We have with us today the management represented by Mr. Promeet Ghosh, Managing Director and Chief Executive Officer; Mr. Kaleeswaran Arunachalam, Chief Financial Officer; Ms. Shweta Sagar, Chief Business Officer of Butterfly Gandhimathi Appliances Limited; Mr. Rajat Chopra, Business Unit Head of Home Electricals and Pumps; Mr. Shaleen Nayak, Business Unit Head of Lighting and Solar Rooftops; and Ms. Natasha Iria, Head of Investor Relations and Corporate Communications. Now I hand over the call to management for their opening remarks, and, post that we will open the floor for Q&A. Thanks, sir, and over to you. Good evening, everyone. Welcome to the earnings call for Q2 of Crompton. You know, to begin with, I want to thank Kotak for hosting this call. As you already know, Kaleeswaran, Shaleen, Rajat, Shweta, and Natasha are joining me today. To begin with, I want to say that I'm delighted to announce that Euromonitor International actually has certified Crompton as the world's number one ceiling fan company. This is, of course, a reiteration of the leadership position that we have, not only in India and now, across the world. It's very gratifying that we have been so validated by an international firm. Needless to say, this has many implications in terms of the scale of operations that Crompton has in ceiling fans. That is something that we can discuss as we go along. Firstly, now let me get into the business itself. Many of you have seen that in the recent months, you have seen the step up in our solar business. Initially, it was in the solar pumps business. Now, solar rooftops is also joining the party. Since we announced our entry into solar rooftops a few months ago, there has been a flurry of activity. We are rapidly scaling up our presence. We recently secured our first solar rooftop order, which was INR 52 crore. Now that was followed by a landmark order of INR 445 crore. In aggregate, the solar rooftop business has already secured about INR 500 crore, about 50,000 units, in the course of just a month or so. This, you know, we believe sets us off to a flying start in the solar rooftop business and actually positions us extremely well in the retail solar business also. This is something that. I think you will see in the months and years to come. In the meantime, our solar pumps business has also been growing very fast. Again, a business which is growing on the strength of the Crompton brand because farmers across the country are choosing Crompton pumps, Crompton solar pumps, and which has resulted in our rapidly gaining a market share now, which was about 6%-8% nationally, all within the space of about two years. This is a business that, as you are aware, we've been growing at 100% + year- on- year, right? These are two businesses that we are very excited about. We can talk about this at some length going forward. We do expect that this is the solar business. With its strong profitability, strong retail connect, and strong return on capital, will likely become possibly the second largest business for Crompton within the next one or two years. Lots of potential there. Both solar pumps and rooftops are high-ticket opportunities along with our core categories. They deliver, as I already said, strong unit economics, have great capital efficiency, and high return ratios. Most importantly, the leverage of the core strengths of Crompton, which is the Crompton brand, which is something that consumers have great faith in. This is particularly important because in solar business, to give you a sense, this is a very, you know, the amount of money that a family may spend on solar, you know, let's say if you set up a 3 kW unit solar rooftop, you spend maybe INR 200,000-INR 225,000. That. Is more than all the products that Crompton currently sells into the home. If you put pumps, fans, mixer grinders, Butterfly, chimneys, kitchen products, all of them, if you put together, they'll probably add up to an expenditure of one, one and a half lakhs. This is a huge opportunity, and people are asking for our products by name. It's something that we are quite excited about. It, of course, also leverages off the extensive distribution network that we have and the very effective sales, service network that we have. Now, to come back to our other core businesses, before I actually get into reviewing the numbers, let me say Crompton 2.2 is continuing apace. We have renewed our focus on consumer centricity, particularly in this situation. We have, in the previous quarter, completed a very extensive U&A study, usage and attitude study. Now, as a consumer company, as you might imagine, this is really critical to how we are evolving as a company. This has also meant a considerable amount of expense. To give you a sense of how extensive this U&A study was, 17,000 people across the various products that, you know, we manufacture and sell, 17,000 consumers were interviewed. Their detailed views about what they think of our brand, what they think of other brands, what they particularly take into consideration in buying various products, is something that this study has thrown up. I have to say, very insightful for us. I think what you will see in the months and quarters to come, you will see us hopefully translating this into the— Premiumization brand, premiumization roadmap, into the product, consumer centricity roadmap, of each one of our products. Our GTM revamp, again, a large transformation project that we've undertaken, which I've referred to, I think, from time to time, is also progressing well. We have a global consultant working with us. We have particularly co-created city-level execution plans with field teams to run targeted pilots, alongside with a very dedicated rural acceleration program. The pilot focus is selling more in existing regions, retailing, and premiumization. Early results are encouraging. We expect to see meaningful progress in our GTM plan also over the next 18-20 months. We expect that this will further strengthen our distribution as well as penetration. Diving into our Q2 results, revenue performance has been steady, underpinned by a 3% YOY growth in underlying volumes. We have. Remained steadfast in being able to not only hold but gain market share across various categories despite difficult market conditions. Particularly, as you are aware, weather conditions have not been favorable. This has led over a period of time to a stocking up with the entire channel, which frequently does lead to not only impacting one product, but a few other products are also impacted as a consequence of this. ECD has witnessed encouraging momentum across categories with market share gains. Year-over-year margins have been impacted, particularly in the LDA and the TPW segment because of adverse market conditions. There is also the impact of commodity price movements, which, as you must be aware, is something that has afflicted a number of players in the segment. We have already started taking pricing actions in order to address some of these. In fact, we were the first company in ceiling fans to take one ounce of price increase in prices, which came into effect about 24th of last month, right? We are taking the lead as always in pricing action. You know, we think that, we are thinking, we believe that the rest of the industry, which has also been impacted by commodity price increases, will also follow. Our BLDC fans now is coming off the launch of the Nucleus platform, which I spoke about maybe six, nine months ago. This led to the launch of fully indigenously developed BLDC products into the market. Nitro and Nucleus, they've been very well received by the market. Our BLDC products in this segment have been growing at very strong double-digit numbers, 50+% numbers. We expect this momentum to continue, and indeed, strengthen as we go forward, with further product introductions in the BLDC segment. Our pumps business delivered a mid-teens growth supported by solar orders of about INR 92 crore that came in last quarter. SDA has continued to grow in strong double digits. You know, our kitchen business, which combines Butterfly, our SDA business, and our large kitchen appliance business, as I've said before, is the second largest kitchen business in the country. In that business, we are growing at double-digit growth, which on that scale, I don't think any of our competitors comes anywhere near competing. On Butterfly itself, this was a standout quarter revenue growth. Now, this is something that you guys would have seen already. Revenue has grown 13.6%, driven by strong channel execution and new product launches. EBITDA and Butterfly has grown at 21%. Growth in our, in Crompton, kitchen is comparable, in fact, a little bit better. So, you know, you can see how the kitchen appliance business, kitchen business in Crompton is doing. Further, lighting, lighting has demonstrated strong performance in both top line, which is about 3.1% YOY growth, and EBIT, which grew at 50% YOY. EBIT margins in lighting, which came in at 15.5%, expanded by 4.8% YOY. Now, with that, I hope you have had the time to look through the investor presentations that we've put out. We, one last point I want to, I want to also flag to all of you, our results this quarter also have an exceptional item. For the first time, we are actually calling out an exceptional item, largely because of the single quantity, that single quantum that was spent on it. As you know, and if you don't, I'm happy to elaborate, we have been embarking on a transformation of various parts of the organization. One part of this transformation has been the restructuring of our Vadodara operations. In the last quarter, we incurred a cost of about INR 20 crore in restructuring the Goa operations. Apart from the restructuring, there has been a big change in the way that the Vadodara operation has evolved as a consequence. This has also been an operation which started a few, you know, earlier, being a lighting business. This is the legacy lighting product company. Over the last few quarters, it has changed dramatically. It is now not only a lighting manufacturing unit, it is a fans manufacturing unit, it is an LDA manufacturing unit, and soon to be also a manufacturing unit for a part of our solar rooftop business. In addition to this, this is also the location where we have set up a significant testing facility. So, you know, that's just to give you a small glimpse of how, you know, the transformation, which is a part of Crompton 2.2, is evolving. And you, of course, heard of some of the other things that we can talk about, which is the U&A study and the GTM, GTM process. With that, I'll pause and I, and you know, we'll take questions. All right. Sure. Thank you, sir. We'll open the floor for Q&A. The first question comes from the line of Aditya Bhartiy. This one. Hi, hi, Aditya. Hi, good evening. My first question is on the ECD margins. While you kind of elaborated on it a bit, but the margin drop has been quite sharp and sudden, and which is why I wanted to understand, is it largely only in the fans category and SDA category wherein we are seeing this margin erosion? Solar pumps and rooftop, I do not think we will be having too much of revenues at this stage, but those are pretty okay in terms of margins. Also, on the fan side, when do you expect these margins to be coming back with the pricing actions that have been taken? Is there a competition angle also attached to it? Actually, I do not know how you quite kind of came to the conclusion that the margin drop is attributable to fans and SDA. Actually, like what I mentioned was that. The margin drop is as a consequence of, one, the commodity price increases in our ECD businesses. Secondly, it's attributable to the TPW and the LDA businesses. Now, as you are aware, the LDA business comprises our air coolers business as well as our water heaters business and the TPW business. Both of these are significantly impacted by seasonality, right? While the channel had purchased, you know, had stocked up some, you know, that's impacted their ability to come back and purchase more. I think there has been a considerable amount of, you know, competitor activity in these products. Yes, we do expect that the price increases that we are taking will help to a smaller extent in fans as we go into the transition, which is 1st of January. We have also been, obviously, taking, going into the last quarter. It's important that we are well prepared with our inventories in Q3, because there's a cliff on the 1st of January. Some of that has also obviously been acted upon. Needless to say, that will, that is until the 1st of this quarter. I, I, it's important to start working in advance, and we have already started doing that. Yeah, those are, I think, the factors which have gone into the, substantially explain the margin in this quarter. There is another element here. We have significantly stepped up our investments, also in transformation, which are currently not obviously giving the returns that come along with these investments itself. So, you know, for instance, we would have started spending money in GTM ahead of the impact that it has on sales. We have started spending on, you can imagine these are only ones that I'm putting out there. There is, we have also stepped up our investments in digital. Again, these are investments that you make first, you know, in various capital expenditures that you, or whatever expenditures that you incur, in transforming your operations. It is above the gross margin level. I told you what the reasons are. Below the gross margin level, there is the transformation expenses that we've stepped up now for the first time because there was a combined expenditure last quarter of about INR 20 crore. We are also calling that out separately. Even outside of the restructuring expenses, there are other expenses which we've incurred last quarter. These are all, I think, very important for us, because they will contribute, we think, to making Crompton 2.2 happen. Sure. One thing that is a little surprising is that there have been times when we have seen sharp RM inflation, but I don't, I can't remember any time when we saw margins as low as what we are seeing in the ECD vertical, and which is why it kind of, I wanted to ask, what exactly has been playing out and by when should we be expecting these margins to be recovering? The segment used to have high teens kind of margins. What should we now start expecting as sustainable margins for the segment as well? Aditya, if you look at it, Promeet walked you through on the comparative to previous period, previous year, which is why is the reason this is a combination of our seasonal categories not bringing in the revenue, which is on a higher gross margin. So mix on that has got adverse. Sequentially, if you look at Q1 to now, it's largely due to operating leverage. Q1 is a large seasonal quarter and we don't have that scale. That is the reason for it coming down. Now, looking at from a forward perspective, what are we doing to get the margin restored? As you would know that, we did this just recently on ECD when we restored the margin back to its mid-teens level. That's our intrinsic margin and that's a portion that we want to move. This quarter, we talked about the reasons. As we move forward, the price increase has been communicated for November. There will be a few more initiatives towards that will be taken as we move forward. Unity is getting accelerated, so we will look at further cost saving that needs to come in. Some of the benefits that we have seen on ceiling fans, on cost initiatives, we may now start moving towards table, pedestal, and wall fans also. Coupled with that, there is also a mix that should help us positively on the premium side. Those are the initiatives that we are looking at. I would continue to say that, from an industry perspective, when we look at it, yes, there has been a margin pressure across the industry, but we continue to lead on margin as we speak, and we are confident to restore it as we move forward with the actions that we talked about. See, you don't ask us to give you specific guidance, Baba, but I will just give you a further, another indication. Right. The last time I was asked these questions was March 2024, right? March 2024, where margins had impacted and, as you know, our, you know, the trajectory of margins. Right. So, don't ask us to give you forward guidance, but we do believe that there are particular factors which have gone into the margin, particularly the unseasonal, you know, impact on LDA and TPW, as a consequence of which we have, you know, we have seen what we've seen. We are taking the lead in addressing this, and we are the first company in the business, in fans, to take a price increase. Sure. Thank you. Thank you, sir. The next question is from the line of Siddharth Bera. Yeah. Thanks for the opportunity, sir. Sir, my first question is on this price hike which you indicated in the fans portfolio. Possible to highlight the quantum, how much has been taken and is it for the entire portfolio? Because we have seen like about 80 basis points sequential gross margin drop in this quarter. Just wanted to understand, is it good enough to offset this drop? Second is at a portfolio level, you have talked about solar being a INR 2,000 crore type of revenue in two years. How should we think about the profitability of this portfolio? Will it be at par with the ECD sort of margins which we have, or, how should we think about this as a margin, over a period? Sure, sure. Let me answer both those questions. We have taken a price increase of about 1.4% in our fans business. That is what we have started with. There, I think we will see what happens as we go along. Hopefully that addresses the first part of your question. I do not think we are in a position to particularly take price increases in the LDA business just yet, to be clear. In so far as your margin and the return profile of our solar business is concerned, the solar business has a very similar margin profile. to the rest of the company in terms of the EBIT margins. To be clear, the way that we are, this business is not the way that the other businesses work. This is a business in which much of the gross margin flows through directly to the EBIT business. Right? So the margin profile of the company is very similar to the margin profile of the solar business. It is at that same time a very high ROCE business. Right? Especially the rooftop business, where, you know, much of the payment comes in pretty much with the installation. Now, I don't need to get into what the, this thing is. I've talked to you about that before. If you want, I'll get into it. But this is a high growth business, high ROCE business. This is going to supplement our core businesses. Sorry, this says internet. This is going to grow our, supplement our core businesses, where, as I said, we are gaining share in fans. We've, we are significantly ramping up our BLDC position, and in pumps also, we've gained share. That leaves our SDA business, which is growing in strong double digit, and like I said, is the fastest growing kitchen business in the country. Got it, sir. Thanks, Siddharth. Yeah. Yeah, tell me. Sir, I just had a follow-up on this solar pumps. You indicated a strong order pipeline. Possible to highlight the quantum? We had talked about this in the last quarter also. This quarter also, if you can just highlight the quantum of the order pipeline, will be helpful. You want to talk about the order pipeline? INR 255 crore. The current order pipeline is INR 255 crore as we speak. Okay, great, sir. Thanks a lot. One sec. Just a week later. That's the unexecuted order. Yeah. Yeah. Yes. Okay. And that business has, as I mean, again, not to get into particular numbers, that is growing at 100+%. Why? Why? Got it, sir. Thanks a lot. Welcome, Barenda. Thank you. The next question is from Renu Bhab. Renu. You. Are you Are you on mute? Yeah. Am I audible? Yeah. Yeah. Go ahead, Renu. You've gone back on mute, Renu. Is it audible? Yeah. Now it's audible. Please go ahead. Yeah. Just one question. Circling back on the solar rooftop portfolio that we are having since, essentially, it will be an outsourced business model for us. And you mentioned ROCEs are very high. How would, in your view, be the networking capital intensity and the key risk on the execution side? Renu. I think the warranty obligations required on the performance of the panels. Right. One sec. If I just put down the questions, you are asking what the working capital requirements in that business are. And two, what are the commitments that we are making on warranty? On the performance of, as in typically for rooftop, there are also performance-related warranties which are required in terms of the efficiencies of the panels. To what extent you will be back-to-back covered with the panel supplier and on our books, what could be the liabilities related to these? Yeah. You want to talk about the back-to-back, this thing? Yeah. Should be completely covered on the back-to-back as far as the panels go. Yeah. To answer, who is the general lady? Renu. Renu. Hey, hi, Renu. To answer your question, these are back-to-back. This is not very different from many of our other businesses. As you already know, we have a pretty healthy mix of products that we outsource and products that we make in-house. Crompton does a splendid job of ensuring that the quality of the product that is put out into the market, regardless of whether it is made in-house or outsourced, meets the Crompton standard. Now, insofar as the working capital is concerned, as I've already told you, this is a business in which ROCEs are high, right? The capital intensity of this business is low. Many of our businesses, we operate at very capital-efficient businesses. That is the case with our fans and pumps business. This is also a business which is high ROCE. I don't know if you can give them some more color if you want. If I recall, in this business, on the retail side of the business, solar rooftops, 85%-90% of the payment is made in advance. Got it. On the panel side, would it be possible for you to elaborate on who our partners here would be in terms of sourcing partners? Typically, if you do not mind, we will not disclose who our partners are. Obviously, when we have gone and got these bids, we have made arrangements for sourcing the solar panels. I want to make this point here, and this is a question that you have not asked but has been asked of us. Because panel availability is a constraint at what price? As in, how have you covered on that aspect? Do we have annual rate contracts with some of the larger suppliers here in the market, or how does the. We have, okay, so the solar rooftop business, we have clarity of what price we are going to get the panels at. Okay? That's point number one. Point number two, now, because we have such a large scale in solar pumps as well as in solar rooftop, that enables us to get well-negotiated prices in the solar panel business, as you might imagine. In fact, one of the very key things that this order allows us to do is to get, you know, get. Scale, on our sourcing, both on the solar pumps business as well as in the rooftop business, and also not only outside, not only in these orders, but outside these orders as we go out and implement orders, you know, directly on individual, take orders from individuals. So the product is exactly the same, right? If you have 50,000 units that you are, you have a scale already in, that obviously significantly steps up your ability to get better prices for these products, as well as will help us step up the execution, you know, of these products, because that is also something that you need to do. One of the reasons why we've managed to get a sharp uptick in solar pumps is because we've done the execution well. Got it. Sir, lastly, a question related to fans, where, obviously we have a table rating change coming through from January. Last time, remember, Crompton had been absolutely low on inventory upstocking of the older inventory, and there was significant de-stocking ahead of these changes. This time around, do we have a strategy in place? You're already in November. Would we be on the board with other industry peers to upstock on the older rating products ahead of the change, or would we go low on inventory, channel inventory, and then push the new product range from January? Clearly, we've learned our lessons from the last time. I'll leave it at that. Also, there have been two projects which have been running in Crompton for the last six months. One, why they are called Utkarsh One and Utkarsh Two. Utkarsh One is how the stocking and de-stocking of current B-rated fans is going to work. Utkarsh Two is how we are going to start manufacturing new B-rated fans. Right? I dare say that we are pretty well prepared as far as we can tell today. Hopefully you will start seeing some of these fans sooner rather than later. There is a, you know, I, we made this point earlier. We are technically preparing ourselves not only for B2, but also for B3. That is why I went and announced to you, now nine months ago, that this is the tech, you know, gave you a glimpse of the technology that we were using. Yes, I think we are in a reasonable state of preparedness. The extent of upstocking, you know, I am, to be in the industry, I can tell you the extent of upstocking is not going to be probably similar to what happened the last time. That is not, in any way, Crompton related. That is because I think the industry, the channel partners last time had upstock across board other than in Crompton. I do not think they felt that served them particularly well. Our sense is that the channel, the levels of upstocking in the channel, will be more moderate across the industry, but we are well prepared. Surely. Thanks much, team, and best wishes. Thank you. Yeah. Thank you. Next question is from the line of Achal Johade. Achal Johade. Yeah. Am I audible? Yeah. Yeah. Thanks for the opportunity. Two questions. First, on the lighting, you know, if you could help us understand, you know, we have had a record margin. You know, how sustainable are these? What has driven this margin expansion? B, mittens volume growth is pretty encouraging. How do you see that playing out going forward? What is driving, any particular subsegment which is helping in terms of the growth? Okay, so let me take the first crack at it, and you know, I'll ask Shaleen to step in if needed. Lighting, you know, as you know, comprises two parts, B2B and B2C. In our case, the growth has been similar in both B2B as well as B2C, right? This is not, we are not particular believers that we should just do, you know, lots of B2B businesses, which are, which are kind of, as you know, very low margin business otherwise. We have done this in B2B as well as B2C. Our growth has been consistent. In B2C, we have been calling out for some time that we are significantly reorienting our product mix. Our product mix used to be lamps and batten, right? Our product mix today is panels, lamps, and batten. Some time ago, our lamps and batten used to be more than 65% of our product mix. Today, they are together probably 40%-45%, 40% of our product mix. We have added a lot of both panels as well as other products like, you know, floodlights, et cetera. All of these are going towards a material uptick in the margin in our lighting business. In our B2B business, also, we have been working towards improving the quality of our B2B business. One of the, without taking specific numbers, one of the objects of our B2B business has been to reduce the kind of government exposure because they have tended to be in our B2B business, increase our industrial part of our business. That is also something that we are managing to do. The largest contract that currently, I do not, I think we've disclosed it. The largest contract that we currently have is with an industrial company, right? That disclosed JSW. Yeah, JSW Steel. We have, so it's fully disclosed, right? There are a spate of activities that we have done in our lighting business, not the least of which is also addressing the manufacturing costs of our lighting business. Now, the lighting business had two manufacturing units. One was in Baddi, the other was in Vadodara. In Baddi, we have changed that manufacturing unit, and now it is a fully dedicated fans business, which is a 50% increase in production capacity to what we used to manufacture in Baddi before. There is no more lighting in Baddi. In Baroda, as you've already heard, that manufacturing unit has gone from being a dedicated facility only to lighting to many other PLs. In this last quarter, we have also undertaken significant restructuring, which, by the way, will come now. The benefits of that will come now to all the PLs that are now based out of Baroda. If we've spent INR 20 crore, typically the payback of these expenditures tends to be about sub two years. Yeah, less than two years, right? Obviously, we've not spent it just like that, right? So, you know, what you're seeing in lighting is the benefits of both front end as well as back end improvements. Yeah. I think that's somewhere. Is it fair to say that this is now the new normal margins? Would that be a fair assessment? Sorry, sorry. From a forward-looking perspective, Achal, as you know, we don't give guidance. Having said that, the idea is to also reinvest back to get lighting on growth. We also look at opportunities to step up our A&P in this. Got it. The second question I had was with respect to, you know, the solar piece. If I look at solar pumps, and also rooftop, both are dependent on the government schemes. If you could help us understand what is the visibility you've got, particularly on the PM KUSUM. There was expectation that it should come through the PM KUSUM 2.0 anytime now. Just wanted to check, any update on that. Okay. Actually, let's step back for a second. Let's, you know, both the businesses are not government dependent, but I'll explain why. Firstly, insofar as solar pumps is concerned, as you are no doubt aware, as KUSUM 1 is expiring, KUSUM 2 has already been announced. September 2024. Yeah. In the month of September, the son of KUSUM 1 has already been announced, KUSUM 2.0. That has, while 1.5 million pumps have been, I think, implemented in 1, the aspiration is 3.6 million. 3.6 million pumps is the aspiration in KUSUM 2. Clearly, the government has every intention to continue to grow, to continue to invest in KUSUM 2. In fact, we, from our point of view. We see opportunity in other states where, today we are not as present. We have already, as you know, got a, as I mentioned earlier, got a market share of about 6%. That is working in a restricted number of states. Basically, we have been in Maharashtra, Rajasthan, and Haryana. We think there is opportunity for us now that we have done so much work to also expand into other regions, and with that will come further increases in our market share. Insofar as the solar rooftop business is concerned, the first orders are from the government. This is a huge business in the retail market, right? Huge business in the retail market. What these orders do is that gets our business off to a flying start, right? Basically, it gives us scale in terms of installation, in terms of procurement, but also most importantly, this is a business. Where if you can imagine the strength of the Crompton brand, where you want to spend INR 220,000 on a product and Crompton goes and says, look, by the way, we've also installed 50,000 units. There is nobody else who can easily make such commitments, you know, to the people. You know, this is a INR 20 billion market. Today, I'm not talking about future. The INR 20 billion market, where this, you know, so this is a large business. By the way, simultaneously to implementing the solar rooftop business in Andhra Pradesh and Telangana, we have also launched our retail presence in a set of states. As that picks up pace, I will keep you informed about it. This is, you know, we do believe that, going forward, we'll have a healthy mix of direct to retail. By the way, this is different from B2B and B2C that we do in other businesses. In other businesses, B2B is a different product. It's a different product, entirely different product, right? It's a made-to-order product. Here, this is exactly the same product that we install in any home. If we put up a two kilowatt product in any home, this is exactly the same product. Exactly the same installation, exactly the same survey, and therefore very similar, you know, supply chain. I hope that answers your question. Yes, very much. Just one small request. Achal, may I? I'm just making a request. Okay, sure, sure. Please allow us some more time for reading, going through the presentation. Keep some gap between the presentation. Yes, appreciate that. Unfortunately, our board deliberations always overrun, so poor Natasha doesn't get much more time to upload the investor deck. Yeah, point taken. Thank you. Next question is from Aniruddh Joshi. Yes. Yeah, thanks for the opportunity, Umang. Two questions. One, both the schemes, you said, have got high ROC and high growth also, but if we exclude the benefits in both PM KUSUM as well as PM Surya Ghar, eventually the consumers may not like to get into these kind of products, because it will reduce the benefits to the consumers. Second point, if the government realizes that the people engaged in, or the middlemen between government and the eventual consumers are making high ROC, eventually government may cut down, immediately cut down on the subsidy benefits also. Assuming subsidy goes down materially almost to zero, do you still think that the businesses can generate high ROC? Also, lastly, on high ROC, the definition that you are looking at, it means like more than 25%, more than 30%. Where would you peg that number? If you can give a broad range, it will be helpful. That is question number one. Last question, in case of fans, obviously the table will change in January. Also, we have seen there is a material inflation in most of the commodity prices also. Yeah. How do you see the overall price hikes that we may need to take considering both the table change and RM inflation? How much have we taken right now and how much pending price hike will be required? Yeah, thanks. Okay. First point I want to make. I said it is a high ROCE business. It is a high ROCE business for us. It is, and that does not mean that it is a high ROCE business per se. It is a high ROCE business for us because it is a combination of the brand pull and the fact that we have scale in our manufacturing, in our sourcing, right? And because we have over a period of time invested significantly in, with our partners in the execution of these. This is not a business that otherwise, businesses do not have high ROCE, right? You have to, they are high, high, so, there are some things that I think differentiate us. What, just let's understand in the pumps business, what is happening in the pumps business that the government puts, government is already doing an auction. Okay. The government cannot say, boss, I will give it to you at lower than the auction. There is an auction. If somebody can bid lower, they are already bidding lower. Huh. After the auction is done, the government says, ask the farmers, now these are the five pumps which are available. Please tell us which pump they want, which pump you want. Right? Right. Right. Somebody can bid, but at the end of the day, the farmer recognizes one or two brands only, you know, and he has faith only in one brand, if I may say so. I'll just come to it, Baba. By the way, the government is not giving a subsidy just like that. You, in the solar pumps business. As you are aware, many farmers get electricity at zero cost if you get it from the grid, right? What the government is saying, because it comes at zero cost, the electricity is very intermittent, right? That, of course, has its own impact. What the government is doing is basically giving a subsidy that you do not have to draw electricity from the grid, and particularly do not have to draw electricity so that they do not have to give you free of cost, right? It is what the government obviously thought through, the subsidy program, at some length. Now, similarly, in the solar rooftop business, what this rooftop business does is that if you have a solar rooftop, it is a two-way meter that you have, right? The government gives you subsidy. You know, the government is deeply, deeply focused on the spread of green energy. By the way, the government has, as you are aware, very ambitious targets about the green, about the carbon footprint of the country, right? Right. What the SEBs do is that when you put up a solar rooftop, when you're generating during the day, part of it you use, part of it you give back to the grid, right? First of all, this is something that has been carefully thought through by the country, and the government's not simply giving money away. Secondly, and even more importantly, this is not a unique journey. We have seen this happen in business after business as the scale grows and the benefits of these products become clear. You can see it in FAME 1, 2, 3, and so on and so forth. Governments find that it is not necessary for the subsidy to continue because the math makes sense for people anyway. Okay. It is not that, I mean, in the near future, anyway, there is a large investment being made by the government in this. Kusum 2.0 is a ready demonstration of it. I do not think we should approach this business as being a short run business. Yeah. Sorry, Kaleeswaran, you wanted to say something. I'll come to the second question, maybe, and then I'll address the first one. Second one on fans, what you asked, as we communicated earlier, 1.5% of price increase has already been taken. There are also actions that we will take as we move into the BW2.0 regulatory change. It need not be price only, as you would know, for consistently over years, we have been running a successful UNMT program that helps us to optimize cost. Both are running in parallel. This will help us to get back to our margins in due course as we are planning to work on these actions. Typically, sunrise industries always start with a subsidy. That is what we are doing in solar pumps and rooftop. End of the day, you are building a library when it becomes a business which is beyond subsidy. You have Crompton as a household name available for the farmer or for the consumer at household to get it installed. The unit economics works today for the farmer because intermittent power supply is ending up in spending cost on diesel, which is significantly high and borrowed at a cost of 36% +. Yeah. Organized financiers are planning to get into it where funding will be at 8%-9%. It will be a standalone business with very good payback to the farmers, on pumps. On B2C solar rooftop, it's a straight case. There is no need to even look at the unit economics as we move forward with scale that pays back by itself. I don't think subsidy has got anything to do with it. In fact, as subsidies go down, the focus of the individuals on products which are long lasting, which are, which when you put in a large amount of money, will give you consistent, reliable supply becomes even more important. Yeah. Right. Thanks. Thanks, Aniruddh. This is very helpful. Yeah. Thank you. The next question is from the line of Natasha Kedia. Yeah. Thank you for the opportunity. Sir, I wanted to know, in terms of newer categories, are we looking at something, more in tune with our distribution channel, like say wires? And given that wires has a strong double-digit outlook in the future, why are we not getting into this category? And our distribution strength is so good. I mean, we can probably leverage and cross-sell or sell through the same channel. Wanted to know if we're looking into getting into this segment. Natasha, actually, would appreciate this is for a quarterly earnings call of what has happened in Q2. We would refrain from giving you insights on future product categories we'll enter. We have called out the way in which we would enter at appropriate time. You'll hear from us about it. I mean, we are well aware of our strengths, Natasha, and I'll leave it at that. I think you can, you will also appreciate that when we formally announce the entry into a segment, it is after having done some homework in the background. Yeah, I mean, you know, solar rooftops is an instance where, you know, obviously, you know, if you've gone and got a INR 500 crore order book, that has not happened over the last two months, no. If we have announced that business three or four months ago, it will tell you that there is some background work that was going on. At the right time, you will hear about our entering various categories. We are well aware of our strengths in various categories. Our strengths are our brand, our distribution, that is not lost on us. Thank you, sir. Okay. The next question is from the line of Himanshu Singh. Hello. Am Am I audible? Yes, Himanshu. Yeah. Thanks for the opportunity. Sir, I wanted to check, how has been the growth trajectory for fans, in October post the monsoon retreat in large parts of the country, if you can elaborate? It has been a slight improvement, I'd say. In trajectory, a little bit better than last quarter. We'll have to see how that pans out. I must say that, you know, our expectation for the previous quarter was a better growth trajectory that didn't quite pan out. This time, I'm hopeful I'll be surprised positively. You know, I think importantly, you know, it's at times like this, I mean, leaving TPW aside, which I said, as you obviously, that's gone through a, TPW tends to be the most seasonally impacted segment, right? Because fans, the lots of TPW gets bought when the weather is hot. I think that's something that we've seen the impact of particularly over the last quarter. The fans business, even in a tough market, we have continued to gain market share, which is something that, frankly, is quite important to us. You know, sometimes tough times are also opportunities for larger players like us. Thank you, sir. Another question, sir. What is the salience of e-commerce and modern trade channels for ECD? And how does the margins stack for these channels? And do we see any pressure on downward risk on margins if their salience grows in over the near term? We don't share the specific channel category-wise data, Himanshu, but the unit economics are strong. That is something that we underpin for all the categories and channel we operate in. We know that e-commerce is a channel for growth, but we also have strong unit economics governing the profitability for it. Maybe I'll give a little bit of color. Look, you know, the channel margins initially tend to be a little lower, a little in MOR and e-commerce. Remember that the e-commerce and MOR mix structurally is higher in our kitchen appliances business than it is in our ECD business, right? I think it shouldn't be a surprise to you that we figured out how that mix should be worked with. I mean, you know, I'll—rather, let me answer it myself. You are aware that in our Butterfly business, where the e-commerce saliency is quite high, we have worked very hard over the last few quarters to materially improve the profitability of our e-commerce business. And remember. You know, when you are one of the largest consumer product companies in the country, that also makes a difference when you're negotiating with e-commerce channels as well as with the MOR. It's not a straight answer, Himanshu. I mean, I think you can tell from the way that the margins at Butterfly have improved that we do have some sense of how to deal with the e-commerce mix. Okay, sir. Thank you so much, sir. That's all from my side. Thank you. Next question is from the line of Deepak Lalwani. Deepak, please. Yeah. Am I audible? Yep. Yeah. Thank you for the opportunity. Sir, my question is on Butterfly. We have seen good growth in this quarter. If you can share the outlook for Butterfly, is this growth a one-off or should we see it continuing? Ask this question for the last, a few quarters. I mean, you've been three off because the last three quarters is not a one-off but a three-off, right? Deepak, I think it's fair to say that we are optimistic of the trajectory that the business is taking. By the way, the Crompton Kitchen Appliance business has also been, you know, whatever, growing at a solid rate, consistently. Yeah. I just had one more clarification. The INR 500 crore order book in the solar rooftop business, executable over 12 months. Should we assume INR 100 crore or INR 125 crore quarterly run rate for this? Look, how exactly it will, buy a bunch, I don't want to tell you, but yes, the expectation is that over the next 6-12 months, the order will be executed. Sure. And sir, just a clarification on your comment, the last comment that the recovery in fans is positive in October. Can you call out how has it panned out across the products, TPW, pedestal, etc.? Look, I mean, I'll answer it as best as I can. At the end of the day, the TPW season is past now. Yeah. So TPW season is past. Insofar as ceiling fans are concerned, we are seeing some pickup. Early days yet, but we are seeing some pickup. That's kind of, I think, the. Are we seeing a similar case for coolers as well? Coolers is again not season, Deepak. I think cooler season is past. We are, it's more to start with the other seasonal products for winter. Therefore, nothing to impact on coolers. There was some stocking in that segment, as you might imagine, and that kind of impacted the profits there. You know, that is, of course, episodic, but the season isn't, you know, isn't really looking up. I mean, it is in season. Fundamentally, it is in season. Yeah. Okay. Sure. Thank you, Deepak. Yeah. Actually, some fans of ours in the TPW segment will pick up with the crop, right? Because they are used to dry crops. To that extent, you know, it'll be interesting to see, now that the monsoon has been very strong and presumably the crops are quite good. As you know, we, unlike many other companies, have quite a strong exposure to rural India. Some of our products are actually used for drying crops, and that should come up soon, but I haven't seen it yet because it's still raining in some parts. Thank you, sir. I have a question from my end. Maybe Kaleeswaran can answer to it. Is there any particular reason why solar as a category is being prioritized, and how are you generally thinking about it internally? The way we have been looking at it is Crompton as a B2C brand has been very well known in this country, and it's an 85-year-old brand. We continuously look at categories that we have a right to win. When we have entered into solar pumps or solar rooftop, it is not to win a couple of orders and see what is to be done, but it is to look at how the consumption in India is going to move over the period of time. Pumps, we believe that agri pumps at a point of time are going to be replaced by solar pumps as an industry. This could potentially be a $2 billion-$3 billion industry in size. In the history of Crompton, in 85 years, we have done about, say, INR 250 crore of agri pumps. In about less than two years, we have crossed that number, and we are looking at double as we look at this year. Significant right to win for Crompton as a brand. Crompton as a brand getting accepted with the farmers helps us a library to be built across, which also becomes a very strong replacement market as we move forward. That is as in far as solar pumps are concerned. Solar rooftop, the idea for us is to look at it from a perspective that we have been a household name. I think a large part of Indian household has grown with Crompton as a name. One of the biggest challenges that has been there in solar rooftop is companies with credibility coming and taking this up. You do not have fly-by-night operators who cannot stand and provide a warranty for a longer duration. What Crompton brings on the table is that enability to execute this, which we have demonstrated in solar pumps, enability to have a supply chain that can address it, and also install and provide post-installation support with great quality. That is why we feel solar rooftop is another industry that helps us to grow. Combined together, as we look at it from a B2C perspective, which is the way that we are approaching this, we see this scaling up to about INR 2,000 crore in the next 18-24 months. That is what we are looking at an outlook for it. The profitability of these businesses are similar to what Crompton is making as an overall business. There is no difference from that. We do see the unit economics is much more favorable and the balance sheet is lighter. Consistently over a period, there has been no significant fixed asset investment that we have done. This is no different from that. Our working capital has been negative, while there could be some working capital involved, but the ROCs are going to be higher than the average. In all, we see this as a sunrise sector that is going to pick up in a significant way for the country. As a brand that has been there for 85 years, it is an opportunity for us to participate and reshape the consumer experience both in households and for the farmers. That is why we are looking at solar as a huge opportunity. We want to be part of shaping this. One of the things that we also committed is, how do we work towards a clean energy journey for the country? This also helps from our commitment that we have made, which we announced in the last quarter from a 2035 energy commitment. Overall, a great business that is a consumer franchisee for us, a great unit economics, and helps us to drive sustainability and clean energy. We feel it ticks all the boxes for us to grow. Most importantly, we do not want to go linear here. When we aggressively scale this up to INR 2,000 crore, which we are looking at, it gives us enormous benefits on supply chain. It gives us enormous benefit on technology and IoT that also will help us and rub off positively in many other segments also. That is largely why we are into it and why we are getting into it. Trust that answers, Umang. Yes, thanks. That was quite comprehensive. If I can just squeeze one last question, would you be able to share, you know, current inventory levels in fans? Is it normal, you know, more than usual? Current inventory levels in fans are reasonable. I mean, I assume that you mean inventory levels with us. Yes, and the channel. Yeah, yes, are reasonable. Like I said, we've been running two programs, Utkarsh One and Utkarsh Two, and both of them are progressing apace. If I may just add to what Kaleeswaran said, absolutely, it is not that we are prioritizing the solar rooftop business or the solar pumps business. The reason I spent some time talking about it is because these are new businesses which you may not be familiar with, and certainly we've not talked about them in the past. Let there be no mistake that we are very, very focused also on our core businesses. I told you that in the fans business, we are recognized as the largest ceiling fan company in the world. That gives scale. Let me tell you that we are not taking that scale lightly. Yes, the fans business has come through a period where seasonality has impacted the fans business a little bit, but even during that time, we have gained market share. It is during that time that we've made investments in XTEC and in Nucleus. We continue to invest, you know, in our core businesses. I mean, you know, one other business that we spoke about earlier, which actually we used to be asked about earlier, was our kitchen business and our light business. And you've seen that with the focus that we've had in those businesses, the trajectory of those businesses has changed. That is not to say that we are neglecting our other businesses. Got it, sir. Thank you so much. With this, we'll end the Q&A session. I'll hand it over to you for closing remarks, if any. Thank you for the opportunity to host you. Yeah, thank you very much. And, you know, if you need to reach out to us, Natasha is obviously available. Thank you, and you have a good evening. Thank you. Thank you. Thank you. you. Thank you.