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Dabur India Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 Results Investor Conference Call of Dabur India Limited. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. 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 the results for the quarter and year ended 31st March 2021. Present with me on this call are Mr. Mohit Malhotra, Chief Executive Officer, Dabur India Limited; Mr. Ankush Jain, Chief Financial Officer; Mr. Shahrukh Khan, Executive Director Operations; Mr. Adarsh Sharma, Executive Director Sales; and Mr. Ashok Jain, EVP Finance and Company Secretary.Please note that due to the lockdown in Delhi NCR, many of us are working from our respective home, so kindly excuse if there are any connectivity issues during the call. We will start with an overview of the company's performance by Mr. Mohit Malhotra, followed by a Q&A session.I now request Mr. Mohit Malhotra to start his presentation. Thank you. Over to you, Mohit.
Thank you, Gagan ma'am. Good afternoon, ladies and gentlemen. These are truly challenging times. I hope all of you and your families are safe and healthy. Just as our hearts go out to everyone affected by the second and more devastating wave of COVID pandemic, we are also eternally grateful to the frontline medical professionals and nursing staff who are risking their lives every day to keep us safe.This is a time like no other in our life. The pandemic is now striking us closer at home, affecting our families, communities, organizations and even our perspective and way of life. At Dabur, we are focused on how to best protect and support our families, employees, business partners, communities in the face of this unfolding crisis. I'm equally inspired by the deep commitment and superlative efforts of each and every member of the Dabur family, who have gone above and beyond the call of duty to sustain our manufacturing and supply chain operations. Together, we have successfully converted the challenges into opportunities and have emerged as a more flexible, agile and fearless organization. As a result, we have reported one of our best performance in a very tough COVID year.In financial year '21, Dabur achieved consolidated revenue from operations of INR 9,562 crores, growing at 10% over the previous year. Our India FMCG business recorded a growth of 15% with volumes going up by 12.4%. Profit after tax increased by 17.2% to touch INR 1,693 crores. We have crossed several milestones in the process. We have crossed INR 10,000 crore of gross sales for the first time in history of Dabur. Our operating profit exceeded INR 2,000 crores. Our market capitalization touched INR 1 trillion mark. One our flagship power brands, Dabur Red, touched the INR 1,000 crore mark. We have added INR 500 crores to our health supplement portfolio, which includes iconic brands of Dabur Honey and Dabur Chyawanprash in a single year.Performance highlights. Let me now touch upon our quarterly performance. During the quarter ended 31st March 2021, we have registered a growth of 25.3% in consolidated revenue from operations. Our stand-alone business recorded a growth of 30%, backed by a robust volume growth of 25.4%. Consolidated operating profit increased by 25.6%, ahead of top line, and profit after tax grew by 34.4%.Coming to category-wise performance. Our health care portfolio recorded a growth of 23% in quarter 4 driven by creative contextual marketing campaigns, localized sales activations and sustained investments behind our brands. Dabur Chyawanprash reported a strong performance despite it being an off-season, gaining market share of 170 basis points. Dabur Honey continued to do well and gained 230 basis points in share in the honey category.The digestive portfolio posted 20% growth on account of improvement in mobility and out-of-home consumption. OTC business posted a very strong robust growth of 34% on back of good performance of Lal Tail, Shilajit and NPDs like health drop, health juices and other Ayurvedic products. The Ethical Ayurvedic business also performed exceedingly well, growing by around 40% on back of strong demand for immunity boosting products, contextual activation and visibility drives in the chemist channel.Within the Home & Personal Care space, Oral Care was a star performer, recording a stellar 42% growth. Dabur Red paste continued its strong growth momentum with Meswak and Babool franchise also recording a strong double-digit growth. Our market share in the toothpaste category witnessed 120 basis point gain vis-à-vis last year. Recently launched NPD like Dabur Dant Rakshak and Dabur herbal range of toothpaste continue to do well. Dabur Lal Dant Manjan also witnessed a growth of 23% during the quarter.The Hair Oil portfolio had a good quarter, reporting a growth of 25% on back of double-digit growth in perfumed oil and coconut oil portfolio. Our market share in Hair Oil improved by 17 bps. We will continue the strategy of supporting our core brands with flanker brands and also launch variants to cater to varied consumer needs. The Shampoo portfolio recorded a growth of 33%. Our market share in Shampoos continued to see an uptick and increased by 70 basis points in the quarter to touch ever higher 6.5%.Home Care marked a turnaround during the quarter growing by 24%, with all brands reporting a smart recovery in demand. Despite the air freshener category continuing to report contraction during the quarter, Odonil brand saw 20% growth. Odomos and Sanifresh also witnessed strong double-digit growth. While Odonil registered a 90 basis points gain in market share, Odomos recorded 130 basis points improvement in market share.Skin Care portfolio witnessed a growth of 38%, driven by strong growth across portfolio. Gulabari performed exceptionally well with a growth of more than 40%. There was a good revival in Fem and Oxy portfolio as well. Our food and beverage business improved significantly, reporting a growth of 28%. In the beverage business, both in-home businesses and out-of-home consumption reported a strong performance. Our market share in JNSD category saw an increase of 80 basis points.In our pursuit to grow our Food segment, we continue to expand our business under the Hommade brand, which saw a growth of 36% in the quarter. The new products launched under the food and beverage portfolio, like Real Mango drink, Real Frappe milk shakes, Hommade chutneys and pickles range continue to see a very good traction in the market.Among the channels, e-commerce continued to be outperformer with a growth of 2x. This channel now contributes around 5% to 6% of our sales. Focus on digital and e-commerce, which has increased considerably during the COVID crisis, we were able to build a closer connect with our customers, consumers, among the rising preference for online purchases.Our recently launched e-commerce first innovation, such as Apple Cider Vinegar, baby care range, value-added honey performed very well. During quarter 4, we noticed -- we introduced Vatika select shampoo range with new ingredients like coconut oil, Moroccan argan and red onion seed. Innovations will continue to be a very strong driver of growth for the company, and we intend to continue to convert consumer insights into innovative and relevant products.Our International business recorded a growth of 21% in constant currency during the quarter. In terms of regions, Middle East, North Africa region posted a growth of 24%. Egypt grew by 22%, and Namaste business saw a growth of 12%. SAARC business performed well with growth of 21% in Nepal and 47% in Bangladesh. International business also reported an increase in the operating margins, aided by favorable country mix and cost-saving initiatives.The year ahead. With the emergence of this more devastating second COVID wave, the operating environment has become very challenging. While there is not a nation-wide lockdown till now unlike last year, the localized restrictions are leading to some last-mile disruptions in supply chain. That said, we are better prepared as a team to handle the pandemic as compared to last year. We are also applying learnings from last year on streamlining the supply chain to ensure minimal disruption in supplies. While this remains a developing situation, our factories continue to operate on relatively normal basis.Going forward, we anticipate that there may be an impact on discretionary product portfolio as people are staying home and outdoor activity is restricted. However, our health care portfolio, especially the immunity-building Ayurvedic products is already witnessing an uptick in the second part of April and should make up for any loss in the discretionary product business.The second wave has posed a greater humanitarian crisis. Safeguarding the health and safety of our employees remains our top most priority. In the past few weeks, we have tied up with local hospitals and organized vaccination drives for our employees and their families. At the time when access to physical medical support is becoming increasingly difficult, we have been helping our employees and their immediate family members gain access to trained medical experts, doctor consultations online, COVID testing facilities and home isolation programs. We have converted our guest houses into COVID isolation facilities equipped with oxygen concentrators, cylinders, nursing staff, ICU kits, et cetera.We are planning to set up a oxygen generation plant, work is in progress, and isolation facilities near our manufacturing units to help out our employees, not only just our employees, but also the community members. We have also extended a special insurance cover to our 3,200 frontline sales force who were not on our payroll and to 650 C&FA employees.I understand these are difficult times, and many of our friends and families are struggling with health issues and other concerns. But I'm confident that we will all emerge from this much stronger and much more resilient in the future. Please take care of yourselves and your loved ones. Stay safe and protected.Aman, I now open the Q&A and invite your questions. Thank you.
[Operator Instructions] The first question is from the line of Aditya Soman from Goldman Sachs.
So the first question is just in terms of seasonality that we're now seeing in 4Q. So before, let's say, FY '20, I mean, 3Q and 4Q were pretty similar in terms of revenue, maybe less than INR 100 crore difference. But we are seeing last 2 years, the gap in 3Q and 4Q, especially in domestic FMCG, is quite significant. Any reasons for this?
Right. Aditya, if you actually see, our health care salience and contribution of business has actually significantly enhanced over the past couple of years. And our health care portfolio is more winter centric, especially the subpart of health supplements is pretty winter centric. Therefore, quarter 3 and quarter 4 assumes a higher salience, in quarter 2 on account of buildup for the quarter of 3 and quarter 3 because of seasonal consumption happens in the business.As we enter quarter 4, it's actually the HPC, which becomes more salient. And there is a moderation or the tapering in the health care business that starts on. So that's the way the business has been. But I think because health care salience has gone up, that's why you see a little marked difference in the seasonality now. And moreover, what's happened in the last quarter of last year, we saw a little moderation or tapering off in the growth rates of our Honey and Chyawanprash business on account of it being off season. And there was a tailwind earlier in quarter 2 and quarter 3. That's why the difference may be there in terms of CAGR that you must be seeing.
That's right, Mohit. And in terms -- going forward, I mean, you indicated that in April, you've seen some acceleration towards the end on the supplements, but you also lap a very tough year. So would you expect to deliver, say -- what sort of growth rates would you expect to deliver on sort of a fairly high number of supplements?
See, Aditya, we were always targeting -- before this COVID second wave actually hit us, we were always targeting to hit a double-digit growth, and we were pretty well prepared with it. And -- but for this shrouding of COVID second wave, now things have become a little more dynamic and fluid. And one doesn't know where this will land up in. As far as April was concerned, I think we had the momentum of March, and it carried forward into April. So we did not see any impact.But I think whatever lost ground that we may have on account of lockdowns and if this wave is limited to June and May end, I think we should be covering it up in the balance part of the year. That said, we have a high base in quarter 3 especially when we lap over the season. But I think we are pretty much prepared with a lot of innovations and price increases, et cetera, to ensure that our trajectory goes up. That said, we are hardly INR 8,000 crores, and we have competitors who are INR 45,000 crores, INR 46,000 crores. I think there's a huge headroom to grow.And especially in health care, which is a low-penetrated category, I think it's just not the base that we need to see, it's the opportunity ahead of us that we need to see if we have to really leapfrog in terms of growth. So I don't think there's any lack of opportunity out there. And as you know, in Foods business, we've entered the drinks category, regeared the business from a market size of INR 1,800 crores to now INR 7,000 crores.We're getting into Foods business with the Hommade brand. In Foods category, essentially unbranded in the country, huge opportunity to grow. Hair Oils is INR 10,000 crores, and we are hardly a 15%, 16% market share. Oral Care, another INR 10,000 crores. We are only 16% market share. Home Care, we are scratching the surface. Skin Care, we're not doing -- not done much. So I think the opportunity is huge on account of diversified portfolio of Dabur. We are very small. So I have no doubt that we should have a good year, provided the COVID situation improves a bit.
Fair enough. And just lastly on this Health Supplements business, I mean, so this quarter, there was no impact because more consumers started getting out. Do you think the impact was just seasonality and weather changes?
The impact was seasonality. The tapering off or the moderation in the health care peak growth that you saw in quarter 3 that came down on account of seasonality, for sure. And Honey as a category, because the competitive intensity became very high in quarter 2 and quarter 3, the category actually shrunk. And because of shrinking of the category, we saw the growth rates mute a bit. But as the STRs go down and the consumption starts the new wave of COVID, I think the category should come back again. And with competition coming in, it should expand the pie going forward. I think it was pretty short term, and that should come around.
The next question is from the line of Arnab Mitra from Crédit Suisse.
My first question was on the fourth quarter. If you look at the growth over the fourth quarter of FY '19, which is -- because last year, there was a disrupted base. If you look at the 2-year CAGR of this quarter on the India business, it looks like a 4% growth CAGR, 4Q '19 to 4Q '21. And while last 2 quarters, you were clearly doing double digits pretty comfortably.So I think the framework you had in mind was that there will be some slowdown in Health Supplements, but you would make it up through, let's say, Foods and some of the other out-of-home discretionary categories. So that equation doesn't seem to have worked in the sense there is a sequential moderation in the 2-year CAGR. So is that something that worries you when you look at an FY '22 lens of how you will deliver that double-digit ambition?
Right. Arnab, I think the primary sales is what you look at in which you look at 4.8% CAGR as compared to the previous quarters, wherein we saw a double-digit or 8% CAGR, which was happening. If I look at secondaries, secondaries are pretty much in line with what was there in quarter 2 and quarter 3 and quarter 4 also. What we did is we implemented CRS, which is continuous replenishment system, in our sales system.If you look at our previous quarters, the year before last quarter 4, we used to do preseason loading because the season used to happen -- the consumption used to happen in quarter 1 and loading happened in quarter 4 of the previous year. Now this year, we did not do that kind of a loading on account of the CRS implementation. And wherein we fixed the inventories at the stockist level, and we -- whatever secondaries happen is what primaries we take in.So there has been a little bit of correction in pipeline of sorts which has happened in the business. That's why the delta growth that you saw has got shaped off in the quarter 4. And that's the way we want to see the business. So I'm not overtly worried because I think secondary sales is pretty much in line. Offtakes are pretty much in line. Market shares are growing across all categories, and we are growing ahead of category growth numbers. So there is no over overt worry here.As far as our Foods business is concerned, that also come around the bend for us. Beverage business has grown by 37%. And if I take out the institutional business, this business will be growing at around 40% for us. Apart from beverages, the culinary business has grown by 36%. We already have a shortage of coconut water as we speak in the market, and we are wanting to augment capacity; it’s not very easy. So I don't think it worries me quite a bit, but yes, the base is there. And I think we'll lap over the base, but -- that problem that we have. I hope I've answered your question, Arnab.
No, that's very helpful, Mohit. If you could, just a follow-up on that. Any sense of how much could be the shaving off of primary versus secondary gap? And is it like a change which has happened once and now there is no incremental, let's say, impact going ahead? Or is there like a process where there could be some impact even in the subsequent quarters that you need to further kind of reduce the pipeline?
Not really. If you look at the pipeline, earlier we had to have 25 days of pipeline. That pipeline has got corrected. In the current year, we ended at around 17 days of pipeline. So there has been 6 to 7 days of correction in the pipeline on account of the preseason loading. We want it to be like that, Arnab, but one doesn't know how the season pans out to be. With this kind of uncertainty, one would definitely don't want to load, but what's happened is that because we know that now COVID situation is going to hit us, there are selective lockdowns, so we are increasing inventory levels at the trade as we speak.In the month of April. We have increased inventory level so that STRs should not drive the retail level and we increase. So it's a very dynamic situation. But that said, we've already implemented this system, and it's very virtuous to implement this system so that you -- by default, we don't increase only by design. If we want to increase the inventory, then we increase the inventory to safeguard the future businesses. So that's the way this is.But I don't think this is going to be the case going forward. This was a one-off implementation where we corrected these inventories by around 6, 7 days to maintain a better hygiene of the distributors. And because we got a better ROI, we've also been able to shape the margins of distributors selectively.
Right. And just any quantification on how much could be the gap primary/secondary for the 4Q itself, any kind of broad range?
The difference I told you in terms of the number of days, that's the difference, broadly. And I will not be in a position to quantify this difference, but the growth difference will be, if you see a growth of around 4.8% and if secondary is in the range of roughly around 8.4%, it should be different of around INR 70 crores, INR 75 crores of difference. That's ballpark, I'm giving you a number.
The next question is from the line of Abneesh Roy from Edelweiss.
My first question is on the stand-alone gross margin. So there's almost a 250 bps compression. So wanted to understand which part of the product portfolio you are taking price hike? And which quarter you expect this kind of a gap to be reduced?
Right. So Abneesh, rightly noted. So we have a compression in the domestic business because we've seen an unprecedented kind of inflation. And this inflation is in the tune of around 5% to 6% in the overall business and spanning across the entire product portfolio. First of all, agri commodities. Agri commodities have gone up, and we have herbs and spices in agri commodities, where there's been a huge inflation, whether it's amla fruit or it's vegetable oils. Or it's -- the second bucket is hydrocarbon link, which is fossil fuel link, packaging material, raw material, where we've seen huge spike because the petroleum rates are much higher as compared to last year.Third is specialty chemicals is also higher for us. So across the board, there's been a inflation, and this is unprecedented. We've tried to pass on this inflation to the consumers by way of 3% price increase, but 3% price increase is not good enough for us to mitigate this entire impact of inflation. So going forward, we'll be taking second round of price increases that may happen, and the follow-through impact of previous price increases will come in the quarter 1 as we see it through the quarter, but there will be some margin pressure in the first quarter, that said. But we expect the commodity prices to cool off in the second half of the year. And therefore, we should be able to compensate the margin loss in the first quarter or the second quarter in the second half of the year. So that's what my take is.And another point is mitigation. We've also embarked on crop optimization projects. I've already alluded to in my previous calls. We got Samriddhi Project this year. We have accrued a gain of around INR 50 crores on account of cost savings in Samriddhi. Next year, another INR 100 crores is planned to come out of the Samriddhi cost saving initiatives as a company. So half of mitigation will be through price increases and hopefully half will come through cost savings.
Related question is A&P spend. Last 2 quarters also, your A&P spend was quite high. And in the Q3 con call, you said that in Q4, likely, that it will come down. It hasn't come down. In fact, 30% stand-alone sales growth, 69% A&P cost growth. So what has led to that not panning out?
Yes. So Abneesh, yes, we are committed to be increasing our demand-related activities, and advertising is a very important part of building demand. Not just for our power brands to gain market share. That's what we are committed to in terms of volume growth and also for our new products. So that said, advertising is most important.But if you look at year-on-year trajectory of percentages spend on advertising, I think we are pretty low. If you look at quarter 2 and quarter 3, our advertising spend was roughly around 8% or even higher of the total top line. But in the current quarter, which you just talked to, it's still 6.8-odd percent and -- which is higher than last year of 5.2%. But last year, we had cut back on advertising because of the lock down situation, which we saw.So therefore, we are committed to be increasing our advertising spends. And the margin shrinkage that you saw is only in the quarter 4, but if you look at the full year, our margins have remained the same. And that is what the guidance that we had given that we will maintain our margins. And anything excess coming in the P&L, we will invest behind the business.So for the full year, we have almost maintained the margin. The little delta shrinkage that you are seeing in the margin, which is only around double digit -- I think it's around 10% or 15% dip in operating margin down in the overall business. That is on account of last year bonus reversal. Otherwise, our margins would have been at the absolute same level.And any incremental profit has been deployed back into advertising. That said, going forward in the year, if the inflation cannot be mitigated by way of price increase or by cost mitigation measures, then we may have to moderate some amount of advertising, but that will be our last priority. That said, we wouldn't want to do it, but push comes to shove, if at all, we have to, then we'll have to regear or recalibrate our entire media strategy and focus on, let's say, channels, et cetera.
So my second question is on Hair Oil. All the 3 companies which have got hair oil, they are claiming market share expansion. So I wanted to understand who is losing market share. And is there any slicing or dicing of data? How can all 3 companies see market share expansion?
Now this is a difficult question that you've actually asked me. So I think a lot of smaller players and more expensive hair oils are the ones which are actually losing market share this time. As far as Dabur is concerned, we've gained 70 basis points, and sequentially, we've been gaining our position in market share. We had lost market share, but that was in the first quarter of last year, which is the COVID quarter, which is where we had lost some share. But this time, we've grown ahead of the market. Just to let you know, market is growing at around 2% or 3% volume growth, and we've registered a 24% volume growth there. Also, we are bound to increase market share. As per Nielsen also, we have increased our numbers -- absolute numbers. Our volume growth are much -- at 9.3% as compared to 2% of the category in the hair oil and across sub-segments of hair oils, be it coconut oils, where our growth is around 40% plus. In perfumed hair oils, our business has grown by 20% plus so -- across the board. I can't comment upon other companies gaining share. Maybe smaller fringe players have lost, but we can perhaps get back to you after scanning the entire Nielsen data as to who's lost out there.
Sure. Sir, my last question on OTC and health portfolio. So in sanitizers, consumer behavior changed dramatically. So in Q4, when COVID was not much of an issue, at least for the first 2, 2.5 months, how was the repeat purchase you saw in Chyawanprash, Honey and your Ethical portfolio of the health drops, health juice? And did you see a big dip? And is the big dip now reversing?
Right. So as I told you, the health care portfolio was more winter centric for us as far as Chyawanprash and Honey definitely. So there was a moderation from the peak levels of quarter 3 that we saw. And that was bound to happen because off season and in season, there is a difference between the 2. The pace of businesses are different. And the growth levels are different.But that said, we saw a growth of 150% in Chyawanprash also and a double-digit growth that we saw in Honey business also, and we've gained market share in Chyawanprash to an extent of 170 basis points. And in Honey, we've gained market share of 220 basis points. So we've strengthened and consolidated our position as far as both these markets are concerned. As far as Ayurvedic medicines are concerned, our Ethical division, that continues to surge ahead because it was not related to COVID, and people had started moving out. And as such the penetration of Ayurvedic health care has improved in the country since the first phase of COVID situation. So we are in a good position, and we are launching a slew of NPDs to complete our portfolio in the Ayurvedic medicine business launching value-added products in our Health Supplements business. And in OTC business, we launched our health drops and our health juices and single herb and poly herbal range. And all those ranges are actually doing extremely well for us. And because we didn't have a base, the growth was there, but some amount of seasonality, for sure, is there in this business. And as far...
And, sir [indiscernible]
Yes, the second wave of COVID is concerned, we are definitely seeing a tailwind again. If I have to separate April first fortnight and second fortnight, we find that our health care business has kind of really -- going to spurt in the second fortnight of April on account of the COVID cases surging. But that said the HPC portfolio...
Sir, one follow-up there...
But that said, the HPC portfolio would not suffer as much because there is no complete lockdown. People are still going out in the market and doing purchases unlike last year. So we are more confident in the current year of the portfolio doing well on account of HPC and [indiscernible] not being completely shut out to consumers because retail outlets were not there. Now retail outlets are there, people are delivering at home. They've got used to e-commerce sales. So things should be much better as compared to last year, and we will be able to control them much better.The repeat purchase at the trade level is showing positive trend as far as our distribution building software is concerned, even for health care now -- in the last month of the last quarter and even now. So we are seeing a positive trajectory now in the health care business on account of COVID.
One last follow-up -- just one last follow-up there. In one of the earlier quarters, health portfolio demand was so much that you were not able to meet. Currently, again, demand you said has gone up. But because of the restrictions in kirana shops and other challenges, is there any stock out or loss of demand you're not able to meet in the current scenario, any significant stock out?
Yes, there is a stock out in the Foods business. Our coconut water business is completely stock out now. We are not able to service the demand in our coconut water business. There are some variants in juices where we are facing stock out. Amla, et cetera, we are facing the stock out situation. In some medicines, we are facing some stock out situation.That said, for the big power brand, we are not facing any stock out because we are pretty well prepared after last year. And as far as CapEx of the current year is concerned, we'll be investing INR 550 crores next 4 to 5 years to set up a greenfield facility in Central India to cater to our South region, East region, West region and also the North region. And that preparation has already started.We've already taken a 50-acre land in -- near Indore to spruce up and augment our capacities and which essentially will be for the health care business, Chyawanprash business and also our HPC business. So that is what we are doing long term to augment the capacity because penetration of health care are going up in the country and long term we have to be prepared. In short term and medium term, we are not facing any shortage as of now in the key product categories, whether be it Honey or be it Chyawanprash or be it all our key [indiscernible].
The next question is from the line of Percy Panthaki from IIFL.
My first question is on the margins. I understand you did speak about the inflation in input costs and your price increases, first round you've taken, second round you're contemplating, et cetera. And you've also spoken about your need of investing in A&P. So I just wanted to understand the interplay of all these elements. At EBITDA margin level next year, do you see a Y-o-Y compression for the full year FY '22 versus the full year FY '21?
Firstly, at no cost, we will let our margins shrink for the full year. We are completely committed. As I told you, the guardrail in margin protection, and we will use different media mixes or different advertising mix elements to ensure that the demand doesn't suffer, and we commit to high volume growth. So that we will do because it could be interplay of trade, consumer promotions, advertising, [ BPA ], digital.So there's a lot of interplay, which is possible and different strategies can be adopted. But we will not allow our margins to shrink. And for that to happen, we've -- I told you we've undertaken Samriddhi, and there's a cost saving on Samriddhi, which is planned. And that's in International business also and in the India business is what we have fearless approach to cost savings, and we are extremely committed to protecting our margins.
Great. That's heartening to know. Second question, and sorry to belabor this point. Everyone has asked this in some way or the other, and I'm going to ask it again. See, if I look at, again, your 2-year CAGR so as to remove 2 things, one is to remove the effect of the low base in Q4 FY '20, and secondly, it will remove the seasonal aspect of sort of sales being seasonal between Q3 and Q4. So if I look at the 2-year CAGR for 4Q FY '21 for something like Health Supplements, it is only 3%. And -- but if I look at the same number in 3Q FY '21, so 3Q FY '21 versus 3Q FY '19, that is 23%. And as I said, 4Q FY '21 versus 4Q FY '19, that has slowed down to 3% only. Similar numbers, respectively, if I tell you for your OTC and Ethical segment. It has slowed down from 16% to 4%.So I mean, our earlier sort of the assumptions or the sort of guardrails that we were working with is that the COVID tailwinds have resulted in a new normal level of sales growth. And after this, on this new normal, the future growth will sort of be a normal 8% to 10% kind of growth. But what we are seeing is that the 2-year CAGR, once the number of cases in Q4 has come down, the 2-year CAGR has gone down fairly materially.And here, you will not even have the CRS pipeline correction because Q1 will be a very, very off-season for things like Chyawanprash, et cetera. So there was, in any case, no question of a higher number of inventory days here. So this fairly sharp reduction in the 2-year CAGR in these 2 health care-related categories on the back of cases coming down, that really worries me that the initial assumption that this is the new normal level of sales. And on top of this, we will now have further normal sales growth. Is that assumption correct?
No, I don't think so. See, Percy, you have to look at it practically, in my view. I understand that you think there's been a slight moderation, which has actually happened. But first, on the inventory levels. If you look at health care and -- segment, your first question Health Supplements. There are 3 brands in Health Supplements we have. We have glucose as a brand here, which is very salient in our summer season, wherein we used to do summer loading. So there's glucose. There is Chyawanprash, and there is Honey.We saw -- seen a growth of 150% on Chyawanprash. Now this is segment-wise. We've seen a growth of near double digit in terms of Honey. But in glucose is what we've seen a compression of around 16%, 17%, which is where we should do pipeline filling and preseason loading. On account of that is the difference that you see. Because out-of-home consumption was impacted in quarter 4 also. Kids were not going to school, and glucose is very school kids usage product. So that has somewhere impacted that business. And quarter 4 not being a season for these. So that is where that impact has been. And number three is that portfolio mix that our sales force plays with. When a sales force is going out to the market, you suddenly have the HPC range also firing now, and you have to sell Dabur Amla also. At the end of the day, a sales guy, has to sell around 5 to 6 SKUs in a retail outlet. So when he sells that, if he's got a 20%, 25% growth rate, so something takes the beating out there.I'm not saying which is not. And while we have 4 different verticals so that also somewhere gets overshadowed because rest of the verticals starts selling. Suddenly, juice has become very salient. And you saw a 40% growth outside of institutions happening. So sales force, energy, bandwidth, time also goes away in the other part of the portfolio. And generally, a habit of selling more HPC than HC in that. So that's the reason, in my view, could be -- and it is a pipeline issue and -- which is there.
And just to add to that, Mohit, there's also some pipeline of juices, which we used to build. It's not only pipeline of health care. But in the fourth quarter, the juice loading used to happen, which didn't happen last year. And therefore -- and this year also, it was low. And therefore, the CAGR on that front also has come down.
Understood. And Hair Care also, if I look at your 3Q FY '21 2-year CAGR, it's 7.3%. In 4Q FY '21, it is 0.3%. So any reason for this 2-year CAGR dropping by 700 basis points?
No. I don't think there's a reason. It's just a growth rate that is getting registered and market share gain. The category was flat. On top of that category, we have actually grown our market share. And I must tell you that in the health care, first that question, that the STRs was very high in the trade because COVID was going down in the quarter -- the beginning of the quarter 4, STRs were built up in Honey and Chyawanprash.So that also, in a way, takes time for the STRs to get released before the new filling actually happens, which also must have impacted the secondary. But I think it takes time for the business to build whatever is lost in the first quarter, which is what the case happened in quarter 1, 2 and 3 on the discretionary portfolio. So I think building is happening.You instantly can't gain in 1 quarter, and we are seeing traction in Hair Oil now building momentum. But for this COVID situation now come in, otherwise, there was a momentum, which is actually coming in. It's not very mathematical in the way we are seeing it. It is also the way the sales guy does the business out there.
I understand, Mohit. And one quarter by itself doesn't really worry me. Anything can happen in one quarter. But I just wanted to understand whether this is sort of signaling something and we need to relook at our assumptions that whatever COVID-related gain they are a new normal or not. That is what I wanted to understand. So if you can basically, just let me know what your confidence level is in terms of clocking a double-digit growth in OTC, Ethicals as well as Health Supplements for the full year of FY '22?
So I don't think we'll be able to register a double digit in the Health Supplement business. I said we are targeting a double-digit growth rate in the beginning when the COVID situation wasn't there, and we wanted to do double digit on that. But Health Supplement on a higher base will not be double digit. Health Supplement will be low single digit for us because the base is higher. But OTC will come in, and Ethical business will definitely have a double-digit growth. That I have no doubt in mind. But before the COVID situation developed...[Technical Difficulty]
Hello?
Yes. Percy, we request you to stay connected. [Technical Difficulty] We have the line for the speaker connected. Sir, over to you.
Yes. Thank you. Sorry, Percy. I got disconnected. I don't know whether Gagan Madam carried forward the conversation or not.
No.
So I hope I've been able to -- yes, okay.
Yes. Yes. So basically, what you're saying is that for Health Supplements, it will be low single-digit growth. OTC, Ethicals should be double digit. And for the company as a whole pre-COVID you were gunning for double digit, but now it is not so sure. Is my understanding correct?
Yes. That's right. But with the second wave of COVID, Health Supplement has got a tailwind once again. And while we were assuming that it will be low double digit, but things could turn anyway. Because, again, Chyawanprash and Honey and all those products have started firing again. And there could be a little headwind on the discretionary portfolio, but a tailwind on the health care portfolio back again. But that comes on a higher base.But we are pretty confident. I think if it's -- the situation is going to improve in the month of June, then I think this problem of the first quarter should be compensated in the other quarters. If not, then we'll have to recalibrate our numbers going forward. But I am very hopeful that with the fiscal stimulus, et cetera, if at all, the government announces, rural will continue to trend up and urban recovery will also be V-shaped. And on back of all this, we should be able to do that very high volume growth. And on top of that price increase, which would lead us to a double-digit value growth.
Right. Apologies for the probing, but I thought it was an important point.
No, we always await your probing. So I think this is always expected, and we love it when you ask us these questions. Thank you.
[Operator Instructions] The next question is from the line of Pritesh (sic) [Prakash] Kapadia from Anived PMS.
Over last 6, 7 years, if I look at, Mohit, we've seen the best data and inventory days. Are these current levels sustainable because of the CRS, which you talked about?
Right. So I think it's not a question of inventory days. It's a question of return of investment of a stockist. And we need to give him an inventory, which he can quickly offload and have secondary. So CRS is a very seamless way of keeping the stock norm of SKU by SKU and then giving the ordering basis whatever secondary is happening in the market.We don't want to load a stockist with the inventory, which he can't sell and which is very subjective and people-based. We want to have a very system automated and digital way of inventory management and secondary. That's why CRS has been implemented. And if the situation warrants, then we relax the inventory norms, which are there. CRS doesn't mean that we have a fixed inventory and that will perpetuate forever. And if we want, we can relax the inventory norms in the system like, which is the case which is happening in the month of April. We know the shutdowns are going to be sequential. And therefore, we relax inventory norms, and we've extended credit lines, and we are increasing the inventory for our health care because we are anticipating lockdowns.
On the Foods segment, given what has happened in the juice segment specifically over the last 4, 5 years. [indiscernible] so Foods being targeted as a much broader play because what we've done over the last couple of quarters, Hommade, couple of products are launched. [indiscernible] all seems to be in that direction. So is there a non-Foods portfolio which we are looking at over the next 2, 3 years at a much broader food and beverage play rather than just juices [indiscernible]?
Right. If you've heard in my commentary, this time, we separated the business into food and beverage. And therefore, there's a special focus on food for scaling up the Hommade brand. This year, we are committed to be making Hommade -- we will breach the INR 100 crore milestone, and that's a target that we've taken ourselves for Hommade in the current year. We are [ reining ] at INR 70 crores this year, and we want to make it up to around INR 100 crores. In next 4 years' time, we want to breach it by INR 500 crores, and that's what we planned a number of SKUs and product categories under the Hommade brand. I think we were a underleveraged brand here, which is what we want to scale up and scale up to a level that it also becomes a power brand for us. So there will be a focus definitely on Hommade, plus there is a tailwind, which is supporting us for ready-to-cook and ready-to-eat now as people are not moving out. So there could be no better time than now to scale up this business.Also, we want to get into the sauces and the condiment segment. And also, you've seen that we've gone into spices segment, which is a very big segment. So we've ushered into spices. So we are only taking 2, 3 subsegments of Foods and trying to make that play, which is not very competitive. And where we have a right to win, and it's in line with our health care initiatives of improving health to consumer. Therefore, spices is an area where we think we will have a right to win here.
And lastly, just one data keeping question. On the juices segment, you could give some number on the current reach of your Real and Real Activ in GT. And is there a lack of distribution available in rural for higher growth because all the actions we've taken over the last 4 to 6 quarters in terms of lower LUPs, the PET bottle, the INR 10 packet seem to be heading in that direction. So if you could share some numbers, that would be helpful.
There is a huge headroom, which we guys have got if I compare the distribution of juices with the distribution of our entire HPC vertical. And that is what we want to bridge by way of launching drink segment, which is INR 10 and INR 20 price point. And that headroom -- that's why we got into a category of INR 10, so that we can activate our entire rural infrastructure and semi-urban infrastructure. Because at the moment, we are present in North and few metros and distribution is restricted to that because of a price point of INR 100 and INR 110.So we've made now accessible price points. And we have an entire infrastructure to ride on. So that by product bundles and infrastructure have to go on side by side. As far as Activ is concerned, we are only available in something like around 70,000 outlets, and Real is available in 4.5 lakh outlets, whereas Dabur is available in 60 lakh outlets. So there's a huge headroom available here for us to bridge the gap.
Next question is from the line of Avi Mehta from Macquarie.
Sir, just 2 questions. One, which segment has seen the highest impact of the CRS implementations, which segments has that been?
So first of all, it's juices, wherein we used to do preseason loading, then there is Glucose-D in our Health Supplements. Then there is our Hair Oil portfolio, wherein preseason loading happens for us because consumption of Amla, which is almost considered like a cooling oil happens in acute summers, that one. Plus Pudin Hara, which is also seen as -- so these are the key segments where the maximum preseason loading used to happen.
Okay, sir. And sir, the second bit is essentially on the competitive situation. Is it now moving back to how it was in the first phase, wherein consumer pull was relatively higher, and hence, marketing support was relatively lesser? Or is it different from there, if you could kind of give us some visibility over there?
Yes. Competitive scenario actually varies from segment to segment in the business. As far as health care is concerned, I think the demand is going to outstrip the supply. So therefore, competitive situation will be very favorable to the company where I think we have to augment capacities, like I was telling you, we are putting up a plant in Indore and -- to augment capacity. So I think that will be the case, less competitive density, higher headroom to take price increases for us. And we grow the category as a leader, increasing penetrations and less need of advertising and less competitive. As far as Foods business is concerned. I think with -- on back of innovations, we'll be able to handle competition very well, and that's what we've done because we are hardly 1%, 2% market share in drinks.And if I look at the larger space of JNSD, we are only 10% market share, a huge headroom to grow there. So that's also relatively less competitive except for the juice segment. In HPC space, which is competitive. In Oral Care, we've got a very differentiated proposition. So I think we manage competition reasonably well, and that's why you've seen a growth of 45% in Oral Care.Hair Oil is pretty competitive because we've got a price player sitting there at a very low price, who plays a game like a commodity, and therefore, competitive intensity is very high there, and it provides a limitation for us to take a price increase. So that is competitive. Shampoo space is again a virgin territory, where you compete with multinationals, then there's no pricing problem, and that's a good space for us.Home Care is a fantastic space with low competitive intensity. Skin Care is low competitive intensity. So barring Hair Oil, I think rest of the spaces are relatively low competitive intensity and power to increase pricing and manage the business reasonably well.
No, I meant it from a near-term lens essentially because that gives us the freedom. I mean the competitive intensity would have come off that gives us the freedom to play with ad spends at least tactically to kind of look at margins. That is where I was coming from, not from a long-term lens. That is what was the key question about.
No, the -- in health care, so the demand has gone up. So less need to advertise as much health care as compared to what the need was when the market demand we had to create. So that's -- otherwise, the rest, we'll have to do what we were doing earlier.
And sir, just following up on what was asked by the earlier participant, would it be fair to look at health supplements as a single digit, mid-single-digit or high single-digit growth category as we go into the future? Or would you -- your thoughts on that. That's all from my side.
No, from a Health Supplement -- because we'll be overlapping a high base. We will see a low single-digit growth rate, and that's what we've targeted ourselves on back of new product entry. We've gone into teas, and we got into single herb. So they will see a growth. But Chyawanprash and Honey on a very high base, we'll see a little muted growth going forward.
But sir, FY '23 onwards is what I was talking about, not necessarily just in FY '22. But would you kind of argue that this is more a double-digit growth category when I can -- when you look at from a medium-term lens? Or would you still look at it from a single-digit kind of high single-digit growth categories is where I was coming from.
No, no, I would see it as a double-digit growth with the penetration levels going up in Health Supplements and the kind of innovation that we are doing on supplements. We've introduced value-added Honeys, and we are introducing different variants of Chyawanprash. So I would bet on a double-digit growth in medium term I think except for this current year, which is a high base lap over. And the penetration levels are also low to an extent of 4%. So there's a huge headroom to grow. And in Honey also penetration levels around 20%. So huge headroom to grow. So these categories should grow at a double digit, if we are able to do a good work in terms of growing the categories.
The next question is from the line of Prasad Deshmukh from Bank of America.
Mohit, couple of questions. One was on [indiscernible].
Mr. Prasad, your audio is not clear, sir. I request you to use the handset, please.
Hello?
Yes, Prasad. We can hear you.
Yes. Yes. So Mohit, a couple of questions. One, in the health care portfolio now, how much of -- how much is the contribution from these products which you've launched for post-COVID recovery, mostly Tulsi, Giloy and Ashwagandha?
The total new product contribution overall to the business is in the range of around 5% for us, NPD. I think somebody asked the question, so I'm answering that question is around 5%. In health care, these NPDs that we've rolled out should be around 2% to 3% only.
Okay. And second, you also mentioned stock-outs in some of the products. So could you give an idea as to what kind of impact this would have had in Q4?
So, Q4, there was no stock-out, Prasad. It was completely okay. It's only in the April second week onwards, post the second wave of COVID is hit, that we are facing stock-out situations. But not in quarter 4. There is no impact of any stock-outs in quarter 4.
The next question is from the line of Shirish Pardeshi from Centrum.
Mohit, just quick observation. When I look at the annual number, our health care portfolio used to be about 34% in FY '20, which has moved to 39%. While when I look at the margin profile, the EBITDA has remained flat. I would tend to believe that health care portfolio would have higher gross margin and net margin. So somewhere, would you be able to help me understand what is it that we should be looking in FY '22 as a contribution and margin profile?
Right. So Shirish, while the health care portfolio has gone up, you will see there's upside in the advertising investment also in the business. So whatever upside on gross margin we got, we have invested back into advertising and also the saving initiatives that we've done, that has also been invested in advertising. In quarter 4, you don't see that because of the huge inflation, which has actually hit us, but otherwise, we invested it behind advertising.So going forward, we will want to maintain our operating margins. And that's what our guidance was earlier also. Any upside that we get on account of either price increase or saving or low advertising on -- that will be invested and to maintain the margins. Yes. And also what's happened in quarter 4 is inflation has hit us in health care with honey, amla and herbs going through the roof because the multiple players have entered and the demand has gone up for amla and herbs, et cetera.
So would you be able to tell that FY '22 health care contribution will be in the range of about 39%, 40% or it will come down?
Our health care contribution should be in the range of around 34%, 35%. It depends upon how our NPDs trend up and then the contributions will actually go up, but we expect the contributions to be in the range of 34%, 35% for health care.
No. The reason why I'm asking because I think about 2 quarters before, you harped on that the company is working very closely with Ayush Ministry, and you are looking forward some products getting listed and distribution will go up with the Ayush outlets. So any update on that, where it is at this point of time?
We are still in the process of creating those products, but it depends upon the COVID situation, Shirish, like you said. If the COVID situation remains the way it is and health pandemic continues, health care would definitely trend up as a business. That's what you saw in quarter 2 and quarter 3. But that said, a lot of our innovations are happening in health care and Foods also. So there's no reason that we see the saliency there also going down.
Okay. No, the reason why I'm asking is that if I bake in a number, say, around 5%, 6% volume growth and you have already said that you've taken a weighted 3%, assume that 4%, will FY '20 to look like 14%, 15% growth?
No, it's difficult to comment, as I told you in the beginning for us to give guidance at the moment. So I don't know how this COVID situation will actually pan out to be. So it all depends upon that. But I told you we targeted ourselves to grow at a high single-digit volume. And on top of that, price increase around 3% odd, and therefore, a double-digit value growth.
Do you think you are confident that you will maintain NPD at 5% for FY '22 also?
It depends upon how NPD fares, actually, but last year was extremely contextual and favoring NPD, but we would want to peg it at around 4% to 5% for next year as well. Because now innovation has become an integral part of doing business for us. So therefore, all power brands are innovating, and that's what -- yes.
Just last quick question on bookkeeping. What is the tax rate we can keep in FY '22, '23?
Sorry, I didn't quite get that.
Tax rate for FY '22, we should be considering.
Right. Ankush, do you want to take that question?
Yes. Thank you, Mr. Mohit. Yes. I think, first of all, all our major factories, except Tezpur, have reached [indiscernible] in terms of income tax exemptions time lines. And hence, we will move out of net. So this year, we closed at around 17.5%. And next year, we expect at a consolidated level, our tax rate would be around 21% to maximum 22% at a consolidated level.
The next question is from the line of Aditya Kondawar from JST.
I had a similar question on the Foods business, and I believe you have answered it.
The next question is from the line of Krishnan Sambamoorthy from Motilal Oswal.
While you elicited it in great detail on the domestic part of the business, could you also highlight what's the outlook on the International business? Particularly with the base of 3% growth in FY '21, is the momentum that you've seen in the second half continuing?
Right, Krishnan. So our International business is in a good space. It's actually turned around for us. Like you saw in the current quarter, our major markets in the overall international business registered a growth of 21% constant currency, in the last quarter. And we will expect to sustain the momentum going forward in subsequent quarters in the next fiscal year. And I would have no doubt in mind that we will grow at double digits in International business.Our MENA business has grown by 24% on back of complete recovery in MENA, COVID cases going down and vaccination happening. Our U.S. business has rebound. And growing at double digits with dollar denominated and doing well with a better profitability. Our Nepal business is doing well, registering a growth of 21%. And Bangladesh business trended up 46%, but there's a complete lockdown now in Bangladesh. So we are hit by the Bangladesh business in this month of April and May.Our Myanmar business, albeit very small, is impacted because of the situation in Myanmar. Egypt business has grown by around 21%. That's doing exceedingly well for us. So I think we are in a good space as far as international business is concerned with margin upside also and cost-cutting initiatives taken there. So I don't think there's any doubt that we shouldn't grow at double digits in International business.
Also, what's the proportion of any India-based manufacturing in the International business? If so, then is there any disruption to export given the ongoing pandemic?
No. The percentage of India export is very minimal, extremely minimal to an extent of less than 1%, 2%. Entirely, it is manufactured abroad, the International product mix. And therefore, that doesn't have any sort of pushback.
And finally, on direct reach, you were targeting to add about 0.2 million outlets by the end of the end of FY '21. Was it on target? And would you take a pause before expanding more?
Yes. So in terms of direct reach, we targeted ourselves to achieve 1.3 million, and that's what we've achieved. And next year going forward, we want to achieve a number of 1.4 million, and that's what we shall do. As far as rural coverage is concerned, we are committed to be building our infrastructure despite COVID situation. And we had targeted ourselves last year to reach up to 60,000 villages, we did. Now we've set ourselves a milestone of 80,000 villages in the next 2 years' time, and that's what we should be doing. And we've created a separate vertical of e-commerce and modern trade. So that's also doing well for us.
The next question is from the line of Harit Kapoor from Investec.
I just have 2 questions. Firstly, on the hygiene space. So the last time, the first wave hit, you were very proactive in terms of taking the opportunity to make some tactical innovations. Just wanted to understand this time around how are you looking at the opportunity?
Yes. So hygiene business has actually plateaued, Harit, over the period of time. And our people stopped going out and out-of-home consumption reduces, people have kind of stopped using sanitizing products. Now with the new wave of COVID, again, it will see a little inch up, but then there is a huge surplus capacity in the market and people are cutting prices, left, right, center. I don't think it's a very profitable category for us to sustain business here.So we did the business of around INR 100 crores last year of sanitizers, but I think that's completely moderated and tapered down, and we are not -- it's almost running out of favor as far as consumer is concerned. So we are not very hopeful on the sanitizing business to be doing well, except the soap business is -- got a tailwind, and that's where we'll focus, which is an ingrained set category.
Okay. Okay. And just -- you spoke about innovation in your earlier questions that were asked. But I just wanted to understand you had an amazing FY '21 in terms of innovation, the ton of new launches. Do you see '22 being a much more moderated year in terms of new products, given that you have this large base to continue investment in? And your investments overall also will be under pressure because of the inflation. So how do you see that?
Yes. So it's been a first year of so many NPDs getting launched. We don't want to create a complete rut of SKUs which people can't handle. So we want to build on the entities that we have created in last year. Just to give you, we want to scale up our Dant Rakshak franchise in Oral Care. We want to scale up our Hair Oil franchise, premium hair oils that we have built. We want to scale up our products in health care, like juices and drops, and we consider them as NPDs going forward and next year also, and we will scale up that business. So that's the way we're looking at it.That said, new opportunities for e-commerce or in culinary, et cetera, we've already embarked on a program called RISE and the thoughts come in there. They will be feeding in, in the '21 for it to ramp up in subsequent years. It's a continuous process of building innovation and building them up in subsequent years. Some of them will fall off, but that's okay. That's a part -- like drinks portfolio we've built, we will only grow the drinks portfolio. INR 10 price point, we created, we'd only build on that.But that said, new variants in Real will still come up. We are looking at a category of fizz drinks in the current year. That's going to hit the market. So all that will continue. It's a continuous process of building the pipeline of new products, launching them, nurturing them, then again going back. So the process will not stop. It's now part of the DNA of the company to innovate.
The next question is from the line of Sanjay Singh from PineBridge Investments.
Am I audible?
Yes, please.
This is Sanjay from PineBridge Investments. My first question is ESG related. So as shareholder in Dabur, we are very confident that the company is doing a good job on the ESG front. But we feel that the disclosures have some scope for improvement. Just to give an example, we do not disclose the absolute level of GHG emissions, the greenhouse gas emissions. Now as you may be aware, the European Union has come up with SFDR regulations that puts down guidelines for ESG disclosures. Now I would honestly request the team to look into these regulations and see how we can comply with the same. As shareholders, we would be happy to engage with the management for the same.
Right. So Sanjay, we, as far as disclosures are concerned, we do the disclosures in the annual report. If you happen to read the annual report, you will have disclosures very clearly on carbon emission, on water. So on -- so all the disclosures are mentioned in the annual report. If you want, Gagan madam can link up with you separately, and we can send you all the disclosures that we do. We are a public listed company, and we are doing all the disclosures in the annual report. And integrated report can be sent across to you as a shareholder.
No, no. I'm aware, Mohit. It's just that if you go through -- and I can engage with you separately, there's this SFDR regulation which has come, which just puts out some 18 points in very detail as what needs to be disclosed. And we have mapped point by point as to which company is disclosing what and whatnot, maybe you're not be aware of all the sessions as of now. My earnest request is just go through them. And if something -- and I've seen what is not disclosed yet. And if those needs to be disclosed, it is good for all of us. That's the...
Great, Sanjay. If you can -- that's a fantastic suggestion. If we are actually missing out on something, it will be great to have to engage with you. And Gagan Madam is also here. So I think we can engage with you off-line. And if there are any gaps in disclosure, we'll definitely plug them.
Yes. Sure, Sanjay. We'll get in touch with you. And in fact, our EV Operations is also on the line, Mr. Shahrukh Khan. And we have been trying to upgrade our disclosures definitely, and we are engaging with different institutions who are also helping us in this direction. So we'd love to engage with you on this.
Yes. Really appreciate this, Gagan. Second question, Mohit, is on the overall Foods front. When I look at -- step back from the quarter and look at last 5 years, our top line growth has been mid-single digits, around 4%, 5%, which is slightly disappointing, but I understand we have gone through a lot as a country or as a -- even as a company.But the Foods part of it has been flat for almost 5, 6 years now at around about INR 1,000 crores. I understand there have been a lot of initiatives around drinks, around extending the Hommade brand into other categories. And this is a very underpenetrated category, the whole juice front at least, if not the drinks. What has been really struggling here? Why have we not been able to grow despite a very underpenetrated category?
Yes. So I think we know the reasons, but I'll go over the reasons once again. First of all, hit by COVID. I think the near term was COVID issue. People were reluctant to have cold beverages, and therefore, the entire inclination [indiscernible] was to have hot beverages, et cetera. That's a near-term reason. The near -- medium-term reason was that the category was only declining. And the third reason is we were only restricted in our presence to INR 100 price point, which could not penetrate beyond the urban areas. And we never breached that high price point to get into INR 10 or INR 20 or more affordable price point. That's what we have been doing now.And now we are also getting into the foods space. So I think we were limited by our effort, if you ask me and our vision and the guardrails we set ourselves. We said that we will not get into the drink segment and restrict ourselves to a INR 1,500 crore market, in which we are 70% or 60% market share. So if you fish in a pond, which is very limited fish, you can't complain about it. Now we are fishing in a pond, which is much larger, which is INR 7,000 crores. And if still, we don't do well, then we'll have a reason to introspect. But I think we've got our strategy right now. And we've gone into market where the opportunity is big. And we are working towards that, and we are sharing all the plans with you guys. And if you have any other thoughts that you may want to share with us.
And your drinks rollout is now national?
Yes. What is national, sorry? Yes, drinks is national now. Yes, drinks is national. Yes.
The next question is from the line of Abhishek (sic) [Abhijeet] Kundu from Antique Stockbroking.
Yes. Abhijeet Kundu here. My question was on Glucose and as well as Hair Oils loading that we are talking about, which didn't happen this year because of the new ERP system in place. So -- but was it true that last year also the loading was affected in particularly in Glucose and -- I mean, in all these products, which have a -- where the loading starts from Q4, where these products not affected last year as well?
So last year, they were affected. That's why the base was lower because the lockdown happened on 20th of March. And therefore, it was impacted last year as well. So that is when it was impacted. And this year, we did not backfill it again. So had we backfilled it, that would have increased the inventories by around 7 days. So around INR 140-odd crore, INR 70 crores to INR 100 crores would have been filled up. And then the growth would have looked optically larger.
Just to add to that, Abhishek -- Abhijeet, that's why the CAGR is low because you're looking at 2-year CAGR, no? So that is why -- because last year, the sales days quarter [indiscernible]. And this year, we have grown on that, but not as much as to report higher growth on FY '19 number.
Great. No, I anyways don't look at the 2-year CAGR because we are not in a business where there is pent-up demand. So if someone has not consumed in the mid-term, he will -- I mean, he will not consume double of what he has to consume. So obviously, there is recovery across categories which happened, and hence, there is no point we're looking at that. So I completely agree with that. I was just focusing to understand.
Thank you.
Next question is from the line of Aditya Soman from Goldman Sachs.
My questions have all been answered.
We'll take the next question from the line of Shirish Pardeshi from Centrum.
Yes. Mohit, sorry, I come back again. Quickly, we have a large rural portfolio. And what I wanted to pick up your thoughts as you mentioned that last 15 days was been challenging, and things are really looking back to worse in the rural. And we also have a very large presence in the north, not per se in the south, but in your experience, where do you see the market is behaving, especially in rural part of the business? Because even rural is also one of the important pieces to our business.
Right. So Shirish, overall, I think big picture, I don't think rural will be impacted so much because I very firmly and hopefully believe that government will announce a lot of fiscal stimulus the way they did last year. So MSP has not been diverse. That will not be reversed. So income will be good. MGNREGA outlay might go up, although the fiscal headroom is limited, but it may just go up.Then farm subsidies can be given to rural consumer because there's a big vote bank for the government. And because of the COVID situation, government is on a back foot. So I think they should be giving in fiscal incentives. So rural on back of all this, should continue on a recovery path, while COVID is happening in pockets, and it is not spread out because the population -- the way it is structured in rural is structured in social distancing. So it will not be as much as a pandemic, the way it is in urban India. So it may not be the case.Monsoon is predicted to be good. So income levels, overall, I think rural will trend up, and it had a V-shaped recovery. Now a little impact because of COVID, but it should be faring well. And urban recovery also was V-shaped after COVID. But now again, COVID has impacted urban more than rural. So I think if urban recovery is V-shaped, then both urban and rural will trend up. So I am pretty optimistic about the rural business in the country. And you're right, 45% to 47% of our business comes from rural. So -- and we've got rural-salient brands, which will continue to keep growing.
Ladies and gentlemen, that would be the last question for today. I now hand the conference over to Mrs. Gagan Ahluwalia for closing comments. Thank you, and over to you, ma'am.
Thank you, Aman. Dear friends, thank you for your participation in this conference call. The webcast recording and transcript of this call will be available on our website soon. Thank you and stay safe and healthy in these difficult times. Wish you all the best.
Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.