Key Financial Figures

  • Q2 FY27 Revenue: ₹233 crores, representing growth of 2.7% against same quarter last year
  • Q2 FY27 EBITDA: ₹53 crores with EBITDA margin of 25%
  • Q2 FY27 PAT: ₹70 crores with PAT margin of 21%
  • H1 FY27 Revenue: ₹674 crores, up 28% over previous H1
  • H1 FY27 EBITDA: ₹167 crores, growth of 85% over previous H1
  • H1 FY27 PAT: ₹141 crores, growth of 75% over previous H1
  • Gross Margin Q2: 59.9%
  • Gross Margin H1: 60.8%

Operational Performance Highlights

  • Almond Drops Hair Oil: Delivered double-digit unit volume growth across pack groups and sales channels
  • Growth Drivers: Small and medium-sized packs outperformed overall brand performance
  • Marketing Investment: Consolidated A&P spend up 7% YoY for quarter, up 18% for H1 basis
  • Market Presence: Maintained robust SOV/SOM ratios in traditional and digital media

Strategic Initiatives

  • Almond Drops Enhancement: Launched new enhanced positioning supported by TV campaign based on "hair strength leading to beauty"
  • 360-degree Campaign: Implemented comprehensive marketing support with enhanced digital investments
  • Growth Portfolio: Coconut franchise delivered strong volume growth; relaunched several smaller brands including amla oils and body lotion
  • Banjara's Expansion: Introduced packs extending brand into large adjacent categories

Channel Performance

  • General Trade: Grew in line with organized trade, both channels delivered strong mid-20s growth
  • Rural vs Urban: Rural continued to grow marginally ahead of urban within GT
  • Organized Trade: Both modern trade and e-commerce performed well
  • Quick-commerce: Remained fastest-growing sub-channel, scaling up significantly

Project Aarohan Update

  • Phase Completion: Close to completing immediate objectives under Project Aarohan after eight quarters
  • Coverage: GTM transformation across 13 key states through three phases
  • Achievements: Added over 1 lakh outlets, 1,000+ distribution points, closed over 600 van routes
  • Impact: Achieved expansion in direct reach and reduction in fixed S&D cost
  • Next Phase: Aarohan 2.0 will focus on expanding direct reach in urban by 10% and in rural by more than that over next six quarters

International Business

  • Performance: Rebound continued in Q2, performing well across country clusters
  • H1 Growth: International channel grew ahead of company growth for full H1
  • Market Performance: Most key markets grew ahead of company average except Bangladesh which grew in teens
  • Profitability: Sharp improvement in EBITDA margins due to revenue scale-up, margin correction, and cost optimization

Cost Environment and Pricing Actions

  • Raw Material Volatility: Continued volatility due to West Asia war, edible oil inflation, and cascading impacts
  • Cost Management: Teams delivered strong savings in fixed costs and employee costs despite sequential gross margin reduction
  • Previous Action: Calibrated price increase towards end of Q1 FY27
  • Q3 FY27 Action: Implementing ~5% increase in consumer price, split roughly equally between:
  • Frontal price increase of 2% to 3%
  • Ml-age reductions contributing similar amount

Management Commentary and Outlook

  • Growth Aspiration: Long-term aspiration for double-digit growth; expecting high teens growth for the year
  • Distribution Strategy: Believe 2-3 percentage points of volume growth driven by distribution expansion
  • Current Status: Operate at 50-60 index to direct distribution of larger peers; target to achieve 75% index
  • Price Point Packs: Contribution less than 20% in value terms (in teens)
  • Organized Trade: Contribution close to 30% in value terms to overall company

Product and Market Development

  • Banjara's Test Markets: Testing new products in four southern states (core markets)
  • Product Strategy: Creating SKUs and propositions to participate in large, fast-growing categories in South
  • Quick-commerce Strategy: For large brands like Almond Drops - demand fulfillment channel; for premium variants - demand creation plus fulfillment channel

Manufacturing and Sourcing

  • Guwahati Factory: Outsourced production from company-owned facility to third-party-run facility at beginning of FY27 for better operating efficiencies

Participants

Management: Mr. Naveen Pandey (Managing Director), Mr. Dilip Kumar Maloo (Chief Financial Officer), Mr. Aakash Gupta (Head, Finance)

Moderator: Mr. Manoj (ICICI Securities)

Analysts: Representatives from PhillipCapital India, 360 ONE Capital, Nuvama, 360 ONE, Avendus Spark Institutional Equities, Eyesight Fintrade Private Limited, and others