Ladies and gentlemen, good morning, and welcome to Orient Electric Limited Q1 FY23 Earnings Conference Call hosted by Ambit Capital. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you and over to you, sir. Thank you. Hello, everyone. Welcome to Orient Electric's 1Q FY23 earnings call. From the management side today we have with us Mr. Rakesh Khanna, Managing Director and CEO, and Mr. Saibal Sengupta, Chief Financial Officer. Thank you, and over to you, sir, for your opening remarks. Thank you, Dhruv. Good morning, everyone, and thank you all for joining us for our first quarter results discussion for the financial year 2023. I hope all of you and your families are staying safe and healthy. At Orient Electric, we continue to follow all COVID-related protocols while maintaining physical presence for all business activities. Coming to our overall performance, the first quarter of fiscal 2023 saw an overall positive performance in the face of multiple challenges faced by the industry. For Q1 financial year 2023, OEL continued strong revenue momentum, growing by 47% year-on-year. The year started with early summer with record heat waves across the country, resulting in healthy demand for cooling products. By the middle of May, early rains in several parts of the country and steep inflation dampened the consumer demand. At the same time, correction in commodity costs indicated a likely price correction, thereby leading to inventory correction by the trade, which led to lower primary sales. Despite these lags, OEL was able to post revenues of INR 622 crore for Q1 financial year 2023, growth of 47% over last year and a CAGR of 14% over last five years in Q1. Following on from financial year 2022, our concern for protecting our gross margin continues unabated. We have been able to contain commodity price pressure on our margins through strategic price corrections and efficient cost control measures. Our gross margin witnessing severe pressure of more than 217 BPS over the last three years due to severe commodity inflation. We arrested a potentially much sharper fall in EBITDA margins, limiting it to 117 basis points in Q1 since pre-COVID levels. Company has been evenly focused on qualitative growth along with healthy profitability and market share. With higher raw material costs, inventory management remains one of the crucial elements in balancing growth. Our working capital days have been consistently coming down over time despite multiple challenges over the past few years. In Q1 financial year 2023, our working capital stands at 33 days at par with pre-COVID levels, and our cash flows from operations remain healthy at INR 45 crores for the same period. In terms of liquidity, our net cash position improved during the quarter due to improved collections and better working capital management. Looking ahead at Q2 financial year 2023, we hope to improve our net cash positions further. Despite experiencing mixed trends during Q1 FY 2023, the ECD segment grew by 37% year-on-year in revenue. The reported heat wave in the first half of the quarter helped liquidate channel inventories of coolers. Due to early rains in some parts of the country, we noticed early channel stocking for water heaters towards the close of the quarter. Despite the headwinds, OEL was able to marginally grow ECD revenues by 4% compared to pre-pandemic levels, thanks to smart marketing, distribution strategies and price management through cost control. Our lighting and switchgear segment witnessed a much promising and optimistic scenario, de-risking the seasonality factors that have typically impacted OEL. This segment reported revenue growth of 80% for Q1 FY 2023 year-on-year, displaying great buoyancy and resilience against the macro headwinds I referred to earlier. After some slowdown in B2B business in FY 2022, Q1 FY 2023 has been witnessing an uptick on the back of higher rates and portfolio expansion, including some prestigious orders in façade lighting. The lighting business continues to deliver strong growth at 79% year-on-year in Q1 2023, led by consumer lamps and luminaires, which are enjoying strong demand from the homes, small offices and showroom segment. We have noticed that government spending has started picking up, which should keep the order book for lighting segment on a strong momentum. Lighting orders for our façade lighting have also seen good traction. With a healthy inquiry pipeline, the company remains optimistic about its prospects going ahead. OEL's switchgear business continues to grow well, thanks to company's new range of switches catering to mass premium segment. This line is being very well received by channels and consumers alike, and the pick in volume continues to fuel the pace of growth. Being able to add new products and swiftly change our portfolio mix makes OEL competitively agile in this segment. Furthermore, the continued efforts in expanding our distribution network through digital means have helped in increasing the share of this segment in our overall revenue pie. OEL has been making good progress in building a base for its lighting and switchgear segment, which will start reaping material benefits in the medium term. During Q4, financial year 2022, we transitioned our distribution approach for our fans segment in under-penetrated markets of Odisha and Bihar with direct to dealer approach and away from our traditional approach of selling via master distributors. With much success in this approach becoming evident, in Q1 financial year 23, we decided to further extend this distribution model to other states, UP, Karnataka, AP, Telangana, where master distributors' access has been weak. Although due to this transition, there has been some weakness in sales in these markets, we hope that in the coming period, this action will allow us to improve our market shares further in these under-penetrated markets. The company sees this as a positive step, as it will help us to further expand in these under-penetrated markets in a more controlled way. While India's path to double-digit growth has become more challenging due to general inflationary pressures, the country's underlying economic fundamentals, along with government's goal for self-sufficiency, are likely to protect the country's long-term positive outlook from the present short-term headwinds. Our fundamentals remain robust and future-ready to handle the current scenario and capitalize on new possibilities. We believe that our new Hyderabad plant, which has already broken ground, will enable us to sustain our capacity to deliver quality growth. In the meantime, our unremitting focus on consumer centricity has helped redefine processes across all functions for developing and delivering innovative products to enhance consumer delight. Our NPI score continues to be above 45%. We have also made a clear roadmap, along with external consulting partners, to speed up our progress in the fields of e-commerce, cost reduction, and go-to-market. This is tangibly giving us fresh energy for growth. Thank you all for joining with us, and thank you and the team. On this note, I now hand over back to Dhruv. Sir, shall we open for the Q&A session? Yes. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Good morning, Rakesh and Saibal. Thank you for the opportunity. Sir, two questions. Firstly, in your own assessment, was first quarter, you know, in line or below your internal expectations? If you could help us understand, you know, some kind of outlook for fiscal 2023, because, you know, the way we understand base is high for last year going into the next nine months. Whatever you can talk about for ECD and lighting and switches, you know, do we really grow in double digits this year? You know, could you please help us understand this, for, you know, over the next nine months, what should we expect? Good morning, Rahul. First of all, I must tell you, I'm not a fortune teller. Yes, the Q1 performance has been below our expectations, especially in the fans portion. Everything else did pick up well, but the sudden slowdown in the month of May and June, for fans especially, has been below the expectation and below our plan. It is difficult to say how it will pan out in future, but we do see that there is going to be a double whammy. There are inventories at high cost and the trade will start taking correction in the inventory. The Q2 may see a certain level of inventory correction. The fact that commodity costs are easing out, we expect that it will help the demand to again kick back and help the industry to cover up the lost sale. Overall, it's a positive judgment. Once again, I would clarify, I do not tell future. Got it, sir. Secondly, on the margins, the second quarter is generally weaker than first quarter seasonally for Orient historically. You know, how should we think about in our minds over the next two to three years? I know, you know, as you said, you don't talk about short-term trends, but any long-term outlook on margins, please, if that's possible. We definitely have our eyes on margins, and we believe that industry has been always supportive of carrying the margins home. We continue to have our faith, and we believe as the commodity will start getting corrected, a substantial part should get back into the margins. We do hope margins to come back. However, it all depends on what is the competitive landscape during that period. Got it, sir. I'll come back in the queue. Thank you so much for answering. All the best. I- Thank you. I will also add one more thing, Rahul, is the kind of efforts that we are putting in our cost reduction will hopefully help us to garner higher strength to defend our market shares and protect our margins. Got it, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead. Hi, sir. Thanks for taking my question. If I look at the last six quarters, you know, your gross margin are in the range of 27%-28%. If I look at the competition, assuming that headwinds and the tailwinds of the industry in last six quarters would be same for all of you. The other electrical companies, you know, almost achieved their pre-COVID levels four, in four quarters out of six, and we are still about at 27%-28%. Just need your comment on it, how one should look at, you know, this kind of a performance and whether we should be going back to our own original pre-COVID gross margin, where we were at 32%+. That's my first question, if you need a comment on that. Second, on the consumer demand, you know, inventory correction of the industry, the price correction, you know, it must be for the competition as well. Generally, on the consumer sentiment, on the consumer demand, you know, how you're looking things at the ground level, given the high inflation across the product categories, in electrical, even other product categories as well. Just these two questions. Thanks. Regarding the consumer demand, as I said, we are seeing the demand in lighting to be continuing well in the consumer side. In the government side, it has been little low, but we are hopeful that as per government's continuous promise about investing in infrastructure, that demand should also quickly come in place. Fans are growing at a very good pace, and we are getting very well placed there. In terms of switches and switchgear, for us, because we are very small, I don't know to what extent market growth will make a difference, but I understand that housing has shown some good uptick and the housing related products are moving on, and this segment is also seeing an uptick. When it comes to water heater, I think it's doing well. Q1 we have seen good growth. We do hope it will continue. Coolers, this time the trade inventories have got cleared. We do hope that will also take off well. Consumer demand is doing very well there. In all products it's going well. It is just that in fans for some time we have seen a little dampening of demand. I'm very hopeful that will also come back in place. Overall demand should be good. As we look at the pre-COVID gross margins, our efforts will be there, and as I said, we are hopeful that industry will provide that space for the gross margins to go to pre-COVID levels. In terms of relative performance on gross margins, I would like to understand from where you come because my understanding is that we have been able to keep our gross margins in terms of position at the similar level. Although our gross margins have been lower than some of our peer group companies and we are trying to build them up, scale also plays a role there. As we build up scale, we should be able to start bridging the gaps. All right. Thank you very much for your answer. I'll come back in the queue. Yeah, yeah. Saibal sir, you were saying something. Sorry. Yeah. Just to add on that, since you mentioned about the sequential and pre-COVID, just be mindful of the fact that pre-COVID in 2019, we had seen the lowest levels of commodity prices that were trending. Not lowest, but relatively much, much lower levels of commodity prices that were trending. The quarterly, we have to be a little bit mindful about the quarterly mix that happens as far as our company is concerned because of the product mix changes from quarter on quarter. Having said that, we have been considerably doing well in terms of consistency, holding the gross margins for the last couple of quarters despite the commodity inflation that has happened. With the commodity prices slightly declining at this point of time, we have to see how it stabilizes in the coming quarters. Given the fact that we are holding high-cost inventories from the previous quarter, it'll take a little bit of time, maybe to stabilize to those levels. As and when we pick up and we go and change the product mix over a period of time, yes, it should start keep coming back. That will take a little bit of time. It will not be appropriate to expect it immediately in the given context and situation. I hope that clarifies anything. Thank you. The next question is from the line of Rahul Kataria from Haitong Securities. Please go ahead. Good morning, gentlemen. I've got a couple of questions. First on your distribution. You know, the distribution revamps that you started with fans business, you know, in Odisha, Bihar. Now, you know, done that in Karnataka and UP. Could you give us a sense on your overall distribution revamp plan? You know, do you intend to go pan-India? And if yes, is it gonna be restricted to a particular product or across the product? And what's the kind of timeline that you have internally for this entire transition of your distribution network? That's the first question. Okay. Yeah, Rahul, we have taken up these states. The first two states, Odisha and Bihar, are already stable, and they're doing very well. The next states are in the state of transition. As I said, it has put a pressure on our total numbers during Q1, but we are very hopeful and looking at the results from the first two states, that we will be able to make up good market share in these states also. This step is being taken because some markets remained under-penetrated under our RGL model for a long time, and we have taken this action only in the markets which were under-penetrated. Wherever we have a strength of a very good master distributor, we want to maintain that strength because that's an amazing strength that we have, and we really value that strength. We will continue with that wherever our strength is strong. We will pick up whatever is good for the market. In terms of which all categories, yes, this particular master distributor system has been only for fans. For the rest, we anyway were going directly to the market. However, to top it all, as I said, that we have partnered with external partners and developed a very strong roadmap for good, for go-to market with very strong digitization. That will expand to all categories in due course of time. As of now, we are, we started in all directions, but our main focus is on these states to put the right working model, which will become a model to be replicated in the rest of the states and rest of the businesses. You know, timeline, when do you intend to finish this entire revamp in plans? See, normally, a full setup of GTM takes one to two years. Since we have a great partner, we have a very clear roadmap. Our Evins digital program has already taken off and well established. We do hope that we should be able to complete it much earlier. Okay. My second question is on, you know, the lighting and switchgear business. You've done well in this particular quarter. Can you split lighting and switchgear revenue and growth in each vertical, you know? And also if you can comment on profitability of each vertical. This will essentially help us, you know, compare the performance with peers. That's the reason to ask this question. You can take most of the performance as lighting-driven performance. The numbers of switchgear still continues to be small. Within the lighting switchgear it is less than 10%. However, both the businesses are profitable today standalone. Most of the profits being driven by the lighting business. Sir, my last question is on the fans. Yes, sir, you were saying? Carry on. Carry on. Sir, in the fans business, you know, with star rating being effective from January 2023, what do you think is price rise which is expected, you know, because of this transition? Your thoughts on inventory, how that typically will move because of this. You know, I'm doubtful if there would be pre-buying in this transition, but just would like to hear your thoughts. Also if you can finally comment on your market share in fans right now. That's all from my side. Thank you. In terms of fans market share has not. There has not been much movement. We've been tracking it. It remains anywhere between 18%-20%. Difficult to have any kind of a syndicated data to say, but that's our estimate. Now in terms of the transition to the star rating, there are different views how it will transition. Some believe that there will be a lot of pre-buying by the channel of the non star rating at a lower price. Some believe that people will actually not take that risk and start buying the star rated. We are trying to assess the mind of the market. It will all depend on how much is the cost difference finally between the star rated fan and the non-star rated fan. There are enough efforts going on how the cost difference between the star-rated and non-star-rated can be minimized. Everybody in the industry, I'm aware, is working in that direction. If the cost difference can be minimized, it will possibly go in favor of the star-rated fans. We're keeping an eye on the ball. We're constantly working hard towards minimizing that cost difference. We will know in another two, three months how the swing will happen. Sure. Thank you very much. Thank you. A reminder to all the participants to press star and one to ask a question. The next question is from the line of Aakash Javeri from Perpetual Investment Advisors. Please go ahead. Hi, good morning, and thank you for the opportunity. Just extending the previous participant's question, that out of the entire fan market, how do you see this evolving in terms of the BLDC penetration over the next two to five years? And would this technology be easily accessible to unorganized players or would organized players gain more market share over time? Aakash, first of all, BLDC is a very simple technology. There is no great thing about it. It's a fairly simple technology. The transition is dependent on the cost difference between the normal induction fan and the BLDC fan. In any electronic product, the cost continues to come down as the scale increases. We believe even in BLDC, the cost will continue to come down as with the increase in scale because a significant part of the cost lies in the PCB. My own estimate is that it will not be an immediate swing. There are pros and cons between both of them. The BLDC fan has all the advantages. There is no sound, it is power efficient. All those advantages are there, but the technology is not fully stable as of now. The failure rate between induction and the BLDC fan, the failure rate difference is there today, mainly because of the power quality. If the prices keep falling down, it will move anywhere from 30% will be BLDC to 50% or will move to 70% depending on over a period of time. It will definitely move in favor of BLDC because the technology will stabilize, the PCB qualities will stabilize. It will move in that direction. Sure. Thank you so much for that and all the best. Thank you. The next question is from the line of Praveen Sahay from Edelweiss Financial. Please go ahead. Hi, sir. Thank you for taking my question. Related to the fan, as you had mentioned, there is a slowdown in the demand. Can you give a color on the premium versus the economy? How is that? Praveen, no difference change. It continues the same way. The mix is similar. There is no special shift that we are seeing. There is a consistent movement towards more of decorative and premium. At the same time, as more and more is moving from unorganized to organized, all that movement is coming from the economy side. The economy is growing because there is a movement from unorganized sector and the premium and decorative is moving because customers are steadily moving towards premium and decorative. Both of them are expanding. Okay. Second, on the ECD price hike. Have you taken the entire, you know, whatever the inflation in the raw material you had taken the price action that absorbed in the term? Praveen, whatever could be taken has been taken. Going forward as the material prices have started easing out, the need for price increase is not there. In fact, what we need to work now on is how quickly the old high cost inventories can be cleared and we take advantage of the cost reduction, and that's how the margins will get on to improving. Okay. Thank you, sir. Thank you. The next question is from the line of Paarth Gala from JM Financial. Please go ahead. Hi, good morning. Thank you for the opportunity. Two questions from my side. One is in the opening remarks you spoke about, working with a consultant, on your e-com initiative, cost reduction and distribution. You have touched upon a little on the distribution side, but, you know, it would be great if you can, you know, talk a bit more on the initiatives in each of these, identified, areas. That is number one. Second is more of a bookkeeping question in terms of, what would be the split, you know, the revenue split for the FY 2022 of each of the key categories of water coolers, air coolers, etc.? Yeah. What we're doing in each one of them, I have not fully understood your question, but let me try and answer as much as I've understood. In e-commerce, we have a clear, very clear view that e-commerce is going to be very important going forward for us, and it's critical that we establish ourselves quickly in e-commerce. Therefore, there is a roadmap drawn for all of our products, how we're going to increase our presence in all the platforms, be it our own brand dot com or be it all the marketplaces and the new coming platforms. How do we improve the back-end system, et cetera, and how do we improve digital presence in terms of marketing on digital, the share of spends on digital, share of visibility on digital. There is a whole game plan around it. It goes along with the talent onboarding and making a very strong team around that. When it comes to cost reduction, you are aware that we already have a very strong program called Sanchay, which is highly institutionalized and digitized, with a very high visibility of every single cost reduction initiative we are taking with a clear measurement, which goes to finance team. We're now giving it a further thrust of putting big speed to this, and we are very hopeful that we will be able to drive the cost down much faster than ever before. The third go-to-market, we have taken these new states, and we are building up a model go-to-market system, which will be highly digitized. We do target high market shares, and this particular model will then be replicated across the country. Thank you, sir. I'll leave the second question to Saibal to answer. Oh, sorry. Can you repeat the question part once again, the second part of it? Yeah, yeah, sure. Sir, just, you know, a broad breakup in terms of the key categories we have in terms of their contribution to revenue. For FY 2022. Any specific, which categories you're talking about? Sir, you can say fans, air coolers, water heaters, kitchen appliances and lighting switchgears. We do not give so much of detail. Maybe I can discuss separately, but let me give you an idea. Normally, fans will be roughly around 60% of the total business and with slight depression right now, a couple of percentage points would swing. Lighting switchgear, as you have seen, it already covers a good 26%-27% of the total revenue, out of which switchgear is just about 2% of the total share of business and lighting is about 25%-26%. That's how it works. That is a trend that remains with little bit of quarterly skews which happens on quarter-to-quarter basis. Yeah. Thank you, sir. I'll just get in touch separately for the other categories. Thank you for answering my questions. Thank you. Anyone who wishes to ask a question may press star and one. The next question is from the line of Bhargav Buddhadev from Kotak Mutual Fund. Please go ahead. Yeah, good morning, and thank you for the opportunity. Sir, if you look at the annual report and the Sanchay program, it says that we've saved about INR 45 crore in FY 2022. Now this is a big number. Just wanted to know how sustainable is this savings and if you can sort of elaborate on a couple of areas where we have sort of extracted such a huge saving. Great. Hi, Bhargav. A few things. First of all, INR 45 crore is not a very big figure when we consider that most of the good companies, they aim to take off, 2%-3% every year from the costs. It's not a big figure. We have to also work in the same direction. As I mentioned a little while back, Bhargav, Sanchay is a completely end-to-end digitized platform. It's called an IdeaBridge, where every single cost reduction idea is put in place. There is a proper team which works on it, follows it through. The cost reductions are measured, finance approves and recognizes these ideas. It's a culture that we have built in the organization where everybody is constantly working towards how do we optimize the design, by using the latest in the technology and by working the most optimum design, negotiations, et cetera. It's fully sustainable. As I said, Bhargav, going forward, we would want to increase this further, our capability in this direction, and we believe that this is something that will help us to maintain our prices and guard our market shares in increasing competition. Understood. The second question is on the B2B lighting side of the business. Is it possible to broadly elaborate how big this business would be within the lighting business? What we understand is that the pipeline is now sort of getting built up again, especially on the street and façade lighting and a lot of innovations are also being made herein, which are more tech-savvy. If you can throw some light on this side of the business, and this would be my last question. Bhargav, to say at an industry level, B2B would be close to 50%. I'm saying the range, okay? Whereas our own business is in the range of 15%-20%. We have a long journey to go in B2B business, and we see it as a great opportunity because the success we have made in B2C business gives us confidence that we are capable of delivering, the similar success in B2B business also. The recent success, in the B2B business, especially when we look at façade and the kind of orders we have been executed and built the confidence of our customers, we believe that we should be able to constantly increase our share of B2B business in the total business. Okay, great, sir, and all the very best. Thank you. Thanks, Bhargav. Thank you. The next question is from the line of Anirudh Doshi from ICICI Securities. Please go ahead. Yeah. Thanks for the opportunity. Sir, during COVID, expansion of distribution was bit impacted. What are our strategies for FY 2023 and FY 2024? Mr. Doshi, I would request you to speak on the handset. Your voice is not audible. Yeah, I'm speaking on handset only. Yeah, I will try. Is it better now? It's better. Please, speak little softly. Yeah. Anirudh, can you keep the mic a little away from your mouth? I think so. Yeah. Is it better now? Yes. Much better. Thank you. Yeah. Sir, what is the strategy to expand distribution over next two years? I guess during COVID expansion of distribution was relatively tougher, but now what is the strategy in FY 2023 and FY 2024? Lastly, we have seen some of the durable companies are doing special efforts to penetrate more in rural markets. What is our strategy on that also? Yeah, thanks. Anirudh, the distribution expansion is in two parts. As I always say, one is the reach, and one is the reach which we can influence. Today our reach is fairly high. We are available in more than 100,000 outlets that we have the reports which are, you know, even four years back we were available at 145,000 outlets. The reach is good. What is important is the quality of the reach and our ability to influence that reach. The programs that we have taken up with the implementation of DMS and SAP across, the objective is to start gaining visibility and influence on our reach, that we can start extracting higher counter share from all the all the important counters. We have started this exercise sometime back. We have gained quite a few quite some strength in this. Now what we're doing in the go-to-market states, we are building a very clear zero-based structure which we believe will be a role model for all other states and all other businesses. Having said that, our Connect program with the retailer continues to gain traction. Today we have more than 50,000 retailers on Orient Connect already connected with the completely geotagged. On the other side, in sales force automation also we have another more than 50,000 retailers who are clearly geotagged today with full visibility. We're progressing on that. Our target is to reach out to a visibility level of more than 80% in the market so that we are able to clearly influence the retailers where we are there. This will include rural penetration because our new distribution is going district-wise micro markets mapping, and therefore we will be covering all the rural penetration also. Yeah. Thank you. Thank you, sir. Thank you. Anyone who wishes to ask a question may press star and one. The next question is from the line of Aditya Bhartia from Investec. Please go ahead. Hi. Good morning, sir. You have started engaging with dealers in the last couple of quarters directly. While we understand the long-term rationale of the move, is it something that is creating some near-term disruption in the business as well? Oh, yes, it is. In those markets, as I said, these are transition markets. If you're referring to the same markets. Yes, absolutely. AP, Telangana, Karnataka. Yeah. Of course, during the changeover time for two to three months, there is a disruption because the previous distributor is on his way out, the stocks have to be adjusted, the accounts in the markets have to be reconciled. I'm very happy that in the two markets where we completed the transition, there have been no bad debts, no loss of money, no loss of sale, and we have very beautifully transitioned to the next model. We will aim to do the same thing of very smoothly transitioning from one particular distributor to a set of the next distributors, so that the health of the market relations remains in good condition. Yes, in the process there is the delay, because there is a blackout period when we will not sell and we will only do the account reconciliations and collection and stock adjustments. Thereafter it picks up at a very good pace. Sure. This disruption is mainly on the primary sales side. There's inventory correction that takes place in the system or even on the secondary side we end up losing market share on a transient basis? The attempt is only to limit it to the primary. To a large extent we are sure that we have been able to limit it to primary, but a few slips here and there during the transition period cannot be avoided. After the transition, the gains are so healthy that they'll make up for any such kind of a small aberration here or there. Understood, sir. My second question is on the performance when we compare it with some of the other electrical companies on a three-year basis. For the ECD segment, we are having roughly flattest revenues on a three-year basis, and that follows an already kind of a weak fourth quarter when inventory in the system for Orient was on the lower side. Conversely, some of the other electrical companies have delivered somewhat better numbers on a three-year comparison basis. Where do you think what really has impacted the performance of Orient, and how would you see that to be improving over the next few quarters? Thanks. Instead of three years, go to four years, and you will see the difference. You know, what happens is there are movements quarter-over-quarter, and if you're taking the cutoff point, normally I would do it in at different levels to see the difference. Because in that year of 1920, we had grown by more than 30%, where the peer group had grown by a very small number. As I said sometime back that if you see the CAGR growth of last five years, Orient Electric you would find is one of the highest CAGR in the last 5 years. Just have a look at, you know, cutting the number of years at different levels. Look at it four years, and you will find a different story. Absolutely. No, I completely agree. We had a very strong growth in one of the years, and since then it has kind of tapered off. Just want to understand whether that growth that we had has kind of taken into account the growth that could have followed in the next few quarters as well, and it's a normal kind of correction that has taken place. Or do you think something has gone wrong, especially during the COVID period? Maybe some of the larger companies doing something differently. Just want your perspective on that. On a four-year, five-year basis, I completely agree. Two ways to look at it. One is the year-year and second is the full five years. If you see both ways, you will find that Orient Electric is doing fairly well with respect to the peer companies. The quarter-on-quarter variations are a little, you know, I don't spend too much time on them. When you see overall year-on-year, you will find that there is a steady performance. It happens that sometimes a particular brand takes a correct price correction at one time, the second brand takes a little later. It all evens out. A quarter here or there, it all evens out. You have to see it that way. Take five years and take four years, three years, and check it out. You will find that the performance is absolutely in line or better than the peers. Understood, sir. That's helpful. Thank you so much. Thank you. The next question is from the line of Ashish from Infinity Alternatives. Please go ahead. Thank you, sir. I just wanted to kind of take a slightly longer term view or a medium-term view. We've seen a five-year growth rate of mid-teens. There have been bad years and good years, as you rightly said. Let's say going forward in the next three years, if I were to look forward, what is the aspiration level from a company perspective in terms of growth rate and in terms of the operating margins? Where do you think can we kind of hit the mid-teens kind of margins, or do you think we'll continue to be at the low teens? Ashish, once again, if I could have seen tomorrow, I would be doing many better things in life than my job here. I cannot see tomorrow. No, I agree with you, sir. Absolutely true for all of us. I'm just saying it from an Ambit perspective. Our aspirations are definitely much higher. We want to do a lot more. But at the same time, we will always be prepared for how the market moves, and therefore are we prepared for the downside and upside both. We stay grounded at all times. We will take decisions based on the best possible estimates while we keep our aspirations very high. All the actions that we're taking, for example, the kind of initiatives which I spoke to you a little while back, are all to actually support the great aspirations that we have built up for ourselves as an organization. We think there are great opportunities in front of us, and if we work hard, there's a lot of success for all of us there. We will be working in that direction, but I refrain to say any numbers there. Okay. Maybe I'll just focus. In terms of short term, do you see any challenges? Because commodity prices seem to be easing off, COVID seems to be behind us. Do you see any challenges over the next short term as you stand today, or do you think it's time to be aggressive in the marketplace? Look, there are definitely challenges. For example, the entire industry today, and I will talk about the industry not for only us. Entire industry is sitting on a high-cost inventory. Okay? One of the reasons why industry is sitting on a high-cost inventory is because the costs were constantly going up. People booked, people produced the material, and then suddenly the commodity fell down, and also the demand fell down. Everybody has inventory at hand. On the other side, as the commodity starts trading down, the trade will not pick up more quantity because the trade will anticipate price corrections, and therefore trade will start cleaning up the inventory. Therefore, it will take time for the entire inventory of high cost, right from the manufacturers and brands up to the trade, for all to get cleaned up before we can start to benefit from lower commodity prices starting to show in the P&L. There is that challenge, how do we navigate this particular time? I do see that the pressure will last during this particular quarter for the industry, but towards the end of the quarter, we will possibly start seeing favorable traction and start taking the advantage of the commodity price corrections. Future looks to be good with all the price corrections that are happening, fingers crossed. Okay. That's it. Thanks a lot and wish you all the best. Thank you. Before we take the next question, a reminder to all the participants to press star and one. The next question is from the line of Achal Lohade from JM Financial. Please go ahead. Yeah, good morning, sir. Thank you for the opportunity. You know, you have mentioned 18%-20% market share in fans. Is it of the total market? Is it of the organized? Would it be possible to give some more color in terms of the deco and premium? How much would be our market share in that segment? Achal, this is of the organized market. We continue to remain a higher player in the premium and decorative. We've not never been aggressive in the lower end. Although with the growth in the lower end, we feel it is important that we cannot be ignoring that lower end also. We have made significant efforts in the last few quarters to start improving our presence in the lower end also. As a brand positioning, we always remain towards the higher end. Our positioning has been there, our strength has been there, our market shares have been there. In the top end quadrant, which we call, it constantly keeps on moving, which we now call more than INR 4,500 fan, we would be at around 40% plus of market share in that quadrant. Decorative also remains to be high. We are the lowest market share in economy. Right. This 40% market share in the fan segment, which is selling more than INR 4,500 per fan, right? Yes. Understood. How much of the total market is organized as per your estimates, sir? How much is total organized? Of the total fans market, how much is organized? Is it 70%, 80%, 90%, 60%? Anybody's guess, but we believe it is close to 70%-75%. Understood. Have you also seen, you know, given the way things are playing out, the unorganized or the smaller appliances players have come back in the market or they're still struggling with the supply chain and stuff like that? We've not seen much coming back to the market. The struggles have been too many. Understood. Second question was pertaining to the lighting business. You know, you mentioned that, for you, the B2B is relatively small. Just wanted to understand in terms of the sales channel for this particular business, you know, is it the same? Do you require to establish a separate channel? You know, what's the right to win here? It's a completely different channel. It's a completely different team. The team's skill levels are completely different. The back end is completely different. Selling B2C is a commodity selling. Selling B2B is a solution selling. It's completely different. The right to win is because we have a very strong R&D team. Our ability to give solutions is very good. We have a very strong design team, and we have been able to put together a very strong the sales team. We have started getting very good empowerment in many accounts. It's a whole journey. It's a completely different kind of a business. It's taken us time to build capability there, but we are seeing very good traction now. Right. Would you be able to give some more color in terms of the total market size of lighting and how much is B2B in that? B2B is generally 50% of the total market. That's how, you know, it's sometimes 48%. Right. Sometimes 55%, somewhere there. Right. In terms of the total industry size, because we tend to get very different numbers. Would you be able to throw some more color in terms of what is the market size? Either for B2B or for the total, we can derive the others. The total market size is considered to be anywhere between what, INR 12,000 crores-INR 13,000 crores of organized market. Close to INR 20,000 crores, including the unorganized market. Out of the INR 12,000 crores-INR 13,000 crores, 50% would be close to that, the B2B. These are ballpark figures. Fair point. There are no syndicated data around this, but these are very ballpark figures. Fair. This is very helpful, sir. One more question I had with respect to the cost deflation, like you rightly pointed out, in terms of it will take some time to adjust to the new prices. What I wanted to check is, if we were to look at the top three to four cost items within the bill of material, they would, I presume, copper, aluminum, steel, plastic. You know, would that be 60%-70% of the BOM, or could that be lower or could that be higher, sir? Any color you can provide on the same? Actually, it's a very difficult question because you have to see some parts they come in form of components, but they are also steel, aluminum and copper. Okay? Okay. Very difficult to put that. Finally, when you look at our particular thing, what is there? Any of the ECDs when you look at it, if you look at a motor inside, you would find it steel and copper. If you find the body, it is either steel, aluminum or plastic or ABS. So by and large, everything moves around that, you know, and rest is your cost of conversions. Right. The cost of electronics. Right. I was coming from. Mr. Lohade. I'll come back in the queue. No problem. Thank you. Thank you so much, sir. The next question is from the line of Amit Mahawar from Edelweiss. Please go ahead. Mr. Mahawar. Hi, sir. Sorry. Can you hear me now? Yes. Hi. I just have two quick questions. First is, Viswanath, the share of fans with INR 2,000 and more range, what is the share that we have in our revenue? Within that, what is the AeroCool's contribution now vis-a-vis last year? The second question is on switchgears. How has our market share moved vis-a-vis last year in switchgears? Thank you. Amit, both your questions are very tough and I will separately have to answer the questions. You are asking specific numbers in 2,000+ and what's the share of AeroCool. I would have them immediately at hand. Maybe you can call me later, I'll try and or maybe Saibal can later give you some details on that. In switchgear, our market share is very, very small. We're still scratching the surface, so I don't think. We're seeing it in form of market share as of now. We're only seeing it internally, how much are we growing, because in such a small base, we should be growing very, very, very fast, very high, and that's the effort. I'm happy to say that, we've been consistently now, it has been in the profitable range. It's growing very well. The new range is getting accepted very well. We're getting more and more confident of now building up on this business. Given the industry norms, this is a highly profitable business, and so we have a lot of expectation from this line of business in the coming time. Got it. Thank you. Amit, were you asking the share of business for the 2,500 plus fans, if I heard you right? Or you are talking about the market share? Sir, he has been, he's not no more in the queue now. He's gone. Okay, no problem. Yes. I'll talk to him later. Okay. Please carry on. Ladies and gentlemen, due to time constraint, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you. Thank you everyone for joining. It's great to see your support towards Orient Electric and the kind of involvement that you have in our business. Many of your questions are thought-provoking, and they help us to work further on some of the points that are raised by you, and they all help us to improve more and become better. Once again, thanks to Ambit team, Dhruv, and everybody in Ambit for hosting this session and making it so well. I do hope all of you are keeping safe, and I wish all of you and your families all the safety and good health. Thank you all. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.