EPL LIMITED — Call Transcript 2022

Feb 16, 2022

16 February 2022

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Sub.: Transcript for Investors Call held on 9 February 2022.

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EPL LIMITED

"EPL Limited Q3 FY2022 Earnings Conference Call"

February 09, 2022

ANALYST: MR. PRATIK THOLIYA – SYSTEMATIX INSTITUTIONAL EQUITIES

MANAGEMENT: MR. ANAND KRIPALU – MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER – EPL LIMITED MR. M.R. RAMASAMY – CHIEF OPERATING OFFICER - EPL LIMITED MR. PARAG SHAH –CHIEF FINANCIAL OFFICER - EPL LIMITED MR AMIT JAIN - SENIOR VICE PRESIDENT CORPORATE FINANCE - EPL LIMITED MR. SURESH SAVALIYA - SENIOR VICE PRESIDENT LEGAL AND COMPANY SECRETARY - EPL LIMITED MR. DEEPAK GANJOO - PRESIDENT AMESA REGION - EPL LIMITED

Moderator: Ladies and gentlemen, good day, and welcome to EPL Limited Q3 FY2022 Earnings Conference Call hosted by Systematix Institutional Equities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing "*" then "0" on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Tholiya from Systematix Institutional Equities. Thank you and over to you Sir! Pratik Tholiya: On behalf of Systematix Institutional Equities I would like to welcome all the participants in conference call of EPL to discuss the third quarter nine months FY2022 results. From the

management team today, we are joined by Mr. Anand Kripalu MD & CEO, Mr. M.R. Ramasamy COO, Mr. Parag Shah CFO, Mr Amit Jain Senior Vice President Corporate Finance, Mr. Suresh Savaliya Senior Vice President Legal and Company Secretary and Mr. Deepak Ganjoo President AMESA region. At the outset I would like to thank the management for giving us the opportunity to host the conference call. Now I would like to invite Mr. Anand Kripalu for his opening remarks and to discuss the financial performance post which we will open the call for Q&A. Thank you and over to you Mr. Kripalu!

Anand Kripalu: Thank you very much and hello everyone and good evening. Thank you for joining this call. We delivered another quarter of robust revenue growth at 14.9% in Q3 where the underlying growth was 11.6%, so it is robust double-digit growth and this growth was broad based across regions and categories. As far as the regions are concerned, revenue growth was lead by AMESA which is Africa, Middle East, South Asia to basically India and the surrounding countries, which grew at 35.7%, which we believe is hugely market leading. EAP East Asia Pacific which grew at over 20% and the America which grew at over 9%. Europe continued to be challenged where the underlying growth of Europe was just over 2% and that was as a result of a decline in the personal care category due to the COVID situation; however, Europe oral care grew double digit. Importantly there was no wallet share loss in Europe so we expect the situation to turnaround very soon. Overall as far as categories are concerned, oral care grew by 7.4% and personal care in line with our strategy grew at a much faster 19.4%. EBITDA margin in the quarter stood at 15.7%, it was impacted by continuing hardening of raw materials and freight cost. Margins were also impacted due to higher personal cost due to absenteeism and overtime particularly in certain geographies because of COVID. A judicious mix of price increases and cost efficiencies are being realigned as we speak. Barring any unforeseen volatility we believe margins have bottomed out and we should see margins recover going forward.

Net profit declined 19.5% compared to the previous year but sequentially improved by 12.6%. Net of one-off PAT was down by 17.2%. Net-net I do want to say that the context we are in is no different to the context for the larger industries that is facing not just high inflation but also high volatility on commodity. With the recent tampering of input costs and all the interventions that we are doing some of which are we talk about we feel confident that future margins will be better than the current. Our ambition as a company is to be the most sustainable packaging company in the world. We believe that this will ensure our long-term performance and be a critical driver of sustainable competitive advantage. We know that most of our customers have made big commitments to become more sustainable and to move to recyclable packaging over the next 5 to 10 years, so this decade we will see a big transformation in companies that can offer sustainability has a product advantage. Hence we are driving sustainability as a company with global focus. Both for our customers as well as our efforts to internally become a more sustainable organization.

Now as far as customers are concerned, we continue to lead in the area of sustainable solutions. We recently added Vicco to our list of customers who partnered us on sustainability and that adds to the list that already contains Colgate, P&G, Unilever, Hela, and GSK. Apart from the work we are doing to provide sustainable solutions to our customers in this previous quarter we have also continued to make strides in our journey to become more sustainable as an organization. We joined the Ellen MacArthur Foundation's New Plastic Economy Global commitment. We became a signatory to UNGC which is United Nation's Global Compact, we were rated "B" by the carbon disclosure project CDC for climate change and water security and importantly we won the prestigious "Best Governed Company" award at the 21st ICSI National Award for Excellence in the category of Corporate Governance, which I am sure all of you as investors would be happy to note. So that is really about our performance and review of the previous quarter in terms of numbers and what we are doing on sustainability. Looking ahead our objective is to drive sustained profitable growth and that remains our top priority. We have a very strong business development pipeline, which will ensure we continue our double-digit revenue growth momentum. In order to drive globe even further and as part of our continued efforts to explore opportunities not just in our existing markets but also in virgin countries I am very happy to share that we are making an entry into Brazil on the back of a long-term contract with the leading multinational company. This underscores the trust that EPL enjoys with its global customers and follow the very successful model of new market entry as we have done already in the past in the case of the United States, Egypt, and China. As you would expect a comprehensive end-to-end company wise margin improvement programme is underway. This includes a fresh round of price increases as well as driving mix improvement even harder. Cost saving initiatives includes increase in-house manufacturing

of cap enclosures rather than buying them from the outside. A global inter-regional and inter-plant competition to further reduce scrap and wastage and improved sourcing strategy being led by experts and the critical relook at our organization design to enhance not just efficiency of our organization but also to improve effectiveness. These programmes will ensure that margins improve. So despite short term challenges faced by the larger industries we continue to deliver strong double digit revenue growth and barring any foreseen volatility we also remained confident that margins have bottomed and that the journey towards recovery is underway.

Finally I would like to make an announcement. We are going through a change of CFO. I am delighted that Amit Jain who many of you have interacted with already in his role as leading investor relations amongst other things who will be becoming CFO effective April 1, 2022. Amit has had a solid tenure of nearly a decade with EPL and understands this business deeply. He will take on the mandate of driving performance management even harder and in particular leading the journey on overall margin recovery, which as you all understand is a top priority. Parag Shah, our current CFO will be leaving the business for personal reasons, he will continue to be CFO till March 31, 2022. I would like to take this opportunity on behalf of all you on the line to thank Parag for his many contributions over this very critical period and on behalf of everybody I would like to wish him the very best in his future endeavours. So with that we are opening up the line for questions.

Moderator: Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Sanjesh Jain from ICICI Securities. Please go ahead.

Sanjesh Jain: Thanks for giving me the opportunity. Few questions first on the Brazil we said that we have signed a long term contract with an MNC customer can you just elaborate what will be the investment which will be required, are we planning to put up a factory there or to start with we will source the finished product to the Brazil, what is the contract we are looking at because your presentation said that the opportunity of overall tube that is 3.5 billion how much out of it is laminate and what is the kind of market share we are aiming to get in Brazil, related question is on the operational bid in Brazil do we expect to initially start with losses and then breakeven at EBITDA level or it is just a trading agreement and we will supply so it will directly contribute to the EBITDA that is in the first set, second set is on the inflation the raw material inflation in Q3 looks much more benign than the previous quarter while our margin continues to decline have we passed on entirely we were anticipating raw material to cool off so we have passed on partially and partially we were anticipating it to reduce or are we completely passing on the raw material price and I just

wanted to understand the pricing structure we are looking at and by when should we reach that to that 59%, 60% kind of gross profit margin, which we were doing earlier?

Anand Kripalu: Let me first talk about Brazil. The fact is this that we have a long-term agreement with a leading multinational company on the back of which we will be making an investment in Brazil. We are not in a position to tell you the specific details of the quantum of investment; however, our intent is to set up a factory on the ground in Brazil. Our intent is in the full first year of production for the couple of years of production we will begin to make a reasonable margin on that business, but you will appreciate that these numbers are still being developed and I just wanted you all to know that we are going ahead with this project. Now we have gone historically as EPL we went into US and set up a big operation there, we went into Egypt, we went into China and then we expanded our portfolio based on customers and wins a solid business in those countries that will be our long-term intent to slowly grow market share and expand our base. Honestly this is how much we can tell you at this stage we will be the first to share more details and please recognize it is a long-term contract it is not just a short-term supplier kind of arrangement. We are making an investment on the back of a long-term contract and therefore we have confidence that we will be there for the foreseeable future. Once legal formalities and so on are done we will try and share more details as it also becomes clear. Now as far as commodities are concerned, Q3 we did see an increase in commodities and the tapering of commodities has really started happening in the last six to eight weeks, so little bit after, towards the end of Q3 or thereafter. What I have already said in my opening comments is in this quarter Q4 we are going for a judicious mix of fresh price increases and also some specific cost saving initiatives. Now to your point on pricing specifically all contractual customers the pricing will come in automatically, the rest had to be negotiated, but I will say that a good percentage of the rest of the customers we will get the price increases for, but we are doing it as we speak and therefore I cannot give a precise number. Now as far as gross margin is concerned first of all I am sure you understand that first of all we do not really want to have a discussion on gross margin itself. Our commitment is a long-term commitment for sustainable growth and margin improvement recognizing that we will have some erosion of margins but we do believe that this was bottomed out and we should see recovery from here, but please do understand give a number of 50% or 51% please recognize that there is a translation loss in margins in a hyperinflationary environment. All our cost increases even if they convert to price increases will mean an optical margin erosion, so what was a certain margin in the past would not be the same even if we would fully protect the profitability and even if we would fully recover all cost increases by way of price hike and that is just a mathematics a bit and I want to reiterate so that you recognize that there will be that kind of shift in the offtakes of the numbers.

Sanjesh Jain: Fair enough. Just a couple of followup on both the questions, first on the Brazil side I can understand you will give more detail later but just to understand how the Brazil as a market, who is the completion if you can share some landscape for the Brazil and when you say 3.5 billion tubes how much of it is personal care, how much of it is oral care, some colour that will be helpful that is one, number two on the RM inflation I completely take that optically margins will come down no doubt in that, but then the revenue growth of double digit is also not comfortable then the real growth is actually what is gross profit margin growth, which is now at mid single digit, is that the fair way to look at?

• Anand Kripalu: Obviously the revenue growth and pricing mix as well and I just want to say that there will be obviously some price on it, there is a good contribution of mix in it as well right and volume in it as well, so it is a combination of all three and we are not really sharing the specific breakup of this; however, what we are giving you as a future commitment on a medium term basis in that we have plans in place based on a strong business development pipeline to deliver what we are promising to you and that is what I would ask you to see**.** I am going to hand over to my colleague, Ram to share a little bit more flavor if you like on the structure of the Brazil market based on information that we have in a position to share.
• M. R. Ramasamy: 3.5 billion is the market size of Brazil. Brazil is a highly cosmetic market; fair care products have sold large numbers in Brazil and their related countries and we will have far better chances with lead customers being our customers globally so we have all the reasons to believe that we will be able to gather over a period of time a good market share of those products too. It is a 60:40, 60% will be the oral care market, 40% will be cosmetics and other areas, so reasonable confidence that we will over a period of time continue to grow because a customer base that we are establishing will secure the profitable growth in that country.
• Anand Kripalu: I am sure everyone will appreciate that Brazil is one of the large emerging markets in the world so it is a very large market and therefore it gives us a foothold and access to a very large market both from an existing market size and hopefully in terms of growth potential as well.
• Sanjesh Jain: Just one last book-keeping question on the depreciation why the depreciation has been growing at a higher pace for the last two quarters while our capex remains under control, which is below depreciation, what is causing the depreciation number to rise faster if you can explain that?

Anand Kripalu: We made investments last year also and we continue to make investments this year and in the natural course of business assets are used to capitalize depreciation and if you notice our capex this year for the first three quarters about 222 Crores so it is investment in the natural course of business and also this includes a creative the acquisition that we had done and therefore the depreciation relating to that company is also included in this base which is not there in the prior year.

Sanjesh Jain: Thanks for answering all my questions and best of luck for the coming quarters.

Moderator: Thank you. The next question is from the line of Sameer Gupta from IIFL. Please go ahead.

• Sameer Gupta: Thanks for giving me an opportunity. Sir taking over from the previous participant I understand the margins have pressure because of inflation, etc., but I just noticed the deviation in the margin performance across geographies and it is quite pronounced in America and Europe so if you could just offer some bit of explanation for this wide difference in performance and margin front?
• Anand Kripalu: So I will start the question and maybe Parag or Ram can add to it. Yes we have seen erosions of margins everywhere because the commodities are going in everywhere, we have seen a bit more in Europe and America and I just want to say that America is particularly followed by Europe has been hugely challenged because of labor cost, absenteeism and overtime that we had to take because the choice that is often was between running the plant or not running the plant and we have made the choice to the extent we could and we still have fully produced what we wanted to produce, but we have made the choice to pay more rupees to get people in. Now in America particularly we are not the only company pretty much every company in the US is facing this challenge on labor shortage and is having to incur much higher cost, so if you see even consumer goods companies in US they are showing decent topline, but because of high inflation and high cost increases they are also showing temporary low margins so that is the reason why it happened. We believe that the worst on COVID related challenges is hopefully behind us, nobody knows for sure by the way as we all know, but where we are sitting today we believe that things are slowly coming back to kind of some levels of normalcy and we are confident that we have plans in place both to drive topline in those two regions and also to improve our operating margins as a result of that and choose the right kind of operating expense control. So our internal plans are clearly to start the journey of recovery of margins that were eroded in those two geographies.

Sameer Gupta: This would be also true for Europe, a large part of the explanation that you gave for America?

Anand Kripalu: It is partly true for Europe, but as you have seen from the revenue numbers we have also added topline challenge in Europe and that is driven by a sharp decline in the personal care segment that is using laminated tubes and I call that out in my opening comments, so I think in Europe we have had more of a double whammy of slowing topline because one category has really slowed down and operating expenses as a consequence of what I said and both have resulted therefore in significant margin impact, we have plans in place to start pulling back.

Sameer Gupta: Got it Sir, very clear. Second question you also mentioned that you are very confident of this being the bottom of the margins, now I understand that these one-off issues in US and Europe not one-off but COVID-related issues might be over, but we are also seeing hardening of crude prices and I know that for you it is tampering of the costs of commodities but a large part of these are also linked to crude and follow with a lag, so just wanted to understand where is this confidence coming from that, these are the bottom of the margins and it cannot really go further down from here?

Anand Kripalu: I had to underscore the fact that I have said barring any unforeseen volatility right because obviously so I would put it this way, whatever the inflation has happened on commodities I think we have plans in place through pricing and cost management to be able to deliver what we are talking about which is margin recovery having hit the bottom. If you have fresh volatility, if volatility is downwards I do not have a problem, but if volatility is upwards, prices going up linked to a sudden inflation in crude and so on then obviously there is an impact on our numbers. What I would like to say is this over the last two months and I have answered this in the first question we are seeing some tampering of our input cost, so there are two things where we have continuous inflation, which is aluminium and one of other polymers, but for many of the other polymers we have seen a tampering of input costs, which means it is not got me worse, so on a rated basis we have seen tampering. Now that tells us that at least there is still some stability coming because we did not see that stability earlier, so what I am saying again is barring any unforeseen volatility because you will appreciate that we cannot given an unconditional message to you. There is nothing clearly happening if it is not volatile beyond a point then what we have said stand because I think we have management driven interventions in place to deliver what we are saying.

Sameer Gupta: Got it Sir last question if I may squeeze in can you give capex guidance for the next two years?

• M. R. Ramasamy: We have always maintained that if you take three to four years the average capex would be in around depreciation it should be about 250, 270 Crores if you look at in a block of three to four years, so there is no different route to be given here.
• Anand Kripalu: We will spend in line with the current depreciation level over a block of three to four years.
• Sameer Gupta: Got it Sir. Thank you very much for giving me the opportunity and I also take this opportunity to wish Parag all the best for his future endeavours.

Moderator: Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead.

• Sumant Kumar: My question is for America and Europe when we talk about the muted growth 9% growth and degrowth in Europe so what we are talking about the travel tube business has been impacted so can you talk about what are the segments have impacted overall the business in America and Europe?
• Anand Kripalu: America has been impacted significantly by travel tube, having said that America continued to grow through this period I think pretty much every quarter we have shown reasonable growth in America despite a large volume of travel tubes being impacted. As far as Europe is concerned it is personal care issue that which I have called out already and our confidence on recovery in these two regions comes from the fact that we have visibility to new business opportunities, which are business development pipelines and what to expect in the coming quarters and therefore our confidence comes from that visibility. Having said that a little bit of travel tubes is also beginning to come back again stopped with Omicron and we should believe that that is also in fact coming back.
• Sumant Kumar: Second question when you talk about the employee cost was similar and overall impact was there because we were paying because employee is not coming to the plant say for America and Europe, but when we analyzed the overall margin impact majorly despite a growth in America business 9% our margin has declined 6% and when you analyze your P&L majorly through raw material cost not through the fixed cost?
• M. R. Ramasamy: The decline in America is essentially coming out of that personal cost and a lag that is there in terms of pricing because of the fact that it takes a quarter for even the contracted customers and one more month where you are doing the prices so it is three to four months after which you get different contracted customers more importantly I think what I would like to say is again repeat what Anand has said earlier that we are in a process of further

taking price increases in the current quarter and Q4 and that should help turnaround things. In terms of people cost it is also part of fixed cost overtime and loss of people related to COVID is a big expense and that is something that is also impacted the margins. So it is very much that and then there is freight and packaging cost also and we have said this before that while we have made headway as a matter of routine we do not recover freight and packaging cost as part of passthrough, but we are kind of making progress there as well.

• Sumant Kumar: Can you talk about overall growth we have seen because our overall growth was 15% is there any volume growth this quarter?
• Anand Kripalu: We are not commenting on the breakup of the growth. All I can tell you is that all three kinds are there in the contribution to the 15% there is volume growth also, there is mix also, and there is price also.
• Sumant Kumar: Volume growth is there?

Anand Kripalu: I have already said that all three are there as part of the 15%.

Sumant Kumar: Thank you so much.

Moderator: Thank you. The next question is from the line of Trilok from Aditya Birla Sun Life Insurance. Please go ahead.

• Trilok: Thanks for the opportunity. Just two quick questions when I look at the personal care category although you already highlighted in your initial remarks I am just very curious to know that personal care was already declining in the Q2 as well and you guys have been given disclosure regarding that; however, in this quarter presentation none of the details are available, any particular reason for that point one and point two is I remember in the last call you were alluded to obviously taking up the price increases and passing on the inflation to the customers and sequentially basis on your disclosure there is not much movement in the RM prices, so still not able to get the maths on the margin erosion on sequential basis?
• Anand Kripalu: The first is on personal care and the second is on marginal or sequential basis. First personal care is concerned just to be clear I am not sure what exactly the question is because we have grown by 19% in personal care and only Europe is called out as a challenge on personal care. So what is your specific question on personal care beyond that?
• Trilok: I am referring to the geography wise personal care growth in terms of revenue percentage this quarter, which is not the part of the presentation that is the point one I was referring to

that was on personal care and beyond Europe decline is there any other regions have seen muted growth in personal care?

Anand Kripalu: Two points AMESA grew 36.9% in personal care, EAP grew 29.3%, America grew 15.1% and Europe was almost flat decline of 0.7%. I just want to make an important point in Europe. In Q1 of this year Europe declined in personal care by 20% and in Q2 it declined by 2.4 and now we are flat, so I hope that with these numbers we are clearly seeing the recovery that is happening in the Europe.

Trilok: With regard to the sequential comment on because last quarter you guys said that we are taking a slight increases for the customers both on spot as well as contracted one?

• Anand Kripalu: Last quarter we had taken enough prices to cover the cost increases that was there till that quarter started, in Q3 we saw fresh inflation after certain tampering we saw fresh inflation that was not covered by way of price increase in Q3 scrap so there was a lag as a result of that, some of that obviously we are aiming to get in Q4 as we are speaking and if commodities do not go any worse then we will recover good part of those cost increases through price increases now that is the reason, to recognize that in this industry you see in a normal inflation environment it is okay, but when you have significant volatility recognized while they take three months plus to start realizing price increases for the cost increases that have already been incurred in the business, so there will always be that phase lag that is going to happen because that is how the business model has been constructed and that served as well actually for three decades by the way and served that really well, we are just seeing this period but not just high inflation but high volatility over the last few quarters and that is why you are seeing the kind of variation in margins as well.
• Trilok: With regard to the margin in the Q4 call you guys had highlighted you guys are probably making a point that Q4 last year FY2021 was probably in the bottom of the EBITDA margin, but is there any change that you guys want to make any statement now because when we are seeing what happened in Q3 without getting into any particular specific guidance, but any forward-looking range would be helpful?
• Anand Kripalu: That is the reason why I have caveated the bottoming out of margins with the line of barring any unforeseen volatility because we do not know that is the reality of the situation but barring that we believe we have programs in place to build on the current situation that we are in, in terms of the current margin delivery and honestly I cannot say more than that at this stage.

Trilok: A response to one of the participant you guys said that volume growth is still there in this quarter as well and we will obviously make our own assumptions, but it is not flattish is that fair to assume at least on a y-o-y basis?

Anand Kripalu: Yes and there is volume, price and mix and it is not flattish.

• Trilok: Thank you very much.
• Moderator: Thank you. The next question is from the line of Douglas Turnbull from Invesco. Please go ahead.
• Douglas Turnbull: (inaudible) 39:08 margin decline has come from and so what we could expect today, so if you look at the case of EBITDA margin decline or something like 400 basis points how does it split between raw material costs, freight, packaging, staff and others and then if we look at others going forward in raw materials what sort of percentage that you expect given the mix of contracted and non-customers and then from the other types of cost increases how much of that can you also get through to customers in due course what determines that whether it is competitive environment or anything else and the trajectory that you expect in margins to take going forward?
• Anand Kripalu: I think that is a complicated question you want to take this offline and see if what we are in a position to share against the drivers of these margin drops, which includes the real margin drop, the optical margin drop, then within the real margin drop what is it for commodities, what is it for freight and other things and what it is for operational expenses because we are all recovering EBITDA margin and then we will see what we can share that because I do not think we have this ready for you offhand honestly I am pretty sure we can share everything that you will ask for, but if you send in a mail we will see what best we can do to throw some light on the question you have asked.
• Douglas Turnbull: Thank you. Who should I e-mail?
• Anand Kripalu: You can e-mail amit.jain.@eplglobal.com.

Douglas Turnbull: Thanks very much.

Moderator: Thank you. The next question is from the line of Hitesh from ICICI Direct. Please go ahead.

Hitesh: Thanks for the opportunity Sir. Sir my question pertains to AMESA region we have seen a significant growth obviously the base was also very technical for us but we have seen good

growth in Q1, Q2 as well as Q3 and I just wanted to know what are the growth drivers do you see in this segment and Q4 FY2021 being the higher days do you think kind of a sustainable growth what you clocked current quarter in AMESA region that is the first question, the second question is that obviously you talked about the raw material prices and delayed on that segment that has put pressure on the gross margin, but despite significant growth for the last three quarters in the AMESA region we have seen pressure in the EBITDA margin I just wanted to understand in AMESA region, also I wanted to understand apart from raw material pressure was there anything else in the cost front which is guiding the margin in the AMESA region? That is all from my side. Thank you Sir.

• Anand Kripalu: AMESA I come back to the growth drivers then what we can share over there. Just to say that on EBITDA actually other cost lines where AMESA has been well controlled, recognized that the cost operating expenses of CSPL have come into the P&L now which was not there in the base, but other than that operating expenses of AMESA have been well controlled and managed, so the real variations is to do with facing of price recovery to cover cost increases largely so that is the real point about EBITDA in AMESA. Now on the growth drivers if I look at organic growth in AMESA it is 26.5% against the 36% odd I spoke about in my opening comment, so the growth is solid, is broad based, by and large broad based, but also includes growth of laminate sales, so the tube sales and laminate sales in these numbers and also includes good growth of laminate sales.
• Hitesh: Sir my question pertains to the Q4 growth which looking forward in the current quarter we are in the higher base of the cue for last year do you think this kind of growth in this current quarter also I just wanted to know that?
• Anand Kripalu: We are not going to give guidance on growth by region, as a default we have a portfolio of regions, a portfolio of categories we are dealing with and we are working towards making sure we deliver an overall kind of guidance that we have given you we deliver that. One quarter (inaudible) 44:35 but we cannot get into discussion on specific growth conditions by region.

Hitesh: Fair point. Thank you Sir.

• Moderator: Thank you. The next question is from the line of Tanmay Gandhi individual investor. Please go ahead.
• Tanmay Gandhi: All my questions have been answered. Thank you.

Moderator:	Thank you. The next question is from the line of Sanjesh Jain from ICICI Securities. Pleasego ahead.
Sanjesh Jain:	The first question again is on the oral care side this quarter it looks like the oral care hasdeclined by 17.6% on a y-o-y basis, a significant growth in this quarter apart from personalcare has come from the laminate sales, which has grown by almost 2x in this quarter what ishappening in the oral care why there were such a sharp decline in the oral care?
Anand Kripalu:	Are you talking consolidated results or this question is specifically on AMESA?
Sanjesh Jain:	No, this is on the consolidated oral care revenue so this quarter we have declined 17.6% yo-y.
Anand Kripalu:	In my opening comments I said that oral care has grown 7.4% and personal care by 19.4%so I am not sure where you are looking at the decline of 17% of oral care.
Sanjesh Jain:	We have the first half numbers and this quarter we have disclosed for 11 months if I deductthe nine months what is that is 3.3 billion and same number in the base year was 4 billion?
Anand Kripalu:	May I request you to send a mail on your specific questions for clarifications because I havegiven you what the right number in terms of the overall performance of the business, so youcan send a mail to Amit Jain and we will answer it to the best of our ability.
Sanjesh Jain:	I will send the question across. Thank you.
Moderator:	Thank you. The next question is from the line of Shivaji Mehta, individual investor. Pleasego ahead.
Shivaji Mehta:	Thank you for this opportunity. My question was basically regarding whether we haveexplored all possible synergies with the Blackstone portfolio company including PiramalGlass do you feel there are still some opportunities with the Blackstone portfolio companyor do you feel that was saturated?
Anand Kripalu:	I do not answer that question specifically because on the glass business and the tubebusiness, to be direct I am not sure we can explore specific synergies with Blackstonecontrolled company but it is a suggestion let me explore it with the team and see if there aresome opportunities to do that because we do not have any other tube making company andthe manufacturing processes tend to be quite distinct, also the customer profile tends to be

quite distinct, but now that you raised this as an idea let us explore whether we can expect a value in that.

Shivaji Mehta: Thanks a lot. That is all from my side.

Moderator: Thank you very much. As there are no further questions I now hand the conference over to Mr. Pratik Tholiya for closing comments.

Pratik Tholiya: Thanks Nirav. On behalf of Systematix I would like to once again thank all the participants for joining this call and I would like to thank the management for giving us the opportunity. I would like to ask the management if there is any opening comments you can please said that.

Anand Kripalu: No, just want to thank everyone for your time for having joined us on this call today. We hope we have been able to give you clarity on some of the questions that you had and I just want to leave everybody with a message that we are absolutely excited and confident about the future of this business and I think with each passing quarter we will be able to report that confidence. Thank you.

Pratik Tholiya: Thank you so much Sir.

Moderator: Thank you very much. On behalf of Systematic Institutional Equities that concludes this conference. Thank you for joining us. You may now disconnect your lines.