Dabur India Ltd

NSE:DABUR

Earnings Call Transcript 2024-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to the Q4 FY '24 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 Ms. Gagan Ahluwalia. Thank you, and over to you, Ms. Ahluwalia.

[Ahluwalia Gagan, executive]

Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this earnings quarter results pertaining to results for the quarter and year ended 31st March 2024.

Present here with me are Mr. Mohit Malhotra, Chief Executive Officer Dabur India Limited, Mr. Ankush Jain, Chief Financial Officer; and Mr. N. Christian, DGM Finance, along with Ms. [indiscernible] Dabur head IR. We will start with an overview of the company's performance [indiscernible], and this will be followed by a Q&A session. I now hand over to you

[Mohit Malhotra, executive]

Thank you very much. Good evening, ladies and gentlemen. Welcome you to Dabur India Limited conference call containing to the results for the quarter and the year ended 31st of March 2024. During the quarter, the operating environment was largely in line with what has been in the period quarter with some uptick in rural industrial, which grew ahead of [indiscernible] the first time last 3 years. The input cost environment has been largely benign as discretionary trends continued in quarter 4. The currency devaluation continued across emerging markets impacting [indiscernible] attracted me has impacted our seasonal portfolio. We remain optimistic of the gradual uptick in consumption trends over the course of next fiscal year, considering normal monsoon, improving macros, continued government spending and [indiscernible].

In this volatile environment, Dabur delivered a resilient performance, our consolidated revenue grew by 10% in constant currency terms and 7.6% in INR terms during financial year '24. India business, including Badshah grew by 7.7%, backed by volume growth of 5.5% and International business registered a growth of 16.4% in constant currency terms. Operating margin for the full year reached 19.4%, which is in line with our guidance. On a like-to-like basis, the operating margin was 20.2%, an increase of 130 basis points. We continue to see the market share gains in 95% of our portfolio for the full year and also in the quarter.

During quarter 4, the company recorded consolidated revenue growth of 7.3% in constant currency terms and 5.1% in INR terms. Our India business, including Badshah reported 5.6% growth backed by volume growth of 4.2%. Consolidated gross margin expanded by 280 bps and operating margins were up 14% Y-o-Y. Profit after tax recorded a growth of 16.2% during the quarter.

In terms of categories, portfolio required 8.1% growth during financial year '24. I will now cover each of the subsegments in detail. Oral Care, our penetration has reached 52%. With every second household consuming Dabur Oral Care product, we are nationally the #2 player in Oral Care category and becoming gray #1 in many of our geographies with Orissa, Kernatka, JP, we are already #1 there. Our strategy of driving herbal category with Dabur red being the court is working well for us. Home Care continued a strong double-digit trajectory for financial year '24 led by Odomos and Odonil. We saw our market share in mosquito repellent cream category expanding by 600 bps and air freshner category is expanded by 260 bps.

In line with our strategy to increase total addressable market for Odomos and Odonil, we have curated to liquid vaporizers and Odonil gel formats. In the Hair Care category, hair oils gained 115 bps market share during the year, our strategy of building Dabur Amla and Pantera brand yielding good results. Our [indiscernible] portfolio is continuing its growth momentum, and this year, we registered a growth of 8%, led by the Vatika franchise.

In Skin Care, global grew around 18% in the glemba premiumization initiatives and extending the franchise into increasing categories like body wash. The Health Care portfolio grew by 4.2% in financial year '24 led by digestive category, which witnessed a strong growth of around 16%, led by Hajmola and consequently, our market share in digestive category increased by 210 bps. In OTC and Ethical verticals, market share in Harita in last day increased by 114 and 70 bps, respectively. Due to the delay in contracted winter, our health supplement portfolio was impacted and was flattish. However, we have continued to consolidate and gain market share in [indiscernible]. We are undertaking manageable initiatives like newer formats, Doctor advocacy, the communication to enhance consumption, relevance and penetration of the supplements. Our average portfolio was flat during the year on the amount of unseasonal rains during the peak summer season. However, the Foods business, which includes culinary products under Hommade brand recorded a stellar growth of 23.2%. [ Martha ] business reported a 23.3% growth during the year with gain in market share.

Emerging channels like e-commerce and [indiscernible] are the fastest-growing channels driving urban growth and contributed to 19% to 20% of the India business. Our digital spends have gone up to 30% of our total media spares. Distribution expenses is a key growth lever. We have expanded our reach to 1.22 lakh villages through 22,000 users, direct reach of the company has gone up to 1.22 million outlets and total reach is an all-time high of 79 lakh outlets. We have added 2 lakh outlets during the year, the highest addition among all the MCG peers.

Therapeutics division, which is our Doctor Advocacy vertical is gearing up well, and we now cover around 1.1 lakh [indiscernible] and alopathic doctors, which turnover of more than INR 120 crores. International business grew at 15.4% in constant currency in financial year '24 led by strong growth in Turkey, which grew by 52%. Egypt that grew by 46%, MENA markets that grew by 12% and Sub-Sahara Africa that grew by 11%. However, we lost 2.5% of our top line due to currency devaluations.

Taking down [indiscernible] profitability. Our gross margin expanded by 240 basis points during the year and 280 basis points during the quarter 4, all accounts of deflation and cost saving initiatives under project [indiscernible]. We remain steadfast in investing doing our brands as a result of this, we have released our spending in A&P by 33%. Our consolidated operating profit grew by 14% during the quarter and 11% in financial year '24.

Adjusted for the monthly legal costs, our operating over 16% in quarter and 15.2% in financial year '24, canning 20.2%, almost near to pre-COVID levels. Our PAT grew by 16.2% in quarter 4 and 7.9% in financial year '24. Adjusted for Namaste legal costs in Badshah amortization, PAT showed a growth of 22.7% in the quarter and 16.8% in financial year '24. We are optimistic that with the expected normal moonsoon and improving macroeconomic indicators, government spending, lower inflation and [indiscernible] demand, we'll see an annual update primarily driven by rural that [indiscernible] for Dabur. We will continue to drive profitable growth because of our business verticals, backed by investments in our distribution network, brand, manufacturing, digital and organizational capabilities.

With that, I conclude my address and open the floor for any Q&A. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Abneesh Roy from Nova.

[Abneesh Roy, analyst]

Congrats on a good set of numbers. My first question is on beverages. So I understand the high base and unseasonal rains in March month. My question is, if I see even full year your dip is impact around 2% and dip is even in this quarter. So I wanted to understand Q1 very hard summer projected. So would you see strong double-digit growth here coming back and what would be your target for the full year also because the base here is minus 2%. And what could have gone here better because there are other beverage players who are growing much faster. They may not be competing head-on, but they are broadly in the same segment on the overall level.

[Mohit Malhotra, executive]

Thanks, Abneesh. Yes, overall, I think there was the kind of a muted performance last year coming on a high base, like you rightly said, and it could have been better. But during the peak of summer seasonal rains, the out-of-home consumption got impacted and therefore use consumption also got impacted. So that was the first quarter issue. And subsequently, also we had some supply chain problems also. We were gearing up manufacturing in the new plant in the Orissa cost and supply chain.

Going forward in next year, I think if the summer is what it is now, what do you see summers is in Delhi and Bombay, but we see in the [indiscernible] it is a very high capital consumption market. But if weather remain, our beverage business should fire, and we have taken a target of double-digit growth for the full year going forward for the Beverage business than we've seen in the past also. So as we go through a number of periods, it still one year down next year, the business kind of bounces back for us. So we are hopeful to the weather supports us and the beverages as the portfolio should do well for us. And we've also already been entering and overall, so we are very well prepared in terms of meeting our capacity also to beat the marketplaces.

[Abneesh Roy, analyst]

Sure. My second question is on Badshah. So One is on the industry leaders like the top 2 players, they are facing ethylene oxide issue in SGHK. So does that open opportunity for you?

And second, if industry leaders are facing this kind of an issue. Is there a risk that given raw material sourcing could be fairly common in terms of the channel, would you also face that kind of a risk? And second is for Badshah, how do you see growth in FY '25? I understand a lot of pricing growth has happened in the second half of the year. How do you see margins? Have you passed on fully? And how do you see overall sales growth in FY '25?

[Mohit Malhotra, executive]

All right. So first is this burning issue of ethylene oxide. Now there are 2 regulatory bodies, Abneesh, as we see there's a domestic regulatory for and there is international regulatory body. The domestic regulatory body being FSCI. So whatever mandated regulatory [indiscernible] there, we are following those norms and [indiscernible] outside is not a part of the norm. So we don't give any radiation to our product when we are servicing the [indiscernible] market with it at all.

So as far as domestic is concerned, we are performing with the regulatory norms of the law of the land. As far as the international business is concerned, there is an Indian spice Board and all our batches go through copper screening in the India pipe before we send it to any one of the smart markets, [indiscernible] export markets. Continuing our site is generally elated to prevent any microbial growth in the Indian port with certain limits, and we have visit the price limits of this pie port. You recently have reduced the limit drastically and that's why the problem happened with the market leader like when it happened. But we guys are within the precised limits, so we think that we are on the safe side.

Whether it opens an opportunity or not, as of now, nothing from our portfolio has been bought or highlighted. So to that extent, there could be a limited, I think, upside this would happen if the competitor is another. But I wish them well also, and I hope this issue is behind the entire industry and the whole market -- growth of market is very unbranded and there is a huge opportunity to play in the market and in international and also in the domestic.

As far as [indiscernible] growth is concerned, we grew by 20% plus last year, partially came from price and partially came from volume. Going forward as the depletion, not inflation, but a muted inflation sets in, we are single-digit sort of inflation, last year to double-digit as inflation if some price increase happens, some roll back of prices is what we have initiated also to spur the volume growth. And but overall, we've taken a value growth of more than 20% in Pasta because a huge upside which is the geographical expansion and international expansion and our portfolio growth in terms of tire are happening as figure on the quality, we have also constructed a micro lab, which was earlier in the stream when we acquired the company. It's now in action. And we are sterilizing all export batches. Sterilization is a preferred method of sanitizing your entire produce. So we are in steel sterilization unlike other competitors radiating oxide. I hope I answer your question.

Then as far as margins are concerned, we think the margins in Badshah will expand next year because, of course, little lesser inflation and we have taken price increase, although roll back will happen, but pretty much, I think margin expansion will happen. So we've taken a higher growth in bottom line as compared to top line in terms of targets that we give[indiscernible] .

[Abneesh Roy, analyst]

Sure. My last question will be on Oral Care. All the 3 listed players seem to be doing well at least this quarter, you grew 22% on a soft base or minus 3, good double-digit growth and market leader also is likely to report strong double-digit growth in this part of the business. So I wanted to understand, is the #4 player losing market share?

Second is South India leading the charge here? Or is it broad-based growth, which is delivering this kind of a double-digit growth?

Third is, could this be a precursor to revival in other FMCG categories? Because this kind of a growth for the full year also double digit for this quarter also strong double digits, why other categories are not showing for you and for the other companies also? So could this be a precursor for revival in other categories?

[Mohit Malhotra, executive]

Yes. Okay. So first thing, I think the entire category [indiscernible] showing an update if you look at the Oral Care category, which is 90% benefited in the country is growing at around 7.5%, which is a very good growth compared to the FMCG market which is growing at around 6%. So it actually growing ahead of the FMCG market. Oral Care is doing well. Now all the players, I think, clearly are doing well. I would not say the 4th player. We are getting market share at the cost of the 4th player. While we see worked, I think we're also seeing pain referring to the fourth player, as you say, but he is also gaining market share in the Oral Care category is what we seen, Abneesh, in line with and GSK pooling date. And so we've gained our 20 basis points in all [indiscernible] all the 3 brands are doing well. Alethia new foray we want to the turnover of more than INR 11 crores is back also, although it's just a more selected obviously loan that is doing well.

Our share that we introduced last year is already clocked a turnover of about INR 40-odd crores and that's towards good success in the Oral Care category. Our Dabur rate has grown by around 25%, 26% in [indiscernible] base that's also on well and market share kind of reached up. And this growth is being secularly across more geographies and more in South India because for us, at least Dabur rates go through towards 1000, we are doing well. South India market is also doing well. Per capita income is going higher. People preferring more postal products in south of India. So that's doing well.

Now is it a precursor to other categories also showing a green shoe [indiscernible] growing. To me, I can't answer with the great conviction, but in terms of our categories, I think it is because in the Hair Oil category in the last quarter grown by 8%. if you have syndicated data to go by, [indiscernible] category has grown by 8% in value, Dabur has grown by around 12% in value and which is very unlike Hair Oil business going up. And that actually is an illustration of the fact that rural growth is kind of coming back because it is rural and also within 120 or 150 basis points in rural areas. While urban growth is kind of almost remain same or a little bit come down, but rural growth is kind of picking up and that's happening sequentially in 2, 3 months that we have seen. But if you actually traded back rural growth, we have seen rural growth from minus 5%, gradually slowly now it has become plus 6, almost now over 120, 130 basis points ahead of urban. So rural trying to come back after COVID. So after almost 3 years of time, we are seeing the rural ahead of urban and I hope it is more structural in nature and not of that we see with the infrastructure spending of the government and all the initiatives is happening and monsoon also seem to be normal going forward. I think this should [indiscernible] well for all of us and the overall FMCG space space.

[Abneesh Roy, analyst]

One small follow-up on the market share, which you mentioned. So the top 4 or 5 players in toothpaste will be around 90% market share. So if all are doing well, the tail of 10% is too small, right, for others to report a double digit number or market share gain. So if you could clarify in the last 6 months out of the top 3 listed players and maybe even #4, who has grown faster in terms of market share? Who has a lot of market share if that's available?

[Mohit Malhotra, executive]

So I don't remember the number of it, but I think [indiscernible] would have a market share and they have been gaining market share consistently [indiscernible] in my mind, has lost market share. I'm talking volumetric market shares now. So dollar has gained market share. Hemalia has lost a bit it in terms of market share. And GSK has gained value market share, and they have gained volume to market share on back of Sensodyne. So that's the smaller players would have gone down and there would have been consolidation because not of [indiscernible] spending also by the organized players, which is kind of spurred off the growth of the category. -- and also will lead to shrinkage in other players going down because distribution ramp-up has also happened by the organized players. And that's my sense.

[Operator]

The next question is from the line of Mihir from Nomura.

[Mihir Shah, analyst]

Congrats on good set of numbers. So my first question is actually on the macro front. You did mention rural is showing signs of recovery, and it has been growing at about 6-odd percent. You mentioned; however, when we see the -- your volume growth and the volume growth for other organized players is lower than the industry volume growth, indicating that the unorganized guys are clawing back share that they lost in the past few years. How should one think about this trend going forward? Should one expect rural recovery to continue and organized players also to get benefit or there will be a phase where our organized players -- where rural will improve, but organized players will not be a key beneficiary of this rural recovery. So that's question one, sir.

[Mohit Malhotra, executive]

Yes. So I think overall -- now this is a very short time frame. As I was telling you in 3 years' time, rural just come back in the next 2, 3 months, the early one after the other. And if the numbers are anything to go by, I think rural recovery should continue because such a long high base of rural lagging harbor. So it should continue, and that should be well for the entire industry. I think it's a wave and this wave will continue for some time as [indiscernible] up. So we both organized and also unorganized.

So one thing is organized player generally get better dividends when this happens because we have better infrastructure investments potentially, if I talk about Dabur here now, we ahead of the top in a lot of infrastructure investments, our villages have gone up from 1 lakh villages to 120,000 villages now, so significant improvement in our village coverage. Our Yudha product to around 21,500 which is again substantial improvement. Our overall direct coverage has moved up substantially, so all of these are both in a way to protect the organized players with unorganized players generally go through wholesale and wholesale is not easy to come by because advertising expenses as that's going up. So try how much they can do. And so during a deflationary environment, a lot of unorganized players come in to margin display and so on all the pots -- so -- but consumer promotions and other tactical measures and price roll back prevent price plugging in gaps by organized players, [indiscernible] unorganized players really make any way. To me, the dividends will be more in organized going forward. [indiscernible], it's all ports different categories and different margin profiles organized, unorganized very slow category so I can't comment upon detergents. That's not where we play.

As far as hair oil is concerned, I think unorganized players are very limited. Oral Care unorganized players are fairly limited. Home Care unorganized players fairly limited, it's being more urban category and therefore difficult more entry barriers, unorganized. Skin care, [indiscernible] see some unorganized players weaker value offering, wherever the margins lower than we had out unorganized players. In health care, in any case, unorganized doesn't play much. In beverages, yes, a lot of unorganized players come in, it is easy to to raise the portfolio. Well, that we are very competitive and therefore, in the marketplace. So that's the flavor here on the [indiscernible].

[Mihir Shah, analyst]

Understood, sir.

[Mohit Malhotra, executive]

I hope I answered your question.

[Mihir Shah, analyst]

Yes, I get a flavor of what you're try to highlight. Sir, on volume growth, how should we think about Dabur's volume growth going forward. Over the past 4 quarters, 3% to 4% volume growth was on a low base or a flattish base. Now we will be starting to cycle 3% to 4% volume growth, so while you indicated that rural recovery is happening and you're growing ahead of peers, can we see more constructive volume growth to sustain? Or do you think there will be a softness in volume growth going forward?

[Mohit Malhotra, executive]

I think the question of softness in volume growth doesn't arise. If we have to grow volume growth is mandatory to have and as far as the annual operating plans are concerned, we've taken a target of a mid-volume growth, mid- to high volume growth. You take it if we have to grow at a high single to a low double-digit growth rate. So it's not something which we can decide, I think we have to grow volume growth, and it's in line with our vision of Ghar Ghar Dabur and Ghar Ghar Alovera, so we need to increase our penetration. We are already there 8 out of 10 household, 80% penetration. If we want our entire portfolio to go to every house volume growth is something that we have to do. It's no question asked, there are no compromises yet. So I think volume growth will be the way forward.

Till last year, we were lapping over or we were at least having some price increases anyway. And now going forward, it's going to be mostly driven by volume across categories. While we posted a 3% price increase, but price increase they'll be fairly limited in some part of the portfolio, which will all be driven by volume only for us. So we feel it will be mid- to high single digit volume growth, top it up with around 3% value, high single to low double digit of a business that we will want to achieve, and that's the number that we've taken.

[Mihir Shah, analyst]

Got it, sir. Sir, and lastly, on margins, what can be possible tailwinds for gross margin given pricing will be limited going forward, mix improvement will be one. But do you see potential higher gross margins going forward? Yes. So that's my last question.

[Mohit Malhotra, executive]

Yes. In terms of gross margin, we've seen 280 basis points of gross margin in [indiscernible] on back of deflation, so we've taken up price increases. So we will see some amount of gross margin expansion, but it will not be in line with what we've seen in past 1, 1.5 years because we've taken drastic price increases and the rate of price increases come down. So it will not be as high as that. And whatever gross margin improvements happen, we invested partly in media, partly would flow down to operating margins.

Going forward, gross margin in midterm to long term will grow, but not to the extent that we've grown in last year, we also want to take out the media percentage, which is now about 6% as we do 7% now when we sit up from 7% to 7.5% to 8% in terms of the media. So with that, I think mid to long term, our margins should improve. We've also embarked on the second [indiscernible] Samriddhi project, which is the cost saving initiatives. They are the over that and also interventions required for optimization of our space and expenses across the balance sheet of the company. They are working with us. So on back of that, we should see around INR 100-odd crores benefit in coming in this year on back of cost savings. That should yield strong gross margin expansion and therefore, investment in media and operating margin.

So we ended up with operating margin of around 19.4%, but this includes the legal cost, like I mentioned. So on a like-to-like basis, it was around 20-point 20% or so we want to take it up to around 20%. So I think that's what I can give you with all these initiatives together yes.

[Operator]

The next question from the line of Arnab Mitra from Goldman Sachs.

[Arnab Mitra, analyst]

My first question was on health supplements where you've been a big decline this quarter and also the full year has been relatively soft. So if you could help us understand, is there a problem limited travel part and how the other parts of health supplements are doing? And what's your own analysis on what is the issue with Chyawanprash is the product losing appeal what other steps you are likely to take to get the growth back in the segment?

[Mohit Malhotra, executive]

Yes. So there are 3 products for our health care portfolio. The first part of our health care is the largest is supplement business. Health supplement business for is a relative problem. A, I think the weather did not support us, generally Q2 was winter and winters have been delayed and contracted. And the way postsales all the trade behavior is typically in the beginning of the season, pull up a lot of stock and the [indiscernible] as the season progresses. So this time, because of delayed winter, our stocking was limited and whatever our stocking happens due to contracted vendors that remain on the shares and because of delayed winter the down the stocking happened. So the better thing is that we don't have inventory -- too much inventory for next year. But Chyawanprash we are modifying the format. We have rerespond we know already with introducing Chyawanprash [indiscernible], trying to improve to modernize our format in Chyawanprash so that we can extend the area increased element of the category and thereby increase the penetrations. But penetrations are definitely kind of gone down, while we increased market share, but average plus overall category penetrations have gone down. So there's an endeavoment for the company to have all-season communication, not restricted to only winter, have communication for monsoon, extended to women, extend the PG to kids, geriatric population and also do advocate on INR 7 crores to doctor channel and make it secularly both [indiscernible] allopathic, work uses for immunity building that's what we are trying to do, as far as Chyawanprash is concerned.

Honey [indiscernible] by season. I don't think there's any problems with the honey. Honey will be consumed. And honey is doing well for us. We are gaining market share consistently. There was a little stock issue on the honey and digitalization problem, which would be corrected going forward and it was in winter and because life of winter has actually happened. So that was the reason why the Honey has gone. Glucose has done well for us. Summers are approaching, acute summer. So we had a 14% growth over the last quarter, so far as glucose is concerned and increasing market share. And they do openly, we and rides and we are gaining market share. As far as our digestive portfolio is concerned, Hajmola is elevated unrestricted growth. Our new version of Mr. Very large doing exceeding [indiscernible] and all the other variants have done well. We did the potent 22%, 20% of the overall franchise. The bottles are doing well, so fast for us. So -- and we are looking at the extension of this brand to the unbranded digestive category. So that's doing well.

Our isabgol. We have last year, it's grown 11%. Podina has 14% growth and as a last [indiscernible], a big problem. Now because we are certainly in a higher base [indiscernible] but both the baby care category as the [indiscernible] category are related in India, and we will come back after we navigate a high basis. Our baby care portfolio is already around INR 40 crores, INR 45 crores. It was last year around INR 20 crores. So we've almost grown by 60%, 70% Baby Care. Our Super pants and baby care are doing exceedingly well, both on e-commerce and also on the advocacy channel.

The third part of the portfolio is OTT ethical. Our ethical business has grown by 8%, which is the classical portfolio has grown by 88%, and that's doing well. And Salaget has grown by 21%, and the market is really blossoming on Salageet. So I think overall health care is doing well, but with the exception of [indiscernible], and we have initiatives lined up to big term products to [indiscernible] level. And so that's where we are. So it's a small part of our business, so I think we should be able to come around. We are introducing gummies and new age formats or like yes.

[Arnab Mitra, analyst]

Understood. And one simple, I mean, any update on the losing case in the U.S.? And -- do we expect the same level of legal costs in FY '25 as we reported in FY '24 or is there any change in that expectation? That will be my last question. Yes.

[Mohit Malhotra, executive]

As far as the legal is concerned, it is pretty much status quo. The last update that I've given you on deal is that the depositions have already happened, fact sheets that have been received from the plaintiff's layer. Discovery [indiscernible] is still continuing. We've been able to achieve corporate separateness of Dabur International and Dabur Viva from Namaste. So no Dabur activity is involved [indiscernible] Dabur International and via Namaste is involved, which is less than 1% of our turnover in terms of top line and profitability. So we've been able to [indiscernible] Namaste and limit our risks to a very great level. So I think that's on the update. This will continue for another, I think, a year, 1.5 years. We are trying to expedite the scientific discovery, scientific [indiscernible] in which we are requesting the plaintiff to give us fact sheets on how this allegation or acquisitions have been made that this is [indiscernible] has been used for generation, et cetera, in the Africas actual population or [indiscernible] so the moment it comes to the scientific phase, I think the case will get really diluted and it will come in our favor. As you know that this is based on the transfer into study which has been held in one by redocument association, et cetera.

So we are pretty confident and Dabur is confident that we will see it comes to the end of the case, when we are trying to expedite as much as possible. A lot of our peers to be involved and have not even cited this case and not even kept a provision. So we are also trying to see that our insurance gives us a gain of the legal cost that we have actually incurred in which case we could surprise you going forward. But that is another litigation that is happening as we speak with the insurance company to reimburse the cost that we are incurring this because of the stipulated number of how much they give you in terms of number but I don't want to get rate go on. But I think only had a good news as an update on which we've given you last time. Subsequently -- we are incurring a cost of INR 105 crores and next year will continue next year also we've taken a budget of INR 80 crores, INR 90 crores similar cost at its last over. So there's no incrementality in terms of the legal cost that we incur next year or around of the case.

[Operator]

The next question is from the line of Harit Kapoor from Investec.

[Harit Kapoor, analyst]

My first question was on the distribution side. So you mentioned that the pace of distribution expansion for you has been higher than historical levels as well as higher than what peers have done. I just wanted to get a sense about, say, the next year or two, do we see now us consolidating especially on the rural and direct side, and focus more on throughput? Or do you see this to be a continued fairly sharp expansion, especially because at 1 point 2-odd million outlets as well as on the rural side, we've done a fairly strong job order. So I just wanted to get a sense on how do you see this going forward? Is this the next phase like starts about now or will you see a focus on throughput.

[Mohit Malhotra, executive]

Yes. The distribution expansion is a very key strategy growth pillar that we see. So there are 2 legs to distribution. One of the expansion leg and at the efficiency leg. Expansion leg in the rural expansion and also urban expansion. Rural expansion is more village expansion. I told you that villages went up by 20% from 1 to 20, but the headroom for increasing the number of villages is huge. We were about 6 lakh villages and as government is investing in infrastructure, roads and highways and railroads, et cetera, most of the rural India is actually becoming urban India and therefore, the headroom will be for us to convert rural into urban and therefore, on Yudha playbook and so okay expansion is working well for us, and that's what is giving us the higher than peer dividends as far as rural is concerned. So that's the plan expansion.

In urban, we are expanding by our direct reach. As you know, we are reaching out around 14 lakh outlets as compared to almost 79 lakh outlets that we are present as compared to this should be around 20%, 30% of our direct indirect [indiscernible] increase, so again, huge headroom available to take up 1,400,000 to something like 20 lakh said are reach expansion of outlets in urban. As well as the urban is concerned, I think the e-commerce is already 10% -- 9% to 10% of our overall business. We continue to engage in e-commerce and to get deeper into e-commerce with e-commerce continuing. This is already contributing of the e-com business that there is a big opportunity to us and we were to get it in with 3, [indiscernible], all those coming opening up the towns one after the other in urban India. So that presents a big option, [indiscernible] also.

Last year, moderate last quarter, more trade has only grown 1%. But if you look at the treasury system, modern rate tires have grown by around 22%, 23% for us because the Reliance kind of self their inventories, I think prior to listing or whatever the case may be, but the held back on primary sales especially gave very good Reliance and Reliance is big for us, around 30% contributing to modern trade. So I think as this clears in inventories next year, again, that that's the third of our distribution expansion center.

The second is efficiency. Efficiency, we have metric or core every day great execution. And that is core we monitor a number of outlets number of lines we sold and what is the premiumization that we do in every outlet, that is happening as we speak here a lot of churn of the exports happen there. People who are not performing below radar of ROI return and the [indiscernible]. So pretty much similar strategy, staying the fourth on our strategy and not anything very different than what we've been talking about in the future. This is giving us results. So we will continue, but continue with discipline. I think we are a little acidic on monitoring them. I think the moment we got more discipline to do it and monitor it more steadfastly, this will only be better.

[Harit Kapoor, analyst]

Just my last question was on the pricing side. Your long-term model is medium to high single-digit volume growth and mid- to high volume growth and some pricing, probably 3% odd. So I was just wondering is at a time where pricing is not so easy to come forth, would F-25 also have a similar kind of 3-odd percent pricing you think at an average of -- that will only happen through the year. So we shouldn't assume an average for the year at 3%.

[Mohit Malhotra, executive]

Average for the year is different for different verticals. We are looking at our juice portfolio, which is very price and still only a 1% price increase there in health care, is more than this change, we're looking at a 4% price increase, in HPC we're looking at about 2% or price increase in line with all the competitor data we have followers there. So the weighted average of that will be around 3% for the full year through the year. So we are not looking at any digit increases. I think Honey will have a little bit of price increase because the both honey commodity price actually inching up. And so that's where we are on the price.

[Operator]

We have the next question from the line of Vivek Maheshwari from Jefferies India.

[Vivek Maheshwari, analyst]

Two questions. First is, again, something that has been asked for F '25 and even the earlier participant asked about medium term. But let's say, if you have to grow your earnings, let's say, double digit over the next, let's say, 3, 5 years. And at some point of time, margin upside will be limited, that will imply that maybe volume growth has to be about 7, 7.5 and 2.5 pricing to get to, let's say, 10%, 11% kind of revenue growth, which essentially means after a point once margins, let's say, start to plateau, the entire bottom line growth will be led by top line. Do you think over ever a 3, 5-year or longer term perspective now, not just you, but a lot of your peers will have to settle for growth, which is like 9% to 11-ish from an earning perspective, is that a fair model?

[Mohit Malhotra, executive]

I think our number is [indiscernible]. So you also feel that the volume would be around mid- to high and 7.5% would be the volume, but as of now, the way FMCG market is actually behaving is in mid-single is one one is looking at, and therefore, a high single-digit growth is what one looks a price increase in our portfolio where we are market leaders in a lot of categories, where we are existing, pricing could be a little better, but because the rural favors Dabur, if rural comes back, I think volume growth will also be driven by the rural for us. That's what I say. But I think long term, that's what it will be. So if the [indiscernible] is remained benign this is not the case internationally. Internationally, the inflation is much more severe as compared to India inflation. If India was to follow international, I think more price increases will come to India also like we have seen in the past one year. India has been insulated the [indiscernible] of inflation, which is what we are seeing in the U.S. the rate cut haven't happened in the U.S. as of today also.

So I think those elections, so we are also keeping a lot of inflation down. And for that, I don't know what the mix will be. So as far as now is concerned, we are looking at a mid-single kind of volume is looking more possible, monsoon goes well, everything goes well, stability of government happens, everything is consistent, there can be 7.5%, otherwise 7.5% volume growth is little on higher. I would say a better mix would be our [indiscernible], and that sort the right sustainable sort of volume growth. But if you look at Dabur, Dabur portfolio pretty widespread and diversified. We are better off than our peers. So like we have seen in the last quarter so that our beverage business and our health care business, both were impacted by unseasonal rains and climate changes, et cetera. But our pet portfolio, which also a fair diversity, it came and build us out an international business also HPC came and bailed us out. So I think we should be in a better position than our peers. That's what my take would be.

[Vivek Maheshwari, analyst]

Got it. And if I actually add to that, Mohit, I would imagine, in some ways, let's say, what you have done with in the toothpaste, and there have been communications from in the past to, let's say, mainstream higher weather natural herbals. So arguably, you can still grow faster, gain shares, let's say, health supplements. It all depends on what you keep in the denominator or even on the -- some of your health care products or even the mainstream FMCG business also given the herbal orientation. So if you have to move, let's say, volume growth to a higher level, which arguably could be easier in your case versus your peers, given that you have share gain opportunity just surely because of you have this architecture. How would you do that? Otherwise, for the industry, I think your peers as well as you. If we assume margins flat at some point, the best case is like 8%, 9% earnings growth, right?

[Mohit Malhotra, executive]

Absolutely right. I think we are in a better position. So no one good thing for us is besides the rural leg that I explained the expansion, that is definitely for a portfolio, which is more accessible price points of INR 10, INR 20, INR 50, INR 100. But beyond that, you suddenly find modern trade in e-commerce where Dabur is the only differentiated player in natural and owning natural and driving the growth to your point of where we've done Oral Care. We can do it in shampoos. We can do it in hair oil. We can do it in hair supplements and we can do it in food also and on all natural and that's how we can grow.

So 2 pivots of growth. One is more rural driven growth, which is expansion driven to growth rather more modern trade e-commerce driven growth. So 2 legs. One is premiumization leg and other is penetration leg. So that can come in, and that's what we've been attempting to do. So to harness or to leverage our rural infrastructure, we created bundles of products which are of accessible price points, which the teams are driving the -- and in other particles of the distribution, we have being separate food and beverage, separate food, separate beverage, separate HPC and SC distribution verticals also. So opportunity is there, but we are limited by [indiscernible] and armament sources. So that's where -- but intent is to what you're saying is right to grow at double digits, yes, driven volume, yes.

[Vivek Maheshwari, analyst]

Got it. And the second question is if I look at your fourth quarter numbers for -- so post pandemic once things started to normalize, every year, you are seeing in the fourth quarter margins are significantly lower than the first 9 months whether it's F '24, F '23 or I think F '22 also. And if you go back to F '19, the margin delta between fourth quarter and the rest of the year or the previous quarter was never that high. Now part of the reason that I see your revenues actually declined quite a bit in fourth quarter versus, let's say, third quarter, your other expenses, even if you adjust for the legal cost, that also moves up quite a bit on a sequential basis. So what has changed so much after pandemic that fourth quarter revenues go down quite a bit. Other expenses jumped up quite a bit and your margins actually down fairly significantly?

[Mohit Malhotra, executive]

We are actually prepared to this answer. I will ask Ankush to give that answer. If the pleased that question answer for you. So I will -- over to Ankush.

[Ankush Jain, executive]

.

Vivek, just to broadly answer this 5 years ago. And over the last 2 years, structurally, the strategy of business has changed. So if you look at exact numbers of 4, 5 years ago, we just pre-COVID, our business and used to be 25% in Q4. rolling as we speak is 22.7%. So just to give a broad number, average first 9 months, we have done INR 3,200 crores average per quarter past 3 quarters. In this quarter, it's INR 2,800 crores, which means last quarter, is slightly lower. And because there the leverage in overhead is slightly lower and hand so therefore, in our business model, you have to probably see both yearly numbers. And that will probably be right way.

[Mohit Malhotra, executive]

So that's the diagnostic of the issue and why it has happened post pandemic, makes a very question, and rightly answered by Ankush. But how we quote correct. I think we have to increase the relevance of summer portfolio and therefore, inch up to leverage all the expenses. So what we're doing is we are launching a lot of summer portfolio products, like you know, [indiscernible] in last year. So which is a Thanda Tail with sales in summer. We are putting a lot of pressure on Pudina. A lot of pressures happening on juices portfolio, glucose as a portfolio. So we are trying to submerse a lot of our products so that, that actually comes up. So as we speak, we are launching [indiscernible] also under the King brand and trying to build that brand so that we are able to increase the [ DLS ] of summer-driven portfolio for us in Q4.

[Ankush Jain, executive]

And just to add one point -- also the 4, 5 years ago, our rural spend in Q4 used to be least. But now even in this quarter is plus 6%. So is that [indiscernible] is also impacting. So therefore, you have to more [indiscernible] therefore portfolio.

[Vivek Maheshwari, analyst]

Sorry if I'm stretching this a bit longer. But my point is -- so 2 things, absolute revenue, why is it lower now versus pre-pandemic, what has changed number one. Number two, even if you look at other expenses, forget about the denominator, but even if you look at it on an absolute basis, your fourth quarter other expenses crore also jumps up quite a bit. So why is revenue base lower? What has changed since pandemic? And why absolute other expenses also higher?

[Ankush Jain, executive]

No. absolute revenue is not. What we said, the saliency of the revenue in quarter 4 is lower than what it got pre-COVID. So absolute revenue is still higher. We used to be up INR 4,200 crores in Q4. Now we had still INR 2,800 crores. So absolute is higher, the same [indiscernible] quarter 4 has gone down.

[Mohit Malhotra, executive]

I think there is some more color, which has to be given. So Vivek we can send a [indiscernible] or we can have a discussion post this meeting with you to explain you. So the way I want to summarize things salience has come down in quarter 4, but absolutely, our turnover has gone up. So 23% as compared to 25% what used to be happening during COVID or immediately post COVID and post COVID was selling over through the year because COVID continued. And after that, [indiscernible] saliency went down, profitability was down as only juice period and summer brand will overhead remain the same.

[Operator]

The next question is from the line of Prakash Kapadia of Spark Wealth Spark Private Wealth.

[Prakash Kapadia, analyst]

Most of the questions are answered. I just had one question, Mohit. You mentioned monsoons are expected to be over the pace is fairly low in rural. So what kind of momentum would we expect in the near term? And what categories will drive this growth for us on the overall domestic business? And if you could give some color on rural and urban, that would be helpful.

[Mohit Malhotra, executive]

Yes. So therefore, if you look at the previous quarter, our rural has grown by 8%, our urban has grown by 4%. So the 400 basis points difference between urban and rural. And that is an indicator of what things will be going forward as the rural growth is ahead of the urban growth. So rural for us -- so we are kind of a barometer of how the performance in the market will be. So rural has done well. On back of our portfolio, which is more some of the portfolio, we and the brand is also pretty rural-centric and very products do well in rural India as compared to urban India. In urban, we have a premium strategy. This is depend from to month but temporarily scientific to a more traditional product for us. So it will be OTC driven health care-driven Oral Care driven also fairly 90% penetrated, hair oil driven, shampoo driven, so as -- and in beverages, also we enter into which is at a price point of INR 10, INR 20, INR 60, we altered very earlier -- just only INR 160 to INR 150, we more urban phenomena. So we are getting more into rural and leveraging our rural infrastructure. I don't think I can say there's any particular or portfolios to do well. You will later if we are able to bring up [indiscernible] to accessible price points and rate our rural village infrastructure our portfolio, I think the potential is huge as we increase our Yudha and make inroads into more internal.

[Prakash Kapadia, analyst]

Okay. Okay. And at least what we reading and hearing monsoon seems to be on the right trajectory. So will that also add to the momentum, especially in rural?

[Mohit Malhotra, executive]

Yes. I think so because agrarian, rural is agrarian economy and if the monsoon is good, agricultural crops will be good, more money in the hands of the farmer, and therefore more shampoo, more toothpaste, more hair oil consumption should happen -- is more still in [indiscernible].

[Prakash Kapadia, analyst]

And for the legal cost, you mentioned around INR 85 crores would come in this year also. So will it be a portion throughout the year, it will across quarters and or how will that pan out?

[Mohit Malhotra, executive]

It's roughly around INR 20 crores to INR 25 crores per quarter because this is pertaining to the legal fees for the layer generally spread out through the year.

[Operator]

We have the next question from the line of Aditya Soman from CLSA.

[Unknown Analyst]

I mean, just following up on the question earlier in terms of seasonality for revenues. I think can you explain why the salience of in 4Q has come off. I mean, you mentioned that the 4Q sales salience is lower than earlier. Can you just talk through why that has happened? And then -- yes. And then the second question is just on EBITDA margin guidance excluding this legal cost of INR 20 crore INR 25 crores per quarter.

[Mohit Malhotra, executive]

So quarter 1, quarter 2 and quarter 3 is generally in the range of -- quarter 3 is actually higher because of Chyawanprash and Honey and high-value items selling. And because the value is higher, therefore the saliency is higher, typically in the third quarter and the fourth quarter uses the case rate of usage is much lower. There was a value saliency goes down, albeit in volume the number of pieces that we sell is almost paid as the quarter 3, but value actually is lower in this quarter 4 because the seasonal business, so you sell more of use loading and you sell more of podina other things as compared to Chyawanprash and Honey, which typically go up in the winter. And that's why the saliency is lower in the quarter 4. During COVID it became also because Pandemic was there also and we were selling also in the others. So that has actually reversed since COVID. As far as EBITDA margins are concerned, we want to go back to 20%. And if you look at without legal costs, the operating margin is already in the range of 20.2%, so we don't go back to 20%. Ankush time for the year. So each of our operating margin to 20%. So Ankush, you want to add any lines or so.

[Ankush Jain, executive]

Yes, definitely, I just want to add. Pre-COVID operating margin was 20 -- and today, as adjusted for legal cost is almost there at 20.2%, and it's also because we have acquired Badshah, it's almost there. So I think Andy has said now, we'll also be partly redeploy back in engagement and generating part. So I think -- what we saw this year, the expansion of 150 bps just for legal cost, obviously, will not be there, but our endeavor would be to gradually increase it in mid to long run.

[Unknown Analyst]

Very clear. Just on the first question, I mean, in terms of the sales coming down, I understand during COVID, health supplements did very well through the year. But even prior to that, I mean, the gap between 4Q and 3Q wasn't as sharp. So why are we seeing such a big drop?

[Ankush Jain, executive]

Yes, even pre-COVID is your Chyawanprash was slightly higher even in Q4, but now we've seen that in this quarter, at least this quarter, saliency of Chyawanprash and health supplement actually went out and to overall saliency was lower.

[Operator]

The next question is from the line of Tejash Shah from Avendus park.

[Tejash Shah, analyst]

Over the last annual presentation, which we did some beginning of the year, this fiscal year. A key focus for this was supposed to be transforming our power brands to our platforms. Now when I see our filing presentation for this 54, there's no mention of platform word itself. So I was just wondering, where are we on that journey? And is it take much longer term, it should not be monitored on a quarterly basis.

[Mohit Malhotra, executive]

Is absolutely our strategy doesn't change. I think it remains in the presentation, it doesn't mention because it was more based on the quarterly results and not on the strategy, but presentation was concerned, it was pretty much based on that. That's why you look at that in the category of the category, we are plugging the gaps in spaces where we are not present and wherever the power brands can extend, we are extending them like Dabur registry send it to B, and that's what we've done in oral care. Dabur Amla is getting extended into value-added and that's what we are doing.

Home Care, Odomos not extend into ABB. It was just a personal application. Now we are sending in to ABC, he most larger addressable market and therefore. Odonil was more solid block for us. We returned the gene platform, and gel is already on a INR 50 crores turnover coming in now. Gulabari, which is only a Rosewater what is sending to body washes. So therefore, are platforms from power brands. And in Chyawanprash, Chyawanprash in powder form we are introducing, Chyawanprash in gummy form we are introducing. Honey also getting extended into break first periods as we talked about, therefore, platform there to take honey from the medicine chest to maybe bring it to the breakfast table and therefore contiguous categories like the fire which will be high based will also come in the future. And in the regulated segment, we will change uses to near to drink. So that's also a platform extension and now to carbonated also. So across the world, home made to culninary is moving into the food category. So we are very consistent with the strategy that we laid out in part of view on the Capital Markets Day. And that's what. The numbers may be, but the strategy remains on board.

[Tejash Shah, analyst]

Great. Second question, if I look at our annual growth from the lens of power brands and non-power brands, except Oral Care, I believe the other 6 power brands would not have contributed above our company's average growth rate for this year. So it also means that a large part of heavy lifting for growth was done with a long tail of other brands, which are emerging brands, which would have done. So first of all, is the math correct on this? And if you can share some insight on this year?

[Mohit Malhotra, executive]

As what you're saying is right now because power brands contribute to 75%, 80% of the business, if season doesn't favor you. So real as the power brand will get impacted and that will impact. So juices got impacted was flat at or within fire. Chyawanprash is a power brand did not fire. So that took down the business. and other brands ENT looked up. But that said, the power brand contribution to the business remains as the growth may not come because of some seasonal issue or others because, it is not our brand at the end of the day, that could positively or negatively impact, but the strategy of parabasal change quarter-to-quarter to look at it for the 4-year period of 5 years years the strategy of the company. So therefore, if you look at the CAGR period, you will find power that 15% over after 2, 3 years. Last year was 30% growth is flat. So average close is around 15% higher than the company average. So that's the way to look at.

[Ankush Jain, executive]

And also, I think just to add on B.In every power brand, we continue to gain market share, both in the quarter and and in previous years. We have actually also seen a relative performance when there is a [indiscernible].

[Mohit Malhotra, executive]

And distribution ratio level in power brands will go up and by virtue of that distribution expansion has been 200,000 late in the current year because you can distribute a smaller brand because that doesn't have the to get distributed and neither this is advertising spend on it. So yes.

[Tejash Shah, analyst]

And sir, last one, if I may. So given the surge in this consumer and judicial activism that we have seen globally and in India, and now there are increasing frequency of these accidents, which are happening on brands now. So as a very responsible company, do you think that industry at large will be kind of investing more on product quality and safeguard so that we are not attacked very so frequently, A. And we also will have to time and again, reinvest in branding equity. So at a very long term or medium to long-term level, do you think that margin expansion will take a back seat versus protecting product and brand going forward, at least in the near term.

[Mohit Malhotra, executive]

Yes, a very good point. I think consumer activism and our is abating that you will address first is the priority of the brand as the brands become more responsible because if you look at social media and growth and et growth, this is a coming and consumers in the metro, the consumer in the maiden [indiscernible] embracing brands, which are talking about environmentally friendly products, which are eco-friendly, which are of sustainability to it do not contain that [indiscernible] so therefore, this really consumer-first approach with the environment, climate, and is will take a front seat. But I think I don't leave the second point that you have made that will the margin take a back -- the moment the brand becomes environmentally conscious is cable consumers are ready to pay a price premium for that. So the moment they pay a price. We have highly become environmental because of versus to premiumization grows the brands become quality conscious and environmental friendly and the premiumization happens and therefore, profitability also is -- so I think consumer reward you with the profitability and the value that the consumer gets.

Now this is relevant for Armentia today. rural India for the Parapan terms of India being so low I think still it's a little time away for the rural India and at least 65% of the population of this country is still fighting under and property and therefore sustainability and improved in climate is a little phenomena. But it's catching up. The consistness is catching up. So that is where we are. So if you look at the examples of plastic straws and paper store. -- paper draws are still more expensive as compared to plastic stores but the prices of pipes trials almost become 40% more premium to plastic stores, which used to be 200% premium. So I think the whole price even comes down, but everybody is making more money because the capacity is going up and scale improves the profitability. So yes.

[Operator]

Next question is from the line of Nillai Shah from Moon Capital.

[Nillai Shah, analyst]

There are a few questions on margins. I just had a question on margins from a longer-term perspective. I've had this discussion, I think, on the call with you earlier. But since you just finished your annual review, maybe you can shed some more light on it. Your margin aspiration near term -- when I take it line by line and compare your businesses with your competition, let's say, in the case of oral care, with Colgate in the case of health care with Rx companies, et cetera, your margins seem very, very low. Most of these companies in India are now trading at -- now reporting margins which are in the mid-20s. I understand you've got a beverage portfolio, but you also have a very large health care portfolio, which should offset those margins. What are your thoughts on margin expansion from a long-term perspective is in the next 3 to 5 years?

[Mohit Malhotra, executive]

Very valid question. And I think it's good that you keep reiterating this, it actually puts more to it also to [indiscernible] in terms of margin. So long term, we know that there is a pharmaceutical business that we take business from as our source of business and there the margin profiles are much higher than where the world was that's why we rotate of going to the doctor and they were advocating our brand. But still it is slower, it could take time. So to your point, long-term margin improvement that we're doing. We have driven the business of baby care, skin care and also our general in the doctor. So it's only INR 120 crores for us. So gradually, slowly, as we put more products there, we'll be able to get better margins out of that.

So if I can periparma business, which is going to doctor, I made a 70% margin as compared to the health care, where a 20%, 50% margin, to your point. The more products are put on that premise to more margins are in man. So the better scale of the business takes time to -- so long term, we have the same part and on the same spot process of building elation back of OCC, et cetera, but the time taking business like before I came on board, 2, 3 years back, we only used to go to iron doctors. And I met doctors again commoditized play of Tuminand therefore, you've got to monopriince we're now going to innovate to this there is a huge upside on the margins that 1 can get. And in most categories like oral peers and hair care, we will be fighting with our competitors and gaining shares on back of pricing.

There's a huge opportunity to premiumize that in other rate, for example, sensitive with a much higher margin can be launched at a Dabur sensitive answer is absolutely where the category is doing well on the back of GST, there is an answer. There is no natural play there, and Dabur has a right to win in that market segment, we can do that. In allovera was on, they can do -- like again, Dabur has the right to win and get a higher margin profile in mass categories or so. So there also, there is a vertical we are seeking on those lines and a working pot.

[Nillai Shah, analyst]

Just to be clear, Mohit, when you benchmark your different categories with the competition. In some cases, you are the #1 player, but elsewhere, when you benchmark. Are you saying that the margins that those categories make for Dabur are similar -- broadly similar to what competition is able to deliver and report -- and the only difference at this point in time is the fact that the health care business is probably making the 50% margin, which can be higher from a long-term perspective. Is that the synopsis of your answer?

[Mohit Malhotra, executive]

Yes, also the digital category were operating in our gross margin profile is pretty similar to our competitors. So it is concerned, we've done the benchmarking. And we've not done the benchmarking. We've taken the big 4 consultants to help us through base market PCG, which we really have done the benchmarking for us and so on the gross margin provided that, but sometimes we use we are 15%, 16% market share. As we scale up the business, we'll be able to leverage the overhead and therefore to float the operating margin. because overhead are higher, that's why operating margin will be lower for the gross margin profile onerous agro margin profile will be very similar.

If there are areas of this gross margin is lower, we are continuously working on optimizing our formulation and packaging to ensure that our gross margins are there because we are not opposing our price -- our price is actually higher or back to the shotcreting of Natural and our cost is also benchmarked to competition. But the only area where we suffer is because of the lower of scale, we are now able to leverage our overhead, but the scale that we comment because of the diversified to the various portfolio that Amenas.

[Operator]

Next question is from the line of Brian Chita from Vallum Capital.

[Unknown Analyst]

Sir, my question is on the progress, if you can share on the 3 new categories within health test that we had shared while we met last year in your annual [indiscernible], which is baby care, see market within Mexican herbal then the large segment of therapeutic a broader progress within these 3 categories would be helpful.

[Mohit Malhotra, executive]

So on baby care,last year, we had turnover INR 20 crores and pole this year, we are dropping a turnover of almost INR 40 crores, INR 40 crores, INR 45 crores of baby care turnover that as well as betaine being sold through both e-commerce for us and also through the audit portfolio. The second category we talked about is health juices, health juices we did a turnover of about INR 20 crores. We've done INR 26 crores in the current year on which we have test marketed in because it's a very competitive category, while we have a right to win but the proposition was not very differentiated. We reproved the formulation, and we work INR 1.6 crores turnover as far as the is concerned. That's on the health care category. We had also done key where the margins were lower.

So therefore, we were not too much to change, but we have improved our market now on back of scale, and we have delivered INR 24 crore sale on back of here also. So these are the whole updates on the health care portfolio. As far as HPC is concerned, we had bits I told you has done around INR 40 crores for us. GM pocket extending the ones into Spin INR25ccores. And and LVP is around INR 12 crores for us. So do was getting extended to SB extending our brands to power platform and increasing our global addressable market. That's where an our green portfolio is INR 100 crores, which we mentioned -- this year, we've not grown on drinks because of the season issue, but I hope next year, this was really in up for us.

[Unknown Analyst]

Right. And am are we tracking the therapeutics proposition that we were supposed to take from higher-wage doctors to elevated doctors that hole of the portfolio which is ready and tougher. How do we track that progress?

[Mohit Malhotra, executive]

So we have an advocate vertical and PDP the 1 driving it. We've done a turnover of INR 120-odd crores all the therapeutic vertical, it's more and with the doctors and operator who see we go to the chemist outlets in the vicinity, and that's how we sell -- we got a turnover of INR 120 crores, but more importantly, it's more qualitative that we are reaching out to 1.1 lakh doctors as compared to 20,000 points that we had earlier. So this has moved up to 1.1 and it's peritins dermatologists, it's gynecologists -- so it's women, BV and the [indiscernible]. So we are focusing on these 3 pediatrics.

[Unknown Analyst]

In Baby Care, we had targeted a subsegment for hygiene, where in diapers and wipes were 1 of the products to be launched, any progress or update on that?

[Mohit Malhotra, executive]

Yes. So we have launched Dave super fan which is baby type sort of, and that's done very well grown almost nation there -- how much is it we saw to turnover, I think around INR 10 crores, INR 11 crores of baby price alone, which is doing very well e-commerce categories very lowly penetrated and it's increasing. Yes.

[Unknown Analyst]

Okay, okay. And last question on the overall premiumization portfolio. What would be the premiumization portfolio and how are we taking that and the growth that we saw in FY '24.

[Mohit Malhotra, executive]

Yes. So the way we look at premiumization is we look at the average pricing of the category and 20% premium than average category price price is what we categorize as the remind, 18% of our portfolio is premiumization portfolio. We are tracking it on a yearly basis. And we see premade are tracking it on all power brands and giving targets to the team to increase premiumization year-on-year. So it's a very objective exercise of tracking and increasing the premium portfolio, which is more driven from modern trade and e-commerce is contribute to 20% of the business. besides doing premiumization internally on power brands, we are also are doing joint business planning with Reliance and to and e-commerce players also and planning premiumization wherever gaps are there as well their demand -- just to give you some examples of that, we are building Apple Siding with a platform. So now this is a premiumization, but we've done a GBP with Alliance and reliance order to be the role brand on the loan. So Reliance is narcollaborated together. We've introduced unable only in July that itself is a turnover of INR 12 crores union back of line alone. So that is another innovation stream that we have started with them. Yes. But this is not really premiumization will just give you an example.

[Unknown Analyst]

And what would be the new product contribution, new product NPD sales and contribution around 3.5%.

[Mohit Malhotra, executive]

But it's really different vertical wise for food business for HPC and around 4% for health care also.

[Operator]

As there are no further questions, I would now like to hand the conference over to Ms. Gagan Ahluwalia for closing comments. Over to you.

[Ahluwalia Gagan, executive]

Thank you. I thank all the participants for joining today's earnings call. The webcast and in transcript will be available on our website. Thank you, and have a great evening ahead.

[Operator]

On behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.