Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you, and over to you, sir. Thank you. Welcome to TTK Prestige's Q2 FY 2022 Earnings Call. From the management side, today, we have with us Mr. T.T. Jagannathan, the chairman of the company, Mr. Chandru Kalro, the managing director, Mr. K. Shankaran, the whole time director, and Mr. R. Saravanan, the CFO of the company. Thank you, sir, and over to you for your opening remarks. Good afternoon, everybody, and thank you for coming. We've had obviously a blockbuster quarter, as you would have seen the results by now. This has been our best ever quarter. It's been best in many, many ways. First thing is that, we've had a stupendous back volume growth. We've had a good bottom line growth, as you've seen, under some very, very challenging circumstances of raw material price increases. And in spite of that, we've been able to actually expand our margin base, and we are well placed for the season retail as we, as we are speaking. And overall, every single parameter in terms of all our core categories have grown excellently. So now we await your questions, whatever may be there. 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 touchtone 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 will wait for a moment while the question queue assembles. Reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Ravi Swaminathan from Spark Capital. Please go ahead. Hi, sir. Good afternoon. Congrats on a good set of numbers. My first question is with respect to, say, the value and volume breakup. I know multiple products are there. Roughly, if you can do a value/volume breakup, or, to put it in perspective, so what was, what was the kind of price increase that we would have taken on a percentage basis during this quarter? So we've given you some value breakup, as you have seen in our release, that you have seen. Anything more than that would not be favorable to give in terms of competition and other pressures. But to your second question on what kind of price increases we have taken, we have taken a price increase in Q2 in July, which was between 5-8%. And there must be a little bit of a lag effect on that because there were old stocks, as you know, with the old MRPs. So some of it came in the last quarter, and some of it did not come. Okay, okay. In the presentation that you had given to the BSE website, so basically, you had talked about in the, under the going forward section, that there has been some amount of festive stocking which has happened, and inflationary pressures are there. So if you can give your views on whether there will be a growth period, given the high base, which was established in 2H FY 2021. Would we see growth over that in 2H FY 2022? If you can give your views on that. You have absolutely hit the nail on the head. You are right. In the first half of this year, there is a base effect, which is a lower base effect as compared to last year. In the second half, it was a normal year last year in the second half, and therefore, while we are not looking at substantial growth, we are certainly looking at growth and healthy growth. Okay. Got it, sir. Yeah, thanks. Yeah. Thank you. The next question is from the line of Resha Mehta from Green Edge Wealth Services. Please go ahead. Yeah, thanks for the opportunity. Congrats for a good set of numbers. My first question is on the sales growth numbers, right? So if you look at the two-year CAGR for the sales growth for H1, it comes at around 8%. So, looking ahead at the festive season, what kind of growth rate is our aspiration for the full financial year and for the years going ahead, assuming that there will be no COVID-related third wave or disruption ahead? Okay, first, we don't give a guidance for the year, as you know. But, when I say healthy growth rate, we are obviously looking at double digits plus in terms of growth rate for the year as well. But I don't want to give you a guidance. Fair. My second question is in terms of our working capital. So, if we look at our working capital to net sales, that's somewhere around 25%. So just wanted to understand, do we use tools like, dealer financing or vendor bill discounting, et cetera, you know, to bring down our working capital? The reason I'm asking this is that, if we look at our peers in South, right? So, Stovekraft has around, you know, around, 10% working capital to net sales, and so has Butterfly improved drastically over the last one year, because of, you know, these, channel financing, tools. So just wanted to understand that. Have you read our balance sheet? We've got INR 550 crore with the bank, earning 5%. Why would I want to go get financing and pay 12%? Does that make sense to you? ... Sorry, I couldn't hear you. Could you please repeat? The point being made is, you know, there's a lot of cash that we are holding at this point in time, and therefore, we have actually decided to plow it back into the business with a view of getting much better returns on it, rather than the treasury income that we would have otherwise got from it. Coming to the channel finance tools, we have got channel finance tools that are in place, but we preferred not to bring it into play at this point in time. Going forward, we will bring it into play, ultimately. We've also used our capital to buy more raw materials so that we are more protected with respect to the thing cost increases as well. So, I think even after whatever working capital you are seeing, you are seeing a very, very healthy return on that capital, in spite of that. And comparing and treating it fairly to Butterfly and Stovekraft, they are both companies which are debt. We have no debt. Right. Right. So, okay, if I were to ask this the other way, is there any scope for further reduction in our working capital? Yes, certainly. We choose not to. Okay, understood. Fair. Thank you. All the best. Thank you. The next question is from the line of Sameer Gupta from IIFL. Please go ahead. Thanks, sir, for taking my question. Good afternoon to you. Just taking it further from the previous participant, so while I also noticed that the first half performance versus two years ago is a growth of 8%, I also heard you on the TV, CNBC TV, that you have taken around 15% kind of price hikes this year. So, that implies that on a two-year basis, volumes are actually flat on a first half basis. So, just one question here, that overall volume growth on a normal base of two year back, if it is flat, I would assume that the recovery is still not complete and, or, there is further scope to recover from here, or this is a normal scenario now with all the price increases taken, there is a volume hit that is also been coming in the consumer. So first of all, it is not true that the volumes are flat. There has been a significant growth in volumes in many of our core categories. That is point number one. Point number two, the 15% does not have—it's not a blanket 15% across the board. You know, it is between 8% or 6%-8% and 15%. Third thing is, all the price increases may not have come in the first half because of the inventory that we would have carried, and there is a lag effect on that. To cut the long story short, if your concern is, are we above the volumes of pre-COVID? Yes, we have very well crossed the pre-COVID volumes as we speak. In all product categories, yeah. Great, sir. So, just a follow-up to that, could you break this into components of growth from new geographies and distribution versus existing distribution? I don't think we would like to give further details than that, because this is sensitive to competition. It is safe for you to know that almost every single geography for us has been growing. In fact, growing well. There has been an all-round growth. There has been an all-round growth for all channels also. Okay, sir. So, another follow-up, and, this is not related to your company specifically, but, in general, in a high inflationary environment, the unorganized or the smaller players face working capital challenges. So my only concern is that, this may be a transient issue, and as inflation goes back to a more normal level, we might again cede some share to these smaller players. Well, if it was that simple, then they would have gained share by now, isn't it? We have still maintained leadership for so many years. The point is very simple. Our mantra for leadership is providing a much better value equation to the customer through innovation, through any of the other kind of value additions that we provide in our products, and that is the strategy we will follow going forward. The unorganized players typically are me-too products. That is not the way we operate. Fair enough, sir. I'll move on the second question, if I may. So, gross margin, when I look at it, there has been a steady rise in inflation in most of the commodities since Q3 of FY 2021, and yet we have seen a sharp gross margin contraction sequentially only in this quarter, versus no major impact in the previous two quarters. So just wanted to understand, is it old inventory that we were carrying in the past two quarters? Is the quantum of price hikes lower than the inflation this quarter? So just wanted to understand this aspect in a more granular detail. Okay. First, let me tell you, you look at the first half of last year and first half of this year, it is almost identical. So a quarter-to-quarter movement is not the best way to look at it because of exactly what you said, which is the old inventory is lying, new inventory is lying, lag effects of price increases, et cetera. So if you look at the first half of last year and the first half of this year, you are looking at almost identical margins. Thank you, Mr. Gupta. May we request that you return to the question queue for follow-up questions. The next question is from the line of Achal Lohade from JM Financial. Yeah, good afternoon, sir. Thank you for the opportunity. So first question is, you know, with respect to the RM cost, inflation- we've seen that, you know, the aluminum prices particularly have actually gone up in last month or 45 days. So my question is, you know, how much price increase more to be done, in order to maintain or protect margins, sir? I will answer this in a different way. We are committed to protecting our margins or coming as close to it for the full year going forward, in spite of all these price increases or cost increases. When you say- Depends upon what cost is it. We don't know how much more cost increase is going to be. If you think everything is going to be no more cost increases, then I can give, give separate for you. Okay. So when you say the current margin, you mean the first half margin or the Q2 margin, sir? Last year's margin. Mar- I always said, please evaluate us on an annual basis. A quarter to quarter is very difficult and has a lot of things, other things. So our plan is to protect our annual margins to the extent possible. And we've also stated that we would like to be within the band, and I think we were—we are well on course to be within that band. Right. Just a question, you know, with respect to your comment in the PPT, with respect to the channel inventory. So, is it a comment pertaining to the industry or the company's channel inventory, which you talked of? Look, last year, Diwali was fourteenth of November. This year, Diwali is fourth of November. A sell-in to the channel pre-season would have happened more in the fourth, Q3 of last year, and this year that has got happened in the Q2 of this year. That is precisely what that line is trying to tell you, because that is how markets work. So that's an industry-wide phenomenon, is what we think, but we are speaking for ourselves here, right? I don't think we should speak for other people. Fair point, sir. And in terms of the competitive intensity, you know, have you seen it now coming back or what happened in last 18 months is kind of continuing even now? Where did it go? What is the competitive intensity? It was always there. I don't think it has gone away. Okay. Okay. The point is that if you see our margins, our profitability, our growth rates, it tells you what kind of branding and what kind of brand power we enjoy with the customers. I think that is pretty evident. Absolutely. Absolutely. And just last question, sir, if I may, with respect to the new categories, in terms of the cleaning solutions and the other new categories, where are we and how the scale-up has been? They are going, as per plan only. There is a distribution expansion plan that is happening. I'll be telling in some areas, last year there was a base effect because some of those categories had gone up dramatically last year, given the COVID had just hit us. So those ups and downs are there, but otherwise we are well on course. Got it. Thank you so much. I'll come back in the queue for any question. Thank you. Thank you. The next question is from the line of Bharat Chhoda from ICICI Securities. Please go ahead. Yes, sir. Congrats on a good set of numbers. I had a query regarding our capacity. So what is our current cookware capacity? Sir, if you can share that. So I think we would have released a press release to the exchange. In the last quarter, we have actually commissioned our new spring line in Gujarat factory, which takes our capacity from roughly by roughly about 60% from where it was, 60%-70% of where it was. And I'm also happy to tell you that we are presently utilizing all of it. Okay. And, sir, on the cooker capacity? Cooker capacity, we have not added anything significant, though I think we have added shifts and therefore our production is up. I mean, just to tell you, the amount of production that we've had more than last year is almost 70% more than last year in terms of production, actual production recorded. In cookers, we're able to produce what we can sell. Okay, sir. Thanks. Thank you so much. Thank you. The next question is from the line of Disha Sheth from Anvil Share & Stock Broking. Please go ahead. Sir, sir, congratulations on this set of numbers. Sir, wanted to check, we have other expenses are lower quarter-over-quarter. So wanted to check, is this the trend which will continue because of the operating leverage we are getting? Or, we have controlled certain expenses because of high raw material, and it might spike up in coming quarters. There is only a 1 percentage point drop, and that could be due to many things, really. I mean, if you look at our other expenses, it's 24.6 and 23.6, not very different. If you look at the half, it's 24 and 24.1, so there's no real significant change. Okay. Okay, and, sir, on cooker especially, how has the demand been? And are we gaining market share since we are growing at a very good rate in the competitive? Well, I'm sure that the category didn't grow by the percentage growth that we have shown, so we must have got shares from somewhere. Okay, and how is the market? Yeah. Okay, and sir, can you repeat the volume and value growth for the quarter? I just missed that. ...No, I did not give any volume and value growth. All I said was that if you see whatever we have given in our release, that is about the best we can, disclose at this point in time. And what we have released is that for the quarter, we have grown by 44% in value for pressure cookers. Okay, sir. That's it. Sir, on over five years basis, what is our sales growth target, since we are introducing new products and- We have already declared our stated commitment to reach INR 5,000 crores by FY 2025 through organic and inorganic growth, and we, we stand committed to that number. Okay, and then the margins in the range of 15%-18%. 15-16.5 is what I thought we said, so I don't want to say 18. Okay. But if we can do 18, why not? Okay, sure, sure. Mm. Yes. Thank you, sir, all the way. Thank you. The next question is from the line of Sanjaya Satapathy from Ampersand. Please go ahead. Yeah. Sir, congratulations on a fantastic set of results. You have managed to protect your margin despite commodity pressure. Is this some kind of a sign of industry discipline and reducing competitive intensity? No, I don't think... It's a, it's a combination of various factors. You see, there are a lot of things that we have done internally to make sure efficiencies show up. I just said that our manufacturing has produced so much more than last year, which means that my costs there would have come down. There are a lot of efficiencies that we have improved, aside of the fact that we've taken timely pricing decisions and timely promotion decisions, which has resulted in what you see. Competitive pressures, I don't think have reduced. Competitive pressures will be there always. It's not some industry where, where there is no competition. But I'm sure with a brand like ours and the respect that it commands in the market, we will be in a position to continue doing this. Understood. And sir, you have also talked about slight slowing of e-commerce business compared in terms of growth rate compared to previous quarters. Is there anything to read there, or it is just, Nothing significant to read there, except that we are just reminding you that the second half of last year was a significant growth over the previous year. Because we tend to think that this last year was a COVID year, and therefore it was a bad year, and therefore, if we have grown against that, so what? The point is that the second half of last year was a significant growth. In fact, if you look at our last nine months of last year, we have grown by 20% over the previous year, for the Q1, which was a washout. What we are saying in this is that, given that the base effect of the first half was different from the base effect of the second half, we don't want you to think that we would grow by a similar amount of percentage that you have seen in the first half, because the first half growth has come on that base effect. There is absolutely no gloom and doom that we are predicting in our release in terms of the market, its demand, and our ability to satisfy that demand. Got it. Sir, if I can just ask the last question, your 15 sales target of almost doubling your sales in three years' time over current year. So, so if you can just help us understand, like, will it—how much will it be driven by your market shares or gain in the existing product, and how much it will be because of initiatives like new products as well as exports, et cetera? See, even when we released our statement on our vision for FY 2025 at INR 5,000 crore, if you recall, we have told you that there's a combination of various factors. We have split it into domestic sales, new verticals, exports, and inorganic opportunities. So it is not that the present domestic sale is doubling, it's a combination of various factors, and we are at work in all of those areas, and we are still staying committed to that number. So it's a combination. There are acquisitions that we are always considering on our side, which we have been talking to you. We haven't reported back to you because we don't have anything right now to report in concrete terms. But obviously, with the kind of cash we hold and the kind of commitment we've made to that growth, we are actively considering many options. Understood. Sir, thanks a lot, and hopefully, the kind of run rate that you are looking for next three years, we will see in a normalized second half of this year. Thanks a lot, sir. Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah, so thanks, sir. Thanks for the opportunity, and congrats for a really good set of numbers. Sir, in terms of the price hikes across the categories, are our price hikes in line with the industry, or have we raised prices higher than the industry? Each company is different. Each, each company is different. Each company's own internals are different. Let me tell you, we, as a company, have followed a cost-plus philosophy and always said that we must maximize value delivered to the customer. If I do—I do never take opportunistic price increases, and that is something we have maintained. Others have probably also been having different times at which they have taken price increases. We have taken on the basis of what our internals were and what our costs were. That's the philosophy we follow, and I believe by following that, the customer will also see the value in Prestige when he is buying a Prestige product. Okay. Okay, sure. So, sir, and, in terms of, as you indicated initially, that, the company would be using the excess cash to improve the margins, which basically, if we increase the inventory levels, then obviously margin may increase, but, will it result in higher, inventory days and in turn, impact asset turns and overall return ratios? So, on one point, and, even after adjusting for inventory uses, still a lot of cash will be still left on the books. So, is there any further plan on that, that additional cash? Just to the previous question, I had answered that there are several proposals that are under our consideration as far as any acquisitions or inorganic opportunities that might be there. And that is something we are constantly looking for, and we are very careful because this, just because we have capital, we cannot go and acquire a company. We need to see what our future is- No. -what its future is, et cetera. So there are several such proposals on the table, number one. Number two, coming back to the inventory issue, if you look at me, my, where the money is deployed, it is not deployed so much in, finished goods as it's deployed in raw materials, for obvious reasons. And that is something you can take up and down at will, depending on which way the market is going in terms of commodity costs. Okay. Okay, sir, and our internal take in terms of inflation, because obviously, it's difficult. I mean, it has literally been an inflation shock post fifteenth of September. We are, everybody is in a way, experiencing. But what would be our internal expectation in terms of inflationary pressures? Whether it's it will continue for some two, three months period issue, or we are expecting it to be a prolonged one, more than one year kind of an issue. If you know a good astrologer, please recommend it. I can't tell you. No, no, sir, I, I agree, I agree. It's a very difficult answer, but means that's why what we are seeing other consumer companies are also, they are taking calibrated pricing because they are fearful that if they take too much of price hike, and then if suddenly the inflation cycle goes down, then again, they are caught on a wrong foot. So- You are absolutely right. It is important to be calibrated in our approach. I also told you we are a cost-plus kind of company, so we have to calibrate these things and also make sure that under no circumstances we try and threaten the demand because it's never, inelastic to price, price increases. Having said that, as I said, we are committed to be in a particular band for our margins, and that's something we are well on course to achieve. We don't decrease prices expecting future cost increases. Okay, so let's say, means we are seeing an inflation which is never seen. Probably, we had seen similar inflationary shock in maybe 2009, but almost 20 years, we have seen this kind of inflation for the first time. So probably if the inflation can be so high, again, the correction in inflation can also be pretty steep. So in that case also, we will not correct the prices then. No, no, it is future. In other words, the cost increases or price increases will not be 15%, it'll be 5%. It will not be negative. When inflation comes down, prices don't come down. The price, the price increases comes down. In any case, I, I, I do think that we are not in a position to comment today. There is an energy cost, which is keeping on going up, and many of our raw materials, energy is a big part of that cost. And unless we see some correction in the energy costs, you're not looking at anything coming down. Like chairman said, maybe the increases will not happen at that same rate, but maybe it will not come down. From our side, we are calibrated enough so that we do not have a situation where we have to reduce prices. We are not there. Okay. Okay, okay, sir. No, no, understood. Understood, sir. That is what it is. Yeah. Yeah, sir, this is very helpful. Thanks. Thanks. Yeah. Thank you. The next question is from the line of Bhavin Vatlani from SBI Mutual Fund. Please go ahead. See, at the outset, congratulations for a great set of numbers. My first question is, if you could help us with your market share in cookers, cookwares, mixer grinders, and some of the other key categories like induction cooktops. I'll not give you the market share numbers. One, because there's a lag between market share numbers by the time they arrive, and the lag is at least a quarter away. But I can tell you that we are currently market leaders in pressure cookers, non-stick cookware, induction cooktops, in value-added gas stoves, in rice cookers, and we are the number 3 player in mixer grinders. Okay. So mixer grinder is an area where you have been highlighting that we are not amongst the leaders, and but the aspiration- We were number six two years ago. We are at number three position today. Sure. But, in your view, what are the efforts that you are taking to increase your market share? Because some of the newer players have been using the online channel very extensively. So if you could just throw more light and speak about the mixer grinder as a category specifically. So first of all, in the online space, we are number two brand. We are not number three brand. So we are very well entrenched in the online space. Our idea of getting market share is very simple, which is what the Prestige brand does, which is toward by providing innovative products and solutions to customers. And our product pipeline is always getting populated with newer and newer innovations, and we are sure that very soon we will be talking and threatening the leaders in this category. ... My second question is on the channel mix, because, in the previous call, you had mentioned that there's a disproportionate increase in online mix because of the travel restrictions. Could you help us with the channel mix, and what in your view is a longer-term sustainable mix that you are looking at? Yeah, as a strategy, we have always said that we would like to be maintaining our presence in all kind of channels, and we do not want to go get into one particular type of channel only. We as a brand are well distributed across the country. We have presence in almost every single type of channel, and we would like to keep it that way. We have seen that, as a matter of fact, when the lockdowns were there, online, of course, disproportionately goes up, and then it tends to even out, and the other channels come back, as we have seen in Q2 and even now in Q3, in the month of October, where people are coming out to shop in the offline space. We believe that in our kind of category, between 18%-22% is the stable online, and the rest will be offline. Sure. What would the online contribution in the last quarter and Around 18%-20%, if I'm right. Around that. Okay, sure. What percentage would be by our exclusive stores? Around 16%-17%. Okay. Just last question, if you could talk about the newer products that you launched in the previous quarter, specifically the Svachh range of gas stoves. How is the response, and what kind of growth we are seeing in that category? See, we have done a calibrated launch, market by market. It's a new product, and so far the response has been overwhelming, if you ask me. We are not able to supply enough. And I believe that it is an absolute disruptor in that category, because there's no one else who's got that kind of a feature, and it's so relevant to any user. So we are having great hopes on this, and we believe that we will be able to gather much better market share with this kind of platform. You are aware that, in pressure cookers, when we launched Svachh pressure cookers, now we have moved every single model of ours to the Svachh platform. We're trying to do something similar to the gas stove platform. Sure. Yeah. Thank you so much for taking my questions. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the question queue. Okay, of course. The next question is from the line of Gautami Desai from Chanakya Capital Services. Please go ahead. Yeah, hello, sir. Sir, I read in one of your past con call transcripts that you had said that you have a 35% market share in cookware, where the addressable market is INR 1,400 crore and non-stick is INR 900 crore and stainless steel is INR 300 crore. So I was a little confused there. So when you say that the addressable market of cookware means what do you consider in that? And when you say that, say, non-stick is INR 900 crore, does it mean that the total non-stick vessels that are sold in India, that everything in India, organized, plus organized, put together, is INR 900 crore? Can you throw some light, sir, on this? I don't know which con call you are referring to, but- No, no, I think last one only, or last, or maybe before that. Now, the addressable means what? Cookware is... Any stainless steel stove is also a cookware. No, of course. [Uncertain], which is cookware. Anything is cookware. Yes. What we are discussing is the value-added cookware, the non-stick cookware, and yes, our estimate is between INR 900 crore and INR 1,000 crore, as per whatever the last research that was available to us. We are also kind of doing retail market share tracking, and that is how we have stated those market shares when we did state them. So, sir, when you say 35% market share, means you are right when you say that, you know, a thali or chamach is also cookware. To wo sara India ka jitna bikta hai, all that put together, your share is 35%? You are talking about non-stick cookware, if I am correct. Uh- The steel boat is not non-stick, right? You had said that cookware is 35% market share, or maybe what you meant is your non-stick, plus stainless steel, plus your other value-added, that all put together could be INR 1,400 crore? Yes, that is correct. Okay. And so that is organized plus organized sold in India, right, in your products? Yes, yes. Okay. And sir, one more thing. I'm not trying to look at any number of market share or anything like that, but I'm just trying to understand- You are trying to confuse me with my numbers. That is what I am saying. Sorry, sir. Sorry, sir. You should have been a lawyer. Sorry, sir. Yeah. And sir, now, honestly, I'm not looking at any number on the market share, but I'm just trying to understand that, you know, when, when you go into newer products like, say, mixer grinder or other appliances like cleaning products and all, and sir, when we see like, you know, large Voltas ads, like, say, someone like a Kent or anybody who like suddenly comes up with all those, a lot of those SKUs in which, you know, you are there, you're trying to be there. And, then we, you know, it's kind of... It looks like a low entry barrier to me and low capital investment, where a lot of manufacturing is outsourced. So sir, it'll really help us in, you know, if you tell us that, you know, what are the kind of entry barriers that, you know, you are trying to pose to your competitors and- ... Okay. Yeah. Shall I tell you that the pressure cooker and cookware industry is at least 50-60 years old? Yeah, right. Do you agree? Yes. It is not difficult to make a pressure cooker and not difficult to make a non-stick cookware. Right. Now, even if I have 30%-35% market share in any of these categories, do you think after 60 years to maintain 35%, does it mean something? Yes, sir. If I had 2% market shares, then I agree with you that there is an entry barrier. Right. No entry barrier. There is an entry barrier, which is brand, which is innovation, which is customer relationships, which is the way we are in a position to offer value to our customers, after-sale service. So many of these things add up. Just making a product and putting a footwear ad does not mean that you can get into the market. Now, a retailer, when he puts in his own in-store brand, does it take over from the brand? Let it be any category. It does not happen because customers buy brands, and that's precisely why brands exist. Thank you, Mr. Desai. May we request that you return to the question queue for follow-up questions? Thank you. The next question is from the line of Koundinya Nimmagadda from JM Financial. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. So, sorry for hopping on the second, sir. Can you just help us understand, you know, what is the price tag that we took in FY 2022? I mean, and when, when did we take it for each of the categories till date? We have taken around 5%-8% price hike in July of this year, in this financial year, and that price increase has been only partially kicking in into the last quarter, which we have just completed. Okay. Understood. I will tell you, there are significant volume growth, if that is what you are trying to extrapolate. There are significant volume growth over last year and the pre-COVID year. Sir, can you help us understand, you know, across categories, I mean, this 5%-8%, I guess it would be higher for appliances, so just trying to understand how it- Yes, you are absolutely right. The 5% was on cookers and cookware, and the 8%-9% was on appliances. Understood. Sir, and then the next question is on the demand momentum from your numbers and from the numbers reported by your PS. It looks like the demand momentum is good, but just trying to understand, you know, with the sort of price tags that we are taking, and do you think, you know, the demand momentum will sustain, the volume growth is going to happen here on? So what is your sense on that, on the possibility of incremental price hikes to pass on the inflation and on the demand side? We have, we have stated to you already that we are going to maintain our margins to the extent, and we- it looks like we are going to be able to do that. Now, taking a call on what the commodity costs are going to be, I think is difficult at this point in time. Hopefully, they will abate, and hopefully, we will not have to do too much more. Uh. But if it is necessary, we will pass on, and the brand is well in, well in its position to do that. Now, coming back to where this industry is, I mean, if you are looking at a price hike of 7% or 8%, let us say, or 5% in a pressure cooker, you're talking about INR 100 at the end cost that the Prestige customer is going to pay. Given that, what is the share of wallet on this type of product? I don't think it is something that will break the demand of the customer. So I don't think it's going to be debilitating. I don't think it's going to derail anything. I... You must, however, remember that there is a base effect of last year, second half versus first half of last year. That is what we have stated in our release. Understood, sir. Sir, my second question is on the distribution side. Can you quantify our current distribution reach? And also, I missed the numbers when you quoted it with respect to the sales mix between the channels. I don't understand. You want to know how many outlets we are in, is it? Yes, sir. I don't have those numbers ready. Okay, sir, not a problem. Sir, the mix between different channels, you had quoted in the call, I just missed it. I'm sorry about that. Can you quote the mix between different channels? I had only stated, I had only stated that we have done about 20% on e-com, and the rest is on the offline channels. And I think we should leave it at that, because there are competitive intensities that I would like to protect myself against. Sure, sir. Understood. Thank you very much, sir. That's it from my end. All the best. Thank you. Thank you. The next question is from the line of Digant Haria from Green Edge Wealth. Please go ahead. Yeah, sir. So you mentioned that, you know, in the second half, we may still grow over the last year's large base, and you have stocked up some raw materials also. Do you foresee any other kind of supply-side issues or, you know, have we tried to insulate ourselves? Because the world itself is going crazy on all kinds of supply chain issues. So just your thoughts on that, you know, if there is demand and, you know, maybe we cannot supply, is such a situation possible, and how have we hedged ourselves against that? Fortunately, no, because most of our supply chain is within India. As you know that we have stopped the China finished goods imports last year itself. Most of the components we have tried to indigenize. There are still some components which do come from there. I believe it is limited in its effect, negative effect, potentially, and we do not see any major supply-side constraints to happen. Okay. Okay, sir. So great to know. And secondly, sir, in your presentation, which you released, you said that rural is seeing some kind of positive momentum again. You know, that's a little different from what, you know, maybe a larger company like Hindustan Lever said. So is it because, you know, our channels, you know, we used to do distribution through MFIs and, you know, those channels, have they come back or, you know, why is it that we... You know, what is it that we are seeing on rural for this positive kind of a commentary? There are two ends to the rural business. One is the MFI-led business, which we have always stated. Last year, obviously, the base was very small, given the fact that almost no lending had happened to non-core loans, because these are coming under their additional loans. Because of COVID last year, they had almost stopped. That has restarted. And the good thing is that that has restarted at a clip which is better than the pre-COVID year also. That is one good news there. The second thing is, on the non-MFI rural sales, which we cannot measure completely, but we can only give you a feel for, the tier two, tier three cities growths are quite robust, and we believe that that is also because these cities are feeder towns to rural India, and that seems to be doing well. So I think the rural India is doing well, and the products that they are buying are also not necessarily the cheapest. They seem to be buying the better products. Okay, sir. Good to know. Thank you. All the best. Yeah. Thank you. The next question is from the line of Vinod from Dolat Capital. Please go ahead. Yeah, thank you, and, congratulations on a very good set of numbers, sir. Just continuing with the question asked by the previous participant, so what is the rural-urban mix for us as well as for the industry, if I take kitchen appliance as a broad umbrella across categories? As I, as I said, the only measurable business that we have stated to rural is in the MFI business, and that has restarted only towards the Q2 of this year, and that is starting to do well. So that will be in the single digit percentages between 3%-5%, which we are seeing, which is attributed to rural as we know it. But what is actual rural, given the population that is there, which will go through our feeder towns, that we can't say how much it is. Our feel is that those markets, those geographies, those pop data are growing faster than the bigger cities. Okay. And again, just continuing on the same thread, one large FMCG company has called out a very big rural slowdown. So what's our views of going forward in the second half of this financial year? I believe they have a better view. I, my current cursory view of this is not negative. It is actually doing very well for us, and will continue to do well in the second half. Okay. Okay. Thank you, sir. Thank you. The next question is a follow-up question from the line of Bhavin Vatlani from SBI Mutual Fund. Please go ahead. Thank you for the opportunity again. Some of your peer sets have been talking about significant step up in the investments on digitalization, and one of them have also mentioned about ability to measure 75%-80% of secondary and tertiary levels. So if you could talk about the investments that we are doing in on the digitalization, because for us so many SKUs actually it could meet the demand better. Let me tell you, we have almost 80% visibility on all secondaries that happen today. And tertiaries. And tertiaries that are happening. All of those are already in place. There is an end-to-end digitalization beyond just monitoring secondaries and tertiaries that is in place, which I don't want to discuss right now here, but I believe that the kind of work that we are doing in digitalization will be unprecedented in the, in our industry, at least when we are finished with it. Oh, sure. And any number that you would help us on digitalization, what is the kind of spend that we would like to have budgeted as a percentage of revenues? I don't know whether we have budgeted as a percentage of revenues. There are more than INR 15-20 crores worth of projects as we speak. And in fact, the management and every one of us have said, if more is required, we will do it, but the idea is to get the job done. Sure. The second question is, I mean, and my... This is my observation, and correct me if I am wrong, that there has been a considerable step up in the pace of new product, and I'm judging from the presentations that you have put out. And do you see this pace maintaining, and what's the kind of spend that we do on, or as a percentage of sales on R&D and innovation? Again, it's a need base. Our spend is on tooling, new molds, on new technologies, on finding out new design, so industrial designs, engineering design, tools and molds, and most importantly, consumer research, which is the starting point to many of these things that we do, and that's something we constantly. Again, there's no budget. What we say is, we want to get, let us say, a particular category in which we want to do some disruption, we do whatever is required for that. We maintain a budget and spending on all these things. Sure. Just last question from my side. You mentioned that you're running almost full out in categories like cooker, cookware, et cetera. If you could just help us, what is the expansion plan, and what is the capital expenditure budget that you may have for this financial year? This year, we will might spend between INR 80 crores and INR 100 crores, if I'm right. At least that is the kind of project. How much will actually get spent will depend on what is the progress on each of those projects. We have just added 1 new spray line, as I said, I mean, in non-stick cookware. We are adding another line in stainless steel cookware. There is a lot of investments that we are now doing in pressure cookers as well. But these are incremental investments, and next year we are doing something else for that. So the capacity in the next 2 or 3 years will actually double. Sure. Yeah. Thank you so much. That helps. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you, and over to you. Well, thank you. That was an interesting session, I must say. I once again say that we had a great quarter and a great first half. You can see that our margins have been maintained under some very challenging and trying circumstances through several initiatives that we've taken. The company is well-placed. There's lots of cash in bank, and it's also well-placed in the market as we speak. Our commentary on the second half has been given on the basis of the first half base, second half base effects of last year, but we are still looking at the second half very positively as we speak, and we hope that we will continue to run well in terms of the top line that we are doing. Thank you very much. Thank you. Ladies and gentlemen, on behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.