Zydus Wellness Limited (ZYDUSWELL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Zyder's Wellness Q2 FY27 earnings conference call. As a reminder, all participant lines will be in the lesson-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 touch-tone phone. Please note that this conference is being recorded. I now have the conference over to Mr. Ashutosh Jyothar Aditya from ICICI Securities. Thank you, and over to you, sir.

Thank you. Hello and good afternoon, everyone, present on the call. I, on behalf of ICICI Securities, welcome you on Riders Wellness Limited's Q2 FY27 earnings call. I would like to thank the management for giving this opportunity of hosting the call to us. From the management, we have Mr. Ganesh Nayak, non-executive director, Mr. Tarun Arora, CEO, and Mr. Umesh Parekh, CFO. I will now hand the call over to the management for their opening remarks. Thank you, and over to you, sir.

Thank you, and good evening, everyone. Welcome to the post-results, teleconference of Zydis Wellness Limited for Quarter 2, financial year 2026-27. I have with me Mr. Ganesh Nayak, Director, and Mr. Aumeesh Parekh, CFO, on the call from our side. During the quarter, Amid the high inflation largely driven by commodities, consumption trends continue to reflect sustained positive momentum across categories, supported by a steady recovery in demand and an improvement in rural offline markets. The gradual improvement in consumer demand coupled with consistent performance across categories supported overall growth. E-commerce and quick commerce continue to maintain strong momentum, steadily increasing their contribution to overall sales, and further strengthening their role in the evolving consumption landscape. Innovation remains a key growth driver with a focus on emerging consumer needs, new consumption occasions, and differentiated offerings. During the quarter, key launches included. Sugarfree entered monk fruit sweetener category with a non-nutritol formulation. Right Bite Max Protein Crunchy Cookies featuring 10 grams of protein made without palm oil, maida, or any added sugar. And of course, continued portfolio expansion in the Comfort Click business, a bunch of vitamin B complex, omega-3 triglycerides, and vitamin B3 and K2 under the weight hold brand. I'll take you through the key highlights of the quarter. And half year ending September 30, 2026. On the financial front, for quarter two, financial year 2027, the company reported consolidated net sales of 11,227 million. Reflecting a growth of 74.6% year on year. On a half-year basis, the company reported net sales of Indian rupees 25,526 million, reflecting 70.1% growth year-on-year. With regards to revenue performance snapshot, domestic portfolio delivered robust growth of 29.2% on year-on-year basis during the quarter, of which seasonal brands grew by 123.5% on a low base. Skin and hair care brands continued its growth momentum with 37.5% growth, and food and nutrition delivered a strong growth of 25.1%. On a half-year basis, domestic portfolio registered growth of 13.3%, in which skin and hair care grew by 35.8%, food and nutrition grew by 20.7%, while seasonal brands de-grew by 8.7%. International business registered like-to-like growth of 12.4% during this quarter and 18.6% in the first half of financial year, 2027. Gross margin expansion continued in the core business and was further expanded to higher margin of the comfort tech business. On the EBITDA front, the company delivered growth of 271.7% during the quarter, reaching Rs. 855 million. The results underscore robust EBITDA margin improvement across businesses. Resulting in EBITDA expansion on a like-to-like basis. On half-year basis, company registered an EBITDA growth of 83.2%, reaching to Rs.3,272 million. Detailed brand performance and market share developments are covered in the investor presentation. Key highlights for the quarter are as follows. EVU continued to deliver double-digit growth led by the TAN removal and peel-off franchises. The brand continued to strengthen its position in spacious cleansing with significant market share improvement supported by innovation and consumer acquisition initiatives. Nutrilite delivered strong double-ditch growth across The portfolio despite commodity headwinds. Sugar-free brand replicated its double-digit growth performance from the previous quarters in the current quarter. Right Byte, Max Protein sustained its strong growth trajectory, reinforcing its leadership in protein stacking through innovation-led category expansion and strong value and volume growth. Cuticolor has been increasingly witnessing strong offtake, achieving positive consumer feedback across organized channels. During the quarter, the brand expanded its portfolio with the launch of Bright Brown, further standarding its differentiated proposition in the safer hair color segment. Compland registered double digit growth outperforming the category trend. Compland neutral growth rates maintain Strong growth momentum supported by direct supply through newly set up own medical marketing team. We remain focused on driving innovation, digital transformation and discipline growth. A diversified portfolio and expanding market positions us to deliver sustainable growth and further margin expansion. Thank you. We will now begin the Q&A session. Over to the coordinator.

Thank you, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Sintesh Deshmukh with RIFL Capital.

Please go ahead. Hi, sir. Thanks for taking my question and congrats on a good set of numbers. My first question is with respect to Comfort Click. You see the growth has moderated from 25% last quarter to 12% this quarter. So could you explain what drove the slowdown and what directive actions are we taking for the growth to come back? And also, since the 2Q growth is below the aspirations which we had set at the time of acquisition, how do you see FI27 shaping up for ComfortClick?

So, at an overall level, I think there are, you know, normal business cycles that go through. There is a small shift in the, you know, some of the prime day between June and July, which swing the number a little bit. Also, we are seeing, you know, seeing some challenges in one of the markets as we shifted between the old, you know, website to the new website where we lost some momentum, but we're quite hopeful that the double-digit growth that we've talked about will continue to move forward. This quarter has been slightly lower than our expectation, but some of the markets have also given us hope that we could build up further on this. So, we'll have to wait and watch, but if we really look at moving average level, I think we've seen a consistency of the numbers. First half is at the infrastructure business is more than 18%. Therefore, we will take it as things come, but we remain consistent in our, we offer double digit growth on this business as we stand today.

Got it. So my second question is, with respect to Complan, we've delivered a double-digit growth this quarter, and we've outpaced the category growth. So can you dig a little deep in what initiatives you've taken in this brand, and how do you see the growth going ahead?

I think we are also generally pleased with our Complan numbers as we have played out, but I don't think it's a one quarter performance. We've been able to do a positive momentum on Complan for now three quarters, and we are hopeful that we'll be able to maintain because this category has been under pressure generally. But last three quarters have given us hope that most of our initiatives will work. To name a few, I think the fact that we've got a very good celebrity who fits in very well, Vaibhav Suryavanshi. And some of the, you know, campaigns that we work with him have had a very good response on the consumers. Last quarter, we've also launched 50% lower sugar. I mean, we've relaunched with 50% less sugar. Also, relaunched Complan Nutri-Gro, which is a 2-6 year toddler initiative. Some of these things, plus some of the on-ground work and distribution and other pieces, all have come together and have given us now three quarters of continued momentum. So fingers crossed, we will continue to keep executing the way we have and hope that the momentum will continue to build on it.

Got it. Thanks and all the best.

Thank you. The next question comes from the line of Ranak Shah with Aquarius Securities. Please go ahead.

Thanks for the opportunity, sir. So my first question is on the skin and hair can. So whether we see from the second quarter or first half perspective, very stellar show, 35% plus sort of growth rate. So what is driving this kind of the growth, X of the cuticle, how the ever-youth is shaping? Can you highlight on that trend? Thank you.

I think while we don't give a brand-to-brand separate performance, I can tell you that Evyouth has been a brand which over the last 5-7 years has seen a very consistent high double-digit growth and really moved the needle in especially the spaces which are strength areas where it is not just gaining market share but focused on category development. And that's really what has given the whole numbers, whether you look at VLOGs, CLUPS, even the new proposition TANWO, which is really built up meaningfully in the last four to five years. Each one has contributed, and we do believe that it will continue to be a growth driver for significant double-digit momentum of the business.

Got it. So my second question is on the right bite. So when we see to the retora, now number of the players plus players are also coming into the functional food play with healthy snacking and all. So despite all this, we are seeing sustained strong growth rate into the right bite. So can you highlight a few initiatives which we have taken the last two, three months to sustain the growth and how we are seeing the business shaping up considering the sizable contribution now coming from this franchise?

So, all I can say is that, you know, this is a space where, which is, you're right, attracting a lot of attention and a lot of new players are coming in and investing big money and there are larger players who are getting interested in this as the category goes. We've focused on the basics. We're not losing sight of the fact that we have to execute every day on the fundamentals. So we are, at the first level, we are somebody who's in hunger for growth, not discounting, which keeps us focused on our business being built sustainably, profitably. Secondly, I think we've focused a lot of energies around sales and marketing to build this right, where our brand-building efforts and decision across channels, omni-channel. I think they are working very well. We've got all of them that is finished to be supporting this, not necessarily... It's making a larger distribution, but the right outlets, right channels. And last, it's waiting at a very fast pace where we are not saying that how do I get into the category, but how do I keep adding more products to the franchise based on what consumer is wanting. These things come together and help us build it in the right direction.

Got it, got it. So my last question is on the profitability. So now, when you are highlighting in your open income remarks, wherein the macro challenges includes your inflationary environment, and we are likely to have a overlapping base of the comfort rate equation. So from the near-to-mid-term perspective, how we are expecting our operating margins to perform and specifically from the mid-to-long-term perspective wherein we are aspiring like mid-to-high-team sort of mid-term margin, how much we are confident considering the current volatile macros.

So, as far as, let me start with the gross margin, and I think I'll first start with the core business, because that really is where a lot of work has to happen in terms of ensuring those margins. So, when I really look at half year one, between the two quarters, despite significant inflationary situations and the commodity moving up, we've been able to increase our gross margin product by product. It would have been, the outcomes would have been sweeter if our, you know, mix was more positive with the summer products, which are even higher than our average numbers. But the fact is that we've been able to do that. So our focus is that if the Thank you. When input costs go up, we won't pass on some of these. We have a pricing power across our brand portfolio and we'll pass on these. Sometimes there could be a lag because we don't lead with the price increases. We lead with what is right for the consumer and wherever there is a need for passing on, we do it. So sometimes there could be a lag, but essentially we will continue to manage our portfolio in a way that we remain profitable and keep moving our margins up. So gross margins will continue to be driven up in our core portfolio. As far as RightBite is concerned, ComfortClick is concerned, that's significantly higher than our core portfolio. So core portfolio including RightBite is... Clearly moving up the margins on a quarter to quarter basis is what we will continue to look at. How does it impact our EBITDA margins? I think we are looking at in our core business to improve our EBITDA margins through gross margin improvement, which I already explained. And operating leverage as we scale up. I think this scaling up, the last quarter being a significant road driver, gives us opportunity to be able to provide operating leverage to the business where our fixed costs do not necessarily go up in sync with our... You know, our top line, and that will give us an improvement in EBITDA margin. So, from a medium-term perspective, I am quite confident that despite inflation, we will be able to move the EBITDA margins as desired. And we've talked in detail in the past. I don't see a big risk. I am more worried about inflation, a continued inflation quote. It will impact consumer confidence and reduce the consumption, which right now in the environment looks good. If that impact, that has a differential impact. So I'm more worried about that. But our actions are in place to keep moving the market.

Very detailed and clear, sir. That's it for my chat. Thank you, sir. Thank you.

The next question comes from the line of Kinjal Mota with Ban Entry Advisors. Please go ahead.

Thank you for the opportunity. My first question is on Comfort Flake's growth. While you alluded to it that there was a shift in one of the, there was a challenge in one of the markets, I wanted to understand that Comfort Flake's majority of revenue comes from marketplaces like Amazon. Is there any slowdown on Amazon as well?

So yes, one or two markets have seen slowdown in Amazon, but those are like temporary ones. At an overall level, we don't expect a significant shift because the opportunity for business to move towards... Online is much higher because we are really talking and we've given this number last year when we bought the business. More than 11 billion is estimated to be a BMS market in our address markets in Europe. And there is opportunity for a lot of it to move online. So we remain steadfast in our view that the business will keep shifting more online. So some bit of some markets have seen a little bit of slowdown in Amazon, but that may be a temporary thing. It is not a systemic number. So I believe that will continue to build up. The good thing is we are now also moving on to other platforms, other marketplaces like Boots. There's a couple of other ones, which we've also listed ourselves. While they are not as large as Amazon, but they give us a good cover for and growth opportunity as we will talk.

Got it. Thank you. My second question is on seasonal brands, which grew by almost 120% in the current quarter. But if you were to look at half year's number, they're still down at 8.7%. If we were to look at H1-Fy27, could you compare glucondi and nisil with Fy25, which was a normal summer year for us?

So, I can't give you any specific Ugondi numbers, but I can tell you that, yes, the fact is that I take out two things. One, of course, the quarter one of a financial year. Quarter four and quarter one are the big quarters for the summer brands, and if I really look at FY27, quarter one was really impacted significantly because of summers, and that's why half year one still stays negative. The two takeouts that I would want you to look at is the fact we've always talked about double-digit growth for our domestic business. This year is first year where summer brands have had a struggle in the quarter one, but half year one has delivered a double digit growth for domestic business at 13% plus. So that's the fact that while we will have ups and downs cyclical impact of summer brands, but our business is becoming immune to seasonality. I mean, it's a good thing in a way because a lot of concerns come back. When I look at some of brands in specific that you asked, I think while I will not have a specific ready number from FY25, but the fact is that like for like, we are seeing a good momentum moving up, especially in quarter two. We hope that we can build it further, but I can't give you a specifics on detail.

My last question is, we have seen gross margin improvements when that continues, but we also continue to invest back in the business in terms of advertisement. Wanted to understand what should be the steady state ANP as a percentage of sales that we should target for a longer term, and when do you expect it to start slowing down?

So. The way I look at it, we've managed our P&L where our domestic business spends about 12.5% to 13% on A&P, and Kuppertlick typically spends about 23%, 23%, 24% on A&P, and that's, I think, a very disciplined trend that we will continue to build on. In domestic business, which is where we are leaders, we have to build the category, and therefore the task is to build the category, and that also helps us grow our business. And therefore, I do believe that this is a model which we want to retain. We will look at gross margin enhancement and other operating leverage to improve our EBITDA margin rather than to cut. The investments are marketing because this is important for a consumer acquisition space. So in short to medium term, I think we'll remain consistent about 12 to 13%, half a percent any time we have an opportunity we'll take out but not a significant shift. As far as Comfortlink investments on marketing are concerned, they operate at 23 to 24. They are more variable because it's a lot of performance marketing and as well as some middle-of-the-funnel marketing. But there also, part of it is very disciplined in terms of percentage to sales and we looked at some optimization in last one year and that's really helped us. So we will continue to maintain the same. Mix.

You got it. Thank you so much. That's awesome.

Thank you. The next question comes from the line of Simran Kumari. Not only enough, financial services. Please go ahead.

Hi, sir. And I will do this. Thanks for the opportunity. My question is specifically regarding the margin. Could you just provide the margin outlook for the rise by as well as comfort during this quarter? And the strategy and target for maintaining this boat for the coming years?

Thank you.

Hello.

Yeah, you want to know the margin for quarter two, yeah, margin,

yeah, comfort click as well as right by portfolio, and the outcomes for the same for the coming year.

So we don't share individual brand or business-wise margins.

Okay, like I just wanted to get an idea like how much our core business had contributed this quarter. Is there and what kind of pricing that we passed on this quarter? Like as you said, there was huge inflation during this quarter. So I just want to get an idea what was the pricing we took in this quarter.

So, let me just give you something which we have said in the earlier calls. EBITDA margins for Comfort Click, we expect between 14 and 15 percent, and that's the steady state that we are envisaging. Anything else, we are not able to share. As far as this quarter is concerned, we have taken some calibrated price increases wherever there were direct impacts on those products. So that our profitability, gross margins are predicted and therefore we've been able to deliver. There is work at hand because some costs are going up as we speak and could make an impact in the future. So we are already, you know, looking at how do we manage those price increases. But looking at margins, you will not be able to separate out the price increases anymore.

Now, is there any plan for further price increase during this quarter, like 3QFY27?

Over half year, too, yes, we will take calibrated price increases, like I mentioned, depending on what commodity is going up. And because it's a very volatile environment, and different commodities are going up in a different way, like We've seen some stabilization on farm oil, so may not need to act on that immediately, but if milk or something else goes up, we will respond accordingly, or PET, or any plastics go up, so we'll respond accordingly. But, I mean, like you would know that it's a volatile environment and very hard to predict, so we are tracking individual commodities and acting accordingly. So we will take some price increases, but it's not across them.

Thank you so much for the answer. And my second question is regarding the same right by portfolio. What was our revenue outlook for this right by portfolio?

We do not give an individual product portfolio-wise answer, but I think like we have maintained, we have more than doubled our historical growth rates on this product and exceeded those estimates, is all I can say.

Thank you so much.

Thank you. The next question comes from the line of Ajay Thakur with Anandrati Securities. Please go ahead.

Hi, am I already back? Thanks for taking my question. So first question was more on the ever-youth I like the earlier participants had kind of checked out on ever-used growth or you'll get more sense because we are going ahead of the category growth rates. So are we creating, you know, market share in the subsegment and also the overall facial segment if you were to kind of look at it from that perspective. So, maybe more color on that, what is kind of diving will help us, you know, understand the sustainability of this growth, even the fact that it has been going at a very fast pace over the last many quarters now. So that's the first question.

So on every youth, you're right, we are growing faster than the category, and we've been, so we define facial cleansing with face wash, scrubs, three types of masks, peel-off mask, sheet mask, and wash-off mask, et cetera. So all facial cleansing products, which is close to about 4,500 pro category. We've been gaining share about a few years back. We used to be number seven, then we became number five in the space. We have now this year, Become number four. So we are actually gaining share and rank in this space. So each of these initiatives that are, you know, we've been taking is adding up to our momentum on this. So you're right, it has helped us improve market share and rank in this overall facial cleaning category.

And is it like any specific markets or that we are targeting which is helping us grow in the ever-youth or is it like, you know, broad-based or any segments which is kind of, you know, surprised in terms of the upside, any, you know, new launches which has performed way better than our expectations for ever-youth specifically?

So, it's a broad-based growth, and it has come over the years. I think it is a validation of our strategy of continuous investment behind category building. Which is really helping us move this forward. So it is not about just that we've got something windfall one year off. But I think year after year, our focus on investing behind developing the segments that we play in, premiumizing, innovating, launching new products, expanding our portfolio. I think each of our actions have come together and this is just a validation of our approach.

I understand. Helpful. Second question was more on the cross-margin. If you were to look at the cross-margin consort level, it is slightly lower tracking at, you know, below the 65% kind of a level that we have been doing, say, for the past two quarters. On an average basis, it could have been more like, you know, 65% kind of a level for the past two, three quarters. And then obviously we have the input cost pressures, which is kind of going on, but, you know, what kind of, you know, level of gross margins will you be comfortable with, and how are you likely to kind of, you know, defend it, given the inflationary cost pressures, and if you can throw some like on the domestic gross margins, what is the international gross margins as well, which will help in terms of understanding a broader mix over there.

I can tell you that for half year 1, our gross margins individually in the domestic portfolio are mostly higher. One or two spaces may be same as a year earlier. So I can tell you that our gross margins for the half year 1 has only got better than earlier. If you are comparing it to two sequential quarters earlier, the fact is quarter 4, quarter 1. Tend to be higher margins because of higher seasonal brand mix, which is disproportionate to this quarter, and therefore, you know, they move the averages much higher. So you may find on a sequential level, a gross margin drop, but as a company at individual level, we continue to track in the right direction. So like for like over last year, same quarter, I can assure you that our gross margins are better off. It is that sequentially, it may look different because, like I explained, the seasonal portfolio moves it up. It is much higher than the average domestic gross margins on Nucondi and Nisil that, you know, affect the, impact the averages. So, therefore, we remain focused on the delivery on gross margin on a continuous basis despite the inflation.

Just one last question was on the cookies launch that we had under the max protein. Is it a pan India kind of a launch? And secondly, you know, what channels are we kind of focusing? Does it also include the channel? And in terms of the price point also, if you can share, you know, how it is kind of, you know, price versus the competition.

So, so it's a pan India launch. We are launching both across channels. It's an omnichannel approach that we follow. We are on online channels. We are launching in offline channels. We do believe that there is enough and more opportunity on building around it. It's a premium play. So, most of the categories you will find us playing to the premium. We are not comparing ourselves with the mass players and the cookies because we really can't do that game. It's a product which is built around, you know, the seven super... Since there is a fair amount of protein in the mix, so it will be a significant premium to the mass product.

All right. Oh, yes, Mr. Ajay, does that answer your question?

Yeah, yeah. Thanks, Haroon. Thanks, Dean, for the answers.

Thank you. The next question comes in the line of Bine Shukla with Philip Capital India. Please go ahead.

Okay, hi, sir. Thanks for the opportunity. Just on KPL business. So, is it possible to share what was the... Sorry, I'm not able to... Sorry, could you just... Can you have me now? Can you have me now?

Yeah.

Yeah, so it was on TCL business. We just wanted to know the quantum of impact on growth because of the demand shifted from July to June, and also because of its website integration, so what was the impact on growth in terms of percentage during the quarter?

Sorry, I could make out the July to June piece. I didn't understand the other piece. I think July to June is a small number. It's not like a big number. I'm referring to two or three events which happened. One was July to June Prime Day shift. One was a website shift in one of them. And a general slowdown on marketplaces in a couple of places. But not a significant number for me to pick up on. We can't detail it out. But some of those things have contributed to the mix. But if we really look at half year one, we are at 18% growth. And that I think is in line with what we expect. If there was some part of the second half that you were asking, I couldn't get that. So maybe you could.

So, just on how was the October month for CCL best years? Is that slowdown since continued in October also, or have you seen some improvement in the best years?

It's a good question, but we really do not share the next quarter numbers.

Okay. Sir, just on detail only, what was the contribution is coming from the repeat purchase customer in terms of contribution and secondly, new launches contribution for CCL business?

So what is the contribution coming from repeat purchase in CCL? New launches. New launches. I think… This year, we seem to have a very good response of the new launches. So I don't have a specific number, but we are seeing a sustainance of the new launches at a very differential level. So we're quite excited with the possibilities it'll take us to, but I do not. So, overall products launched in last three to four years, the numbers will be closer to 4%, but just 2% on the last products launched in last one year will be the share of growth.

Okay, just a second on the regional brand. So, can you please help us to understand what was the contribution of summer portfolio during the Tokyo, of the mistake of me?

Sorry, your voice is, I think I missed some of the voice. What is the contribution of summer portfolio to?

Summer portfolio contribution during the Tokyo, sir.

So, we don't share separate salience of these. We've given you what is the growth for each of these segments, but what was the contribution we will not be able to share in specifics.

Okay. And third is on Google demand, sir. How things are, demand is shaping down in Google demand. Do you see any kind of lowdown in terms of sentiment in Google market or is it still resilient for you?

So, rural demand continues to be robust. While we have significantly lower than larger FMCGs in terms of rural portfolio, but whatever we have, glucondin, isl, or even a complan sugar-free labor use, we do see that rural is holding rather well. In fact, growth rates are slightly higher than urban.

Okay, last question on total price hikes we have taken so far versus on a case of commodity inflation.

So it's a mixed bag. Overall value we may not be able to share, but the fact is that we have taken it on. Specific products in SKUs where we have a direct impact of the cost of, from the cost inflation from the input point of view.

So I am keen to know the blended price, I think.

Will be about less than a couple of questions, please, right?

Less than 2%.

Commodity inflation will be in a single digit.

Yeah, it'll be in single digits because some part has obviously has been much higher and we've taken it on, but there are some products like Dextrose and several other products which we do an annual tie-up, so they remain fairly stable through the quarter of the year.

Un-Dextrose. Very helpful, sir. Thank you so much.

Thank you. Did I answer your question?

I know.

The next question comes in the line of Nandan Vartak with Wealth Managers. Please go ahead.

Thank you for taking my question.

I'm sorry to interrupt. Could you please use your handset?

Hello.

Is it okay now? Yeah. Thank you.

So while you I think he's got disconnected.

Oh, yes, sir. The current participant has been disconnected. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question comes from the line of Devang Saravgi, an individual investor. Please go ahead.

Good evening, sir. Am I audible?

Yes.

Sir, my question is on Comfort League. If Comfort League growth returns to 20%, can consolidated gross margin get back to 65% range in non-seasonal quarters?

So, it's a hypothetical question because, I mean, we could do those mixes, but at the end of it, I think what we've given is fairly, I mean, it'll be in a similar zone. I mean, I'll have to put a match together and come back to you, but I think this is what it is right now.

And second, can you expect growth to normalize from Q3 for comfort, look, any projections for that business?

We believe that we'll continue to be on a double-digit growth that we've talked about. And half-year-one, we have delivered 18%. We do believe that we will stay on course to get to a double-digit for half-year-two as well.

Thank you, sir.

Thank you. Participants, if you wish to ask a question, you may press star and 1. The next question comes from the line of Nandan Vartak with Wealth Managers. Please go ahead.

Sorry, my line got dropped off. Am I audible now? Yeah, so actually, I was asking that while you gave an indication that profitability continues to be stable to improving at gross margin levels, even for the domestic market. But last year, H2 was very strong in terms of our gross margin deliverables. And given the inflationary pressure which we see currently, do you believe that H2 of this year, we will be able to continue this trend of improving gross margins or stable gross margin? Margin G1 and H2, or you believe that the high base effect will have some...

So, I do believe that we'll be able to hold on to our gross margin levels. But of course, it will mean a lot of effort in terms of ensuring that we are managing our costs rather well and taking price increases wherever required. So, our endeavor is to... Match or improve loss margins, but only time will tell how well we are able to do because the volatile environment, hard to predict, but our intent and actions is what I can commit to.

Right. Great. Great to hear that.

So second is on the comfort click again. We have the numbers, you know, in terms of a broad directionally, we understand, right? I, you know, just to because given one is the seasonality impacts of products and segments which come on the companies and it's one and the second is now the we have added international. So there is some it becomes very difficult to get the complete hang of everything. So just would request you to have some, you know, some Some concerns, which if you can be a little more specific on the question I have, we have around 500 crores broadly give and take for a quarterly run rate for ComfortClick. It has been in the last year, and it's a 18%, 20% growth segment, which has been near broadly. Combine that, you also indicated that it's a 14-15% EBITDA margin kind of business which When we look at the last year of Q2, because only one month of Comfort Click was added there, when we look at the math in terms of domestic sales being so strong in this quarter of almost 29%, the math actually tells us that the Comfort Click would have been actually, the margins would have been in low single digits, if at all. And also the fact that the growth on the international side, you just mentioned light to light, but if we do the numbers after doing that, it would be a very bigger impact than what the qualitative indications have. Will it be a fair way to say that this is how did the quarter went by?

So, all I can tell you is that I think margin's comfort lake is holding rather well. We have given you a reasonable view of comfort lake's growth, which I think you can dissect and you can look at it. As far as domestic business is concerned, we have grown our business. Cross margins have also improved, but we've also invested back on the business. And that also has an impact on the overall bottom line. Overall, we've balanced our bottom lines between both domestic and international, where we have focused on building growth and preparing for the books. And those things have been balanced, and that's how we've been able to deliver what we wanted.

We're gonna like to like this is also, would I have seen some pressure on the margin this quarter is what I get it like.

No, that's what I like I explained, not really, they've been consistent. Okay. And we've invested also on brand building in the domestic business.

Okay, great. Sir, we'll do the numbers again and come back in.

Thank you so much.

Thank you. The next question comes from the line of Chairman with Ardeco Asset Management. Please go ahead.

Hi, sir. Thanks for taking my question. Two questions on the comfort table. It's not able to hear you clearly. Can you hear me? Not clear. Am I audible? Hello. So, sir, it's been a year since the comfort level acquisition.

It's not clear. It's not clear.

Sir, could you please use your handset and come in a better network area? The voice is getting cut off in between. Am I audible now?

Yes.

So, sir, it's been a year since the Trump project acquisition, and we understand antiquity, like these have been normally being few surprises. So, while looking back, are you surprised by underlying the seasonality of the sales or the competitive intensity in the coal market?

Sorry, are we surprised by what?

Underline functionality of the sales or the competitive intensity in your cold market.

For comfort click?

Comfort click, right.

Yeah, so I think When we look at Comfort Lake, and you're right, it's been a year, there has been a higher intensity than we did imagine, but that's okay, that's expected, because when you do well, and when you actually set a path in this kind of space, some of those competitions are pretty much expected, and that's playing out. That's not... So much of a problem. A little bit of highs and lows happens across market to some bit of cyclality. I think we're watching and I think not a big surprise. We obviously remain very optimistic about these businesses and when I look at First half-year growth, it's in line with the double-edge growth that we envisaged, we'll just see how it plays out in the future quarters and then decide if there's any surprises or if there are any different takes on this.

Understood, sir. And so, given the size of an opportunity size of the VNS market and the underlying fragmented nature of the industry, how are you thinking about stepping up the marketing span at the comfort check to gain the market share in key of the marketplace?

So, one of the things we are doing is, and the team understands it rather well, they are very good with performance marketing and bottom of the funnel. We are stepping up our investments on the middle funnel and top funnel spaces. We are also looking at some markets where we will build it a bit differently. So, we are preparing ourselves for the future where we will see a lot more competition, but we have also enhanced some of our capabilities on more brand building. I think we are well prepared to take on the future growth from that agenda as the market expands and we want to play in a larger space and more players come.

Yeah, but that's the thing for my side. Thank you so much.

Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now have a conference. What is the management for closing comments?

Thank you, everyone. Wishing you and your family is a festival filled with good health, happiness, well-being, and safety. We'll see you next quarter. Thank you.

Thank you, sir. On behalf of ICAC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.