While the demand scenario is favourable, prevailing sharp increase in input costs are set to pressurise gross margins over the medium term in our view. While HMCL has undertaken price increases to pass on some escalations, we believe further hikes are likely to be gradual so as to not arrest ongoing demand recovery. The company's cost control programme LEAP 2 delivered ~100-125 bps savings in Q3FY21 and remains a powerful mitigation tool to offset some of the increases, however. We build in benefits of operating leverage over FY21E-23E as well as elevated raw material costs...