Ladies and gentlemen, good day and welcome to the Ladies and gentlemen, good day and welcome to the IFB Industries Limited Q2 FY27 earnings conference call hosted by Nirmal Bang Institutional Equities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rabindranath Naik from Nirmal Bang Institutional Equities. Thank you, and over to you, sir. Thank you, Alaric. On behalf of Nirmal Bang Institutional Equities, I would like to welcome everyone to the Q2 FY27 earnings call. of IFB Industries Limited. We thank the management of IFB Industries for giving us the opportunity to host the call. Uh, from the management team, we have with us Uh, Mr. Sandeep Joseph Abraham, MD and CEO, uh, Home Appliances Division. Mr. Soumitra Goswami, CFO. Mr. C.S. Govindraj, ED Manufacturing Home Appliances Division. Mr. Amar Singh Negi, ED Service Home Appliances Division. Mr. Arup Das, ED Engineering Business. Mr. Rajiv Bundra, Head Finance and Accounts Engineering. Mr. Karthik Muchandi, Head Finance and Accounts Home Appliances Division. Mr. Ranjan Mohan, National Sales Head, Home Appliances Division. Uh, please note that today's discussions may contain forward-looking statements based on current expectation. which involve risks and uncertainty that could cause actual results to differ materially. The management assumes no obligation to update these statements in light of new information or future developments. Without taking much of your time, I would now like to hand over the call to the management for their opening remarks. Following the management's commentary, we will open the floor for the question and answer session. Over to you, sir, and thank you. Good afternoon, everybody. I am Soumitra Goswami from IFB Industries Limited. I welcome you all for IFB Industries Limited investors call for 2nd quarter of FY26-27. Now I will inform you about quarter 2 result. Revenue for the quarter was ₹1,512 crore against last year's ₹1,327 crore, which is a growth of 14.04%. PBBIT for the period was ₹90.92 crore and its percentage to revenue is 6.01% as compared to last year's ₹102.50 crore, which was 7.73% on revenue. There is a decline in PBIT amount by ₹11.6 crore, which is a growth over last year by 11.3%. The decline in PBIT was primarily driven by an increase in material cost due to hike in commodity price and adverse forex impact. Staff cost remained lower as compared to last year. However, other expenses increased due to higher payout in office expenditure. EBIT for the quarter stood at ₹53.86 crore, which was 3.56% on revenue as against ₹68.32 crore in the corresponding period last year, which is 5.16% on revenue. Quarter 2 PAT was ₹39.56 crore, which was 2.62% on revenue, against last year ₹49.75 crore. Which is 3.75% on revenue. Results of YTD September 2026 are as follows. Revenue for the period was ₹3,042 crore against last year ₹2,637 crore, which is a growth of 15.34%. EBIT for the period was ₹179.38 crore, which percentage to revenue is 5.9% as compared to last year ₹172.45 crore, which is 6.5% on revenue. Like Q2, material cost for the YTD period also remained elevated as compared to last year. Staff cost decreased marginally during the year. However, operating expenses again increased like quarter 2 in the area of office expenditure. EBIT for the period was ₹105.40 crore, which is 3.3% on revenue against last year figure of ₹102.25 crore. Which is 3.9% on revenue. Profit after tax for 6-month period was ₹77.62 crore, which is 2.5% on revenue against last year ₹75.11 crore. Which is 2.9% on revenue. With this, I would request to start the question and answer session, please. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 comes from the line of Lakshmi Narayan KG with Tunga Investments. Please go ahead. Yeah, thank you. I just want to understand the engineering business. There has been a strong traction in terms of growth. Can you just outline which which subdivision is actually leading to this kind of a growth and what is the plan, uh, you know, over the next couple of years? Because I see that there is a strong order book as well as Uh, you're adding, uh, you're making some investments on that front, uh, that from the engineering, uh, division. Uh, the second is I want to understand, uh, what has been the progress on the BLDC motors in terms of growth, either captive as well as an external. Then third is in terms of the motors in general, Uh, I mean, which is outside the BLDC for the automotive motors, um, what kind of capacity utilization or plan you have? Uh, these are the questions related to applying— sorry, uh, to the motor division as well as engineering division. And I also have a question related to the steel division in terms of how— I mean, are you planning to add more capacity into the steel division and where the steel division, uh, you know, who are the customers of steel division, and is it more captive or is it external? So these are the questions related to the non-home appliances. Thank you. Uh, this is— I will take the question related to engineering division. Uh, as far as engineering division is concerned, we have achieved the budget in terms of top line revenues as well as bottom line. Now, uh, this we expect to continue because we don't do guidance, but we expect to continue in the same fashion going forward. If the market doesn't behave erratically, there is a sudden drop, we expect to continue the same growth pattern going forward. Now, your question related to other areas which we have focused on, which is the area which has given us the growth. Now, as far as our growth is concerned, it was mainly concentrated around high-end aunties, tantees. These are the 2 areas where our growth growth came from. As regards diversification, because We feel that disruption is on the cards with the advent of EV. So we need to prepare ourselves adequately so that we are not taken by surprise when the numbers of EVs really climb up. In order to do so, we have backed orders from EV segment. As a result of which, we have acquired land in Gujarat. For the. product. That is absolutely 100% EV product. IFB Industries Limited. be in— it is under construction now and expect manufacturing by 2027, September, October. October onwards. So that's one part of it. Then we are setting up our rechange plant because there are certain government guidelines for which we were unable to import. Chain. As a result, our businesses was affected. So what we decided is we go for our own chain plant. This not only adds to the existing bottom line as well as our top line will also get considerably increased. from present level. So it will be an advantageous situation for us, and even OEMs are Hallo? Hello, I'm there. Sir, Arup sir is not audible. Would you like to continue the call or should I reconnect him? Do you all want to answer the question? I think you need to reconnect him. Okay, okay. Ladies and gentlemen, please stay connected while I reconnect the management. Thank you. Ladies and gentlemen, the management is reconnected. Please go ahead, Arup sir. Yeah, we're all there, but I think Uh, Mr. Lakshmi Ram, can you tell me till where have you heard and from where you want me to— so you're talking about, uh, the EV thing and the Gujarat? And you said that growth is coming from the, uh, um, OEs, uh, that I kind of didn't hear you after that. Um, so, uh, can you just, uh, Can you just elaborate on what is the business mix of this, uh, of this business? Uh, is it highly, uh, you know, indexed towards 2-wheelers or Uh, what is the, uh, uh, uh, Sorry, sir, your voice is not clear. All-wheelers, EV. Okay. It is 2-wheeler, 4-wheeler, 3-wheeler, uh, electrical. The engineering business, which, which, uh, the growth we have seen the last 2 quarters, what is the business mix of the engineering business? Finelining, finelining and stamping, which has, uh, generated— my question is from the end applications. I'm asking from whether, you know, how much is concerned 52 to 53%. As far as, uh, 4-wheelers is concerned, it's around 40%. And electrical and 3-wheelers all put together, another 10%. Can you just give me the mix, sir? How much is towards 2-wheelers and how much is towards the passenger cars? As far as 2-wheelers are concerned, it's around cost increases? See, uh, it's an absolutely very good question. There is tremendous pressure from the OE side of reducing. That's why If you have seen our presentation, you will find we have set up an engineering technology excellence center in Switzerland. The basic idea of forming this technology center was to ensure that we create a value to the product, make it more cost efficient, reduce operations, thereby you— we become cost efficient and we stay competitive at the same time on margins. So this Transfer of technologies from our company in Switzerland to our plants have really added mileage to our product cost. And we are benefiting out of it. Incarne. And, and are you seeing, uh, compression in margins? Because we see that a lot of auto component companies are facing difficulty in passing the gross margins through to their Uh, I think because OEs are asking them for, uh, for margin, uh, right? So how are you seeing that? Are you able to pass on your Yes, sir. And there are a few more questions related to the others also. As far as you talked about the steel division, I will reply to the steel division. The steel division has gone for a CapEx and increased the furnace annealing capacity. And so from a level of 1,500-1,700 tons, we have moved to 2,800 tons. per month. So that capacity buildup has already happened. We are trying to stabilize that, uh, process. So that we can, uh, repent, uh, get the benefit out of the CapEx which we have invested. This is number one. And number two, You talked about the customer base. One is internal customer, that is IFB Industries Limited, different plants having requirements of steel. That is one. Parallelly, we are also scouting for orders which are for outside customers. So it's a mixed bag, you can say. I would say it's around 1640. IFB Industries Limited. And, and the other on motors. That, uh, I think Mr. Anand will take the question. Mr. Anand. I think Anand got disconnected. You have to connect him back. The next question comes from the line of Srishti Jain with Monarch AIF. Please go ahead. Thank you for the opportunity. So in your earlier quarters, you had named a few actionables for the home appliances division. Market share gains, sales force productivity, uh, pricing position, and scheme discipline. This is X of, you know, cost reduction. Could you, you know, probably score in each of these as to where we are and in which of these we are behind? So, uh, if you look at market shares on, on the washer, we have maintained our market shares or perhaps slightly gone up. And on, on, uh, on refrigerator and AC also, it's more or less a similar kind of situation. We have increased as far as microwave and dishwasher is concerned. As far as our various activities in the— on the ground is concerned, when you look at it there are multiple activities that are there. One is this entire program which is on cost innovation and how do we bring our costs down considering the, the negative impact of commodity and forex. Uh, to be fair, we have not been able to recover whatever was the increase in commodity and forex, but we have done a reasonably good job out there. And that's a continuous process that is happening. A lot of work, as you rightly pointed out, is happening on the, on the field when it comes to getting our in-store promoters in place. Getting our visibilities up, our displays up, and all those things. And that is one of the things which is resulting in the, in the growth that we are seeing in, in the business. All these places, I would presume that, that it's a continuous process and therefore we continuously need to work on it. There is no end, end game in it. It's a process that we'll have to continuously work on. And so specifically on the scheme and incentive rationalization or rejig that we were trying, right? How's the channel reaction been? Have we lost any share or shelf presence anywhere? Station, we are not, we are not necessarily saying that we are going to cut down and things like that. There are 2 things that we are saying. Our schemes should be able to deliver the volumes that we are looking at. And in that unlikely event of not delivering, then, then there has to be some, uh, for that inefficiency that is there, we should be able to, uh, to take back or not pay what, what is, what is not due. And therefore, I would not say it is a cost-cutting or a scheme reduction program. It is just a thing saying that there is a volume that you are supposed to do. You do the volume, please take the money. We would love it if you do the volume because we don't want to save money. We would like you to do the volumes. But if you don't do the volumes, then basis whatever is your achievement, there would be a graded payout that is there. And that is fair as long— I believe that as long as we are fair to trade and we are not doing anything which is not fair. If the trade is also fair to us, say that, okay, fine, I have given a commitment of a volume. If, if I've not done the volume for whatever reason, then then it's fair that you don't give me the full payout. So I think as long as we are fair to each other, uh, the system will go on properly. Got it, got it. And last one, right, uh, how much headroom do we have in our cost innovation program? And once it is there in our base, right, what are the 2-3 levers that you are looking for You know, that will probably take us from the 6% margins that we have to double-digit margin that we want. Yeah, so one thing that is clearly there is that the current scenario has obviously made us look inwards and see that what are those places where inefficiencies are there. And how do we do— how do we take care of that? And the good thing about these is that whenever you do these inward things, then they are there to stay. Uh, once the external factors ease out, a lot of the work that we have done internally are there to stay, and hopefully the external factors will ease out, and therefore we'll start getting the benefits of that. Again, as I said in the previous case also, this is also a continuous process. We had certain numbers in our mind. We have been able to get those kind of cost savings that are there. But yes, it is a continuous process because commodity and forex is not easing out, and therefore we have to now keep on looking at better ways of doing things. However, As a company, we said that whatever we are doing, it should not be compromising on customer experience. So whether it be the quality of our products or the features that we offer, Uh, there cannot be any compromise on that because that would have been the easiest thing to take off some features or reduce the quality of our products. But as a company, we believe that our customer experience is something that we built over years, and that's not something that the current scenario can allow us to liquidate. And therefore, we continue to provide the same quality products with the same kind of features that are there, but looking at inward things. And we'll have to continue to look at it till the external factors ease out. Perfect, sir. Join back in the queue. The next question comes from the line of Vivek Kumar with Geometric Securities. Please go ahead. I'm audible. Yes, you are, sir. So is it more of competitive pressures or is it more of— I'm not talking about the margins, I'm talking about the sales growth. Are we losing market share somewhere? And because you have just mentioned in the previous question that market shares also you are not losing. So how should we understand? Is the market growth low, or what are the— this 20% growth, Vikram Nagasar also used to say that minimum should be 20% growth because we have so much room in distribution and products. So if you can, uh, diagnose and please help us to understand things better. Yeah, so if you look at quarter 1, we grew 18%. So thanks for the opportunity, sir. You've been guiding of 20% growth in appliances, but not just in this year, but if you see over the last few years— I know you were not there, sir, but just And at that point of time, when I was asked the same question, I said we have already grown 18% and therefore 20% is definitely on. Second quarter, we grew 10.5%, and one of the reasons that you need to understand is that this year There is a shift in Diwali. Diwali last year was on 20th of October, and this year it is on the, on the 8th of November. And therefore there is a shift in Diwali and all other related things, whether it be Dhanteras and all those things. That has got shifted to the next quarter. So Q3 is when Diwali happens, and then all of us run on Diwali-specific schemes and all. Last year it would have got over in Q2, but this year it gets over only in the, in the, in the first month of Q3. Therefore, the 10.5% looks muted, but I don't think there is anything wrong in what we are doing. And, uh, yeah, so we'll stick to that 20%. Uh, overall, your yearly growth should be 20% is what? Yeah. Currently we are at 14.2, 14, 14.5% is what we are currently growing at because of the first quarter of 18%, and we should have a good Q3. I mean, we can't give you a forward guidance, but I'm presuming that we should have a good Q3. And, uh, 20 is, yes, aspirational, but we would market share there? So across— no, we have not lost market share. One of the, uh, so when you look at the overall category, we have not lost market share, uh, but yes, competition is is stiff. And in front loader, one of the things that is happening is the higher capacity is becoming, becoming bigger and bigger, the 12 kg and above. You're seeing it in, in all our categories also. People seem to be migrating to the higher capacity. There was a time when people used to be buying 6.5 kg and 7 kg. That is slowly shifting. And it's moving to 8 kg and above. And there is a new segment which is 12 kg and above, which is there, which is a significant, uh, portion of our market. like to be somewhere close to that. The second question is, in the presentation you have mentioned that, uh, front loaders have grown at 40%. So we are also maintaining that growth, or are we seeing some competition and losing At this point of time, we don't have a 12 kg We got an 11 kg product, and, and that's a small product gap which we'll be trying to rectify. So competition is there, and, and we are trying to play in the 12 kg market with an 11 kg offering. So have we lost market share in front loaders or no? Like you mentioned, we don't know. We are maintaining our market share. So So 20% would be aspirational on the— even in the medium-term basis, sir? Or because Vikram Nath sir used to say it like 20% should be minimum. So how should we think, like what are the levers available for us to Let me see where Q3 ends and then I think, yeah, but, uh, 20 definitely going by what we did in Q1 and considering that Q3 should have Diwali in it. Uh, we could— we should definitely pull up some numbers, but at this point, as I said, we are at about 14.5%, which is— which is, if you look at it, last year we grew by 9.8% for the full year. So H1, we are at 14.5%. So we're significantly more than what we did in the entire year of last year. And, uh, and, uh, and, uh, that I am interested in. But you are guiding up from before. Yeah, the last question is on ACs and refrigerators. Are any guiding guidance on market share and, uh, uh, how are we looking at product profile? Where are we positioned in these 2, AC and refrigeration? Market share are too small at this point of time, and, and we are making some inroads, but market shares are too small. But we are definitely making some inroads as far as AC and ref is concerned. Therefore, we would like to be on the premium side of the segment. And there also, when you look at it, if you're looking at AC, uh, we would definitely like to work on the higher 1.5-ton, 5-star, 2-ton, and those kind of products. And when you look at refrigerator, in fact, the presentation also talks that our focus has been on on the frost-free segment. And therefore, while the market is lesser as far as frost-free is concerned, we would like to, like to take it to at least one-third of our business will come from frost-free, which is a— which is the more premium of, of the, of the offerings. Then on the engineering division side, Any idea on positioning, sir? Where are we positioning in those segments, like the premium or— so all our products are, are basically on quality, and therefore Uh, there was uncertainty regarding Tata, Tata's project and sunset. So how is it going? Any update on it? Uh, this is— we are going ahead with the project. Uh, we have gone for LOI. And construction of the factory is commenced. We should assume 20% growth rate to continue in the medium term, right? That is what you were saying before earlier also. IFB Industries Limited, I said, uh, we would like to continue in the same fashion provided the market doesn't slump due to economic condition or something of that sort. If it happens, then it's a different story. Otherwise, we should be in the IFB Industries Limited. Thank you, sir. Thank you very much. The next question comes from the line of Madhur Rathi with CounterSilical Investments. Please go ahead. So firstly, I wanted to understand how come our rental expense in the cash flow statement has increased from ₹26 crore to ₹64 crore for the first half. And due to that, our H1 EBITDA, standalone EBITDA, has fallen from ₹134 crore to ₹105 crore. Show me to here. Uh, in case of rental expenditure, why the listing has gone up due to addition of REU asset? I want to mean the leased asset has increased in the first half as compared to last year. So that is why the expenditure— more expenditure have been charged in the P&L. And that which is affecting the cash flow also. So since, uh, basically rental rent is not a part of EBITDA, if we think about it logically, so basically our H1 EBITDA has actually fallen due to the increase in rent outgo despite the increase in revenues. Are you talking about P&L or you are talking about cash flow? I am talking about our EBITDA. EBITDA percentage is not affected by the rent expenditure because rent is not— rent is coming below PBBIT every time. Rent is coming below EBITDA. Rent is not coming before calculating EBITDA. No matter what the accounting standard is, logically speaking, operating profit cannot include rent. Operating profit will be arrived at after subtracting the rent, no matter what the accounting standard might say. So if we look at our cash You are looking at our P&L, right? Company— I'm looking at your cash flow statement which says operating profit before working capital changes is 169 crore versus 160 crore year before for H1. standalone. अच्छा लेट मी सी वन यू अगेन कम बैक इन द क्यू आई विल गिविंग यू द रिप्लाई या शॉर्ट सो सो आईल मूव ऑन तू माय वी नेक्स्ट हैड प्लान क्वेश्चन सिंस सर सो नाउ past over 2 years to reach 10% EBITDA margin in our appliances business. So how near or how far are we from that? And of course, in the light of the increase in the commodity prices and the forex depreciation, so despite this, is that target intact of 10% EBITDA margin in appliances business? तो यू आर टॉकिंग अबाउट कैश फ्लो आई वाज थिंकिंग कैश फ्लो स्टेटमेंट No, no, we are not. In fact, if you look at it, the increase in material cost itself is about 4-odd percentage. And therefore, that has really hit us as far as our gross margins and all those things are concerned. This is despite all the cost initiatives and all those things that we have done. Despite that, our BOM cost has gone up by about 4.3%. If that had got added And if that had not happened, that's a very, uh, theoretical thing, but if that were not present, then we would have been still not at 10%, but somewhere close to 10%. So what kind of price hike have we taken and what price hike is the industry on the whole taking because the rupee depreciation and the, uh, commodity inflation for everybody. So, uh, similarly, what is the price hike that we have been able to take in the appliances division, the weighted average price hike? Yeah, so the, the price hikes are happening, but are the price hikes the industry price? And we definitely look at every opportunity that is available to take a price hike without being, uh, uncompetitive in the market. So the market— so the industry has also taken price hikes, but the price hikes from the industry, uh, it has not been good enough, uh, to, to manage the, the, the bomb that is there. So And that, I think, is a phenomenon across the industry. While I wouldn't want to comment on other companies' performance, but I'm sure you would have read that it's a, it's a phenomenon across. So our price hikes have not been in line with what was required to pass on the commodity increases. So like you quantified that 4% is the increase in the commodity and the forex hit, The commodity increase is not 4%. I said the BOM increase. If you look at the percentage of net revenue of BOM, was about 4-odd percentage that is there, and we are nowhere close to that when it comes to our, our price hitting figure. And so also we had plans to decrease our fixed cost by 3-4 crore per month. So are we, uh, near— has some part already happened or it is still to take Please. So we have had some reduction as far as our staff cost is concerned. Uh, when you look at staff costs, there are 2 things that are happening. There are people who are leaving, and then we have an option of either filling it up or not filling. So we are close to about 100-odd positions we did not fill up. And then you also get the benefit of when somebody new is being brought in, you can bring him a more experienced person, if he's being replaced with a less experienced person, you get that benefit also. So as a result of it, as a combination of this, the number going down by an X number And because of initiatives that we have taken as far as salaries are concerned, despite giving, uh, the annual increment, we have been able to reduce our staff cost in Q2. Some of the others continue to improve. Yeah, because they're all seeing an EVS and all those things are things that, that keep increasing. So there is some impact as far as the staff costs are concerned. Now, sir, we had mentioned in our annual report that we had plans to decrease our trade scheme and discounts, which were approximately ₹1,800 crore, which is a very significant number. It is 25% of our appliances division revenue. So have we seen any progress on that count? So as I said, the idea is not to reduce the schemes per se. The schemes have to be effective enough to deliver what it is supposed to deliver. But what we have now done is that because there are these commitments that, that our partners do with us, we have been able to put in a factor wherein we say that if you don't do what you are supposed to do, then your payout will be accordingly adjusted. So the idea, I don't think, is to reduce, uh, things. We would rather have that our, that our, that our trade schemes actually deliver the targets that, that partner has agreed with us. So we'll continue to do that. We will put our initiatives in such a way that, that it is attractive enough to offer partners to deliver what, what they are committing to us. However, if they are not able to, which is only fair, if they are not able to do it, then their payout will be graded. Understood. Now, sir, our engineering division is a star performer and a consistent one at that, sir. And now the revenue last year of this division exceeded ₹1,000 crore also. Sir, so why don't we just demerge the engineering division which is mature enough to stand on its own feet so there can be enormous value unlocking? Somitra. Now, would you take this question? See, at this juncture, uh, we don't want to demerge because we have our focus on many things. You might have seen that, uh, there are many projects which are already in pipeline, so we want to focus on that. Streamline those, and then maybe in future, as We find it right. We will definitely think about your proposal, but at this juncture, no such proposal is on the cards. Now, sir, uh, we have 10 manufacturing facilities, and I can see that many of them are at the same location. Like, for example, we have 3 in Goa, 3 or 4 in Bangalore. Again, 3, uh, I believe in, uh, Kolkata or Howrah. So, so any plans to consolidate these facilities to basically streamline operations and reduce costs? Uh, As of now, there is no such plan. As of now, so much so here, as of now, there is no such planning to consolidate all the plants. Understood. And so lastly, sir, in the industrial, uh, washing machine segment, the, the commercial washing machine segment, sir, what would be the market size? And are we the industry leader over there, or over there also there is some competition of maybe Chinese imports or something like that? Hello, this is Govind Raj here. I'll take this question. According to the information whatever we have, uh, we are number one in that segment. Approximately about 20 to 25% is the market share. And there are players, uh, in, uh, who manufacture in India as well. There are imports coming from Europe and US. So last year this division did 104 crore revenue. So if we are 25%, then broadly the industry, the market size is around 400 crore. For the whole range? Yes, it's about 400 to 500 crores because there is no, uh, one agency which is giving the total market size. This is based on the information what we get in the market as well as the import data. Sure, sir. Thank you very much and best of luck. Thank you. Thank you. The next question comes from the line of Saket Kapoor with Kapoor and Company. Please go ahead. Yes, sir. Uh, firstly, in continuation to the question raised, uh, from the earlier participants, do we have an answer for the rent part which he raised about rent. I'll be coming back separately. Offline, you please ask the question to me, I'll be answering. Because what, what we can read from the cash flow from financing activities, there are 2 portions to it: the lease rent paid as principal portion and the lease interest portion. So yeah, both are there. So how to account for it? And yeah. Your point was— one minute. Your point is that why the lease rent paid principal portion have increased as compared to last year? Yes, yes. Inter— inter breakup is not available with me right now. I will come back. Please, um, answer the question to me offline, not in this call. Okay, okay. Now coming to the first is the engineering division. When we look at, uh, slide number 23, we have very well mentioned that we were looking at a new order booking to the tune of ₹500 crore, wherein we have achieved as of, uh, as of the event date, the order booking is ₹220 crore and the RFQs and all are mentioned. So, uh, if you could just give us some colors on how is this division going to shape up for the— for H2? And I think so that you were answering about the Tata project. So what is the CapEx that has been planned and what kind of asset turnover or margin you can outline for us? Uh, as far as H2 is concerned. As I told you, told the earlier speaker that We don't give guidance. If there is no market downtrend or economic situation going bad, We should be round about this level, definitely. As far as the order book is concerned, Yes, in 220 crores there are, there are splits of IFB Industries Limited. Those businesses are there. Uh, the a CapEx in Gujarat where we will be making product for the EV. Only that. Uh, has a CapEx of 100 and Hindu. EV car product. Because we, yeah, because we are governed by NDA. We cannot disclose now. It will get disclosed once manufacturing starts. 110 crore, and we will be manufacturing LED. I didn't get your point clearly, sir. You are not properly— I said it is Okay, and the CapEx is 110 crore, you mentioned? 102 crores. Adherency is something— adherency. Hello. Yeah. There's a lot of noise, sir, but I cannot hear you clearly. Okay, and we will be doing the CapEx for H2 itself. We will be commercializing the project, uh, in 2 phases. It will be 27, 26, 27, 27, 28. Okay, and what kind of asset turnover should we expect from this? Uh, I will check and come back. I will check and come back. Okay, so, and also, sir, when we look at the closing balance for CWIP, that is, uh, capital work in progress, was 40 crore, and for, for the first half, I think so, we have done ₹56 crore of CapEx a minute for purchase of plant and machinery. So if you could just segregate where have we spent the money, what kind of getting capitalized, uh, for the H2? How much will get capitalized for H2? Rajiv, can you take this question please? Uh, hi, this is Rajiv. So I think, uh, this is, uh, you are talking about one company as a whole, that, uh, correct, correct, correct, correct, correct. Yeah. From here I am taking this question. Our total, total CapEx in the first quarter 1 was 12.43 crore and quarter 2 is 16.15 crore. Totally 28 point 58 crore for the half-year period. Whatever there is at capital WIP, that is basically on various projects which are going on. The moment it will be capitalized it will be, it will be coming into the CapEx. As of now, it is not completed, so it is lying in the capital WIP. It will come in the main CapEx item the moment the job will be over. That, that is— I am telling you another thing. I am telling, I am telling you another thing. You, you had asked me that lease rate, then principal portion, why it has increased by ना ना फ्रॉम 19 को तू 57 को Out of that, whatever has increased, that is basically the lease rental paid in for our Gujarat plant. Whatever we have paid, 37 crore, it is basically is coming here. So that is why it is, it is being shown that 19 crore, 18.99 crore has become 57.45 crore. Another participant also asked me this question. Yeah, yeah, because this is coming under cash flow under financing activity. Okay, okay, okay. So this, this will, uh, this will be acting as a, uh, as on the asset side only. It will not flow through the P&L. It is not, not coming to the clinic. When you were mentioning that, uh, it will get— when it will get capitalized, uh, what is the timeline for this 39.5 crore? That we'll have to see item by item. Suppose in the capital WIP there are 50-55 items, we'll have to see line by line when it will be getting capitalized. Maybe by over the period of 7-8 months it should be capitalized, but I cannot tell you right now that how much will be capitalized within 35 months. Got your point. And one more point on the cash flow. I think so. Our, uh, the, the income tax net of refund is closer to ₹23 crore. So can you give me an understanding, uh, what have been the advance tax payment? This is because this is net of refund. How much have you paid for the first half? Advance tax payment, I think we have paid 11 crore— 8 crore, sorry, sorry, 11 crore in the first first quarter, and second quarter we paid around 14 crore. So 25 crore is what we have paid proportional to 45% of the tax liability. Yes, yes, 45%. Right, sir. So, and last, uh, and so lastly, sir, for this share of loss from the associate, I know it's— I think it's pertaining to the refrigeration part of the story, but since it is affecting our console number, so, uh, just to understand what were key reasons why Uh, is our associate, uh, is in red, or we— are we losing money on the venture? See, the associate is a separate company. IFB Refrigeration Limited. It's a call of IFB Industries Limited. We will not be discussing here, but the share of loss of the associate I can share with you. We have taken 6.23 crore in the first half against last year 3.23 crore. Basically, Refrigeration has increased their loss. Because very high material cost— material cost has gone up by 8 to 10% because basically in their case most of the materials are oil-based. And due to this war, all the materials price has gone up. So it has actually affected the P&L of IFB Refrigeration. I am not going into the details, but we have taken a loss of 6.23 crore for the 6-month period against last year 3.23 crore. The loss has increased in our P&L for the associate company. by 3 crore from 3.23 to 6.23. Right, right. Okay, sir, thank you for all the reply and hope for a very prosperous recovery for IFB as an organization also. And for everybody, uh, all the questions. Thank you. Okay. The next question comes from the line of Lakshminarayan KG with Tunga Investments. Please go ahead. Yeah, sir, if I just look at the small appliances and the large appliances— when I say large appliances, I'm referring to the segments which we are in— I, I think based on our channel checks, we see that the small appliances have you know, they have taken price increases very easily, whereas large appliances companies haven't taken any meaningful price increase. So, um, uh, you know, just want to know whether that is true, that that is like the industry-wide nobody's taking price increases. And second, uh, if I just look at the numbers which one of your large competitors have actually reported today, somehow they have maintained their, uh, their margins, um, you know, at a gross level. I want to understand, uh, you know, is it— what is, uh, what is holding us back in general? That is number one. Uh, second, I want to understand, uh, what kind of expenses we have incurred in advertising, sales promotion in the last 6 months and how that compares with the previous years. 6 months. Mr. Laxmi Narayan, here I will be taking the last question of yours first. The sales promotion expenditure in our Profit and loss account, actually there are 2 parts. One is pure advertisement and sales promotion, another is CSR expenditure. Firstly, I am telling you the quarter 2 expenditure. Quarter 2 expenditure, in case of the company level, sales promotion expenditure has come down from 32 crore to 25 crore. CSR expenditure stands same, 50 crore to 50 crore. Total sales promotion including CSR, it is coming down from 81 to 75. And it is 4.96% on revenue this year against last year 6.13% on revenue. And for the half-year period, for YTD September period, the sales promotion expenditure have gone down from 62 crore to 44 crore. CSR expenditure remains same, 95 crore to 95 crore, and sales promotion expenditure including CSR expenditure from 156 has come down to 139 crore. In terms of percentage to revenue total, it is 4.58% in the current year as compared to last year's 5.92%. Yeah, as far as the question of small appliances and large appliances, I'm not too sure how much small appliances is taking, but because perhaps the ticket size is smaller if I were to take a good increase also, what would impact the customer might be low. Coming to our portion, as far as large appliances are concerned, yes, I do agree that we can definitely do with a lot more of price increases than what we have what we have done. As a company, would have liked to do it, but we need to be competitive, and therefore we have been cautious when it comes to our price increases. Also, the industry might be a little cautious because these are peak selling periods for us, and therefore a lot of other industries we are finding that because the products have become completely uncompetitive. There are other industries which should have also done well during this period who are reporting that their shipments are bad and the sales are bad and things like that. I don't want to comment on the industry. But there are other industries which normally tend to do well during this period of time who went ahead with large price increases, and the general paper reports say that the products have become completely outpriced and customers are delaying their purchases. So I think it's a little cautious approach by the industry that because they are larger value items, and therefore during the festive period we should not be seen as completely outpriced, where a customer says that, okay, fine, let me delay or postpone or cancel my, my purchase. But to your point that we could definitely do with better price increases. Yeah, I want to understand what is our sales mix across multiple, you know, regions in India, either by, by north, east, west, south, or by Tier 1, Tier 2. And, uh, and also in terms of our channel mix and how, uh, in the last 1 year or so that has changed, what kind of distributorships or dealerships or sales points you have actually increased. Um, any, any color on that? I wouldn't get into too much of details, but for the industry, South will be a large market. So, so South is traditionally a large market for the industry, whereas followed by West and then North and then followed by East. That is how normally the industry operates in our, in our category. As far as our, our counters are concerned, I think some time back I'd said that our concentration is on the key outlets. We have identified a set of key outlets which is where a large portion of the business is happening. So our entire focus is on that, that we give superior, uh, coverage to those key, key counters that we have, we have identified. And they are spread across, across the country, across tiers. And, and things like that. E-commerce is also a large player depending on, on, on festive periods. E-commerce does well in certain periods and then suddenly goes quiet for the remaining portion of the period. So it's a, it's a very dynamic market. Uh, months change. weighted distribution that becomes important. It's not just numerical distribution that is important, it is weighted distribution that is there. Unlike in a typical FMCG where you say that, okay, go and give your product to every shop and and look at numerical distribution. Here, I think what is very critical is the, is the weighted distribution. You tend to go to a certain set of counters when it comes to buying your home appliances, unlike in FMCG where you might just walk across to the nearby, uh, shop and say that, okay, fine, I don't care, but I go and buy out there. So, uh, we go by weighted distribution, and, and what is important therefore is that how do you get more out of, out of those critical counters. Uh, sir, sorry, is there any, uh, places where you are under-indexed with respect to the market where you can actually really catch up more? And also, I mean, how have you Because sales is a mix of distribution expansion and product expansion, uh, what kind of footprint expansion you have done? Let's say if you raise it to 100 like 105 or 110. What is the kind of expansion you have done on the distribution? No, here, if you look at the appliances division, it is So there it becomes— because this industry also operates in a way by, by which the, the large counters give you the space, but everything else is your responsibility. And therefore, getting your displays up, getting people to, to promote your product, uh, ensuring that the, the the returns per square feet as far as, as far as the counter is concerned. How do you able to maximize it, ensure visibility is there? And those, those are, those are the tricks of the game. And therefore, a lot of focus is on, on ensuring that we get those right. Got it. Thank you. Thank you. The next question comes from the line of Pulavarti Kiran with Pulavarti Finserv. Please go ahead. Yeah, hi, thank you for taking my question, sir. Just one, uh, question on the capital allocation. As an organization we were never, what I can say, taken debt to expand. Uh, however, you were more disciplined in terms of your capital allocation, in terms of maneuvering the growth versus the CapEx. Do you foresee now there are many more opportunities both in engineering and consumer durable business where you can use debt more effectively to improve the ROCs? Uh, so basically in our company, basically we are following a principle. Whenever some CapEx or project is going on, we are doing a 1:1 thing. Nothing we could do. But now, particularly engineering division is on expansion mode. Many things are coming in that division. So basically, going forward, we'll be understanding the requirement, and accordingly we'll be finalizing that how much to borrow and whether we'll be using our internal accrual also. Because we have money in our balance sheet, we can use that also, we can borrow also. Final decision has not been taken, we will be taking it, but I told you that As a policy, we are generally doing 1:1 debt and equity. But in spite of that, your net debt has always been cash positive historically, isn't it? Yes, cash positive always. Can Dakshin Sunway Group Hello? When that change— what I mean to say is, look at the consolidated— I am not in a position to tell you this at this point of time. Uh, so I told you that going forward, based on the situation, based on the requirement, will be— we may change our policy. But as of now, generally, we— whatever this battery chain project is coming battery can project is coming in Gujarat, we are going to do one is to one there. So understood. Now, as of now, there is no change in policy. Understood. And so one added question over there is that you were always suggesting that you were evaluating many potential targets to acquire. Uh, even in the annual report you said that you have almost evaluated 70+ companies, but were unable to proceed on that. Uh, if you can just help us understand, in the last maybe 6 to 7 months, is there any update? What has been your experience in terms of acquisitions? How do you think about it? I will take this question. We have seen more than 72 companies till date. Uh, there are many more companies which are out for sale, etc. We— our objective was always to go for a company which has synergy with our product line, number one. Number two, it should not be disruptive product line means today we buy the company and 7 or 8 years or 10 years down the line the product becomes obsolete. So That All those parameters which we are looking forward to— a good customer base, a good product line, having future growth opportunities. And not disruptive in nature. All these things we are trying to list out. Sorry to interrupt, sir. You're not audible. Whether he's connected or he is disconnected now. Sorry, he's connected but just not audible. I can— we can move forward to the next question. Sure, sure. So A reminder to all the participants, please press star and 1 to ask a question. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for the closing remarks. Okay, I'm Sandeep Abraham here. As I always say, it's a pleasure to be able to interact with our investors and give them an idea of, of where we are and what is it that we are looking at. A lot of the questions that you ask help us sort of hone what we are doing. And make things better. There were questions that came on fixed costs. There is always this question of increasing— growing at 20%. There's this question on EBITDA. being double digits. So these are questions that keep coming, and these are questions that we are, we are truly looking at. How do we ensure that we deliver some of those things? So we really are appreciative of the questions that you are asking and the time that you are spending, spending with us. It will help us take IFB to the next level, and with all your help and your guidance and all your interests that are there, we are confident that we will be able to do that. It's also festive time, so on behalf of the entire IFB group We'd like to wish all our investors a happy Dhanteras and Diwali, and I hope it's going to be a very prosperous period for all of you and for us. Thank you very much and festive greetings. Thank you, sir. Ladies and gentlemen, on behalf of Nirmal Bang Institutional Equities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.