Gentlemen, good day, welcome to the Borosil Limited Q1 FY24 earnings conference call, hosted by Monarch Networth Capital. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, over to you, sir. Yeah, hi. Thank you, Darwin. Good afternoon, everyone. On behalf of Monarch Networth Capital, we're delighted to host the senior management of Borosil Limited, represented by Mr. Shreevar Kheruka, MD CEO; Mr. Rajesh Kumar Chaudhary, Whole Time Director; Mr. Anand Sultania, CFO; and Mr. Balesh Talapady, Vice President, Investor Relations Business Manager. We will start the call with opening remarks from Mr. Shreevar, and then we move to Q&A. Thank you, and over to you, sir. Thank you, Rahul and Monarch, for hosting this call. Good afternoon, everyone. It's a pleasure for the Borosil team to be interacting with you again. Borosil Limited board approved the company's financial results for Q1 FY24 on August 14, 2023. Our results and an updated presentation have been sent to the stock exchanges and have also been uploaded on the company's website. Consolidated revenue operations during the first quarter, ended June 2023, was INR 250.6 crores as against INR 216.2 crores. That is a growth of approximately 16% over the same period last year. During the quarter, the company achieved a consolidated EBITDA, before exception and one-time items, including investment income of INR 31.2 crores as against INR 39.3 crores. The EBITDA margin was 10.4% in Q1 FY24 as against 13.5% in the same period last year. PBT during Q1 FY24 was INR 10 crores as against INR 26.1 crores in Q1 FY23. Last year during Q1, we had an insurance claim resulting in an exceptional gain of INR 5.1 crores, whereas this year during Q1, we had one-time expenses of INR 2.9 crores due to due diligence expenses and acquisition opportunities. That's a total swing of INR 8 crores there. The investment income was, is lower by about INR 2.9 crores during this quarter as compared to the quarter in the last year. Finally, depreciation and finance, finance costs are higher by about INR 10 crore, primarily due to the commissioning of the new opal furnace during Q4 FY23. During the quarter, Borosil recorded a Consol profit after tax of INR 6.4 crore as compared to INR 19.4 crore during the same period last year. Coming to our business-wise performance, Borosil's consumer business comprising glassware products and non-glassware products under the brand Borosil, and its opalware range under the brand Larah, started with a very strong sales performance of INR 136.2 crore as against INR 138.7 crore during the same period last year. That is a growth of 18.4% over the same quarter last year. Sales of glassware products were muted, with sales of INR 39.2 crores against INR 40.77 crores. That's slightly negative. The glassware market expansion has been flat during the first quarter. This will improve going forward as we enhance our product range and increase availability of our products across various channels. Non-glassware products grew by 19% to reach a turnover of INR 70.8 crores during this period. Here, we saw good growth across all our ranges. Non-glassware sales of Borosil brand now comprise about 64% of our revenue. Our opalware brand, Larah, is about INR 60.2 crores, that is a growth of 38.2% over the same period in the previous year. The consumer business was at 13.7% as against 12.7% during the same quarter last year. We have seen some softening of direct costs, such as fuel and raw material prices during the first quarter, and we expect to continue seeing margin improvement as we further clear revenues. However, as already mentioned, in the past, the company will continue its marketing spend behind both its brands, that is Borosil and Larah, to increase consumer mindshare and grow the brand digitally. As evidenced by sales numbers, I believe that these spends are having, you know, positive results. At this juncture, the focus of the company is to expand the franchise of brands. We want to bring more users into the category of microwavables and upgrade and convert users from plastic and melamine into glass storage and opalware. We continue to introduce new products to expand our range of offerings, such as in high-grade steel on-the-go pro, on the, on-the-go products, as well as domestic appliances. With Borosil and then Larah, we aim to become the brand of choice for the modern Indian kitchen for everyday use in storing, preparing, cooking, heating, and serving. Moving on to the scientific division. Net sales during the first quarter of 2024 were INR 74.4 crores. That is a growth of 10.2% over Q1 FY23. This sale includes sales of INR 7.8 crores from the recently acquired process industry business of Borosil Scientific, which was not there in the same period last year. Our scientific product business comprises four product ranges now, that is lab glassware, lab instrumentation, that is, under the brand LabQuest, primary glass, glass, packaging for pharma customers under the brand Klasspack, and the recently acquired process chemistry business. During Q1 FY24, lab glassware sales were INR 42.8 crores, that is a growth of 3.2% over Q1 FY22. LabQuest was INR 6.7 crores. That is a rate of a growth of 24.7% over last year. Klasspack was INR 17.1 crores. That's a decline of 17.4%, and Goel Scientific was INR 7.8 crores, which was not present in our revenue at all last year. The company has identified a number of levers to ensure long-term sustainable growth in the scientific division. In the lab glass consumables market, the company's push towards procuring, towards selling on Government e-Marketplace is being seeing traction. This channel reduces the risk on receivables and could potentially improve order flow from the government to Borosil. Borosil also entered the INR 110 crore filter paper market, which was hitherto dominated by a single player. We expect this to continue growth into the future. We continue to add more customers and expand the range of solutions being offered to existing customers. That is on the back of our wider product portfolio, which we already shared, four different product ranges. We are also developing an OEM business plan for supplier critical items to some of our large export customers. We expect to retain a dominant position in the domestic market. Export sales continue to see very good traction for lab glass and vials. Not only do we have repeat customers, our volume share for our customers also is increasing. In lab instrumentation, we will focus on increasing the range of solutions that we offer and, at the same time, expand our customer base. Recent products developed and introduced by the Borosil Technologies team include mini pilot lab reactors, bottle top dispensers for hazardous acids, as well as products in the nutrition and environment categories. We will leverage our existing customer relationships in the lab glassware business to increase customer penetration for LabQuest. The team has also recently launched process systems, which gives us entry into new customer segments of API, bio drugs, and chemical manufacturers. In pharma packaging, which is at the moment seeing some stress, we, while we did gain new businesses, we have a loss of revenue from a few existing clients due to which sales are impacted. Several factors have contributed to the setback, including substantially reduced demand for injectables, heightened competitive pressures and pricing challenges in regulatory markets, cost reduction efforts affecting input materials, and a strategic transition to more cost-effective packaging materials for the Drugs (Prices Control) Order, that's DPCO business, as well as general injectables. During Q1 FY24, the company acquired 90.17% equity in Goel Scientific subsidiary, Klasspack Limited. Borosil's SIP business will derive several synergies with this acquisition. It will add a complementary product portfolio to Borosil's existing range that can leverage Borosil's brand and strong sales and distribution network. Borosil's R&D capabilities, together with Goel Scientific's specialized glassware skills, will enable the company to provide its customers with world-class made-in-India products. The combined operations are expected to provide deeper market penetration, entry into new markets, enhanced product offerings, and an innovative range of products. This will lead to input cost optimization for our clients as well as sourcing benefits. In the interim, in the, in the, in this initial phase, we will be investing behind setting up many systems and processes into Goel Scientific, as well as, you know, hiring people as needed to enhance the sales outreach, which may have a short-term impact on costs. However, we believe the business would perform very well even in the medium term. EBITDA margin for scientific products during Q1 FY24 has reduced from 15.2% last year to 8.5% in this quarter, Q1 FY24. Margins in scientific glassware have showed improvement, however, the drop in the division EBITDA is on account of lower margins in the Klasspack business, as well as higher costs on the LabQuest business, as well as the recently acquired process chemistry business. In LabQuest, more than proportionate cost increases were attributed to R&D expenses and higher staff costs as we continue to scale the technical team. Borosil Technologies is still a nascent business, and the subsidiary is in an investment phase and is currently incurring losses. As the business scales, these costs will get normalized. We expect that new products, which will take 1-3 years to stabilize, should help the business show positive results. In Klasspack, EBITDA margin declined as compared to last year, primarily owing to lower sales during the period. Additionally, gross profit was lower, owing to steep increase in cost of materials and power that could not be passed on to the customers. Although, we expect the material cost to reduce in the coming periods. We see the situation to improve in the coming quarters as we are seeing more traction on new customer sales as well as reduced input costs. The new borosilicate press ware facility of 25 tons per day in Jaipur is estimated to be commissioned in the third quarter of FY24. The company's board of directors has initially approved the establishment of a borosilicate 3.6 million tubing furnace at the company's plant in Bhavnagar, Gujarat. The decision aimed to enable in-house manufacturing of glass tubing, that is a key raw material used in the production of the company's scientific products. The goal was to increase reliance on external suppliers for this crucial input material. However, as we continuously assess the company's expansion strategy, considering factors such as project cost effectiveness, time considerations, and availability of other options, the decision to proceed with setting up the in-house tubing project has been put on hold. The decision will not impact the company's ongoing operations, and we will continue to procure the required tubing from external suppliers as we have been doing for the past many years. In previous communications, we detailed our intention to reorganize the company's operations into two distinct publicly traded entities through a comprehensive arrangement scheme. The appointed date for the scheme is April 1, 2022. Post receipt of observation letters from the stockholders and approvals from equity shareholders and creditors, the company has filed a petition with NCLT for seeking its approval on this scheme. The said petition has been admitted for final hearing, which is now scheduled for September 1, 2023. However, the timelines of this step are not in our control, and we'll keep you informed on the progress in this regard. Overall, we maintain a strong sense of optimism regarding the medium-term potential within the consumer business. While there may be occasional periods of modest growth coupled with customer, consumer caution, we anticipate robust expansion in our sectors, given the favorable long-term trends. Our primary focuses, we are introducing innovative new products, enhancing customer experience, and improving efficiency throughout our market channels and supply chain. Additionally, we will invest in strengthening our brand presence. In the scientific segment, we are definitely in a growth stage, with addition of various new product portfolios in, in our, in our basket. We plan to capitalize on our leading position in lab glassware to ensure consistent growth with these new product introductions. Simultaneously, we aim to foster the growth of the instrumentation business through LabQuest and expand our pharma packaging offering by Klasspack. In the medium term, we continue to anticipate double-digit revenue growth for this business. With that being said, I would like to now throw the floor open to questions. Thank you. 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. The first question is from the line of Rahul Dani from Monarch Networth Capital. Please go ahead. Yeah. Congratulations, Shreevar, on a strong revenue growth. Just a couple of questions from my end. Specifically Opalware, you know, you know, we have seen competition report very subdued growth, and we have got a very extremely strong growth. Just want to understand how the market is. In terms of margins, you know, our margin expansion has come in at the primarily because of Opalware, and where do you see this stabilizing? Yeah, thanks, Rahul. Well, I can't comment on competition, we also have seen, you know, relatively slower growth. I mean, we had anticipated even higher the revenue growth than what we, we achieved. Unfortunately, I think the market has not been that strong in the first quarter, and I think that's the case across consumer product companies. The, you know, we, we continue putting efforts behind all our channels, and I believe that our, our strategy to broad base our various channels, has resulted in, in, you know, in, in what I would call still very good numbers. On the, on the point of margins, yeah, the consumer division, margin expansion is definitely driven by higher margins at our Larah facility. As we see more capacity utilization, I think the margins will continue increasing. So, we are quite positive, although frankly said, we do hope that consumer sentiment picks up during the Diwali period, which is just upcoming up. Sure. Secondly, on the scientific division, like, we do understand that you've been spending on the recent transaction. Do you expect margins to kind of be in these levels for the next couple of quarters and maybe pick up from next year? No, I think, scientific margins should pick up on this quarter itself, because there, there, there were specific also reasons why we had higher costs in the first quarter. I don't see them, them, them at this level. We, definitely, we should come back to more or less consistent levels of margin as we had in the last year. However, to see margin improvement compared to last year, I think, yes, this will take maybe another year or so, because I think our, our Borosil T echnologies businesses is one of the reasons the margins are low. It's basically higher cost than what we're selling, and there's a net loss in that, in that, in that division. I think given what we are seeing in terms of traction of our instrumentation range, I think from next year we should be profitable there as well. So that drag on the margin, which is currently being faced from there, should go away. Klasspack also the drag on the margin, which is, which also should improve because we've got, I would say, three, four very strong customers who've been added into our kitty. Now, it takes time for them to kind of, you know, scale up operations. That should also happen in the next, you know, one or two quarters. I think margins will bounce back. To see substantial improvement in margins compared to the year before, I think we'll have to wait till next year for that. All right. Thank you so much. Thank you. The next question is from the line of Aditi Patel with Niveshaay Investment Advisors. Please go ahead. Hello? hello. You are audible, ma'am. You may proceed. Yeah. Hi, good afternoon, sir. regarding the capacity expansion for the glassware facility and the Klasspack, I wanted to understand the status of the same. I couldn't follow that in the commentary. First, my question is regarding the CapEx. Yeah. Yes. As far as Klasspack is concerned, I think more or less whatever was the CapEx plan, it's already deployed. Unfortunately, the CapEx has come in at, at a time when demand is low, so it's kind of sitting idle, frankly. Our capacity is much lower than we had anticipated, so that's a negative for us. And then, like I said, we're working on new customer relations, which we already have achieved some success, and assuming that these customers come in, we should be able to start utilizing that CapEx. CapEx cycle for Klasspack is more or less finished. A couple of, you know, things we added in the second half of this year, which already, let's say, accounted for, but nothing new. As far as the production facility is concerned, we had, you know, some delays because of delay in, in shipment of machines, especially from Europe and, you know, the supply chain issues, which was very, very strong last year, but has reduced, are still not completely, you know, gone. We, we expect that production facility to start in the 3rd quarter of this financial year, sometime in the 3rd quarter. Okay. sir, like, when we see the Klasspack division, so, margin-wise, if I see the affected margin, can I also attribute it, key, we have already done the CapEx, and that involves an amount of CapEx expenses, too, other than the raw material price increase? Yeah, of course, the depreciation has gone up because of the CapEx. Sorry, is that your question? The same thing, sir. The margin that is affected in the Klasspack division, is it only on the account of raw material price increase or because the CapEx was also completed, and like the employee expenses and everything, you have already deployed for the same division? Yeah. So that's, that's right. What happened is, A, the CapEx was deployed. B, our fixed costs, which are, let's say, employee costs, energy costs and a lot, a lot of sense of fixed costs. The fixed costs, you have the reverse of operating leverage happening because your, your sales have de-grown, and therefore, those costs, which are all built into the system for a higher sales growth, are actually now spread over a lower sales base. Therefore, our, our fixed cost as a percentage of overall revenues have increased substantially, which also destroys your margin profile. These are costs which are not easy to. You know, you don't want to take a short-term decision to cut these costs because, once your sale comes back, then, you know, if you need those skilled people, you need them. You, you, you know, you have to, you have to live with it for a few months till we get the sales back. Yes, you're, you're right. The margin cuts in the scientific division is, so they're attributable to 2 main reasons. One was the higher costs in Klasspack associated with the higher CapEx and, the general lower sales. Second is on, on Borosil Technologies, again, because of the, more investment in, in skilled people to help, let's say, drive, new product development. Okay. Okay. Sir, for this Klasspack division, the revenue mix for the domestic and export markets would be? Yeah. Actually, that's one of the silver linings for us, which, our export sales have actually been increasing every month, month-on-month, year-on-year. In fact, this year, I think exports will be more than 30% of revenues, which 3 years ago was hardly 3%, 4%, 5%. That's a silver lining for us, and we are working harder to see whether we can take that up to maybe 35%, 40%, even higher than that. That's something because the export customers are paying us for that CapEx that we ran for those camera inspection systems and for all the, for all the, you know, value, value addition that we're doing. That's certainly something that we see with optimism. Okay. Okay. Lastly, sir, when do you see the raw material prices to stabilize for this division? Raw material prices have reduced from this quarter on, then they will be stable only. I don't think they will increase further. From, from next quarter on, I think you should see an improvement or reduction in raw material prices. Okay. Yeah. That's all from my end. Thank you. Thank you. The next question is from the line of Priyank Chheda with Vallum Capital. Please go ahead. Yeah. Hi, thanks for the opportunity. My question is on the Opalware. Can you elaborate? You did mention your broad-based channel strategy has resulted due to remaining immune to the macro consumer slowdown that we are witnessing. If you can elaborate that further, along with few data points onto how, what is your revenue contribution across the channels, which channel has led to growth or de-growth? Thank you. That's my first question. Frankly, we don't share the channel-wide data, and I would not like to do that at this, at this point. However, we, you know, consistently maintain that our people are our strength, and we have, you know, we have a very strong sales team across all the channels, whether it be general trade, modern trade, you know, CSDs, even exports, our institutional sales, of course, e-commerce, myborosil.com. Across all these channels, we have very strong teams which we have worked on and developed and also had to have lower overall margin in the business because of the higher manpower costs. At some point, that, that is, you know, kind of paying back for us. That, combined with our marketing expenses, have, in my opinion, driven the sales growth. unfortunately, I'm not at liberty to share the, the channel-wise numbers or growth. I can say that the growth is very broad-based, and I can't say that there's any specific order or specific, let's say, specific channel or region, in fact, even, which has contributed disproportionately to the growth that, that we see. Would it, would this be relevant across the industry, or would it be only for you, if you can, help us with that? ... I mean, look, people are relevant across every industry. Yes, it's relevant across every industry. I, I, I think, yes, it's, it, it is relevant to every industry, that if you have, if you have good people and, you know, they, they, they, they, they have a good, you know, they, they, they know what to do, then normally they get the job done. That's and also that's what I'm seeing. I can't give any further... I mean, I, data on that subject. Sorry, I was referring to, the salary growth or the broad-based growth that you have witnessed. Is the same trend across the industry or is it only specific to Borosil and SP? I'm sorry, I mean, I have general idea of what's happening, but I don't pay too much attention to competition numbers. I think you're in a better place to kind of check that, what you need. Got it. Got it. No worries. One more query on your presentation, where you mentioned the industry size, the opalware market size has, is around INR 900 crore as per your presentation. It's the same size that you had mentioned in September 2021. Despite it being estimated to be growing at 20%, I mean, can you help us with what the- I think we may have made a mistake there. Maybe we have to revise that. That's definitely not accurate, for sure. No problem. If you can help us with what, what are the industry dynamics in opalware right now, how they are, that are shaping up? Any trends on, I mean, are the organizers gaining more share versus the organizers? If you can help me on the industry dynamics. See, unorganized versus organized is opal, there's hardly any unorganized. However, I've, I've repeatedly said this: I don't consider the market to be open. The market is dinnerware, okay? When you go out to buy a plate, you're not thinking, "I want to buy an open plate," or whether you, I mean anybody, okay? They want to buy a, a dinner set, or they want to buy a cup or a saucer or, or a mug. When they go to buy a product, I don't think they necessarily think of which category or rather which material to buy. We should look at the overall size of the dinnerware market, which is multi-thousand INR crores, maybe more than INR 10,000 crores. You have to add steel there, you have to add plastic there, you have to add bone china, and so on and so on, okay? If we, we have to get a share of that pie, not a share of the opal pie. That has been the consistent messaging from our point of view. I, I think if you look upon that as a market opportunity, then, then we probably, as an industry, we will succeed, not individually, but as an industry, we will succeed. I would urge you to look at the entire industry of dinnerware or tableware, serving ware, whatever you may wish to call it, and see what, what, let's say, share open can take from that. Got it. Clear enough. In, in one of your presentations, you have-- one of the slides, you have mentioned that you have gained share in the opalware market. If you can help us quantify, if possible. In general, if you can comment on how has been the competitive landscape in such a sluggish scenario, are the players embarking on to more discounts, giving their channels or what? I've not seen much discounting frankly. I think all the players are very mature, and they are extremely able and very, very, let's say, strong, all, all the players in this, in this open business. I don't see discounting as a challenge. I, I think, in general, like I said, or again, I mentioned that we have a, we have a broad-based channel strategy, which, which others may or may not have, and therefore we benefit from it. This also costs us. It costs us by way of higher advertising costs, and it costs us by way of higher manpower costs, which is a cost that we pay, and therefore, that impacts our margins. While our growth has been good, but as you, as you know, that our margin profile is not as good. It's a cost-benefit thing, and we, we choose this way, we choose this route. Somebody has to choose some other route. Neither is right or wrong, it's just a question of philosophy. Yeah. Got it. Got it. Clear enough. Just the last question on has your second furnace started contributing to your sales in the current quarter? Earlier you had guided that you would be looking out to selling off selling off almost of your 60%, 70% of the capacity in the current year. Given the sluggish scenario, do you want to revise that guidance? Look, like I said before, the key is Diwali. We are still... Last year, we had sold out, and we had grown 36%. We did not cut prices. You can assume that volume growth is 36% or 40%, in that range, okay? In principle, of the second furnace, we're selling that percentage of our capacity versus the 60% that we had really hoped to sell. I, I... Let's wait for another quarter. Let's see how Diwali goes, then I can comment further. Right now, it's hard for me to give guidance, further guidance on this. Got it. Thanks a lot for answering all my, all my questions. Thank you. Thanks. Thank you. Ladies and gentlemen, if you wish to ask a question, you may please press star and one. The next question is from the line of Pranay Roop Chatterjee from BCMPL. Please go ahead. Hi, good afternoon. Am I audible? Yes, you are. Yeah. My first question is with respect to the opalware division. I think the festive season this year is beginning sometime end of August, if I'm not wrong, it will go up to sometime second week of October. On a quarter-over-quarter basis, should we expect improvement in your opalware sales? If you can comment on how you are seeing July and August progressing. I'm sorry, I can't give comment. I can't, I can't talk anything about this quarter, only whatever is published. I think as per my understanding as well, also. Sorry about that. Got it. Got it. With respect to glassware division, you had said your new furnace will coming in Q3. I think I asked this question last quarter as well, and you had said you would have better idea closer to the date. Any information you can share regarding how much cost up-fronting can happen because of the new furnace, in terms of incremental costs getting built? And in terms of you would also have some benefit because raw material produced in-house will be cheaper than getting imported. How would those dynamics sort of play out, and how do you envision them playing out over the first 2 to 3 quarters of the furnace being active? Yeah, look, this is, actually, for me, the biggest threat or the concern is this, this furnace, because as, as you see, our glassware sales have been flat, okay? Right. This is not a good sign for us. Yeah. That's not a good sign for us because we definitely need to sell much higher volume once we have our own production. The volume from that production is, like, three, four times what we are selling. Yes. Our biggest challenge, in my opinion, for our consumer division, everything else is on track, in my opinion. The biggest challenge for us is how do we sell three, four times the volume of the press production when that production starts? That's something, frankly, we are working on, and I can't say we have an answer to that. Okay. Yeah, that's, that's something that, I would say we, we really need to, maybe think something different or get, get, you know, maybe some out-of-the-box ideas because that's not a, that's not a problem that we, that we've been able to solve yet. Got it. Got it. Got it. If you could still, in case you have had internal discussions, if you could share one or two levers that you would have to, you know, get that additional volume, because you would need to gain share in this market, you know? Yeah. Yes. The most, the most basic lever is product range, okay? Right now, we offer maybe 30, 35 SKUs in that next category. In our new product line or in our new furnace, which will come online soon, we have almost 85 SKUs that we plan to launch. Oh, okay. So- Oh, okay. The point is, the point is that you want to give customers choices. When the customer has a choice, then they're likely to choose something within that range. When you give them fewer choices, then they may choose something totally out of the range. They may not choose that range at all. I, I would say the range of products is the number 1, let's say, lever that we can pull, that we plan to pull when we, when we launch this, this range, and that should definitely give us better volume. The number 2 lever is higher exports because of China Plus One, we, we have, now it's also a chicken and egg situation because we have, we... the big, overseas, let's say, department stores who are interested in the product, but till we have production, they can't approve us and so on. It's a little of a chicken and egg situation. So that should be a number two lever. The number three lever would be, definitely, pricing, which is, which, which would need to be attractive to make the product within reach of the everyday consumer. These are the three levers that we hope to be able to pull once the, production comes, and that we hope would help, help us, drive, the, the volume growth in the business. Interesting point you mentioned the last one. How much would the price, in your view, would how much would the price need to reduce to, you know, sort of materially expand this market, right? Because one of the reasons that the glassware is adoption is low is the pricing, right? How much% would you expect that to be? It, it may be, I think, different. It'll be different product by product. Right. like, for example, glass lunchboxes, I think already are quite competitive in general. Yeah. Because you have a broad range of products available, and the competition is more or less a similar pricing. Something like a serving ware, something like a serving ware, where we are outpriced when you compare to other categories, there you may need to have a 15%-20% reduction. Okay. It may range from anywhere from nothing, we don't need to do anything, to a 15-20% reduction. Somewhere in that range would probably be, you know, the, the, the right price point. Got it. My last question regarding SIP margins. I think in Q4, EBITDA margins reported was around 22%. That obviously has reduced, because of the reasons you mentioned. Should we expect Q2 to be more of a transitory quarter, where you are trying to figure out things and, you know, going back to that 18%-20% levels, which might come by something in Q3 and Q4? Is that a fair statement to make? See, SIP in general has a seasonal business. Q4 is always strong, okay. One should not look at, you know, either you can't look at preceding quarter and next quarter margin, because the quarters themselves are very different. I thought that a margin of almost from 22% to whatever, you know, 8.5%. Mm-hmm. That's not the way to look at it. To say, I mean, at the end of this year, can we be closer to last year, what we did? I think with the exception of Q1, which has not been very good, I, I think that's a safe, safe statement to say in general, okay? How, to again, like, I think I asked someone before, that the expansion of SIP margins will probably start happening from next year, when- Okay. Our, to those two areas where we are today in a negative situation, one is the whole technology business, and the second is Klasspack. Right. Those should start picking up again, because those are actively dragging our margins down, and both for separate reasons. One is for a sales reason, and the other is for higher costs, which are not yet kind of absorbed by the product range that we have. Understood, sir. Got it. All clear. Thanks for answering my questions. Thank you. Thanks. Thank you. The next question is from the line of Dhruv Kashyap, Individual Investor. Please go ahead. Yeah, good afternoon, thanks a lot for taking my question. The first question was on the Borosil consumer wear division, and the sort of really exciting part of the business. Given that we are currently sort of operating in a fairly flared up consumer inflation environment, where there is a tendency of the consumer to deprioritize discretionary spending, and so on and so forth. The fact that, I guess, one way to mitigate it is to sort of put in more newer, exciting offerings in the various categories we operate in, and categories, new categories as well. The dynamics that earlier we were procuring some, manufacturing some, some were coming from China. We were to mitigate that and sort of bring it a lot more into India. Could you just sort of share some color, including the new categories or the new launches that we are getting into? Just give some idea of, given that we are entering the festive season, that how are we placed on the consumer wear business, including the build-up? Okay. Dhruv Kashyap, firstly, I'd like to clarify your first statement. I don't think consumer is more or less exciting than scientific. Both businesses for us are extremely exciting, okay? We love both the businesses, and we believe both have incredibly interesting opportunities for us ahead, and also should help return, you know, returns on both the business should be more than, more than what you would otherwise anticipate in a risk-adjusted way. Yeah, just to make sure that I'm clear, both the business to us are very exciting, not just one or one, one or the other. Coming to your next question on consumer business, we have very much, or let's say very well developed, at least for our size and scale, product management teams. These teams are continuously going to visit end customers, they're visiting our channel partners, and they figure out what really is the need of the market. It's very bottom-up and not top-down at all. They have complete autonomy to drive new introductions and to drive our own, whether it's our own factories, whether it's our supplier partners, to drive them to make new products. You know, we as management we try and get out of the way, because once we get in the way, we actually slow down that process. You know, I get lots of complaints from my mother, because she keeps telling me that I have no idea what products are being introduced at Borosil. My answer to her is that even I don't know what's going on in terms of new product introduction. That's the pace that we. I think we launched 109 SKUs last year. It's a pretty, you know, rapid, say, product launch compared. Again, this is for our size and scale of operation. I think that's more or less continuing for this quarter as well. You will continue to see new products. We could check our website, myborosil.com. You know, you. I think you'll get a sense of what's going on over there. you know, there are different products for online, there are different products for trade, different for LFS. It's hard to kind of boil all of this down into some metric, but we, we see a lot of engagement from our end customers with us, and that's how we drive product development. Yeah, thanks for that, Shreevar. I think a lot in common, my sort of analogy, especially in my judgment as well. I think, on the SIP part of the business, just to understand, there is, there are a lot of parts to it, right? There is a labware instrumentation, there is a sort of the instrument, sorry, the, the, the, the test tube detail, et cetera, you know, that part of the business, then there is the Klasspack part of the business, and now there is borosilicate. For a fairly small revenue, there's a lot of complexities in moving parts. How are you seeing this play out? Because if you start investing in all four and you land up in a situation where there's a soft demand environment, especially given who you cater to as a customer, et cetera, given that large part of it is B2B, where you might not even have pricing power. And just for me, just help me demystify this, because it sounds very complicated. Yeah. Complexity is our friend, that is the first point. The more complex it is, the fewer people that can do it, and therefore, if we have complexity and we can solve for the complexity, then you should make better returns than otherwise, right? Otherwise, if it was simple, everyone would do it. Yes, you are... that part is absolutely correct. The SIP business is definitely complex, with many SKUs. The second point is price, except for power packaging, which is, let's say, which has a different dynamic. The other three verticals, which would be the glassware, the instrumentation, and the process systems business, we are actually the pricing- it's not clear that the companies that buy from us have all the pricing power. We also hold a substantial pricing power. We have a big moat, that is our product range. Because this is a C-class item for most of those companies, in terms of their annual purchase. Because it's a C-class item, the focus is more on making sure the quality is correct, so that they don't have complaints, and also that they get delivery on time. If we manage that, you know, whatever, 2,000 SKUs, and we can deliver this across the country within, let's call it 1 day. Say, I think I... The last I checked, we're delivering about 96% of our SKUs within 24 hours to the end customer. They don't want to I mean, even if they save money on it, they save nothing. They save, like, pennies. Like, their total spend on lab, all this stuff put together in a year, could be 3%, 4%, 5% of their overall spend. Even if they save 5% of that, it doesn't bother them. On the flip side, if they get bad quality or they, it gets delayed by 5 days, then they, they're much more valuable experiment. Their costs, which are the fixed costs of those scientists who are doing all the experimentation, all of that goes for a toss. I, I don't really think that we have the pricing power, but I, I do believe, and but it is different from pharma packaging, because in pharma packaging, we're supplying a raw material, and raw material is not a C-class item, it's an A-class item for the pharma company. That's why there is a slight difference in this- in the- in these four businesses and not to be looked upon all, under one, say, umbrella. I, I think the-- coming to demand environment, I think India, the R&D spend is going to go up. Pharma bus-, you know, generic production in India is gonna go up, API production is gonna go up. I, I, I think we're at the front end of that curve, that's-- now that's a business bet we've taken, that the demand will go up. Obviously, if the demand goes down, then we're in trouble. I mean, this is a business which is fairly stable, and I, I don't see any shocks from the demand side or any something, any new technology which can totally replace you coming up very quickly on the demand side. Yeah, of course, there's a risk. Every business has a risk, and this has also that risk. It's exceptionally well explained, and thank you all for that. I think my last question, very quick one, is that, you know, given that we have come out of a slightly challenged quarter on, let's say, the SIP end of the business, including the margin, and we are entering a very sort of forward festivity period. Because correct me if I'm wrong, in your line of business, you start loading the channels or trade in July, August, September, or in October, November, December, so Diwali. So given that, how are you seeing this play out in, the, you know, July, August, September, October, November, December? I'm not asking for forward guidance, but I'm asking for your expertise and your stewardship in helping us laypeople understand that how is the lay of the land looking? We can do our job, which is to get the products manufactured or sourced and stock it up, and then we go to the customer and ask for orders. I mean, at the moment, I'm not seeing anything either extremely exciting or extremely depressing. It's kind of neutral. But it's still, you know, this year, Diwali is in November, not October, if I'm not mistaken, sometime the second week of November. Diwali is a bit later than normal. I think the festive demand should start picking up just about now or maybe in the first half of September for a kind of, you know, end August, September, October kind of festive season. I, I can't say there's anything, you know, dramatically exciting or anything dramatically depressing. Things are still on, on the, let's say, very much balanced. I think in the next 30 to 45 days, we'll have a very good sense. It's a little bit too early this year just because of Diwali being too late, meaning being later. Thanks a lot, Shreevar, and I sort of thank you and, senior Mr. Kheruka, for your excellent stewardship for both the companies, Renewables and Limited over the years, and keep up the great work. Thank you so much. Thank you. Thank you. Participants who wish to ask questions, please press star and one. The next question is from the line of Shriram L, an individual investor. Please go ahead. Thank you for the opportunity. My question is on the segmental margins. I mean, is it possible to disclose the, you know, segmental margins in the consumer division, like opalware, glassware, and non-glass? I'm sorry, we don't do that. Sorry? I'm sorry, we, we don't do that. We don't do that. Okay. so, okay, so, coming from, you know, the competition side, you know, the competition, you know, is reporting a higher margin. I'm just trying to understand where are we heading in terms of our... You know, just want your guidance in terms of margin trajectory. I mean, where do we see our margins, you know, 5 years from now? That is what I want to understand. Frankly, 5-year rate is good. If you go through our previous transcripts, this, well, this discussion has been had many times. I can repeat those points. Number one, we spend higher on advertising and sales promotion by 7%-8% compared to our competitors. That's one of the reasons why our margin in the consumer business are lower. The number two point is that we have larger teams deployed for. Therefore, manpower cost is also slightly higher than what our competitors would be. The third point is that our scale is we have built or we are building to build a business which maybe have a INR 1,000 crore-INR 2,000 crore kind of revenue number. Therefore, many of our, let's say, fixed costs are higher than our competition. Finally, especially in opal business, because we are relatively newer entrants, our selling prices may be 2%, 3%, 4% lower than the competition. All these factors contribute towards a lower margin. Of course, we have to look at the business margin in different ways. What we manufacture, we look at from a return on capital employed perspective or a EBITDA margin and then, and then a return on capital employed. When we look at our other business, say, the stuff that we are not manufacturing, but we are designing and then buying or sourcing, there we, gross margin is not really the relevant point to look at. It's more the ROCE, because your capital deployment is much lower. You don't have plant and machinery, it's only working capital. Our, our targeted ROCE is about 24%, which, which for this division. While we are not there yet, I, I think in the next two, three years, I think we should hit, hit that number, assuming we can satisfactorily sell whatever production that we manufacture. If, if we hit a 24% ROCE on our consumer business in the next couple of years, I'd be, I'd be, I'd be quite satisfied with that development. Got it. Thank you so much. Thank you. Participants, to ask a question, you may please press star and one. The next question is from the line of Vaidik from Monarch Networth Capital. Please go ahead. Hi, sir. Congratulations on this set of numbers. I just wanted to understand what would be your advertisement cost for the quarter in terms of%? It's about 7%-8% this quarter. If I'm not wrong. Rajesh, maybe you can correct me if I'm wrong. Yeah, 7% is correct. Yes, sure. Okay. 7%. Okay, one last question. For the whole year, where do you see your revenues going? Like, at what percent do you see the business would grow, and for FY 2025 as well? Look, this is I can't answer for this year. In, in principle, we gave a, we gave a guidance of consumer division to grow 15%-20% CAGR, and I think we can stick to that for this year as well. As far as, the scientific division is concerned, we gave a guidance from 10%-12%, and I, I believe we stick to that guidance as well. Nothing changes the guidance in either direction so far. Okay, sir. Thank you. That's That's it from my side. Thank you. We have no further questions. I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thanks. Well, thank you for all your questions. Really appreciate it. Thank you for your interest in Borosil. As, as a company, we are, like I said, extremely bullish about both our divisions, the growth profiles, and the margin profiles as they evolve. We are definitely in investment mode. On the consumer side, there's CapEx as well as a lot of expenses on the marketing side. On the scientific side, there's acquisitions, and there's also a lot of expensive product development. We are in that phase of our journey. I do expect a little bit of volatility on margins in the short run, but in the medium to long run, I believe that these businesses will certainly yield more than a fair return on the capital employed. That should, you know, yield well worldwide for us. We're, we're building really a business to scale, and I'm really proud of our team that's, you know, dedicating 24 hours of their life every day to do this. Thank you to all our investors and to those who are, you know, tracking and interested in the business. Thank you. Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines.