Marico Ltd (NSE: MARICO) Q1 2026 Earnings Call dated Aug. 04, 2025
Corporate Participants:
Unidentified Speaker
Saugata Gupta — Managing Director & Chief Executive Officer
Pawan Agrawal — Chief Financial Officer
Analysts:
Unidentified Participant
Abneesh Roy — Analyst
Nitin — Analyst
Arnab Mitra — Analyst
Harit Kapoor — Analyst
Nihal Mahesh Jam — Analyst
Aditya Soman — Analyst
Vivek Maheshwari — Analyst
Arushi Lunia — Analyst
Mihail Shah — Analyst
Percy Pantaki — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Marico Limited QN FY26 earnings conference call. We have with us the senior management of Marico represented by Mr. Gupta MD and CEO and Mr. Pawan Agrawal Group CFO and CEO International Business. 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 then zero on your touchstone phone. Please note that this conference is being recorded before we get started.
I would like to remind you that the Q and A session is only for institutional investors and analysts and therefore if there is anybody else who is not an institutional investor or analyst who would like to ask questions, please directly reach out to Marico’s investor relations team. I now hand the conference over to Mr. Sagata Gupta for his opening comments. Thank you and over to you sir.
Saugata Gupta — Managing Director & Chief Executive Officer
Hi everyone. Good evening to all those who have joined the call. I would like to start with a narrative on the operating environment during the quarter gone by, after which I will touch upon our performance and strategic objectives going forward. During the quarter we witnessed stable to improving demand trends in India across urban and rural. Premium categories continue to outperform the mass segments while alternate channels like modern trade, E commerce and especially quick commerce continue to lead growth while general trade also moved into a growth after some quarters as a result of focused initiatives, improved execution and the ongoing progress of Project Safety.
Looking ahead, we are optimistic about a gradual and broad based recovery in consumption sentiment supported by easing retail and food inflation, a favorable monsoon, increased government spending and higher msp. Moving on to the quarterly performance, we have continued to deliver a sequential uptick in underlying volume growth in India which is nearing double digits, backed by improving traction in the core aided by GT improvement and sustained momentum in our new businesses. Offtake swings have been encouraging with nearly the entire business either sustaining or gaining market share and over 80% of the business sustaining on improving penetration.
Revenue growth in India business reached multi year highs as the strengthening volume trajectory was supplemented by pricing actions in core portfolios taken in response to the sharp inflation in key commodities like copra and edible oil over the last 12 months. Delving further into India business. I will now share some perspective on the performance of our key categories. Parachute has continued to demonstrate resilience amidst the hyperinflationary conditions in Copra prices. In such hyperinflation, while consumption typeface is typical, Parachute has exhibited minimal volume impact and consolidated market share, underscoring its inherent strength in terms of price inelasticity and deep consumer trust.
Despite multiple rounds of price increases and MLH reductions amounting to an effective price increase of 60% plus after normalizing for MLH, the brand remained in growth territory during the quarter. We have delivered this growth despite consciously rationing certain low margin volumes to protect brand profitability. During the quarter the brand continued to gain share in modern trade e. Com While pricing transitions are in fact quicker and the new prices have already hit the shelves, we understand that the unprecedented levels of inflation in this particular cycle has been due to the supply demand graph created by a combination of crop yields due to an uneven weather patterns in the first half of 2024 and speculative activities and some unseasonal rains in May, April and May and the temperature fluctuation this year which further extended this cycle and led to a sharp spike in April period when normally conversion starts, but this year because of rains the conversions got delayed.
Principally, it is the inelasticity of certain sources of demand that accentuate the demand supply gap during such times. As you know Copra can’t be import. While the length and severity of this inflationary cycle poses short term challenges, we have been able to hold on our ground and deliver stable outcomes. On the back of pricing and enduring equity of Parachute, the brand has successfully navigated multiple hyperinflationary cycles whether it’s in 201415 or over a 18 to 24 month cycle in 17 and 19 where we had also taken around 35% price increases and still delivered 6 point they delivered 5.5% growth over a period of 1719 and a 6.5% growth in 2014.
The scale of operations, coupled with resilient back end capabilities and prudent inventory management continues to reinforce a competitive edge. That being said, we believe the current market conditions are unsustainable and the copra market should settle down over the course of this fiscal given the forecast of monsoons and a decent progress so far. In fact, prices have just come down around 12% from the highs in the last two weeks. As consumer pricing gradually normalizes, we expect Parachute to chart meaningful recovery in volume growth given our competitive advantage under such condition where the smaller players are out of the market.
SEOFOLLA Oil bounced back to deliver mid single digit volume growth which is in line with our medium term aspiration. We expect the brand to be steady on a full year basis. During the quarter we launched Safola Cold Press Oil range on E Commerce and Quick Commerce platform. This is in line with the purpose of the brand to reinforce healthy cooking choices in Indian household and premiumize its play value. Added Hair Oil had a strong step up in its recovery led by sustained momentum in the mid and premium segment. The franchise gained 140bps in value market share this quarter on a mad basis.
We are confident of maintaining a double digit growth momentum in the franchise throughout the year on the back of the sharper brand activation supported by a strategic pivot from trade led investments toward brand building and therefore increasing SOV especially in the mid and premium segments along with enhanced direct reach through Project SETU which invariably benefits val the Foods Portfolio scaled in line with expectations. The core Sapola franchise grew in double digits while True Elements and Plixes plant based nutrition wins sustained accelerated growth momentum. We remain on track to deliver over 25% growth this year and over the medium term while steadily improving profitability.
During the quarter we also expanded our Muesli range with two variants. We’ll continue the innovation momentum and expand the TAM of Sapphola through extension into relevant adjacencies. We have a clear path for each of the three food brands and see tremendous TAM expansion opportunities across the board and some of it we have shared in the presentation for plic. Central Elements Premium Personal Care continue its strong growth momentum during the quarter led by the Digital First Portfolio. The Digital First Portfolio comprising Biodo, Just Terms and the Personal Care Portfolio. PLICS exited the quarter with an ARR of over 850 crores, scaling up well ahead of our earlier targets.
Given this trajectory, we are on track to reach 2.5x of FY24ARR by FY27. We continue to operate with a keen eye on the profitability and are striving to deliver double digit EBITDA margins in this portfolio by FY27. Moving to international business we recorded high teen constant currency growth maintaining a stellar momentum. Bangladesh delivered a robust performance underpinned by broad based growth across core and new franchises while Vietnam had a muted quarter. Strategic interventions under view Expect a gradual recovery in this business in the quarters ahead in mena, the accelerated scale up in the Gulf region, Egypt continued supported by healthy traction and new franchises and sustained market share gains in our Core and in the npd.
South Africa was static this quarter, but we aim to achieving our full year growth aspirations. To sum up, we have started the year on a strong footing with both India volume growth, overseas business constant currency growth and the consolidated revenue growth trending positively and reaching multi year highs. We firmly believe that we are in a virtuous cycle by virtuous growth flywheel and like to share a perspective on why we see it that way. Over the past few years the CPG landscape has undergone significant shifts shaped by macro events and evolving consumer behavior. During the COVID period, while categories like food, health and hygiene benefited from natural tailwinds, we believed it also brought a degree of complacency among CPG players since the share of wallet was artificially shifting in their favor given that the lockdown created situation where other expenses, whether it’s out of home, whether things like travel entertainment was not being done.
Subsequently during the inflationary environment following the Ukraine war, the sector delivered pricing led top line growth and amp and other cost led margin expansion and some of them got rewarded in emerging markets. However, we believe the core mantra for consumer companies must remain centered on driving volume led growth which is far more sustainable and enduring lever for growth. We draw a lot of confidence from 99% of the business gaining sustaining market share in India which has happened after a while. We are consciously staying away from the trap of optimizing margins at the cost of long term brand investments.
We’ve also resisted steroid based selling, organic spend and investing in below the line of price led selling. We believe our resource allocation strategy over the past few quarters is paying off. We have also done significant SKU rationalization so that we believe in fewer, bigger, better. We also seeing the positive impact of Project SETU led initiatives in rural and on mid and premium segments of Waho. As we scale this up further in urban, we expect it to catalyze growth in food and PPC categories like serum and male grooming. In addition to inflationary cycles being conductive to GT ROIs, our prior investments towards reinvigoring the GT distribution system have already begun to yield early wins with the revival of growth in the channel after a long hiatus.
In addition, this high top line growth is helping in improvement of the ROI of our digital distribution partners after a long time. Next, the scale up of our digital brands has opened new frontiers for diversification innovation offering avenues for accelerated revenue and profit growth. In the medium term. Our brands are earning recognition with three of our digital brands featuring in the latest edition of the Insurgent Brands list published by one of the top VCs and one of the big CMBB management consulting firms. In addition to that, we have started the process of cost synergies amongst the digital brands as well as data synergies.
Coming to our strategic objectives for this year, with high single digit volume growth in India as our base case, we’ll strive to deliver double digit volume growth in some quarters supported by pricing growth. We will target around 25% revenue growth this year. While the pricing like denominator effect may suppress optical margin this year, we are not alarmed by the optical drop in operating margin and firmly believe this is a temporary hike and not any structural concern. We would think of this inflationary cycle like a one time upheaval which could in some categories potentially approve business models.
Although we are delivering sector leading growth and moderate profits in spite of this high inflation which is unprecedented and I believe exceptional. While delivering double digit EBITDA growth this year may be somewhat of a challenge, we expect better visibility by the second half. That said, consistent with historical trends, moderate profit delivery during inflationary years have been invariably followed by considerable profit accelerations in deflationary periods and thus we are fairly confident of delivering double digit profit CAGR over the next two years. We have seen cycles like this before and each time we have come out stronger.
We believe that what continues to anchor us through these cycles is a resilient and experienced senior leadership team with collective experience of over 140 years in Marico and average leadership tenure of 8 to 10 years that reflects deep institutional memory understanding of various business cycles. Ashish who handles, he’s the CEO. India has been working together, we have been working for 20 years and Pawan also been with us for 21 years. So between the combined three of us who are handling the business we have around 63 years of combined experience in Marico. Over the last few years we made significant investment effort towards trending our leadership depth and we now have a solid Gennex leadership in place.
Looking at the medium term, while the journey from 5k to 10k 10,000 crores took longer and we were not happy about it, there’s a very fair chance that we could touch 15,000 crores over the next two years. Therefore, we also believe that the 10,000 to 20,000 crore leap can be achieved within the next five years if we continue to maintain this momentum. Last but not the least sustainability remains central to our Strategy. A sustainably 2 point framework to 2.0 framework is delivering strong progress across all key focus areas and moving up towards our 2030 goals.
We are confident that our commitment to creating shared Value will drive long term sustainable and differentiated growth. With that I conclude my remarks and thank you and we are happy to take your questions.
Questions and Answers:
operator
Thank you very much sir. We will now begin with the question and answer session. Anyone who wishes to ask questions may press Star and one on their touchstone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avnish Roy from Nuvama. Please go ahead.
Abneesh Roy
Yeah, congrats on very good volume growth, revenue growth. My first question is on the India hair oil business. So three subparts to that. First is Copra. How is the supply side now looking and what kind of correction you see in the next 2 3/4? That is my first sub question. Second is Wahoo has seen a smart recovery after a few years of challenging times. The entire category saw challenging times. Now with urban recovery being talked about by most FMCG companies and rural continuing to remain reasonably robust. Would you expect Bajo volume growth to accelerate from here? That is the first question.
Saugata Gupta
Let me first address your question on coconut oil as far as copra is concerned. As I said that the correction has started. We also need to understand that we being a significant buyer of Copra, we have to also manage the entire supply chain assurance as well as pricing. We are now in a state where we believe we have much more control of the situation because as you know that copra and the overall coconut demand titration happens in these kinds of inflation. So the normal S and D imbalance adjusted itself because every consumption point gets titrated.
So and given our supply chain advantages and other things are position building and other rest, I think we are in a far more better control. So we believe that things are much better and therefore I don’t see any further inflation at this point in time but we will be able to give a much better kind of a feel in the second half. But as I said that in spite of taking such price increases we have actually in transaction terms still delivered a slight growth of 1% and given the outlook on parachute we should be under control.
Coming to value added hair oil we took a conscious call over the last two three quarters because we faced unreasonable competition where a lot of spends went from ATL to BTL in the bottom of pyramid especially in AMLA segment that we wanted to defocus convert a lot. And what happens normally if competitive spend falls? You can maintain the same SOV at half the spends or we said that it was a suicidal strategy. It doesn’t make sense. So we had re pivoted towards investing behind medium and premium brands which makes certain margins that is working. In addition to that, the first benefits of C2 we are getting especially rural because whenever you do direct distribution, the second and the third brand distribution increases and therefore we are extremely confident of maintaining this double digit value growth in terms of the value added hair oils business.
And if you take X Amla actually the volume growth is double digits and this is the high margin part of the business. So you can understand this. Plus you know the food margin improvement as a digital margin. So we have been able to hold on to margin in spite of this kind of a unpecimented, you know, input cost inflation.
Abneesh Roy
Thanks. One quick follow up question here on the coconut hair oil business. Whenever we see such sharp inflation in FMCG and specifically in hair oil, we see local players kind of lower their intensity and presence in market and obviously COPRA has seen absolutely insane kind of valuations. So if you could talk about some of the local players in the core market and similarly on the consumption side because customer in India is extremely value focused. Have you seen any kind of a consumer change at the coconut hair oil level that some part is going to waho? I do notice your very resilient volumes but that could be a function of market share gain because the very big retailer which had a annual call recently, they did say that in coconut oil they saw very sharp decline versus your almost flattish volume.
So you have done quite well. But have you seen some section of customers shift to other hair oil and you have gained market share so it’s kind of getting hidden.
Saugata Gupta
So I think as you know that our entire growth model is based on unbranded to branded and letting market share from other smaller players in the coconut oil market. I alluded to two piece of statistics. In 2015 over 2014 we had taken a 35% price increase and we delivered a 6.5% volume growth and yes market share gain over 19 to 17 because it was over a 18 to 20 month period. The average price increase was again 35% and we had delivered a two year CAGR of parachute of 5%. So I believe that we should be able to hold on to the volumes.
There could be titrations but all I can tell you that we are taking certain steps whatever in terms of our strategy which will ensure that the volumes are not impacted. Yes, the smaller players and other smaller branded Players will be far more impacted.
Abneesh Roy
Sure. Last question on the international business, if you could comment three sub questions there. In terms of the Gulf and Egypt, what is happening? 42% CCG Is there some base effect? Is this sustainable on South Africa? What is happening there? Why you have not changed the full year guidance in spite of weak flattish number And Bangladesh are you getting volume growth? My sense is the pricing growth in the coconut hair oil business there also will be quite sharp. Of course lower than India. Given you do have import option there. How is the volume growth in Bangladesh?
Saugata Gupta
So let me address one by one as far as the Middle east which is the MENA is concerned, the growth is being fueled by two things. One is growth in the core in terms of market share gain in our core businesses. As you know that we never participated in Wahoo in Egypt. We launched Wahoo in Egypt two, three years ago and then we have launched a full portfolio of Wahoo in Egypt which is Herbs India. We have got fiance and we have got Amla. Similarly we have got an aggressive in distribution investments in and also in we have launched Shampoo in Egypt and Middle east we have launched shah gel and body lotion.
So the NPT contribution has been significant and all the NPTs are doing well as well as we are getting share in our course. So this last year also we grew 30% plus. So this continues and we are expecting we’re able to have these accelerated growth in the Middle east because it’s a very strong focus and investment market for us because the, you know, in terms of the opportunity or the headroom for both top line growth and we have also done this with a significant improvement in operating margins so that we continue to reduce our dependence on Bangladesh for both top line and bottom line.
I think your second question was on South Africa. Sometimes in quarters we do some certain area adjustment of strategy and all that. So we are pretty confident that we start getting back quarter two and we have a visibility of July that we will get it back on growth and over the full year we should be able to hit double digit growth which has been our consistent this one. Having said that again, as you know over the last four, five years we have outperformed the sector by a mile in South Africa and significantly improved profitability. So we have been able to prove that yes we haven’t made so much investments in South Africa or Africa, but with a very, very frugal and a very efficient capital allocation we have been able to give sector beating growth consistently in South Africa over the last five years.
Now Coming to Bangladesh. Bangladesh has two components. As a volume growth in the core there’s significant NPD performance. As you know, we have done very well doing recently well in shampoo, we are doing well in baby and there is some part of inflation and price increase in Bangladesh has been far lower because international copra has not got impacted so much as the Indian copra.
Abneesh Roy
Sure, thanks. That’s all from my side. Thank you.
operator
Thank you. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead.
Vivek Maheshwari
Team. Good to see results. First is on, you know, sort of on ATL versus btl what you mentioned. So at a consolidated level I see your advertising spends, you know, have gone up quite a bit, about 25%. But India business is actually down 20%. The absolute number is like lowest the last five years or let’s say 20 quarters the percentage number. I know the denominator shifts quite a bit in your case, but we have seen inflationary cycles in the past at about three and a half percent. This is also the lowest number that at least I recall or we have ever seen.
Can you just elaborate more on this?
Saugata Gupta
No, you’re right Vivek. It’s incorrect to look at ASP percentage to sales because of denominator effect. Having said that, yes of course there has been some cut in India inp, but let me just tell you two, three broad contours for that. Number one, we have not cut in the focus categories of premium Wahoo foods and ppc. So these categories we have invested adequately and also we will and Shogarth also touched upon this fact that we’ve ensured that our share of voice is higher than our share of market in focus categories. Secondly, in Bop and Wahoo we have definitely cut down due to competitive intensity, competitive activity at the at the trade and therefore we have rationalized spends towards consumer beneficial pricing in that segment.
Additionally, I think in this quarter we have cut down a lot of non media spends. Like we have rationalized the frequency of Nielsen subscription data, we have deferred some of the new film shoots which was discretionary and hence reduction in utilization of celebrity time cost. And additionally we also extracted a lot of inefficiency out of media and non media spends and hence getting more bang for the buck for the same dollar spent. So these are some of the reasons. Because of which you see the NP spends little going down but going ahead. We believe that NP will trend upwards in India business. And of course at a console level we continue to invest behind all the focus categories and New parts of the business.
Vivek Maheshwari
I see. Okay.
Saugata Gupta
So basically in terms of media spend, there has been no reduction?
Vivek Maheshwari
No. Why do you say that? Sorry? Because the number is just about like 85 crores.
Saugata Gupta
Because all the cuts have been done on non. I mean non media and production and other activities. What we have ensured that the media spends have not got media from the. Focus categories in fact has increased for other part, as I explained, largely because of non media cut in some of the elements and plus some of the non focused categories, of course we have cut down.
Vivek Maheshwari
Got it, got it. And to, you know, on the. So when I subtract, you know, standalone from console, the advertising spend over there is up 60%. I’m guessing that bulk of this will be on India business only and international movement will be relatively lower. Right. Is that fair?
Saugata Gupta
Yeah, you’re right.
Vivek Maheshwari
So it is largely on the newer businesses and also international business also has gone up, but not to that extent. Got it, got it. And the second thing is, you know, your comment in the press release, the way in which or the information update about the M and is so what you mentioned in the existing geographies or even a new geography. I’m guessing that is more in the context of international business that you’re talking about. And you have done, you know, I would say exceptionally, you know, well, on the, on the acquisitions that you have done in the digital first D2C space in India, are there still white spaces that you are looking at in India or you think the platforms are ready, the brand platforms and it is just more.
And you have also given in your release, you know, the categories that you can, you know, expand into with the existing platforms. So how do you think about India acquisitions from here on?
Saugata Gupta
There are one or two spaces which are I think available still. See, we are clearly going into not only market attractiveness but a right to win which are adjacencies. So we believe that there are one or two spaces which are available whether it’s in food or personal care. In addition to that, I mean, as you know, food is an interesting for us. So therefore we will continue to be, I think looking into these acquisitions. Our track record for acquisition in terms of has been good. We now have a good playbook and we also believe that we see ourselves as a strategic investor of choice.
I think the kind of given that we are when we have multiple brands, the kind of synergies and the kind of cost and the kind of knowledge we can give and help a founder grow his or her business is I think significant.
Vivek Maheshwari
Got it, Got It. Thank you. Wishing you all the very best. Thank you.
Saugata Gupta
Thank you.
operator
Thank you. The next question is from the line of Arushi Lunia from Macquarie. Please go ahead.
Arushi Lunia
Hi. Hi guys. Team, am I audible? This is Avi here from a party.
Saugata Gupta
Yeah, hi Avi.
Arushi Lunia
Hi sir. So I just had one question on Copra. Just wanted to understand a bit. How is current COPRA versus the, you know, sector average? Is it. If you could kind of give us a sense and based on that, would it be fair to say. Sorry, if you could kind of help first clarify that part. You didn’t get the question. Versus versus 1Q average, sorry, quarter average. I’m really sorry. 1Q average, is it still, Is it ahead of that? Is it below that? How would it be?
Saugata Gupta
Yeah, yes, 12% down in the last few. So that 1 or 6% was for the quarter. But yes, if you take a point today it’s 12% down in the last. From the peak. From the peaks. Yeah, from the peak. So from the sector average it could still be down. That’s the correct understanding. I’m again, I’m sorry, from the 1, 2 average it would be down. That would be the right understanding. It went up further in July and now we are seeing about 10 to 12% correction from the peak that we had seen in July. Okay. And again forces to sort of linked. It back to the point which Shogarth had mentioned earlier. We do not see any further pricing action, at least given the recent trends that we have seen in the coca prices.
Arushi Lunia
Got it. So just a clarification, it would be fair to say that whatever was the 1Q EBITDA growth, the growth logically should kind of improve as we go forward. Given that Wahoo is improving, given that we are seeing, is that a fair.
Saugata Gupta
Expectation to be difficult to give quarter on quarter guidance? In fact, Shobhata touched upon his opening commentary that while we had given a double digit profit growth guidance earlier in the current scenario, it looks a little challenging, but we’ll still strive for high single digit growth in this year. But typically what we have seen is that inflationary years get followed by a deflationary year and we have been able to make up for more than what we could not do in the previous year. Therefore, from a two year perspective, we are fairly confident that we should be able to deliver double digit profit growth.
Just wait and watch in the second half. See right now as I said that yes, double digit looks challenging as of now, but you never know. See, I mean three months ago I never could have predicted copra Prices.
Arushi Lunia
No, yeah, no, no, I understood. So except copra, there’s nothing that I.
Saugata Gupta
Have to look at, you know. And. But as you know, we never give up like the Indian cricket team till the last, last ball. So we will not give up. We will be like the Indian cricket team.
Arushi Lunia
Perfect. That, that’s all from my side. I just wanted to clarify that point only. Thank you very much. Thank you.
Saugata Gupta
Thank you.
operator
Thank you. The next question is from the line of Mihail Shah from Nomura. Please go ahead.
Mihail Shah
Hi team. Thank you for taking my question. Firstly, on parachute, just one small clarification in the press update you highlighted that there is a consumer pricing of about 60% in the press note and that translates to closer to about 30, 31% for the quarter. I wanted to know after this 31% what is the incremental pricing that you have taken that has yet to come through in the numbers?
Saugata Gupta
We have taken additional 30% price increase in quarter one. We don’t intend to take any further price increase.
operator
I’m sorry to interrupt you sir. Mr. Shah, could you please mind muting your webcast line? There is a follow up.
Saugata Gupta
So the full effect of this price increase will be visible in quarter two where the value growth probably could be even higher on the parachute franchise. But again from quarter two onwards or later, half the quarter we’ll also start anniversaries in the base. So in H2 year pricing growth will progressively come down from the peaks of quarter two. Understood. Prabhu, thank you for clarifying that. After such sharp price increases, I mean historically I don’t think I recall much price declines in parachute. Maybe in 17, 18 and thereabouts. How confident are you on the volume growth front? You’ve sustained it this quarter. But does this kind of price increase put significant pressure on titrating for consumers? Can one expect a sharper decline on volumes on parachute or not?
Mihail Shah
Really no.
Saugata Gupta
So I think there are two things. One is obviously we will take steps. Now I am and I can’t get you getting into details of what are the steps we will take to ensure that, you know, protecting some of the packs which are much more sensitive to pricing, we are taking steps. Secondly as I told you is that during such times, you know, the small players are really, you know, in terms of, they are really stretched in terms of their presence. Also some of our branded large competitors who have been doing some what I call unreasonable kind of pricing which at which was lost last year I think will not do that.
So I think there will be market share gain. So combination of that we will be able to hold broadly the volumes. I don’t see any reason to be stressed out. And I think the other thing is that what I believe is going to happen is that the peak has been reached and therefore as we go towards the second half I think there will be a little bit of stability as far as pricing and other things goes.
Mihail Shah
Thanks for that. Secondly, on Waho is you know, great set of numbers after such a long period of time. Is there any element of channel filling or is largely project SETU that is driving this? You know what is the core driver for this and sustainability of this? I know you mentioned that you were trying to do double digits but just wanted to check on that one.
Saugata Gupta
I think we are very, very, we have a very high confidence level on sustaining double digit growth in RAO and two things. One is that as you have seen we are seeing also a significant increase in market share. See what happens is that normally wholesalers take high velocity items. So to give you an example a parachute or a Shanti Ambla will be a natural thing of choice which will go through the wholesale system or the indirect sale system. Now that we are over a three year period adding half a million set of outlets, invariably it is the second or third brand that goes into the range selling and that is the advantage we are getting.
So therefore we might not only taking share from the organized players, we will also be taking share with some of the smaller players. And the second thing which we are doing is that because we have said that I am not going to get into the BTL fight at the bottom of pyramid but invest behind equity building. We are significantly investing behind equity building which is also that means that our share of voice is increasing. I’m investing behind because it is my job as a category leader to drive category growth. So we are fulfilling the job which we had abdicated because of, you know, we were trying to fight at the bottom of pyramid.
So it’s a combination of that and as I said the biggest See Wahoo. Obviously we haven’t taken price increase majorly. The biggest thing which illustration of the fact that you could take out Shanti Amla from the equation because we are not getting into this, you know, pty wise BTL or whatever you call it, case wise BTL fight which is I think very inane, you know, out of volume growth of the other brands which is brands like Hair and Care, Jasmine, Aloe, Ayurvedic, they are actually double digit for the first time after a lot of quarters and we expect this kind of A trend to be maintained.
Mihail Shah
Fantastic. That’s wonderful. Heartening to hear. Lastly, if I can just push in one more on margins. I wanted to understand how should one think about margins in the near term with this kind of inflation. Wahoo. Is a margin accretive category. If that goes by double digits while the kind of pressure that you’re seeing from co Oprah. I mean when will this converge and when can we start seeing, you know, margins starting to expand? Can it be like in two to three quarters? Is that a fair understanding?
Pawan Agrawal
So see from a margin percentage standpoint, very honestly it’s very difficult to sort of gauge because this is a multiple moving parts in terms of body inflation price increase that we have taken. But as I mentioned earlier in this kind of inflationary scenario what is important is to look at the profit growth because margins will definitely look compressed because of the significant denominator effect. And as you would have heard Shogartha say that we are expecting even higher revenue growth going ahead. So therefore margin percentage guidance is difficult. But yes, we hold on to what I just said a while ago in terms of the profit growth and as.
Saugata Gupta
I said again reinforcing. Let us wait a quarter because situation is volatile. We have far more control on volume growth, revenue growth. I think on the margin it will come. And as I said we strongly believe in emerging market volume growth is important. So if we can deliver in some of the quarters going for a double digit volume growth automatically margins will come next year. In terms of a two year basis it will be a healthy margin growth. I mean there is no reason to be concerned at all. One or two quarters is fine but I don’t think any power plant globally can has taken these kind of price increases and actually can also hold volumes.
Pawan Agrawal
And we’ve seen in the past that any compression in margin in a particular year has been supplemented by a significant expansion in subsequent that will play out as we move along to FY27.
Mihail Shah
Fair point. Thank you very much Jens. Wishing you all the very best and congrats on a great set of numbers.
Pawan Agrawal
Thank you.
operator
Thank you. The next question is from the line of Percy Pantaki from IIFL Securities. Please go ahead.
Percy Pantaki
Hi everyone. My question is on the parachute segment. So you mentioned that now there is like a 60% price increase on parachute. We have seen inflationary cycles in the past but I don’t think we have ever taken a 60% yoy pricing in parachute. So in light of this, I know you said you will take measures to protect volume but in light of this do you Think it is possible that with a 60% pricing volume might touch a negative double digit kind of number or you think that that’s out of the question, it can’t get so bad.
Saugata Gupta
First of all I think it’s the 60 is a point to point and as Pawan alluded to as we move towards second half this number will go down drastically not you know, it will go to another between if there is no pricing ACTION Anything between 46 to 35% and I think I gave you some piece of statistics that in the twice in the past we have taken 35 that time India might have been the 11th largest economy. Today we are far bigger than and the aspiration and this one number two is this 60 is a one quarter phenomena.
It’s not a two three quarter phenomenon as I said that there has been stabilization that is happening on the copra prices from the peak that this kind of a demand, the supply demand, this one was also something which was a function of some speculative also function. It is not a structural major issue. So it will get sorted out. Now obviously you will only see a proof of this one after the quarter happens, the second quarter but we don’t see, we are not unduly perturbed by this one. There could be volume pressure here and there but I mean that double digit, this one is not a.
It’s a doomsday scenario, it’s unlikely to happen. I don’t think anything like that will happen.
Pawan Agrawal
Let me just add I think confident nothing of that sort will happen. In fact in this quarter also if you adjust for MLH it is 1% positive growth and also this is despite taking certain calls of rationalizing the supply on certain channel SQ combination because that was very low margin. So we took a very conscious call in terms of not supplying to protect margins. So therefore we are absolutely confident that there won’t be a scenario where we will have any major decline. In all probability we should be able to deliver growth adjusted for mlh.
Percy Pantaki
Got it. And secondly just wanted to understand the drivers behind the copra price. What is the reason that the inflation is so high and even like even taking slight moderation from here it would still for the full year remain much higher than what our original estimates were. So what led to this?
Saugata Gupta
Basically I think I talked about in my opening commentary so what happened was there was a slight drop of productivity in the coconut this one about around 9%. Now what happened was that some of the demand as I talked about that coconut which is used for consumption, coconut which is used for religious Purposes those initially they are inelastic. So the copra thing is the end of that entire supply chain. Now therefore, that led to. And also what happened is there were some unseasonal rains and which was in April, which led to copra copra needs dry weather for conversion.
That conversion cycle got delayed. And since all the other demands were met with a certain pricing, the availability for copra availability that was further shrunk because when you had a 9% overall productivity drop, if the other things have done at a certain level copra that availability was then that led to some speculative activity. I think now what has happened, given all the pricing automatically demand rationing has happened as a result. What we are seeing is that as demand rationing starts happening, we are seeing the first signs and we are still in season. See, the season continues till September.
So we don’t have a problem in terms of. So our first job was to also ensure that we have supply, you know, supply assurance. So therefore. And now we will. We believe that we have far better control of the situation as of now. Now going forward, yes, I think the overall pulio copra will still be high, but at the same time, sequentially copra prices expected to now go down unless there is again some other black swan event or something. But directionally. And what happens is that if you see inflationary cycles invariably followed by a deflationary cycle, because what happens at demand titration happens.
Also the rains this time are good. Our first idea about the crop is also decent. So we believe that they will be followed by a deflationary.
Percy Pantaki
So when you’re saying productivity is 9% down, does it mean that the crop itself is sort of 9% down?
Saugata Gupta
What exactly does it mean broadly?
Pawan Agrawal
Okay, okay.
Percy Pantaki
And this is because of some seasonal.
Saugata Gupta
Vagaries that the 9% has got affected.
Percy Pantaki
Or what is the underlying reason for that?
Saugata Gupta
Temperature and temperature unseasonal rain or as a function of that.
Percy Pantaki
Understood, understood. And this. Waho. Basically you are focusing more on the mid and premium because you think that the lower end doesn’t really make profit. But what we have seen across many.
Saugata Gupta
I think it makes profit, but it doesn’t make as much profit.
Percy Pantaki
Correct, Correct. So we have seen across many segments that consumption is under a huge amount of pressure. And in this kind of a scenario, basically the consumer is willing to go for cheaper alternatives. You’ve seen that in multiple categories in the consumption space. So while your strategy is sort of good of focusing on the more profitable parts. But do you think this is the right time to do that?
Saugata Gupta
I don’t know why I have not noticed. See first of all the index session of RPI is not that massive, you know. So what have we said is even in Wahoo also what we are not doing is in the brands like Amla category not focusing on btl. That doesn’t mean I’m not going to invest behind Shanti Amla mid and large packs. Okay. It is about that price point. BTL driven strategy. Once we have now got Val, the rest of the things I will again invite I might invest in Amla also and grow the category. What we are saying is we don’t believe that by converting ATL to BTL that is basically, you know, that doesn’t necessarily lead to consumption.
The question is if I gave 10%, 20% BTL am I getting increased offtake? I am. My hypothesis is that increase in BDL doesn’t give you off take long term offtake.
Percy Pantaki
Right, Got it. Yeah.
Saugata Gupta
I. All I’m saying is I’m not buying volumes by doing that.
Percy Pantaki
Thank you very much.
Saugata Gupta
Because Marico is not giving BTL to the wholesaler.
Percy Pantaki
Got it? Understood. Understood.
operator
Thank you. The next question is from the line of Aditya Soman from clsa. Please go ahead.
Aditya Soman
Hi, good evening and thanks for your time. So two questions. So firstly on Wahoo, what would be the volume growth? I mean you indicated that it’s sort of double digit excluding Shanti Amla. Including Shanti Amla, would it be close single digit?
Pawan Agrawal
No, it will be slightly more mid single digits.
Aditya Soman
And so that effectively means that that volumes for the non sort of the bottom third, I mean the remaining 30% of your portfolio other than parachute would be sort of north of 25. Would that be the right rate to get you to the 9% overall volume?
Saugata Gupta
We don’t want to get into this one. All I can say is that we have indicated that so full has mid single digits you would not get into individual category wise growth. But yes, the premium part of the business or diversification of business would be higher growth.
Aditya Soman
Understand? No, that’s very clear. And then just lastly on this Wahoo bit again. So your competitors on their call they mentioned that they have gained probably the most market share in their own category and obviously they compete in Amla. So would that be the right inference that they are gaining market share because of BTL?
Saugata Gupta
I can’t comment on this one. We have gained 150%, 150 bips value share. We focus on value share.
Aditya Soman
Very clear. No, that’s it for me. Thank you.
Saugata Gupta
Thank you.
operator
Thank you. The Next question is from the line of Nihal Mahesh Jam from HSBC Securities. Please go ahead.
Nihal Mahesh Jam
Yes, good evening and congratulations. Focusing on the foods business, there has been a slight moderation from the 40% growth you saw in Q4 to 20%. So any specific parts you want to highlight on that?
Saugata Gupta
I think see there’s a quarterly basis happened because last year there were some launches which happened. So I think we are Fairly confident about 25% plus growth in the food business. Sometimes this fluctuates because as you know it’s not a still a 900 crore plus business. So sometimes fluctuations happen. There is nothing to be worried about. Two things we look at. One thing we look at is that the core of the foods which is the safola oats, masala oats and honey and all, are they growing by double digit? Yes, they are going by double digit sometimes, you know, because there is some part of two elements, some part of flicks it fluctuates.
I don’t think there’s any cause for concern. Maybe 40 would have been a slightly higher number because we have been always been talking about a 25% kind of a growth. 25% growth.
Nihal Mahesh Jam
Second is on the profitability of the food business itself. In case of personal care you’ve given this outlook of double digit ebitda. Now in case of foods you mentioned that you expect to see a gradual improvement in the gross margin from where you already reached. But just if I had to speak in terms of the EBITDA profitability, what will be the aspirations say similar by FY27 for this part of the business.
Saugata Gupta
So I think two things. One is as far as the oats plus masala core of the businesses which is a concern, which is a significant this one we are almost touching the company ebitda. Now what we have realized is that as long as you concentrate on value added part and this one at a, we break even say any category at 150 to 200 and we hit 3, 300, 400. So our objective will be to get some of these categories into that. Having said that, quite separately I think over the last two years we’ve improved gross margin by thousand basis points.
It’s still a work in progress. We need to continue to do that. And I believe that what we actually look at is the blended gross margin of our NPD versus your current portfolio. The blended gross margin of our NPD is higher right now than our current portfolio and this will progressively move up.
Pawan Agrawal
Now just to add foods is also a low NP model. So Low gross margin, low NP model and therefore at a net contribution level it won’t be very, very different once it reaches a particular scale then to reach to a company ebitda it’s not much of an effort because it’s a low ANP model.
Saugata Gupta
And also continuing on that we are using the Sofola master brand and getting the amortization of the spend. So you know you have to look at from a Sapphola master brand. So for total this one is a net contribution term.
Nihal Mahesh Jam
So just quickly one last question. That the 20,000 crore number you’re given by FY20, just more clarity in terms of you know, the different segment contribution you mentioned foods and D2C 25% by 27. But just more clarity on the statement you made in the annual report.
Saugata Gupta
So I think we can’t get it.
Pawan Agrawal
To give a, you know, exact breakup of the 20,000 crores. But the idea is that on all the core categories we’ve given some guidance. For example let’s say we’re talking about food 25% plus growth, digital search business 25% plus growth. Maho we are expecting to do deliver double digit growth, a combination of all of these plus of course international business. We also expect mid teens kind of a number. With a combination of all this, 20,000 crores can be achieved.
Nihal Mahesh Jam
Got that. Thank you so much. Wish you all the best.
Pawan Agrawal
Thanks.
operator
Thank you. Thank you sir. The next question is from the line of Harit Kapoor from Investec. Please go ahead.
Harit Kapoor
Yeah. Hi, good evening. So just had three questions. One was on on SetU. So you know it’s almost a year and a half in your three year journey. Just wanted to get a sense of, you know, how much of the 500,000. Direct would we have broadly covered and. Any target for this year.
Saugata Gupta
So I think while to be honest, while we kicked off SETU sometimes around one and a half years ago, but the impact started because we were prototyping the SETU thing. So I would say that we are seeing the first signs of growth of SETU and you will see perhaps better impact of SETU as we go into the second half of the year. There are two parts of it. One is the rural direct reach where we are not only doing direct distribution but also converting some of our indirect to direct using far more technology and getting a control of it, better ranges.
The second part of the SETU will be also in urban where we will increase our presence in food, specialty stores, cosmetic as well as chemistry which we will unfold as we go. So you will start seeing. So this will lead to two things. One is you will certainly see a GT improvement in GT growth as we move from quarter to quarter this process. While we said it’s three years, I would knock off the first six months because we were trying to get the model right. So I would say one year, there is two more years to go.
But we are pretty confident that what we have achieved in this is two things. One, we believe that the long term sustainable competitive advantage for incumbents or large players in the FMCG sector is strength in gt GT is not going to vanish overnight. So therefore, while we get short term sales in by investing in OT what we have said that it is on our interest to ensure that our distribution system in terms of ROI stability stays continuously in control. We are the first to call about this issue of GT and that’s why we started this setU.
And the second thing it will start doing is we’ll be able to do rain selling and tomorrow some of the digital brands, once they hit a certain critical mass, create a specialized DT channel for the say the top 10,000 15,000 food outlets or the top 10,000 105,000 beauty stores or the top 10,000 chemists. So that’s the other thing which we have not even leveraged yet. That will be phase 2B of Ketu.
Harit Kapoor
The second question was on Waho. You know, given that the non AMLA brands have grown double digit and clearly share has come from those brands. Just wanted to get a sense of, you know, who, you know, who are the players that or you know, which are the type of players that we’ve been successful in gaining share from. The question essentially is, you know, if. You look at it a few years. Back you’d also had certain, you know, D2C led players in the premium space. Who came in and took up some space there, created certain brands there. So is, is, is some of it coming from there as well that as you are expanding your reach, customers coming back to the umbrella brands a little. Bit more, more color on that. That’s all.
Saugata Gupta
I think mere distribution of placing a product doesn’t lead to market share. I’m alluding to some D2C brands, okay. And I don’t think Nissan captures them at all. So whatever share we have got would be share from large organized players. So I don’t think there is any this one on D2C players. And as I said that I think the biggest gain has come because of our SETU which is involved in direct distribution, availability weighted distribution. And secondly because of the Fact that we are now investing behind some of the brands, it is leading to overall brand preference.
Harit Kapoor
And lastly in your presentation. You had a slide where you spoke about the. 900 to 2000 crore journey for the. Four brands in the digital space. Is this pertaining to digital first brands overall or it’s pertaining to these four brands in the journey. You see these four brands going over. The next three years. Because I just want to know if there is an acquisition element to that. 900 to 2000 also.
Saugata Gupta
No. So I think as of now it is the four brands. But we’ll be happy to acquire some and ensure that this number is definitely achievable crossed. But what I wish you all the. Best just to just to add that we want to allude it to in this chart is that what is the potential TAM expansion for each of these four brands?
Harit Kapoor
Yeah, I got that. Great, thanks. Wish you all the best. Thank you.
Saugata Gupta
Thanks.
operator
Thank you. The next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead.
Arnab Mitra
Hi. Congratulations on a great quarter. My first question was again on the digital brand. So you’ve given this enhanced aspiration of 2 1/2 x and also margins going up sharply. Your chart shows a significant jump from where you are today to 27. So now what you’ve seen in other digital companies sometimes is all the things don’t happen together. If you try to pull the margin up, it does affect the growth rate at least to some extent. So what’s giving you the confidence that you can do both which is scale up the top line but take up the percentage margins in some of these businesses?
Saugata Gupta
Okay, I think I covered this last time. There are two cohorts in terms of Beardo and Plix. They have broken even. In fact Beardo is close to double digit EBITDA clicks has broken even. They now are accelerated growth path and obviously they will have, you know, because of cost synergies and scale synergies will continue. So to in order to make them grow at an accelerated. This one I don’t need to do burn actually my EBITDA will also increase. As far as just herbs and Q elements is concerned, we are okay with moderate growth and get a path to breakeven within the next 18 months.
The biggest one, which I think we have a unique opportunity is that all these brands have access to the entire Marico cost structure. Whether it’s procurement, whether it’s supply chain. Now look at another example of digital media buying because we are going to buy one Marico digital buying and Digital media buying all these are structural cost saving with a standalone digital brand will never have access to and those are the things we are tapping for example. I’ll give you an example Biodo when we insource one or two of the hero sqs into our own manufacturing system we straight away got a 500, 600 bit improvement in gross margin.
We’re starting that process now.
Pawan Agrawal
So just to add there are two broad levers. One is of course this back end synergies which Shoghita spoke about and second is also with the scale operating leverage will kick in now these businesses are becoming sizable and therefore let’s say overheads etc. Will have an operating leverage. So this is giving us the confidence that even operating margin percentage will improve. And again we have a job to do in just a central element which we’re expecting that we should soon move to breakeven and therefore the overall digital cohort the applicable to margin will happen.
Arnab Mitra
Just one follow up on this. I mean so what we’ve seen again in some of the other digital brands is that this advertising spend which tends to be a really large cost in these businesses, they almost become like a variable cost because it’s performance marketing which is almost variable. So are you saying that in your case the way the PNL of these brands look, there is actually going to be decent operating levers on advertising which I assume would be a really large percentage of sales at the early stage when the brand is scaling up.
Saugata Gupta
So let me give you a construct. As far as advertising is concerned a good digital marketing leads to lower ROAs. Number two is if you look at say D2C part of the business as long as the EOVs are high and your digital marketing spends are better, you actually get better profitability. The second thing that happens is that we also believe that it’s just not about performance marketing but also off platform spends that needs to also drive and as I told alluded to that given it is a one medico buyer of platform spend efficiencies are far better than standalone brands.
So unlike some of the standalone brands we are also getting economies of scale as far as a 2x is concerned. And as you look at it, it’s not that we make super obscene gross margin beyond the fact that at anything between 250 to 300 crore level I can make double digit EBITDA. It proves that our cost structure can be manageable. And as you know I think we it was mentioned, I think in my opening remarks recently there’s a study done by VC and in partnership with an MBB consulting firm on insurgent brands, you will notice that not only our brands are high growth are also extremely capital efficient.
Arnab Mitra
Got it, got it. And my last question is actually on, on, on the copra that you know where COPA is today are how much do they have to drop then before you have to start taking price drops? What I mean is, I mean till where have you priced copra on a broad based basis? Do you expect second half they maybe need to take price hike. So given how much the cycle has gone up, even if it comes off, let’s say 10, 15% from here, you may not need to take price hike corrections.
Saugata Gupta
So it all depends on the situation. What we will do is we will always balance volume and margin, I think and we now have a broad pricing model which has been developed with around 15 years of data. So we will not be greedy about margins. At the same time we believe that usually in a deflationary cycle we have been able to increase our margins.
Pawan Agrawal
I just want to call out one thing Arnab that our vulnerability towards copra price fluctuations have come down over the years as we pulled multiple levers of margin expansion that we’ve discussed over the call in the last two quarters. For example food gross margin or digital business margins. In fact driving BAO growth through mid and premium segment is also helping us drive up margins with a better mix. In fact, rapid scale up of premium portfolio international business, scaling up of smaller business units in international business, all these are additional profit levers and therefore our dependence on copra as a lever of profitability has come down and will keep going down over the next few years.
Just to share a number, the dependence on parashment and safola for profits has gone down by approximately thousand basis points over the last few years. So therefore we are not that much vulnerable now as to copra and edible oil prices now as we used to be, let’s say a few years ago.
Saugata Gupta
And I think if you really set it that as if Waho keeps on growing double digit, your digital businesses grow and all that. So this number will progressively even this year will get less impactful. So it’s fine. I mean yes, it’s something which is, you know, has been something unprecedented but it’s not giving us sleepless nights.
Arnab Mitra
Understood, Understood. Thanks so much. That’s it from my side. All the best.
Pawan Agrawal
Thank you.
operator
Thank you ladies and gentlemen. We will take the last question for today which is from the line of Nitin from MK Global. Please go ahead.
Nitin
Thanks a lot for the opportunity. So my Questions are on the copra prices. So there is a drop of around 12%. So based on the previous answer it seems like we are not going to take any price cut right now and we will look for balance. So the other two questions are around there was a solvent extractors test release which talks about pest attack hurting yield of sort of copra. So. So is there any such concern for this year? And second is around is it like import of copra is banned in the country. So can we import finished good from Bangladesh?
Pawan Agrawal
We cannot import either copra or oil. We can only import to the extent what we can export. Now the representation from C is an independent industry body. So again we do not have such information of that pest etc. Damaging the crop in a wide scale manner. Yes, there could be some limited impact. But again it’s an industry body which does represent the industry as a whole.
Saugata Gupta
So just to add that as I said that the drop has been not major at 8 to 9%. It happens in any crop and whatever little visibility we have is there’s no additional concern as we go into next year.
Nitin
Yeah, this is reassuring. Second, in terms of like the long term path we have discussed in the annual report around doubling revenue by 2030. So this implies around mid 10 sort of a growth ahead. So we’ll be able to highlight like how much of the business like we are expecting from organic business and inorganic.
Saugata Gupta
I think when we talk about a five year number, it’s an aspiration. We now put the building blocks in place to do it. It’s very difficult to say inorganic, organic. I have never believed inorganic to be a substitute for organic growth. Inorganic is always an accelerator and therefore for us we will always make. And in today’s uncertain world always there has to be a plan B and a plan C. So I don’t see any inorganic component that kind of a plan. The way we said is that I think given that we have started the year on a good note and the building blocks in place of diversification, getting wahoo back into double digit value growth, international business getting into teens.
I think our ability to deliver a kind of a 15%, 14, 15% growth which takes us to. That is possible I think this year we have talked about a 25% around 25% which accelerates. And that’s why I told in the opening commentary that in order to secure that aspiration we will try and attempt to hit the first five. I mean to move to 15,000 in two years.
Nitin
Thank you sir, thanks for the opportunity. All the very best.
Saugata Gupta
Thank you.
operator
Thank you. As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Thank you. And over to you sir.
Pawan Agrawal
To conclude, we’ve had an encouraging start of the new fiscal having delivered robust growth and resilient margins in both India and international business. Despite facing unprecedented levels of input cost pressure in India, there are clear signs of gradual pickup in the core portfolios while the new businesses play their part of accelerating growth. The international business has been a consistent growth driver and we intend to further solidify its double digit growth trajectory over the medium term. We are fairly confident of maintaining the strong volume and revenue momentum in the quarters ahead while tapping multiple levers at our disposal to effectively navigate transient inflationary pressures.
In the immediate term, we will continue to prioritize driving a sustainable and profitable growth construct for the medium and long term. That is it from our side. If you have any further queries, please feel free to reach out to our IR team like and they’ll be happy to address. Thank you and have a great evening.
operator
Thank you members of the management, Ladies and gentlemen, on behalf of Marico Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.