2QFY18 net sales grew 9.5% YoY (against our estimate of 19% YoY) to INR7.0b. EBITDA declined 8% YoY (against our estimate of 6% YoY growth) to INR2.1b. Adjusted PAT declined 12.9% YoY (against our estimate of flat PAT) to INR1.3b. Management called out strong performance in both Feminine Hygiene and Healthcare, but sales were expected to be higher on weak base. Since gross and EBITDA margins for base quarter 2QFY17 were unusually high; we were expecting 380bp EBITDA margin decline. Operating margin decline was steeper than expected at 570bp YoY to 29.9%. Gross margin declined 350bp YoY to 60.1%. Encouragingly, ad spend to sales grew by 110bp YoY and by 24% YoY in absolute terms. This expense has been lower than expected in recent quarters. Other expenses increased 120bp YoY to 16.6%. Other income declined sharply due to massive dividend payout in May 2017