi — Centrum Capital — Analyst

Hi Varun and team. Thanks for the opportunity and–

Operator

Sorry to interrupt you. We cannot hear you very clearly, sir.

Varun Berry — Managing Director

Actually I can, I can hear him.

Shirish Pardeshi — Centrum Capital — Analyst

Am I audible now?

Operator

Yeah, Shirish, you are audible.

Shirish Pardeshi — Centrum Capital — Analyst

Yeah, hi, Varun. Thanks for the opportunity and congratulations to the whole team. I have got 3, 4 questions, I’ll try and shortcut put it together. One, if you can allow last 2 years we have inched up the market share. I mean, we have no idea but if you can help us where we stand today, how much market share gain we have got in last 2 years, especially from FY ’19 onwards. Second is you spell out something on the international because we keep hearing that we’re trying to do something from the distribution channel perspective but when do we see the meaningful contribution from the international business. And third question is on ICD. When I look at the filing today morning. I think directionally what I gather is that ICD has come down while all the time ICD has gone up. So against 811, ICD has directionally has come down to 754, but maybe if you can help what is it that you’re looking or is it going to be going up or is it going to come down and what timeframe.

Varun Berry — Managing Director

Shirish I missed your first. The second was international, third was ICD. What was your first question.

Shirish Pardeshi — Centrum Capital — Analyst

Share, market share.

Varun Berry — Managing Director

Okay. So share growth has been fairly good, Shirish. We don’t give numbers because it’s a syndicated study, and that’s why we give you the trends but approximately we’ve gained about 0.8 share points or 80 basis points in the last 2 years and that’s been pretty good because the fact is that it’s been a continuous market share growth story for us. I feel good about that. International, yes, see, if you think about international, we are not looking at a big bang change to our international business. It’s very easy for us to look at big acquisitions, etc. but we are very careful about making sure that we get our paybacks if we are looking at big acquisitions. What we did with Nepal is a testimony for a very good call that we took. We’ve turned that from a 10, 15 crore business to a 100 crore business. So that’s a good call. Similarly we’ve got some calls that we’ve taken in Africa as well. We’ve got 2 contract packers that we’ve put in place. So hopefully slowly and steadily we’ll gain some base in these markets and be able to set up a foundation for growth for the future. Yes. UAE, which is our largest business has been a little bit of a pain and the pain was because of our distributing partner there. We were not able to get them to implement and execute the way we thought we could get a lot more business. We’ve got a very, very good partner now but you got to remember that these markets changeover takes a lot of time See what happens is, if you’re changing over, first you have to move all the stocks which are — with the other partner to this partner. So your secondary sales might not get impacted but your primary sales do get impacted. Even settling in you have to register the new distributor. So, 3, 4 months go away in making sure that all of the accounts have your new distributor registered and then you start to sell. So it’s a very painful process but we went ahead with it because we knew that we will see a benefit from this as we move forward. So I think we are doing some interesting stuff in international. It’s not as we had envisaged, I must admit. We haven’t gained as much heft in the international business but we will continue to make sure that we get some interesting stuff going there and get our bases fixed and the other parts of the business have been doing really well. So Europe, Americas, even Australia, Southeast Asia have been growing hefty double digits but they’re all on the basis of exports and they are small businesses. So it’s not making that much of an impact but I think again this year could be a year of change as international is concerned as well. On ICDs Venkat, could you comment on that please.

N. Venkataraman — Executive Director & Chief Financial Officer

Yeah, yeah. So the total group ICD as of March ’22 stands at 740 crores. Bombay Dyeing of 350 crores and Bombay Burma of 390 crores and this is against March ’21 of 790 crores, which is about 294 for Bombay Dyeing and 500 for Bombay Burma, and both of these are within the approved limits for both the companies.

Shirish Pardeshi — Centrum Capital — Analyst

But Venkat, I got that. Just if you can help, what is the roadmap. Is it going to go up because on a quarter-on-quarter basis, you see up and down but is there any strong case that ICD will get resolved maybe in the next 4 quarters.

N. Venkataraman — Executive Director & Chief Financial Officer

So it’s not going to go up. That is for sure. The attempt is to see how we can dilute them as we go forward.

Shirish Pardeshi — Centrum Capital — Analyst

Sure, sure. Just one question because normally at year-end you give the new product contribution. So in 40,000 crores, what is the FY ’22 new product distribution if you have and if you can share any guidance or targets for FY ’23.

Varun Berry — Managing Director

Sorry, for FY–

Shirish Pardeshi — Centrum Capital — Analyst

’22 against that 14,000 crore what we have reported in the top line, what is the new product contribution.

Varun Berry — Managing Director

It’s about 4.5%.

Shirish Pardeshi — Centrum Capital — Analyst

And this number will be higher because we are now getting into dairy for FY ’20.

Varun Berry — Managing Director

Yes, for sure.

Shirish Pardeshi — Centrum Capital — Analyst

Okay, thank you and all the best to you and the team.

Varun Berry — Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Vishal Gupta from PhillipCapital. Please go ahead.

Vishal Gupta — PhillipCapital — Analyst

Yeah, hi Varun, 2 questions, one being on the brand front. So 50-50 Potazos I think you extended from East India to other parts of the country. I just wanted to understand performance on that as well as on Milk Bikis because when Milk Bikis there are very big plans. So if you can give just some color in terms of distribution reach, growth rate, advertisement [Phonetic] planned given that you’ve expanded from the strongholds of Tamil Nadu and Kerala to rest of India. And second question is on the capex plan for FY ’23.

Varun Berry — Managing Director

So I’ll let Amit Doshi who is our new CMO to answer the first 2 questions and then I’ll tell you about the third one.

Amit Doshi — Chief Marketing Officer

Hi, hi. I think currently both of the brands, Potazos and Milk Bikis have been going quite strong. Potazos as you rightly said, we’ve expanded to other parts of the market and we’re getting, we’ve been getting good response to to the extension to these markets. Now one has to remember that this category is new to the market. It’s a novel format and therefore we will really have to continue to commit to invest and grow and expand the adoption of this category. So therefore as a marketing unit, that’s what we’re really focused on how do we create more trials, build more awareness for the format. And then just to give you a perspective in organized trade, we’ve actually seen a very, very quick ramp up for Potazos, which again is a great testament to the product. I mean that’s where the early adopter consumers are. Now we just want to continue to build our story on the differentiated cracker segment. That’s where most of the growth in the category is coming and we’ve recently after Potazos, we’ve recently launched another unique product called Biscafe. It’s a coffee cracker and is being positioned as the perfect accompaniment to coffee. Now, if you look at the beverage consumption market in India, there are a lot of accompaniment to chai but really none for coffee and this, we believe, is going to be a really, really unique experience for consumers. So together, Potazos and Biscafe both will lay a foundation for a very, very new turn in the category. So that’s on Potazos. Milk Bikis, we continue to expand in the rest of India. Now if you look at some of the inflationary trends that Varun spoke about combined with some of the challenges that we faced in a few Hindi markets, we’ve had a little bit of a plateau, but again that’s a short-term blip. We — the head space for growth is huge if you look at the low-value added glucose category. So while there have been a few short-term blips in the longer term we don’t see anything going away. We continue to invest to make sure that we upgrade consumers to a higher value added product.

Varun Berry — Managing Director

Right. And coming to the capex, we’ve got 3 plants coming up this year. We’ve got the UP plant. We’ve got the expansion of Ranjangaon, expansion of Odisha and we’ve got the Tamil Nadu plant coming up. So there will be a reasonable investment in all of these, about 250 crores each of two these plants and the expansion will be approximately 100 crores plus the finishing up of the dairy plant in Ranjangaon. So the total capex, Venkat, is going to be in the region of INR650 crores to INR700 crores, this year?

N. Venkataraman — Executive Director & Chief Financial Officer

Yeah, correct.

Vishal Gupta — PhillipCapital — Analyst

Okay, The last question from my side on dividend payout, have you finalized some policy because last 2, 3 years, we have seen extraordinary dividend payout. So any particular policy, have you framed out on that front.

Varun Berry — Managing Director

Venkat, you want to comment.

N. Venkataraman — Executive Director & Chief Financial Officer

Yeah, so the policy is already in place. There are various parameters that we have put down there. And we also essentially say that we want to be in line with the other FMCG companies in the country.

Vishal Gupta — PhillipCapital — Analyst

Okay, thank you. Thanks.

Operator

Thank you. We would request participants to please limit your question to 2 at a time. Thank you. The next question is from the line of Manoj Menon from ICICI Securities, please go ahead.

Manoj Menon — ICICI Securities — Analyst

Hi, Varun, Venkat and team, hi. Just only one question, Varun. Just wanted to pick your brain on your thoughts about market share, let’s say 5 years out from today. The context of asking this question is the way I understand, let’s say you have somewhere close to 40% share. And you don’t really want to have a bigger share in the glucose segment which is possibly 30% or higher of the market. So if I take up 40%, which is your market share and change the denominator from, let’s say the addressable market, which the way you have defined it from, let’s say, 100 to 70, you probably have got little more than 60% market share in the relevant categories in which you want to play in. So in that context and please amend any of the numbers, which I said which could be materially incorrect. Just wanted to understand your thoughts on market share with a really medium to long-term view, sir. Thank you.

Varun Berry — Managing Director

So, Manoj, the way I look at it is very simple. Our market share in the urban markets is approximately 39%. And our market share in the rural market is 27%, 28%. If you were to equalize our rural share to our urban share, we would get to that number that you talking about. Now, how do we equalize our urban share to our rural share, you’re absolutely right. Glucose plays a very important role in rural markets but in the last 6, 7 years, we’ve made inroads into that market with more premium products like Good Day 5 rupees, like Milk Bikis, like Marie. So we will continue to do that. We are not breaking the market into segments. We are saying that this is a consumption of biscuits whatever kind of biscuit it maybe, consumers are always willing to make a leap of faith and try a biscuit which is different, which is more premium maybe, which they would stick to or not stick to but that is the way we are looking at the market and we will find ways of making sure that with–

Operator

Ladies and gentlemen, we lost the line from the management. Request you to continue to hold while we join them back. Ladies and gentlemen, thank you for patiently waiting. We have the line from the management reconnected. Over to you, sir.

Varun Berry — Managing Director

Sorry, sorry guys got disconnected. Can you hear me.

Operator

Yes, sir, we can hear you.

Varun Berry — Managing Director

Okay. So I was talking about market share and so that really is our objective. Our objective is that we’ve got arsenal. We’ve got arsenal of brands. We’ve got an arsenal of price points, products. We have to get to that with whatever we have in hand. Yes, there will be — there are products like Tiger Crunch which we haven’t taken to its limit. Tiger Crunch is in the value space doing extremely well, growing very high double digits, very, very high double digits in areas where it is present. It’s quite a bit like Milk Bikis which was only in the South and not in other places. So similarly Crunch is in maybe 4 states and does extremely well. So you’ve got to take it, we’ve got to make that a weapon. And by the way, glucose is not 30%. G lucose is more like what 20–

Amit Doshi — Chief Marketing Officer

15-20, 15 odd percent.

Varun Berry — Managing Director

It is about 18% now. It’s come down pretty dramatically from what it used to be, okay. Margaret, can you move on.

Operator

Mr. Menon, are you done?

Manoj Menon — ICICI Securities — Analyst

I had only one question. Thank you so much.

Operator

Thank you. The next question is from the line of Alok Shah from Ambit Capital. Please go ahead.

Alok Shah — Ambit Capital — Analyst

Yeah, hi. Congrats for a good performance. My first question was are you seeing consumers moving from 5 rupee to 10 rupee price points because of grammage cuts. So essentially, the question is the number of packs that you would have sold, say a year back at 5 rupee and 10 rupee price point, are you largely seeing any shift over there.

Varun Berry — Managing Director

No, we haven’t seen any shift like that. So see, it depends on your laddering. If you’re giving better value at 10 rupees then consumers might shift but our value is not dramatically different. The laddering on our value is maybe slightly better but not good enough for people to move from 5 to 10.

Alok Shah — Ambit Capital — Analyst

So would that be a strategy in the coming year considering the inflation is the period where one would look at using that as a strategy. Just wanted to pick your thoughts on that.

Varun Berry — Managing Director

Could be but it’s a huge leap. So consumers sometimes just have 5 rupees to spend. And if we do not provide them that opportunity or we provide an opportunity which is sub-optimal from a value standpoint, then they will move to some other products and the products that are available in the market are ranging from other food categories to certain snacks which are being freshly made at the outlet to bakery biscuits which are available in open form, etc. So we’ve going to be a little careful that we don’t reverse this agenda of gaining from the bottom of the pyramid snacks.

Alok Shah — Ambit Capital — Analyst

Got it, got it. My second question is on this roughly 4% to 5% kind of volume growth. So wanted to check, is this coming from say a larger share of Milk Bikis in South or is it largely coming from Hindi belt. If you can just give us one step more granular breakup into the regions or the products from where this volume growth is coming.

Varun Berry — Managing Director

So it’s a little bit of — it’s also the mix of the product categories that we have. So within biscuits, yes, it is because of, you know, we’ve been selling a lot of Tiger Crunch and Tiger Crunch, by the way is not unprofitable segment like some of the other value segments. So it’s a reasonably profitable SKU for us and a reasonably profitable brand for us. So we’ve been growing like 30%, 35% on that. Milk Bikis has been fairly good growth for us. So all of those are adding to this plus our milk drinks have been doing really well, the Winkin Cow has been doing very well for us. So I think it’s a little bit of product mix and a little bit of mix between our categories.

Alok Shah — Ambit Capital — Analyst

Got it. So as this adjacencies will scale up, which would mean that this volume growth per se could be little higher. So maybe now it would be premature, but going ahead, would you like to give a split of biscuit volume and the adjacency or something of that sort. Is that sort of thought process.

Varun Berry — Managing Director

Yeah, I know it’s possible but once they adjacency businesses get to a certain scale, we’d love to do that.

Alok Shah — Ambit Capital — Analyst

Sure, sure. And my last and final quick question is to my reckoning for the first one you mentioned with respect to the new team for the adjacent business. So is that a change in the — complete change in the teaming or reporting structure or any of those can you share. Thank you.

Varun Berry — Managing Director

So that’s a good question. So what we’ve done is we’ve tried to make, so it’s a change in structure. We’ve got young leaders who are very aggressive and we’ve got different verticals. Actually, that’s a good point. Maybe in the next meeting with all of you, I should share that on how we are structured or maybe I did share it with you last time. So we’ve got verticals. Obviously biscuits is one, then we’ve got cake, rusk and bread as another vertical. We’ve got dairy as the third vertical, and we’ve got new businesses, which is croissant, wafers and all of the new businesses that we are looking at to be the fourth vertical, and we’ve got very solid young leaders who are very deeply engrained into their businesses and what we’ve tried to do is we’ve tried to create agile structure so that decision making is not like a large organization that Britannia is but they can take some quick and dirty decisions when whenever necessary so that we don’t suffer the reasons for a large company not being agile. We want these guys to operate like start-ups and that’s really helping us. First, the quality of people and second, the teams that we’ve set up under them. And third, the agile structure. All 3 of them are helping us.

Alok Shah — Ambit Capital — Analyst

Got it. Considering the paucity of time, maybe I will not ask a follow-on but we would like to maybe in the next quarter understand much more on the compensation structure, their ESOP or something of that sort to get more comfort on that. Thank you.

Operator

Thank you, ladies and gentlemen. Due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments.

Mayank Mundra — Investor Relations

Thanks everyone for spending time with us on this call. We look forward to interacting with you again. Thank you.

Operator

[Operator Closing Remarks]