Marico Ltd. (MARICO) Q4 FY22 Earnings Concall Transcript

Marico Ltd. (NSE: MARICO) Q4 FY22 Earnings Concall dated May 05, 2022

Corporate Participants:

Saugata Gupta — Managing Director & Chief Executive Officer

Pawan Agrawal — Chief Financial Officer

Analysts:

Percy Panthaki — IIFL — Analyst

Vivek Maheshwari — Jefferies — Analyst 

Kunal Vora — BNP Pariba — Analyst

Shirish Pardeshi — Centrum Capital — Analyst

Harit Kapoor — Investec — Analyst

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Rakesh Roy — Indsec Securities & Finance — Analyst

Gaurang Kakkad — Haitong Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Marico Limited Q4 FY ’22 Earnings Conference Call. We have with us the senior management of Marico represented by Mr. Saugata Gupta, MD and CEO; and Mr. Pawan Agrawal, CFO. [Operator Instructions] Please note that this conference is being recorded. Before we get started, I would like to remind you that the Q&A session is only for institutional investors and analysts, and therefore, if there is anybody else who is not an institutional investor or analyst but would like to ask questions, please directly reach out to Marico’s Investor Relations team.

I now hand the conference over to Mr. Saugata Gupta for his opening comments. Thank you, and over to you, sir.

Saugata Gupta — Managing Director & Chief Executive Officer

Yes. Hi, everyone. I hope all of you, your friends and family are keeping safe and healthy. FY ’22 came to a close in a relatively positive note for us as we stepped up our performance consistently through the year despite a variety of external disturbances in the operating environment, whether it’s the new COVID variant, geopolitical tensions, demand slowdown or even sharp [Indecipherable] and volatility input costs. Given the circumstances, we have single-mindedly focus on strengthening our brands and executing smartly which reflects in a consistent double-digit revenue growth on a 2-year basis and robust market share and penetration wins across our domestic portfolio. Our International business has been a beacon of strength, having delivered double-digit constant currency growth for a fifth quarter in a row and charted a predictable and profitable growth journey over most of the last five years with a very, very healthy ROC. We have been also able to inch our gross margin sequentially for third quarter in a row with calibrated price hikes, cost rationalization and about half of our raw material basket that is copra being deflationary. However, despite the continuous cost pressure at an overall level, on a Y-o-Y basis, we have chosen to ramp up investments in brand building and not compromise on the long-term health of our brand equities to manage short-term profits.

We’re also making visible progress in our ESG program, which is also showing up as an improvement in independent ESG rating and multiple ESG recognition throughout the year. The motto of making a difference and our belief in conscious capitalism has been the cornerstone of Marico’s purpose since the very beginning. It has been a long-standing belief that sustainable and purposeful business will stand the test of time and drive superior long-term performance. We have now introduced multiple sustainability initiatives across our global operations and recently announced a commitment to achieve net zero emissions in our global operations by 2040. I’m delighted to report that we have surpassed our [Indecipherable] 2022 ESG goals and we’ll soon really the focus areas and go for the next decade of action. Coming to the quarter one by India, persistent inflation continued to support consumption sentiment despite daily economic activity and mobility now largely back to normal. As a result, FMCG market volume decelerated further, with rural slowing down more than urban and growth being tightened. In this challenging context, we stayed well ahead of the market as our volumes were steady on a year-year — Y-o-Y basis, even on an exceptionally steep [Indecipherable] of 25%. Rural has been benign, urban for us as well, and we are hopeful of a recovery in rural demand towards the second half of next year if we have good monsoons and government spending in front ended. Delving into the India business. Parachute Coconut Oil has been proactive in parking on value to consumers in a soft copra environment, and we expect it to maintain its strong position going ahead. The Saffola franchise grew by 30% plus in FY ’22.

Saffola Edible Oils has commended held in volumes this year on a very high base of 17%. Following the recent surge in Edible Oil prices, we expect to remain competitive in the market in the near term. In Foods, I’m delighted to report that we have made our aspirational top line targets for this year. Amongst the new products launched last year, Soya Chunks have already scaled about 50 crores. In about a year’s time, Oodles and Chyawanprash has been slower and [Indecipherable] investor in the superior product proposition. With the launch of Saffola Peanut Butter and Saffola Mayonnaise, the total addressable market of the brand Saffola’s expanded to circa 36,000 crores. We have set our sights on the INR850 crores to INR1,000 crore target in Foods over the next couple of years. In value-added areas, we’ll maintain our focus on premiumizing the mix renovation to drive double-digit value growth over the medium term. Premium Personal Care has grown in double digits, high double digits this year. Beardo has crossed the INR100 crore annual run rate on exit basis, which gives us tremendous confidence and it shows that we have got the model right and it is tracking much ahead of acquisition assumptions. Just in terms of also my internal target. Our digital-first brand have clocked INR180 crores to INR200 crores in annual run rate on an exit basis, and we will continue to be aggressive towards building up INR250 crore to INR500 crore portfolio by FY ’24.

In the international business, we have a stellar quarter in year with each of the markets contributing handsomely. In Bangladesh, we continue the diversification journey through accelerated growth in hair care, including shampoo and baby care portfolios. In Vietnam and MENA, we have realigned the leadership structure to be able to replicate attributes on the strategy that has worked in Bangladesh in order to build a sustained growth momentum in those businesses. The MENA market presents an attractive growth opportunity, and we’ll invest to grow in this market. We are confident of delivering healthy growth over the medium term in South Africa and export businesses as well. Looking forward, the near-term demand outlook is uncertain, but we are confident of staying ahead of market growth, winning market share and gaining penetration. We also expect margins to be subdued in the near term, but there is some degree of comfort given that copra prices should remain line throughout the year, and it constitutes half of our raw material basket. Both demand and margin trends should improve towards the second half of this year.

Overall, we are hopeful that we’ll be able to cope up all the stress factor in Q1 and get into a rhythm when things start easing out from August, September because of base correction as well as relative demand and input cost stability. Over the medium term, we’ll continue to do what we are doing well in terms of driving sustainable and profitable growth in the core domestic and over overseas franchises, managing costs aggressively and staying true to our purpose in our ESG commitments. However, to unlock the next leg of growth, we believe that we need to get the four dimensions right to deliver long-term double-digit value growth. We call them 4Ds. The first D is diversification of business, both in domestic and national markets. In domestic, there are three pillars: premiumization of enhancement; turbocharge growth in foods; and scale up Premium Personal Care digital-first brands. Out of the 3, we have seen early successes in 2, and the premiumization of hair enrichment is work in progress. In International, we’ll continue to scale up non-CLO portfolio in Bangladesh and similarly expand the addressable market of the businesses in Southeast Asia and MENA by replicating our successful model in Bangladesh. The second D is distribution. We’ll continue efforts towards go-to-market transformation in urban and rural.

We are scaling up a dedicated to Food GTM in order to drive our aspirational target in foods. In addition, we have institutionalized the framework, internally known as sales 3.0 to strengthen our micro market focus and execution, doing enhanced agility with all-around decision-making and leverage technology and analytics. The new framework structure represents a shift in our sales operating structure from core divisions that is north, east, south and west to multiple seven to eight clusters, which are defined based on similar consumer behavior, brand preference and geographical continuity. We expect similar revenue for driving distribution-led growth in all of the international markets of Bangladesh, Vietnam, Saudi and Egypt. The third D stands digital. We’re investing towards raising the digital question across the value chain to make the organization future-ready. This is also reflecting in the talent we are hiring. And now we are imbibing a new ways of working, which we believe has enabled us to transform into a digital service organization and win amount involving consumers and marketplaces. The last D, but not the least, is diversity. We are consistently working towards building diversity in terms of gender and thought — and our talent pool process across all levels of the organization, where we apply equal opportunity for all at the workplace, and believe that a positive enabling an inclusive culture will give us a strong and competitive edge over the longer term. So just to repeat the four Ds.

This is basically — the first one is diversification. The second one is distribution. The third is digital; and the fourth is diversity. I would like to close my comments by conveying my gratitude to all Marico members and associates for their exemplary commitment and dedication over the years and the last couple of years, in particular. We are gradually returning to seeing our teams in offices with a reasonably permanent hybrid setup, and pray that the pandemic is now largely behind us.

Thank you for your patient listening, and we’ll now take your questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] First question is from the line of Percy Panthaki from IIFL.

Percy Panthaki — IIFL — Analyst

My first question is on Parachute. So I understand last quarter, I think you had mentioned that this time, you have been ahead of the curve in taking the price corrections and you’ve gone through two or three rounds of price correction. And therefore, you feel that there would not be any market share loss to the smaller or unorganized players as has been in the past, when there has been a commodity inflationary cycle. So now despite this, the volume has come very, very subdued. So just wanted to understand what has happened in this category? Is it still that there has been some amount of market share loss to the smaller and unorganized players?

Saugata Gupta — Managing Director & Chief Executive Officer

If you look at it, I think largely, we have gained market share, 170 bps volume market share gain in repack. Number two, the category decline is slightly lower than the FMCG decline. I think the FMCG decline last quarter has been minus five in volume. And the CNO decline is around minus 4. We are ahead of our decline is around minus one on a base of 29. So actually the 2-year CAGR is comfortable double digit. Also, I think full year, we have been around 5% volume growth, which is in line with our medium-term. We have taken a price jump this time proactively. It takes around 45 to 50 days for that to effect in the market because of the overall pipeline between to distribute or distributor to retail, especially in retail and rural markets. We’re also cognizant of the fact that, obviously, given the kind of a rural stress — the conversion from unbranded to branded will be a little challenged. Having said that, I think given that we’ll continue to expand distribution in rural and the fact that we continue to be, this time, proactive in pricing, and we must realize that I think in terms of whether it’s working capital, supply can agility in these kinds of inflationary times, we would be advantaged. I think we are fairly certain of protecting market share and getting back to the medium-term volumes for the full year.

Percy Panthaki — IIFL — Analyst

Okay. And in VAHO, I was looking at your CAGR on a 3-year basis because now 2-year basis is also not valid because the 2-year basis also over affected. So on a 3-year basis for this quarter, our value CAGR is 1%, which means that the volume will be 0 to negative. So again, just wanted to understand in this category, over three years, we have not seen any growth. So is this also a category issue? Or is this a market share issue? What is really happening here?

Saugata Gupta — Managing Director & Chief Executive Officer

Again, if you look at it, I don’t think if you look at personal care category, a 3-year basis, also, the numbers are similar. So also, you must realize that VAHO in 2020 got affected into April also because of — there was no production for 22 days and we couldn’t sell it. So if I take that aside, this year also, we have not — actually, there have been hardly any price increases in raw. Only now in the last quarter because largely in ’20 and ’21, it has been benign in terms of food and, in fact, there has been price drop. So volume and this one is largely in line. So I don’t think it is a difference in it. And as you know, that a significant portion of VAHO, there is also a rural kind of a buyer. So I believe that, yes, three-year is stressed, but you have to also say that none of the years which was business [Indecipherable]

Percy Panthaki — IIFL — Analyst

No. So if I take Q4 FY ’19 as my starting point and I look at Q4 FY ’19 versus FY — Q4 FY ’22, yes, Q4 FY ’22, there is, of course, the overall FMCG slowdown. But I’m assuming Q4 FY ’19 would be a normal quarter, right?

Saugata Gupta — Managing Director & Chief Executive Officer

That is the base. So I’m talking to take 2021 and ’22. So 20 — quarter four was not a normal quarter where we [Indecipherable] seven or 10 days. So all in [Indecipherable]

Percy Panthaki — IIFL — Analyst

It doesn’t matter. We are just taking a CAGR. So only the point to point will matter, what happens in between will not.

Saugata Gupta — Managing Director & Chief Executive Officer

I completely agree with you. So all I’m trying to say is there’s no difference from any personal care category.

Percy Panthaki — IIFL — Analyst

Correct. Correct. Correct. So this is just again…

Saugata Gupta — Managing Director & Chief Executive Officer

[Indecipherable] CAGR — if I look at your CAGR for the entire group and of the entire India FMCG, which is 60% of the personal care category, 6% to 7% that’s a 3-year year CAGR.

Percy Panthaki — IIFL — Analyst

Right, right, right. So then coming on to the macro part, if it’s basically only the macro and poor overall FMCG demand which is causing this, how do you look at this situation evolving over the next two to three quarters?

Saugata Gupta — Managing Director & Chief Executive Officer

As I said, that — two things. One is, obviously, there will be a kind of input cost pressure definitely, and I don’t see that abating very, very, very soon. Having said that, two things, we will do. We will strive to grow ahead of the market and also gain market share. Number two, I think as far as copra is concerned, that part, we are pretty reasonably okay because of the input cost pressure, and we have taken proactive to the Parachute which is, in fact, Parachute, by the way, just [Indecipherable] you look at the 3-year number, that’s far more, I think it’s 5%. So for example, Parachute, three years ago, the levered our [Indecipherable] expiration. So secondly, if you look at the base effect, obviously, quarter one rate continues to be high. I think the volume base of 16%, if I remember. So 21%, sorry, 21%, then move to fixed and then to flat and 1 kind of a number. So I think the base will also start correcting itself. In fact, we had seen this year, the past year, the slowdown starting sometime in September.

So a combination, as I said in my opening commentary, we believe that the — both the input cost situation and the relative demand situation with the base correction will tend to reach itself out. So therefore, I think you will see a better second half than the first half. Having said that, I think Parachute is something we should be able to deliver the medium-term aspiration. Number two is, we continue to stay invested behind foods and our digital business. They don’t seem to be significantly impacted even this quarter where there was no inorganic component because we just launched and this one in button the last day almost and we are seeing it actually in April that was a launch. Food delivered around a 17% kind of growth, which was like-to-like. There has been no new launches this quarter. So I think if you look at the fact that we will continue to grow with digital and Foods and the fact that Parachute is in recent context, I think we should get into back into a rhythm of growth in the second half.

Percy Panthaki — IIFL — Analyst

Sure. And just a housekeeping. Can you give us the absolute sales you’ve clocked on your Foods and digital brands for the full year?

Saugata Gupta — Managing Director & Chief Executive Officer

It is between — for the Foods, it’s between 450 crores and 500 crores.

Percy Panthaki — IIFL — Analyst

And the digital brand? Also [Indecipherable]…

Saugata Gupta — Managing Director & Chief Executive Officer

Digital is 180 to 200.

Percy Panthaki — IIFL — Analyst

Exit run rate. Okay. Okay.

Saugata Gupta — Managing Director & Chief Executive Officer

Quarter four run rate.

Operator

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

Vivek Maheshwari — Jefferies — Analyst

Sure. Am I audible?

Operator

Yes.

Saugata Gupta — Managing Director & Chief Executive Officer

Yes.

Vivek Maheshwari — Jefferies — Analyst

So one question, Saugata and Pawan. We have — I mean one thing that always stood about Marico was your disclosure. So quarter after quarter, we are seeing one of the other disclosure going down or going off the release. So let’s say, this time around it’s international, domestic margins, it has been volume growth. What has suddenly changed? For a decade or more than that, you were so consistent with your disclosure. And suddenly, in the last few quarters, you have completely changed that stance. So what has changed? I just want to understand.

Pawan Agrawal — Chief Financial Officer

Thanks, Vivek, for the question. So I think largely, there were two changes that we’ve done in the last two to three quarters. One was Saffola volume growth and then VAHO volume growth. And we had talked about as one of the reasons for not disclosing this volume growth because of the internal parameters, we had moved to evaluate parameters. And therefore, it was only right for us to align the external communication in line with what we are tracking internally. So that’s the major change. And rest on what we are talking about is not very, very significant. And if required, we could always discuss those off-line. But these are not very significant disclosures. And we don’t think that that’s going to impact the readability or the understanding of the performance. And therefore, we’ll continue with this.

Saugata Gupta — Managing Director & Chief Executive Officer

Just to add, I think we have just aligned the internal KPI with the external KPIs. So whatever we are — it is there in our internal KPIs and external KPIs, and it’s better to track similar KPIs. That’s about it.

Vivek Maheshwari — Jefferies — Analyst

Okay. My request still would be that you may want to reconsider because if there was one company which always stood out on disclosure, that was always you. And you have also gone down a lot at that time when some of the peers have actually increased disclosures. So that’s just one suggestion. The other bit is on the copra pricing…

Pawan Agrawal — Chief Financial Officer

Vivek, as I said, the only thing is that we ensure that the understanding of the business performance, that is not compromised it. We will be holding back further information, which we believe from a competitive standpoint, could hurt us. And that’s the reason we have cut down on certain disclosures. But I think still, if you compare with any other companies in the PSC, we believe that we have one of the disclosures in the industry.

Vivek Maheshwari — Jefferies — Analyst

Right, Pawan. I mean you have been around for long, right? Suddenly, why worry about competition when you’re never worried about competition for most part of your journey? So what has changed in that context in the last, let’s say, four quarters? Why suddenly you worry about competition now and not any time in the past?

Saugata Gupta — Managing Director & Chief Executive Officer

I think, I think the competitive intensity can change, market structure can change. And you have to at least respect the fact that I — we have to — we have aligned, as I said, internal and external KPIs. And we believe that we are trying our best to whatever we want to in terms of our presentation, the kind of — that gives us a fair idea about the business performance. Having said that, I think we are open to suggestions and you can please provide those suggestions offline.

Vivek Maheshwari — Jefferies — Analyst

Sure. I will do that. Second is, given how the oil tables are moving up. Do you see any risk to — from a coconut oil standpoint? Or — and therefore, copra? Do you see any bit of — I don’t think inflation necessarily will come back given where the peak was in the cycle. But do you think some of the, let’s say, assumptions or estimates you have had on Copra, those get challenged given how the competing oil prices are behaving?

Saugata Gupta — Managing Director & Chief Executive Officer

As you know that copra is an insulated market structure because imports are not allowed. And therefore, whatever the best estimate of supply and demand we have indicates that it will stay relatively benign for the rest of the year. And as you know, that as we speak in May, we have a visibility of the harvest because the season has started sometime the season starts sometime in the third week of March. And given everything, we are pretty confident. Having said that, obviously, you can’t, any time, prevent any Black Swan. I think we are fairly certain that, at this point in time, at least over the next six to nine months, and this is the season where obviously, that leads to a — and the season is pretty good as of now.

Vivek Maheshwari — Jefferies — Analyst

Okay. And Saugata, just a follow-up. Pardon me if my understanding is not correct, but if the competing oil prices move up, there will be a — so if I understand that India in several ways from a soft commodity standpoint, can be very different from what the Asian Southeast, Asian or global market prices are. But given the competing oil prices are moving up, that you think will not impact copra or coconut oil?

Saugata Gupta — Managing Director & Chief Executive Officer

Yes, because it will see, last year, and if you look at historically, 10 years, there’s no correlation between copra and, say, other things like other vegetable oils, like sunflower oil, or — if you look at the data, the SMD is slightly different. The usage is slightly different. And so therefore, I think that is the reason. And as I said, that the harvest is good in domestic harvest, fairly robust harvest. And obviously, if there is inflation, we’ll see. But as I said, that if the season is good and season prices are good, I think most of the year is taken care of.

Operator

The next question is from the line of Kunal Vora from BNP Pariba.

Kunal Vora — BNP Pariba — Analyst

Actually, like almost a continuation of the previous question. Can you share your thoughts on how the disruption in the coco edible oil market, how it impacts your business? Is there an interplay between copra and other edible oils? If not in India, in Indonesia, is directly? And with other edible oils being highly inflationary, copra being deflationary, are there any benefits you see of customers looking to — looking copra as option or like the customer will be very different? If you can share your thoughts on this?

Saugata Gupta — Managing Director & Chief Executive Officer

So as far as the Indonesia is concerned, it is with respect to palm, yes, we import for our international markets, copra from Indonesia and some other countries in Southeast Asia. The palm ban in Indonesia has had no impact on copra. Having said that, obviously, there has been international prices have been slightly bullish, but I think it’s unlikely to impact any margins in our international business practically. And as far as — as I said, that the copra usage is different from coconut in terms of other vegetable oil, but the correlation is slightly — the correlation is not very high. And I have the visibility of the season. And you know that during the season, we procure a significant part of the copra for the year. I think it gives us a fair idea that, at least in the immediate term, there is no such risk.

Kunal Vora — BNP Pariba — Analyst

Sure. Second one, how is Saffola doing in terms of volumes? Edible oil prices have moved up sharply to customer facing inflation across categories. Is the customer downtrending? What are the trends you’re seeing in future supply edible usage? Are you losing some customers you had acquired during the last couple of years?

Saugata Gupta — Managing Director & Chief Executive Officer

So Saffola, as we said, that the volume has been flattish for the quarter. Obviously, there has been significant inflation. And therefore, which reduces the — whatever I call the conversion rate of people upgrading. A significant portion of the Saffola consumers actually come from the segment who wants to believe in healthy living and, therefore, consume less oil. And, therefore, the total incremental outlay is left. Having said that, I think if there is consistent inflation for a large period of time, there could be some risk of downgrading, and that is there for any, every category.

Kunal Vora — BNP Pariba — Analyst

Sure, sure. I see. And lastly, if you can talk about the competition in the VAHO segment and like why it remains much higher compared to other categories. This is one category in which you’ve not seen any meaningful price increases. Is it because of low inflation or industry is sacrificing margins here?

Saugata Gupta — Managing Director & Chief Executive Officer

Actually, it’s not. I think what has happened is there has been some price increases, which have been taken. Having said that, I think there has been increased activity at the Bottom of Pyramid. And therefore, some of the subcategories of brands that are growing — are growing at the Bottom of Pyramid. Having said that, if crude continues to remain at these kind of levels, I think there will be price increases in this category. And some — in more cases also, I think why we have taken a combination of some price increases and some volume correction in the pack, so which is also a surrogate price increase.

Pawan Agrawal — Chief Financial Officer

And just to confirm, Kunal, we have taken about 5% to 6% price increase in the month of March because of the increase [Indecipherable].

Operator

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

Shirish Pardeshi — Centrum Capital — Analyst

I have one structural information and fundamental thoughts. The category penetration for PC is very large, and you have been actively expanding the distribution. So I was looking for your qualitative comment, when you’re saying on Slide 8, you’re saying that FMCG market has declined minus 4% Y-o-Y. So specifically, in terms of if you can split what is the coconut growth category in quarter four Y-o-Y and VAHO growth in quarter 4. And the second part to it, you just mentioned that the value end of the VAHO was also growing for us or the industry almost 6, seven quarters, and it is showing the negative trend. At least the syndicated data of what I have seen in the month of February showing negative trend. So any qualitative comment what’s changing structurally in the VAHO segment?

Saugata Gupta — Managing Director & Chief Executive Officer

Good. First, to answer your question, I think the FMCG, overall, is a decline in this quarter has been 4%. I think Personal Care is 9%. Coconut, as far as VAHO is concerned, so coconut, as far as VAHO the FMCG, I mean, VAHO is slightly more than FMCG decline, but in line with the overall Personal Care. And coconut is in line with the FMCG, which is minus 4, minus 4. Having said that, I think if we look at the three years [Indecipherable] and [Indecipherable], I think we see [Indecipherable] volumes are 5% and which is particularly in line. one Coming to the VAHO question, I think what has happened is essentially a lot of growth in the Bottom of Pyramid obviously has come from rural.

And if I look at the stress factor, the stress factor in rural has been pretty high. A lot of growth that happens in the category, and this is true for some of the categories which have medium offerings done by some amount of premium brands or new age digital brands, which has happened in — which is sold through e-com, modern trade and beauty outlets, I think there is — that growth is — has got less impacted. And I’m not so sure whether in some of these categories, like I’ll give you an example. Does Nielsen actually capture how much is [Indecipherable], for example? Or some of the premium hair fall that’s sold in digital or e-commerce. So we believe whatever data we have, that segment is relatively less impacted than what has the impact in rural. And that is the reason, I think if you look at the Bottom of Pyramid growth has also got impacted and rural has got more impacted. Because if you look at in e-commerce, some of the categories, we are not seeing that kind of an impact, or in modern trade, that kind of impact.

Shirish Pardeshi — Centrum Capital — Analyst

Okay. That’s really helpful. My second question is on the foods part. You have done a lot of extension. Now in the medium to long term, you will keep inventing and adding more some substances to Saffola franchise. But if I pick your brains, in last four to five quarters, whatever new addition we have done, which things it will take you to a higher level or your aspirational level of Saffola franchise would being more than 500 crores?

Saugata Gupta — Managing Director & Chief Executive Officer

I think as I said that we have — in the — we have hit a number which is between 250 crores and 500 crores, in line with our aspirations. I think Oats and Masala Oats continue to grow, and we have expanded penetration, expanded the category. Soya and Honey has both crossed 50 crores — 50 crore mark. And it is line with our aspiration. We have some job to do in this [Indecipherable] branch. I think what we are looking at is essentially — and also we are creating a portfolio that actually supports our GTM, separate GTM of food, which we prototype successfully in two markets, and we are scaling up this year, which is a completely separate GTM from our standard sales system and which will have a dedicated national head which will drive the food journey. I think we are looking at products which expand the total Saffola addressable market, which Saffola can provide which are better for you in SME of the segment. We are looking at — we might not get into the center of plate. We will look at in between me and we are looking at intermediaries and that’s the reason we are to accompaniment like peanut butter and mayonnaise and some of the spread.

So we have picked up in overall stock. We tried to give you a picture. We are looking at medium-sized categories, which have [Indecipherable] over the medium to long term; penetration, which are — penetration, which is low to medium. But Saffola has a right to win by offering a differentiated or a better-for-you category. And we are looking for categories which are primarily can be sold through urban food GTM as well as modern trial and e-commerce. We will not get into something which is rural. We will not get into products which are sold in [Indecipherable] because we don’t want to — we don’t have that distribution, neither we’ll go into things like cold chain products.

Shirish Pardeshi — Centrum Capital — Analyst

Okay. That’s really helpful. If I may squeeze one question on international. Vietnam, we have been seeing a lot of turn around. Is the problem in Vietnam geography is completely solved? And that could be a next big leg of growth for us in the next two to three quarters?

Saugata Gupta — Managing Director & Chief Executive Officer

So I think Vietnam has been a combination of two things. I think, yes, you’re right. I think we have had a little bit of year-on-year little two years. Also the fact that Vietnam has got impacted by two rounds of COVID and they had a much — they also had some format of lockdown. Also, we have — we had, had a single category presence. We have now started doing well on foods out there. We have started regaining market share. I think we — in intellectual markets, and I have told this before, is we believe if a disciplined organic approach of getting the portfolio right, getting the go-to-market right, getting the cost structure right and getting the right talent and processes. And also when they run in tandem, there is this rhythm of growth or virtuous cycle of growth. And I think we have had the successful model in Bangladesh, where we believe that we are, clearly, in terms of clearly in HPC, we are the number 2 company, which is normally done by other people in the world in various other markets, and we’re extremely confident of the diversification journey.

I think, of course, the learnings in place, including, for example, localization of senior leadership, getting the right talent. And we believe that not only in Vietnam, but MENA, where there is a clear profit pool and market share pool be taken from competition, we’ll be able to aggressively replicate this. I think amongst all our peer companies, we have the healthiest international business, highest ROC, consistent growth. We are in markets. All the three markets are stable in terms of economic growth, in terms of ForEx, no such problems. And therefore, I think I’m pretty confident our international business has entered a virtuous cycle of growth.

Operator

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

Harit Kapoor — Investec — Analyst

So just first three things…

Operator

Mr. Kapoor, sorry to interrupt you. We are not able to hear your audio, sir.

Harit Kapoor — Investec — Analyst

Can you hear me now? Is it better?

Operator

Yes.

Saugata Gupta — Managing Director & Chief Executive Officer

Very clear.

Harit Kapoor — Investec — Analyst

Yes, yes. So just two questions. The first question was on coconut oil. I just wanted to understand, with this — with an element of down-trading across categories that market is seeing, is it possible that coconut oil growth picks up at the cost of value added at least in the near term? Just wanted to understand how you’re thinking about that. That’s my first question.

Saugata Gupta — Managing Director & Chief Executive Officer

So as far as Coconut Oil is concerned, I think we have to have a pricing for right conversion from unbranded to branded. We’ll continue to invest behind rural distribution, and rural market share is slightly behind urban market share. As long as we do that and take proactive pricing calls, I think we should be able to deliver the medium-term growth aspirations.

Harit Kapoor — Investec — Analyst

So I wanted to just understand the — whether you could see a down-trading benefit in PCNO from maybe the lower in value-added hair oil, given that there are price increases likely in those and Parachute price increases don’t happen. So could that be a scenario which could potentially play out over next 2, three quarters? Is that even possible?

Saugata Gupta — Managing Director & Chief Executive Officer

So if we get the PCNO pricing right, I think there will be no down trading back to from branded to [Indecipherable]

Harit Kapoor — Investec — Analyst

Got it. Got it. Got it. Okay. The second question was on the Foods GTM journey. If you could just help me understand what — a little bit more on what work we are doing there. And how — what areas we can see accelerated growth being driven by the Foods kind of GTM. I just wanted to give a better sense on what changes need to be made there to be able to drive faster growth. We’ve already — the fact that we’ve already launched several new products, what needs to be done on the Foods GTM journey?

Saugata Gupta — Managing Director & Chief Executive Officer

So I think the biggest one is getting the food GTM right. And I spoke about the fact that we are segregated our Foods GTM earlier as well. So we prototyped it at a distributor level. We are now putting dedicated managerial and national. There’s one for Food GTM where a senior leader will actually drive the Food GTM without any escape button. So that is his or her only role into driving the alternate GTM. So therefore, to me, Food GTM is the biggest thing is because if you really look at food, whether it’s between modern trade e-com and urban set of food outlet, especially stand-alone modern trade outlets, I think that is where the kind of categories we have launched is that a significant part of the way. We don’t need to get into marked distribution to because that doesn’t — that gives you volume numb, but doesn’t give you waited. So to me, that’s the first thing. The second thing is, I think, we will continue to drive rural distribution. We are still under-indexed in a couple of states where we have to do.

We believe rural, given the fact that wholesale as a cat channel, will continue to deplete. I think direct rural distribution will become a source of competitive advantage and an entry barrier for competitive actions. And lastly, I think what we have done, which while it’s not a distribution job, but we now have a channel-wide assortment to prevent any, what I call channel conflict, and we operate, to a large extent, successful year, MOP or a minimum operating price across all channels. So therefore, the noise levels, in fact, which was there in 2019, as far as channel conflict is concerned, has been largely addressed. And we believe that each channel has a role to play. And each channel, we look at as a separate P&L. So therefore, I think all the alternate channels and the new channel, there’s a separate P&L approach so that we ensure that we sell an assortment such that while the cost of sale in each channel can be different, but at least your net contribution level, it will reasonably neutral.

Operator

[Operator Instructions] The next question is from the line of Siddhar Bhattacharya from Anvil Wealth Management.

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Am I audible?

Saugata Gupta — Managing Director & Chief Executive Officer

Yes.

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Yes. My question was more from the point of understanding the Edible Oils business, the Saffola as well as the virgin oil categories that you’ve launched. So in my assumption, I believe the blended oils would be a significant portion of your total business segment, right?

Saugata Gupta — Managing Director & Chief Executive Officer

Yes, Saffola? Yes, we only sell blended.

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Only blended, right?

Saugata Gupta — Managing Director & Chief Executive Officer

It’s a multi-seed oil and we sell multi-seed oil, yes. [Indecipherable].

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Yes. So — yes, yes. So my question regarding that is, basically, from a production standpoint, do we have enough levers in place in terms of blending ratios that allow us to sort of take care of inflationary pressure in any of the input oils that come through?

Saugata Gupta — Managing Director & Chief Executive Officer

No. So our entire endeavor is to design scientifically oils and the ratios which is best for consumers in terms of heart health. And therefore, we don’t change it. It is not like soap that you keep on changing total fatty matter or something like that. We, as you know, as a Saffola brand, we — if I’m a n giving an 80-20. Whatever we have also made some changes in the past, but is in line with scientific evidence in terms of the balance. So we don’t just, because of inflation, keep on changing formulations.

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

Okay. But is there a range there to follow? Or is it like…

Saugata Gupta — Managing Director & Chief Executive Officer

No, no, no. You can’t. You don’t. You don’t.

Siddhar Bhattacharya — Anvil Wealth Management — Analyst

You can’t. Okay. Okay. And I also wanted to understand with your launch of the virgin oils, which I see the olive oil as well as the coconut oil, what is the game plan over here?

Saugata Gupta — Managing Director & Chief Executive Officer

No, no, no. It’s a very, very small digital. It’s largely available in e-commerce. And it’s — we are just participating in it. And if you ask me very honestly, in this — is it just a mere participation strategy, there is no big expiration or game plan on this.

Operator

The next question is from the line of Rakesh Roy from Indsec Securities & Finance.

Rakesh Roy — Indsec Securities & Finance — Analyst

So my first question is regarding, sir, can you highlight on the demand scenario in the international market because Bangladesh market also facing high inflation, sir. So can you give me an idea, sir?

Saugata Gupta — Managing Director & Chief Executive Officer

I think most of the markets where we participate in, other than Egypt, there is inflation, but not significant inflation. I think Egypt and [Indecipherable] there’s a little more inflation. As you know, Asian countries are more rice-eating and rice-producing countries, and therefore, the food inflation is relatively low. It happens. It has happened in more where it’s — where wheat is imported, and that is the moral [Indecipherable]. I think we are more or less in control of the situation. And there is, obviously, there are some countries in our Indian neighborhood which are facing far high inflationary trends where we don’t have that much significant revenues.

Rakesh Roy — Indsec Securities & Finance — Analyst

Yes. Just my other — just to know, sir, Bangladesh also — Bangladesh interested is also on 17-month high, sir. And there also, we are seeing some downside [Indecipherable]…

Saugata Gupta — Managing Director & Chief Executive Officer

India also inflation is 17-month high. So I don’t think, if there is something — what I’m saying is there is nothing disruptive as far as our growth journey in Bangladesh is concerned.

Operator

The next question is from the line of Gaurang Kakkad from Haitong Securities.

Gaurang Kakkad — Haitong Securities — Analyst

So I just had one question regarding Saffola Oil. So in response to the earlier participant, you indicated that there is no change in terms of blend in terms of oil just because of inflation. So I had a question in terms of the pricing of Saffola Total versus Saffola Gold. So if you look at the pricing 3, four years back, Saffola Total used to be at a 20%, 25% premium to Gold. And today, the pricing is almost similar. So is it that we are taking a hit on the margins for Saffola Total with the inflation which is there? Or is there some other thought to it?

Saugata Gupta — Managing Director & Chief Executive Officer

No, no, no. I don’t think it is, unless somebody is providing a discount, still there is a differential in pricing. I don’t think it’s equal. But having said that, the gap has reduced a bit. So to give you an example. If you now go to Amazon or Instamart, I think we will see there is still, I think, a 10% to 15% gap between the price. Unless there has been some discount you have seen especially run on Total. But the pricing, there is a difference. I think it is 2 30 and 2 65, is it?

Gaurang Kakkad — Haitong Securities — Analyst

Actually, I was looking at the MRP data, and it was like 2 55 and two 50, which like 3, four years back was 201 2 50

Saugata Gupta — Managing Director & Chief Executive Officer

[Indecipherable] 2 50

Pawan Agrawal — Chief Financial Officer

Gaurang, what would also happen is that it could become — it could be also a possibility that the under MRP of Gold could be there in the market, or the newer MRP and lower MRP of Gold, and therefore, the prices could be lower. Number one. Number two, as Saugata mentioned, the difference would have come down because what also happens is such a hyperinflation scenario, but absolute outlay becomes very, very important. So to that extent, the price increase maybe slightly on the lower side for Total, but the difference [Indecipherable]

Gaurang Kakkad — Haitong Securities — Analyst

Sure. That helps. And just to get a sense, maybe Gold would be the largest brand in Saffola, say, 40%, 50% contribution? If you can put some number to that.

Saugata Gupta — Managing Director & Chief Executive Officer

No, I can’t. No, no. We’re not going to do this because [Indecipherable] Gold is…

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.

Pawan Agrawal — Chief Financial Officer

Thanks a lot for listening on the call. To conclude, we ended the year on a good note with India business putting up a resilient performing amidst macros, while International business continued its consistent outperformance. We also defied sharp cost pressures to deliver a double-digit EBITDA growth. Going forward, given the uncertain environment that we are in, it is difficult to gauge how demand will pan out in the near term. However, we are quite confident that we’ll continue to beat the marketing growth India and international business. While there is unprecedented cost push in various cost line items, we draw comfort from the fact that [Indecipherable] is on discretionary trends. And this, along with other cost control measures, should definitely help us to manage the pressure on margins. If you have any further queries, please feel free to reach out to our IR team, and we’ll be happy to address the questions. That is it from our side. Stay safe. And take care.

Operator

[Operator Closing Remarks]