Emami Limited (EMAMILTD) Q4 2023 Earnings Con Call Transcript

Emami Limited ( ?????? : EMAMILTD) Q4 2023 Earnings Con Call dated May. 25, 2023

Corporate participants:

Mohan Goenka — Promoter Director

Rajesh Sharma — President, Finance and Investor Relations

Vinod Rao — President, Sales

Vivek Dhir — Chief Executive Officer, International Business

Analysts:

Dhirendra Kumar — IIFL Securities Limited — Analyst

Shirish Pardeshi — Centrum Broking — Analyst

Gul Raj Bhatia — President, Healthcare Division

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sneha — RSP and Ventures — Analyst

Harit Kapoor — Investec — Analyst

Ajay Thakur — Anand Rathi Securities — Analyst

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Bhavesh Jain — Enam Securities Private Limited — Analyst

Anurag Lodha — Axis Capital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Emami Limited Fourth Quarter FY ’23 Earnings Conference Call, hosted by IIFL Securities Limited. [Operator Instructions]

I now hand the conference over to Mr. Dhirendra Kumar from IIFL Securities Limited. Thank you, and over to you, sir.

Dhirendra Kumar — IIFL Securities Limited — Analyst

Hi, good afternoon, everyone. This is the Dhirendra, here from IIFL Securities. We are pleased to host the management of Emami Limited today. And on the call with us, we have Mr. Mohan Goenka, Director; Mr. Rajesh Sharma, President, Finance and IR; Mr. Vivek Dhir, CEO, International Business; Mr. Vinod Rao, President, Sales; and Mr. Gul Raj Bhatia, President, Healthcare Division.

Without further ado, I’ll hand over the call to Mr. Mohan Goenka. Over to you, sir.

Mohan Goenka — Promoter Director

Thank you, Dhirendra. Very good afternoon, ladies and gentlemen. Thank you for joining us today. I welcome you all to this conference call on Emami results for the fourth quarter and the year-ended FY ’23.

The industry is currently experiencing a mixed demand environment, with discretionary categories, like personal care, continued to remain muted as consumers, especially in the rural areas, are reducing non-essential expenditure. Inflation in rural areas reached 6.8% in FY ’23, the highest-level in the previous nine years. The rural inflation surpassed urban inflation for the first time since FY ’18. Additionally, excessive rainfall in many areas of the country in March impacted the demand for summer products.

In the given macroeconomic environment, our overall revenues at INR836 crores grew by 9% in the fourth quarter of this financial year. Our domestic business grew by 5% over previous year in Q4. For the full year, our revenues at INR3,406 crores grew by around 7%. Domestic business grew by 4% on a very high base of pain management and healthcare products. Excluding sales from both these categories, our domestic business grew by 10% in FY ’23. Dermicool and The Man Company contributed around 10% to the consolidated revenues in the fourth quarter and by around 6% in FY ’23.

Coming to our brand-wise performance, Navratna range declined by 3% during the quarter, but grew by 2% on a four-year CAGR basis. For the full year, it grew by 6%. Kesh King range grew by 1%, both during the quarter and full year. Male grooming range grew by 29% and BoroPlus range declined by 25% in the fourth quarter. They grew by 3% and 1% respectively in FY ’23. Pain management range and healthcare range, being COVID constructional categories, witnessed corrections during the year. Pain management range corrected by 9% during the quarter, but grew by 7% on a four-year CAGR basis. For the full year, it corrected by 14%, but grew by 7% on a four-year CAGR basis. Similarly, healthcare range declined by 13% in the fourth quarter, but grew by 8% on a four-year CAGR basis. In FY ’23, healthcare range declined by 12%, but grew by 8% on a four-year CAGR basis.

Also I’m happy to share that most of our major brands have increased their household penetration level during the year. Our sustained interventions and marketing efforts for all our brands have ensured that they have not lost any market share, and in fact, have cemented their leadership position in their respective categories. Our innovation pipeline continued to plug gaps in our existing portfolio and I’m happy to share that we launched around 20 products in FY ’23, with the majority being digital-first launches on our D2C portal, Zanducare. While our recent launches contributed more than 3% to our domestic sales in FY ’23, they contributed around 7% to modern trade and 20% to e-commerce sales.

In quarter four FY ’23, we have launched Zandu Fast Relief Spray, recommended by Indian Association of Physiotherapists. We have seen continued growth in modern trade and e-commerce since the several past quarters. The trend continued in Q4. Their modern trade grew by 18% and e-commerce grew by 64%, increasing the resiliency to more than 20% of domestic sales, a 500 basis-point jump over previous year. This, along with our continued distribution efforts, have helped reduce our dependency on wholesale channel.

Our International business continued its stellar performance, growing by 19% in Q4 and by 20% in FY ’23, despite of high inflation and several key markets facing challenges, like currency depreciation in Bangladesh, economic crisis in Sri Lanka, ForEx and liquidity crisis in Nepal, and ongoing political conflicts in CIS countries. The growth has been mainly driven by strong performance by our power brands in the markets of MENA, CIS and Bangladesh.

As expected, the quarter witnessed some moderation in input costs, which led to an expansion of gross margin by 60 basis points at 63.1% during the quarter. Despite integration of our subsidiaries, which are in investment phase, our EBITDA at INR200 crores grew by 22%, with margins at 23.9%, expanding by 260 basis points. Our profit before tax at INR148 crores grew by 51% over previous year. For the full year, EBITDA at INR863 crores declined by 9%, but compared to pre-COVID period, it grew by 4% on a four-year CAGR basis. Our EBITDA margins, excluding strategic investments, at 26.7% are close to pre-COVID levels. And including strategic investments, they stand at 25.3%. Profit before tax at INR670 crores declined by 3% over previous year, but grew by 13% on a four-year CAGR basis.

Going ahead, we expect the growth momentum to improve in FY ’23, driven by a mix of macroeconomic support and our internal interventions. Our investments in new-age startups like The Man Company and Brillare have not only gave us — given us insights in the digital front, but also accelerated our growth levers. With inflation moderation — moderating, the upcoming quarters look promising for the industry due to declining commodity prices, better monsoon, higher crop realization and continuous government interventions.

With this brief, I now open the floor for Q&A. Thank you.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions]

Our first question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead.

Shirish Pardeshi — Centrum Broking — Analyst

Hi, good evening, Mohan Ji, Rajesh Ji. Thanks for the opportunity. To start with — I have few questions, but I have been wanting your direction. In the quarter, our employee cost has gone up by 16.8% and other expenses have gone up by 20%, while expenses [Phonetic] decline, the revenue momentum is still muted, and these costs are going up. Is there any explanation here?

Rajesh Sharma — President, Finance and Investor Relations

Yeah. Good afternoon, Shirish Ji. The costs have gone up because we have also again integrated The Man Company subsidiary since second quarter — third quarter. So, these expenses were not there in the base quarter of last year Q4.

Shirish Pardeshi — Centrum Broking — Analyst

Yeah. But if you take-out that effect, what will be the number look like?

Rajesh Sharma — President, Finance and Investor Relations

So, that would be in the range of around 10%, 11%, kind of.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. And similar impact in the other expenses also?

Rajesh Sharma — President, Finance and Investor Relations

Sorry, in the?

Shirish Pardeshi — Centrum Broking — Analyst

Other expenses also?

Rajesh Sharma — President, Finance and Investor Relations

Right. Other expenses apart from that also, as we have taken up few distribution projects. So, on account of that also, we have spent some money. Project closures [Phonetic] and other initiatives, distribution initiatives, which we gave. But, again, because of the MC also, that costs have gone up by around INR19 crores in the quarter.

Shirish Pardeshi — Centrum Broking — Analyst

So — just a follow-up here. Could you share FY ’23 the entire revenue for these two subsidiaries?

Rajesh Sharma — President, Finance and Investor Relations

So, as Mohan Ji mentioned in the call, that both Dermicool and The Man Company, which were not there in the base quarter have contributed roughly 10% in this quarter. And for the full year, it is around 6%.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. One more follow-up here. The ad spend is now settled to around 15.5% of net sales, which has come down almost 300 basis points. So, in FY ’24, where do we look at the ad spend? I mean, obviously, I can understand the season is not done well, so maybe you will have withdrawn from ad, but any indicative number or any target you are planning to have in FY ’24 for ad spend?

Rajesh Sharma — President, Finance and Investor Relations

So, this year, the ad spend is in the similar range. Last — for the last year, we had spent around 16.5%, before also similar spend is there. So, next year, we hope to be within the similar range. However, we would endeavor to spend little more, so it can be in the range of 16.5% to 17.0%, kind of.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. And on brands, I have two questions. One on the Fair and Handsome, what is it that you have done? Is it purely the ad spend or — because the commentary what Mohan Ji, the discretion demand is under pressure. So, even if you look at quarter four, the male grooming segment has grown 29%. Is it the consolidation effect there or it’s primarily the distribution gain, what we have got?

Mohan Goenka — Promoter Director

Shirish, it is primarily due to the base impact, because last year, due to COVID in quarter four, the Fair and Handsome had — did not perform so well. So, that’s why in quarter four, it has grown at 29%.

Shirish Pardeshi — Centrum Broking — Analyst

But last 45 days, you think the similar growth is there?

Mohan Goenka — Promoter Director

Growth is not 29%, 30%. So, it has moderated now. The growth should be somewhere in single-digits.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. And my last question on the brands, any word why the healthcare business is declining so much? And how much the correction you can expect in next one or maybe two quarters?

Mohan Goenka — Promoter Director

Gul Raj is here.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. Yeah.

Gul Raj Bhatia — President, Healthcare Division

Hello, Mr. Shirish. How are you?

Shirish Pardeshi — Centrum Broking — Analyst

Yes, sir.

Gul Raj Bhatia — President, Healthcare Division

So, I think the correction, as I had mentioned in the last quarter, about — there was some correction which happened in the last quarter also. So — but from this quarter onwards, we’ll be on a growth track. So, both in the OTC business and in the Medico business, we will be having good growth. So, the base effect of the COVID, certain categories rose, such as Chyawanprash etc., was there in last quarter also, that should get nullified from now onwards.

Shirish Pardeshi — Centrum Broking — Analyst

Yeah. So, why I’m a bit surprised…

Gul Raj Bhatia — President, Healthcare Division

I’m sorry, go ahead.

Shirish Pardeshi — Centrum Broking — Analyst

Yeah. No, I just wanted to check with you, I’m a bit surprised, because what Mohan Ji you said that we have launched many new products, effort which is expanding on Zandu online business also. And despite that there is a decline. So, I’m bit worried. I mean, I was expecting a flat number. I’m not giving a target, but I was expecting a flat number. But the cut is little higher.

Gul Raj Bhatia — President, Healthcare Division

Yeah. So, if you look at the previous year, which is basically, the periods of — there were two COVID waves had happened, one happened in the period of April, May, June ’21, and then there was a second wave, which happened in January, February ’22 Omicron. So, during those periods, we had done reasonably well in terms of growths of community range, both through — on the Medico side and on the OTC side. So, that had actually impacted us — growth this year due to the base effect.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. All right. Thank you. All the best. I have few questions, I’ll come back in the queue.

Operator

Thank you. Our next question is from the line of Prakash Kapadia from Anived Portfolio Managers Private Limited. Please go ahead.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Yeah. Couple of questions from my end. Now given that we’ve mentioned there were unseasonal rains in our opening remarks and in the PPT, so what is the demand on summer portfolio? Because a quarter ago, we were confident of double-digit growth happening in FY ’24. So, clearly summer portfolio seems affected. So, how do we look at FY ’24, given that we’ve seen this disruption again in the summer portfolio?

Mohan Goenka — Promoter Director

So, Prakash, we will have to wait, because summer, we still have one month to go. But, yes, you are right that the summer has been weak as far as the last two months are concerned because of the rains in most parts of India. So, let us see, let us evaluate. But other than summer products, because what we have seen is encouraging that all the other categories, whether it is pain or Fair and Handsome or Kesh King or healthcare, all are filing. So, there is some momentum what we are seeing it from the rural markets and from all other markets. The only issue is the summer portfolio.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Okay.

Mohan Goenka — Promoter Director

Yeah. If the summer would had been favorable, then I’m sure the growth would had been very good.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Gul Raj was mentioning about healthcare. So, given healthcare and pain management, is there visibility of growth happening in ’24 and beyond? Because the base seems to grow. Gul Raj did mention about healthcare. What about pain management?

Gul Raj Bhatia — President, Healthcare Division

Yeah. So, pain management is also doing well in these last two months. So, there seems to be visibility for growth in these two large categories, healthcare and pain management for us.

Mohan Goenka — Promoter Director

Yeah. On all the other categories also, as I said, other than just the summer, because very clearly, we are seeing some issues only on the summer portfolio.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

All right. Lastly, Mohan Ji, on the subsidiary and associate companies, could you give us some road ahead? I think Helios last year was INR82 crore sales, Brillare Science was around INR17, INR18 crores of sales, what the trajectory and growth they have seen, what is the roadmap, what is the part of positive profitability and scale if you could give us some direction, please, that would be helpful.

Mohan Goenka — Promoter Director

So, they are at a initial stage, Prakash. And this year, we have taken very aggressive numbers as far as the startups are concerned. Most likely, we are expecting at least a 50% to 60% growth from these startups this year, that is the target that we’ve set. We are more bullish on The Man Company.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

And what kind of growth would that have seen in FY ’23?

Mohan Goenka — Promoter Director

FY ’23, the growth in The Man Company was…

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Okay. I’ll take it offline, if you don’t have a number.

Mohan Goenka — Promoter Director

Yeah. It’s not readily available, but Rajesh can share, he is just looking at the data.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

I will take it offline, no problem. Thank you.

Mohan Goenka — Promoter Director

Around 40% growth in The Man Company.

Rajesh Sharma — President, Finance and Investor Relations

Total 40%, yeah.

Prakash Kapadia — Anived Portfolio Managers Private Limited — Analyst

Thank you.

Operator

Our next question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Yeah. Thanks. My first question is on the summer categories. So, you are an expert in the FMCG. So, when you will see the numbers for summer categories of other companies, for example, the beverage business of Dabur or Sovereign Beverage [Phonetic], there we see very high growth in Q4, and my sense is even, that’s within Q1. Against that, when you speak of the slowdown still in your summer category, what could be the reason? Because, broadly, the things should be fairly similar, right? You can’t have such big difference.

Mohan Goenka — Promoter Director

Abneesh, you would have to wait and watch, because our intelligence says that, everyone is suffering in these last two months. The summer was good, because they had a bad base. That’s why the fourth quarter did very well as far as the beverages are concerned. But as you rightly said, we are — we have a large summer portfolio and we are in touch with the market. Every company who has summer portfolio is suffering.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Right. Okay. Second is, in terms of your startup business, you mentioned your target by FY ’24 is 50% to 60%, which is in fact an acceleration versus the 40% seen from The Man Company. In that, what is giving you the confidence? Because we are seeing generally the B2B and startup business now taking challenges, given customer has completely gone back to the traditional ways of buying in terms of pre-COVID behavior. But what is giving us the confidence in this?

Mohan Goenka — Promoter Director

This year also, Abneesh, we grew by 40%, as I said. There are couple of new initiatives that we are taking in The Man Company. And our experience in e-commerce, we have integrated with them. You’ve seen our growth momentum in the digital front. So, there are a couple of new launches that we have planned and we are going to invest heavily as far as the male grooming is concerned. So, of course, their team is looking after The Man Company and they are very confident of achieving at least 50% to 60% growth with the investments that we have set in.

Abneesh Roy — Nuvama Institutional Equities — Analyst

All right. My next question is on Dermicool…

Mohan Goenka — Promoter Director

We are also expecting it to be profitable next year as far as The Man Company is concerned.

Abneesh Roy — Nuvama Institutional Equities — Analyst

But not in FY ’23, right?

Mohan Goenka — Promoter Director

Not this year. This year was not profitable. Next year, we expect The Man Company to be profitable.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Okay. My next question is on Dermicool. So, this was the first full year since the acquisition. So, could you take us through what changes happened, how is the final number of FY ’23 looking versus initial revenue expectation, and in terms of the brand, now you have three different brands in the same category? So, any thought on the — two separate brands, do you want to continue longer-term? And in terms of pricing, positioning, promotions, etc., how things are different between the two?

Mohan Goenka — Promoter Director

So, this was well calculated at the time of acquisition, Abneesh. Both brands don’t compete with each other, because Dermicool is a prickly heat powder, whereas Navratna Cool Talc is a general-purpose cooling powder. So, both really don’t compete. They also don’t compete on the SKUs, because Navratna, primarily the sales come from a smaller SKU, which is priced at INR10. So, that is the key selling SKU as far as Navratna is concerned, whereas Dermicool, the sales comes from once 150 grams. So, they don’t compete. The consumer profile is very different of Navratna Cool Talc and Dermicool.

But last year, we did almost INR113 crores revenue from Dermicool. This year, we’re expecting about 15% growth from Dermicool. But as I said, unfortunately, the beginning has been slow, because of the summer. So, let’s see how much can we achieve, but that is what we have set the target as.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure, sir. And final question, Kesh King, 1% each growth in Q4 and FY ’23. FY ’24, how are things looking? I understand your 30ml SKU at INR49. Apart from that also, last two, three years, you have done a lot of work in terms of new products, LUP [Phonetic] etc. So, FY ’24, how do you think Kesh King range?

Mohan Goenka — Promoter Director

Kesh King range, Abneesh, is doing well in this quarter. So, if the momentum continues, we are confident of about 10% growth in Kesh King.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Okay. And for the full domestic business also, you think high-single-digit growth is possible this year?

Mohan Goenka — Promoter Director

Yes. Abneesh, unfortunately, summer has been a little weak. But as I said, we are seeing some momentum coming in from the rural markets and that’s why, we are seeing growth across the categories, other than summer. So, if that trend continues, we are very hopeful that it should be about 8% to 10% growth for the domestic business.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure, sir.

Mohan Goenka — Promoter Director

What is very — what is very, very heartening is that the input cost pressure has really eased and we are seeing margin expansion. So, we would be able to put in some money on advertising on most of our categories. So, let us hope if other than Navratna portfolio or Dermicool, if all the other portfolio fires, then we are very confident of doing about 8% to 10% growth.

Abneesh Roy — Nuvama Institutional Equities — Analyst

Sure. Okay. That’s all from my side. Thank you.

Operator

Thank you. Our next question is from the line of Sneha from RSP and Ventures [Phonetic]. Please go ahead.

Sneha — RSP and Ventures — Analyst

Hello?

Operator

Yeah.

Sneha — RSP and Ventures — Analyst

Hi, good evening, everybody. So, I have read this report regarding the Promoters have…

Mohan Goenka — Promoter Director

Your voice is not clear, please.

Sneha — RSP and Ventures — Analyst

Can you hear me now?

Operator

Please hold the line. Ms. Sneha, please hold the line. I’ll be right back. Ms. Sneha, you can go ahead with your question.

Sneha — RSP and Ventures — Analyst

Yeah. So, good evening, everybody. Sir, I have read this report regarding the Promoters have pledged the Emami Limited shares. So, what is the plan for Promoters to reduce the pledge?

Mohan Goenka — Promoter Director

So, Sneha, in all my calls, we have maintained this consistency that we have identified certain assets. [Technical Issues]

Sneha — RSP and Ventures — Analyst

Hello?

Mohan Goenka — Promoter Director

Sorry. Hello?

Sneha — RSP and Ventures — Analyst

Yeah.

Mohan Goenka — Promoter Director

Yeah. So, we have identified certain assets. And once the transaction materializes, particularly, the hospital one, you would see deduction in pledge.

Sneha — RSP and Ventures — Analyst

Okay. Thank you.

Mohan Goenka — Promoter Director

Yeah.

Operator

Thank you. Our next question is from the line of Harit Kapoor from Investec. Please go ahead.

Harit Kapoor — Investec — Analyst

Yeah. Hi, good evening. So, first question is on the A&P side. This year, you’ve been at about 16.5%, you said that investments — you’d like to invest more, given that the margin tailwind is there at the gross margin level. So, just wanted to get your sense on which are the areas that we’re looking to accelerate investments? You mentioned male grooming. Are there any other areas that we can kind of just talk about?

Mohan Goenka — Promoter Director

So, Harit, most likely, we are expecting our advertising to be in the range of about 17%, which is similar to this year. This year was 16.5%. Yeah. So, other than summer, because summer has not had a good beginning. Other than summer, we are up our expenditures in all the categories, all the categories, healthcare, Kesh King, Fair and Handsome, balms, all the categories. We are expecting about 250 basis point expansion in our gross margins. So, if we keep our advertising in the range of about 17%, there should be some expansion in our margins.

Harit Kapoor — Investec — Analyst

Got it. And just on — one more question on the margin side, last time, I think you had mentioned the core margins of 27%, I think, outside the investment portfolio. Given the raw material environment, is the confidence level even higher on this number?

Mohan Goenka — Promoter Director

[Foreign Speech] it looks like, because it is really easing. So, if the trend continues, it’s very difficult to say how — because just the first quarter. So, if the trend continues, yes, we are very confident of achieving more than 27%.

Harit Kapoor — Investec — Analyst

Got it. And then on pricing, typically, your margin has — always is added up 3% to 4%, I think, from a revenue — in a management perspective. Is it fair to assume given the material costs are very — ’24 will be more of a volume growth driven year rather than anything on pricing, right? Is that the fair way to look at it?

Mohan Goenka — Promoter Director

No, Harit, despite of that, we have taken some price increases. Our price increase has been in the range of about three 3%, 3.5%.

Harit Kapoor — Investec — Analyst

Got it.

Mohan Goenka — Promoter Director

Yeah. So, if you grow at about 8% to 10%, balance would be volume growth.

Harit Kapoor — Investec — Analyst

Okay. Perfect. And just one question on beverage. So, you did mention that there is some kind of momentum that you have seen, the year-over-year momentum given that rural has been fairly weak over last three, four quarters. But from your super stockers etc., you guys believe, like, on daily basis and from a distributor, do you feel that some of this momentum is real and sticky at least early signs, obviously, ex-your summer portfolio?

Mohan Goenka — Promoter Director

Yeah. No, definitely, as I said that some of our portfolios, like male grooming or Kesh King, even Kesh King, Fair and Handsome, balms, they are — they have all started showing some signs of recovery in the rural markets. But unfortunately, the summer portfolio is pulling us down. But, yes, there is some positivity when I discuss it with our team and also the dealers.

Harit Kapoor — Investec — Analyst

Great. I wish you all the best, Mohan Ji. Thank you.

Mohan Goenka — Promoter Director

Yeah. Thank you.

Operator

Thank you. Our next question is from the line of Ajay Thakur from Anand Rathi Securities. Please go ahead.

Ajay Thakur — Anand Rathi Securities — Analyst

Hi, sir. Thanks for taking my question. I just wanted to understand more on the distribution initiatives that we have undertaken. Can you please elaborate on the same? And also if you can spell out what are our targets in terms of the distribution increase for FY ’24, ’25 versus FY ’23?

Vinod Rao — President, Sales

This is Vinod Rao here. So, we’ve continued our investments in the Project Khoj, which is a rural expansion. So, we’ve added close to 11,000 towns last year, and we’ve reached around 52,000 towns and villages as end of financial year. And we will continue to consolidate that, because we’ve added lot of land towns and sub-stockist towns. We will consolidate, optimize, but at the same time, we will add the high-throughput towns. We expect to add around another 8,000 towns and reach around 60,000 towns and villages by the end of next year financial.

And we’ve — and if you take the chemist project we added around close to 31,000 chemists last year, which takes us to around 1.3 lakh chemists across the country. And here, we won’t — we don’t plan to add more chemists, but we’ll consolidate that business and derive business out of those expansions that we’ve done.

Ajay Thakur — Anand Rathi Securities — Analyst

Thanks. Also, I just want to understand mode in terms of the oil markets. So, there have been no — I mean, most of the hair oil companies have actually shown quite a bit of a growth in the hair oil segment. Even for our Navratna, we have seen some kind of a growth. So, I just wanted to get your sense in terms of how you look at the hair oils market going forward? Can we expect the momentum to continue? What would it be our explanation in terms of growing the Navratna portfolio and the Kesh King portfolio?

Mohan Goenka — Promoter Director

So, Ajay, as I said, the momentum is better than what we had experienced in the last few quarters. And other than Navratna, because Navratna has been a slow start, only because of the summer and nothing else. But, Kesh King is performing better than our previous quarters. So, Kesh King being a little expensive product, we will still have to wait and watch. We have launched a small size also in Kesh King as a brief pack. So, as I said, we are confident that Kesh King should do about 10% growth. Navratna, we will have to wait and watch. We still have a one month to go as far as summer is concerned.

So — but we are bullish. We have performed in the past. If you see four-year CAGR, everywhere, we have done about 6% to 7% growth. So, we are not seeing any worrying sign as far as the hair oil portfolio is concerned, because we have not seen any competitive intensity as far as Kesh King or cooling oils are concerned.

Ajay Thakur — Anand Rathi Securities — Analyst

Okay. Thanks for that. And lastly, Mohan Ji, I just also wanted to understand more on the innovation pipeline or what kind of segments we will be targeting going forward? Any color on the same could be helpful. Thanks.

Mohan Goenka — Promoter Director

Sorry, we can’t be very specific on new product development. But they would be primarily in D2C. We are really focusing on the digital-first brands. We have done exceedingly well on that. Today, our modern trade e-com contribution is almost 20%. We have launched a lot of digital-first brands, identified a lot of digital-first brands, some categories we have identified. So, most of it is going to be in D2C.

Ajay Thakur — Anand Rathi Securities — Analyst

Okay. Thanks for that.

Mohan Goenka — Promoter Director

Thank you.

Operator

Our next question is from the line of Naman Satiya with Mirae Asset. Please go ahead.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Yeah. Hi, sir. Firstly, could you please call-out the…

Mohan Goenka — Promoter Director

Can you speak slightly louder?

Operator

Naman, may we request you to use your handset, as you’re not audible?

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Hello? Yeah. Is this better?

Operator

Yes, sir. Please go ahead.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Yeah. So, could you please call-out the organic volume growth for this quarter? I believe the overall volume growth was 2%. So, say, excluding Dermicool and The Man Company, what would that number be?

Rajesh Sharma — President, Finance and Investor Relations

Yeah, Naman, so, overall Dermicool and The Man Company contributed around 10% to the topline. So, that’s the addition which we have got.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Okay. I was trying to get a sense on the volume — organic volume growth numbers.

Rajesh Sharma — President, Finance and Investor Relations

So, volume growth was negative — the volume growth was negative for the organic business.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Okay. Sure. And sir, secondly, a bookkeeping question. So, in the standalone books, other expenses have jumped about 60%, 70%. Could you explain that?

Rajesh Sharma — President, Finance and Investor Relations

So, I think, in the beginning of the call, we explained that the other expenses and other staff costs also, this includes the numbers of The Man Company in this quarter as well as for the full financial year, which was not there in the base quarters of the full-year last year.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Okay.

Rajesh Sharma — President, Finance and Investor Relations

So…

Naman Satiya — Mirae Asset Mutual Fund — Analyst

[Speech Overlap] standalone books, where I think, there are some…

Rajesh Sharma — President, Finance and Investor Relations

Okay. They are standalone — in the standalone books, the other expenses have gone up because of the cancellation of dividend announced by one of our subsidiaries, Emami Bangladesh. So, we had — because of the ForEx remittance problems in that country, Bangladesh, they have not been able to remit the dividend which we announced in the beginning of the year, which we had accounted for as income in the earlier quarter of this year. So, we had to cancel the dividend, because they were not allowed to repatriate the funds to India. So, that amount has been shown as other expense in this quarter, because the dividend stands canceled from our subsidiary.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Understood. And adding to that, there is also another INR32 crore impairment, is that included in other expenses in the standalone books again?

Rajesh Sharma — President, Finance and Investor Relations

Yeah. That is also for our this strategic investment of — on account of the Brillare Science, because earlier, we had accounted for lot of valuation gains on the investment in the standalone books and also on the options, which we had. So now, because last year, we have not seen significant growth in the numbers of Brillare Science. So, this is the the projections, which we have considered earlier and the actions which have come off, we had to take some impairment on the valuations, including — increasing valuations, which we have considered earlier.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Sure. So, does this…

Rajesh Sharma — President, Finance and Investor Relations

That’s…

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Is that through to the consol books of this or nothing — other expenses of consol books?

Rajesh Sharma — President, Finance and Investor Relations

So, on — at the consolidated level, we have provided for some impairment in the intangible assets of the Brillare Science on — roughly INR8 crores, INR9 crores, kind of, amount at the consol level.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Okay.

Rajesh Sharma — President, Finance and Investor Relations

This is the valuation exercise done at a very conservative level.

Naman Satiya — Mirae Asset Mutual Fund — Analyst

Sure. Okay. Got it. That’s all from my end. Thank you.

Rajesh Sharma — President, Finance and Investor Relations

Thank you.

Operator

Thank you. Our next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead.

Shirish Pardeshi — Centrum Broking — Analyst

Yeah. Thanks for the opportunity. Rajesh Ji, just to continue, that was my question, to get a little more depth. This impairment, what you’re saying, is there any charge which will also get followed up in FY ’24 or you’ve done one-time?

Rajesh Sharma — President, Finance and Investor Relations

As I just mentioned, this impairment is also on the very conservative side, this is the DCF valuations, and I think DCF valuations don’t work for the startups, because if you look at any kind of market valuations, that is mostly on the multiples of revenue side. But it is still — on the accounting side, we have taken this impairment. But going ahead, it doesn’t look like that there would be any significant impairment going ahead.

And for this standalone, at least we should be able to recover the amount which we have provided this year.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. All right. Next question is on — bookkeeping. How much MAT credit is still balanced and will we exercise in FY ’24 and what is the steady tax-rate we should build-in for FY ’24?

Rajesh Sharma — President, Finance and Investor Relations

So, FY ’24 tax-rate should be similar to FY ’23, current year tax rate, you can consider, because next year also, we will be accounting for our MAT credit. And we would start utilizing our MAT credit from FY ’27.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. My last question to Mohan Ji, I just wanted to be little clear in my mind. Over last four to five years, I know, we are at the mercy of season, things have not happened, we had COVID, we had good time and now, we are back to square one. So, since the time we have become Vice Chairman, what are the tangible changes you have brought in, in terms of efficiency, throughput or maybe if you can highlight if things are under control or we can really expect something inwardly looking than outwardly?

Mohan Goenka — Promoter Director

So, Shirish, just the change in designation, it doesn’t mean that there has been some big ticket changes [Foreign Speech], because we were always at the helm of the business and driving the business. Of course, in the last three, four quarters, what we have really invested is in terms of distribution, in terms of strengthening our manpower, strengthening the team, strengthening modern trade e-commerce, which we were lagging behind. Of course, there are challenges, as I said, it is very specific to summer. Other than that, I don’t see any challenges we have.

We have a very strong pipeline of D2C brand that you’re going to see this year. So, if rural continues to perform well, I’m very confident that we will get back to 8%, 10% growth levels. International has stabilized very well. We expect at least 20% growth in the international business. Healthcare, Gul Raj is here, we expect at least 15% to 20% growth from the international business — sorry, from the health business.

So, I think, overall, things are very much in control. Of course, there would be some ups and downs as far as the summer or the winter portfolios are concerned, if the season is favorable or unfavorable, but I would definitely say that things are very much in our grip. And if you take a slightly long-term view, then we are in a very good trajectory, that’s what I see.

Shirish Pardeshi — Centrum Broking — Analyst

That’s good to know, Mohan Ji, but I’m still happy with time. About three quarters before, we have shown a lot of momentum in healthcare, we added feet-on-street, about 300 odd people were added. But when you look back and now, when you compare, we have done from our bit, but if the market is not supporting, we will come back and question you the seasonality factor. But that’s why I’m saying, I’m a bit worried that really — when you say things are under your grip, can we see a bright year in FY ’24? I mean seasonality will continue, having its own effect.

Mohan Goenka — Promoter Director

So, Shirish, I don’t know what lens you look at. I have always maintained that we will not do anything for the short-term gains [Foreign Speech]. We invest for long-term and we will keep on investing for long-term. So, we are very happy on certain fronts. Of course, as I said, we have, for all our categories, our penetration levels have gone up. But consumption levels at overall has reduced for some categories.

Other than the summer, I’m not seeing any challenge. So, the e-com, modern trade, international business, people, or distribution, we have invested a lot, digital-first brands, I’m saying we’re launching a lot of digital-first brands. So there — from our lens, I think, there is lot that we have done and we will see the results in coming quarters.

Shirish Pardeshi — Centrum Broking — Analyst

I agree with you, Mohan Ji. But the whole question for me is that, when we can see the excitement in the stocks. The…

Mohan Goenka — Promoter Director

That is not in my hand, Shirish, and we can only do our job. And as I said, I’m very optimistic. I’m very happy that there should be some margin expansion this year. And I hope that we invest that money on advertising to getting some new consumers. We have been able to contain our competitors, as far as Kesh King, other categories are concerned, even male grooming is concerned. So, there are some positive signs also.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. And the last last point, you have maintained over now last 2.5 years that we will divest non-core assets and the pledge, things will happen. Is there any timeline you want to say that? I mean, I know things are bit little complicated on-ground. But if hospital deal is not happening, do you have any momentum, do you have any other plan to liquidate and get the pledge at the lowest level?

Mohan Goenka — Promoter Director

If the hospital deal doesn’t happen, Shirish, we will have to get back to the drawing board, we would have to find certain alternative. But I am very, very confident that the deal will materialize. It is just a matter of time. The deal is signed, sealed, everything. We are just awaiting government approval. As soon as we get it, the transaction would conclude. So, it’s just a matter of time. I think, max of about three weeks to four weeks, that’s what we think.

Shirish Pardeshi — Centrum Broking — Analyst

Okay. Thank you. I have taken my Liberty to question you, but thanks for your patience.

Mohan Goenka — Promoter Director

Thank you, Shirish.

Operator

Thank you. [Operator Instructions]

Our next question is from the line of Bhavesh Jain from Enam AMC. Please go ahead.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Sir, on Bangladesh, any…

Operator

Mr. Bhavesh, may we request you to use the handset?

Bhavesh Jain — Enam Securities Private Limited — Analyst

Hello?

Operator

Yes, sir. You are audible now. Please go ahead.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Sir, on this Bangladesh, any concern with this ForEx unavailability on the growth side? Because we are seeing lot of headwinds related to economic growth also over there.

Mohan Goenka — Promoter Director

So, Vivek, you are there, can you reply?

Vivek Dhir — Chief Executive Officer, International Business

Hello, I’m Vivek Dhir. So, like growth-wise, we don’t see any issue. We are covered sufficiently for the material side, material is imported into the country and we are managing foreign exchange for purchase of materials. So, that is happening. And we are very suitably placed in each and every category in Bangladesh, and growing over there. So, growth-wise, there is no issue.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Any ForEx related issues?

Mohan Goenka — Promoter Director

Vivek, you want to highlight?

Vivek Dhir — Chief Executive Officer, International Business

Not at — the concerns for the business at the moment. Remittances are available for raw material, purchases and packaging material purchases, which we are doing. So, there is no concern on that side as well.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Okay.

Vivek Dhir — Chief Executive Officer, International Business

We are able to run our business. And we have keeping strategic inventory coverage as well.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Okay.

Mohan Goenka — Promoter Director

Yeah. And we are very — we are very, very confident, Bhavesh, that our international business should grow at about 20% for this year.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Okay. And sir, ex of this Helios, what will be our margins for the quarter and the whole year?

Mohan Goenka — Promoter Director

Ex of Helios?

Bhavesh Jain — Enam Securities Private Limited — Analyst

Yeah.

Mohan Goenka — Promoter Director

Yeah. Just a moment.

Rajesh Sharma — President, Finance and Investor Relations

Hello?

Bhavesh Jain — Enam Securities Private Limited — Analyst

Yeah.

Rajesh Sharma — President, Finance and Investor Relations

It is around 27%, just below that.

Bhavesh Jain — Enam Securities Private Limited — Analyst

For the whole year, right?

Rajesh Sharma — President, Finance and Investor Relations

Yeah.

Bhavesh Jain — Enam Securities Private Limited — Analyst

Okay. Yeah. Thanks a lot and all the best for the future.

Rajesh Sharma — President, Finance and Investor Relations

Thank you.

Operator

Thank you. [Operator Instructions]

Our next question is from the line of Anurag Lodha from Axis Capital. Please go ahead.

Anurag Lodha — Axis Capital — Analyst

Yeah. Thank you for the opportunity. I just had one question. So, you’ve taken these initiatives for Project Khoj to increase distribution across towns, right? So, sir, how is this driving revenue growth? Because, I mean, we’ve been adding a lot of towns aggressively. So, I just wanted to get a sense on how is it driving growth going ahead. And I just wanted to understand if there has been any lag from older distribution centers due to which the growth has been impacted?

Vinod Rao — President, Sales

So, the rural growth, despite the headwinds that we face in the rural economy, and we’ve seen the slowdown across the rural. That didn’t stop us from investing in rural. And we we looked at the high-potential towns and villages. So, we used the different model. We didn’t go in concentric circles of looking at town, clusters, and then looking at a population cotton, then diving distribution. We looked at potential with respective in our categories and we grow distribution in that manner. So, that gave us a lot of confident, because we got a very high repeat rate. So, all the 11,000 towns that we’ve added, we’ve got repeated some more than 85% per month on the expansion. That gives us lot of confident that we’ve added the right kind of towns and villages and it has helped our overall rural expansion, which has gone from 32,000 two years back, now we were doubled it. We almost had 52,000 towns and villages.

So, what tends to can happen in expansion of its nature, as and when you go a bit more directive, there could be some fallout and some impact of it on wholesale, because wholesale capers indirectly to this and you do not have too much control over that business, but actually gives us lot more control, because these are then digitized. And we know exactly where the sales are coming from. So, overall, I think once the demand kicks-in, we will be able to see much better growths coming in from overall rural, and I think that the infrastructure has been created for even future. So, in one year, one shouldn’t look at it, you should look at it more on a long-term point-of-view. And that’s why we’ve invested behind rural.

Anurag Lodha — Axis Capital — Analyst

Got it. Thank you. That’s all from my side. Thank you.

Operator

Thank you. That was the last question of question-and-answer session. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Rajesh Sharma — President, Finance and Investor Relations

Thank you all the participants for joining us for today’s earnings call of Emami. Thank you IIFL for arranging this. Thank you. Have a nice day.

Operator

Thank you. [Operator Closing Remarks]