United Breweries Ltd
NSE:UBL
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United Breweries Ltd
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Ladies and gentlemen, good day, and welcome to United Breweries Limited Q4 FY '20 Earnings Conference Call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Harit Kapoor from Investec Capital. Thank you, and over to you, Mr. Kapoor.
Thank you, Andrew. On behalf of Investec Capital Services, I would like to welcome all the participants to the call as well as would like to thank United Breweries' management for giving us this opportunity to host the Q4 FY '20 earnings call for United Breweries. From the management of United Breweries, we have Mr. Radovan Sikorsky, Director and CFO; as well as Mr. Robin Akston, who is part of the Business Control and Investor Relations.
I'll now hand over the call to Radovan for his opening comments, post which we'll take Q&A. So over to you, Radovan.
Thank you. Yes, good afternoon, everyone, on the call, and thank you for joining. So today we're going to discuss quarter 4 and full year '23 results of UBL. And I'm here together with Robin and after the opening comments for our results, we are, of course, happy to take your questions.
I will start with the highlights of Q4. Volume growth of around 3% in the quarter, driven by an single [Indiscernible] Rajasthan. We create some market headwinds during quarter 4 as well and the volume growth, excluding some of that was around 17% for the quarter. The premium segment, again, recorded growth ahead of the present portfolio, which is nice to see, growing around 19% in the quarter, driven by Heineken, Kingfisher Ultra and Ultramax, which is all to see. Net sales were up in a region of 3.5% with healthy pricing around 5%, with some of the positive premiumization coming through in net sales as well. But quite a bit of step up there down by the negative state mix. Our price increases have been taken across multiple states, and we have a continued commitment in driving revenue management activities. We're being much more behind that, and we see some fruits coming out of that going forward as well. Gross margin under pressure, as I have said before, for quarter 4 that would come, and that's really coming through the cost of sales, the value and the packaging material. The decline versus quarter 3, so we saw that the pressure would continue and was slightly more, but that was primarily also because of the state leases. So the statement effect was slightly higher than very [Indiscernible] and therefore, a slight decline in the GP margin. On the EBIT margin, mainly driven by that gross margin and that was the key draft on that front. In terms of highlights for the full year, so fantastic 31% growth. So again, showing that category really coming back and actually at 2023 March year-end of the highest volumes we have sold in terms of which you look back historically, which is great to see.
Premium segment grew close to 60%, strong net sales growth as well, supported by the [Indiscernible] but, of course, impacted by the negative statement. [Indiscernible] good margin decline for the full year. And again, I don't need to repeat the inflationary pressure, but we all first [Indiscernible] leverage in that. So that cost mitigated some of that negative impact.
In terms of -- from the board meeting, the board proposed a dividend of INR 7.5 per share. And although you know that amount is slightly lower than last year. Also last year, we had quite high cash position, but still it is quite a bit higher than in previous years. And that really shows our commitment to shareholders that we really believe in the long-term category of this business and the resilience of our business going forward. So I think that is nice to see. In terms of the final, the outlook, nothing really changes from that perspective. We believe in further building category growth driving premium to our portfolio Heineken Silver, Kingfisher Ultra family who will continue on that journey. In terms of the inflationary pressure on our cost base, that will continue in the near term, like I've mentioned, but we see some light at the end of the tunnel as we get to the back end of the year as well. As you know, we will continue with our revenue management initiatives and, of course, have really a cost mindset in terms of managing our cost saves. So overall, we remain optimistic on the long-term growth potential of the industry increasing disposable income, favorable demographics and premiumization.
So with that, I will conclude. And I think, yes, we can move to Q&A.
[Operator Instructions] The first question comes from the line of Latika Chopra from JPMorgan.
My first question was on the demand front. As you exited the quarter, 70% volume growth at Tamil Nadu, I think growth rates are fairly healthy. But as we look at the quarter, did you sense any adverse impact from unseasonal rainfall, as a lot of other countrymen companies are calling this out, and do you see that as a risk for the summer quarter? Is it the current quarter?
So you're moving -- you're saying moving into quarter 1 of this year, yes?
Yes.
Yes, so the weather was -- has been having an impact particularly in the north, definitely. And we see that. So it's putting some pressure on what we're seeing in some of the volumes. That consensus [Indiscernible] for sure.
Sure. Kind of the second part was, other than the weather impact and if you look in the other line consumer spending behavior fairly healthy in your view? And how is market share progress for United Breweries, including or excluding the Tamil Nadu piece.
So in terms of consumer, I do not see any impact. It's really to [Indiscernible] to tell. We still confident behind that. And we're seeing the strong premiumization as well. So we're seeing it has a disposable income must be planning a role there as well. So at that moment, I fell that I don't see it really any issue in that respect. And in terms of your question on market share, yes, we have come under a bit of pressure in our market share, excluding Tamil Nadu. So we have lost low single-digit share, but again, you probably know even better than me, how volatile these market shares can be across the different states, also depending on supply, from interstate supply [Indiscernible]. I would be too much reading into that at this point. I think we needed to look at it from a more [Indiscernible].
Sure. And the last question I had was on raw materialization. You said this might remain a headwind in the near term. If I listened it correctly, last time you spoke about the high cost barley inventory probably be getting exhausted by Q1 of FY '24, is that the same duration status right now? And we are increasingly finding that the fresh barley in India, the prices seem to be moderated, I guess you would be procuring the fresh barley. Any color on incremental input transportation, particularly for barley and for glass. So assuming the state mix remains constant at Q4, would it be right to say that Q4 was bottoming out of gross margin?
Yes. So in sense like you say that, right [Indiscernible]. I've mentioned that in the last call that quarter 1 is going to continue to be difficult for us in terms of margins. Hopefully, the weather picks up a little bit, and I think there are some green shoots in that in terms of the volume side, but the margins -- pressure on margins in Q1 will continue, and we should start seeing some benefits flowing through in quarter 2 as we start incorporating the new barley cost into production. And the current status on the new -- on the barley in the market, it's a good crop, and quality is good. Some issues with moisture as it's been raining quite a bit, as you rightly said about the weather conditions. So it had been raining more in northern parts in the Rajasthan area. So there is moisture in the barely, but it seems to be that the crops are so good. And in terms of pricing, it's sort of more or less in line to what we thought that there is pricing is coming down versus what we had in the price. So that's good to see.
Next question comes from the line of Nillai Shah from Moon Capital.
The line of Mr. Nillai has been disconnected.
I'll come with another one. This questions comes from Jay Doshi from Kotak.
My apologies I joined a bit late so if the question has been answered, I'll go back in the queue. Could you give some color on your market share trends in the past couple of quarters, have you managed to maintain market share? Or are you losing market share both in the premium segment as well as mainstream segment? That's my first question.
So like I said in previous call, we had come under a bit of pressure in the market share in total, in a very low single digits. But again, like I mentioned to the previous question, I wouldn't read too much into it. Like there is volatility in market share across state when we try and consolidate across the whole of India. So that's the way we look at it. In terms of premium market share, I believe we are a bit flat in terms of the growth. Maybe excluding market share, it could be around, yes, I would say it's all fair. As you know, it's not that easy to gain exact market share, but the way we see how we're operating in the market also [Indiscernible].
Understood. That's helpful. And if you have not already answered, could you give us some color on what's the impact of AP Telangana volumes on a Y-o-Y basis? And what's your strategy for those markets? If you answered that, I will look at the transcript later.
Yes, I've mentioned in the transcript, I've said that given some of the [Indiscernible] markets [Indiscernible] we had a growth of around 17% in the quarter. So on Tamil Nadu, we're seeing some positives coming future semi intensive volumes as there is shortage of capacity as well. So we are cautious in terms of saying if that will continue, but it looks like for the next couple of months, we see increased demand for volumes, which is nice to see whether that will be permanent, I cannot say at this time as we work through improving the situation there. We continue with the same rate market model that we said that the changes we made, leading our own sales force. And we speak to that. But there seems to be a bit of positives coming up now for the summer, and we will monitor that.
Next question comes from the line of Nillai Shah from Moon Capital.
My question is essentially on the market shares. You give us color on that. But just thinking about one state on which we get data on a regular basis. Karnataka, which has generally been a state where you've been very strong in the past because we a significant market share loss out there. Can you give some update as to what really is happening in that particular state for you?
So in Karnataka, yes, we have lost some market share, to be honest. You know the what there has been some dynamics there in terms of the growth of what we would call the economy statements or [Indiscernible] driven by powerful. Now that is growing part a lot in the market. We have also introduced [Indiscernible] in that sort of segment that we are careful of being driving that volume growth because we feel that, that is not good for the [Indiscernible] category. So we have we have lost some share there. But we're going to work our way through that and see how it goes. In Karnataka as well, as you know, the election are coming to, so there is quite a bit of volatility in the market or supply. So we've had some administrative issues around dispatching. So that has complicated things a bit. Next week, as you know, it's going to be a bit more difficult. So hopefully, as we get through that, we can get that contract again.
Okay. And then the second question essentially is on the start that we've been trying to focus on the premium segment, which obviously improves from a hinge perspective and good for UBL from a long-term perspective. In the near term, how do you balance the volume growth versus what your aspirations are from a long-term perspective for the premium portfolio. So just to say that when your sales force is going through to the outlets, how are they incentivized to drive volumes versus mix versus just overall growth for the business?
So I'm not going to go now into details of the sales incentive scheme. But of course, it's a combination, obviously, the pool from the consumer and the push that we get, we do intensified sales to focus on premium as well. But importantly, not to take the [Indiscernible] of Kingfisher, which is the bread and butter of our business still, right? So it's the right balancing act, I would say, right. We've been managing that by trying to build the brands to digital, to media, in the respecting the regulatory environment we build consumer pool. We get the traction, and we see nice traction coming through actually for the Heineken Silver brand. And that's how we do it. And it needs to be a game of patience, I think that what is key for us. It takes a long time to build the brand, if you look what Heineken is [Indiscernible] taken many years, but we can see that at the end of the day, there's huge opportunity for us.
Got it. That's clear. Just one more bit on the input cost that you spoke about to the earlier question. Given that the volumes arguably are more than overview have envisaged as we went into the season period, and now we have certain issues with the weather conditions. So volumes for next quarter are also slightly uncertain at this point in time. Will it be then fair to say that the barely which you've procured will probably go through to the end of 2Q, given the lower-than-expected volumes that you have witnessed?
That's a good question. That's a good question. Of course, I'm also grappling with that. So I'm still confident that you know that we will continue to have good volumes. But to your point of if we have muted volumes tearing into the next couple of quarters, which hopefully won't be the case then that that would be an impact, 100%, I cannot remind that would impact yet.
Next question comes from the line of Krishnan Sambamoorthy from [Indiscernible] Bank.
Yes. Rather, when you mentioned that gross margin pressures are likely to persist in Q1. Were we talking about both material cost pressures as well as [Indiscernible] being unfavorable?
Yes. I mean the state mix it's difficult sometimes to make the call because -- the trade [Indiscernible] were a bit stronger in quarter 4 when we expected. So it was slightly it could continue not to the same extent, essentially. What we are doing, however, is ensuring [Indiscernible] new management activity, is to try and push more and more pricing also in those states that have an impact on price mix. So that is a key focus for us. So we are looking at other space you could potentially take price as well that will help us in that respect.
And how many months of barley did you have inventory did you have at the end of March? And how much do you have currently? Will you be able to share that data, whether you be [Indiscernible] barley for the 7, 8 months of the year, during the season?
We had quantities higher than what we had in March 2020, right? And there was -- and the reason behind that was that we needed to be slightly more conservative as we move into 2022 on the back end because if you recall very well, the value prop wasn't good in 2022. And at the same time, volumes were coming way above expectations. Like I said at the beginning of the call, if you look at the full year volumes, it was a record year for us, which is contractive also for the category. And when we saw that coming through, as we were progressing through the year, we made the call that we need to procure more. At that stage, there was also the pressure of Ukraine and barley crops combination and volatility, and therefore, there was a more conservative outlook on that. So our costs are higher how much more I cannot like really see at this point. But yes, that's basically the [Indiscernible].
Okay. And have you been supplementing your inventory significantly over the last month or so?
Have we been sorry, what?
Increasing your value inventory?
Well, we now are working to get the new crop in. So we already started purchasing crop and in the markets, and we are sourcing so that that's happening, yes. But of course, we don't have the old crop.
Okay. Just one more question on the other component of your raw materials, by Q1, the higher proportion of markets would still mean like any adverse in specs [Indiscernible], your bottling costs can come down. Do you see bottling cost being high for a few months and therefore, your Q2 numbers and beyond that way? Or do you see some time of the production rate?
Now the question on the bottling is still there in pricing. So we still see our Q1, the bottling prices will be an impact and even into Q2 on the bottle. It's more the value that I see the sort of the improvement. But on the bottles, the pressure is still there because of the with supply in the market. But I think we are working through that with our large suppliers. And I think we are not more looking now into the medium to longer term that we are in much better position and control of our pricing.
Will you be in a position to guide?
And on top of that, I think I mentioned it also in my previous call, there's a lot of focus on us on the tenability of the [Indiscernible] to get better variability improvement. So that's what the team is working on. It's not an easy process, right? Because it's complex infrastructure, bottle collections to the difference in S1, S2, S3 sort of layers that we operate through. But I think more that can be done there. And that, of course, helps a lot, and it's also grateful sustainability. It's got a double impact for us. That will positive income. So it's -- just some of these things just take a little bit of time. It means structure that is thinking through, but we see opportunities there as well.
Okay. And would you be able to be the portion to guide us on when do you expect bottling cost to come down in Q2, Q3, basically?
It's a little bit difficult for me to say that now, in terms of bottle. I still see the pressure continuing on the bottle. So I think we're going to get more the benefit of the bottle [Indiscernible] point in time. On the bottles, I've seen much more effective in terms of bottle returns. That's what we need to also focus on.
Okay. Just a follow-up on that. Typically, if I'm correct, the important proportion would be about 70% to 75%. So from a 4- or 5-year perspective, what do you expect that number to be?
Yes, I'm not -- you know it's an estimate. I'm not going to go through those estimates. We want to improve on where we are, and how we came out of COVID. And there has been some improvements already, but I'm still not happy with it. I still want teams to work more on that to focus on that. And for me, yes, it's all about profit as well in terms of efficiencies, but also the sustainability agenda for us.
Next question comes from the line of Ajay Thakur from Anand Rathi.
We understand on the competitive intensity. Given the fact that many of the new players are kind of seeing increasing share or increasing revenue, which is much faster than our growth rate. Can we expect that in the medium term or market share could be, as I said, from the current levels?
Our market share will be, sorry?
Our market share would be [Indiscernible] in the medium term from our current levels due to the competitive intensity rising from the newer players?
No. I mean, look, Kingfisher has a very strong brand presence in India. And I think our premiumization strategy is also going in the right direction. Competition is healthy in India, and as we've always said, there is a lot of opportunity for [Indiscernible] growth. I mean we just need to focus on doing the right things in opening up new occasions for the brand Kingfisher and for our premium portfolio. And I think if we do the right things, we can keep our market share or grow our market share actually in certain [Indiscernible], and it really got premium because we recently indexed, and so that would be nice to see, and that is a focus to bring up in the market strategy.
And second, I wanted to understand what would be the mix of bottles and barely for us in terms of the raw material cost? And if I were to look at in terms of the correction in the barley cost, will we get the benefit of the whole of the correction in the barely cost whenever we exhaust our current inventory?
Well, yes, we will get the full benefit when we close the full inventory, that's definitely the case. And hopefully, we can exhausted it as quickly as possible to be honest, right? And that would be the best. In terms of the mix cost and then I've given quite a lot of information already on that on the previous question. So in terms of the [Indiscernible] strategy and value pricing, so maybe you could pick that up from the transcript there, but [Indiscernible]
Next question comes from the line of Chinmey [Indiscernible] and from HSBC Life Insurance.
So just on the gross margin, so you mentioned that margin is attributed to state mix Q-on-Q decline, the sequential decline. So can you help us understand like the states which would have now resulted into a negative impact with respect to the statements?
You mean in quarter 4, yes?
From quarter 3 to quarter 4.
Yes. So we're getting really strong volume growth out of state like Telangana, and Rajasthan was also strong despite [Indiscernible]. Yes. Well, actually despite, actually, it was strong. I think going into the back end of March, some -- there was some weather impact already. But yes, I think those changes in the North and Telangana has some impact on the segment. So the growth exceeded what we thought this year.
And you also mentioned that basically you are trying for price increases in these states will have impacted you negatively. So have you got any hikes in any of the states or cost recently? And what kind of content [Indiscernible] require?
So we got some nice price increases in Rajasthan in March, and [Indiscernible] how much percent it was. Yes, it was double-digit price increase. So we had a nice price increase coming through there. We are looking at opportunities also in some of the early space I mentioned, yes.
Yes. And also 1 thing for Telangana. So Telangana, we would have obviously filed for the [Indiscernible]. So I mean, is there a [Indiscernible] time line in together we will get a response either whether we get it or not it, how is that?
I'm really sorry. I didn't understand the question, the last question.
In Telangana, we would have also filed for the price increases. So is there a timeline that state has -- 1 month movement or a certain time period you will get a notification whether we get it or we don't get it?
Well, we are in the [Indiscernible] of discussion from that one. So we are hopeful to get that price increase also in Telangana. I think our case is quite clear of why we want this price increases due to the strong inflationary pressure on our business. And the official understand our views. We are open really open in these discussions. So hopefully, we can -- you can hear it. They need to do their work to understand it, which is understandable. And we are really pushing for it, and that would be very much if we could get that soon.
Yes. And then lastly, my question is on Tamil Nadu. So -- because of the gain in the route to market, we have lost our presence over there. So I mean a target or a guidance or part where we plan to, say, recover at least 50%, 60% of the market, which we [Indiscernible] on that?
Yes. So like I said in the previous call, we changed the recent markets to the way we believe we want to try with our sales, et cetera, of course, and like I said at the beginning of the call, we see some positives coming through for -- into now going to the summer season of all this coming through for May and June. But I want to be cautious on that in terms of [Indiscernible] for the longer term or not. But it's nice to see that that's happening. And we can see also some excitement at the brewery [Indiscernible] this is happening. But I'm just cautious of [Indiscernible] long term. So -- but like I said, we continue doing our efforts to try and get the volumes, but [Indiscernible].
But ambitiously, I mean, should we expect at least 50% in that market in terms of the lost volumes, say, in a year's time or at a ratio, I mean, can you just [Indiscernible] on that?
Like I said to you, I'm cautious at the moment. We're doing what we can. There is some cost of goods coming through for the next couple of months. But I cannot really say at this time. Even are we working through our way through this and [Indiscernible].
Next question comes from the line of Chanchal from [Indiscernible].
Sir, firstly, the CEO has been released from today, so in terms of management change, new CEO, you can talk anything about it?
Yes. So yes. So this announcement has been a few months back. As you know, he decided to try. We want to do something different. So you've just given me a lot more work, unfortunately, but at [Indiscernible]. In terms of the CEO search, so we are in the process, we are a lot closer, so that is good news. So hopefully, we can come to the conclusion of that in the near term. And that's basically what I know at this stage. So much closer to the decision as you work through this. As [ Heineken ] can also look through this this through [Indiscernible].
Sure. Near term would be 2 to 3 months, I assume?
Well, hopefully, even sooner than that. But yes, that could be, I think, the worst case scenario 3 months, but slight -- let's see. I cannot really give a date at this point in time, should know over the next few weeks a bit more.
Sure. Second question is how big was Tamil Nadu for us in terms of million cases? If you can help us understand?
I think we cut were sort of high single digits in terms of volumes in the past, yes. So I mean, yes, it has an impact. And like I said...
I am asking 2, 3 years back, if I assume 3 years back, how big was Tamil Nadu or how big is Tamil Nadu in terms of beer market, rough numbers, if you can help us understand?
Well, I mean, it was around 7%, 8% of our total volume, so you can just figure it out.
Sure. Sir 70% of total. Thirdly, in terms of operating profit per case, do you internally look at operating profit per case state wise, or how does the -- your profit and P&L account work, because each trait profitability is mixed. And you have called out a couple of quarters because of the state mix of profit is not superior. So do you look at operating profit per case on various state internally?
Yes, we do. Yes, we do. And internally, when regarding to more details of the business, we do we look at the India [Indiscernible] as a total and also [Indiscernible] alcohol and soft drinks in our segments, but we also for each line of purposes. Of course, we look at per case, per state as well. Per brand, per SKU as well, small bottle, large bottle, can, et cetera, [Indiscernible] regarding to that sort of future, correct.
So interesting. And what's the cutoff of operating profit per case below that operating profit per case not operate in a state, or it's not good to operate in a state, and you focus on volume only?
No, definitely. We're not just focused on volume. So not at all. You know well that certain states are more profitable than others. But we are a scale business. Kingfisher is a national brand. It's the multinational brand -- beer brand in India. We want to keep it that way. But we have to make the right calls and do the right revenue management activities, so that we can grow profitability in the states that there is lower profits over time. And that's why like I've said in terms of the state mix where we have some negative impacts, we try and focus our revenue management activities also around there on how we can extract value. Of course, we are in a regulated pricing environment in some states. But as we work through it, and we have the discussions around it, and we show that we have inflationary pressure. We can have a good conversation around it to try and drive price.
So I mean, let me ask you again. I'm just trying to do you have a benchmark operating profit purchase, which you can share with us, if you look at, or it is an operating margin? How do you look at state-wise?
Look, I'm not going to share the type of details in terms of the case, et cetera. And so we have that information, but that's information that's internal that we do not share externally.
Next question comes from the line of Akash [Indiscernible] from Sara Capital.
Sir, we have heard about the operating environment and the scenario and the possibilities of how the operating metrics would pan out maybe. But just to get a sense on some of the strategic initiatives or I mean, how are you planning out what kind of some color on the strategy that you're taking to kind of come back or maybe improve in terms of the overall performance and something -- some color on that would be very useful.
You mean overall?
Yes. From a broader perspective, yes.
Well, we know our strategy really hasn't changed to what we've been saying. So for us, we continue on the same track in terms of category penetration, playing our role as the market leader to grow the category in a responsible manner. That's important for us. But there's a lot of opportunity to grow in a responsible manner to premiumize to look at more cartons for the category. We are now looking much more and more on innovation internally to build an innovation funnel to take more risk with the innovation as well. So that continues. We look at our footprint in terms of where we have our breweries. We've got a healthy footprint, but we can also improve on it in different areas so that we can serve the market better. We looked at also our SKU performance, bottle chance and what is the consumer looking for. So very overall, how we continue to look at the total category. And as a leader, we take responsibility of that as well to do it in the right way and to also ensure that we look at sustainability agenda in the right day as well, which is very important for us in the planning.
Got it. That's helpful. And in terms of the premiumization that you were talking about, how are you looking to take that premiumization mix higher? What are you, I mean, going to do to promote that or something from maybe high [Indiscernible] perspective as well?
So with high [Indiscernible] really focused on certain states. That's important for us. We want to really embed into certain states and to grow the brand and expand the brand market. So it's not enough all like India launch because then we'll be focused and it's not good for the brand. So that is the approach. It's also important for us that we manage the profitability. So we try and in the place where we grow Heineken that we have the right footprint in the production for the brand. So we work to those things as well. In terms of the Kingfisher family with Ultra Max sanction, we find that there's really pockets in India where we believe that there's a lot of opportunity for Ultra and Ultra Max, but then sometimes we just don't have the footprint for production there. And therefore, then the profitability is low in to move volumes into sale. So all these types of things we are working through and to really focus on the premium and drive profitability in premium.
Got it. Got it. And lastly, just any sense if you could give -- is there any possibility of a stake increase from the promoter side coming through something like that?
Which case?
Promoter stake? Is there a possibility for promoter stage being -- promoter stake increase coming through or something?
I can't actually understand the question. So promoter stake.
Sir, the stake from the promoter in the company, is there any possibility for buyback there or a share increase from the promoter is what I'm asking about?
Oh, you mean from the majority shareholder?
Yes, yes, yes.
Not that I am aware of. Not that I'm aware of it no trends like this.
Next question comes from the line of Prashant Kothari from Pictet.
Sir, my question on excise in previous or what about excise increase in average we've seen this year and how does that compare to what we might have experienced in the last few years, any kind of a [Indiscernible] changing trend?
I don't have that information in front of me. But as far as I am seeing and what we have discussions, nothing really that significant, to be honest. So that's the [Indiscernible]. Any changes in mix [Indiscernible] policy has across different states, I haven't seen really significant increases in mix [Indiscernible].
Next question comes from the line of Latika Chopra from JPMorgan.
So quick question. I wanted to check what is the volume and value share of your premium brand in FY '23?
So the volume share we have around around 21%, 22% or so. We don't really track value to be honest.
And what this comparable number be, say, FY '19 or pre-COVID?
It was lower. Cannot recall now, I think it was around -- no, I'm not sure. I know we've grown low single digits or more single digits in terms of market share. But I cannot recall exactly how much that was, but we have grown pre-COVID, yes.
All right, no worries. The second which I wanted to understand was, I know we are going through this whole key compensation period. So I just wanted to check on the thought process here. As you look to increase the share of these [Indiscernible] brands, should we expect a disproportionate decrease in brand spend. And even if you reach somewhere normalized margin, the operating margin uptick will be far more gradual in your view? I'm talking about next 3, 4 year period. And also related to action is, I understand you talked about managing profitability a couple of times. How -- so are you only looking at market shares in premium brands, has that become the key metric for you? You still care about overall market share. So you're okay to kind of let go of new margin page for brand brands in those states and kind of look at building more of the senior portfolio?
Okay. So I'll [Indiscernible] to the last questions, actually that one. So in terms of market share, so definitely, we are under-indexed in premium, so we want to grow share there as well. In terms of overall market share, we do -- we need to balance that directly, right? We want to keep the scale that we have. We want to ensure that within the mainstream segment [Indiscernible] does maintain a strong position, right? So we don't want to lose share within mainstream segments. But as premium grows, it does impact mainstream depending on cost of total category growth. So there can be some shift there, but now we also look rightly or looking at how much is your share in premium, we would better than we're also doing what you see as we get best what is our share in mainstream. We definitely do not want to take our centers. I mean, I want to make that very clear. Kingfisher is a very important brand for us, and it's a fantastic brand. And like I said was that we look at new operations for the brand as well. We do extensions on the brand. So for me, it's an end to end, to be honest. Under premium focus on that grow share, not done this share on Kingfisher. Guidance is between revenue management, activities and the growth of volume. So have that in mind. So it's not at all costs, volume growth, 100% not. And therefore, if you see there is a couple of advantages here and there, we not get a [Indiscernible] about this, right? Not at all. And sometimes, you might lose 1% or 2% change on revenue management activities and so be it. So I think I have summarized this.
Got it. And the last question is on CapEx. Your plan for FY '24, anything to share here?
So our brand for 2024 is strong. I think in the region of around INR 300 crores, yes, around INR 300 crores [Indiscernible] correctly in that ballpark.
Next question comes from the line of Harit Kapoor.
So I just had to go through questions. One that you have mentioned that the ex operating model changes, you have a [ 17% different way ], are you only exlcuding out Tamil Nadu and Andra Pradesh here, or are you also excluding out Delhi and [Indiscernible] receptions in the last quarter?
Did you say [Indiscernible]?
Are you excluding only Tamil Nadu and Andhra Pradesh that you are still excluding operating model changes at 17% growth? Or are excluding out any other states as well, which had some disruptions in the past like Delhi, et cetera.
Yes, so we met 17 [Indiscernible] also excluded Delhi. And we also not operating in Chattisgarh.
Right. So which 4 markets are outside your [Indiscernible]?
So I've included [Indiscernible] that's also included in the 17% to 10%, which is Delhi, Tamil Nadu, [Indiscernible] and Chattisgarh.
Got it. The second was on the price increases. So you had 5% in quarter 4, which is obviously over the years you've received. Given the trend currently, what is the kind of price increase trends you believe you can have for fiscal year '24, given the data that you already have in terms of price side [Indiscernible] at a latest averaging?
Once again, [Indiscernible] single digit. That's it. That's the way of -- and if we think it's more, that would be great. And as we work through that, the revenue management activities are not just around that, but also in terms of any [Indiscernible], et cetera, that we can't be more efficient there. So yes...
Got it. And just a clarification on your presentation, you had mentioned you received price increase in Telangana. That's the old price increase you're talking about in the presentation?
Yes, that is still over, yes, because the [Indiscernible] price increase in '22 happen sort of numbers [Indiscernible] into this [Indiscernible] quarter.
Okay. And so the discussions we're having now of is fresh price increase or as you trying to push the state [Indiscernible], that's what you trying to say?
Yes, we're trying to push for a fresh price increase as you know driven around the inflationary [Indiscernible].
The last question comes from the line of Nillai Shah from Moon Capital.
Just 2 more. So first of all on Tamil Nadu, when this route-to-market change did happen. I remember in a discussion you were doing that the company expects minimal disruption from the Tamil Nadu route to market change. But obviously, it's not the way it panned out. So where were you surprised in terms of how much it can impacted our business?
I do not believe we said that we expect an disruption, we actually -- know what it would be. We took the decision and -- to change our model, where we use our sales force, et cetera. And yes, I mean, the impact has been larger than expected operating and therefore, we see we travel through that target our volumes back in. And like I said, summer looks good, but I'm very cautious on that anyway.
Any possibility of your [Indiscernible] change in other states, especially given that you have a management change, which is on the annual?
At this stage, no, no plans of any evolution market changes. We're looking -- like I said, we continue looking at [Indiscernible] states, and we look at our footprint, our commercial strategy, which always try and improve what we can, but no nothing that give you out challenge at this point.
That's helpful. And just one last thing. In terms of the pricing that we've got through fiscal '23, there would have been a significant shift in the on-premise versus off-premise mix that happened versus last year during that last year had the COVID impact, is some part of the pricing also driven by this mix change? Or this is just pure pricing?
Yes, that's pure pricing. As you know, the on-premise is quite small actually in the market, like I've always quoted before. So it's just pricing really. There's no real mix impact between on and off, put it that way.
Ladies and gentlemen, we have reached the end of question and ask session. I would now like to hand the conference over to Mr. Harit Kapoor for closing comments.
Yes. Thank you, Sanjay. Firstly, on behalf of Investor Capital Services, we would like to have the management team of UBL to give us this opportunity and to host the call. And we'd also like to thank all the participants to spend the time to join us. I'll now hand over to Mr. Radovan for his closing comments. So over to you, Radovan.
Okay. So yes, so I think just looking forward, like I said, we continue to drive value out of the business in terms of top line, on our revenue management and a focus on our cost base. And we remain optimistic on the long-term growth potential of the industry, like I said before, and I think you can all remain positive in that respect. And yes, I look forward to our next call. I wish you all good afternoon, and I hope all of you will enjoy our Kingfisher over the weekend. So thank you very much.
Thank you. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us. You may now disconnect your lines.