Cello World Ltd

NSE:CELLO

Earnings Call Analysis

Cello World Achieves Modest Growth Despite Adversities

In Q1 FY25, Cello World reported a 6.1% year-over-year revenue growth, reaching INR 501 crores. Despite weak urban demand and election-related challenges, gross profit margins improved by 120 basis points to 53.8%. The Consumer and Furniture segments each grew by 6%, while Writing Instruments remained flat. EBITDA increased by 8.6% to INR 135 crores with a 27% margin, and PAT grew by 6.7% to INR 83 crores. The company anticipates a stronger second half, maintaining a 15-17% growth expectation for FY25. Significant revenue gains are expected from the soon-to-be commissioned glassware plant.

Strong Revenue Growth in a Tough Market

Cello World Limited reported a 6.1% year-on-year revenue growth in Q1 FY '25, reaching INR 501 crores. This increase comes amid challenging conditions characterized by weak urban demand and uncertainty due to election activities in the country. The notable contributions to this growth were from the Consumer and Furniture businesses, each growing by 6%. On the other hand, the Writing Instruments segment remained flat, reflecting a broader industry trend. Yet, the management expressed confidence in the Writing Instruments business, targeting expansion through new product lines, including markers, crayons, and geometry boxes.

Margin Improvements Across Segments

The company improved its gross profit margins from 52.6% to 53.8% year-on-year, a gain of 120 basis points. Specific improvements were evident in the Consumerware business, which saw a gross margin increase of 170 basis points, while the furniture segment improved by 100 basis points due to lower raw material costs. The Writing Instruments category, typically boasting higher margins, recorded over 80 basis points expansion as well. This trend indicates that the company is effectively managing costs and navigating through a competitive market to protect its margins.

Future Growth Driven by New Plant and Marketing Campaigns

Cello is optimistic about future growth, maintaining guidance for an overall revenue increase of 15% to 17% for the fiscal year. A critical factor driving this confidence is the upcoming commissioning of a new glassware plant, expected to contribute an additional INR 75-80 crores in revenue. The plant is scheduled to go live around mid-September, coinciding with high demand seasons. Furthermore, the firm has increased its advertising expenses substantially, rising from INR 2.8 crores last year to INR 7.8 crores this quarter as part of a back-to-school campaign, aiming to enhance brand presence and capture market share.

Diversifying Product Portfolios and Market Reach

The management showcased plans for diversification within their product portfolio, particularly in the Writing Instruments segment, where they aim to add new products that target children’s education and creative arts. Additionally, management indicated a modest improvement in channel inventory levels, signaling an easing of supply chain pressures, essential for boosting sales in subsequent quarters. Currently, 81% of revenue is generated through in-house manufacturing, underlining the company’s commitment to maintaining a robust production backbone.

Navigating Economic Pressures

Despite facing economic challenges and low demand in certain segments, Cello's management remains focused on operational improvements and inventory management. They noted a strategic move to not excessively push volume sales at the risk of sacrificing margins, which emphasizes a long-term view towards sustainable growth. The company’s overall approach suggests a balanced strategy that blends solid sales execution with prudent financial management.

Channel Distribution and E-commerce Expansion

General Trade accounted for 74% of sales this quarter, but a shift is underway towards other sales channels, particularly e-commerce, which has been steadily increasing. The company aims to boost e-commerce sales from the current 10% of total revenue to approximately 15% over the next few years, showcasing adaptability to changing consumer behaviors. This transition is supported by enhancements in product quality and an established brand reputation which are crucial for online sales success.

Earnings Call Transcript 2025-Q1

[Operator]

Ladies and gentlemen, good day, and welcome to the Cello World Limited Q1 FY '25 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Nilesh Patel from ICICI Securities Limited. Thank you, and over to you, sir.

[Nilesh Patel, analyst]

Thanks, Neha. On behalf of ICICI Securities, we welcome you all to Q1 FY '25 Results Conference Call of Cello World Limited. We have with us Mr. Gaurav Rathod, Joint Managing Director; and Mr. Atul Parolia, Chief Financial Officer. Now I hand over the call to management team for their initial comments on the quarterly performance, and then we will open the floor for question-and-answer session.

Thanks, and over to you, sir.

[Gaurav Rathod, executive]

Good morning, everyone. This is Gaurav Rathod here, Joint Managing Director. Along with me is our company Group CFO, Mr. Atul Parolia. The results and presentations are available on the stock exchange and on our website. I hope you had a chance to look at it.

Our performance during Q1 financial year '25 is in line with industry trends. We have grown our revenue by 6.1% on a year-on-year basis, and we're able to improve gross profit margins from 52.6% to 53.8% year-on-year, an increase of 120 basis points. I would like to highlight that this growth was achieved despite facing multiple headwinds on the demand front, including weak urban demand during the quarter and an increasingly challenging environment due to the elections. That said, we are optimistic about the rest of the year and the demand seems to be improving.

Improvements in our top line was primarily driven by the Consumer and the Furniture businesses, which grew at 6%, respectively, while the Writing Instruments remained flattish due to the continued sluggishness in the overall demand scenario. Having said that, we remain confident about the Writing Instrument business. This growth will also be -- the growth in the Writing Instrument business is a function of our footprint expansion alongside additions to our product portfolio. In the rest of the year, we are -- we'll be adding product lines like markers, crayons and geometry boxes, which will help us penetrate and expand in the market.

On the margin front, while the overall operating margins remained stable, we saw an uptick in the gross margin profile. This improvement is a result because of the shift in the product mix and revenue mix changed primarily due to this reason. Our Consumerware business recorded a 170 basis point improvement in gross margin on a year-on-year basis, followed by moulded furniture and allied products, which grew by around 100 basis points year-on-year, largely due to lower raw material costs. Writing Instruments, which already have higher gross margins in our product basket, so over 80% points margin expansion on a year-on-year basis.

I would like to highlight that in quarter 1, we ran a back-to-school advertising campaign that resulted in an increase in our advertisement expenses from INR 2.8 crores in financial year '24 to INR 7.8 crores in quarter 1 of financial year '25. Such activities are important in order to enhance the brands recog and salience. And we continue to -- we will continue to do so for the rest of the year too.

To end with, we expect the second half of this financial year to be stronger, driven by an improvement in the overall demand scenario throughout all our business verticals. And we continue to maintain our growth expectations of about 15% to 17% in financial year '25.

With this, I would like to hand over to our CFO, Mr. Atul Parolia, for the financial highlights. Thanks.

[Atul Parolia, executive]

Thank you very much, Gaurav, and good morning to everyone. I now will be sharing financial details for the quarter gone by. In Q1 FY '25, we achieved a revenue of INR 501 crores and EBITDA of INR 135 crores with a healthy EBITDA margin of 27% and growth of 8.6% year-on-year. PAT stood in at INR 83 crores with a margin of 16.5% and growth of 6.7%. Speaking about the business vertical, over 65% of revenue came from the Consumerware, 17% from Writing Instrument, and remaining 18% from the Moulded Furniture and Allied Products. Overall, around 81% of the revenue came in from the in-house manufacturing.

As Gaurav highlighted in the opening remarks, we saw an increase of around 150 basis points in our gross margin, which stood at INR 269 crores. Consumerware gross profit margin was 55%. Writing Instrument margin was 59.3% and Moulded Furniture was 45.6%.

In terms of channel mix, General Trade contributed 74% of our sales, while Export and Online export -- Online sales contributed approximately 10% each. Revenue 6% was contributed by the modern retail. With this, I would like to open the session for question and answers.

[Operator]

[Operator Instructions] The first question Jay Doshi from Kotak Securities.

[Jaykumar Doshi, analyst]

My first question is if -- I were to sort of -- is 15% to 17% top line growth guidance? Or is it an aspiration? And because if I were to look at 6% growth in first quarter, it implies you are indicating a 19%, 20% growth for rest of the year. And if you can sort of help us with the math, how much of this 19%, 20% growth in the remaining 3 quarters will come from the soon-to-be commissioned glassware plant? And how much of it from the base business, rest of the business?

[Gaurav Rathod, executive]

So I think it's not an aspiration. It's something that we believe that we'll be able to achieve. As you rightly said, due to the commissioning of the glassware plant, which will come in later this year. We expect significant revenue gains from that particular plant. Also normally, this Q1 has been subdued, and we don't expect the rest of the year to go like this because primarily, you're aware of -- because of the elections and also because the heat wave that was around the country, the footfalls overall was pretty -- it was one of the worst that we've seen. So I don't expect the same in the rest of the year. And we have already seen signs of improvement. So that is why we are pretty positive that the revenue should be in line of our expectations.

[Jaykumar Doshi, analyst]

Understood. And what is your expectation of top line from the new glassware plant this year?

[Gaurav Rathod, executive]

So it should ideally for us, should add about INR 75 crores to INR 80 crores more revenue than the previous year.

[Jaykumar Doshi, analyst]

Than the previous year?

[Gaurav Rathod, executive]

Yes, than the previous year.

[Jaykumar Doshi, analyst]

Okay. And that is entirely going to come in the next year?

[Gaurav Rathod, executive]

That is generating new revenue. That was not present basically last year.

[Jaykumar Doshi, analyst]

Correct. Correct. Fair point. Second is there was an increase in receivable days and channel inventory that you had indicated at the -- on last call. And the expectation was it will moderate by September. So is that on track or because of acute weakness in demand has inventory levels gone up further? I should say, the question is, that do you foresee any channel inventory correction during the course of year? Or are you comfortable with the levels in the?

[Gaurav Rathod, executive]

So actually, even during quarter 1, we have seen our secondary sales performing much better than what primarily we were able to achieve. So definitely, there is easing of the stock positions at our channel partners as well. So I think there is correction. Though it has not significantly come in, in terms of the working capital but it is definitely improving. So we will see some improvement by the end of the first half.

[Jaykumar Doshi, analyst]

Understood. So June quarter and working capital is slightly better than March quarter? Or maybe if you can share the numbers later in the call? If Atul can share some color later?

[Gaurav Rathod, executive]

So sorry to interrupt, but it was not significantly better, but it has improved. But we expect more improvement in the next couple of months.

[Jaykumar Doshi, analyst]

Understood. Final question is some key objectives for QIP were, one was, you're looking at some inorganic opportunities? And second is it would enable you to proceed with the consolidation of merger of WimPlast also? So what are the timelines on this? And can we expect some updates on both these aspects?

[Gaurav Rathod, executive]

So on the inorganic growth front, as I mentioned earlier as well, we have been looking at some opportunity. And they are in -- on the table at this point of time, and we'll try to close them as soon as possible. Apart from that, in terms of the plant that we had indicated, Steel Rajasthan was a steelware and the thermoware and the plasticware, both is in line. It would think about 8 to 10 months for it to be commissioned, but we've started the process of the machinery and the erection of the plant. So that's in line.

In terms of WimPlast, ideally, of course, from a management perspective, we would like both of them to be one, to be merged. And once it is decided by both the Boards, I think we'll be able to go ahead on that as well.

[Jaykumar Doshi, analyst]

Sure. Lastly, your guidance, 15%, 17% does not factor in any potential inorganic, right? So that is all organic as of now?

[Gaurav Rathod, executive]

That is pretty much organic at this point of time.

[Operator]

[Operator Instructions] The next question is from the line of Nilesh Patel from ICICI Securities Limited.

[Nilesh Patel, analyst]

Yes. I just wanted to understand, you have mentioned that in the Writing Instruments segment, there will be an entry of geometry boxes and marker segment. So could you please throw some light on it? And could you also share some light on the kind of lower growth into Writing Instruments segment, considering the year has reported a good set of numbers in the segment? So could you please share some light on Writing Instrument particularly?

And my other question is on -- related to the channel distribution. So could you please share some light on general trade and other channels? So how have they performed into this quarter, particularly? And is there a total, you can say, subdued performance is due to lower kind of growth into general trade, particularly?

[Gaurav Rathod, executive]

So first -- your first question, basically, Writing Instrument overall in the Pen segment has been clearly subdued. If you see other peers in the Pen segment, it would be pretty -- it is pretty flattish for everyone. If you're talking about a couple of peers who are more into the stationary side, on the art side of things, which is mainly for kids' crayons and other items, that has performed better. So I guess, they are not comparable completely.

Second of all, I think the geometry boxes and the crayons are in process. We will be coming out with those product lines very, very soon. There is no timeline as per se because we are working on the machinery side and the plant side of things. So it might take slightly longer, but of course, will come in most likely in the second half of the year, in terms of the revenue that can be generated out of those businesses.

Thirdly, in terms of geographical distribution, now we have pretty much covered most of India, in terms of the Writing Instrument segment. We have a couple of geographies that we see are slightly weaker in which we would like to strengthen at this point of time. So that will help us improve our numbers over the year.

In terms of general trade, general trade still is about 74% of our sales. It has slightly -- you are right that general trade has been weaker in this particular quarter. Though I don't foresee it to be weaker the entire year. But this particular quarter, yes, general trade has struggled more compared to other verticals. And that is why you'll see that some numbers have not significantly changed, but it has changed slightly up to 5% and the channel mix has changed or -- because it's from 80% it went now to 74% for this quarter. So slight shift, but we don't see that happening over the entire year.

[Nilesh Patel, analyst]

Yes. Okay. And so going ahead, do we expect the dependence on general trade to kind of a bit lower and kind of increase into alternate channels?

[Gaurav Rathod, executive]

So we're always trying to improve our alternate channels, let's say. But I think this is in line with the industry standards. I don't see a very big change coming very soon, but we've seen some shifts for e-commerce has started doing slightly better than our expectations. So I think there should be some growth there but not significant changes in the mix.

[Operator]

The next question is from the line of Sumant Kumar from Motilal Oswal Financial Services.

[Sumant Kumar, analyst]

So can you talk about how is the Consumer-Glassware performing in this quarter and the plant status, when we can expect the ramp-up of the new plant?

[Gaurav Rathod, executive]

Sure. So Sumant, basically, the Consumer-Glassware also has performed pretty much in line with all the other Consumerware products, so the same growth. Basically, it has been ramped up in terms of the Opalware plant, we have pretty much ramped up everything. So now we have some capacity. So we are at about 75% capacity utilization at this point of time. But we hope to improve this over the year. And of course, the first quarter for Glassware is always slightly weaker than the second and the third. So we expect it to grow much faster.

Secondly, in terms of the ramp-up of Glassware plant, we are pretty much ready. Our hiring date for the plant, we had actually kept it for August, end of August, but we're slightly intentionally actually delaying it because it takes about 40 to 45 days for the glass to come out. And we would be right in the middle of the season of Diwali. And at that particular point of time, it was not ideal to launch a new product line. So we are going a little ahead of our timeline intentionally by about 15 to 20 days. So we are looking at about mid-September kind of commissioning date, Mid-September, kind of commissioning date, which will help us just after the season, launch the product more effectively.

[Sumant Kumar, analyst]

And can you talk about export -- Writing Instrument export growth, how it is at current price mix?

[Gaurav Rathod, executive]

So export predominantly, it's in the Stationary segment for us. The rest of the items, there is very meager revenues, the same contribution for the other product lines. So I guess this thing has come on recently well. It's in line where as -- previously as well as we've already said that it's about 40% of our Stationary business, or the Pen business and it continues to be the same in terms of the mix.

[Sumant Kumar, analyst]

So have you seen degrowth in Writing Instrument exports this quarter?

[Gaurav Rathod, executive]

This quarter, we are at -- not really. It actually improved slightly exports for us.

[Sumant Kumar, analyst]

The domestic, has degrown this quarter?

[Gaurav Rathod, executive]

Domestic is slightly on the degrowth side, slightly about 1.5%, yes.

[Sumant Kumar, analyst]

Okay. So considering there is intense competition in the Pen segment, so our strategy to diversify to other products in this category, how are you seeing this segment growth higher because the Pen segment, I think the other players are also entering into it? So any other new big segment or is that you are going to increase the Pen segment of this particular channel?

[Gaurav Rathod, executive]

Right. So as I mentioned, I think that we will be entering the Stationary segment. So other stationary. We are basically predominantly today only into pens. So markers, crayons, geometry boxes is something that we have previously stated as well that we will be entering and we will be doing this soon. So I think, yes, you're right, it has become flattish though we don't anticipate this to be flat throughout the year. It's just this quarter, so hopefully, we'll have demand back. But yes, we will be entering definitely other segments.

[Sumant Kumar, analyst]

And for all that, we have a manufacturing facility. We will not outsource?

[Gaurav Rathod, executive]

Not all of it. It will be a mix. It will be some outsourcing and some manufacturing.

[Sumant Kumar, analyst]

Okay. So and then you will outsource and then you will have a manufacturing. Correct?

[Gaurav Rathod, executive]

Yes, yes, of course.

[Operator]

The next question is from the line of Devanshu, an individual investor.

[Unknown Attendee]

Am I audible?

[Gaurav Rathod, executive]

Yes, absolutely, please go ahead.

[Unknown Attendee]

I just have slightly basic questions. So in the -- in the new plant that you will be ramping up or maybe, let's say, manufacturing will start by the mid-September. So you would primarily be manufacturing the borosilicate glassware, right? And not the other ones maybe like lead crystal, like a tampered glass or something else, it will primarily be focusing on borosilicate, right?

[Gaurav Rathod, executive]

No, actually, this is not a borosilicate glass plant. This is a soda-lime. So soda-lime is your basic glasses, which is your drinking glasses, which have no borosilicate kind of raw material in it. So this is purely soda-lime. So it's just a jargon, but it's a different furnace also all together.

[Unknown Attendee]

Okay. So you are currently not -- will be -- let's say, you don't have any plans for manufacturing the glassware, specifically the borosilicate glassware will go into laboratories or kitchenware or maybe lighting?

[Gaurav Rathod, executive]

No, no, no. So we're not getting into borosilicate glass, which is primarily a lab driven and baking driven. We are not entering that.

[Unknown Attendee]

Okay. I don't know why I have some understanding that you are currently trading in the soda. So that is also not true as of now?

[Gaurav Rathod, executive]

That is true. We still trade in these products.

[Unknown Attendee]

Okay. Okay. So no manufacturing plant as of now?

[Gaurav Rathod, executive]

Correct. Correct.

[Operator]

The next question is from the line of Meet Jain from Motilal Oswal Financial Services.

[Meet Jain, analyst]

So just wanted to get some backdated numbers like work segment-wise consumer, writing, and moulding. What kind of numbers were in 1P FY '24 to understand the growth of this segment?

[Atul Parolia, executive]

Segment-wise growth, as you have said, Consumerware has grown, revenue has grown by 5.4%, Writing Instrument is flattish and Furniture has grown by 15.9%. So overall, it comes to 6.1%. And vis-a-vis if you see the EBITDA, the overall revenue increased by 6%, which was mainly contributed by the Furniture and thereafter Writing Instrument and consumerware.

[Meet Jain, analyst]

Okay. So we have -- like Moulded Furniture business has driven the entire growth this quarter. And so -- are we expecting similar kind of performance from Moulded Furniture as we have seen the margins are also very good in the Moulded furniture it has spend in the highest. What kind of trajectory for the entire year or going ahead?

[Gaurav Rathod, executive]

So Moulded Furniture actually primarily upward Moulded Furniture grew in this quarter, but it was also a factor of the cooler business within the Moulded Furniture business that actually performed very well in this quarter. So that is why you've seen that kind of a growth for Moulded Furniture segment in this quarter.

[Meet Jain, analyst]

Okay. And this will be outsource business annually?

[Gaurav Rathod, executive]

Yes. the outsource, that's the elephant. yes.

[Meet Jain, analyst]

Okay. And just one, what growth was -- have you mentioned from Writing Instrument, what kind of degrowth?

[Gaurav Rathod, executive]

So it's about negative 0.2% is what the degrowth is.

[Meet Jain, analyst]

0.2%?

[Gaurav Rathod, executive]

Yes.

[Operator]

The next question is from the line of Karan Bhatelia from Asian Markets Securities.

[Karan Bhatelia, analyst]

Am I audible?

[Operator]

Yes, sir.

[Karan Bhatelia, analyst]

So, Gaurav, with respect to the addressable market for the new product launches, maybe the markers, crayons and geometry boxes, how bigger is this market? And second, how is the gross margin profile and the relation profile compared to our existing portfolio in pens?

[Gaurav Rathod, executive]

Right. So I think there is a significant gain that is possible with this particular product line. The addressable market is huge. So I think it would be wrong for me to comment on the overall size, but it's quite -- it's large. There is still gaps in the market that we've seen. Initially, we will be doing a mix of some manufacturing and some outsourcing. So of course, margins will be slightly lower than our current Pen business that is the complete manufacturing side. But eventually as volumes grow, we would try to backward integrate and see where we can take margins.

[Karan Bhatelia, analyst]

Right, right. Correct to assume that the addressable market could be bigger than Pens for these couple of categories?

[Gaurav Rathod, executive]

We've not -- never looked at it that way, maybe choosing the Pen business is the largest and still has room to grow. So I believe -- for us it is just an addition category. We're seeing how much we can offer gain in these segments.

[Karan Bhatelia, analyst]

Correct. Correct. And in the last couple of calls, we did mention that there is substantial headroom of growth for our Writing business in terms of new channel partners, the distributors. So how do you see the growth for the FY '25 across the 3 categories in terms of response?

[Gaurav Rathod, executive]

So I think in terms of the Pen business, we have not covered all the geography, and we have been trying to cover most of them now. And we have -- of course, there are some weaknesses in our few markets, some of the channel partners we still have to look at and see how we can align them better and grow those areas. So definitely, there is some room there.

In terms of our other businesses, we'll be pretty much Pen India, there is good coverage. We're just working on improving our product line for the every day. And that is why you're seeing improved margins because the products are improving. We're not pushing it as hard because we believe that in a bad market scenario, pushing our product too hard can yield revenues, but then at the expense of margins in the long term. So that is why we've always been conservative on that front.

[Operator]

The next question is from the line of Grishma Shah from Envision Capital.

[Grishma Shah, analyst]

I want to understand what the margin trend over the next 3 quarters given that growth in the Moulded Furniture was primarily driven by cooler and that's a seasonal business. So overall, how would the margins pan out with the Glassware capacity coming in and this cooler is not contributing significantly over the next 1 or 2 quarters?

[Gaurav Rathod, executive]

So I think are you talking primarily about WimPlast? Or are you talking about the overall scenario?

[Grishma Shah, analyst]

Sir, overall business.

[Gaurav Rathod, executive]

Right. So I think -- see, even today, the WimPlast or Moulded Furniture segment for us is still contributing very easily to our overall revenue and profitability. So I guess, it's not a significant deterrent over the next few quarters. There will be consumer as the newer businesses will grow much faster because normally, they perform better during the second and the third quarter because of -- primarily because of the festive season. So I guess that will be compensated by our other segment growing much faster during the next 3 quarters.

[Grishma Shah, analyst]

Okay. So margins should be with the comfortable range is what you are saying?

[Gaurav Rathod, executive]

Yes, margins -- the margins, it's a competitive environment. It's not been the best of years. So 1%, 2% up and down, we've already said that it's possible that we might have to discount slightly but not significantly. We don't see that happen.

[Grishma Shah, analyst]

We are also coming from a base where the margins were slightly better based on lower input prices. What's the scene for this year? How have the raw material prices behaved?

[Gaurav Rathod, executive]

So I think we've reached a place where input prices have pretty much stabilized. So we are not seeing a major reduction on any of the raw material or other packing material prices to go down significantly from here. So I think we are pretty much in a stable condition at this point of time.

[Operator]

The next follow-up question is from the line of Jay Doshi from Kotak Securities Limited.

[Jaykumar Doshi, analyst]

My question is on BIS, in -- across all the categories that you operate in, can you give us some flavor or color on where you think from a slightly longer-term perspective, you may end up being on the beneficiary side? We know a little bit about the vacuum flask bottles, but are there opportunities elsewhere also?

[Gaurav Rathod, executive]

So I think, yes, BIS though it has not been implemented very hardly at this point of time, and still people continue to import the product. We actually do not have good clarity at this point of time. But of course, if they are to implement, we are preparing ourselves in terms of the actual machinery and that we are putting up at in our sun. So we're taking the first step towards it. And in the future, if there is no imports allowed or there is anything else that the government decides to do, then we will be in a good position to take advantage of that situation in time.

[Jaykumar Doshi, analyst]

Understood. In terms of opportunities in other adjacent categories, are you considering or evaluating anything outside of your existing categories? Anything that you find interesting where you may potentially enter either through WimPlast business or through...

[Gaurav Rathod, executive]

So of course, I think we've always been a company that has looked at adjacent categories. So of course, we will keep looking. At this point of time, I think we have enough on our plate for the next 1.5 years, 2 years to perform and grow these categories that we are now entering. So I guess -- but of course, we are always on the lookout. And in the Consumerware business, it is extremely important to grow horizontally all the time. Yes, for sure.

[Operator]

The next question is from the line of Rakshit Desai (sic) [ Percy Panthaki ] from IIFL Finance.

[Percy Panthaki, analyst]

This is Percy Panthaki here. Sir, just can you tell us what was the pricing element this quarter in the total growth?

[Gaurav Rathod, executive]

So I think pretty much it was -- price and volumes grew hand-in-hand because there was no input price reduction that came in this year. It was pretty flattish. So overall volume and value growth has been in line for this quarter.

[Percy Panthaki, analyst]

Understood. Understood. And what is your general thought process on acquisitions? Would you use acquisitions to enter into something new? Or would you use it to consolidate market shares in your existing business?

[Gaurav Rathod, executive]

So a little bit of both, consolidate as well if we get some opportunities at a good price that we are able to acquire. We are already looking at that in our current horizon as well. And of course, if there is some interesting categories that have some synergies, we are definitely open to look at those kind of opportunities as well.

[Percy Panthaki, analyst]

Understood. And in your core business, that is the sort of consumer, houseware ex glassware, what do you think are the growth drivers of the business at a company-specific level? I understand the macro construct penetration, upgradation, et cetera. But at a company level, what is it that you're doing in order to accelerate the growth?

[Gaurav Rathod, executive]

So I think as we are already entering into new segments, even the glassware side also. So we have been primary into Opalware. We're getting into the soda-lime glass as well. So glass for us in this segment is going to be a very quick driver. Apart from that, all of the other segments, whether it's hydration or lunch packs or [indiscernible], they continue to grow pretty well. The idea is to -- has always been to upgrade the product line to premiumize it further. And I think that will help us grow this category much faster.

[Percy Panthaki, analyst]

Any update on distribution in terms of number of outlets you directly reach and how that has increased over the last couple of years or so?

[Gaurav Rathod, executive]

So I think in the Consumerware business, it's pretty much flattish the number of outlets. It's about 56,000 in the universe that we cover. And 80% of it is actually a very frequent business and -- the other is slightly -- we touch it maybe a few times a year. So I think that way that universe has remained the same. But of course, the shelves -- some people have expanded their shops. They've improved the product portfolio. So I think that is what we have seen. The current shop owners building better shops.

[Percy Panthaki, analyst]

Understood. And your e-commerce salience of the portfolio, how much is that now and how it has moved over the last couple of years?

[Gaurav Rathod, executive]

So I think the e-commerce for us has been a couple of percentage points increase this quarter as well and I think it takes about 10% of our overall sales, which I think can improve over time by about 3% to 4% in the next 2, 3 years, we could look at something at a 15% of revenue mix coming from e-commerce.

[Percy Panthaki, analyst]

Understood. And according to you in e-commerce, what are the key success factors in this industry?

[Gaurav Rathod, executive]

I think for us, our known brand is very important even in the e-commerce space because most of the players, are either C2C players, so the level of trust is very limited with those kind of players. So I think that is one of our biggest plate because we've been in the market for so long. And our known-ware is the houseware space. Also, I think our supply chain, of course, makes a lot of difference in the e-commerce side, and we are able to reach the customer quicker. And I think that's another important reason why e-commerce has picked up. Also, of course we offer better product lines, in terms of our premium product lines, which sometimes don't do very, very well in some parts of GP, but started very well on e-commerce. So I think e-commerce is slightly a more premium platform and then we're able to showcase our products better and able to garner customers that we would have probably not been able to from our general trade.

[Operator]

The next follow-up question is from the line of Karan Bhatelia from Asian Markets Securities.

[Karan Bhatelia, analyst]

Gaurav, so how do you value addition portfolio across categories, writing, furniture and consumer brand, how are we seeing this in the next 2 years to say so?

[Gaurav Rathod, executive]

So I think that's a grand evolution. It's of course, we are trying to get into a much better or slightly more premium product lines. When I say premium, it doesn't mean that we are going out of our segment of mass premium as a brand. We're just trying to improve the product line with better molds, better processes because that's the mote in this segment and improvement in -- because the industry is a very price conscious market, and we are vary of that.

And so the improvement is coming from purely design and aesthetics, and better finishes. I think that's what we have been always doing. And for, as in evolution in the next 2 years, we would like to evolve into much better overall product line, which we are continuously doing. And that's why you see gross margins being maintained or slightly improving as well.

[Karan Bhatelia, analyst]

Right. See, for example, in Moulded Furniture, correct me, we are at 15% to 20% of value addition, right? So how is this percentage for the other 2 core categories?

[Gaurav Rathod, executive]

So Moulded Furniture actually is very easy to compare. The other is not really comparable because there is a lot of product lines that some people won't say value-added, but because the number of product lines are so huge. So when I talk about the newer stuff that they're coming with. So say we added about 300-odd products last year in our Consumerware segment. Pretty much 80% of that portfolio was all products that were with much improved finishes and aesthetics. So I think pretty much everything there over about a couple of years would change to that kind of a product outline.

[Operator]

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

[Gaurav Rathod, executive]

Thank you, everyone, for joining us today. I hope we've been able to answer all your queries. We look forward to such interactions in the future. And in case you require any further details, you may contact SGA, our Investor Relationships partner. Thank you.

[Pankaj Rathod, executive]

Take care everyone.

[Operator]

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