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Dabur India Ltd
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Ladies and gentlemen, good day, and welcome to the Q2 Results Investor Conference Call of Dabur India Limited. [Operator Instructions] I now hand the conference over to Ms. Gagan Ahluwalia. Thank you, and over to you, ma'am.
Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this conference call pertaining to results for the quarter ended 30th September, 2021. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer, Dabur India Limited; Mr. Ankush Jain, CFO; Mr. Adarsh Sharma, EVP Sales; and Mr. Ashok Jain, EVP Finance and Company Secretary. We will start with an overview of the company's performance by Mr. Mohit Malhotra, followed by a Q&A session.I now request Mohit to start the presentation. Over to you.
Thank you, Gagan ma'am. Good afternoon, ladies and gentlemen. Have beans, I would like to convey my best wishes to you and your family for Diwali and the festive season. Covid situation is as vaccination is being ramped up across the country, with mobility increasing, there's an improvement in out-of-home consumption and some of the channels like modern trade and enterprise, which are more impacted are seeing a revival. The quarter also saw a strong recovery in our Food & Beverage business and HPC business.The consolidated revenue from operations increased to INR 2,818 crore during quarter two, growing by 12% over previous year in spite of a high base of 13.7%. India FMCG business registered a growth of 11.9% back to volume growth of 10%. This reflects a two-year CAGR of 15% in the India business and 13% in the consolidated revenues. Consolidated operating profit increased by 9% despite unprecedented inflation across categories. Profit before tax saw a growth of 12%. Our profit after tax grossed INR 500 crore mark for the first time, reaching INR 504 crore during the quarter. The increase, in fact, was around 5% on account of the step jump in tax rate in India business.HPC portfolio performed well with 16.7% growth, driven by a good momentum across all subsegments of HPC. Hair and Oil reported a growth of 27.9% with a strong double-digit growth across all segments. Our market share in Hair and Oil improved by 80 bps. Both perfume and coconut oil performed very well, driven by marketing investments and distribution expansion. Shampoos performed very well and recorded a growth of 20%. Our market share in shampoos increased by 30 bps during the quarter. Salients of bottoms in our portfolio is increasing and touched 23% during the quarter, indicating the traction of shampoo in urban markets for the products. The newly launched Vatika Ayurvedic Shampoo and Neem Shampoo showed good consumer acceptance and performed well. Oral Care portfolio continued to post industry-leading growth of 13.3%. The Red toothpaste, a flagship brand posted a double-digit growth riding on a strong ayurvedic heritage and consumer pull.Our market share increased by 40 bps in the toothpaste category. Home Care reported a strong growth of 25%, driven by double-digit growth across segments. Odonil reported an increase in market share of 210 bps and Odomos increased its market share by 120 bps. Skin care portfolio witnessed a robust growth of 27% with a good traction in all the brands, FEM, Oxy, and Gulabari. We have entered the facewash category with the launch of Vatika Face Washes and have also introduced Amla Aloe Vera Nourishing Gel. Health care portfolio reported a marginal decline on a very high pace. Our health care business has grown up 50% over last year's given by COVID contextual and immunity building products. Health supplements, including Chyawanprash and Honey, showed some moderation, although the two-year CAGR on these brands was more than 20%, and the brands continue to be salient in consumer's mind. This is reflected in the strong uptick in the market share, which in Chyawanprash category went up by 520 bps and Honey by 430 bps.We continue to be the undisputed market leader in the Honey market with strong presence in all channels, e-commerce, monitored and gentry. The digestive portfolio registered a good recovery with 23% growth on back of improvement in mobility and out-of-home consumption, while cohort contexture OTC products saw some moderation, the power brands, such as Honitus, Lal Tail, Pudin Hara saw strong growths. Ethical portfolio continued to perform well with growth of 12.6% despite a high pace.Food & Beverage business was a star performer in this quarter with a growth of 43%. The business saw a strong[Audio Gap]Overall 15%[Audio Gap]It is well poised to cross INR 100 crores for the year. Among channels, modern trade showed a strong recovery, growing by 26%. Enterprise business also saw good turnaround 44% growth. E-commerce business reported a double-digit growth and contributed to around 7% of sales. Immuno's growth was ahead of the urban growth by around 100 bps.International business recorded strong constant currency growth of 13.8%, with strong growth in almost all geographies. MENA, our largest market, reported a growth of 12.8%. Egypt grew by 17%. Sub-Saharan Africa grew by 25.4% and the Namaste business grew at 16.7%. Turkey business was impacted by currency depreciation. SAARC business performed well with a growth of 17.6%. Overall, our portfolio continues to be on a good trajectory with increase in market shares in almost 95% of all the categories. Our focus continues on brand building, building power brands, expanding distribution, driving innovation, enhancing efficiencies, and building organizational capability for being future-ready. Inflation remains a big concern going forward. However, our intent is to mitigate this impact from calibrated price increases and saving initiatives.With that, I'll bring my address to a close and open the Q&A and invite your questions. Thank you.
[Operator Instructions] First question is from the line of Abneesh Roy from Edelweiss.
So congrats on a very good set of numbers. So I've got four questions. First question is on Shampoo. You have seen one of your fastest growth on a two-year basis in shampoo. So I want to understand here, in terms of Ayurvedic, what is the salient? Can a repeat of tooth taste happen in this category? You've launched Neem, Ayurvedic. Is there a pipeline filling, which is helping 19% CAGR on a two-year basis, so -- and 30 bps gaining market share also. So if you could take through in terms of naturals and ayurvedic, because in shampoo, anyway, a lot of the competitor products also have some level of naturals, unlike, say, toothpaste. So if you could clarify on that?
Right. So I think your question, Abneesh, having balance three questions maybe once I answer your first question, I think shampoo's market -- absolutely right observation. I think in our view, Shampoo will have a very similar trajectory, the way toothpaste market has had. The salience of herbal market in shampoo is not even 10% as we speak. And our market share out of that is the overall market be around 6.7%. We've been really gaining our market share. So this time also, we've gained 13 bps, and we reached our highest market share around 6.7% in Shampoo and all the variants have done well.We are deliberately and consciously trying to improve our bottle saliency, which is accretive in terms of gross margin to us while 80% is the Sachet business, but 23% is also bottle saliency that we have registered, which is a very good growth, and the salience increase happening in modern trade and also in e-commerce for us. While in GP, still Sachet is the one which is ruling. But in long term, we expect Shampoo to tread the path of Oral care, wherein the Herbal segment is almost 32% of the total market segment and Shampoo has a huge headroom from 10% to 30%. And there are not very many larger players present in the Herbal. We've launched a new shampoo and we used ayurvedic shampoo. Ayurvedic shampoo when we rolled out, is getting a very good traction in the marketplace, and we'll be launching multiple alpha ingredient shampoo and multiple benefit shampoos also in this range. So yes, this is one of the good drivers of our business.
Sure. My second question is on Odomos Liquid vaporizer. So the earlier leadership of Dabur had shown reluctance in entering this part of HRA. So if you could take us what is different here given four to five brands already there here, plus Fits All machine also is already well-established by many players. So will this be largely like ghee and cold-pressed oils in terms of being present largely on online? Or do you see medium, long-term being very aggressive even in Kirana?
Yes. So, Abneesh, we've got a very strong brand on most Odomos market share in the personal application cream market is almost 62%. And year-on-year, we've been increasing our market share. As we see Odomos has increased market share by around 210 basis points in this current quarter also. The brand is very salient. Unfortunately, the brand was only operating in the INR 300 crore category and the 62% market share. And for good or bad, the earlier regime thought this is the way to go on.But in my view, we have a fish in a pond where there are fishes. And therefore, now we've started operating the INR 300 crore franchise with a brand like Odomos. And we will be operating in all subsegments of HI with the Odomos brand. We made multiple attempts earlier also to launch innovative products on Odomos, not very successful. So as you know, we'll be getting into spray. So we've gone into LVP, and we've gone into nets already, and this will be across the more launch. It will not be a launch which will be restricted to e-commerce because e-commerce is very small salience of the LVP market. In terms of our hike to wins and key differentiator also, here, we are less invasive and less chemical, and there will be a [indiscernible] which will add in the LVP in the active.
And pricing-wise, any difference?
Pricing-wise, we will be pretty competitive in the marketplace to start with. And at a competitive pricing also, our gross margins are good here, in the range of around 50-odd percent.
Sure. My next question is on beverage. So 17.5% CAGR on two-year basis. So how much is new products and PD, et cetera? And how much is the volume growth, largely volume growth here?
Yes. So the NPD contribution is almost around 10% for us, almost 9.5% to 10%. And this year, we've launched multiple NPDs last year and all those NPDs are firing on all cylinders for us. Just to give you a couple of points. Our pet bottles that we rolled out in the mango drink, where we compete with Mazza and Frooti, that's doing exceedingly well. This year on the drinks market, we should have INR 100 crore turnover coming only from drinks. Our Apple mini is doing exceedingly well at INR 10 price point. Our INR 10 price point even in drinks in Tetra pack is doing exceedingly well. We've launched aerated fruit drinks also, early days yet. We are small players, but that's also doing exceedingly well. Our volume -- We've not taken any price increases much in the Beverage segment because there's not much of inflation here. And most of the growth of 43%, 45% that you see is all on back of volumes. And that's all.
Last question. So Chyawanprash, Honey, I wanted to understand where are you getting such a big gain in market share. So 520 bps in Chyawanprash, 430 bps in Honey. And second is this double-digit Y-o-Y dip. So how would you retain the new customers? So Chyawanprash, for example, penetration increased in the COVID. How will you ensure that a lot of these new customers continue to remain?
Yes. That's a tough question that you asked, Abneesh. Obviously, during COVID, what happened, there was somewhat of a strong tailwind. And on back of tailwind, what happens, the penetration levels of Chyawanprash, it happens to be so low in the country, actually doubled the penetration. So Chyawanprash penetration in the range of around 4% actually became in the range of around 8% while we see there is a initial headwind in terms of penetration in Chyawanprash. And in the last 1 quarter, the penetration has gone a bit down because there's a little setting in terms of health care product usage with the consumer. But overall, from 4%, the penetration have actually gone up to a level of around 7% still the highest since 12 years back. So there is a penetration increase which is happening. But Chyawanprash is a small category and to expand the category, we are doing all what it takes to expand the category to cope more consumers into it. So therefore, the launch of [indiscernible] different format, therefore launch of -- of the format of Sugarfree.On back of all this, we are only expanding the addressable market of Chyawanprash and trying to improve a little bit energy consumers into Chyawanprash. So Chyawanprash is a very sticky product. If consumers use Chyawanprash then they stick to it, and the last stage is not very high in Chyawanprash kind of a product, and they get hooked on to it once if they get used to the taste of it. So last stage is not the issue, roping in more consumers, bringing more awareness, and increasing penetration, which is what we guys are working on. And as -- we get 520 basis points because we are the big player.As more players enter into the Chyawanprash market, we strengthen our position in Chyawanprash, and we are the beneficiaries of that share of volume going up in the Chyawanprash market. So that's how we are getting benefited. And 520 basis points in terms of back off will give you the awareness of Chyawanprash given by the Government of India, most guests coming in, where there are so many. And also, we're doing better execution in marketplace, preseason loading, and all that. That is really helping us in certain production.As far as Honey is concerned, while there are other players who've entered the Honey market, the great thing that more competitors are coming in, they're actually increasing the size and the penetration levels of Honey market also. And we are, again, the beneficiaries of that. So we're going up, unlike last time, where we were not very competitive and not very aggressive. We lost market share to Patanjali. This year on, we are being competitive, and we are actually gaining our market shares. And we've gained our market shares in e-commerce, modern trade, GP across the board, everywhere. We are also extending honey into multiple other formats that I spoke to be launched, Honey Tasties. We extended Honey group through various variants. We've launched and Ashwagandha, Honey in last year. And all of them are doing well, and we are trending on path of introducing more value-added honeys in the market and our initiative of taking honey from a therapeutic chair to foods continues, so as I speak, yes.
The next question is from the line of Avi Mehta from Macquarie.
I just have two questions. First, essentially, a lot of your peers have called out signs of weakness in rural demand. Even you seem to have indicated some softness in sentiment towards in the run-up of festive. Could you share your thoughts and your opinion on this? And also, are there any factors which make it possible that we will not have a material impact even if we see a rural slowdown?
So, Avi, it is very contradictory. So we are getting different feedback coming in from -- as far as the syndicated data is concerned, we find that urban is trending better as compared to rural. But if you look at the CAGR -- which is very optically the case being so. But if you look at CAGRs, pre-COVID, COVID, post-COVID, rural has been very, very delayed. And Pudin Hara has been growing and it has actually brought the index, the rural index will be at the rate of around 104, 105 to the pre-COVID, during COVID level that rural has been resilient through COVID all through.As far as urban is concerned, urban growth are still not in line with what the pre-COVID growth were. So it is still on a recovery path. So urban growth that you're actually seeing, you're seeing go on back of modern trade recovery, e-commerce doing well and lock down easing out and mobility actually improving. That's why urban is growing. But long term, if you plot this going forward, the rural will be resilient. If I look at our numbers now, in our numbers, we see rural is growing almost at around 12%. And this 12% growth is coming on back of 26% base of rural. So rural is tending to do well.Urban growth is in the range of around 9%, coming on back of 18% base. So the rural is trending well for us. And to leverage this -- and your monsoon has been great. The harvest has been fantastic. MFPs have not been rolled out. MGNREGA and Redmond is good. Unemployment rates in are the lowest at this time and the festive season is coming in. We saw in the month of August and in the month of July and August, Real was doing very well. Only in the month of September, we have seen some slowdown. I would not say slow down, some liquidity pressure in the rural, that also the barometer of that, and we -- the wholesale demand in the internal has been a little lower as compared to what we saw in the month of July and August.But I think with festive season approaching and people back on the buying spree and mobility picking up, I think it's a matter of time rural will, in my view, keep trending well going forward also as compared to us, at least for us. And we are also putting up our infrastructure improvements in place. We've already appointed around 7,000 which is seeding operations for our villages. Our village coverage was targeted to be at around 80,000 and which we have already done, we had about 83,500 all being done. And next year, we should look at around 90,000 villages to be covered directly. We appointed more sub stock case and also. So rural is resilient, and I don't think there should be some other problem while it keeps recovering.
Okay, sir. Perfect. So I mean, you would not be so concerned about this sign is what I kind of read. That is correct, right?
No. We are concerned a bit, but I think the festive season should do the trick. And MFPs are not being rolled out, and Government will take initiatives to see that rural demand remains salient. So we are hopeful on the macroeconomics. Yes.
Okay, sir. Okay. And just the second question is essentially on the margin side. Now, you called out the cost pressures. Now we've done -- this quarter performance suggests that you've used the levers of cost savings and price hikes very well to offset this impact. Would you say that we are still kind of confident of maintaining our expectations of flattish to margin expansion FY '22? Or would you like to revisit those numbers given the inflation? That's all from my side.
Yes. So, Avi, inflation has been tough on us. We thought that there will be a little softening of inflation was to happen in quarter three, but the projection that we are getting for quarter three is also inflation only picking up from there, and we are not seeing any signs of softening happening in inflation. That said, to offset that impact of inflation and to continue to stay at inflation, we've taken price increases in segments of Food we've been able to mitigate all the impact of inflation through price increases, cost savings, etc. In our Health Care business, we have taken more price increases to more than cover up the inflationary impact in health care.In HPC business, is 50% of our business, in 80% of our subcategories of HPC also, we've been able to cover up the impact of inflation, barring hair oil and hair care, where we are letting up ourselves only, and we are not taking very aggressive price increases because we're seeing demand is also recovering from COVID, we see ease out happening in the market. And as you see in -- the syndicated data tells us, the hair oil market itself is around minus 2%. So in a market which is showing a volume growth of around minus 2%, we don't want to take a price increase in a hurry, and we want to wait and watch, and we want to wait as much as we can, and that's where the maximum impact of inflation is also.And we are deliberately not pushing, and we are being calibrated there, which is the hair oil portfolio where we are dependent on price point, lower price point. And also, the market is pretty competitive. Yes. So that is what we are waiting and watching. But if push comes to shove and inflation doesn't abate even in the third quarter or in the fourth quarter, then we'll be forced to take another round of price increases across the board.One advantage with the company, Avi, is that we have brands which are market leaders in the category, and they are the ones that set the pricing table. And we are able to dictate the prices there, be it our health care range, our juices range, our home care product range, even juices where we are market leader, and in other segments of Oral care where we are market leaders in the ayurvedic subsegment. So we are able to take those price increases. We ourselves voluntarily are not really pushing the envelope on the price increases, so that it doesn't have an impact on the demand for us. Volume share gain is more critical. But as said, we want to maintain operating margins for the full year.
Our next question is from the line of Shirish Pardeshi from Centrum.
There are 2 questions, which I see here is that the NPD, what you mentioned is about 10%. Is that correct number for the quarter?
So it's only in the Food & Beverage segment is around 9.5% to 10%. That's the Food & Beverage segment, Shirish. Overall, NPD ratio is around 4.6% for us.
Okay. So my question related on this is that there is a lot of noise, and most of the companies are talking about B2C brand. Are we making some efforts to exclusively have this or we will use the traditional product extension strategy and getting into more aggressive into the adjacencies?
Now on the B2C, we are making efforts. And by end of, I think, December, hopefully, we should have a platform, which is a direct B2C connect. That B2C connect is besides the regular conventional e-commerce connect on B2C that we already have. And in terms of NPD, we are launching exclusive e-commerce brands, our innovation grade in e-commerce portal, which is around 7% of overall business, is in the range of around 10% to 12% also, besides the food and beverage business. So e-commerce, NPD are raising much ahead because this is a cradle for us to seed a lot of innovations. So those are exclusive e-commerce brands for us, like you've seen the apple cider vinegar, you've seen the virgin coconut oil coming in, sesame oil coming in, all these are on -- baby care range happening.Now we launched diapers. These are all e-commerce exclusive initiatives that we have rolled out. So for that, that's a cradle of innovation for us, and we'll keep seeding brands, which are B2C connect exclusively all shared portals, which are like Amazon, et cetera, and try to create our own portal also for B2C connect with the consumer with the objective of creating a first-party data, and -- which will help us in our conventional route to market in terms of reaching out to the final consumer. So that's the plan on B2C.
Okay. My second question is, thanks to Mr. Adarsh Sharma, we have seen -- I mean, you have guided about 55,000, 60,000, 65,000 coverage and you are much ahead of time, and you're covering 84,000. So could you spend a minute or two explaining that? What is it that it means to the revenue growth? Is that momentum, the coverage? And you mentioned about 7,000. So what is it that in the second half we can expect? If the throughput is going to improve and you're also indicating that you will try to get it to 90,000 villages. Right.
So we continuously want to grow and keep investing behind our rural infrastructure, where Dabur is actually the front-runner in terms of creating that entire infrastructure. So we have got the seeding operation drive Yoddhas, and it is yielding great results for us. In the beginning, we appointed Yoddhas in only the Hindi belt, which is UP, MP, Bihar, the three states that we've identified. And we had appointed Yoddhas there. Now we are extending these three states to six states, wherein we include Maharashtra, we are including Gujarat, and we are taking West Bengal also into account, and we are doing the seeding operation.So as the business scales, what happens is, in seeding operations, we appoint a rural, village-level entrepreneur, we create a stocking point there and as the business scales up, then we convert them into a substock, and the business is on the road and then become the integrated part of our super -- sub network. That's the way we are growing, and this has given us a very rich dividend, and we've been able to beat any sort of depression or compression in demand, which may happen in the rural. We are not witnessing that.So on back of that, I think we guys are doing very well. And we are also simultaneously creating a lot of low unit price points and accessible price points, which means the villages can absorb, which is INR 10. In the presentation, we've also shared with you Chyawanprash, we created a INR 55 price point. Chyawanprash in the INR 200 range, could not be afforded by rural, and rural is 47% of our business. So we've introduced a smaller price point so that, that can arrive the rural infrastructure and consumers can benefit from these products at the right affordable price points. I don't know if I got your question right, I hope I answered.
Yes. So one follow-up. If you can spell out this volume growth, what you have reported, is the fact that your coverage and rural has gone up and I would tend to believe that our direct coverage also would have gone up. So could you spell out what is our direct coverage? And the second part in that is that, does that mean that our dependence on wholesale has come down because our throughput and direct coverage will improve our efficiencies?
Yes. Definitely, we -- it is coming down. As you see, wholesale reliance is coming down. But that said, wholesale still remains a very important and essential part of our business. Wholesale contribution to the business is in the range of around 30%, 30-odd percent. And it used to be around 33%. So still, it's now 30%. So it is a channel that we can't ignore at all. And we are very conscious on rate stability on cash and carry because it disrupts this channel, and we've seen some lot of disturbances coming on account of these cash and carry channels also. So our direct reach has gone up. It used to be 1.2 million. We have increased it through as we speak around 1.3 million. And going forward, next year, we are targeting a 1.4 million reach through to direct reach. So this should -- the ultimate objective is to reduce the reliance on wholesale and go direct because when you go direct, you sell a higher assortment and more number of SKUs as compared to wholesale, which is only sell the KVIs for you.
Our next question is from the line of Aditya Gupta from Goldman Sachs.
A couple of questions. First, on the Hair Oil business, I mean, there's definitely been a step-up in the quarterly revenue run rate annually given upon. All these segments doing well. So -- and then the margin pressure also. So between volume growth, market share, margin pressure, how are you looking at this segment going forward? How competitive are you willing to be to drive volume growth over?
So Hair Oil is a market, on the account of getting recognition, we have -- I don't think it's fully recovered from the COVID. If you look at the syndicated data, we see the Hair Oil market minus 2% as we speak. Whereas we guys are not really fettered by the market not growing because our task is to take share from the competitors in all subsegments we're doing well as compared to market declining by minus 2%, we are growing at plus 28% in Hair Oils and all the subsegments of Hair Oil are growing for us. So first of all, in coconut oil, we've grown coconut oil market. Anmol brand is grown by around 23% and done very well for us, and it's continuously growing. It's already become INR 166 crore to INR 200 crore brand for us. And we'll be premiumizing the brand also going forward. So coconut is doing well.The second subsegment is Perfume Hair Oils. In perfume hair oils, both of placard brands and the hero brand Dabur Amla are also doing well. The Sarson Amla, Brahmi-Amla are our placards brands are doing well. And the third market is Almond, and almond oil with opening up of modern trade, and almond oil being in the modern trade is also registering very good double-digit growth. That said, our market shares have gone up in all these three segments. We've gained 80 basis points market share in overall hair oils, including all the subsegments here. So we are very positive because the headroom is huge in hair oils for us. So we are only around INR 1,000 odd crores, and the market size is around INR 10,000 crores.And there is always a scope of -- to play. Almond oil is already a #2 brand in the market leader now. We've placated the #2 brand already existing Shalimar and now we are the #2 here. So we are very positive about the Hair Oil market, and we'll continuously keep striving. That said, there is a lot of inflationary pressure in hair oil, on account of hydrocarbon linked raw materials going up and also packaging rate is going up, which is quite fairly weakly linked. So there is a pressure. But we are trying to absorb that pressure. We are not passing that pressure of margins to the consumers as we speak because market share gain is more important. And hair oil as a business, only 10% of the overall business of the company, and it is not something that we are completely dependent on, and we can try to remain as much as possible, that's what we are trying to do.
Got it. Very clear. Second bit on the HI business, you earlier told that you are spread in all the segments. How widespread is the launch already? Is it national? Or what percentage of your total, let's say, umbrella of outlets is already reaching and what time lines to distribution here?
So we just started. We just -- now's the entry, we are now available in e-commerce and in modern trade to start with. And then gradually, slowly, we'll be rolling it out in the other channels. We will not be launching in GT to start with. So if we first e-com and then modern trade and then eventually we rolled out to other channels also. So it's a very early beginning that we're in. And while Odomos is doing very well for us, but in other categories, we have just seeded the entry.
Got it. And the last bit, again, a little bit on margins. I think you talked in some of the previous quarters that the A&P spend is -- or your aspiration is to take it higher north of 9%, 9.5%. But if I look at what's happened in standard and oil consol in between the 6.5%, 7%, 7.5%. So how should we be thinking about this line item, especially in the current inflationary scenario?
So let's say, we look at A&P expenses. And for us, A&P expenses is just not advertising, which is the ATL, but also BTL. It depends upon the demand situation in the marketplace, competitive intensity, SKUs, channel mix, product mix. It all depends. And most important is competitive scenario. So if we find the competition is very aggressive on the trade day, then we channel those resources on trade and gain market share. If we find that its consumer is getting more value, and there are more discount rates, then we pass -- then we channel the resources to giving more value to consumer -- value of giving them consumer promotions. If we find the market is under penetrated, then we invest the money in increasing the market penetration and therefore, advertising.So if you look at the overall A&P spend of the company, A&P expense has been in the range of around 12.5%, which is in line with our top line growth. So that is good enough. That's not got diluted. What you see, what is visible to you is only the ATL or the TV spend. TV spend have been optimized, and that has been done because last year, there was also a lot of COVID contextual advertising, which has not come in in this year. So there is a efficient and optimized spending on ATL, which has actually happened. And that said, we will be backing up our power brands and innovation with sufficient investments so that our market shares don't go down. And that's what we are committed to doing. And overall, for the whole year, we'll be investing around 7% to 8% on ATL, et cetera, whereas BTL is even higher.
And also, just to add on, and on a media basis, the CAGR has been 18%. So last to last year, we were 6.5% sales in this quarter. And this year, it is 7.2%. So on a consistent basis, two-year basis, we have increased it by 70 bps. Also the media.
Our next question is from the line of Percy Panthaki from IIFL Securities.
Congrats on a good set of numbers. On hair oil, just one data point, if you can give me -- your two-year CAGR for the revenues is 9.5%, what would be the two-year volume CAGR in the Hair Oil business?
So I think it will be in the same range, Percy, around 7% to 8%. We've not taken much price increases in the Hair Oil business. Because of the competitive density, our focus has been to gain market share and not much price increase we have taken yet.
And can you give some data on the broad basing of your Hair Oil business so versus, let's say, five years ago or something, your main unit, which is your Dabur Amla Hair Oil, what salience would that be 5 years ago, what it is today, so that we can get a sense of how you've broad-based your business with different sort of sub-variants?
So I think overall, if I compare a couple of years back, Dabur Amla was Dabur Amla, the brand since we started in flanker brand strategy since then till now flanker brands now contribute to more than 10% -- or the 10%, I think, 15% of overall sales of Dabur Amla. So gradually, slowly, that pie of the business is also growing, and we are taking share from the cheaper players in the marketplace with half the price with these flanker brands. So I think around 15% of the saliency of hair oil should be the flanker brands that we introduced. And therefore, we say that flanker brand is creating a moat around our main hero brands, which is Dabur Amla. It is working well for us. I know that's the question, Percy, that you asked?
Yes.
Resilience of coconut oils, and that is also Anmol brand was very small. Now it's just fairly significant, and we are aggressively growing that.
Understood. You also mentioned that your innovation rate is 4.6%. How do you define this?
Innovation is defined by NPD that we roll out in the current year and last year. So that's how.
So FY '21 and FY '22.
Yes. That's right.
Okay. And so basically, if I glance, let's say, two years into the future, would you think at that point of time also your innovation rate will maintain more or less at this kind of a level?
Yes. I think that's the least we can do. I think if not more, it will be in the range of around 4% to 5% consistently.
Okay. And I know this is sort of sensitive information, and I'm not looking for any exact sort of answer, but broadly, in which areas would you focus your innovation going ahead? Till now, I believe your innovation has been, at least in terms of number of launches, being more focused on health, immunity, hygiene, etc. In value-wise, yes, one fruit juices will be a big contributor, just that one innovation. But going ahead, in terms of number of innovations, would the focus shift from health, immunity, hygiene, et cetera, to something else?
So, Percy, that's not been on track record. We've actually been doing innovation across our eight power brands. The logic is that we have eight power brands, we will scale them up. We have to make them bigger and innovations are coming under every power brand. So what you've seen is under Chyawanprash and Honey, we've introduced capsules, powders and Honey has gone into Tasties and throat relief and all that. That said, even in Odomos, for example, Home Care, which is a home care brand, but that is also getting extended. Real has got extended into drinks and the INR 10. Innovation, more as a Indian brand, which is at and the premium made as the e-commerce. And that's how we are trying to capture innovations at every power brand. In addition to that, we have a RISE mechanism, which is regional insights, which we capture. And then we see innovations for every region for us. So even if we talk, the most of the answer to the question is selective.
Understood. One last clarification here. In the innovation rate, would you -- I know it would not be adjusted as a number, but would you also at the back of your mind, have some calculation as to the amount of cannibalization? Because if it's some kind of a variant and not a completely new subcategory you're entering into, variant will give you sales, but it will also cannibalize some existing unit. So the actual addition to the sales might not be 4.5%, although those products which are launched in the last couple of years might be 4.6%.
No, not really. The way we see is if it is an incremental addition to the turnover of our products, and that's how we see innovation that. And if you say it'll cannibalize, yes it'll cannibalized, but that's a conscious cannibalization. So it will be reading and feeding and the more you feed, the more you grow, that's the way we look at it. So every brand has been given a task for a KPI of having a 5% incremental revenue coming in from innovation and not only innovations, Percy, you know what I'm saying.
Right. Got you.
The next question is from the line of Arnab Mitra from Credit Suisse.
My first question was on fruit juices or beverages, where you've grown very strongly, and after a long time, we are seeing a two-year growth in this category being strong. So I just wanted to understand your confidence level in terms of, is this really marking a turndown for that business? Or were there some specific factors in this quarter, which could have helped this growth? I'm kind of guessing that as the channels were opening out-of-home, there could have been some restocking in this category and things like that. And so just wanted to gauge your confidence in terms of -- is this really a turning point? And would you kind of continue at a reasonably good growth rates into the second half?
Yes, Arnab. We are very confident. I think we've turned the bend on Juices business. So to your point, there are both reasons: one, the market is easing out. And therefore, mobility is increasing. Out-of-home consumption and in-home consumption both are fired as far as juices is concerned. We've gained market share because what happened is, market, which is declining, is now growing at 37%. So there's also a tailwind of the market. I would not say it's only our initiatives only. The market is growing by 37%. We've grown by 43%. And therefore, our market shares have gained about 100 basis points. Our NPD has contributed to around 10% here. And most of the initiatives that we put in place have also fired. So on back of all this, I feel if COVID wave three does come in, then I believe, the juices is in a good place and should keep firing for next couple of years, at least.
And just a follow-up on that, on the NPDs, the edited product as well as the food drinks, how far are you in the distribution here in terms of where you would potentially want to be versus where your products currently are available?
Arnab, there's a huge headroom available. We are not even scratching the surface as far as distribution is concerned. So first, we are looking at the immediate frontier, which is our real distribution. So first, drinks will cover that distribution. And as we cover that distribution, we will keep appointing distributors who are very -- who are different people ecosystem altogether for E&D outlets so that we have the next milestone in place for us. So that said, a huge headroom. So we are not even covering 10% of what the drinks is today in terms of the universe.
Understood. And my second question, more than second, and last question is that this entry into -- of this launch of Dabur Vita, which I'm assuming is the NVP and the LV under Odomos, these are obviously very large categories, a lot of advertising spend happens in these categories. So while I do see the point of kind of making the frontier bigger, is it spreading too thin? Because would you have the ability to do advertising in those categories that the incumbents do a lot of advertising? And also in the context that you have Hommade, which you want to scale up. So just wanted your thoughts on that choice that you're making?
Yes. So, Arnab, we are not launching very many new brands actually, if you see. Hommade's the brands that's already existing and already salient. So we are just scaling up that brand. This year it will be INR 100 crores. Next year, we're looking at a INR 200 crore coming out of Hommade brand. So that's one, which is an existing brand for us. And Vita is the extension of Dabur brand, and we are promising immunity plus growth to the consumer, and it's the right to win for us to increase the addressable market size. NVP, we are launching. It is not an Odomos as very salient in the consumer's mind. So it is just an extension. So I don't see these as very new products. Yes, there is a requirement of advertising, and that would be the case, but we will be going in a calibrated manner in modern rate first and selective outlets. So the requirement of advertising will be limited as compared to mass advertising, and we are not spreading the product to thin across for it to require mainstream advertising. So we'll be going in a very slower calibrated approach gradually, slowly, geography by geography, channel by channel, to see how it actually grows.
The next question is from the line of Harit Kapoor from Investec.
I had three questions. Just one on the innovation side, so is there a measure that you're using on judging success rates of two generations, maybe, all that you've done over the last two years, which has been -- which has been fairly significant? How do you judge success rate? Is there a metric? If you could share anything on that side with us?
Right. So just a couple of metrics. First of all is that we launch a product with a safe KPI, which is a turnover, to be achieved that the turnover. Then we have a list of outlets where we reach out, and what is the repeat purchase rate coming in from the outlet is. If the hurdle rate goes beyond 20%, then we attribute success to NPD and if the hurdle rate is less than 20%, then keep reworking and refining the mix till we dial it correctly and we increase the hurdle rate. Once the hurdle rate goes up to 20%, then the growth is beyond the point. So that's the way we look at the metric. And then as we launch the product, then immediately, we do a launch track to refine the mix going forward. So that's the way we work.
And compared -- and in the last two years, I mean, what would have been that success rate? Is it higher than what you did with the previous two? Or anything you could share?
See our NPD success rate has been very good, except the COVID contextual portfolio, where we've got push back, especially the sanitize and the home and the hygiene portfolio. There, we have seen the market only shrink, which is sanitizer market. And there, we made a good turnover of INR 100 odd crores. That's been reduced to around INR 7 crores. So that's been negative as far as success rate is concerned. But rest of the places, wherever we launched our products, be it health care, or beverages, or HPC, we've had a significant good rate of success.
Got it. The second question was on the rural side. So compared to 18 months back, pre-COVID versus now, has the overall share of rural and India business increased? Because rural has also grown faster, and you have also been sharply increased your distribution on the village side. So has there been an increase there? And if the yes, what? How much is that?
Yes, the rural growing faster compared to the urban products. I think only in the quarter one, when post-COVID and then the recovery of urban happening, Urban business grew higher than us. For us, overall, rural contribution is around 47% to 48%, depending on quarter-to-quarter ranges between 47% to 49% for us. So it's been almost remained pretty much similar from 47% to around 49%. As we speak in the current quarter, it is around 47% for us. But rural is growing at a much faster.
And pre-COVID this might have been -- this is a little lower than 47%, right? I'm assuming.
Right. Around 45%. Around that.
Got it. And last question was on the bandwidth side. You're sharply increasing distribution on rural as well as with significant new product and new category introductions that you're doing, over the last five quarters, people costs, which is employee costs have actually grown below sales growth. So I just wanted to understand to support both distribution and increasing your TAM on the product side, do you envisage at least in the near or medium term, sharper increase on the -- at least on the employee line item to kind of handle this? Or do you believe that you can still drive leverage from there?
So we are consistently investing in the front end. So be it advertising, that investment is going on. And SMB investment is also continuing, as you would have seen our infrastructure. So we are appointing more number of sub stocks. We've appointed more number of, and those are distributors for us that is a seeding operation. That doesn't cost increase in terms of overall S&M cost. What calls for increase in the cost is the engagement program.So we've embarked on chemist engagement program, modern trade engagement programs, and e-commerce programs, which cost money, but that's adequate enough, whereas the scale of volume of business kind of is coming, and we have a volume growth of about 10%. We are easily able to subsume the cost of infrastructure increase and get a positive operating leverage because the volume growth and the value growth is higher, and that's happening. But that said, we are continuously investing on infrastructure and people also. So what we've done, operate under Samriddhi Project is that we've increased the span of control. We've reduced people at the top, and we've increased our feet on the street below. That said, investments in front-end is a priority. So we will get a leverage from indirect overhead staff costs, and we keep investing in the front end, and that's a priority for us.
Our next question is from the line of Richard Liu from JM Financial. It seems we have lost the line for Richard. We'll move to the next question from the line of Alok Shah from AMBIT Capital.
My first question is on the rural distribution that you mentioned that it is being south to Yoddha. I just wanted to check that who surrounds your Yoddhas currently? And follow-up to that would be, what would be the revenue contribution that you get from the incremental 20,000 villages that you're in, if you have the number handy?
Alok, sorry, I couldn't get you. There's a little gargle in the line. Can you please repeat your question?
Yes. So my question is, you said that the rural distribution strategy that you adopted is being done through Yoddha currently, and they are more like -- like village-level entrepreneurs. The question is, does Dabur directly service this Yoddha? Or are they being serviced through some mediatory?
No we directly serve to Yoddha. Through a super stockist, we serve the Yoddha, and so the stockist takes this operation when he appoints the Yoddhas in unserved villages. And that's how it becomes a stocking point. So we have rural sales promoters who actually go in and appoint these Yoddhas and create a stocking point over there. And that cash and carry operation that we guys have got, and we don't extend towards the credit also to the Yoddhas. So this streamlined and the person is converted into a substockists.
Got it. So basically, that is a channel where you do not intend to have a channel conflict going ahead? Because there's a lot of new channels, which are coming over, trying to tap this untapped rural. Is that understanding correct?
These are completely hinterland villages that we are talking about, which are not served actually. So here, it's not what we see towards a conflict. And we are actually working with other players also. In Maharashtra, there are a couple of other players that we are working with them also with the seeding operations. So there's a joint work, which is happening with them. Yes.
Got it. My second question is on B2C. Moving -- ever since you have come the CEO, Dabur has been very adaptive to anything -- your world views are changing, be it at the time of COVID, the technical launches, etc. But in B2C platform, somehow, some of you have taken time. Now come to my understanding, maybe your products are absolutely ideal for B2C with high gross margin, ability to increase your LTVs, lower CAC, etc. But somehow, we are still targeting about, a few more months after which we'll plan and then we'll invest behind it. So can you share your views as to why is it that on B2C platforms you have taken some more time, possibly?
Yes, I believe. You are absolutely right. I think you observed it correctly. So when I came to the India business, there was a platform which was created for Ask Dabur, which is a B2C platform that we guys have created. It was a direct platform, wherein we are soliciting orders from the consumers, and we were serving the consumers our products. And it was a complete view. We had almost around INR 10 crores to INR 11 crores that we lost in that operation because it was an operation where the consumers used to put up the order, we used to service that order. And when we should take the order to the house, they used to cancel the order because it is more cash. So we were bitten by B2C and we had huge losses that we had taken. So we want to be very careful when we do B2C. We tried the B2C operation that we'll embark on is not going to be our revenue model operation for us. It is more going to be a brand-building and giving the first-party data for us. It's a marketing tool rather than being a commercial tool for us. So that is why we are taking time. So we are working with a couple of vendors who are helping us building this B2C model for us, which could have exclusive brand. It could be available to our existing brand portfolio also. So we are taking some time, but I think we want to get it right this time on.
Got it. And my last question is on your cash and liquid surplus. Now broadly, you have close to about, I think, INR 5,000, INR 6,000 odd crores, cash plus liquidity investment sitting in your books. Now, what are the alternate uses for this? Are you looking at some acquisition very seriously? Because while in the past, although you've mentioned, but domestic acquisitions have really not come back. So what can we think of this cash surplus that you have on your books? That's all from my side.
Ankush, you want to take this question?
Yes. Thanks, Mohit. Yes, Alok, right as you've mentioned, we are sitting on almost INR 5,600 crores cash at a consolidated level in almost INR 4,500 crores at Indian level. Yes, we keep on evaluating the right opportunities, which are something which are very strategic, from either the product portfolio mix or from a geographic constraint, but they have become at the right value and at the right time for us to invest. And yes, we are open to opportunities, as we said, for the right strategic spec, and we will be keen on investing going forward. So we are evaluating.
So any hurdle, time line where you will think that if we don't have, then possibly, it is -- we will increase our dividend payout or look at some alternate ways of cash repatriation? Any thoughts?
In terms of that, we are evaluating, but it depends on the timing. It depends on the right opportunity. When will it come? How is it? We'll keep on doing the due diligence also. But both the parties into every -- and the right terms for the part -- for the deal...
And also, if you remember, in the month of May '21, this year, we have increased our dividend payout to the shareholders.
We have increased the dividend payout as we speak. So that's what we have done. But acquisitions are a chance event, and you can't really plan the acquisitions. We can plan diligence and we can do market working, and that's what we keep doing all the time and evaluating targets, to Ankush's point. But we can't have a fixed time line. It is a big chance event.
The next question is from the line of [ Harshit ] from HDFC.
So say have consistently spoken about the massive opportunity in health supplements category, given the gross under-penetration of products. But the growth, as one might anticipate, has moderated. So a couple of questions here. So are we looking for new category launches, say, outside of Honey and Chyawanprash, say [indiscernible]. And secondly, as the COVID's most likely behind us, do you feel there's a need to revamp the communication? Now as most of the products across multiple categories have been marketed as protectors against COVID and there might be a need to change the consumer perception. And sir, lastly, you have mentioned about the stickiness in Chyawanprash. So I just wanted to know who would be the larger audience here? Is it the senior folks or is it the youngsters? So just wanted to check if you are doing any wide space margin here.
So your voice wasn't very clear, but I think what I've understood is you're saying that are we planning to get into other categories besides Chyawanprash. And I think the answer is yes. We've already gone to the nutraceutical markets by the end of COVID. We've only launched a range of fewer herbs in the marketplace, and gradually, slowly, we are scaling it up. And the range of pure herbs that we've rolled out, Ashwagandha, with Giloy and multiple pure herbs, pure herbs in both capsule form and also in form of powder what we've rolled out, and we are gradually slowly scaling it up. Now the answer is, are we planning to exploit new wide spaces? Yes, we are -- our plan is to get into MFT space, which is wide space as far as we are concerned. And we feel we have a right to win. And therefore, Dabur Vita is being rolled out in that space. It's a huge market, a big equity. So that's what we are planning. Was there a second part of your question also?
Chyawanprash audience.
Yes. The target audience for Chyawanprash is more adults and who have low immunity, and they are the ones who actually use it. And it's made for the family, for kids, and for adults, and for the whole family. And after COVID, the product has become actually a family product and not only for adults, but the perception, to your point, it’s more adult today. It makes an entry from the adults and then it's being used by the family, the mother, and the child, and everyone. And to improve the organ electrics and the sensorials of the product, we are working on it. And that's why Chyawanprash in a tablet form and also going forward, powder form will help us broad base the target audience of Chyawanprash from adult to the kid and to the mother. And the Dabur Vita initiative will also help us with the sale.
Understood. That was very clear. And so secondly, we have a big ambition in Food business. I think where we are aiming for INR 500-odd crores in the next three to four years. So I wanted to understand what specific categories are we looking at, say, beyond condiments and the opportunity size? And what does current pipeline look like in this space?
So we were a Hommade brand. And from Hommade, we are scaling it up. As you know, that we've already rolled out chutneys and pickles. And for confidentiality reasons, I'll not be able to tell you as to which all categories we'll be getting in. The market is becoming very competitive. I'm sure you'll appreciate that. But we are proposing to scale up the Hommade brand drastically and increase the brand franchise. As and when we keep launching the brand, you will come to know. But tens of pickles and chutneys to brand the unbranded, huge market, which is already there in India. And we've got a very positive response in pickles and chutneys.
Understood. And sir, so can we presume that the growth here would -- can be largely through an organic -- and/or will it be organic growth only in the Foods business specifically?
So, it could be a combination of both organic and inorganic. We are counting out for targets for inorganic, but that's, again, per chance. And -- but we are still working on an organic entry as well.
The next question is from the line of Jay Doshi from Kotak Securities.
I've got two or three questions. The first one is, over the past two to three years, new product launches have started contributing 5% to sales as against maybe 1.5% earlier. So during this period, how has your allocation of advertising budgets being between the mature brands and the new products that you have been launching? If you could throw some color. And essentially, the idea of asking question is because both in digital-first brands, B2C brands as well as some of the new categories that you're launching, the requirement for A&P support would be significant. So I just want to understand how are you balancing the aspirations of different brand managers?
Jay, for us, it is really not launching new brands, we are getting into existing categories through power brands. It is a power brand architecture of eight power brands, and most of our resources are deployed behind power brands, like in Real. Real is a power brand for us, if we get into drinks, which is an existing category of drinks in addition to nectar. And therefore, requirement of advertising is not as much. It is more requirement of distribution and more requirement of bandwidth, which is what we provide. And that's how we guys manage our resources. So really it is INR 1,000 crore brand, If we get into a drinks market, see broad-based addressable market from INR 1,600 crores to around INR 7,000 crores. And therefore, requirement of those advertising resources is not much.If I'm scaling up a homemade brand, I will say in an onion paste, garlic paste, and ginger paste, now I'm getting into chutney via different areas required, but within the similar ad pro. As I keep growing the brand, I have my advertising investments also growing. That's the way. If I'm in Home Care, our Odomos brand, if I launch a racket, electric racket, I don't have to advertise so much. Its only e-commerce, portal advertising that one has to do. And likewise, brand after brand, we do the same thing. If in Amla, we launched Amla Almond, it's a flanker brand for us. So it is getting subsumed under the Amla franchise for us. So that's the way we get planned, wherein it doesn't put too much strain on our pull strings.
Understood. That's helpful. Second question is what is the level of planning that would have gone behind the launches in case of Dabur Vita, your foray into MFD category and liquid vaporizer? So what are typical product development life cycles? And when would you have started working in that direction from time conception to go-to-market?
See we've got a gauge process for all the NPD. The gauge process invariably used to take around two years prior to COVID, and COVID, we've been able to shrink the entire window of NPD launches, which was two years. Now, it is also -- it is taking us -- in COVID, it used to take us three, four months. But now I think after back post COVID, it is again taking us almost a year, to tell you, we've been planning for almost 1.5 years as far as Dabur Vita is concerned. And now it's in the light of the day. So it's the case of LVP. And so invariably around a year or so, if.
Understood. And finally, a quick bookkeeping question. You indicated that July and August were quite good as far as the result demand and growth were concerned, but there was a little bit of a slowdown in September, and then you indicated that you're hopeful that with festive season, demand will improve. So I'm not really sure whether you've made any comment on October quarter, whether -- sorry, October month, whether it was better than September and in line with what you witnessed in July and August, and this is with respect to rural demand?
No, we've seen a little, I told you, liquidity pressure from the rural and from the Wholesale segment, which we have seen and which carried on in September and also into October. So hopefully, November with the festive season, things should actually get better. But there is a pressure on the demand that we guys are seeing. And the Kantar indicated data also alluded to what I am saying. And also the Newton September data, which has just come out today, is also talking about almost a flat volume growth in the FMCG market as we speak.
The next question is from the line of Rakesh Roy from Indsec.
Sir, can you highlight the demand outlook for international market for region wise?
International market. So yes, international markets are doing well for us. And I think we are out of the COVID crisis, and all the markets are doing well for international. Overall, International business has grown by 13.8% constant currency terms, with the largest market, Middle East, North Africa has grown in constant currency terms at 12.8%. And all the countries in the MENA markets have done well. Our Sub-Sahara, which is the Africa market, has grown by 25%. Our Nigeria business is a key market in Sub-Sahara has grown by 21%. Our Namaste business, which is a North America business, and a bit of Sub-Sahara has grown by 16%. Turkey business was a little impacted in the last quarter as we got out of COVID. The growth has been around 3.5%. For us, there's been currency depreciation there also. The SAARC business has also grown by around 17.6% for us. Overall, International business is in a good space and doing well for us, and we would anticipate double-digit growth come in international business if the COVID third wave and any lockdowns don't happen in international markets.
The next question is from the line of Abhijeet Kundu from Antique.
My first question was on the tax part, timing question. For the year, where do we see the effective tax rate? Because in this quarter, tax rate has gone up significantly. So for the full year, what should be the tax rate that we have to factor in on a consolidated basis?
Yes, Abhijeet, on a consolidated basis, we are almost 23%, both at a quarter level and YTD level. And net will be in a similar range for the full year, around 43% to 43.5% for full year. Yes.
Okay. And two more questions. So one question was around -- maybe you said that there has been some issues with liquidity, tightening of liquidity in the rural markets. And Nielsen has indicated a flat year-on-year volume growth. So in the light of this, how do we see the year ahead? I mean, December and March quarter, I mean, so what are your expectations? Because the first half has been really strong despite a very strong base. Now what are the expectations? Would it be possible to still grow in double digits on the top line front?
Yes, Abhijeet, we've indicated that we've taken a target of double-digit growth for the full year, double-digit volume growth for the full year, and we will maintain a target to do double-digit growth. There is a base sum, which is there in the current quarter, and that we have to circumvent. That is there. But some quarters -- one of the quarters could be having single-digit, another could have a double-digit growth. But overall, for the full year, we'll maintain a double-digit growth rate in the India and also in the International business. So I think that is what we will do, not because of the macroeconomic, but because of our own efforts and good execution. Yes.
Okay. And lastly, in Oral Care, as per our channel change, there has been some amount of pressure in terms of growth because the competitive activity has gone up. So last year, one of your -- the largest player was finding it difficult to reach out to the markets. There was some issue with distribution all of that. And so this year, there has been heightened competition. For Dabur, what we have seen is Dabur is growing at a very strong rate in Oral care, led by Dabur Red Toothpaste. So is there any -- I mean, increase in competition or a slight moderation in growth or on a high base growth has moderated a bit in Oral care? So what's the scenario there?
So, Abhijeet, Oral Care, we are in a good space. I think we've got a very differentiated proposition, and we are completely unfazed by the competition till now. And Dabur Red, which is a flagship brand has grown by 20% in the last quarter also while we are at 15% growth, overall for Oral Care, but that is coming because of a very high rate of Lal Dant Manjan last year, which grew by around 40%, and that is almost flat in the current quarter. But Red Toothpaste has got a CAGR of 20% and this quarter we'll gain 40 basis points in terms of market shares also. And we are steadily increasing.Now if you look at the market size, the market segment of Herbal, which is around 30% has actually grown at 1.3x of the non-Herbal, where the market leader, which you're saying is not aggressive. That is growing at around 8%, 8.5%, which is non-Herbal, and the Herbal market is growing at around 11% to 12%. So there's a huge delta between a non-Herbal and the Herbal market and Dabur is growing at 1.3x for the Herbal market also. So therefore, from a market state standpoint, we are consistently gaining market share, and it's a matter of time, I think another two quarters, we'll 50 basis points behind being a #2 brand in the country, #2 company in the country in oral care.So I am an extremely confident on oral care despite competition going up, but the combination is good for us because we'll be able to manage competition reasonably well here, and I don't think there's so much a pressure. Plus, we've got a right to win, and we are the #1 in the herbal. And there's nobody else in Herbal, and even if the competitor does herbal offering, they only add to our tailwinds. So we'll become the beneficiaries of that. Our -- all the new product initiatives of Dabur and alpha ingredients that we use are doing well. So overall, I think we are in a good space as far as the Oral care is concerned.
Ladies and gentlemen, we will now close the question queue. And take the last question from the line of Richard Liu from JM Financials.
Mohit, I have two questions. One is, I've noticed some announcements in recent times with regards to private placements of NPDs. Just wanted to check what is this regarding, especially since you've got a cash balance of INR 5,000-odd crores?
Yes, I'll let Mr. Ashok Jain take that question.
It has been placed primarily to fund the capital. As we recently put on a new plant in Indore, which will be costing over INR 500 crores in addition to the modernization expansion, we keep on going forward in existing plants in other places like Jammu, or Pantnagar. And primarily, our investment, which we had, that we have invested for a higher return for a slightly longer period. It was not making any sense to draw those returns. And moreover, we have been able to pay this money at a very fine rates. That is why we have resorted to this placement of entities.
Okay. Understood. And Mohit, the next question to you is really that if you can walk us through the numerous NPDs that you've been doing since the last 1.5 years, as in how have these done in quarters subsequent to the quarter of launch? And if you can just take an example of maybe the best-performing NPD and the worst-performing NPD, how large they've become since launch and how big these can become over time?
So, Richard, NPD is going to be the center stage for strategy and that's one of the ways how we are trying to grow and which will be the case going forward also, if I take one of the best NPDs will be drinks, then we extended real Tetra Pak into drinks, and we entered the Mango drink market, which is INR 7,000 crores, and that's doing well. It's the second year of the launch. Not even the second year. I think it's the first year going forward, we launched it sometime last year. And this year, we'll clock INR 100 crores in the drink space as far as that's the best. The worst will be in terms of sanitizer during COVID, we launched the sanitizer. We did INR 100 crore of sales and sanitizers in some six months' time. And this year, we'll do a sale of not even INR 7 crores. So that's the worst NPD for me. The ones which are medium will be COVID contextual NPDs like Tulsi Drop, Honey Drops, health juices.During the COVID period, they did very well, now post second wave of COVID, now the growth is actually much lower. But I will not say that this launch is not doing well. It's a huge market and will continuously grow. The CAGRs are still in double digits, more than double digits. And going forward, it will sustain as we keep changing up these NPDs. And we've done apple like one of the better launches that we've done in e-com versus apple cider vinegar. Apple cider vinegar is also doing exceedingly well. Around INR 1.5 crores to INR 2 crores of business in which we are clocking every month in that. So even the baby range that we rolled out in e-commerce is doing a business of around INR 1 crore, INR 1.5 crores on a monthly basis. So overall, I think, I would say, 80% of our NPDs have done very well. 20% they've not done so well. But so we are okay with it. So it is not giving us sleepless nights, has not done well. So I think we'll manage it. And we are incorporating a culture, a furious customers of doing NPDs as a company. And even if some of them fail, it's all right.
Thank you. Ladies and gentlemen, that was our last question for today. I now hand the conference over to Ms. Gagan Ahluwalia for closing comments. Thank you, and over to you, ma'am.
Thanks, Kevin. Thank you for your participation, ladies and gentlemen, in this conference call. The webcast or here recording and conference will be available on our website very soon. Thank you very much.