Bajaj Consumer Care Ltd Management Discussions

Global economic overview¹

The global economic recovery remains steady, with the world economy projected to grow at a rate of 3.2% over the next two years. The growth rate aligns with the pace observed in 2023, thus indicating a continuation of the positive momentum. Advanced Economies (AEs) are expected to experience a slight acceleration in growth, with rates increasing from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. On the other hand, emerging markets and developing economies are projected to see a modest slowdown, with growth rates dipping from 4.3% in 2023 to 4.2% in both 2024 and 2025. Global inflation is forecasted to show a steady decline over the forecast period. In 2023, global inflation stood at 6.8%, which is expected to decrease to 5.9% in 2024 and further to 4.5% in 2025. Particularly, advanced economies are anticipated to return to their inflation targets sooner compared to emerging markets and developing economies. Core inflation, which excludes volatile items such as food and energy, is projected to decline more gradually, indicating persistent inflationary pressures in certain sectors.

Geopolitical tensions pose risks to the economic trajectory, potentially disrupting global supply chains and hindering growth. However, opportunities for sustained recovery exist, driven by favorable economic indicators and improving consumer confidence.

Overall, the global economy will continue to grow in 2024. However, policymakers and businesses will need to navigate uncertainties and challenges to ensure sustainable and inclusive economic recovery.

Outlook

Global growth is forecasted to remain steady at 3.1% for CY 2024. This will be followed by a modest increase to 3.2% in CY 2025. Despite a consistent growth rate, the historical average of 3.8% (2000-19) has yet to be reached following the global pandemic. Rising trade distortions and geoeconomic fragmentation are expected to persist, adding pressure on global trade levels. Inflation on the other hand continues to fall. Global inflation is expected to fall to 4.4% in CY 2025, from 5.8% in CY 2024. Notwithstanding the hurdles, emerging markets and developing countries are predicted to sustain consistent growth rates in CY 2024 and CY 2025 with minor regional fluctuations.

Indian economic overview²

The domestic economy continues to display strong momentum, with real GDP expanding by 7.6% in the fiscal year 2023-24, driven by robust investment activity. The post pandemic recovery of the Indian economy was stronger than expected, led by private consumption and aided by a rebound in government spending. Looking forward to expectations of a normal southwest monsoon are poised to strengthen agricultural activity, while the manufacturing sector is expected to sustain momentum due to sustained profitability. Services activity is projected to surpass pre-pandemic levels, and private consumption is anticipated to strengthen further, supported by increased rural and urban demand.

Inflationary trends

Inflation has softened to 5.4% in 2023-2024, but food inflation rose to 7.0%. Although expectations of record rabi wheat production and a normal monsoon provide some relief, uncertainties persist due to climate shocks and supply-side constraints. Fuel prices remain in deflation, while core inflation has notably declined to (-) 3.4% in 2023-24. However, Food price uncertainties and continuous geopolitical tensions continue to weigh on the inflation outlook.³ RBI noted that the economys resilience is supported by robust investment demand and positive sentiments. However, persistent food price pressures present challenges to achieving the inflation target. Unforeseen supply-side shocks from adverse climate events and geopolitical tensions contribute to uncertainties in the economic outlook.

The Monetary Policy Committee emphasizes a gradual withdrawal of accommodation to align inflation with the target while supportingeconomicgrowth,aimingtostrikeabalancebetweencontrollinginflationarypressuresandfosteringrobustexpansion.

Urban and rural segment-wise CPI performance⁴

All India year-on-year inflation rates (%) based on CPI (General) and CFPI: March 2024 over March 2023

			March 2024			March 2023
		Rural	Urban	Combined	Rural	Urban	Combined
	CPI (General)	5.51	4.14	4.85	5.51	5.89	5.66
Inflation
	CFPI	8.55	8.41	8.52	4.72	4.82	4.79
	CPI (General)	187.8	183.6	185.8	178.0	176.3	177.2
Index
	CFPI	187.8	193.4	189.8	173.0	178.4	174.9

Notes: Prov. Provisional, Combd. Combined

Consumer tendency⁵

Consumer confidence for the current period has been steadily improving, with respondents reporting better perceptions across all survey parameters. The current situation index rose by 3.4 points to 98.5, its highest level since mid-2019. Confidence for the year ahead also saw a notable uptick, driven by increased optimism in all survey parameters. The future expectations index (FEI) reached 125.2, its highest level since mid-2019. Households expressed improved sentiments regarding the general economic situation and employment prospects, both for the current period and the upcoming year. This positive outlook extended to discretionary spending as well. Respondents reported a better income situation compared to the previous year, with expectations of further income growth in the year ahead. Overall, the survey reflects a growing optimism among consumers, signalling a positive outlook for the economy.

Outlook⁶

India, with its current GDP of USD 3.6 trillion, has secured the position for the fifth-largest economy after the United States, China, Japan and Germany. By the FY 2031, Indian economy will reach USD 6.7 trillion according to CRISIL predictions. In the coming seven fiscal years (2025-2031), it is likely to see India surpass the USD 5 trillion level and will also reach the USD 7 trillion threshold. India will shift to become an upper-middle-income economy, showcasing a progressing economic landscape. According to these estimates, in the upcoming years, the country is showing strong potential for economic growth and development.

These estimates highlight the countrys potential for strong economic growth and development, establishing India as vital in the global economy in the coming years.

Industry overview

The fast-moving consumer goods (FMCG) sector is expected to grow by 8.4 % in FY 2023-24. This growth continues to be lower than the past year as the impact of inflation has still not completely abated. This growth continues to be uneven across geographies and town classes.⁷ Growth in the FMCG markets is currently being driven by urban markets as consumption in rural India is still subdued due to the combination of high food inflation and low wage growth. FMCG spends in the country is also being impacted due to the increase of the Purchase basket of consumers, in particular due to Mobile Phones, data and higher spending on education and health.

E-commerce and digital media continue to enable growth as more and more consumers shift to ecommerce platforms driven by pricing as well as innovative products . Digital media is making discovery of products far more easier than what it was possible with traditional media channels.

In the medium-term, growth prospects for FMCG remain good. Rising incomes and price stability will allow households to shift to branded products for commodities and move up the value chain to products that offer better functionality or user experience. Consequently, the current uneven growth patterns are expected to normalise, leading to sustained long-term growth across various segments and categories.

Growth of Consumption⁸

The food and non-food divisions significantly contribute to Indias FMCG business. In the third quarter of 2023, rural consumption has shown 6.7% improvement in the non-food category. Despite facing negative response from the rural markets previously, personal care sector is now witnessing significant expansion and recovery. At the same time, in urban markets, there is a visible growth of 10.4% in the non-food segment. These trends uphold the increasing demand for FMCG products in urban and rural areas, showcasing the strength and vitality of Indias consumer market.

The Hair Oil Industry

Growth trend for hair oils was similar to over all FMCG market. Urban markets outpaced rural markets in FY24 . On long term basis (MAT March2024), recovery was visible with the market growth increasing quarter after quarter. Household penetration continued to be high with 92% of Indian households having consumed hair oil in last 12 months. The average consumption per household was steady at 1.5 litres, (Source: Nielsen Offtake Nos. MAT MAR24 and Kantar HH Panel MAT Dec23) Hair oils remain an essential and enduring part of Indian consumers hair care routine. The resilience of the hair oil market is rooted in deep-seated traditions and continued consumer demand for nourishing products.

Overall Hair Oil Market Trends

		Value Sales Growth % (YA)
Markets
	Q1	Q2	Q3	Q4
AI (U+R)	3.7	6.4	6.2	8.2
All India Urban	7.1	7.9	7.1	7.4
All India Rural	-0.3	4.6	5.0	9.2
		Volume Sales Growth % (YA)
Markets
	Q1	Q2	Q3	Q4
AI (U+R)	2.8	5.9	5.6	8.2
All India Urban	6.9	7.8	7.2	7.9
All India Rural	-1.6	3.7	3.8	8.6

Non-food consumption⁹ Growth drivers¹⁰

Growing hair concerns - With urbanisation, hectic lifestyle, pollution and worsening climate change, people are increasingly facing hair problems. Hair ailments like dandruff, dryness, itchy scalp and hairfall are triggering concern. These have resulted in a higher demand for good hair oil.

Sharpening focus on Ayurveda - Customers are increasingly focusing on homely Ayurvedic solutions discarding chemical-based products. This shift could be aligned with the rising trend of social media influencers shedding light on the need for good, clean hair care.

Rejuvenating Indias tradition of hair oil - India has a strong tradition of applying hair oil. This culture has always been beneficial to the hair oil market. There has been a recent rise in the demand for homely ayurvedic and natural ingredient oil markets. The traditional oil market promises age-old remedy to all the modern hair-related problems. The consumers are drawn to these traditional hair care procedures.

Industry Trends

The hair oil market exhibits the following broad trends:

1. In rural India, low-price brands and low-pick up price SKUs (10/- 20/-) are commonly consumed. This trend has been further accelerated due to the impact of inflation on consumers spending power.

2. In urban India, E Commerce penetration continued to increase. As a consequence E commerce is now no longer a preserve of premium products. Products across the price spectrum are now being purchased on Ecommerce platforms.

3. Many consumers are mixing hair oils and various kitchen ingredients to create their personal oils, leading to an increase in the usage of various pure oils like coconut, castor, curry and so on.

4. Many consumers are also adopting more and more hair care products and regime usage is going up . Hair oils are being used in tandem with shampoos and serums.

Long-term Outlook of Hair Oil Consumption

Traditionally, hair oil has a strong prevalence in the Indian market as applying oil on the hair has always been a routine practice for ages. The following trends will ensure that consumers keep using hair oil for benefits such as healthy hair, dandruff-free hair and zero-hair fall.

Increasing Hair Concerns

Present-day lifestyles and environmental issues like pollution are creating a range of hair problems, such as dryness, dandruff, hair breakage, and so on. This will ensure the continued relevance of hair nourishment, providing hair oil brands with an opportunity to effectively capitalise on this demand by incorporating validated ingredients like vitamin E into their oils.

Impact of Social Media

Social media, including the role of influencers, is playing a significant role in educating consumers about hair care in a more comprehensive manner compared to traditional media. The influence of this medium is contributing to the popularity of hair oil as a preferred solution for hair nourishment, even as consumers explore various hair styling options and chemical treatments.

Outlook

The long-term outlook for the hair oil industry continues to be positive despite the short-term challenges and demand slowdown. The industry provides ample growth opportunities, driven by a growing population, urbanisation, premiumisation and increasing demand for value- added products. The Company strives to leverage these opportunities and will continue to launch innovative products that meet diverse consumer requirements and fuel its future growth. Automation in operations will be instrumental in strengthening its supply chain and improving processes, while ensuring premium quality and the ESG responsibilities of the Company are met. Further, the Company will continue to invest in marketing and advertising to help reinforce its brand name and new product launches.

Beauty and personal care (BPC) market¹¹

The global BPC market is expected to become a USD 660 billion market by 2027. The beauty and personal care industry of India has scaled up in the global markets with a valuation of USD 14 billion. According to a report, the Indian BPC industry accounts for about 5% of the global economy and is reported to reach USD 30 billion by 2027. It is predicted that India, now under-capitalised, will contribute 33% to the global economy with a CGAR of 10%. The online or e-commerce platform is forecasted to become a massive marketing channel for the country.

Growth drivers

Demand for Clean Products: Increasing consumer preference for clean and natural beauty products along with organic compounds, anti-pollution and anti-ageing properties are driving growth. This trend aligns with the rising awareness of sustainable living and ethical consumption practices among Indian consumers.

Popularity of Customised Products: An increasing popularity of customised beauty and personal care products can be observed. Consumers are seeking products that cater to their specific needs and preferences. This focuses mainly on skincare solutions for different skin types, haircare products for diverse hair textures and eco-friendly formulations.

Shifting Consumer Focus Towards Premium Products: In India, more customers are preferring premium beauty products. This trend is expected to drive incremental spending. Most consumers are upgrading to branded, higher-priced products with enhanced features and quality.

Company overview

FY 2023-24 has seen some revival for the hair oils category. The decline that we were seeing in Fy22-23 has got arrested and the category has seen flat to positive movement in the year. Most of the Hindi-speaking markets, where most of the contribution of the Company comes from, still continued to decline in large part of the year but at a lower level compared to FY 2022-23. Demand in rural markets has been a key cause of concern in FY 2023-24. Despite the category constraints, the internal growth of the organisation has been better in this financial year on the back of exceptional performance by organised trade. Organised trade registered a phenomenal growth of 21.9% in FY2023-24. General trade on the other hand had been under pressure.

Sales and distribution

Distribution remains the backbone of the Company, as we continue to be the market leader in terms of outlet reach, with close to ~43-lakh outlets serviced nationally as per Nielsen. During the financial year under review, the Company also focused on driving direct reach and increasing the retail contribution. Key stores within the retail channels were strengthened through improved loyalty programmes. The Company has witnessed 19% growth in retail loyalty outlets channel on the back of increased investment in key stores and driving sales effectiveness. The focus next year will be on how to maximise range selling in our existing set of outlets. The rural town coverage expansion, which started two years back with van operations continues with a strong network of ~550 vans functioning nationwide.

Organised trade has done well in FY 2023-24. The Company is aggressively driving distribution and penetration, both in modern trade and e-commerce channels. Organised trade now contributes 25% to the India business, which is now on par with industry, though there is scope to improve further. Better customer engagement, participating in customer events, right assortment strategy, and visibility investments both in modern trade and e-commerce are a few of the levers which the company drove and has resulted in a significant performance in organised trade. We will scale up further, focusing and capitalising on the realms of e-commerce, and B2B. The upcoming year will be dedicated to expanding distribution channels, with a particular focus on the e-commerce space. There will be increased investment in enhancing visibility and brand presence. The goal is to reach a wider consumer base and strengthen market penetration by leveraging online platforms and improving overall visibility in the marketplace.

FY 2023-24 was a year where we continued to scale up new products which were launched in the previous year. Bajaj Coconut oil showed good traction. The Non-Almond drop portfolio contributes 13% to the overall business which has improved by 9% over the previous year. This aligns perfectly with our efforts to reduce reliance on the Almond oil portfolio. During the year under review, significant attention was given to enhancing the sales capabilities of our front-line sales team. Comprehensive learning modules were developed and the team underwent intensive classroom training programs to reinforce their knowledge. Additionally, e-modules were created to further support their learning. The emphasis on driving sales fundamentals and improving sales efficiencies remained strong, resulting in positive growth in the retail sector.

The focus on data analytics through front-line SFA has been key this year. Van operations were also GPS-enabled from tracking and compliance perspectives. Looking ahead to FY24, we plan to further enhance efficiency by automating the review and monitoring mechanisms.

Key initiatives for sales and distribution

Increase in market interaction in the markets of Punjab, Delhi, Rajasthan and Madhya Pradesh through organised trade;

Separating distribution channels for large packet sizes and medium to small packet sizes to reduce channel conflicts;

Separate 700ml packets have been introduced for markets seeking out large-size product packets;

BCCL has introduced and is pushing the 10-20 rupees small sachet for Almond hair oil products;

Attractive offers have been placed for Uttar Pradesh, Rajasthan and Madhya Pradesh to boost sales;

BCCL has introduced new Non-Almond Hair Oil (NADHO) products and the products are being pushed strongly into the market;

During COVID, BCCL began VANS operations, which have now grown into a full-fledged operation with over 500 VANS operating in various states.

Supply chain and procurements

After a tumultuous year where prices of raw and packing materials had gone up significantly with some of them hitting multi year highs, we saw correction in the prices in FY 24. There were certain availability concerns in some of the materials but the risk mitigation exercises done over the last couple of years helped us tide over the situation comfortably. The Company continued to drive various initiatives for cost-reduction in material cost to stay competitive in the market place. Our supply chain remained flexible and responsive, enabling us to meet the evolving demands of our customers, particularly with the expansion of our business in modern trade and e-commerce channels.

Manufacturing

The manufacturing footprint in BCCL is a mix of our own and outsourced facilities. We continue to invest in our plants for additional capacity requirements, productivity improvements and upgradation of the safety and quality processes. The Company has adopted the Smart Manufacturing Processes to improve lead time, quality, cost, customer service, and flexibility with a process-driven approach implementing the techniques, such as doing it right the first time (DRIFT), Zero Defects, and operational excellence. The Company invests in automation and lean practices to continuously improve productivity and help the plant significantly offset the increase in the variable costs.

As we expand our product profile, we will continue to have a mix of taking production in-house and developing new contract manufacturers. During the year, we have added new partners, who bring in specific capabilities for certain product categories. We work with our partners to ensure the quality standards are at par with BCCL standards through adequate controls and capability enhancement of their teams.

Quality

At BCCL, we believe in maintaining the highest quality standards for our products. We have well-defined processes to ensure compliance with all the product and regulatory requirements. We continuously audit our vendor ecosystem and work with them to consistently maintain and upgrade the quality standards. All manufacturing facilities have completed annual certifications of ISO standards. Our laboratories are well equipped with analytical facilities that cover wet chemistry, microbiology, and packaging testing for day-to-day analysis as well as for supporting the development of new products.

Safety Standards

We have implemented several measures in our plants to continuously enhance safety standards. As is our practice, we conducted an external audit to evaluate our practices and processes. The identified risks were promptly addressed, and appropriate mitigation measures were implemented to ensure compliance against any potential issues.

Environment and Sustainability

We strive to keep sustainability at the heart of our operations by ensuring optimal usage of resources like water and electricity. We work on both the demand and supply side of both these critical resources Our goal is to achieve water neutrality within the next two years and create a potential of 5X recharge of our consumption. In the case of energy, we reduce our carbon footprint by various initiatives including investing in newer technologies, continuously working on improving efficiency parameters in our operations. We have taken measures like Miyawaki plantation of trees near our plants and also working on sourcing of renewable sources of power. We intend to be carbon neutral in Scope 1 and Scope 2 in the medium term.

The Company has fulfilled its obligations under the Extended Producer Responsibility (EPR) framework by effectively addressing plastic waste management.

Risk Management

At BCCL, risk management is an integral part of the Companys strategy and planning process. At BCCL, we follow an institutionalised ‘BCCL Risk Management Framework that allows us to identify risks impacting our business and deploy organization-wide processes for assessing, prioritising and mitigating the risks. Evaluation of opportunities and risks is a constantly evolving field. The Company has created a risk infrastructure by setting up an Risk Management and ESG Committee as the apex committee. Our Risk management committee determines the risks in relation to the achievement of business objectives and appropriate risk responses. It is responsible for ensuring the effectiveness of our companys risk management framework, which helps the organization to respond to identified risks through acceptance, avoidance, transfer and mitigation and also seek opportunities in assorted risk scenarios. The risks are identified based on their likelihood and severity and are categorized into key and non-key risks where the high and medium risks are part of key risks while the low risks are part of non-key risks.

Steps in the risk management framework defined at BCCL for functional risks:

1. Define clear business objectives and strategies

2. Identify and assess Risk (3-dimension risk identification)

3. Priortise / Measure risk (aligned measurement function + RM team)

4. Manage (>> identify existing controls, identify residual risk, define risk treatment plan >> cost of mitigation >> mitigation plan)

5. Monitor and track progress of aligned action plan for risk mitigation

6. Report risk exposures (Board, Audit Committee, Risk Management Committee, ManCom)

Risk Definition	Risk Vulnerabilities	Mitigations
	Non-compliance with existing and	a. Adequate monitoring mechanisms are in place to
	emerging laws and regulations may	ensure awareness and adherence to applicable
Existing and	affect the business continuity and cause	laws and regulations
Emerging Rules and	reputation risk, penalties, and damages
Regulations		b. Engagement of compliance consultants has
		ensured timely knowledge and implementation of
		existing and emerging compliance requirements
	a. Inflation results in increase in the	a. Robust margin/pricing and cost reviews done on
	price of input materials, and other cost	a monthly basis and corrective actions are taken
	impacting profitability	as necessary
	b. Economic slowdown impacting	b. Broad basing of product portfolio to ensure
	top-line growth due to reduced	availability of products at various price points for
Macro economic risk	consumer purchasing power affecting	urban and rural consumers
and revenue growth	consumption	c. Expand product and channel diversity, innovate,
	c. Overdependency of sales on few	and launch new offerings for broader business
	products/ channels/ geographies	growth.
	impacting revenue growth	d. Explore acquisition opportunities to enhance
		capabilities and pursue inorganic growth.
		e. Explore opportunities in International Market
	a. Shift in consumer tastes, preferences,	a. Consistently engage with consumers to grasp
	and behaviors driven by cultural	evolving trends and behaviours
Changes in	shifts, demographic changes,	b. Implemented a strong innovation program to
consumer	technological advancements, natural	address emerging consumer trends.
preferences and	and sustainable brands
		c. Update brand equity/ assets to align with evolving
competitive intensity	b. Rising competition from new	consumer preferences.
	age brands in offline and online
		d. Balanced advertising focus between digital and
	marketplaces
		traditional media
	a. High attrition rate impacting	a. Integrated retention initiatives and strong
	organization stability and performance	employee engagement platforms are in place to
Human Resource	b. Lack of robust succession planning for	arrest high attrition
related risk	key roles	b. Structured talent management framework being
		launched to retain critical talent and feed into
		succession planning for key roles
	Inadequate supply of raw materials due to	a. Conduct annual risk assessments for critical raw
	disruptions in the supply chain like	and packing materials
	• RM unavailability,	b. Proactive measures taken to mitigate risks
	• Dependency on a single vendor for RM	related to cost, service, or quality issues.
Supply chain risk	/ PM supply and	c. Strategies involve developing alternate vendors,
	• Unfavorable price fluctuations	plant locations, or increasing inventories
		d. Strategic buying including advance purchase
		of selected commodities wherever required to
		protect against price volatility
	Any significant breach to our Code of	a. Regular engagement with employees and
	conduct by employees or business	business partners on Code of conduct and
	partners would lead to damage to	Business Ethics
Violation of ethics	corporate reputation and financial results
		b. Vigil mechanism in place to report and handle
and business
		incidents
Integrity
		c. Regular audits, management reviews and
		controls testing to assess compliance with ethical
		standards
	Breach of cyber security/attack or	a. Robust security policies like next-generation
	unauthorised access to IT security/system	antivirus, filtration, internet protocols,
	can cause	applications and USB access, domain control
	• disruption of operations,	system and activity directory in place
Cyber security and	• financial loss,	b. Timely backup of SAP and other key applications
data protection		along with user data taken periodically
	• damage to brand reputation,
		c. Regular third-party audits conducted, and
	• legal liability and
		corrective actions taken. IT Security policies are
	• leakage of valuable IPRs and personal	revised periodically based on inputs received
	data.	from consultants and service providers
	Any disruptions to our manufacturing	a. Regular audit by external agencies to assess the
	or depot operations due to potential of	safety risk of our plants and actions are taken to
	accidents, fire incidents , strikes occurring	address the potential areas identified
	at company premises poses threats to	b. Conduct regular safety training, mock drills, and
Disruption in	employee safety, property damage and
		awareness sessions for preparedness against
operations	business continuity
		the potential incidents
		c. Proactive engagement with, both internal and
		external stakeholders to anticipate and mitigate
		disruptions

Human Resources

In order to transform into a forward-thinking organization, BCCL considers its employees to be its most valuable resource. The idea that there is "One BCCL Family" among all of our employees has been the cornerstone of our culture. Through our people-focused projects, we intent to improve the work experience and raise employee morale, which will ultimately result in a more satisfying and rewarding work environment for everyone at the company. BCCL has constantly placed a strong emphasis on making strategic investments in its workforce, by enhancing its systems and procedures for managing people. It has been a constant endeavor at BCCL to ensure that HR continuously partners with the business to achieve overall organizational goals.

Maximising Human Potential

We are committed to diversity in the workforce, systemic equity, and the development of an inclusive culture and to providing our employees with a work environment free from discrimination and harassment. We have a well-designed policy emphasizing the importance of equal opportunity. We have certain teams like R&D, Internal Audit, HR having over 40% representation of female employees. At BCCL factories about 35% workforce deployed are female.

To understand the meritocracy tenets, we trace the journey of a new joiner in our largest function, Sales. A prospective candidate who has applied for the position of Sales Officer goes through a rigorous, objective set of functional assessments (Online test conducted by Mettle) that evaluates basic functional competencies of the role – namely business understanding and data interpretation. This is followed by up to three rounds of interviews, with the immediate line manager, the skip level manager, and the head of the department post which the final call is taken.

The next most important focus area for us is to onboard each of our employee through a robust 100-day induction program.

Performance Management System

Our Performance Management system (EDGE – Enhance Develop Grow and Excel) ensures that every employee gets an opportunity to discuss about their KPIs, developmental needs, career aspirations and ways of working at least three times every year with their manager and skip level manager.

Enhancing Employee Experience

BCCL has been certified as Great Place to Work for 6 consecutive years with consistent increase in the Trust Index

Score. The "Great Place to Work" is an evidence-based, industry-neutral, and internationally recognized model of employee engagement. Throughout the year, a number of infrastructure improvements were made in response to employee feedback, with the goal of fostering a lively work environment. This involved designing more interesting and enjoyable areas at the head office as well as more creative and contemporary workspaces. Some areas where we have seen significant improvements w.r.t GPTW Scores are: Training and Development, Reward and Recognition, and Employee Engagement.

Our employee engagement framework CARE stands for Connect, Adequate, Recognize and Engage. It aims at Increasing Employee Productivity, Lower Employee Turnover, and Improved Customer Satisfaction.

Numerous engagement activities, such as team gatherings, sports events, outings, and the celebration of national holidays, were carried out at various zonal offices, plant locations, and the Head Office. Programs like "Mann Ki Baat," "Meet the Leaders", "Chai Pe Charcha", "Samvaad", "Fireside Chat with Leaders", etc. were introduced and effectively carried out by various teams with the objective to build continuous top-down and bottom-up connects across the organization.

To ensure seamless on-time dissemination of this evolving strategy to all employees, the Managing Director holds quarterly ‘Town Hall with the entire organization with a week of publication of quarterly results. The town hall also have an extended open house where employees are encouraged to not only share individual issues but discuss on products, market feedback, and other areas of business interest. In addition to quarterly townhall, monthly location-specific communication meeting: ‘‘SAMVAAD is held by the Location Incharge (Mancom members, Regional Heads, Plant Heads, etc) where monthly updates on development in the organization, functional updates, reward and recognition events are held.

This year in April, a whopping 500 members consisting of the senior management team, corporate teams, and sales teams gathered in Agra for our Annual Sales Conference. The two-day program was jam-packed with team presentations, prizes, and recognitions among other engaging activities. The organizations most prestigious honor program, the "MD Circle of Excellence," went one step further and invited the winners families to the award ceremony. Throughout the entire session, there was a mixture of commitments, emotions, and praise coming from all directions.

Followed by this, in the same month, we held the International Sales Conference at Kuala Lumpur, Malaysia. The event brought together teams from the Head Office, Nepal, Gulf countries, and Bangladesh, fostering collaboration and exchange of ideas among representatives from various regions.

To ease travel for work-related purposes, we have revised our Travel Policy and have incorporated other services like Uber Corporate and partnering with Thomas Cook for business-related travel. This initiative not only reduced transportation complexities but also boosted employee satisfaction and productivity.

Learning & Capability Development

Throughout the year, BCCL upheld a culture of ongoing education by providing a variety of modalities and formats to meet the interests and preferences of many learners. All of our employees participated in the compliance awareness programs on topics of POSH, Code of Conduct, Brand Protection, and Whistle Blower Policy. NEEV, a custom-designed training program, was introduced for the domestic sales staff. "NEEV" is a comprehensive training program designed to provide the sales GT team with critical abilities in team management, ownership, planning, and review. The programs objective is to guarantee that team members possess a solid basic understanding of important topics and are ready for whatever comes next.

In an effort to advance the "BCCL way of selling" by enhancing in-market executions, the extended sales team comprising ISRs and VSRs was given a new initiative called "PASSION." It was a clearly laid out seven-step process that included organizing and getting ready, going up to the customer and saying hello, patrolling the store and upholding housekeeping standards, closing the call, assessing the degree of success, and wrapping up the day with the required updates and notifications. In our manufacturing department, we have undertaken a Total Productivity Maintenance initiative for continuous improvement in the productivity. This consists of both formal classroom learning as well as On the Job projects. These projects are reviewed on monthly basis and are implemented at the shop floor. Development efforts at BCCL are directed towards various levels of the organization through programs like:

• First Level Manager Learning Journey – Ascend – This program consists of 6 days of classroom sessions spread over 4 months (2 + 2 + 2) followed by working on On-the-Job project. This is supported by group coaching sessions and smaller assignments pre and post each session. At the end of the journey all the participants present the real-life projects they had worked on to the Mancom team.

• Negotiation and Influencing Skills workshop for Procurement team –2 days hands-on workshop was designed and delivered by an expert in the field. The workshop was practical with practice sessions to ensure that the concepts learning was made relevant for the participants. The next 30 days roadmap was drawn for each participant. Post 30 days, all the participants had to submit their assignments to the trainer who evaluated them and submitted the findings to the HOD.

• This year we have partnered with LinkedIn Learning as well with the objective to promote Self Learning.

• We also focus on regularly upskilling our leadership and managers on variety of topics to equip them with the right skillsets to drive business.

Talent Management

Our Talent Management framework aims at building a robust Talent pipeline especially for critical roles in the organization. This is done by identifying potential candidates who can take up next-level roles within the organization. The leadership team every year to discuss each eligible candidate and identify the way forward actions for them through the forum called Talent Council. The Council also discusses the career path and succession plans for each of these candidates and critical roles. Post these discussions Individual Development Plans are drawn out and actioned upon throughout the year. Basis this, differential interventions are designed to engage and retain the talent pool.

For example:

• For High Potential candidates – Development plans and actions are aligned with their identified next level and targeted roles. These roles are as per their career paths and Succession plans drawn at organization level. The actions consist of formal and informal interventions like classroom sessions, mentoring by leadership, on the job assignments, coaching, role enhancement etc.

• For people who have Average potential and performance, actions are drawn to upskill them in their current role.

This is how BCCL ensures that the diverse requirements of employees are taken care of when it comes to Talent Development. Helping everyone to realize their full potential and contribute to the organizational goals.

Culture@BCCL

The culture at BCCL is built on the foundation of our Core Values of Consumer First, Entrepreneurship, Innovation and Integrity. All the values are bonded together by Trust which defines the culture of the organization. One important area of trust building was to remain flexible and responsive towards the unique need of employees. Some of the policies created during the pandemic time continue to be part of ways of working. Flexible working timings and work-from-home polices are continued keeping in mind employee welfare. Chai Pe Charcha i.e., Skip-Level Meeting is a one-to-one meeting or one-to-many meeting that managers hold with their indirect reports with the objective of leveraging the power to build trust, invite a diversity of perspectives and gain insight. They are helpful for:

1. Building relationships with people on your team who dont directly report to them.

2. Gaining valuable insight into your team / state/ zone / function.

3. Getting feedback about the managers.

‘Mann Ki Baat is a monthly interaction conducted by the Regional HR business partners with the Sales frontline team members. Managers of these employees are kept out of the discussion to ensure that participants are open and candid in sharing their thoughts and feedback. Feedback from these sessions is then collated in 3 sections i.e., Feeling / Mood, Manager /organisation related, and business related. Its helps to:

1. Understand the pulse of the team monthly.

2. Quick steps to ensure that business does not get impacted.

3. Drive employee engagement initiatives by the manager and the organization.

We also foster a culture of Innovation within the organization by continuously striving to develop new products and improve the existing processes and systems. Our core NPD i.e., New Product Development process is an important mechanism in BCCL for bringing new products to life. The process engages the R&D, Marketing, Supply Chain, Manufacturing, and Sales teams in each of its steps. Starting with idea generation where we use the principle of Design Thinking specifically to come out with ideas that have our consumers at its core, then idea screening where both the left-brained analytical approach and right-brain sensorial approach are used to distil ideas.

Awards and Accolades

• The Company achieved the prestigious "Great Place to Work" (GPTW) certification for the sixth consecutive time.

• Our robust people policies, processes, and systems, ensure continuous efforts towards HR Excellence. Last year in December, the organization was awarded the Special Commendation for Golden Peacock HR Excellence Award (GPHREA) 2023 at IOD Indias 18th International Conference on Corporate Social Responsibility and Golden Peacock Awards Ceremony held in Mumbai.

CSR activities

CSR activities are done by a third party hired by BCCL. For water resource rejuvenation practice, BCCL wanted to increase cropping intensity. New water CSR initiative has been introduced for Maharashtra on 1750 kilometres of land. Rajasthan is also in focus with work being done in 34 districts. BCCL received recognition in 2021 from the Ministry of Jalshakti. For sustainable agriculture practices, BCCL assisted in changing the cropping pattern from traditional to horticulture. This initiative has brought value to the stakeholders of up to 1 lakh rupees per annum.

BCCL has also organised for Kisan Pathshala, a farmer finishing school. The focus area BCCL is solar, bio-gas energy and women empowerment. BCCL focuses mostly on need-based CSR.

Opportunities

BCCL possesses considerable potential in the FMCG sector, which is rapidly expanding, in healthcare and beauty items. Upon recognising this tendency, BCCL intends to diversify its portfolio, focusing on both ethnic and premium product areas.

BCCL also intends to expand into the global Indian diaspora market, with a special emphasis on countries like Bangladesh. BCCL is investing in automation and digitisation to improve operational efficiency and cost control. These strategic efforts position BCCL to attract new possibilities and increase its presence in the FMCG market.

Strategy

BCCLs strategy focuses on strengthening its position in the Light Hair Oil segment with Almond Drops, whilst continuing to build non-Almond Hair Oil portfolio with Coconut, Amla and Sarson Hair Oil. In addition, the "Almond Drops" equity is being extended into adjacent Hair and Skin categories. BCCL is also leveraging ‘Ethnic credentials with entry into categories like Gulab Jal and Henna. BCCL is also strengthening its Route-to-Market across select States in General Trade and would continue to grow disproportionately in Organized Trade. Lastly, the scale up in International Business is also being prioritized with investments in critical markets like Bangladesh and Middle East.

Financial review (Standalone)

Results

(in lakhs)

Particulars	FY24	FY23	YoY%
Sales (Value)	95,156.79	93,811.19	1.4%
EBITDA	16,260.1	14,618.90	11.2%
Profit Before Tax (PBT)	19,237.9	16,948.43	13.5%
Profit After Tax (PAT)	15,876.7	13,981.54	16.7%

Summarised profit and loss account of the Company

Particulars	FY24	FY23	YoY%
Sales (Value)	95,156.79	93,811.19	1.4%
Other operating income	1,614.16	1,182.10	36.6%
Total	96,770.95	94,993.29	1.9%
Consumption	43,500.14	43,738.10	-0.5%
Salaries and wages	9,631.42	8,670.55	11.1%
Promotional expenses	16,000.04	17,079.97	-6.3%
Other expenses	11,739.30	10,885.75	4.5%
EBITDA	16,260.10	14,618.90	11.2%
Interest and bank charges	100.59	92.13	9.2%
Depreciation	948.03	809.31	17.1%
CSR	438.46	478.06	-8.3%
Other Income	4,464.91	3,709.02	20.4%
Profit before tax	19,237.87	16,948.43	13.5%
Taxes	3,361.24	2,966.89	13.3%
Profit after tax	15,876.63	13,981.54	13.6%
OCI Net of Taxes	(15.42)	18.70	-182.5%
Profit after tax (after OCI)	15,861.21	14,000.24	13.3%

Key profitability ratios

Per the SEBI (Listing and Disclosure Requirements) (Amendment) Regulations, 2018, BCCL is required to provide details of significant changes (changes of 25% or more as compared to immediately preceding financial year) in key sector-specific ratios. BCCL has identified the following ratios as key financial ratios in FY 2023-24:

Particulars	FY24	FY23
EBITDA/ Sales	17.09%	15.58%
Profit before tax & exceptional item/sales	20.22%	18.07%
PAT/sales	16.68%	14.90%
Total comprehensive income/ sales	16.67%	14.92%
Basic earnings per share rupees)	11.12	9.52
Diluted earnings per share (rupees)	11.12	9.51
Interest coverage ratio	32.83	46.59
Debt equity ratio	NA	NA
Profit before tax margin	20.22%	18.07%

Detailed explanation of ratios

Interest Coverage Ratio– The Interest Coverage Ratio measures how many times a Company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost.

Debt Equity Ratio – The ratio is used to evaluate a Companys financial leverage. It is a measure of the degree to which a Company is financing its operations through debt versus wholly-owned funds. It is calculated by dividing a Companys total Debt by its shareholders equity.

Profit Before Tax Margin (%) – Profit Before Tax Margin is a profitability ratio used to calculate the percentage of profit a Company produces from its operations. It is calculated by dividing the Profit Before Tax by Sales.

Key balance sheet ratios

Particulars	FY24	FY23
ROCE	22.8%	20.4%
RONW	18.8%	16.8%
Book value per share (rupees)	60.6	57.5
Net working capital (in no. of days sales)	9.4	6.8
Debtors turnover (in times)	25.7	36.9
Inventory turnover (in times)	18.4	17.9
Current Ratio (in times)	5.8	6.1
Quick ratio (in times)	5.4	5.7

Detailed explanation of key balance sheet ratios

ROCE – Return on Capital Employed (ROCE) is a financial ratio that measures a Companys profitability and the efficiency with which its capital is used. In other words, the ratio measures how well a Company is generating profits from its capital. It is calculated by dividing profit before interest on long-term debt, exceptional items and tax by the average capital employed during the year.

RONW – Return on Net Worth (RONW) is a measure of profitability of a Company expressed in percentage. It is calculated by dividing profit after tax for the year by the average capital employed during the year.

Book Value Per Share – It is calculated by dividing equity at year-end by number of shares outstanding at year-end. Net working Capital – It is calculated by dividing net working capital (excluding Current Investment, Cash and Bank balance and Tax assets & liabilities) during the year by sales turnover and further converted into days.

Debtors Turnover – The above ratio is used to quantify a Companys effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a Company uses and manages the credit it extends to customers and how quickly that short-term debt is collected or paid. It is calculated by dividing sales by average trade receivables.

Inventory Turnover– Inventory Turnover is the number of times a Company sells and replaces its inventory during period. It is calculated by dividing sales by average inventory Current Ratio – The Current Ratio is a liquidity ratio that measures a Companys ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by the current liabilities.

Quick Ratio – The quick ratio is an indicator of a Companys short-term liquidity position. It is calculated by dividing the current assets (excluding Inventory) by current liabilities.

Dividend

The Board of Directors do not propose to declare any Final Dividend for FY 2024.

Treasury Operations Highlight

During the Financial Year, the Companys Treasury operations were managed efficiently to generate stable returns for the funds within the defined framework of investments.

The inflation trajectory will largely depend upon the geopolitical situation and its impact on global commodity prices and logistics.

The Company will continue to tactically shift the allocation between bonds of different tenors depending upon interest rate scenario and liquidity condition in the market. However, it will assure that the credit quality of the portfolio of investments remains top notch and there is no credit risk in the portfolio. The Company Treasury remains committed to actively manage portfolio to generate higher returns without sacrificing the credit quality of portfolio. Over the last decade of treasury operations, the Company has achieved credible reputation in debt markets for regular and stable investment operations.

Cautionary statements

The information in the MDA section may contain forward-looking statements within the meaning of applicable securities laws and regulations. These statements reflect the BCCLs goals, plans, expectations and estimates for future events. Forward-looking statements are based on certain assumptions and expectations, but there is no guarantee that they will be correct or realised by BCCL. Actual results may differ significantly from those expressed or implied in the statement owing to factors beyond BCCLs control. BCCL makes no commitment to publicly amend, change, or revise any forward-looking statements based on subsequent developments.