Marico Ltd Q1 2022 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Avi Mehta - Macquarie Research - Analyst : My question was on the RPI for Saffola that you were kind of -- is it fair to kind of -- what I took away is that you would look at it from a constant currency basis as in absolute rupees value rather than a percentage basis as the deflation cycle or whenever the deflation cycle kicks in?

Question: Avi Mehta - Macquarie Research - Analyst : Okay. So the difference percentage divergence also between -- would also kind of change effectively dependent on where the -- there is a deflationary/inflationary cycle, that is how...

Question: Avi Mehta - Macquarie Research - Analyst : Okay, sir. Got it. Clear. Sir, no, I was trying to link it up with the 3-brand strategy that you have kind of evolved, which is the Active -- and is that -- are those gaps also something that you are kind of -- when you talk about RPI or was it just the entry level that you were talking about?

Question: Avi Mehta - Macquarie Research - Analyst : Got it, sir...

Question: Avi Mehta - Macquarie Research - Analyst : Okay, sir. And sir, on the digital brands, I just had a small question. You did kind of allude towards Coco Soul being one of the brands that would be digital. Could you kind of share in that experience, is the playbook very different? Because my understanding was that Coco Soul is largely an

Question: Avi Mehta - Macquarie Research - Analyst : Okay. Sir, let me rephrase it. Would you argue that the playbook would be very similar? I understand with personal care, but do you think that the playbook for digital brands differs a lot between foods and nonfoods?

Question: Avi Mehta - Macquarie Research - Analyst : I mean, I was recently looking at honey. I know it's not exactly the same, but that -- if you could kind of give from that perspective, how do you -- and that then kind of boils down to what are the kind of brands that you're looking when you look for acquisition or what kind of brands would you kind of consider? Is this only like honey that you (inaudible) or something very different? If you could help us understand this better.

Question: Avi Mehta - Macquarie Research - Analyst : Like honey. So is it like honey or is it like...

Question: Avi Mehta - Macquarie Research - Analyst : Okay. So would it be fair to read them, given we have been kind of looking at this profitability lens as well that your focus would be largely on the personal care segment when you say digital...

Question: Harit Kapoor - Investec Bank plc, Research Division - Analyst : I just had 2 questions. You mentioned -- you typically mentioned the margin band in the previous quarter saying that it would be in the 19%, 20% band, probably at the lower end, given that you had such an inflationary quarter and yet managed a 19% operating margin for the business, I mean, is there a possibility of upside, given business recovers back potentially, especially on the inflation side? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2021 / 12:30PM, MRCO.NS - Q1 2022 Marico Ltd Earnings Call

Question: Harit Kapoor - Investec Bank plc, Research Division - Analyst : Right. Right. Fair points. The second part is the international margin performance, and I'm looking at more like a gross margin performance. And the impact there has not been so severe. So is that the difference -- because we also have copra prices having a large impact because Bangladesh is a large copra RM business for us. I just wanted to get a sense from you, is it that the only the major difference between international and India is the edible oil side, and that's really the big difference on the gross margin?

Question: Harit Kapoor - Investec Bank plc, Research Division - Analyst : Got it. I was just asking from the lens that while Bangladesh is 50% of revenue, it's a much higher proportion of the EBITDA internationally.

Question: Kunal Vora - BNP Paribas, Research Division - Analyst : Sir, on international, you mentioned that there are certain headwinds in markets like Bangladesh, Vietnam, South Africa. And your base going forward also is high compared to what you had in 1Q. So would double-digit growth, which is a medium-term target, be difficult to achieve for the rest of the year?

Question: Kunal Vora - BNP Paribas, Research Division - Analyst : Sure. Okay. Second and last question about your pricing strategy going forward. Assuming RM price cools off, like you've seen for copra to an extent, which are the segments in which you will be open to reverse the price hike? Like it looks like in case of edible oil price hikes, like price cut is a possibility, while Parachute, it might not be? So just your thoughts on what can we expect in pricing going forward.