VBL — earnings call

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Prepared remarks

Moderator · Conference Operator

Ladies and gentlemen, good day, and welcome to Varun Beverages Limited

Questions and answers

26813665 Varun Beverages Limited

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

The first question is from the line of Percy Panthaki from IIFL.

Please go ahead.

Percy Panthaki

Before Pepsi acquisition, you had shared that your market share in south and west would be around 25% and in your existing geographies, it was about 40%.

Now, of course, we do not expect you to update us on this on a regular quarterly basis, but since it's been three years since then, would you give us an idea on what kind of market share it is today versus what you had shared earlier?

Ravi Jaipuria

After our acquisition, we had limited progress, since last two years’ peak season was affected due to COVID.

Our focus was to enhance our go-to market, increase our distribution, which we had started in 2019, but could not completely go through with it till 2021.

This is the first year where we are seeing that the change happening and our distribution enhancement is starting to give us encouraging results so that is why you are seeing better numbers.

We are also witnessing better results in the off- seasonal quarter, because the territories which we had acquired have started doing well.

Percy Panthaki

If I look at this quarterly result and try to calculate the organic volume growth on a three-year basis using three years, because two years also is not a normal base, because of COVID.

So now we have to look at three years.

So on that basis, the organic volume growth for the India business is 10.5%.

I just wanted to understand whether the industry itself is growing at this rate or is it market share gains, which is leading to such robust growth because in this kind of a consumption environment, no other FMCG company is reporting a 10% kind of volume growth.

In fact, most of them will report close to zero volume growth this quarter.

So just understanding the source of this growth, is it broad based industry growth itself and if so, why is this industry so different from the rest of the FMCG pack?

And if not, then obviously it's a market share gain for you.

Ravi Jaipuria

Well, partly the industry is growing, it is not only that we are growing.

We believe competition is also growing.

But We can't really be sure of market share gains because those numbers are not available.

Our increased focus on go to market is giving us some results.

Overall, if you look at it, the summer season started a little earlier.

So I think everything put together real enhancement in go to market, which is the key issue in this trade and putting enough chilling equipment is what is helping us grow the market.

Percy Panthaki

Any data you can share on, the increase in distribution touch points, or the increase in the chilling infrastructure, that you have effected?

Raj Gandhi

We are increasing our penetration in the market, not only by increasing distribution and go to market, but also by enriching our product portfolio over last year.

If you see, in the last two years, what has changed for us is Sting, which is an energy drink.

Last year, the growth in Sting volume was ~440% and contributed ~5% to our mix.

In this quarter it has grown ~131%.

In dairy products we are already running at full capacity.

In case of Tropicana there were two phases, firstly getting the franchise rights for Tropicana from PepsiCo which had never franchised it anywhere in the world.

Secondly, since last 10-15 years it was getting co-packaged from third parties, whereas we put up a facility, started in-house production and made it profitable so that we could grow it profitably.

We are already at 100% capacity utilization on Tropicana, and we expect to develop further capacity by next year in this segment since there is huge potential.

So, other than go to market, product portfolio enhancement is another factor.

Percy Panthaki

Also, can you give us, some guidance on your CAPEX, not the total amount, but things like in the international geographies, where do you think if at all, you would require capacity enhancement and whether it can be done through a brownfield, or would you need a greenfield and similarly in India, now that you have a robust footprint, presence in almost every state, do you think that most of the capacity enhancement in India can also be done through brownfield rather than greenfield given that most of our facilities have excess land on which brownfield expansion can be done?

Ravi Jaipuria

We try and enhance our capacity wherever it is possible by brownfield expansion since we have plants in most of the States.

In some of the locations, even though we can put up another line, the amount of water we draw does not allow us to put any more lines there.

So, that is one of the conditions, which necessitates some of the brownfield expansion into greenfield expansion.

The one large State, where we didn't have a plant was Bihar.

We have just started commercial production there and that is doing extremely well for us.

Raj Gandhi

Percy, as disclosed in our results presentation, in Sandila, we did brownfield expansion, and in Bihar where we did not have any plant, as mentioned last time the decision to put up a plant was driven by arbitrage between freight versus fixed expenses and that proved to be a good decision.

This additional capacity is helping us get the growth in the region.

So, it is going to be a mix of the two, at least for some more years.

On international front, last year we had doubled the water capacity in Morocco, but due to Delta variant, we could not complete the expansion during the season and it was completed in August.

It is expected to give results this year.

In Zimbabwe, we are adding capacity by end of May or early June this year, which is just before the season.

The capacity increase in Zimbabwe is because last year Zimbabwe got support from Zambia, however, this year Zambia will be feeding DRC, where we are not going to make any investment.

So, these are the international CAPEX plan.

Percy Panthaki

In terms of monetary amounts, what is the rough number for CY ‘22?

Ravi Jaipuria

This year it won't be very large because the water line was already put last year in Morocco and DRC is going to be fed from our Zambia plant.

It's only one line, which we are adding.

So about $10 million to $15 million in the total CAPEX we are looking at internationally.

Moderator · Conference Operator

The next question is from the line of Himanshu Nayyar from Yes Securities.

Please go ahead.

Himanshu Nayyar

Firstly, just to understand this quarter’s performance, I mean, there was a commendable reduction in expenses below the gross margin line.

So just wanted to understand, is this completely operating leverage or there were certain one-off benefits or cost reductions as well that we sort of saw.

Just wanted to understand whether we can operate broadly at these level of employee and other expenses basically and can we benefit significantly in that case once the gross margins starts recovering again.

Raj Gandhi

Since volume has gone up and there was not much change in fixed expenses this is mostly due to operating leverage.

Himanshu Nayyar

If this sort of volume growth continues for us and once the gross margins recover, we should be looking at significant margin expansion?

Raj Gandhi

In the current quarter because the demand was quite strong and the commodity prices had gone up, we curtailed the discounts to the maximum.

These discounts may come back once the price increase happens, so we don't see a big jump in the profit margin except due to operating leverage.

As we have stated in our earlier call, about 23% of our annual volume, we do in the first quarter and second quarter is 1.5x equivalent of the first quarter's volume.

So because of this operating leverage, the operating margin in next quarter is expected to be much better than the first quarter, while it is not true for all the four quarters.

Third quarter may be similar to first quarter, however fourth quarter will be depressed

Himanshu Nayyar

In terms of gross margins, can you talk a bit about in the current quarter, how are we seeing our raw material prices, whether we might need some amount of price hikes?

Ravi Jaipuria

We have enough inventory of our key ingredients - PET resin, for the full season so we don't see any challenge on that front, even if the prices go up.

Since we are already sitting on stock with us and concentrate is fixed there's nothing to worry.

Sugar prices are reasonably within the same range maybe Rs.

1-2 up or down.

So, we don't see any further cost escalation.

The competition has taken some price increase and we have also taken some price increases, the benefit of which will come in this quarter.

Himanshu Nayyar

I think we've taken a Rs.14.5 crore write off on some plant and machinery but we don't see that, flowing through the P&L, so is it a direct adjustment from the balance sheet that has happened in that case?

Raj Gandhi

It is flowing through the P&L under other expenses.

This was primarily a glass line along with a small can line.

As we had already shifted the water line as part of the consolidation process to another plant and we were left only with the glass line and small can line.

Since glass category is not growing, and in our experience the cost of production per case in larger plants is substantially lower, the Company took a write off of this line.

In the next few years we are going ahead with the consolidation process.

Therefore, you know, there can't be a straight answer like in the earlier question that will everything be brownfield, because consolidation is going to be key next few years.

Himanshu Nayyar

So, adjusting for this Rs.

14.5crore, are operating margins even higher because you're saying this Rs.

14.5 crore is a part of other expenses.

Raj Gandhi

That's right.

Moderator · Conference Operator

Thank You.

The next question is from the line of Shrenik Bachhawat from LIC Mutual Fund.

Please go ahead.

Shrenik Bachhawat

Could you please explain if electricity issues are being faced in various parts of the country?

So will that impact our business in any form going forward?

Ravi Jaipuria

Well, we are not facing any major electricity issues anywhere, but if there is any electricity issue it doesn't affect our business, because we are fully backed up with generators.

So with respect to overall production, there will be no constraint.

It might be that if there is less electricity, the cost might go up slightly because of generators, but it's not very significant.

Shrenik Bachhawat

I mean to say from the distribution side, the retail outlets and will they be affected?

Ravi Jaipuria

We are not seeing any challenges of now.

Shrenik Bachhawat

Could you share the utilization level currently and previous year, if I am not wrong, it was around 60% - 65% in the peak season?

Ravi Jaipuria

Due to COVID we didn't have a peak season in last two years, however, this year we are trying to utilize our lines as much as possible.

Shrenik Bachhawat

Could you share the volume growth expectations and EBITDA margin expectations for CY22?

Ravi Jaipuria

Well, we have just said that, our first quarter is about 23% of the yearly mix, so hopefully the volume should be based on that and EBITDA margins are always higher in the second quarter because of the growth in volume.

So it's looking quite healthy.

Shrenik Bachhawat

Now, on full year basis.

CY22 full year margins, what can we expect?

Ravi Jaipuria

We did ~21% in 2019, which is our normal margins.

For us, it'll be a little difficult to give any guidance beyond that.

Moderator · Conference Operator

Thank you.

The next question is from the line of Dhruv Bhimrajka from Monarch AIF.

Please go ahead.

Dhruv Bhimrajka

What would be our volume split between domestic and international market for the first quarter?

Raj Gandhi

Out of 180, 147 is India, balance is international.

Dhruv Bhimrajka

As of the quarter ending Q4 CY21 we had a net debt of approximately Rs.

3,005 crore.

So in these four months, what is the debt that we have repaid, if any, and what would be a net debt as on date or as the end of the first quarter.

Raj Gandhi

Our Net debt as on 31st March was approximately Rs.

3,100 crore and that includes additional financing for inventory, which we created for PET stocking.

Dhruv Bhimrajka

Okay.

So there's no debt repayment as such in the first quarter?

Raj Gandhi

Yes, because in this first quarter we have paid for the CAPEX for Jammu plant, which is for backward integration, for, Sandila plant, which is a brownfield expansion and for Bihar plant, which got implemented in this month.

So we have incurred CAPEX without raising any additional debt.

Dhruv Bhimrajka

In CY22, you said for international markets, there would be a $10 million to $15 million CAPEX.

So how much would it be for the India market then?

Raj Gandhi

Up to May 2022, $10-$15 million, has been paid already from the internal accruals, so there’s no debt increase.

For India, what we are saying is that capex incurred will be equal to the depreciation for an organic growth of approximately 12%, however if we grow, say 1.5x of this growth then the capex will be 1.5 times depreciation and if we grow 2x then it will be two times depreciation figure.

We have given a guidance through this formula and projecting future is a little difficult.

By June end we will know broadly in which direction we are going ahead and we'll be firming up our CAPEX plans and we'll be able to share.

Moderator · Conference Operator

Thank you.

The next question is from the line of Jaykumar Doshi from Kotak.

Please go ahead.

Jaykumar Doshi

My first question is 16%- 17% volume growth in India is very impressive in context of what we are seeing in FMCG as well as, you know, alco-beverages company that has recently reported.

So is this growth, broad based across geography and is the environment conducive for you to grow double digits in north and east markets as well?

Ravi Jaipuria

This has been broad based, so it's not only the south and west.

The growth has been reasonably good throughout the country, depending on the rains and the weather, but mostly it's been broad based.

Jaykumar Doshi

So from south and west, when will we see accelerated growth in this season or you think that it'll be next season?

Ravi Jaipuria

Well, we believe we are already seeing accelerated growth from south and west and all the territories, which we have acquired.

So wherever there are very weak territories, we are seeing additional growth coming in.

Jaykumar Doshi

So it just started to contribute?

Ravi Jaipuria

It has started.

Jaykumar Doshi

On international markets 30% volume growth is very good.

Other than Sri Lanka, are you seeing any kind of operating challenges or currency related issues in any market, or do you see any risk in context of inflation?

Ravi Jaipuria

No not really.

Even in Sri Lanka, business wise we are still doing all right.

We would be one of the few companies, which is continuing to grow in Sri Lanka.

Obviously, the foreign exchange challenges are there, which we are managing but it's a small part of our overall business.

And actually, if you look at the first quarter growth, Sri Lanka has grown at 37%.

So Sri Lanka is also growing for us.

Jaykumar Doshi

I would assume its local currency; it must be local currency 37% growth.

Raj Gandhi

This is actual volume growth.

Jaykumar Doshi

The partnership with Pepsi in foods business and starting as a co-packer, so are their other players globally in other markets where this model has evolved?

And the idea of asking is, beverage is a well-established model of bottling all across the world and it's a very high margin business as compared to foods business.

So are there similar partnerships that have evolved which where we can look and get a better understanding?

Ravi Jaipuria

Not to our knowledge, we might be the first to foray.

We are also learning from it that's why it'll be an interesting start and let's see where it takes us.

Moderator · Conference Operator

Thank you.

The next question is from the line of Nihal Jham from Edelweiss Securities.

Please go ahead.

Nihal Jham

If you had to compare say from three years back, has there been any significant change in the product mix other than say the Sting being added versus CY19?

Ravi Jaipuria

All the three categories Sting, value-added dairy and Tropicana juice has done extremely well for us.

Sting has been a very strong performer for us apart from our core business, which is CSD, juices and water.

Nihal Jham

Would it be possible just to give an approximate proportion of what these three specific products would make up at this point of time of total volumes?

Ravi Jaipuria

Sting is about 6%-7% of our mix, Tropicana is 2% and dairy is about 0.5% for the time being..

For value-added dairy and Tropicana, we ran out of capacity and are producing 100% to what our capacity is.

And it’ll not show a seasonality dip or jump because we'll continue producing 100% of our capacity.

That's basically the capacity of the unit, which we had put up in Pathankot.

Since Tropicana and dairy both are fungible on the same equipment, which together is giving us about 2.5% mix and about 7.5% Sting.

So, between the three products, the mix is ~10%.

Nihal Jham

Which you can say would be close to a negligible at least two to three years back.

Ravi Jaipuria

Which was practically not there.

Nihal Jham

That is very helpful.

The second question was on this Puffcorn arrangement.

I know we've answered.

But just at this point in time while the current arrangement is a co- packing, is there a discussion on the table that you take up the distribution similar to the beverage business, and would this also require a manufacturing setup?

Ravi Jaipuria

We believe it's a bit too early, let us start with the first unit.

Let us understand this and right now it's a co-packing arrangement only.

So we think we'll stick to that for the time being and understand it before we can talk anything more.

Nihal Jham

My last question was on the debt side.

You've obviously given a strong run rate and performance.

There will be significant cash generation that will accrue in second quarter and for the year.

Is it fair to assume that most of this will be used for say debt repayment or, how should we look at it?

Ravi Jaipuria

We believe part of it will be definitely used for debt reduction and some of it will be used for CAPEX enhancement because with the run rate, the growth, which is happening, we would have to spend some more money on CAPEX.

Moderator · Conference Operator

Thank you.

The next question is from the line of Devanshu Bansal from Emkay Global Financial Services.

Please go ahead.

Devanshu Bansal

Sir, to build on the question asked earlier on international deals.

The base quarter was also quite strong here and, on that base, we have grown about 30% in volumes.

So just wanted to understand the drivers of this strong growth as well as any outlook here that you can give us for the coming years would be helpful.

Ravi Jaipuria

If you look at Morocco, by the time we were able to put up our additional line, it had passed the season because of COVID.

So that enhancement of the additional line has started giving us results now.

In Zimbabwe as well, the addition that we did last year has started giving us results.

Sri Lanka has also done very well.

Morocco has given approximately 50% growth for us and Zimbabwe has done well for us.

Actually, all the countries have done well for us.

The overall business has improved and we expect some good results going forward.

Devanshu Bansal

Sir, going ahead, any outlook you can provide as in if Morocco now CY22 would be a good base and upon that what is your outlook on growth in these geographies?

Ravi Jaipuria

Well, Morocco has become a reasonable sized business for us and because of the growth in volumes, it has become a profitable and good business for us.

Devanshu Bansal

How is the traction for our other new launch Mountain Dew Ice and are there any marketing plans that we intend to launch going ahead?

Ravi Jaipuria

We think we have got our hands full this year with Sting and Mountain Dew Ice, which was already launched last year.

It is doing extremely well for us.

With value added dairy as well as Tropicana we have got enough.

Products like Gatorade are also doing extremely well this year for us.

So we think we have enough products apart from our core business, which is growing at a very healthy rate.

Devanshu Bansal

Sir, I was specifically asking for Mountain Dew Ice, not a new product.

Ravi Jaipuria

Mountain Dew Ice is doing well for us, with whatever limited capacities we have, we are producing it and it is selling to the capacity actually.

Devanshu Bansal

In terms of PET stocking that we did in December 2021, what would be the crude price levels at which we stocked PET in December?

Ravi Jaipuria

That's very difficult for me to, but we bought it at a reasonably cheaper price because we bought it mostly at the end of the year.

Raj Gandhi

Apart from price, the second reason was de-risking against the logistics issues and we still have enough for the whole season.

Ravi Jaipuria

We’re pretty well covered, may be little more than H1.

So maybe even the third quarter is reasonably covered.

Moderator · Conference Operator

Thank you.

The next question is from the line of Sumant Kumar from Motilal Oswal.

Please go ahead.

Sumant Kumar

Can you talk about the out of home consumption trend and how is the contribution in this quarter?

Ravi Jaipuria

The biggest growth is coming from out of home consumption now.

Since people are outside, there has been significant increase.

Till last year, in - home consumption was major contributor, but now in-home consumption is about 30%- 35% and on the go is about 65%.

Sumant Kumar

Okay.

So, the major volume growth happened in this quarter is due to 60%- 65% volume growth from out of home consumption?

Ravi Jaipuria

Out of home is more because there are no more restrictions, so everybody is going out unlike before which was mostly at home.

Sumant Kumar

6% realization growth can this trend continue for the coming quarter?

Ravi Jaipuria

Looks like.

Sumant Kumar

What is the CAPEX number for CY22?

Ravi Jaipuria

If it is about 10% growth, our CAPEX would be approximately similar to our depreciation level.

If this growth doubles, then our CAPEX would approximately, in line with the growth, be double of our depreciation level.

Moderator · Conference Operator

Thank you.

The next question is from the line of Rakesh Roy from Indsec Securities and Finance Limited.

Please go ahead.

Rakesh Roy

Can you highlight on international business, especially in line with the Sri Lanka and Nepal issues?

In Nepal, they are trying to restrict some import from other countries.

Ravi Jaipuria

They are not restricting manufacturers.

That is for luxury goods basically for traders.

It's not for manufacturers, and it’s not impacting us at all.

In Sri Lanka, we all know there is a foreign exchange crisis, which we are managing.

The business is doing extremely well we are managing with it and it is a small part of our total business.

I think we just need to wait and see what happens, we feel they'll come around, it may take three to six months, we don't know but we are managing and our franchisor is also supporting us.

Rakesh Roy

Out of India total volume, how much is the South-west volume?

Ravi Jaipuria

About one-third.

Rakesh Roy

Can you give me the idea how much is geography-wise mix?

Ravi Jaipuria

Every quarter is a different mix because seasonality is different for every quarter.

We've not had a proper full year, which we hope we’ll get this year.

So we think you should give us this year to really find the real mix of each geography.

It won't be right to give the mix for summer, April, May and June is always higher in North, while in South and West months like October, November, December, or January, February and March would be better.

Every quarter is a different mix.

Moderator · Conference Operator

Thank you.

The next question is from the line of Sanjaya Satapathy from Ampersand Capital.

Please go ahead.

Sanjaya Satapathy

I just wanted to confirm this Rs.

15 crore in WDV that you said, so we should reduce our other expense and see the normalized margin by adjusting that, that is what you said, right?

Raj Gandhi

That's right.

Sanjaya Satapathy

Yes.

So that is 19%.

Typically this quarter one is 23% of your sales volume.

Am I right sir?

Ravi Jaipuria

Approximately.

Sanjaya Satapathy

This 25% CAGR over a two-year period that we are seeing, so is it sustainable because historically you have been saying that this beverage business will grow at about 10% to 15% volume growth annually.

So, are you saying that this kind of a growth is bit of a one off and it will come back to that level pretty soon or you are saying that, because of the initiative that you have been taking, you’ve been getting some kind of market share and that is why one can look for not 10%, but rather 15% of a sustainable growth in future?

Ravi Jaipuria

Well, we’ve always said the market should be growing at 10% to 15% and we will always keep trying to do better than that, but will we succeed or not we don't know.

Our job is to keep trying.

Sanjaya Satapathy

If at all, you will be successful that will be due to this foray into south, which will turn around and also these factories that you are expanding, right?

Ravi Jaipuria

We hope so.

Sanjaya Satapathy

I am seeing that between your different categories, this juice segment is kind of relatively subdued.

And is there any explanation for that in terms of the outlook and how it'll kind of also clock growth which is similar to the other segments?

Ravi Jaipuria

Well, as we had said, the juice is not really subdued.

It's done extremely well, but we have run out of capacity on Tropicana.

As soon as our second facility will be ready we expect to see a 100% growth on that when the facilities are ready.

Sanjaya Satapathy

And when will that be ?

Ravi Jaipuria

Hopefully, it should be next year sometime.

Sanjaya Satapathy

In terms of margin, while gross margin has gone down, you have done some operational savings.

I thought that you were talking about some kind a 21% kind of EBITDA margin.

Ravi Jaipuria

Our first quarter is a subdued quarter and our EBITDA margins are always lower in Q1. If you see our second quarter, you'll see our margins much higher.

So on an average throughout the year, it averages out to about 21% and that's the guidance we have been giving basically.

Sanjaya Satapathy

Despite the raw material prices going up so much.

Ravi Jaipuria

That's right.

Moderator · Conference Operator

Thank you.

The next question is from the line of Alisha Mahawla from Envision Capital.

Please go ahead.

Alisha Mahawla

With respect to the Kurkure Puffcorn, what is the kind of investment that you're looking to make?

Ravi Jaipuria

It's a very small investment.

We are testing it out.

So it's about Rs.

20-23 crore,

Alisha Mahawla

Okay.

And this is only for co-packing.

We are not going to be doing any manufacturing.

Ravi Jaipuria

We will be producing and co-packing for PepsiCo.

Alisha Mahawla

Do we have selected geographies?

Ravi Jaipuria

No, it's their choice wherever they want to take it.

We just have to produce it and give it to them and where they will sell it, is their call.

Moderator · Conference Operator

Thank you.

The next question is from the line of Suvarna Joshi from Quantum Adviser.

Please go ahead.

Suvarna Joshi

What is the mix between price hike and the product mix which is contributing to the 6% odd kind of a realization improvement on a Y-o-Y basis?

The second question is, I wanted to understand the mix in terms of SKUs.

Now, when we were in the COVID period and in-home consumption was very high.

We had seen that larger pack sizes were doing much more sales and now with out of home consumption being the driver, I'm certain that it is more to do with the smaller ones.

So can you just indicate as in what kind of pack sizes are doing better for us and how do we stand over here despite the gross margin pressures that we are seeing?

Ravi Jaipuria

See, fundamentally you are absolutely correct that as the market has opened up the small size SKUs, 250 ml bottles, single serve bottles have started doing extremely well.

The major growth is coming in that pack and as far as the margins are concerned, partly due to the increment in pricing which has been very small, but what we've been able to do is reduce our discounting as the demand is high and we've been able to convince the distributors and retailers that the costs have gone up.

So we will not be able to give that kind of discounting.

Suvarna Joshi

So, it is not the effective price hikes that we have taken which has led to this

Ravi Jaipuria

Partly, I would say, with the 6%, maybe 1% or 2% is pricing and the balance is efficiency and of course cutting discounts.

Suvarna Joshi

And how much of it would be from the product mix?

Ravi Jaipuria

Product mix, I don't think has made that big a difference.

It's basically minor difference, of course, single service is more profitable, because it's on the go pack.

So all the things mixed together has given us a 6% improvement.

Moderator · Conference Operator

Thank you.

The next question is from the line of Devanshu Bansal from Emkay Global Financial Services.

Please go ahead.

Devanshu Bansal

Sir, continuation with the earlier question, I just wanted to understand are in-home consumption trends sustaining or you are sort of seeing a decline with on the go picking up?

Ravi Jaipuria

We would not say declining, but the major growth is coming from on the go.

People are going out they're drinking out.

The restaurants have opened, hotels have opened, cinema halls have opened, people are traveling from one place to another.

So railway stations, bus stations, all that has opened up so that is where the major growth is coming.

But we don't think the habit which has been formed by drinking at home has come down.

Devanshu Bansal

Sure.

If I understand it correctly, the distributor commissions or discounts that you used to sort of account for have now been moved below gross margin level, so is this understanding, correct?

Ravi Jaipuria

The commissions have not been changed.

It's just that, because of the cost, all the beverage companies that were giving more discounts in the market have felt the pain.

So we have curtailed part of the discounting and partly it has got covered up by the extra volume which we are doing.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen, this was the last question for today.

I’d now like to hand the conference over to the management for closing comments.

Raj Gandhi

Thank you very much.

I hope we have been able to answer all your questions satisfactorily.

Should you need any further clarification or would you like to know more about the Company, please feel free to contact our Investor Relations team.

Look forward to interacting with you soon.

Thank you very much once again.

Disclaimer

This is a transcription and may contain transcription errors.

The transcript has been edited for clarity.

The Company takes no responsibility of such errors, although an effort has been made to ensure high level of accuracy.