Ladies and gentlemen, good day and welcome to the V-Guard Q4 and FY 2026 Earnings Conference Call hosted by Investec Capital Services Private Limited. 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Prasad from Investec Capital. Thank you and over to you, sir. Thank you, Yusuf. Good evening, everyone. A warm welcome on behalf of Investec India to Q4 FY 2026 Earnings Call of V-Guard Industries Limited. We have with us the senior management team of V-Guard, represented by Mr. Mithun K Chittilappilly, Managing Director, Mr. Ramachandran V, Director and Chief Operating Officer, Mr. Sudarshan Kasturi, Senior Vice President and Chief Financial Officer. Now I'll hand over the call to the senior management for the initial remarks, post which we'll open the floor for Q&A. Thank you. Over to you, sir. Thank you, Vineet and the Investec team for hosting today's call. A very warm welcome to everyone joining us today to discuss the company's operating and financial performance for the fourth quarter of FY 2026. I trust that all of you had the opportunity to review the investor presentation shared earlier. We delivered a robust performance in Q4, marked by strong growth in both revenue and profitability. On our consolidated revenue for Q4 FY 2026 stood at INR 1,755 crore, a YoY increase of 14.1% for the full, 14%. For the full year, we achieved a top line growth of 7%, with almost all growth coming from the second half. The Electronic segment comprising of Stabilizers, UPS Systems, Inverters, and Batteries delivered a strong growth of 22.3% YoY. All categories delivered growth during the quarter. The Electrical segment, which is our largest revenue contributor and includes Wires, Pumps, Switchgears, and Modular Switches, registered a YoY growth of 15.9%. In the Consumer Durable segment covering Fans, Water Heaters, Kitchen Appliances, and Air Coolers, we reported a 4.1% YoY revenue growth. Fans and Air Coolers witnessed a decline, while Water Heaters and Kitchen categories grew strongly. Sunflame reported a YoY top line growth of 8.6% in Q4. The slowdown in the CSD business continues, but the non-CSD business grew by about 16%. The GTM in-integration has been completed, and the business is experiencing strong traction. Sunflame reported Sorry. Yeah. In Q4 FY 2026, the revenue from South markets grew by 16.2%, while non-South markets grew at 11.8% YoY. For the full year, non-South market contribution is at 48%. The gross margin remains healthy. We have maintained gross margins at 35.3% this quarter, which is at similar levels of Q4 of last year. This is on the back of significant improvements achieved in the last three to four years. EBITDA, excluding other income for Q4, stood at INR 171 crore, reflecting a YoY growth of 19.3%. For the full year, we reported the EBITDA of INR 527 crore, an increase of 2.6%. EBITDA margin for the full year was 8.8% compared to 9.2% previously. Consolidated PAT for the quarter was INR 112 crore, up 23% YoY compared to PAT of INR 91 crore in the pre-previous year. For the full year, consolidated PAT was INR 308 crore, lower by 1.7% YoY. In Q3, we recognized an exceptional one-off charge of INR 22 crore towards gratuity and leave encashment arising out of the new labor code. Without this, the impact, the underlying PAT growth for the full year would have been 3.6%. Working capital management continues to be efficient, leading to strong cash flow generation. We have a net cash of INR 231 crore as on March 2026, as compared to INR 64 crore in the previous financial year. Considering the financial performance and healthy cash position, the Board of Directors has recommended a final dividend of 150%, equating to 1.5 per equity share. The West Asia war has created challenges in terms of commodity inflation and supply uncertainty. So far, we have navigated these challenges well, which reflects the inherent resilience of the business. We continue to monitor these risks, and we have mechanisms in place to take appropriate and timely actions. Overall, FY 2026 was a challenging year, with the first half experiencing weak summer and tepid demand. The business performed much better in the second half. With the momentum of Q4 and indications of a supportive summer, we are hopeful for a strong start to FY 2027. With that, I conclude my opening comments, and I would like to thank Vineet and the team at Investec for hosting this call and would like to request the moderator to open the floor for Q&A. Thank you. Thank you very much, sir. We will now begin the question and answer session. First question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Thanks for the opportunity and congrats for a great set of numbers. In terms of the price hikes, if you can indicate, because all commodity prices have increased materially. What will be the price hikes across segments or at the portfolio level aggregate? Have you passed on the entire impact of increase in cost to the consumers? Or do we need another round of price hike? What will be the quantum? That is question one. Question two, whether the Kitchen Appliances segment has now really come out of the, in a way, bear phase and now we should see pretty healthy growth in the segment, considering the strong numbers posted by Sunflame also. How should we think about for FY 2027 for Kitchen Appliances as a category itself? Three, how is the Fan market shaping up post March? Because we had understood that Kerala as a market has seen some amount of softness, Kerala and Karnataka. How are we looking at the Fan and cooler market post March? Yeah. Thanks. Yeah. Okay, I'll take up the second part, which is on Kitchen Appliances. Yes, we do believe that there seems to be some, I think the improvement in demand for Kitchen. We are seeing traction both for V-Guard as well as Sunflame. I think the GT business of Sunflame is growing well. We have also taken some actions in terms of business integration, which is also helping. We have more boots on the ground as far as selling Sunflame is concerned. Now Sunflame has access to all the networks and capabilities of the sales system of V-Guard. That's definitely helping that. Yeah, we do also believe that, you know, Kitchen business is slowly coming out of the woods after the lull which happened post-COVID. The third is. Okay, now I'll go for the first part. Sudarshan, price hikes, the quantum? Yeah. Okay. Yeah, there have been some significant increases in input costs across representative categories. It would typically, we are seeing in a range of somewhere between 8%-13% kind of cost increase. This has happened over a period of time. What that translates into is eventually when the high cost inventory comes in, a 13% price hike would be required. Okay. At the moment, prices are getting passed on. We've probably landed about 75% of what price increases are required so far. That's something we would have to watch in future. Yeah. I think, we have landed most of the pricing action, and I think, most companies have announced and taken pricing action. I think the balance 25% should happen as and when the high cost inventory start hitting the inward, you know, in the month of May and June, is what we feel. The third is on the Fan. The Fan business, I think, you know, Fan business has de-grown in Q4. I think, I don't think it's been Kerala. I think for us, you know, the eastern markets, especially the summer products, have not grown in Q4. The part of that is also pulling down Fan. Maybe in the South markets, including Kerala, Fan would have been, you know, a flattish kind of number for Q4. However, April, the summer sales has been reasonably good in South India. We'll wait and see, you know, what happens for the full quarter. Okay. Sure, sir. Very helpful. Just one last question. V-Guard has a high revenue salience from state of Kerala. Post the war in West Asia, we believe some of the remittances, et cetera, there might be some disturbances to that. There is possibility of some impact on the overall economy at Kerala level. How do we see that impacting, let's say FY 2027? Because probably so far there was no impact considering it just two months only. Do you see any impact? What will be the strategy to mitigate the impact, if any? Yeah, that's it for me. Okay, so far we have not seen any special impact, you know, in Kerala. In fact, the summer in Kerala has been pretty supportive, Kerala numbers are pretty good. Kerala today is not that large like it used to be, so it's about 15%, 16% odd. It may not impact the overall company, you know, that much as it used to do earlier. So far we are not seeing an impact. Even when we talk to, you know, real estate companies, they are actually seeing still traction happening because we also will see some improvement in demand because people who are evaluating to relocate, you know, the only earning member staying back in those countries and sending their families back home. All these things are going on. Having said that, Q1 is not about that. Q1 is primarily gonna be summer, and Kerala as a state has done well, as far as summer is concerned. Yeah. Okay. Sure, sir. Many thanks. Very helpful. Thank you. Participants, to ask a question, you may press star and one. Next question is from the line of Vineet Prasad from Investec. Please go ahead. Hi, sir. Sir, I have a couple of questions. One is, from FY27 perspective. How do you see demand shaping up, considering one, the summer season, number two, possible inflationary pressures, and its impact on consumer sentiments? That's my first question. Second is from the next couple of years perspective, how do we see margins trending? With given bulk of the investments in the new capacity is already done, ramp up as we speak is on its way. If demand momentum is conducive, do you think we are heading towards double-digit EBITDA margin over the next year or two? Yeah. I think, if you look at FY 2027, we, you know, we just completed one month. South India has done well. South, the temperatures were warm in most parts. I think South India, the summer has started. North India, it is still, you know, it was raining in many parts of the geography. North India also has a longer window at least till June 30th. We are expecting the demand to pick up. The expectation and the prediction from the IMD as well as Skymet and other agencies are for a pretty warm summer. That is hopeful. South India, it has already started. You know, the numbers are pretty decent. As far as the medium term is concerned, yes. If you can see after even having a such a adverse year, you know, we had a very bad Q1 in the first quarter in the current, you know, FY 2026. We have come back strongly and our edge to EBITDA is in the region of around 9%. 9.5%. We are already close to double digit numbers. Yes, there are some concerns because the cost inflation is very high. Across categories, across raw materials, prices have gone up. Even metals, you know, the metal prices are also going up. Because we have to also understand that West Asia also produces a lot of aluminum. They have a lot of aluminum smelters which are out of action now because of the blockade. I think we'll wait and see. I think the inflationary trend is pretty severe and we, it is as bad or little worse than the Ukraine war inflationary trend, what we experienced. The good news is this time, you know, we are ahead of the curve in terms of pricing. If you see our margins are fairly, you know, protected, in Q4, and we hope to do that. Yeah, if, yeah. In the medium term, I think yes. Once this is over and the raw material prices come back to normal, we are pretty confident of hitting double digit EBITDA. Yeah. Vineet? Hello? Hello. Sorry. I was on mute. Just follow-up to the question your earlier response. What I understand is, this time around industry has been a lot more proactive, and margins to that extent could be, could remain resilient. Has this been a case across players where if most players have taken price increases or it is us and couple of maybe the larger ones who've been proactive, or it's the industrial trend? No, I think we have seen a pretty much broad-based reaction by the industry to increase prices. In seasonal categories like summer categories, you know, this action is getting delayed. For example, in South India, a lot of this pricing is getting passed on, whereas North India, where summer is yet to start or it's starting slowly, you know, some of it is getting slightly pushed. I think the intent is pretty strong. We are seeing this across because the quantum of price increases are high. This is not only about price increase, but in some cases there is genuine shortage of raw materials. We are all scrambling to secure raw material supply. You could see, you know, some of the smaller players not even being able to produce, you know, products. We are in a state of supply shock. That's also another reason why, you know, there is there has been a very strong, almost cohesive action by all players to increase prices because the quantum is very large, so there's no way that none, you know, most, almost all the categories, the cost hike is I mean, the quantum is so large that you can't absorb the shock. Understood. Understood. Thank you. Thank you so much, sir. Thank you. Thank you. Before we move to the next question, a reminder to the participants, to ask a question, you may press star one. Next question is from the line of Rachna Kukreja from ASCIL Ventures. Please go ahead. Thank you for the opportunity. My questions are on Sunflame. My first question would be, have we incurred most of the transition and integration related costs for Sunflame? Going forward, what could be the expected benefits from these initiatives taken? Okay. Ram, you want to take this? Yeah. On Sunflame integration. I think the Sunflame integration is progressing well. We, you know, in functions like service and quality, we have fairly progressed with the integration and we are seeing results also. There are improvements in cost, and there is improvement in performance and customer satisfaction. In sales, I think, you know, the integration, you know, happened over November, December, and it's still underway. We are seeing early results in terms of being able to, you know, place, you know, Sunflame into stronger counters where we enjoy, you know, traditionally good relationships. I think that's encouraging. On supply side, you know, in terms of planning, sourcing, this integration has happened over last quarter. In general, of course, there will be some, you know, benefits in indirect costs, warranty charges and, you know, even, you know, cost of quality. Those are, those are areas where, you know, we expect to see some benefit. The most significant benefit will come, you know, from the sales integration. This is something that we should expect over the next, you know, three quarters and into the subsequent year. I think the initial benefit will come as we spread Sunflame into our network. I think deeper benefits will come from second half of this year, you know, as progressively our NPD pipeline starts to hit the market over the subsequent three or four quarters. I think progressively we should see better outcomes because the actions are underway. We are already seeing these, you know, benefits in functional domains like service and quality, as I already spoke to you about, or even warehousing and logistics. Yeah. That's it. Next question. Hello? Yes. Yes. I just wanted to know about the initiatives taken for the GT and the eCom channel for Sunflame. GT is fundamentally in terms of sales integration and branch integration, sales force integration and branch integration, and sellout, you know, integration of sellout management capabilities. That's as far as GT is concerned. eCom integration, you know, we are having the same team and the same systems driving Sunflame. It's taking longer time because I think, you know, we are also working on the offerings on the platform. You know, we had some challenges with listing some categories, you know, voluminous categories. GT, I think, you know, we are seeing traction already. I think we had some decent growth for full year, and I think Q4 was better, and we expect the Q1 to be also, you know, reinforcing the direction of growth. Yeah. Okay, my second question would be, given that the innovation cycle in the Kitchen Appliance industry is very fast-paced, and we too have, you know, refreshed our portfolio. The benefit of this portfolio would be, you know, visible after a year. Will we be able to sustain or improve our profit margins? How is this new portfolio different, both in terms of, industry, led innovations and our previous portfolio? How would this redefine our position in the industry? No, I think, you know, two, three things. One is, you know, as far as our See, I think, you know, we are refreshing products as we speak. It's just that, you know, the significant part of our refresh will land, you know, towards later half of this year. Yeah. That being said, you know, already, you know, portfolio enhancements are happening. Now, there are, you know, multiple layers here. I think, you know, at No, one layer is, you know, some of our offerings are dated and, you know, they are being upgraded. Some of it is about, you know, addressing white spaces. Some of it is about, you know, getting the lineup to reflect, you know, emerging technology trends like BLDC. These are the kind of things. Fundamentally, the addressability of the market, the freshness of the offering and, you know, the wherever, right? Particularly I think, you know, we have Fans in CSD or, you know, we have what I would say as, We had gaps in built-in and, you know, we had gaps in, you know, BLDC-based offerings in hobs. These are getting addressed. Yeah. I think, you know, as far as the, you know, as I said, you know, right now, this year, you know, you will start to see benefit as we strengthen the reach with the help of our, you know, branch and our sales force, and also as we strengthen the sellout capability for Sunflame. That's our focus. I think, you know, the larger benefit of product rollout, you know, will be more visible in second half of this year and also going into next year. Yeah. Okay. Understood. Thank you. Thank you. Participants, to join the question queue, you may press star and one. Next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah, thanks for the follow-up. Just two questions. Now, with integration of Sunflame largely done and debt repayment also over, the cash accumulation should start on the balance sheet. Just some of the CapEx may take some cash, still there might be cash accumulation. What will be the strategy with the cash? Is the management or the company looking at another inorganic growth opportunities, or how should we think about that? That is question number one. Question number two, we see BLDC as a technology is making rapid inroads even in Kitchen Appliances like mixers also. How does the management see Sunflame prepared for that kind of product innovation? Overall, how do we see the BLDC Fans also, market shares, shaping up for V-Guard? Yeah, that's it from my side. Yeah. As far as the cash is concerned, we are done with debt repayments and, yeah, barring CapEx, we should be having a reasonably good free cash flow. We have not taken any call of, you know, making any acquisitions or anything like that. If we get an opportunity at a good value, we will look at it and it will be a case-to-case basis. Ramachandran, to report on that. The other part is on BLDC. I think already if you look at Ceiling Fans, V-Guard's BLDC is contributing roughly- 40%. 40% odd of the Ceiling Fan sales, which is pretty good. Our growth in BLDC has been very, very good. Our complaint rates, reliability and offerings are very, very competitive, and we are continuing to launch as we go forward. As far as the BLDC in Kitchen is concerned, there are two areas. One is on mixer grinder and second is on Chimney. Chimney, I think we've already launched BLDC Chimneys. In mixer grinder, I think this is a device that is used for half an hour, 40 minutes daily, so it's not a device that is running constantly, like a fan or a AC or something like that. There, I think, you know, we have not yet launched. I think that's more difficult to explain to customers, the rationale of, you know, payback when something is running only for half an hour or 45 minutes every day. But in the other two cases, like Chimney as well as, you know, Chimney, the running time is longer. It'll be a few hours every day, so there seems to be some traction. That's But I still don't think it will be as much as the fan, because in the case of ceiling fans, it's running for almost eight, nine hours a day, I mean, assuming that you're putting fan through the night, in your bedroom, and that's the payback hypothesis is very strong there. Okay. Yeah. Sure, sir. Thank you.. Thank you. Participants, if you wish to join the question queue, you may press star and one. Next question is from the line of Deepak Lalwani from Unifi Capital. Please proceed. Hello, sir. Thank you for the opportunity, and congrats on good set of numbers. I have a few questions on the revenue side. I'll ask all of them together. Firstly, on the Electronics division, we've seen good growth this quarter. If you can break up this into volume and value split, and if you can help us how the secondary growth, that is the channel growth in April has been. That's one. The second question, the Durable segment, I understand, has been hit this year because of bad summers. What is our strategy to revive growth again in this segment? If you can share your product and channel level strategy. Third, wires, we understand that the competitive intensity has increased. One more big player is entering this segment end of this year, so how should V-Guard be able to, you know, tackle this and be able to grow? At an overall level, Mithun, if you could share what kind of growth rates one should envisage for your company going forward, because you've had a bad year and looks like summers have been good and there's recovery. Overall, what kind of growth should we aspire? Yeah. I'll take the start with the second part. Yeah. If you look at the durable, consumer durable, segment, both Air Coolers and Fans have performed badly, especially TPW Fans. That's primarily related to a lot of the impact of Q1, where we had extremely poor summer. TPW is a very, very seasonal business, so if it does not get sold in the summer window, then the inventory typically sits with the trade and continues so on and so forth. Having said that, as we speak currently, we are having a shortage of TPW Fans because, like I said, the South Indian summer has been pretty decent and sellout has been good. That's as far as the Consumer Durable is concerned. I think this year we should have a good growth in Consumer Durables because of the low base effect. The third part is on wire. Wire is, we are cognizant of the fact that a large player is entering, plus some of our peer companies from lighting are also entering wire. Wire competitive intensity is expected to be more than what it was. It's a very peculiar category. You know, it's a category with low gross margins, and you need a scale of at least INR 1,000 crore to make money in this business. There is also fluctuation of raw material prices upwards and downwards. When it goes downwards, you have to also write off your inventory. I think the new players will find it. It will take some time to figure out the mechanics on, you know, how to crack this industry. It's not an easy industry to break into. We have also had entrants before, who have entered and left. Yes, we are cognizant of this, and we are also taking some measures to strengthen the sales system. On the volume and value growth of Electronics, Sudarshan, do we have a number roughly? Uh- for Q4? Roughly speaking, about 3% is price growth. The balance is volume. In Q4, about 3%, would be, because you have to understand the pricing and the actions would have started, towards the later part of the quarter. It's mostly volume growth. I think price growth is, you know, about 2%-3%. Yeah. Thanks. Yeah. That was very clear. Mithun, if you could share your view on the overall growth rate of the company for the next year. I think, as a company, we strive to grow between 10%-12% in volume, and there is a 1%-2% price growth. You know, like, you know, culminating into a 15% growth, which is what we aim to do. Currently, I mean, the price growth could be higher because, like I said, we are seeing significant cost inflation. We will wait and see what happens. But, so far, you know, we are confident of holding our volume growth. Like I said, if we have a reasonably good summer, the summer category should perform well. We have to also be cognizant that Q1 of FY2026, we had a degrowth in some of the summer categories. We should have a healthy, you know, volume growth this year because the base is on a lower side. Sure. My next question was on margins. If you can help me understand. See, we've been talking about double-digit EBITDA margins, and we've done well on the gross margin side. For the next year, if you can break this double-digit EBITDA margin, how should we look at it segment-wise? How should it play out in the consumer durables, which has seen a very sharp deterioration in margins? How should we look at the recovery in Electronics? By double digit, are we targeting somewhere around 11%, 12% or 10% is our broad guidance? Ideally, this year we would have loved to, you know, claim that we will hit 10% EBITDA margins. That's double digits. You know, we are going through a fairly significant cost inflationary period. You know, the things are quite volatile and there is no, it doesn't look like the conflict in West Asia is going to end anytime soon, right? We're probably gonna have a prolonged period of high cost going forward. If it was a normal kind of inflation, we could have been much more confident to say that. In this case, we probably would like to finish a couple of quarters and then come back and comment on the margins. So far, like I said, we have been proactively, we have been proactive to sense this and start pricing actions early. A lot of our peers or companies have also announced pricing actions as they've come to realize the quantum and size of the price increases are high. Now, I think for a company like us, I think we also need to have a good summer to help us. South India is pretty much, we have had a decent start to summer. If non-South we also have good traction for summer, I think, we should be, you know, confidently hitting that, you know, number. I wouldn't say 11%-12%. I would say at least 10% is what we would like to expect. Yeah. Okay. Like I said, this inflation is still, you know, something that is, you know, going to be a challenge. What we see this year is that, you know, apart from the summer challenge, you've controlled your expenses quite well. The employee cost is flat and the other expenses has not gone up much. Should we see the same trend playing out even in FY2027, which could, you know, provide you some buffer in terms of cost management, et cetera? Yeah, some part of the employee cost is variable pay. Definitely, you know, as a company, if you don't achieve the, you know, top line and bottom line numbers, the payout, variable payout also comes down. That's the there. We also are not expecting any huge increase in manpower this year. Like I said, we are watchful. We have taken actions to control some costs. We will Like I said, if we get a good Q1 and good summer, then we would be more confident to spend, you know, in the following quarters. That's the way we look at it. Understood, sir. Last question. Since you said April was good, any qualitative feedback that you would give us in terms of how this economy will be in terms of the growth rate and in terms of the channel demand? No, I have. You are also following the same, you know, news articles and predictions by the Meteorological Department as we are. I can say that, you know, South India, usually the summer starts early, March, April, and that has been on track largely. North India it's been a mixed bag. You know, there are rains in some parts of North India. If you look at North India, East is a big market for V-Guard, so, you know, East also has to fire for the company to do well. You know, I would like I mean, so I think we still have time. I think we still have another, one and a half months, more than one and a half months left, for the quarter, so it'll be too early to comment, on this. Just keep in mind the base is already on the lower side because last year we had a decline in some of the categories. How is the channel inventory in all these categories? Like I said, it's a mixed bag. If you look at TPW Fan, neither we have inventory nor our partners have inventory, and we are having stockouts. It's a mixed bag. It's not the same for everything. Certain categories are, you know, we are having, you know, supply challenges. Like I said, in South India, I don't think there'll be any inventory issue with any trade partner. North India is the summer is yet to start. You know, the summer sales are yet to, you know, fully start. Okay. Thank you. All the best. Thank you. Participants, if you wish to join the question queue, you may press star and one. Next question is from the line of Natasha Jain from PhillipCapital. Please go ahead. Thank you for the opportunity, sir. Two questions. One broadly across categories, you know, be it your Stabilizer, Wires or Fans. When I've gone on the ground, what I've understood is there was a lot of inventory that got pushed in because of, you know, cheaper raw material costs and therefore cheaper product prices. Q1 has been broadly disappointing in terms of at least south or you yourself pointed east and North India was also a little bit of flip-flop here and there. South also, what I've heard is the channel was stockpiling inventory for more than what's usually required. On this backdrop, while secondaries have moved faster across cooling products, can you throw some light how is the selling or the primaries happening against the secondaries? The second question is if you could also point out if, you know, in case you do channel financing for which product categories? Okay. If you look at Fans, the star rating change happened primarily for Ceiling Fan. The sales for Ceiling Fans is very high in December because all the brands had to sell all the Ceiling Fans before December 31st, you know, 2025. Because of that, there was a lot of channel inventory as we entered. Okay. But this doesn't hold true for TPW because TPW, the star rating norms are yet to start. It's expected to start the next year. Okay. When I said that TPW inventory is not there, this is the reason. Ceiling Fans we don't have any inventory issue. There is sufficient inventory with us and with the trade. Also, TPW Fans, most of it is made out of plastic and there is a challenge in procuring that particular type of plastic in India, so as we understand. This is the reason. Okay. There is a raw material shortage for that particular type of plastic that is most widely used to make TPW Fans, and many of our vendors are not having, you know, requisite inventory to make them. That's the one reason. Channel financing, I think on the whole it's about 10% of our retailers. If you look at the data book, 10%. Retail. The other- Retail finance we don't. Retail finance we don't. We do channel finance. You're talking about channel finance, right? Yes, sir. Channel finance, sir. Yeah, yeah. Channel finance, that's for our primary customers. Yes, our primary customers. Yeah. Approximately 35% of our business- Okay goes through channel financing arrangement. Yeah. It's not category linked. It is customer linked. It is not a category thing, it's a customer. For example, if you have a distributor for a, you know, bunch of products like water heaters, Fans and air coolers and all, the entire customer is under channel finance. It's not a category thing. It's more of a distributor level arrangement. If you look at the entire portfolio of debtors, 35% of the portfolio is under channel finance. Understood, sir. Could you throw some color in terms of are the grade B, HC dealers, distributors facing any problem in terms of working capital management and therefore slower payments to the brands? Is that something that you have observed? No, I don't think so. In fact, our collections have been pretty strong in the March quarter. We have a pretty strong commercial team where, which independent of the sales team actually tracks and manages the, you know, credit limit of each of our customers and decides which customer should be increased credit limit, which customer should re-reduce, which customer should be offered channel financing and which customer should not be. We don't have this problem, and we also have a tool wherein which we also are able to see the inventory of our partners, wherein which we know whether they are sitting with inventory or they have diverted money from the business and so on and so forth. As far as V-Guard is concerned, we don't have this issue. Whatever sales we typically do, these are usually real sales and it's not just, we don't encourage and we don't allow dumping. We have mechanisms to stop that practice. There is this tendency by sales guys to dump stuff. We have an independent way to try make sure that doesn't happen. Yeah. Understood. One last question. I think this is more longer term in nature than near term. For the longest time across cooling products, we've been hearing that there will be consolidation, you know, be it cooling on the AC side or cool out on Fans. A lot of competition that's come in. Right now the situation is such that, you know, costs have increased multiple times and the price hikes are not enough to offset that cost. Do you think now is the right time when you could see consolidation happening or the industry is going to remain fragmented and therefore competition probably will be the same in terms of intensity? See, what is happening is the core growth in the country is not that high. What is happening is every company in every category is thinking like, "Okay, maybe if I get into this category, growth will happen." That is why you see everyone in the Lighting business trying to enter into Wires. There are companies which are in the, you know, water purification business that have entered into Fans. I think everyone is entering everything, okay? It's not that, you know, and this process has not stopped. You know, it is an ongoing process. It's something that has been going on since 2016/20 17. It's an almost eight, nine -year phenomenon. We at V-Guard, we are going to, we have pegged our growth and we have to grow despite all these macro headwinds, and that's what we aim to do. We have done this by integrating our manufacturing. For example, from a sourcing company, we are now a completely integrated manufacturing company, which allows us to build products which are sufficiently differentiated. We are not selling, you know, your me too, e-economy and sub-economy model kind of products. We want to build and sell, you know, premium and masstige products, for which you need to own as much of the supply chain as possible. That's why we have spent like close to INR 300 crores- INR 400 crores last eight years to build, you know, so many plants and to get into the manufacturing. It is an incredibly tough thing to do, but we have done it because this is the only way we can fight this overcrowded market. I don't see it, you know, I don't see consolidation happening. One thing is sure, when such shocks happen, when you have a environment where you have to take 15%, 20% price increases, and when you have an environment where a lot of the raw materials are under shortage or you're not getting raw materials, that's when the better, you know, more organized companies which have better supply chain capabilities will probably do better than, you know, some of the other players. That's, that's the broad thing. So far I've not seen any, you know, move for consolidation, but because we are still seeing, you know, everyone trying to get into every other category. Just a follow-up on that. When you say everyone trying to get into every category, again, a broader longer-term question. We've seen a lot of brands entering across Electrical space, right? Some of your peers who were predominantly, say, a Fans player have now entered wires and vice versa. Predominantly wire and cable player try to enter Fans markets in the last couple of years. Yes. Just want to understand your view, what is the strategy that works here? I mean, is it that if you have a Fantastic channel, you can push anything? No, it is not. For example, if you want to profitably build a business, you have to, you know, you have to take 15, 20 years, build it SKU by SKU, get into, you know, you can start with sourcing, but I think unless you are really investing in the R&D, unless you're really investing in the manufacturing, I don't think many of these companies have any hope to make money out of it. I mean, they can show revenue, but making money is a different, you know, the top, barring the top four, five brands in each of these markets, most of them will not end up making money. That much I can guarantee. At V-Guard, for example, we have always remained a multi-product company. It's not that we have got into multiple categories for the sake of getting into it. We have always been and organized as a multiple product company, we have very long-term view. You know, we are okay to cede a category for 10, 15, 20 years. I don't know how many of the, our, you know, of the companies you spoke about are able to do it. Like I said, like wire is a completely different category. When they enter wire, they'll understand that winning in wires is, you know, very different. The skills required is probably very different from what is required to win in Fan. Similar, a wire company may not be able to be successful in Fans. Everyone will not be able to do everything. For example, as a multi-product company, our cost structures are fairly high because we have to carry people for all our categories. These are some of the trade-offs we do. Good news is, like company like us, we are more, you know, our risk is very less because we all the categories will not get into trouble at the same time. We will see lesser, you know, impact on, you know, fluctuations in each category. But I can say that I've seen the cycle, like for example, eight years back, everyone wanted to get into Kitchen Appliances space, now, you know, everybody is out of Kitchen. A lot of the other brands that have got into Kitchen have got out. Now only the key core companies are still remaining. We'll have a similar kind of a cleanup after four, five years. Understood, sir. Sir, just one last observation I'd leave you with. I'm actually on the ground right now to get some channel feedback, and I came across a lot of players who've been keeping your Solar Inverters, and I got fantastic feedback on that product and the support from the brand was also very positive. I just wanted to drop that feedback. Thank you so much, sir, and all the very best. Thank you. Participants, if you wish to join the question queue, you may press star and one. Next question is from the line of Vineet Prasad from Investec. Please go ahead. Thank you for the follow-up opportunity. Just a couple of things. Mithun, we've realized, Solar business for you has been growing extremely fast. Can you give some idea about what the size of that business could be? Number one. What I understand, it could be more than INR 500 crores in terms of top line now. How do we see it growing, are there further legs to growth? As in, can it grow in very high double digits for another few years? I think, you know, we don't like to give out numbers, but it is not, you know, it has not reached the INR 500 crore mark. We only entered I mean, we only ventured into this business, fairly recently, like, you know, about three years about 36 months back. But it's growing very fast. If you ask me, this business has potential to become very, very large, but we have been very careful and choosy. For example, we are primarily selling Solar Inverters for residential users, so we and small, you know, institutions. We have not got into the very large institutional orders and, you know, such like that, because there are associated risks along with it. We are very confident that pretty soon, maybe in three to four years, this will become one of the largest, larger categories for V-Guard, as we have, you know, an inverter battery business today which is quite large. Similar size or it can be even more than that. As on today, we have tried to sell to customers where it is more of a B2C kind of a play, and it is not institutional sales. I mean, we do institutions, but it's very small. It's mostly residential consumers where we have equity and where we have pricing power and where our sales and service network, you know, have a differentiating factor, where instead of institutional sales where, you know, it's more of a price base. We are very bullish on this category, and we do believe that given the recent challenges with fuel and all that, government is under huge pressure to diversify away from fossil fuels in one way or the other. This already have good traction in India, and I think, you know, it'll continue. One more thing is, I think West Bengal and Tamil Nadu are two markets which were till now not, you know, encouraging this adoption of rooftop solar because it was a BJP government initiative. Both these states we have hope. Definitely West Bengal will open up, and I think Tamil Nadu also, the new government policy will be definitely to push for, you know, cleaner energy. Understood. Understood. That is helpful, Mithun. Lastly, on the lighting foray, where are we? If you can give some timelines, how are we progressing in terms of product distribution, sales? Any color on that? It's still work in progress for us. I think sometime towards early next quarter, we look forward to bringing it into market. Understood. Understood. That's it from me. Thank you so much. Thank you. Thank you. Next follow-up question is from the line of Deepak Lalwani from Unifi Capital. Please go ahead. Hello, sir. Thank you again. Sir, I just wanted to check, you know, how many months of inventory of each raw material do we maintain at the factory level? Aluminum, copper, plastic, et cetera. This availability issue that you mentioned, so how are we sourcing our materials from different channels, if you could explain? If there is an issue, is it a big issue that will proportionally lead to lower production? If you can just highlight that. These two are my questions. I think as far as availability is concerned, it's primarily on the polymer or crude derivatives where there are availability issues. For example, our batteries require sulfuric acid. Sulfuric acid is also used for production of pesticides. That is a controlled substance now because the government is rationing it. We are still okay. We have tied up with, you know, tied up and locked up supplies for the next one month or, you know, more than that. The same is the case with certain type of raw material. Like I mentioned, TPW Fans, there seems to be some shortage. I think we As soon as the war broke out, we had set up a war room and we identified these sensitive items very well in advance. We have gone and because we are a fairly cash-rich company, we've gone and secured supplies from wherever we could. We are pretty much okay. I think till end of June, I don't think we'll have any issue. I think largely we should be fine. I mean, there is definitely. For example, if the demand is 110, the supply will be like 105. There will be some bit of shortage here and there. I think a company like us will be largely okay because we have a diversified supplier base, and we have gone and secured supplies for most of our production. Sulfuric acid is still challenging because we cannot store that material, a lot of that material. We don't have the capability to store it. It's an acid, our ability to store is very low. Wherever we can store, we have tried to store or we have stored it at, in our vendors' places. We don't foresee any supply-related challenges, at least for Q1. We are largely covered. This is a, you know, potential issue for many. Could be for smaller brands, regional brands who don't have the kind of clout we have, you know. Company like V-Guard will have over its suppliers. Sure. Understood. Last question, you mentioned that we've taken a bulk of our price hike. Has there been any resistance that you've seen in demand, the demand falling off for our categories? Loss of market share that you have seen, which you can highlight? With any price hikes of this much of a quantum, this is not a natural price hike, right? Usual price hikes, our retailers are used to is for 2%, 3%. When it's 10% and 12%, definitely there is going to be some negotiation, pushback and all. Like I said, as far as we see it, I think by the time this kind of the high cost raw material starts hitting in, we are fairly confident they'll get passed on because a lot of it is being accepted. Wherever there are some challenges, for example, if it's a summer category and, you know, it's in a geography where it's, summer has not started yet or there is some rains and stuff like, we have given case to case, you know, support for our distributors and retailers. Largely it's looking okay because I think it's not that I mean, I don't think any company can absorb the quantum. I think everyone has announced, and I think there is definitely an intention to pass on these prices. Like I said, if only in cases where the weather is not supporting, only those places we are giving case to case. You know, largely it is, you know, being passed on. Sure. Sir, if you can share, what's your raw material mix for the whole company, copper, plastic and aluminum, roughly? Copper is the biggest. What is second biggest, is aluminum or the steel? It'll be copper. ABS. Yeah. Yeah. Copper will be the largest, followed by polymers and then. Followed by polymer, then aluminum, then steel. Steel. Yeah. I don't have a exact number for that. Yeah. It's, it's not a single category, right? It's multi. Each category has got a different mix. Sure. Understood. Everything has gone up, right? Yeah. Yeah. It's not that anything has not gone up, right? Yeah. Yeah. Okay. Got it. Sure. Thanks. Thank you. Participants, if you wish to ask a question, you may press star and one. Ladies and gentlemen, if you wish to join the question queue, you may press star and one. As there are no further questions from the participants, I now hand the conference over to the management for the closing comments. Thank you all for taking time to join our earnings call. I would like to thank Vineet and the team at Investec for hosting this call. We look forward to interacting with all of you in the next quarter. Thank you. Thank you, sir. On behalf of Investec Capital, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.