Sundrop Brands Limited (SUNDROP) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Sundrop Brands Ltd. Q2 and H1FY27 Earnings Conference Call, hosted by IIFL Capital Services Ltd. 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 touchtone phone. Please note, this conference is being recorded. I now hand the conference over to Mr. Siddesh Deshmukh. Thank you and over to you, sir.

Yeah, good morning, everyone. I have the pleasure to host the management of Sundrop Brands for their 2QFI 27 earnings call. From the management, we have with us Mr. Nitesh Pajaj, Group Managing Director, Mr. Ashish Kumar Sharma, CEO and Executive Director, Mr. KPN Srinivas, CFO, Mr. Abhinav Kapoor, Whole Time Director and CEO, Del Monte Foods, and Mr. Amitosh Kumar Banka, CFO, Del Monte Foods. I'll hand over the call to Mr. Nitesh Bajaj for his opening remarks, post which we'll open the floor for Q&A. Over to you, sir.

Thank you, Siddhesh. Good morning, all, and welcome to the initial call for quarter 205.27 for Sundrop Brands. Before we take you through the presentation and discuss our performance in greater details, I would just like to spend some time on sharing our perspective on the current operating environment and some of the key developments that are shaping our industry and our business. The overall consumption environment, as we see, remains strong. FMCG demand across various categories remains stable in the improving trajectory despite the inflationary headwinds. So, overall environment, I would say, remains strong for our industry. Consumer environment, if I see, with the evolution we are seeing in the channel front, consumers are becoming more discerning. There are positivities in consumption cycle, both at the value-conscious customer side as well as on the premiumization side. There is a willingness to spend on trusted brands, products which bring convenience, products which offer differentiation, also affordable, valuable price points in the mass market category. As we see, this environment is very supportive of our diversified portfolio across cooking, convenient meals, and snacking most occasions. We continue to see very strong opportunities across our ready-to-cook and ready-to-eat products, culinary solutions, spreads, even oils, and convenience-led categories. Our presence across general trade, modern trade, e-commerce, e-accounts, quick commerce, and the entire Horeca channel also enables us to participate in this expanding and stable environment and ride stronger on the emerging and new demand pools which are also getting created. From a cost perspective, and we are seeing that in the recent past, there has been inflationary environment. There has also been volatility, but as we have gone through the quarter, what we have also seen is, over the last two or three months, the environment, while volatile, has remained range-bound. We have been able to take price corrections, price increases in relevant categories where we have seen inflationary trends. On certain commodity days, like packaging, etc., we have seen broad-based inflation, and these inflations we have been able to calibrate in our pricing, and our brands have shown resilience and power so that our volume trajectory hasn't got impacted, while, of course, we have seen the benefit of that coming in the value side. This, of course, is also getting balanced by our very, very strong focus on driving procurement efficiency, driving our manufacturing productivity initiatives, and also taking our portfolio mix towards more premium, greater value for our consumers and also for our business. Going forward also, in the light of this environment, our priority will remain on ensuring strong volume growths while we continue to drive margin improvements with a mix of initiatives, which I have talked about. I will now take you through the presentations, and as I go through various slides, I will keep calling the slide numbers so that you have the context. I am moving on to slide number three. Where I'll briefly recap our vision and the journey we are building at Sundra Brands. Our ambition, as we have talked always, is to build a scaled, multi-category food platform which addresses evolving consumer needs through innovative, delicious, and convenient food solutions. I am now moving to slide number six. With the addition of Delmonhe, now we have three strong brands in our portfolio. Sundrop, Actu, and Del Monte. And each of these three brands combined give us exposure to very attractive categories across everyday cooking, convenient meals, and snacking occasions. Over the last couple of years, we have strengthened and sharpened our focus on the core portfolio, faster growing channel, and unprofitable growth. We are also strengthening our presence across modern trade and e-commerce while leveraging the combined platform to drive scale, efficiency, and margin improvement. Most important, our growth model is now becoming increasingly capital-efficient, combining our existing manufacturing footprint with third-party capabilities, and we have expanded a mix of networks in CPU sites, driving some of our capacity requirements and also some of our innovations in the journey in the last few months. Alongside this organic growth, which we have been very strongly focused on, we, of course, continue to evaluate any opportunity which may come in the environment for us to add inorganic opportunities which can build on the platform we have been able to create. Our overall objective is very clear and sharp. Build category-leading brands, scale profitably, and create a stronger, more diversified food company. Now, moving to slide number 7. This slide, of course, captures the three brands sitting under one platform. We, as you know, are a very diversified platform today with these three brands which span in attractive categories, multi-channel presence, and also very strong capabilities which the organization has across distribution, e-commerce, and analytics. As you can also see, our portfolio offers consumption locations which are very broad-based, so right from multiple parts of the day, in-home to out-of-home consumption, on-the-plate, side-of-the-plate, white cuisines, protein snacking, all of these multiple consumption opportunities in the day of life of a consumer, this portfolio sticks on. And as you all know, this, of course, All of these are very synergistic when they come in terms of distribution, channel, and also in terms of manufacturing footprint. So, while a very diversified portfolio, it rides on a single tenet of very strong capabilities in distribution and manufacturing, which allows us to have a greater operating leverage as we build a business. Moving on to slide number 8. We believe our portfolio is very well-positioned to build. Thank you. And increase beyond volume on the value side. Thank you. Thank you. Thank you very much. All right, here.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shirish from Otilal Oswal Financial Services Limited. Please go ahead.

Hi, Nitish, Shirish. Congratulations for a good set of delivery numbers. I think the momentum is now getting built. So I have a few questions. Starting on Act 2, you mentioned that 83% volume growth on Ready to Eat. What is the growth which you have seen in Ready to Cook?

Ready to cook in volume growth is about 5 to 6%. Sorry? 5 to 6% in ready to cook. And blended in the entire popcorn franchise, the blended growth is about 10 to 11%. Okay.

So, sub-question here, this volume growth is largely driven by the e-commerce channel. I'm talking about the entire portfolio.

Yes, on the entire portfolio, I'll break it up in two parts. The RTE growth, if you look at it, it is driven by both general trade and e-commerce, because we still continue to drive about 7% growth in terms of rupee 10 pack, which is largely our HFS pack, which is our new consumer acquisition point. What e-commerce is doing is, e-commerce is upgrading consumers into a higher value pack. So the e-commerce growth in tennis terms is also higher in volume, but it's upgrading. So as an overall, if you look at, the small pack growth is also being driven, and the large pack also. Same is the case in RTE also, where the small pack growth is about 23%, but the large pack growth is about 53%, getting as a blended growth to about 37%. So, e-commerce is helping get bigger parts in-home to the consumers. The HFL distribution is helping us get the new consumers come into the category by increasing saliency and productivity price.

Okay, that's helpful. But I was more interested. What has suddenly this changed? In e-commerce profile because the growth is stupendous and I think we have delivered a very strong growth and it is now incrementally becoming 19% of our sales contribution. So I just wanted to understand is that the competition itself in e-commerce is getting spread or every player is growing and the consumer has started ordering more such kind of snacking product?

So, if you look at quick commerce, and I'll try to give you flavor across categories here, quick commerce is helping definitely drive the snacking or impulse consumption, because ability to get faster delivery of something which I need here and now is there, which means any consumption earlier we should have possibly sat in the basket of what I could put at home. We have changed the trajectory of our investment to define capital efficiency. One of the areas where we were not investing heavily or that much used to be e-commerce because we were a very general trade between companies. The change of trajectory in the last two years Putting a very strong team, putting a very strong tech backbone within the company for driving performance marketing investments and ROI. All of these initiatives have helped us do much better than the categories. So we have actually gained shares across categories driven by the fundamental changes in the way organization was approaching the channel. So yes, there are structural failings for Snacking, consumption categories where quick commerce helps, and we have seen expansion of quick commerce. There is a structural tailwind of quick commerce being on a general buoyancy, and that we know is translating to e-commerce channel growing between 80 to 25 percent. The part which is unique or, let's say, driving us to grow faster is around our internal focused investments and also putting a very strong team capability around tech, which is helping us grow this faster and gain share.

So, this is, it's really helpful, but I just wanted to check if this growth will continue, because we're now just entering into the special season.

So, I think Yes, we are very confident to first answer that summarily, and our confidence is now driven by two years of sustained performance, and also with the way our innovations are sticking up. You need to create eventually... We have opportunities to reach countries to gain shares, and of course, ride on the network in 2012. We have seen both, and that really gives us the confidence that this is a sustainable long-term lever we have been able to build.

My second question on the...

Should you have a follow-up question, please rejoin the queue.

Okay, thank you.

Next question is from the line of Nitin from Aurum Edge LNP. Please go ahead.

Yeah, thank you for the opportunity. Sir, regarding peanut butter category, we hold only a fraction of this, of the valuated segment. That is now a major part of the market. So what is the plan and timeline to win back to share over here?

So we have, as we talked about, as we

had said in the last couple of quarters, that in the premium side segment, which is largely your chocolate peanut butter and high protein chocolate butter and zero separation peanut butter. So we started launching this product from Q4, and by the time in Q1, we got listings and everything in place. If you look at sequentially in Q1, the saliency of these new products in our portfolio was about 8.3%, which in Q2 has moved to 12.4. So, we continue to build the acquisition of new consumers in these value-added differentiated products while we continue to build them. That is why if you look at our decline rates have now almost stabilized from minus 8 in Q4 to minus 3 in Q12, almost minus 1 in Q2. So, we are almost there with it now, which is what we have said. So as the acquisition of consumers on our new variants, or rather new value-added chocolate and high-protein chocolate peanut butter and zero separation peanut butter happens, we will continue to build the value-added side of our peanut butter.

Yes, just to add and to also comprehensively understand we are looking at when do we see this business coming back to strong growth and a sizable share in the premium or the value-added side. As Ashish talked, we are already seeing that momentum. Our internal ambition with which we are really driving is to take our growth in e-commerce to asset-of-category levels and much stronger. Today, we have reached about 18% growth. Our ambition will be within the next two quarters to put it ahead of category groups in e-commerce channel. And while we achieve that, we will also then enter into these platforms in general trade and modern trade, especially modern trade where saliency of value-added offerings is relatively much higher. And that would be a task for FY28.

Okay. Now, next question is… Is this correct to say that the revenue momentum is encouraging, but operating leverage has not improved so far. H1 pad was positive and encouraging growth, but operating cash flow was negative, almost 49 crores, 50 crores. So what drove this, and will Q3 bring it back to positive? Can you please elaborate on this?

Yes, so KT Srinivasan will answer this. Good morning. Just give me a moment, yeah. So if you look at on the cash flow side, there are broadly three things which you have to look at. One is inventory. In inventory, we have taken certain structural calls because of the uncertainty in the environment we faced. We have looked at areas where volatility could impact availability, and we have consciously taken our inventories up. And some of these areas are in the area of corn, some of our product like oats, where we are consciously trying to build inventory. That's one. Second, if you look at channel, overall finished goods inventory or channel inventory or receivables from channel. In that, dominantly, the increase is in line with our sales momentum. So our DSOs, et cetera, haven't changed. They have remained constant. So, these are the two areas where we have seen increased receivables, dominantly led by increasing sales momentum. Our DSOs have remained constant. There is no change. And second, selective inventory interventions, which are strategic in nature, which allow us to make sure that we do not have any vulnerability in the period of uncertainty, which has been there in quarter two. We are seeing signs of stabilization, so you would also see as we get into quarter three, this level will come back.

Perfect. My next question is… Sorry to interrupt, sir.

Should you have a follow-up question, please rejoin the queue.

Sure. I'll do that.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Next question is from the line of Deep Gandhi from iThought PMS. Please go ahead.

Yeah, hi, good morning. So first question is on the Italian side. I mean, if I look at the volume growth, we were at this range of 14 to 15%. But this quarter, I mean, it's quite high at 30%. So if you can, you know, explain to us what is, I mean, we can understand value growth is growing faster due to the price movement, but even the volume is very strong this quarter. So if you can give us the breakup between the pasta and olive oil, the volume growth number, and what is driving this growth and is it sustainable?

Yeah, Abhin has a request to go take this question.

Yeah, hi. Good morning. So, if you look at the volume growth between pasta and olive oil for this quarter, it's about 33%. So, it's driven by pasta. So, pasta is roughly at about 30% plus, 33% to be exact, and about 15% is coming from olive oil. So, that's the current volume split between olive oil and pasta. Now, what is, of course, driven is the fact that, as I think Mitish explained in his presentation, that this is one of the portfolios, one, which is a core for Del Monte. From a consumption perspective, from an equity perspective, and this is something that has also been structurally driven by the sales and marketing team right now. We are also putting investments behind it, and that, I think, primary is the reason that we have seen some shifts. There is also a bit of an impact off the base of last year, and that also meant, because of GST base of September last year, that also meant that there is a bit of a positive impact that we are seeing. Normalized would be closer to about 25% to 26% as far as pasta is concerned. So these are the primary drivers as of now. And we expect this momentum to continue into the festivities.

Sure. Sharon, if you can also share the normalized number for olive oil, I mean, what kind of volume growth you are expecting? You mentioned 25-26 for pasta.

Yeah, so volume growth for olive oil, we would probably see in the range of about 12-15% again in quarter three.

So, second question is again on the core and non-core side. So, if you can, you know, tell us what was the contribution of the core revenue in this quarter? Because if I see last year in Q1, our core business had grown lower compared to non-core. So, on a YOY basis, non-core grew by 18 percent and core growth was 13 percent.

Yes, so I think one structural shift which has happened is oil has been inflating a lot. And as I talked about, we have passed the thriving crisis to consumers. So a good way to look at core versus non-core growth is volume growth in core versus volume growth in non-core. Our volume growth in core portfolio used to be about 10%, which has expanded to about 12%. Part of it could be about the GST benefits. So I would still say we are at a 10 to 11% volume growth sustained level in the business. If you look at non-core, oil used to be historically declining. We did take some experiments which gave us a confidence that we could target 4 to 5 percent volume growth in oils, and that is the path we are traversing, and which is what has happened in oils in this period, where volumes have grown by about 5 percent. So, structurally, you can see the volume growth in core is double or 2x. And also a positive is that even the non-core portfolio, we are seeing volume expansion by selective interventions in areas where we do believe the ROI is very, very strong. And that is a thesis on which our investments are shaping up in this business. It's not anything different from what we are, let's say, endeavoring to deliver, where we are putting our investments. All of that is a calibrated approach, and it's working with me. I hope I answered your question.

The participants' line has been disconnected.

Okay, sure.

Can we take the next question? The next question is from the line of Siddhish Deshmukh from IIFL Capital. Please go ahead.

Hi, sir. Thanks for taking my question. My first question is with respect to the gross margins. So, I wanted to ask if we had any impact or benefit from the lower-priced raw materials this quarter, and secondly, at a TrimSol sales level, what would be the pricing this quarter, and are we fully covered for the RM inflation, or do we expect another round of price hikes given the volatility in the commodity prices?

So, see, look, all of these calls are category-specific calls because today the environment is not a broad-based inflation. We have seen at an overall aggregated level stability to maybe a marginal deflation in oils in the recent. If you may recall, in September last week, there was a reduction in duty on edible oils, and the industry and consumers have got the benefit of that. To some extent, the overall environment, I would say, is stable. Our inventory positions are generally aligned more to, let's say, I would say, requirements and ability to make sure that there is no disruption in supply. So our inventory levels have not changed in the context of pricing. We are adequately covered with a stable price environment in most commodities. In certain months where we did see disruption, we have possibly increased a little bit of our inventories, and that is strategic call, but again, not advice for rising-like calls. And overall, I would say it's a quarter ahead. I do not anticipate any, let's say, In fact, on the cost side, which will impact margin, or which will lead us to increase price increases, do price increases. Having said that, in Del Monte, we do have a certain key account and export business, which are annual contracts, and some of these annual contracts. Do cut for revision in a year-end cycle. Could be calendar year, could be potential year, depending on the contract. And there, in the past, we have not been able to take price increases because there was a contract. We will have to take, to that extent, some price increases. And wherever we, let's say, have some expectations required at a selective level, based on the last of procurement, that will be very minor or marginal. So, dominantly, I would say, from the consumer side, a stable environment is what we are foreseeing from certain export and businesses, where we had an opportunity which we could not do it because of historical. There you will see some improvement, and that will help us build our margin. Specifically, I would say the impact should come more in quarter four rather than in quarter one, because general renewal of contracts will happen between December to March.

Thank you.

Thank you. Next question is from the line of Isha Shah from Malhotra Family Office. Please go ahead.

Listen, sir, on a good set of numbers. Sir, our Q2 revenue grew 21% year-on-year. So, how much of this growth was driven by volumes, new products and distribution expansion, and what growth rate should we consider over the medium term?

So as I talked about our overall volume growth is close to 10% and in the core categories the volume growth Oddly adding. Innovation is helping us prelimize, but it's adding some more to price prelimization and not necessarily to, when I say the category index is going up. So we are getting about 3% to 4% benefit of prelimization of portfolio, where our big banks, higher value-added banks are improving, and another 6% to 7% impact is coming on the time. Price increases, which has been passed. That will be the breakup. If the 20 percent, there will be about 10 percent premiumization, and 6 to 6 percent premiumization. Thank you.

Next question is from the line of Natchi K from NK. Please go ahead.

Question. The first question is around the popcorn portfolio, which has been consistently doing well. So, can you talk about the sourcing strategy on that front and do you feel the low rainfall or more anticipated agriculture is allowed?

Let me get the answer. See, you are absolutely right. One of the key ingredients for our popcorn growth is the popping corn, right? Over the years, we have also... Work with the Indian grower and we now indulge in an indirect contract farming such that we secure ourselves for the coming years and also have a very good forward looking on what the pricing is likely to be. So our popcorn sourcing is now multiple. We also source the national varieties which we need for a certain kind of patch like microwave popcorn. But in the Indian varieties of RTE and RTC, Indian IPC, we source in India. In India, the corn is largely grown in Andhra and Chathilgarh, right? And we have diversified toasting because of the fact that, you know, weather conditions, water levels, and other things. Largely, we get into a contract where the growing and the contract farming starts sometime in November. We harvest it by February because the corn crop is about 95 to 105 days and in Chhattirgarh it's about 120 days. And that is how we have secured the entire year's plan in terms of to be grown domestically and sourced.

Okay. So, any idea on how the pricing and margins will shape on this going forward?

So, we have a very secure contract for next year. We do not see any significant inflationary trend on the popping climate.

Okay, great. And on the spread front, I know you've answered this, please, I'm going to call spread. Apart from the new product innovation and e-commerce push, what else could be the driving factor? Anything on the marketing or advertising? Because the competition is way more active on that. Your question was on e-commerce? No, the spread segment overall. Which brand segment, sorry? Across your thing? No, spread segment. I'm saying that competition is much more active on the marketing front. I know we are innovating new products in this threat segment, but the growth is sort of muted. So, how are we addressing that?

So, you are talking all brand segments put together. See, we have identified core categories on which we take investments. Roughly about 60 to 63% of our portfolio in that range. Let's see. Two-third of our portfolio is where we do our marketing investments. And that portfolio, as we have talked about, is going at about 12% in volume terms. There are marketing to, marketing and overall ad spend ratio to sales is close to 9%. We do, and if you look at historically, this used to be about 4-5%. So, thank you, Emil. Over the period of last two years, we have come to a ratio of 9%, and ideally, we would want to operate in closer to double digits only, so we are there. I don't think there is going to be any significant shift, but we are clearly investing. It's just that it is focused on ROI-driven approach behind core categories we want to build. Thank you.

Should you have a follow-up question, please rejoin the queue. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to one per participant. Next question is from the line of Deep Gandhi from iThought BMS. Please go ahead.

Yeah, sorry, I think my line got dropped off. So, sir, can you please help us understand, I mean, the reason for non-core growing faster than the core, which happened last quarter, and I don't know, I mean, if you can share the numbers for this quarter also and if that trend is continuing.

Okay, if I repeat it again, you need to dissect core versus non-core on two fronts. One is the value front, second is the volume front. You are right that non-core in a value front is doing good. The reason is, on edible oil portfolio, there was an inflationary environment, and hence the value growth on edible oils is close to about 15%, okay, while volume growth is close to about 5%. In case of core portfolio, the feature is different. The overall growth is about, let's say, 18%. Volume growth is close to 12% and premiumization and price increase net growth. Why I'm calling premiumization? Because also we are launching more value-accredited packs in this portfolio. That put together is about 6%. So that is how you need to look at these numbers. Inherently or structurally, our core portfolio is 2x the volume growth of our non-core portfolio.

Sure. Sorry if my line got dropped off and you might have answered it, but can you help us understand, I mean, what is the outlook for edible oil business for next two, three quarters? Because we see a lot of volatility on the edible oil prices. So, are you expecting any kind of margin hit on the edible oil side in the next two, three quarters?

So, we have been able to establish a playbook on edible oils. Where we do believe that we should be able to drive volume growths of close to 4-5% and keep our margin protection in terms of our growth ambitions. So, edible oil, we will not make it a margin-attractive category. We will see margin expansions coming through foods, which is what we are doing. In this period also, we have seen about 70 bits margin expansion in foods. In oils, ideally, we would want to... Protect our margins, and that is what will continue going forward. So, approach will remain the same. In terms of environment, what we have seen in the more recent times, I do not think there is an immediate concern about increasing our inflationary environment in the next three to four months. Why am I saying that? Because in September, there was a structural duty reduction by the government. And post that, dominantly, we are seeing the movements happening in the range of plus-minus 5%. And that much, I think, is very easily manageable through price calls and price changes.

That was very interesting. Thank you and all of this. Thank you.

Thank you. That was the last question for today. I know I'm passing it forward to Mr. Nitesh for closing comments.

Right. Thank you all for your participation in this set of questions. I do understand one or two participants had a few more questions. So, please feel free to reach out our company secretary, Kavita, with your questions, and we will be happy to engage and answer your questions. Also, would like to wish you all a very happy Dhanteras, happy Vipavali, and best wishes from all of us at Sundrop Brands here for the festive season and the new year ahead. Thank you so much.

Thank you. On behalf of IIFL Capital Services Limited and Sundrop Brands Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

I know you answered this question. Apart from the new product innovation and e-commerce push, what else could be the driving factor? Anything on the marketing or advertising trend because the competition is way more active on that. Your question was on e-commerce? No, the trend segment overall. Which trend segment, sorry? All across here, I think. No, the trend segment. I'm thinking the competition is much more active on the marketing front. I know we are innovating new products in this red segment, but the growth is sort of muted. So, how are we addressing that?

So, you are talking all brand segments put together. See, we have identified core categories on which we take investments. Roughly about 60 to 63% of our portfolio in that range. Let's see. Two-third of our portfolio is where we do our marketing investments, and that portfolio, as we have talked about, is going at about 12% in volume terms. There are marketing and overall ad spend ratio to sales is close to 9%. We do, and if you look at historically, this used to be about 4-5%. So one clearly, over the period of last two years, we have come to a ratio of 9%. And ideally, we would want to operate in closer to double digits only. So, we are there. I don't think there is going to be any significant shift. But we are clearly investing. It's just that it is focused on ROI-driven approach behind core categories we want to build. Okay.

And this negative value growth…

Sorry to interrupt, sir. Should you have a follow-up question, please rejoin the queue. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to one per participant. Next question is from the line of Deep Gandhi from iThought PMS. Please go ahead.

Yeah, sorry, I think my line got dropped off. So, sir, can you please help us understand, I mean, the reason for non-core growing faster than the core, which happened last quarter, and I don't know, I mean, if you can share the numbers for this quarter also and if that trend is continuing.

Okay, if I repeat it again, you need to dissect core versus non-core on two fronts. One is the value front, second is the volume front. You are right that non-core in a value front is doing good. Reason is, on edible oil portfolio, there was an inflationary environment, and hence the value growth on edible oils is close to about 15%, okay, while volume growth is close to about 5%. In case of core portfolio, the picture is different. The overall growth is about, let's say, 18%. Volume growth is close to 12%, and premiumization and price increase that growth. Why I'm calling it premiumization? Because also we are launching more value-accreative packs in this portfolio. That put together is about 6%. So that is how you need to look at these numbers. Inherently or structurally, our core portfolio is 2x the volume growth of our non-core portfolio.

Sure. Sorry if my line got dropped off and you might have answered it, but can you help us understand, I mean, what is the outlook for edible oil business for next two, three quarters? Because we see a lot of volatility on the edible oil prices. So are you expecting any kind of margin rate on the edible oil side in the next two, three quarters?

So, we have been able to establish a playbook on edible oils. Where we do believe that we should be able to drive volume growth of close to 4-5% and keep our margin protection in terms of our growth ambitions. So, edible oil, we will not make it a margin-attractive category. We will see margin expansions coming through foods, which is what we are doing. In this period, also, we have seen about 70 bps margin expansion in foods. In oil, ideally, we would want to... Protect our margins, and that is what will continue going forward. So approach will remain the same. In terms of environment, what we have seen in the more recent times, I do not think there is an immediate concern about increasing our inflationary environment in the next three to four months. Why I am saying that is because in September there was a structural duty reduction by the government. And post that, dominantly, we are seeing the movements have been in the range of plus-minus 5%. And that much, I think, is very easily manageable through price calls and price changes.

That was very interesting. Thank you and all of this. Thank you.

Thank you. That was the last question for today. I know I'm passing it forward to Mr. Nitesh for closing comments.

Right. Thank you all for your participation in this set of questions. I do understand one or two participants had a few more questions. So, please feel free to reach out our company, Secretary Shri Savita, with your questions, and we will be happy to engage and answer your questions. Also, would like to wish you all a very happy Dhanteras, happy Vipavuli, and best wishes from all of us at Sundrop Brands here for the festive season and the new year ahead. Thank you so much.

Thank you. On behalf of IIFL Capital Services Limited and Sundrop Brands Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.