Ladies and gentlemen, good day and welcome to ABB India Limited's Q1 CY 2024 January to March quarter earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded, and any unauthorized recording of this call is strictly prohibited. The recording will be made available on the company's and SEBI's website subsequently. I now hand the conference over to Mr. T.K. Sridhar, Chief Financial Officer of ABB India Limited. Thank you, and over to you, sir. Thank you, Neerav. Very good morning to all of you. Welcome to the Q1 2024 results call. I have with me on the call Mr. Sanjeev Sharma, the Country Managing Director, and Kiran Dutt, who leads Electrification, and also Sanjeev Arora joining us remotely for the Motion. We were not able to get other people for Robotics, Subrata and Balaji, for Process Automation because they are traveling and they are on with customers. And therefore, we now start the call. Over to you, Sanjeev. Good morning. Thank you, Sridhar. Thanks for joining today. We had an AGM on 11th of May, Saturday. I hope many of you had a chance to watch the proceedings because they were available live. But we'd today like to give you a quick overview of January to March 2024 results. So just before we dive in, just as a reminder that ABB in India, we operate four verticals, which we call as business areas: in Electrification, Motion, Process Automation, Robotics, and discrete automation. In our view, our portfolio, all the business areas, and the 19 divisions under these business areas really represent a sweet spot for what is happening in the Indian economy, be it in terms of infrastructure development, industrial development, digitization, and also the manufacturing expansion that is taking place in the country because our portfolio products, they align very well with respect to the growth that we are seeing in the multiple market segments. As you know that we have 19 divisions which are exposed to 23 market segments, and that gives us the fundamental resilience as we participate in the marketplace. We serve our markets with 5 manufacturing locations, which are in Nashik, Faridabad, Baroda, and 2 campuses in Bangalore. Within these campuses, we have 25 plants, and we have 28 customer care offices around the country so that we are close to customer always. We are also serving the market with 750+ channel partners, integrators, OEM supporters for our business portfolio. As you know, the impact of the partners is that we get about 41% of our business through partners, and 59% is direct sales. Next, please. Just to give you business highlights, in the quarter gone by or the quarter that we are discussing today, our orders grew by 15%, which we believe is the underlying success of ABB India's multi-division, multi-market segment portfolio because it pairs very well what is happening in the marketplace and also the kind of focus each of our divisions pays to their customer and customer market segments. We continue to grow and penetrate in multiple market segments, multiple geographies, deep into Indian territories, and also we continue to expand our product portfolio in each division. Combination of that continues to give us more access to the market, and that's the reason we grow faster than the GDP growth of the country. Our revenue on back of higher backlog grew 28%, and we continue to experience positive book-to-bill. Our profit after tax grew 87% due to good capacity leverage, and also we continue to optimize the cost. So there is a good operational excellence results which are coming through our value chain because we focus not only one part, but we focus on the entire value chain, and our teams continue to deliver us better operational results. We stand at a robust cash position at INR 5,036 crores. And while we do the business in a credible way, we continue to focus on the sustainability aspect because we think it is the right thing to do. It is not something which is a buzzword for us. We do it because it's the right thing to do in India and also for the environment. We reduce 88% of our greenhouse emissions in Scope 1 and 2 at our own operation as compared to baseline year of 2019. We continue to focus on water. Our operations are increasingly becoming water-positive. That is, we put more water in the ground, and we continue to raise the level of the groundwater level wherever we are present, and that we continue to do. Right now, more than 50% of our campuses are water-positive. We also launched a compact drive, ACH180, which caters to a very exciting segment of HVACR equipment sector, and this again is a high-growth segment. As I mentioned, we continue to expand our portfolio. What we see is the positive market momentum across market segments, and both for the large customers, medium-sized customers, and the small customers. We had a healthy mix in last quarter of short and long-cycle opportunities coming from the industrial sector as well as from the digital, that is, data centers, and also from railways and metros. Our export expansion took place by 23%, though exports remain by percentage at 10% of our portfolio, but net-net, there is a high growth. Why the percentage of export looks 10%? Because the domestic growth is much, much stronger. Discrete continued momentum in the automotive sector and electronics is visible to us. Also on the process industry side, if you see, we have the energy industry, metals, and mining. They are expanding. Data centers is quite a discovery for us a few years ago. You remember, we keep talking about it, but now we really are seeing the scaling up of orders out of this particular segment, especially the global majors who are trying to set up data centers to localize data and also provide much faster and higher cloud services to the ever-expanding digital consumption in the country. I think the data center market is showing a lot of strength for us. Also on the transportation sector, demand for propulsion technology for railway and electrification for metro, that's a very, very positive development for our portfolio. Of course, we continue to enjoy the resilience and the vibrancy that we have in Tier 2 and Tier 3 markets where we continue to increase penetration. With all this, our order backlog grew 25% to INR 8,900+ crores, and that's the picture that we paint with orders growing 15% and revenues growing by 28%. Just to give you an impression in terms of significant wins, when we talk about data centers, so we put in compact substation and smart power products and medium-voltage switchgears for large data center projects. When I say large, you can imagine the largest possible data centers being put in by the major players, global major players who buy these similar products and services from us globally, and they continue to repeat that in the country. And also, our robotic solutions beyond automotive are penetrating in new market segments like the F&B segment wherein there's a good uptake because the productivity of a plant is not only production but also how quickly you can deal with the end-of-the-line packaging solution because that otherwise slows down the productivity of the line. So that's where the robotics come quite handy. Global metal product manufacture relies on system drives, so we had a major order there. Also, robotic solutions are being increasingly applied in the manufacturing of electronics, which is expanding in the consumer goods and mobile phone assembly, and robotics is becoming a key ingredient for scaling of the production. Our low-voltage motors, for the range of pump manufacturing and water solutions, an engineering company continues to find favor because we deliver energy-efficiency motors, and everybody is very conscious these days in terms of really buying energy-efficiency components to run for their facilities. Our process automation solutions for remote terminal units, leak detection systems, and SCADA for the Brownfield project of an energy major, that again is a very solid solution and really relied upon. We continue to see a lot of repeat orders in these particular areas here. So this gives you a flavor of how ABB's portfolio plays in different segments, different market segments, and different products, how we have created the very large and wide catchment for the market. So one of the key reasons why we succeed is because we have very passionate teams in the market as well as in the businesses, and they continue to reach deep into the market and market segment. So at any time, if you speak to us today, there is somewhere our teams are connecting with more new customers and really making them aware of our ABB portfolio and the benefits of it. And that's something which continues to that awareness itself continues to create a growth momentum for us across the country. Next, please. So if you really look into the market segments that we talk about, this is how we see them. So you can see the high-growth segments are in data centers, railway, metro, and electronics. They are growing, say, +15%. And enhanced, which is, say, the middle one, they grow between 8%-15%, and sustain. And these are the segments, sustain, which we may call as moderate and low-growth, but still, these are the segments which give us 50%-plus in our orders book. So you can see that as the sustain continues to move to enhance and enhance moves to focus and the rotation takes place, that brings the basic resilience for ABB's product portfolio. And we are seeing now signs in the moderate to low-growth segments. Some of them are breaking out, and they are going to the enhanced market growth side. So that's where you can see that the focused one gives us very high growth. The enhanced one gives you a very stable and solidified growth. Sustain, they are coming out of the low-spend cycle to the higher-spend cycle, and that's something we enjoy, and we will enjoy in coming quarters. Now, the theme for the quarter, just to explain to you, every time we take a theme, this time we have taken buildings and infrastructure, a deep dive in it. It's a $1.4 trillion market growing at a CAGR of 9%, comprised of infrastructure in smart cities, roads, waterways, ports, tunnels, and many others. This is an area which is a sweet spot for our Electrification and our Motion portfolio. And here, that's the reason when you look into the Electrification portfolio, I think our teams are doing a fantastic job in terms of connecting with the existing and the new customers, and that's where you can see we have a high growth coming in. And also on the transportation sector, our Motion teams are really bringing the best of the portfolio that is available in Europe and localizing and have localized it for local products because now Indian Railways and metros are really looking for best-in-class global products, and that plays quite well for our portfolio. Now, key drivers, of course, you know about affordable housing, green building solutions, technology and AI shaping the industry, which requires different kinds of ways to look at it, proactive government policies and support. All these are adding to the growth in these particular segments. Next, please. So on sustainability in practice, just by the way, the picture that you see on the left is not a stock picture. This is a picture as I'm sitting in the ABB boardroom. When I look down, this is an ABB campus picture. So when we say green, we really mean it. So we really ensure that we nurture the sustainability aspects around all our campuses. So we have, as I mentioned, reduced Scope 1 and 2 GHG emissions by 88%, and that's what we will stand in 2024. Water recyclability, we will improve from 37%-45%. Our three units are already water-positive. They will become four. And zero waste-to-landfill units, we already achieved one, and we will also make sure that within 2024, we have two units or two campuses which become zero waste-to-landfill units, and we continue that journey. And this is something we have committed. One is, it's nice to show these numbers, but we, as a management team, feel this is the right thing to do, and that's our motivation to do it. I think with the results, we also know that three years ago, we had only two ESG funds which were invested in ABB, and as of last count, I think it is about 52 or 55 ESG funds invested in ABB stock. On the CSR side, we continue to develop the infrastructure in the rural road infrastructure project. So this road, as you see, it's being developed around Nelamangala Rural Road, which is close to our plant and which also serves safe commute of the vehicles plus also providing a segregated pass for women to be able to come to industrial areas in a safe and a much more conducive way with a lot of confidence that if you want women to participate, you've got to have the right infrastructure to walk to the work from these metro stations or from the spot where the buses, etcetera., drop. We continue to develop with mind so that there is a higher confidence in the teams and the women and the men to come to the plants where we are situated, and there is a positive talent acquisition possibility for us. At the same time, the rural folks who use these roads, I think there are less accidents, and there is a much smoother movement of goods and people in these areas. We do organize science competitions on National Science Day. We have a special school to mainstream children for special needs, and also we have inaugurated a paediatric OPD, a municipal hospital in Delhi that we have supported every so we have multiple areas, three focal areas which are education, diversity and inclusion, and healthcare for communities, and we make sure that all the funds that we have, we meaningfully spend them every year. Next, please. So summary, aligning with India's growth and global shift. So what we see right now in the market is domestic demand and elections. Though everybody asks us, "What is the impact of elections on the portfolio and the growth?" you can see, as such, we have not seen such a big impact in the Q1. We do believe that this time around, elections have had no real impact, but we are cautiously optimistic about it. Whether there are pre-election or post-election, some weakness can be felt, but we have not felt it in a major way. Demographic and social change, I think, India has a positive demographic bent going forward, and also we are seeing a good income distribution in the country, and also consumption is increasing. So that, again, backfills the customers who are encouraged to expand their capacity, and that goes quite well for our portfolio. Private CAPEX, yes, we see significant private investments in areas like data center automation, industrial automation, metals and mining, and PLI-led CAPEX. This is something which is the starting point. I think many people say whether they have peaked, but from our point of view, all these areas are just starting. They are just taking off. They are not peaking. They are at the starting point relative to when we compare how these segments have grown in other developed economies. We are at the starting point, not at the midpoint, not at the high point. And then, of course, energy access and transition, global offshoring, technology advancement, all these are playing for our portfolio. So at this point now, I hand it over to T.K. Sridhar, our CFO, to take you through financial highlights. Thank you, Sanjeev. I think it was very insightful. So let's go to the finance numbers. How did we perform? And I think our press release has got a lot of more information and data for all of you guys to digest. And also, I think this time we made it sure that these presentations are available well in advance so that it could help you or we can do our report writing if it's needed for you guys. So coming to the performance, how did we perform? I think, as Sanjeev was mentioning, it was, again, another strong quarter. It was a solid start for the quarter as well. I think this quarter was characterized by certain milestones which were achieved which were not there in the future. I think the first time we crossed in revenues, we reached INR 3,000 crore. PBIT, yes, 15% is what we saw, and also cash, we reached about INR 5,000 crores. So this is something for the first time which we have done. When we go a bit deeper, orders received, I think we did INR 3,600 crores, 15% up over the sequential, and also 15% up for the Q4. But I think a good part of it is that the INR 373 crores of orders, what you have seen is basically coming from the data center orders, what Sanjeev was alluding to earlier. So backlog, I think a strong backlog. We don't see any sort of non-moving or slow elements on this, so we hope all of these backlogs will be executed in the quarters to come. Not to forget, there's also included traction orders, which are long-distance station orders, including the service element of that. So that takes a bit of a portion of this. Revenues growth of 28%, INR 3,000 crores, and profitability been quite high compared to the previous quarter. So I think this was absolutely a very normal quarter. There were no untoward one-offs like the Forex or any other cost which was there, but I think it was more attributable to the material cost, good material cost, good revenue mix which has helped us to do this, and also on the good control over the elements of other elements of cost. So overall, I think it was a good start for the year. So let's go to the next slide. So we are operating at 4,600 people in the organization. So I think this is something slide which I would like to spend a bit of more time. So I think when the group normally releases the results, the group gives a view of different geographies, and one of the key geographies which the group looks at or takes reference to is India. So I know when the group results were announced, so in India, they said it was a growth of 5%. And there were quite a few questions to me that whether it is 5% or what it is. So my request is the group looks at India differently, and we report orders differently. So this picture will give you both the views. And for the sake of good clarity, even though Sohini was mentioning it could be a bit of a conceptual slide, I made sure that we give more data about it so that it is because for the first time, I thought of giving more clarity to this topic so that we could establish this clarity for all of you once and for all. So orders which emanate out of India, right? So this is the view, what a group looks at it. So it consists of customers in India placing orders on ABB India Limited, which is the listed entity what we are talking for, and also what are basically there are other companies in India which also can get some orders like the B&R Automation sort of stuff. And also, we have other ABB companies outside India. So this looks at what are the orders which the Indian customers have placed on different ABB entities globally and locally. So if you look at it, so last year, the order intake was $389 million, and this year was $407 million. So therefore, it gives a 5%. And this was exactly what was captured by the group in its press release. But when you now look into how do we report orders, it's basically what orders we get, ABB India Limited gets, from customers in India because also customers outside India and from ABB group companies within India. So this is basically an absolutely opposite situation of this. So here, we look at the $453 million, the same basically INR 3,607 million crores. If you convert it, it becomes $453 million at the exchange rate of 83 rupees per dollar. So therefore, this is 15%. I thought so this picture should give you enough clarity. So my request to you is before you start to write and give predictions, I think we need to wait for the ABB India results to come to get the real view of it. Yeah. Next slide, please. So now getting into the financial summary, I think if you look at it, so the most interesting part of it is that, of course, we did cross INR 3,000 crores in revenues, and this is something which was the first in the quarter, several quarters. So we have good deposits and therefore good interest, which is a major portion of the other income which we have. So material cost is at 59.8%, first time in the history of ABB where we have gone below 60%. So I am sure that this could evoke a lot of interest in all of you people as to whether it is sustainable, whether it is something which is one-off, whether it is something which is going to be the future trend sort of stuff. But I think I would like to clarify that this very strong material cost reduction has happened due to 3-4 factors, pretty much very important. One, it consisted of higher services and higher exports. Process automation did a phenomenally high component of services in business in this particular quarter, and EL also did something on the exports portion of it. And then localization and SCM savings was very important for us to achieve. So this is an unabated effort what the organization puts in. Not to forget that these orders are from the times when the prices were pretty at elevated levels because the material costs or the commodity prices were at that point of time pretty high, and so that factored in that. But whereas afterwards, the material cost started to soften, so we have a positive advantage coming out of that. And so that's something what we do. And also connecting back to the slide where Sanjeev was mentioning about the sustain, enhance, and grow sectors, and I think that also played a very vital role in terms of the better margin orders which come from this particular mix of market segments what we have. So I think so that's it. I think this is and to be sort of on a safer side, this is one of very good strong quarters, right? So that's how we see the material cost going below 60%. And the personnel expenses are definitely higher than what it used to be previously. It is driven by upward salary revisions, and we added some 450 people during the quarter compared to last year to this year. So that's something which has also impacted on the personnel expenses, right? Other expenses, majority of them is all volume-linked. So we did have a one-time payable tax impact of INR 10 crore, which was, I think, one-off, which would I say. And Q1 had a warranty cost which we had also declared in the press release last time, which is not there in this particular quarter. So interest costs, primarily, I think this could be a bit of a question as to when we have zero debt on the balance sheet, so why do we have interest costs? I just want to tell you this because that major element of this almost 95% of it is basically, one, what we need to do on account of accounting positions on lease equipment what we buy and hold and remind the prices what we hold on lease and also the warranty and the discounting. So I think this is basically the accounting position what we have. But otherwise, there is no interest cost what we pay to the bank from as we have flush with funds. Over to you. I hope we'll go to the next slide. So just going more into the segment-wise, Electrification, so INR 1,800 crores of orders almost, right? So I think this is basically a 34% strong order input, and that's more basically from the large order what we got from the data center. Definitely, the backlog moving pretty fast in revenue, therefore, in its 30% growth. So I think PBIT, all-time high, 23.7%, and that's basically the reasons what I told. And they also gained because of the stable commodity prices and good offerings to technology, more premium customers. That's how it is. And also, the connect on the Tier 2 and Tier 3 cities is something what has basically helped out. So overall, I think that's how the PBIT definitely improved, and there was no major any Forex impact on this. Next. Motion. Motion was a bit flattish in orders. I think some of the system orders got slightly postponed. So hopefully, we look at it at Q2. And of course, I think as all of us know, so there was non-standard products. There is a certain price for sure what we see, and that's something which we have to navigate as the system stabilizes. Backlog's pretty steady. So therefore, it's a well-oiled machine as what people would see as Motion as a segment. So I think the revenue mix and the price advantage of the previously favorable margin orders is something which has done to also soar on the margins to 20%. So here, I think Process Automation is one of the turnaround segments as what has been for us in quite some quarters, few quarters to come. So revenue's pretty high, and this is the first time a high execution of service orders what has been done by Process Automation, especially in the oil and gas and the metals and mining sector. So that's something which has really improved, and definitely, the improvement in the project's execution as well as the composition of orders, I think which is reflected in the revenues, is something which helped on the margin front, no Forex impact again in PA. And the last slide, robotics. I think they're also a bit flat. I think so they will get some orders in the coming quarters to come from the industries what are relevant for robotics is what we were seeing in the previous slides in the business. So revenue's growing pretty solid at 60%. Of course, Q123 was slightly flattish, and therefore, relatively, it looks higher. But I think INR 100 crores or INR 110 crores or INR 115 crores is standard what the thing is showing. They have a slightly lesser backlog at this point of time as we see because the revenues have started to grow faster than the orders, and they would catch up in the coming quarters with the orders as well. Definitely, in higher revenue execution, you see that translating in the bottom line as well and with a good composition of service and profitable segments of revenues. This is, by and large, the overview of finance and as well as listing. Needless to mention, we have a very resilient and diversified business model with 41% in this quarter coming from EL, 32% from MO, and Process Automation going up to 23% as what we saw and which has basically pushed up the profitability numbers as well. Compared to that is the offerings which we go through, projects, service, and products. So projects are slightly higher at 16%, and services is then a good percentage of 14%. So this is something which is a clear focus for quite a few business divisions. And coming to the geographies, as what Sanjeev was mentioning, is that even though projects are growing so exports are growing, definitely, on a comparable basis, pretty strong. But the domestic demand is something which is going faster, and therefore, we could see 92% of our revenues come from India, and the balance is what is from exports. So this is, by and large, the Q1 synopsis of how we performed, how the business environment looked like. And so I know we did take a bit of a longer time, three minutes more than what we should normally take for our commentaries. So we now can open up for questions and answers. Neerav. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Renu Baid from IIFL Securities. Please go ahead. Yeah. Good morning and congratulations, team, for a very strong performance. Just firstly, I would want to appreciate how well the company has explained the bridge between group and India reported numbers. So that is very helpful for all investors. Second, again, coming to questions, first, Sanjeev, you did highlight that various end markets are just at the start of their investment cycle when you compare with other developed markets. So from a preparedness perspective, both with respect to capacities and people capabilities and skill sets and technology, how is ABB planning to invest its cash yield and build up its portfolio for these emerging opportunities in the domestic market? That's the first question. Yeah. Thank you, Renu. As far as we are concerned, we continue to invest in the incremental expansion of our capacities, both in the people resources as well as the physical resources are concerned. So that's always an ongoing process. So every year, you see we have expanded facilities. Plus, we continue to invest in the productivity measures in the existing facilities so that we are able to produce more from the same infrastructure. So if you see EL, MO, PA, we have a lot of expansion taking place there. And I think as you go forward, you will continue to hear from us that, yes, our forward planning is matching in step with how we see the market will grow. Renu, just to add to what Sanjeev was mentioning, right, I think we invest almost in the last two years, INR 180 crore-INR 200 crore in just on expansion. That particular effort will continue as we see the demand expanding. Sure. Secondly, Sridhar, at various segment discussions, you did allude to very high margin or better price margins in the orders when commodities were at the higher level, aiding margin expansion. So possible to broadly quantify in the backlog or, if at all, in terms of revenue, approximate contribution from these in terms of dips towards the margins from these high-priced orders? And given the kind of backlog and the mix that you're seeing today, do we think net margins in early teens should be broadly sustainable for us from a two to three-year perspective? That's a good forward-looking question, Reno. Thanks. So let me give you a bit of a color on it while we don't give any forward-looking forecast on it, right? So if you look at the backlog of 8,500, so almost 40% of it today is held on long-term operation projects, right, both from railway customers which we had announced in the last year and also from the Process Automation. So what is basically from EL and MO, right? So they run on a book-to-bill situation of almost 40%-50% quarter-over-quarter. So that's something what they need to book, right? So these particular orders, whatever you have, right, so are something which has come from the periods where the material costs were high and which we had priced it to the customer, but whereas subsequently, the material costs have softened, right? So now the question is, the future prices what we give from the book-to-bill revenues which we give in the next 3-4 quarters for this particular year shall have to carry a natural adjustment to the current prices, and that's all it is, right? So therefore, at this point of time, it is not such a way predictable to say that whether the existing backlog would give us the same level of margins as what we saw in the Q1, right? But as we see that we are because I'm having come to reach then a 12% of profitability last year. So our end of it is to make sure that we are there and we do not fall below that while our efforts are there to improve upon it. Got it. Lastly, if I can ask one more. In the annual report, if you see, we saw very impressive growth in the share of electronics and specifically other product segments which grew by almost 30%. So possible to broadly mention any notable categories within these other segments, whether it was UPS for data centers, metering products, etc., which drove higher growth in the product portfolio for us? You are mentioning of EL? Overall, if you see the annual report, we have a product-wise breakup given in terms of switchgears, motors, electronic supply components, and others. So very material jump in others, if I have to just share across the numbers. Then others, revenue in terms of overall, did see a big 30% jump on a yearly basis. So, Renu, in material terms and the size terms, data centers definitely is one. Railways is another one, and the metro. These are the ones which are playing out plus the electronic sector and the automotive side, but on the EV side, there's an expansion for us. Got it. Got it. Yeah. And last time, I think we also got some good orders from the metals and mining as well as oil and gas, right? So that also is something which helped us. And that's exactly what you're seeing in terms of service revenues which got executed in Q1 for PA. Got it. Okay. Thanks. That was helpful. Thank you, and all the best, team. Thank you. Thank you very much. Ladies and gentlemen, in the interest of time, kindly restrict to two questions per participant and join the queue again for a follow-up question. The next question is from the line of Jonas Bhutta from Aditya Birla Sun Life AMC. Please go ahead. Thank you for the opportunity. Sorry. Congratulations on a great set of numbers. Had two sort of longest questions, but both related to the drives portfolio of the company. Again, drawing from the annual report, we saw that the drives and traction motor business sort of grew almost 40% year-over-year, but it was also sort of compensated with higher imports in terms of raw material. So despite a higher import content and pricing pressure for standard products, just wanted to understand how is the motion segment showing such high margins, one. The second, which is drives-related again, is if you can give us an overview on the drives market and is it growing at the same pace at ABB's own growth in the drives business, particularly LV/MV? Will the adoption of maybe an IE3 or IE4 motor standard take away some of the need for drives in the future? Yeah. Those are my two questions. Thanks. Thank you, Mohit. We have Sanjeev Arora, our President for Motion division, on call. Sanjeev, would you like to take a view on the questions that they mentioned? Yeah. Thank you. Thank you, Sanjeev, and thank you for a very good question. See, let me pick up the first, the drives part. Let's understand how the customer behavior is changing. And I am very, very confident that whatever may be the situation, our customers are building their blocks on the sustainability and energy efficiency around that. And that will really bring the real drive in the drives demand. And on top of it, they have really seen and tried the best of the technologies in the past, and they have a lot of confidence in ABB drives. And hence, we see that we are growing much, much faster than the market growth with the low-voltage drives or the medium-voltage drives. This momentum will continue irrespective of what we see in the times to come in the market because customers are really dedicated to their goals of really Net Zero and energy efficiency, and this is a low-hanging fruit. Coming to your second question of IE3, IE4 motors, whether that will hamper the drives part, let's understand. Sorry. Sorry. Sorry. We are losing your audio slightly a bit. See, I am in a place where the signal is a bit of a challenge, but am I still able to? Sanjeev, we can hear you. Sanjeev, we can hear you well. Please go ahead. Okay. Thank you. So IE3, IE4 motors will never, ever dampen the momentum of drives because let's understand, hardly 15%-20% of the motors in the industry today are using drives. And so therefore, as the penetration increases, the drive market does increase. But on top of it, the direct online is going to stay there. And as we move towards energy efficiency and actually, if you really ask me, it is very, very unfortunate that such a developing economy like India is still at IE2 basic efficiency. And this is actually, I would say, absolutely unfortunate. So as we learn more about motors, we should raise our bar to IE3, IE4 as the minimum efficiency level which should prevail in the country in case we need to really cope up with what Europe of the world or US of the world are actually going to. So it is not going to dampen because the market is very wide. Secondly, we must at all costs now, the government should play a vital role in bringing up the efficiency from IE2 to at least IE3 or IE4 level as the minimum operating efficiency. That's from my side. In case any more clarification, I'm open for it. So just one quick one. What% of our drives portfolio is localized? That's my final question. Thank you. That is one thing which we refrain from expressing. But then I can tell you, we have a good amount of localization. So, Jonas, what we do is localization is a continuous process, but that is something which we continue to do to stay competitive as well as making sure our supply chains are as local as possible. Your question on IE3 and IE4 and drives is very relevant. Of course, on the lighter side, you can help us by whenever you go to other calls with other customers who are using a lot of energy, and you should ask them the question, "Why are they not using more IE3 and IE4 motors and drives?" I think that will help us also boost the consumption of these products, which actually overall reduces the energy footprint in the country. Got it. Thank you and all the very best. Thank you. Thank you. Thank you, Neerav. Thank you. Next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Yes. Good morning and congratulations on a very, very good quarter. My first question is on the data center. Is it possible to give some sense of the data center contribution as a percentage of our revenues? Is it fair to say the contribution has reached more than 10%-15% of the top line? No, it has not reached to those particular levels, right? So it is, of course, a very fast-moving market, and therefore, it is very vibrant in our revenue distribution of that. My second question again on the data center side. How do we see this strategic opportunity this year versus last year? Is it looking better or flat compared to last year? It is accelerating. It's increasing in the size, the size of the data centers, and also the players are doubling up the investment in this area. And this is something we will see continue having the same trend. Yeah. As a last question, is it right to say that we have localized all the data center opportunities to the country? No. No. You mean by the operators? No. I think. No, no, no. My question is the starting point. My question is. Even by ABB's. Mm-hmm. My question is, sir, whatever we are producing for data center, is it completely localized? Yeah. That is highly localized. That is highly localized. Understood, sir. Thank you, sir. Thank you and all the best. Thank you. Thank you. Thank you. Next question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead. Hi, sir. Thank you so much for the opportunity. Sir, currently, 40% of our revenue is derived from the partners. That is more of distribution side. So you mentioned that we are reaching Tier 2, Tier 3 cities. So in terms of your own understanding, how much market we have covered in terms of Tier 2 and Tier 3 cities and what more penetration we can achieve? And basically, I'm asking the further potential for our growth in terms of Tier 2 and Tier 3 cities and penetration. Good question. We have Kiran Dutt, our President for Electrification. So he deals with this topic, and it's very dear to him. So Kiran, would you like to say a few words around it? Thank you, Sanjeev, and thank you, Mahesh, for this question. You're talking about Tier 2, Tier 3. I'm even looking at Tier 4, Tier 3 cities, Tier 5 cities as well. So that's how the situation is in India. As you know that we have already commented that we are already looking at 20+ segments of the market. And all these 20+ segments are located in different kinds of cities in India. So you understand that. And it's very important for us to ensure that these customers who are located in Tier 2, Tier 3, Tier 4 cities are catered to in the best way possible in the shortest possible time as well. So looking at that, our penetration has increased over the years. Over the past few years, we have been looking at what kind of distributors are available and where could we penetrate more and more. That's a continued action. We will continue to do more. If you ask me how much we have covered, we have a long way to go. We would do that in the course of the years to come and ensure that our customers get the best material possible at the best, I would say, the least possible time which is possible to be delivered to them. As we mentioned, this part of our portfolio, we sometimes fondly call it as a fast-moving industrial goods. So here, as Kiran very honestly said, it's a journey which has started, and it's a long way to go. So this is, I would say, on the lower side of the curve rather than on the mature side of the curve at the moment. Yeah. So I think in the presentation, Sanjeev, so you definitely showed about how we are connecting with the customers. I think there are certain cities like Haldia and Asansol where you have not even sort of thought about. I think that's some of the connects which will definitely develop this particular market. Sir, I mean, the distribution side, this portfolio is moved towards Motion, or is it moved towards Electrification? Both electrification and motion and also partly in process automation. Okay. Sure. Sure. Thank you. Thank you so much, sir. Thank you. Thank you. Next question is from the line of Amit Mahawar from UBS Group. Please go ahead. Hi. Good morning, Sanjeev, Sridhar, and congratulations on great performance. Sir, if we look at the global color, it seems Asia is driving a lot of demand on new electrification products, especially on the medium voltage. Do you see for us when we expand capacity? I mean, you spend today INR 150-INR 200 crore on capacity expansion. A bulk of this going towards the electrification portfolio expansion. To the last participant's question, any specific gaps majorly you would want to cover on the medium voltage side for data center because we still don't do a lot what Parent does because the market in India is still emerging. So any color on the expansion on the EP side and if EP will expand disproportionately in revenue share in the next five years? Thank you. So on the expansion side, we are investing in all areas, namely electrification, motion, and process automation. So we are seeing that growth. Robotics, we already invested quite well in 2020, and we get the benefit in terms of the market share of the market segments we are focusing on. As we go forward, we are not only seeing the growth in one particular market segment. As you said, we have multiple market segments and also not in one business division across all the divisions. So we continue to make investment. But you should keep in mind that ABB in India is manufacturing for the last 75 years. So that means we already have our investments in place, and anything that takes for us to cater to incremental demand is only an incremental investment for us. So that's where we have the leverage. Plus, we continue to optimize our operations. We continue to use a lot of automation and robotics that also in the same footprint, we are able to produce more. So that, again, adds to our operational leverage as well as on the productivity side. Now, going forward, as for the data centers are concerned, data centers are nothing but power guzzlers sitting with the computer sitting in the computer racks. So what you need to do is to feed them with the low voltage power as well as the substation at the medium voltage level. All those technologies are largely produced in India, and I think our portfolio is quite complete for ELDS as well as ELSP. And we expanded quite a bit in Nashik last year for ELDS portfolio. So we feel we're fairly complete, and that's where the confidence level of our customers who are coming to India or who are in India is quite high because our supply chains are pretty robust and controlled at the local level. So our deliveries and typically, data center customers are in tearing hurry, so we are able to match their demands both in the product delivery as well as the services that are required to run those data centers. Fair, Sanjeev. Thank you. And a small second question is, globally, if Perin is thinking of expanding capacities, we have some select mandates. Incrementally, do you think you will get a more share of export mandates than your Chinese counterpart or the Asian counterparts in select segments, or it is not a major change that you see? Thank you. My time in morning till evening totally gets dedicated for Indian market because we are a multinational. The very reason we are present in India is for India, and that's where we see continue to spend more of our time. But at the same time, the mandate I have given to all the division heads is to prepare their factories and operations to world-class levels, even better than what is existing anywhere in the world so that there is a pull for those factories to supply in the other locations. That's what we continue to invest in the last five years. We are seeing now there's a lot of pull coming from the global managers to buy from Indian factories. So that will be our strategy. We will not be seeking proactively any mandates because this is something we will allow the natural pull to come from the global segment. There are pulls and pressures in the global market which are favorable for India, and we will take benefit of it. Very well, ties up, with what Perin says about you. Thank you, Sanjeev, and good luck. Thank you, Amit. Thank you. Next question is from the line of Parikshit Kandpal from HDFC Securities. Please go ahead. Hi, Sanjeev and Sridhar. Congratulations on a great quarter. Sir, my first question is on large order pipelines. If you can highlight, give some more color on how's the large order pipeline panning out for the rest of the year. Large orders, we are getting from railways for the Motion, which is the traction orders. We have a good large order coming out of the data centers for the Electrification, especially the distribution solutions. We also have large orders in our Process Automation Energy as well as Process Automation Process Industries segment. That's where the bulk of the large orders are sitting at this point of time. Then we, of course, have the medium-size orders and the fast-flow orders, as we call it, the fast-moving industrial goods in Electrification, Motion, and the Process Automation. As far as Robotics is concerned, it's an ETO business which is very specialized. And when companies like local manufacturers of the automotive expand, they continue to upgrade their lines, and that's where we see cyclical orders into robotics, very high quality, very sophisticated orders across electronics, automotive, and others. But yes, large orders, I mentioned to you the divisions where the large orders are sitting, and also we see a pipeline going forward. Okay. Sir, my second question is on the new product introduction. So you introduced the ACH180 drive. So my question is, annually, what's your target or so how do you see how do you increase the times? So potentially, what these products do to your total addressable market opportunity in terms of expanding your portfolio? So what would be that impact on the same? We always start small when we have the new product introduced. So we allow our channel partners to absorb it, introduce it in a big way with the Customer Connect program in the first few quarters, and then we start seeing a kind of rational uptake of those products and consumption and absorption of it. So it's always whether you go to the new market segment or you go with a new product, in terms of percentage growth, you get it high, but since the base volume is always small, and it takes time before you get it at a substantial mix in the portfolio. It's largely in Tier 2 cities. Tier 2 and Tier 3 cities or across the portfolio? Wherever they select this particular product, wherever the HVAC systems are being installed, they're across all the Tier 1, Tier 2, Tier 3 cities. Wherever the new infrastructure is being built which requires air conditioning, I think that's where these products get positioned. Okay, sir. Thank you, sir, and wish you the best also in the questions. Thank you very much. Thank you. Next question is from the line of Umesh Raut from Nomura India. Please go ahead. Thank you, sir, for the opportunity and congratulations for the impressive set of numbers. Umesh, may I request you to speak a little louder, please? Is it audible now? Yes. Thank you. Sir, my first question is related to the theme that you have mentioned for the quarter which is buildings and infrastructure. So where we are exactly in terms of CapEx cycle, barring, say, data center, especially related to residential, commercial side of the buildings and hospitality as well? And in terms of overall contribution towards top line, how much of building automation is currently contributing? So I'll just give a brief comment, and then I'll let Kiran answer it. So this is one segment wherein the real estate sector has, again, kicked back after a lull of 10 years. So whether it's residential or commercial side, I think it is expanding. And also on the infrastructure side with the government spend on a different type of infrastructure projects, we have the expansion there. But I'll let Kiran put more color and understanding of it. And I believe around the building and infrastructure, it's about 10% of our mix. 8%-10% something. Thank you. Thank you, Umesh, and Sanjeev. Thanks for the question. The point I would like to imply is in the slide what we showed, we also showed something known as affordable housing. That's the sector which is going to grow. We already are looking at 20 million homes which are going to be built. Having said that, it's also important to note that for the buildings, there's a component called MCB for which we celebrated 100 years of invention in ABB Global. It's been already announced. The press releases are already there. You can have a look at it. In fact, the MCB which is a primary part of any particular house or a home, it was invented by Hugo Stotz, and this was in 1924. That was later on, of course, bought by Brown, Boveri & Cie. Later on, you know how ABB was formed with ASEA and Brown, Boveri & Cie coming together. So that's a very important aspect I would like to mention here. Then what is also important to understand is 70% of the buildings which are going to be seen in 2030 are yet to be built. So having said that, what's the potential in this particular segment of the market? You also mentioned a question on building automation. I think what we see at this point of time is just the initiation or probably the first start of this kickstart of this particular building automation. We see a lot of potential coming out from it. Some of the colleagues sitting here have also visited our office here and seen what exactly building automation can do. And it's a good showcase to the customers who would like to implement building automation as well. Building automation is, at this point of time, a preferred one by a lot of customers who are in the commercial sector. The residential sector is just on the rise or pickup. It's just the start of the story. Thank you, Kiran. As Sanjeev mentioned earlier that there's a lot of uptake on the sustainability side for the IE3 and IE4 motors and also what drives. Just like that, as we go forward, the building automation also falls in that category wherein building automation, BMS, is a key component to make sure that the energy optimization takes place in the high-class buildings. So we see a good scope of development there, having experienced how Dubai market developed and other markets which were recently constructed, how the consumption of these products take place. Thank you, sir. My second question is pertaining to capital allocation policy. We have seen almost a jump of 2X in terms of cash position which is currently closer to INR 50 billion. Looking at, I think, operating cash flow generation going forward as well, I think it will remain closer to about INR 15-16 billion on a yearly basis. So I just wanted to understand what we are thinking in terms of utilizing that strong cash balance and upcoming future cash flow generation. Okay. I think we had already a couple of calls before. Also we had the—I remember doing this. So I think the first thing is that we follow a very clear capital allocation policy. I think 30%-35% goes in terms of meeting the working capital expansion needs, what is needed as we grow. And the balance would be required for—we have earmarked certain sum of some of the cash for inorganic and organic options, right? So that's something which you already declared. So which is every business is definitely working towards that as to how they could expand their portfolio or become more operationally, more productive in terms of their offerings to the customers. And so there are various options what is being looked into. And last but not the least, I think we also share the cash with the shareholders, and therefore, as you know, that we increased the dividend quite extensively in the last year. So I think this capital allocation policy is consistent, right? So it slightly changes from year to year depending upon the focus area, but this is how we run the capital allocation policy. Thank you so much, sir, and all the best. Thank you. Thank you. Next question is from the line of Aditya Mongia from Kotak Securities. Please go ahead. Yes. Thank you for the opportunity and congratulations on a very strong set of numbers. I'll go ahead with my questions. The first question was, first of all, special thanks to Jonas for his questions, taking up from there on energy efficiency. So we've seen the benefits of energy efficiency come in a meaningful manner from a bottom-line perspective in the motion segment. The parent has been talking about other areas wherein, let's say, decarbonization-linked kind of spending to reduce decarbonization is starting to yield business opportunities. It will be interesting to Mr. Sanjeev Arora's views on in India, in what shape and form beyond energy efficiency is he seeing new business opportunities? In specific, you're talking about propulsion technology. Something on the traction side also you could kind of comment upon. That will be my first question. Sanjeev, would you like to take this question? Yes. So thank you. Thank you very much for this. I think we have all seen the energy efficiency benefits. Partly, that also supports the carbon neutrality because ultimately, when we have more efficient technologies to run our operations, especially with the motor-driven equipment which are the energy guzzlers, and if we use the energy optimally, then definitely, we support the carbon neutrality theme. Second part is when you come to the new technologies, we are very well placed when we talk of hydrogen and ammonia in our portfolio, the production of hydrogen and ammonia. We have taken a few orders in hydrogen. And especially when you talk of the powering of the electrolyzers, we have good technologies. Now, while we talk of this, even when you talk of the ethanol space, again, there also, we are very well placed blending the oils. And then I would also like to take this opportunity and mention here that one part is the production, but another part is the transportation of hydrogen, ammonia. And there, our energy efficient motors and drives, use of compressors, use of pumps, they are a very good technology to be placed with the OEM who will actually supply them to the end users. So I think overall, while in production of electrolyzers, but also in transportation, also, we are very well placed. Coming to metro part, sorry, the railways part, we have seen the electrification going very, very strong. And we have been a very major contributor in terms of electrification of Indian Railways. And now, we also play a good role in the metros and providing our absolutely state-of-the-art technology on the converter businesses and also on traction motors. Overall, I think we are adding to the theme with the global technologies and which is very much welcomed by our customers. Let me know in case I have missed out on something. I think Sanjeev, thank you. I think that's quite a bit of an explanation for the question. In the interest of time, should we go for next question, please? Yes. So my second question would be more on the margins. So just to set some context for myself, you're now ahead of the margins that the global parent is reporting. And just to set some other context, you have INR 1,000 crores of capital inside business, and you are earning more than that as your EBIT. Now, I just wanted to get a sense whether this is in any way a reflection of a receding competitive intensity in the sector or the customer moving towards newer products. Just trying to get a sense because our sense was Indian market was more competitive versus what the global market, global parent sees for itself. And the quotient of, let's say, going for new products, new technologies is also more European than Indian as a concept. So just trying to get a sense of whether we are seeing any changes on competition and acceptance of new products in India versus where the world is for ABB in specific. That will be my last question. Thank you. Aditya, it's a good question. There are two things which are forming the market in India and which I think is favoring us. One is the expansion of the market itself and the appreciation of the market segments which are now acting on scale. When they act on scale, they always like for premium products because reliability, availability, maintainability, serviceability become the important aspect. The second part, post-COVID, we talked about before, there is a huge shift of the customers who used to be very price-sensitive earlier in terms of whatever products and the solutions they bought towards the products which are more reliable and more available and also are better supported. Because during the COVID period, customers realized that it is not just the price of the product, but it is the company's ability to support those products digitally, remotely, as well as provide those components when you need it so that you continue to have your operations running during the supply chain constraints. Those abilities, which was demonstrated by the companies, and ABB was one of them, I think there's quite a marked shift of certain customers into our area. So that's why you can see if I look into the last three years, ABB has grown 27% CAGR on our orders. So that's an indication of not only the domestic market expansion but also a premiumization of the market and also movement of a large section of the customers towards companies like ABB. Now, with respect to the profitability, etc., I think that's a lot of operational excellence, localization, how we manage the kind of the support the customers with the prices in the marketplace, and also how our supply chain is acting. I think it's a mix of that and also the productivity measures that we have put into our shop floor. So if you combine all these things, that's where the total effect is coming. It is true that global and everybody thought that India is a so-called very price-sensitive, low-cost market, but I think that view is changing for good. And I have seen this happening, quite frankly, in China as well. In the early cycles of China, that's exactly what the pattern was emerging. Yeah. Thank you. Those are my questions. Thanks a lot for the color provided. Thank you. Next question. Thank you. I think next could be the last question because, yeah. Next question is from the line of Ashwani Sharma from HSBC. Please go ahead. Yeah. Hi. Thank you for the opportunity, and congratulations on an amazing set of numbers. Sir, ABB overall has a 14%-15% business coming from the services end market. May I ask how is it different across the four segments that the company has? And it would be great if you can give some color on how is the profitability different in services portfolio versus product portfolio? Services, the most concentration of the services is in Process Automation. That's a larger percentage of Process Automation business in the services, then followed by Motion and Electrification. So that's how the automation is. And of course, Robotics also has quite a good mix. So I would say in Process Automation or industrial automation, service contribution is 40%, Electrification is 22%, Robotics is 6%, and Motion is 32%. Okay. Yeah. And sir, profitability, would it be possible to give some color on how is profitability different? Yeah. Sridhar, this is only Q1 numbers, right? So the profitability, I think, say, I would give a very general color because I cannot give anything which is specific to the divisions because then it becomes very sensitive, okay? Right. Yeah. So I think we feel at northwards of +25%. That's the problem. I mean, any service business revenues will go beyond 25% of the margins level, so EBITDA margins level. So that's basically how a good combination of product, projects, and services helps us to maintain a healthy bottom line at the end of the day. Great. Thank you for answering my questions in all the way here. Bottom line and healthy relationship with the customers as well because our products are the one which requires a lot of reliability and availability services because it's critical components operating in very critical plants. So that's where the customer really appreciates how our service teams are organized and they're able to respond in time. So I would say for both of our comfort, yeah, the margins are reasonable for us to operate this business. Yes. Yeah. Great. Thank you. Thank you. Thank you very much. Thank you very much. Ladies and gentlemen, we'll take that as a last question. I'll now hand the conference over to Mr. T.K. Sridhar for closing comments. Thank you, Neerav, and thank you, everyone, for joining this particular call. So as we close this call, we wait for the election results to come out, right, so which will be in Q2. So again, we talk to you again in the month of August, right, Sohini? Yeah, in the month of August, right? So that's how we have the Q2 results which will come up. So thank you very much. I'm hopeful that these discussions are pretty much useful for all of you. And feel free, just in case there's an unanswered question, feel free to write back to us. So we will do our best to answer them. Thank you very much. Thank you very much. On behalf of ABB India Ltd., that concludes this conference. Thank you for joining us, and you may now disconnect your lines.