Second Quarter - Dabur India Limited

Richard Liu:Will that backfire now?Dabur India Limited Q2/H1Earnings Conference CallOctober 31 st , 2008Sunil Duggal:No I think all our positions are exhausted in fact they were exhausted around August butthey helped us in the first five months of the year so now we are really buying spot we arenot taking any positions of any substantial nature.Richard Liu:Okay. Thank you. Thanks a ton.Hemant of Enam SecuritiesHemant:Hi good evening Sunil, this is Hemant here. Just a quick question and follow-up question infact on what you have mentioned earlier, I wanted to get some clarification on theConsumer Health Division wherein I just noticed that your margins in this particularsegment despite the robust top line growth have really not improved, could you give an ideaas to what is really happening on that particular front and can we see some ease out goingahead.Rajan Varma:Well, with the growth we have to put in some extra investments on to our ad pro in thisperiod and I think going ahead we s easing of this ad pro expenditures coming back to thenormal margin that we expect at the end of year.Hemant:What would be the normal margin level if I may ask?Sunil Duggal: Let me give you some numbers here. Our gross margin here was 62% last year and 60%this year so small erosion there but the big gain has been in A&P that has been 700 bps upvis-à-vis last year which has led to almost a flat net contribution growth, so this erosionisentirely attributable to A&P.Hemant:All right, fair enough. In terms of retail, can you give us a highlight as to what is thecurrent role out plan? Given the fact that real estate is coming at a cheaper value prices.Sunil Duggal:To be very honest, at this point in time we are just scouting around for stores, we have notclosed any deals, it is a very volatile environment. There is a lot of churn happening in realestate, to tell you all about that. We want to have established businesses which haveenduring footfalls and some longetivity in terms of profile and till we do that we won’t startspending a substantial amount of Capex on the stores etc., so we are waiting for this wholeforks’ to come down, the realty space is at this moment is in a very shark-infested waters,so you are treading with a great deal of area but having said that we would like to openaround 15000 sq. feet of fresh retail space over the next six months, whether we will be ableto do that I am not too sure but that is what the intent is because we already have CapExsitting in our warehouses which is around 15000 sq feet, but we need (a) space which iseconomical and (b) space which is of enduring quality.