Ladies and gentlemen, good day and welcome to Orient Electric Limited Q4 FY24 earnings conference call hosted by Ambit Capital. As a reminder, all participant line will be in 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 touch-tone 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. Good morning, everyone. We welcome you to Orient Electric's Q4 FY24 earnings call. From the management side today, we have with us Mr. Deepak Khetrapal, Vice Chairman and Managing Director, and Mr. Saibal Sengupta, the Chief Financial Officer. Thank you and over to you, sir, for your opening remarks. Thank you, Dhruv. A very warm welcome, all ladies and gentlemen. It's always a pleasure when we find that so many of you are interested in our business at Orient Electric and find time to join us. With me on the call, I believe, is not just Saibal, our CFO, but also Ms. Avani Birla, the President of Strategy in the company, and she's also on the call. In terms of, let's say, where do I start with the results, I'm quite sure all of you who are so keenly interested in our company, you would have seen the results that you've declared yesterday. I'm sure most of you would have also seen the highlights, the presentation that we circulate. But even then, I think I'll just go through the highlights as we see them here and give you a little bit more perspective on what you've seen, the numbers that have come out. One thing I certainly want to point out right at the start is that I'm sure you would have noticed and perhaps appreciated that the theme that we've been outlining in the last few earnings calls every quarter is that the theme has been sustained and we've been playing that out in a very consistent manner. What I mean by that is that we've been promising that we are focusing on our top-line growth and we are focusing on our gross contributions or gross margins growth, which have stayed completely in line with our promise or our indication. There are obviously investments still going on, large costs, which I know are not being as productive as they need to be. I'll come to a little more detail, but the theme of our top-line growth and gross margins growth has been sustained. The revenues, as you would have seen at Q4 and Q4 at Orient Electric level, we have reported a very robust growth of 20%. I'm calling it robust despite the fact that all of us are aware that last year Q4, especially for the fans business, was a soft quarter. As a result of that, we have some base effect certainly playing in the overall large growth. But let me come to a little more information on that. The ECD, our Electrical Consumer Durables Division, in that, our sales have actually grown by 24.3% and lighting and switchgear by about 9%, which is a little more modest compared to what ECD has done. Now, within ECD, the fans business, as I was saying, because that's the business which really had the hangover of the low base effect of last year. So despite the low base, when I report to you that our fans growth is actually at 29%, which I'm sure will give you an idea of how, in a very consistent and very, I would say, intense manner, we've been trying to develop our fans market, basically, 29% growth most certainly guarantees that we have gained back our market share to a very significant extent, I think, last few quarters. Perhaps we were even not where we needed to be, but with 29% growth in Q4, it seems that we have our at least go-to market with the products and with our distribution system back on track. For the full year also, in FY2024, the fans growth has been at 15%, which I'm quite sure is ahead of the industry. Within ECD, the appliances actually have been more modest. It's under 5%, 4.5% thereabouts. And as a result, the ECD, as I mentioned, overall is 24.3%. In the lighting business also, given what we are going through in the lighting industry, we have over 9% growth in Q4. And this is despite the fact that in the LED lamps, we've had continuing price deflation. We've grown in volumes on every sector, but I'm talking about lighting. But I think in the progress that we've made in our professionals' units or B2B business, I think we've done some really, really good work and have been gaining strong new customers. Not just supply of professional luminaires, I think we've also done very well in terms of booking some really prestigious projects, not just booking them, but also executing them in a manner which actually is auguring well for our future products because I think our track record in executing projects has been liked by all the customers for whom we've done the job. While till the last quarter, I had reported the Srinagar Smart City as one of the perhaps more complex but more rewarding jobs for us, in this quarter, I'm happy to report that we've also done façade lighting in Dwarka, the Sudarshan Setu that our Honorable Prime Minister had inaugurated just a few weeks ago. In fact, on his personal handles, he had carried a video of that bridge. Most of it, if you've been able to see it, is the work done by our professional lighting division, the façade lighting division there. Also, similarly, in Ayodhya, we have done some work around the Ram Mandir. Obviously, it's a very large project. We only had a small share of that, but we've done some work there. We've also done the lighting work for the Jagannath Puri Temple, the Parikrama there. These are some of the major, I would say, projects in the lighting division I wanted to highlight. Besides the normal lamps, as we call them, that business, we obviously are now making very strong strides in the professional luminaires and also the façade and building lighting. When you look at the year as a whole, our turnover is slightly over INR 2,800 crores, which at the overall company level, is a growth for the year of about 11.2%. Within that, the full-year growth for ECD is at 13%, just under INR 2,000 crores. The balance is from lighting and switchgear, which have grown by 6.7%. The gross contributions in Q4 for FY24 have actually shown a very robust increase of nearly 250 basis points, both compared to the previous quarter and also compared to the previous year, which I think is with the strong top-line growth that I've just reported when we are reporting the gross contribution, the gross margins, again, there's a very strong development there and our margins are very close to 31% in Q4. And this obviously has been a result of, I would say, most importantly, a better product mix that we've been able to push into the market. We have been able to improve our realizations per unit sold by us and obviously, the sustained cost management that our entirety is focused on. In the lighting business also, despite lower realizations per unit, I think our gross margins there also have shown an improvement, which we're very happy about because on the lamp side, we've been losing prices. And although the costs are lower, but obviously, it shows. But the gross contribution that we should be getting from the projects like façade lighting or from professional luminaires, that's also helping us. In that division, there might be a little bit of drag on the overall margins as we grow our switchgear and the wires business. As you know, they are still nascent businesses. They're still being nurtured by us. So overall, we report lighting and switchgear, but the lighting has done better. Switchgear and wires, perhaps, will take a little more time before we start seeing their contributions. Wires, perhaps, will never get to as high a contribution as lighting and switchgears make. But switchgear, we see an improvement and I'll tell you what we are doing with our switchgear going forward. In terms of when I'm reporting good growth in top-line, good growth in gross contribution that we earn, however, these strong strides forward have still to show up in our EBITDA, which we acknowledge completely. But let me just point out one thing that we reported EBITDA for the quarter at INR 31 crore. While it's looking below the desired levels, and it is, however, one key differentiator here is that in this quarter, we have made provisions of close to INR 19 crores towards the EPR liability, which has come to all the industries which are consuming anything which the government deems needs to be recycled in the interest of green earth. So that is about INR 19 crores a hit that has come in. And there is also we felt that when we were doing the, I would say, the final accounts, the final verifications, we've adopted a slightly more stringent provisioning policy this year. A few of the things we thought we must sort of clean up our books about, not because something was wrong, but just because I thought our governance standards perhaps mandated that we provide for a few more things. So that's another one-time hit of about INR 4 crore in this quarter. So total, close to INR 23 crore of hit on those adjustments, just to make an apple-to-apple comparison. I'm no way saying that the INR 31 crore is something that we are happy with, but just to make sure that the comparison is more robust. So if we add the INR 23 crore against the EBITDA which we are reporting of INR 31 crore, it actually would be close to INR 54 crore against INR 44 crore in Q4 last year. And similarly, doing an apple-to-apple comparison for full year, the EBITDA would perhaps be more around 167, 168 crore rather than INR 149 crore, which has been reported in the numbers that we've seen. Well, despite that, I'm not saying that these are the results we are happy with or that were the results we were seeking. We still need to do a lot more work, but these things give me and my entire team a lot more confidence that we are at least on the right track. Keep growing the top-line, keep growing the gross margins, and also manage your costs well. And also, like I said, having adopted a little more stringent provisioning policy, we still are continuing with the rest of the work that we need to be doing. What I mean by that is, while the significant investments that we are making for strengthening our organization's capabilities, and they have started showing results in the top-line and gross margins, honestly, these investments are geared or aimed at achieving a much larger growth and margins than we are and we are working towards that. As outlined earlier, the overhang of these investments are yet to be fruitfully. We are assuming or rather, not assuming. That's the wrong word. We are expecting that as we are beginning to see the improvements in many other areas, perhaps it's a matter of just another two quarters and we should be able to show the net results at the EBITDA level as well. So we're working towards that. And we want to definitely come back to the EBITDA percentages that our shareholders expect from us. Give us a couple of more quarters and we should be back there. In the short-term view of not making these investments, perhaps it's going to hurt us more in the longer term. And that's why we seek your indulgence to keep continuing the efforts we are making to basically make sure that the organization is prepared to handle a lot more ambitious plan as we go forward. Coming to strategic initiatives, I'm extremely happy to report that the states in which we've decided to go direct to the markets, replacing some of our legacy distributors, in both states in Q4, we reported 46% growth. For the full year in the states where we've gone direct, the growth is 65%. Now, this obviously convinces us that this is perhaps the right thing to do. Wherever we are finding opportunities, as you will have noticed, we've already gone direct in two more states within the first few weeks of this financial year. There's one more state which is being planned sometime within this year and maybe one more. So there are three to four states, I think, we'll take up for direct distribution within this financial year. And what that does to us is not just we are growing better, but because we have direct access to the markets and we are able to do, I would say, a lot more work to have better penetration in the markets, we are also able to create and achieve a lot more success in our premier categories because somehow the master distributors are always reluctant to really support our more ambitious SKUs in the market because they thought they were too expensive or too risky. But when we go directly, there's a lot more room available with us to push the right product mix in the market. And that better improved product mix also shows up in the average price realization that we have. In terms of the legacy distribution, it continues to disappoint us because the overall growth for the full year, we've actually had disappointment there with a very marginal, there is no growth. There is very marginal degrowth, actually, which is what is worrying for us. So we'll perhaps pursue this going direct to market and have more impact in the market. The other, I think, project which has been a very fond project for all of us has been the project of growing our presence in the South India market. In our Grow South project, I'm delighted to report that in this year, our overall sales, 32% of our overall sales are now coming from Southern India, which I think is a huge, huge, huge leap forward from where we were for a long time. South, as we knew, it's a very large market, but somehow our presence there was not enabling us or the weakness in our presence there was coming in the way of our achieving what we needed to achieve there. So I'm delighted to report it's 33% growth during the year in South markets. And now our total, as I mentioned, nearly a third of our revenue is coming from South. E-commerce is another area which we've been focusing on that we know is an expensive way of doing business, but we are there. And in Q4 itself, our e-commerce growth is 85%. And for the full year in e-commerce, our growth is 75%, which actually just reflects the new approach that we have adopted in the e-commerce. Also, the other area of focus, which we are actually rolled out yet, but the so-called modern retail or large-format retail—all the very large retail stores that we have in that—we are beginning to work with the topmost partners in India and going to make sure that our presence in the large-format stores is also a lot more noticeable by everybody. And in this particular year, in the last few months, the work that we have done, the large-format stores have reported 80% growth in the quarter. Although for the full year, it's just 13% large-format stores, but the thrust on this has actually started just a few months ago and we are already seeing a huge traction in the large format. We continue to work on the product mix, as I mentioned earlier, and also the market mix to improve our realizations. We continue to intensify our efforts to improve efficiencies and our procurement that we do from the market. And very intense project, as we keep referring to it, the Project Sanchay, that keeps gaining more and more strength and more and more traction. So that's being continued. Another area that we've improved very dramatically in the last few months, I must call out, is in our supply chain, the way we distribute our product, our warehouses, the locations, the transportation, the entire logistics around it. And not to deny the fact that we've also been fortunate in having some tailwinds in the form of the benign commodity prices, which is, like I said, which is with the industrial, with the economy as a whole. But yes, we do benefit somewhat from there. In the last earnings call, I referred to the new challenge coming up in terms of the BIS standards being imposed on ceiling fans and all fans needed by a certain date. I think there was a little bit of anxiety in our minds whether this will actually get implemented or it will get extended. I think in February, the transition has happened. I'm, again, very happy to report that all our ceiling fans that are in the market today are BIS or ISI marked. So that's a huge, huge shift in the, I would say, government policies and the new regulations, but we managed to meet them successfully. The next transition that is going to happen is our tables, pedestals, and wall fans, which will be, again, subject to BIS certification starting September. We are now getting up to make sure that there are no hiccups, at least from our side, in delivering the fans to our customers. A thing which causes us a little bit of concern and we are beginning to sort of, in a way, take action there, we do realize that our new product development for which we had a very good name in the market for many years in the recent past, we've not done what the markets and the customers expected from us. But having realized that, we very recently strengthened our R&D effort by inducting new professionals from outside who come and sort of join our team. Very soon, I think our track record of introducing new and innovative products will be back on track. That's something that, again, will be liked by all our customers. And coming out of that, I'm sure all the investors will be happy with that. Another area in which I promised that we will be focusing on is improving our after-sales service to the consumers. And on that, we've, again, made investments and significant strides. And I'm delighted to report that the impact of our improved service is already being acknowledged by our customers and also the trade who gets to hear from the customers. So we're very happy that the changes that we made in service side are also beginning to be noticed in the market. I don't know how many of you have caught it because, obviously, we are not spending huge amounts of money during this IPL and elections right now. But some of you who have seen it, I'm sure you would have seen there is freshness in our branding and marketing efforts also. What I'm referring to that you might have noticed is the new TVC that we launched a few weeks ago. It establishes the future of fans in which we have our brand ambassador Dhoni in a new avatar. He's talking about that he's seen the future of fans already. So if you people have not caught the TVC, please catch it. It must be available on our YouTube channel as well. So please see it. I'm sure you'll love it. Anybody who's seen it, we're actually getting very rave reviews to that campaign. We have an ongoing project which we call Project Orange in which we are actually really strengthening our presence at the retail counters, not just large-format stores, but many other smaller stores who retail fans to the customers. We are doing on-the-counter work to Project Orange, we call it, because that's our corporate color. So we want more and more retail stores in the hinterland of our India to look more like Orient fan stores when you're talking. But it's actually all Orient products, but fans is the biggest thrust area where the distribution is very, very large. I mean, this kind of rebranding at the retail counters, at the point of sale as it's known, is increasing our engagement with the final consumers when they're making the decision at the retail counters. Our out-of-home advertising approach has also been refreshed. And in the hinterland, people who have access to that will actually see our communication really displaying a very micro, local-level sensitivity. And the messages are being designed for the cities, for the particular localities in which they're, which, again, is being appreciated by everybody, including the consumers who've seen the new communications approach. So good job on that front also by our marketing and branding team. Obviously, it's our job as people who are in the market to sell more product, to leverage those communications by selling more of the product that we think the consumers should be using. In the middle of all this, we've also managed to commission our new factory, new plant at Hyderabad. I know it's been delayed somewhat. The reasons were difficulties in being able to get the engineers from China or vendors of equipment to come and commission our plant. I'm happy to report that on 6th of May, we've commissioned the plant and we've already started dispatching and invoicing TPW fans, our table, pedestal, wall fans. While that activity has started, the two lines of ceiling fans also are under commissioning. Hopefully, by the end of May, we'll start dispatching ceiling fans also from there. While the commissioning and start of production has happened, I must outline here that while our factories were coming up, we also were expecting lots of our vendors who supply us components to be ready. Unfortunately, because of the delay at our plant, those people had slowed down their preparations. We are working with these vendors who have set up facilities in Hyderabad to feed our plant. It's a few weeks' time before their capacity will ramp up enough to give us enough material to start producing fans at the current needs. All of you would be curious about what's the capacity and what's the size that we can expect from the commissioning of the Hyderabad plant. The fact of the matter is that the capacity that we'll build at the Hyderabad plant can more than double our sales as we stand. So it's a very large capacity being set up, or rather set up now. The limitation will not be in terms of our ability to manufacture the product. The limitation might be in our ability to create enough traction in the market to be able to sell that many more fans, which is an activity which, obviously, now that we know that we have the production capability, we'll start driving that part a lot more harder. To get to doubling the fans will take a little while because you can't suddenly change the markets or change the customers. But we are fully ready from the backend side. Now the work really starts. The frontend to start getting a lot more share of the growing fans market. So that's an update on the Hyderabad factory. I did mention about switchgears, which also we've been in the market. But as luck would have, we've chosen a European technology which is more expensive than what the markets are used to and what the consumers are willing to pay. We have now installed and commissioned. It's not a very huge investment. We've, again, invested in our Noida plants where we make the switchgears to bring out more competitive switchgears. And the new production lines are a lot more efficient with there. Again, the margins will improve as we go. So that's the, I would say, the full story on what we are trying to do to introduce more products to the market. In lighting right now, like I said, lighting, not much is required to be done. But on switchgear, definitely, we have to do some work. We've already completed that. We'll be coming to the market soon with a very fresh approach to switchgear as well. The next area of focus for us now remains is switches, which, again, the work is on. The quarter will be able to sort of, in a way, announce something that we will do differently going forward there. On the financial matters, I think working capital, all of you would have noticed that we certainly have improved in terms of number of days of working capital that is on hand as in 31st March. And post that, in fact, it's improved even further because towards end of March, the entire industry had to give a lot more credit to the distribution on the other channels because the winters so far, I mean, many of you would have seen, got extended. The pickup of our material was not happening in the month of January, Feb. So in March, to not lose the shelf space, all of us in the industry had to give more credit to the channel partners, which has been given. So as on 31st of March, the receivables looked a little stretched. But that has played in very handy because as the heat built up in the month of April and now we are seeing May, the demand for fans is very, very strong in the market, which is definitely good news. And the additional working capital, but let's say, being normalized now. And there's a fairly robust cash in hand as on 31st of December, as you would have seen from the accounts and the balance sheet that they've gone out. That's the overall summary for what we believe are the important highlights of what we've done in Q4 and last year. Perhaps we can answer a few questions as they come. Thank you very much. Shall we can do question and answer session? I think so, yes. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use hands-free while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Bhargav from Ambit Asset Management. Please go ahead. Yeah. Good morning, team. Thank you for the opportunity. My first question is on this EPR provision that you have done in this quarter. Just wanted to know that given that this is an industry phenomenon, would the industry players take price hikes to pass this EPR liability? Also, if you can quantify this liability for every year, what could be that number? That's my first question. Okay. Let me answer that straight away. As you know, EPR basically imposed with backdated effect, left us no space to recover the past cost from the market. But we at Orient Electric, we can tell you that beginning April, we have taken our prices higher to cover the EPR costs going forward. So that's already being done. And that's already being recovered. So here onward, whatever EPR liabilities come would be met out of the increased pricing that we've already passed on to the market. What the cost estimates would be, which we need to recover based on if you took the decision to increase the prices, we believe it will be for the year that we are in FY25, it will be perhaps around INR 21-22 crores in that range. It should not hit our P&L because we should be able to recover this cost from the market. Secondly, sir, I believe the McKinsey contract would have got completed in FY2024. So just wanted to know what could be the savings from this in FY2025? Look, while the work is over, just for everybody's benefit, there is the agreement that we had with them. There was a certain amount which was variable pay. The last component of the variable pay will get paid out in the month of sorry, in this very quarter, in the very first quarter itself. So that will be accounted for in Q1 of FY25. You see, quantifying the savings from there, I've stayed away earlier. Also, people had asked because these are contractual terms with McKinsey. And I don't think they want us to go public with what exactly the terms are. The The moment I tell you what are the savings, you would know what the contract was. So a little bit more confidential in that nature. But the cost savings will be significant, not just because we are not incurring those costs, but also because the gains that we're having, all these thrusts, whether e-commerce growth, LFR growth, GrowSouth, and Sanchay, in all these areas, McKinsey helped us a lot. And all those benefits are coming in. But the costs also which are hitting in parallel, they will stop after the first quarter. Okay. Sir, my last question is, is there any update in terms of appointing a CEO? We were sort of searching for that. If you can just highlight in terms of any updates. That would be my final question. Yeah. No, the search, as I told you earlier, has been on. I think we're getting close to the end of the search. Soon, once the decision has been made, obviously, we'll need to make a public announcement. We will make it. Great, sir. Thank you for your thoughts and all the very good. Thank you. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all participants in the conference, please limit your question to only two questions per participant. Should you have a follow-up question, we request you to rejoin the question queue. Next question is from the line of Ravi Swaminathan from Avendus Spark. Please go ahead. Sir, thanks for taking my question. My first question is with respect to the ECD segment, especially the fans category. What kind of growth we should think of with respect to fans at a market level given the hot summer that is there in FY25? And what kind of aspirational growth that we might be thinking for Orient in this? And how it can come, whether geographical reach, expansion, etc.? And apart from the price increase that is associated with EPR, any other couple of rounds of price increase, is it possible? Has it been taken over the next six months? So if you can give your thoughts, I'll be great. Okay. Look, guys, as all of us do know, that the fans market in India is not growing at the percentage of growth that we have either achieved or we are talking about. We know that fans growth is expected to be in single digits year after year. As far as we are concerned, we are planning to sustain over the next few years a double-digit growth which could be in the region of between 15%-20% year-over-year on a compounded basis. Here, the game is going to be largely about taking market share, obviously, because if the market grows at 7%, 8%, 9%, we are talking about 18%-20%. And there, the fight is very intense when you want to take market share from the competitors. But we will be helped in our quest through, like I said, one, the number of new things that we've done in terms of as I mentioned earlier. I don't want to repeat them again. On top of that, the Hyderabad facility should give us a lot better access to the markets with products available in better time because, I mean, the fact is that given the current capacity that we had during the peak season, we used to have limitations on how many products we could make and deliver to the market. So we've been a little constrained with that. Using that, and on top of that, our marketing, our distribution, our project orange, our service investments, all these things put together, I think we'll try and keep working at a percentage of growth which will be close to double of the industry growth rate. In terms of pricing, over the next six months, what kind of price increase we will take? I mean, that's a very difficult question to answer. Pricing is dynamic. There was one question on EPR which I've already indicated that we are recovering that from the market. Other price increases will be a function of many of the market dynamics. And we'll keep taking appropriate decisions as we move forward in the market. There's no way to plan six months ahead what price increase we can take. Okay. In terms of the EPR cost on a recurring basis, if you need to track it like a metric, will it be like a percentage of the overall fans revenue or something of that sort that we need to kind of look into or how to think about it in terms of on a recurring basis? You see, in terms of it's very difficult to do in percentage of sales purely because the pricing of the product is not related to our obligation under EPR. Okay? So there are two different things. I mean, in a very, I would say, back of the envelope calculation, if I've given an indication of about INR 21 crore and you divide that by about 1 crore of fan sales, so it's maybe 20-odd rupees, around INR 20 per fan. And that INR 20 per fan could be sold in the market at INR 1,500. It could be sold at INR 5,000. So as a percentage to sales, we can't link. But more, we are working in terms of price per fan or the cost per fan. Understood. With respect to the lighting market, there has been continuation in terms of price erosion. Many of the industry players had talked about pricing seeing likely to bottom out, etc. Are you seeing pricing in the LED space showing signs of bottoming out? Can it happen in the near future? If you can share your thoughts on that. Yeah. From what we are seeing right now, the erosion rate definitely has come down significantly. The last four quarters have been falling very sharply. Going forward, I think the right term to use is perhaps close to bottoming out, not bottomed out yet. I don't think that the erosion should last more than two quarters from now. That's what our reading of the market is. Got it, sir. And if you can give a percentage breakup of. Ravi sir, sorry to interrupt. Could you please return to the question queue for follow-up questions as we have several participants waiting for the turn? Sure. Thank you. Next question is from the line of Nikhil from SIMPL. Please go ahead. Yeah. Hi. Good morning. Thanks for the opportunity. Three questions. One, on the ECD side, I have two questions. One is in the markets where this D2M strategy we've been deploying over the last one and a half years, although the growth rates have been tremendous, can you talk about how our market shares would have moved in those particular states where we have done this? Or if there is no exact data, if you can talk about how those markets would have grown versus our own growth. That is one. Secondly, on the consumer durable, other than fans, if I'm not wrong, we said our growth was around 5%-6%. Can you talk about how the coolers as a segment has grown for us? And have we seen any market share gains over there? Those two are on the ECD side. Okay. Let me answer because otherwise, it's very difficult for me to remember all the questions and start answering. So let me start answering them. See, on the D2M side, when I'm telling you the 46% growth, there is no way those states have grown at 46%. You know that. So it's obviously coming at, I would say, coming through winning the market share. It's very obvious. No market has grown by 46%. Okay? And there, the big difference has been that we brought a very fresh approach to how we not just distribute the products but how we approach the consumer at the retail counters or familiarity with what the consumers need, the ability to put out very sharply focused SKUs at the right counters. There are a lot of things that go into that. It's a very, very hard work that is going on right now. So obviously, we are gaining market share because none of these markets would have grown by more than 8, 9, at best maybe 10%. Some rare market. So obviously, there's a huge market share happening in those markets, including in South India as a whole. When we are saying that we've grown at 33% in the year, South market is nowhere close to having grown by even double digits. So there is market share gain there. Coming back to the question on coolers, ECD, yes, coolers is one segment, actually, which we have struggled with in this past financial year. That's a fact. There have been multiple reasons, untimely rains, extended rains happening, and then the products not getting sold out in time. The channels that we then went into very late towards the end of the year, when the season starts, they are still sitting on last year's stocks. So there are lots of dynamics which went wrong last year. And we haven't had the kind of success that we wished to have in the coolers business. While we may not have grown in coolers, but we've done some really good work in our water heaters which are finding really good growth again and the kitchen appliances, the small appliances, as we call them. And not just in the general trade, I think the major win in those appliances is coming from our e-commerce because that's the market which actually is big in small appliances, kitchen appliances, kinds of things. So that's the data. But coolers, yes, we struggled last year. We are actually currently thinking of reaching on our entire strategy on how to approach the coolers market. Okay. And one last question. On the lighting side, last year, we had seen this continuous price drop. And Ravi also asked this. Would you say that if we have while our top-line growth had been around 8%-9%, and you had also mentioned that on retail and if we do on B2B, B2B had grown very strongly, on the retail, what would be our volume growth? And has that negated the price erosion which happened last year? And the continuation, if we look at Q4, Q3, are you seeing that the price trends are now stabilizing? Or is it still dropping? You said the rate of drop is reducing. But is it now almost close to ±5% or still around 8%-10%? Okay. Again, lots of questions. One question. Whatever was the volume degrowth sorry, the value challenge, rather, value erosion that was coming in lamps, we have managed to make up for that through the volume growth. That's a given. So for a lamps business, have we had degrowth in sales, no, in INR crores because we made up for the value loss through volume increase. So that's one answer to your question. The second question that you were asking about, has the price erosion? I I did say that it seems close to bottoming out. Yes, the rate at which the costs were coming down and prices were coming down, I think given whatever not just our industry in India, the whole world could do with that, as of now, seems we've scraped the bottom. And when you say drops, are now in small single digits, low single digits. Okay. Thanks. I'll come back in that case. Thank you. Thank you. Next question is from the line of Nirransh Jain from BNP Paribas. Please go ahead. Yeah. Hi. Thank you for the opportunity. So sir, my first question is on the lighting segment, the margins. I mean, I just want to better understand what leads to this volatility in the margin in the fourth quarter, especially considering that switchgear is still roughly around 5%-6% of our business, if I'm not wrong. So then this and we are growing very strongly in the professional lighting. So shouldn't professional lighting be able to deliver better margins for us? And how should we look at the lighting margins going ahead? So that was my first question. Okay. Look, what we have to realize is that while in the lamps and switches, we just supply the products for distribution, the cost of sales are pretty low. I think there is some confusion about how we believe margins and how, I think, investors are looking at margins. When we talk about margins, we are talking about gross margins. That is selling price minus the cost of the goods sold. At that level, the professional luminaires, the façade lighting, give us good contribution margins. Where it starts costing more is the whole, if I say, the cost of that operation, from having designers on our payroll, from having the execution teams for having continuing to sort of work with the customers during the execution period, that has many costs which come in our books as fixed costs. So you are talking about margins at the EBIT level, as you've seen, right? Right. Let's remember, so gross contributions are good in professional luminaires and also in the façade lighting and other projects like that. But the fact of the matter is the cost of servicing those orders is higher, which sits in the fixed cost. And that's why at the EBIT level, it looks low. But that's a question of operating leverage because we already have designers on our roles now. As the order book increases and we keep increasing the business, it'll start evening out. But it doesn't even out when you have a total business of INR 30 crore, 40 crore, 50 crore there, right? But you need a full team. Otherwise, you can't execute the project. So there's a little bit of dynamic playing out in that particular market. So it's not straight away. It's not as simple as lamps supplies to distributors and retailers, and the business goes on. It doesn't. Right, sir. That's very helpful. My second question is on the TPW fans. So now since we have commissioned our new Hyderabad facility, I mean, what kind of exports potential are we looking at? Because we have been talking about the huge potential that is there, especially for the TPW fans. And this year, we have grown our exports by mid-teens. So what is the outlook there? I mean, what are the targets? And how should we look at about capturing this potential going ahead? Well, we've just commissioned the plant. We are stabilizing production first, stabilizing the quality. See, in international markets, one thing you must remember, we want to target, obviously, Western markets which are seeing summers like never before. And the market for fans is booming there. But the catch there is, to be able to export products in those markets, we need to first have our production facilities in place. And we will need certification from each of the markets where we want to sell the product. I'm sure you're aware. All electrical products going into other markets need local certifications also. So starting with the process, we are taking the initial daily steps towards that. I think in about two quarters from now, we can talk about specific targets for each market. But let's do the work that we need to do at this time. Capacity we have set up, how to use the capacity in a manner that we start having the rewards coming out of that, will take a few quarters. Always happens. Any large investment that you make, it doesn't deliver from day one. Give us that time, and we'll let you know which markets we're able to enter. It depends on what certification we're able to prioritize and get early. And as we keep entering every market, we'll keep talking about what numbers we can do there. So sky is the limit. But I think we need to be aware of how practically the business happens. Sure, sir. Thank you so much for the answers. Thank you. Thank you. Next question is from the line of Natasha Jain from Nirmal Bang. Please go ahead. Yeah. Thank you for the opportunity. Sir, your opening comment was quite detailed. Most of our questions got answered there. You mentioned that Avani is on the call. So in case she's on the call, I have two questions for her. These are more broader strategy-level questions. So in terms. Just one minute. While Avani is on the call, but I believe she is only in the listen mode. She will not be able to answer. Ask the question. I will try and answer them, please. Sure. My first question is, we've seen a lot of management change, right, in the past one to two years. So by now, you must have internalized as to what went wrong at the top level, why that happened, and at the hindsight, what changes you could have done. So can you tell us what changes you are planning to do in terms of making sure that that doesn't happen? And the second strategy-level question is, sir, on one side of the spectrum for fans is a company like Havells, which continues to do extensive advertisement. On the other end of the spectrum is the leader Crompton, who continues to discount the channels' features. Now, Orient, I believe, is not somebody who can either do extensive advertisement at this point, neither can we afford to discount the channels' features. So how do you plan to navigate this? What balance are you planning to strike here so that you do both but do not get discounted because of both the leaders and the extremes? Those are my two questions, sir. Thank you. Okay. On the organizational side, the question that you asked is a huge one. While we say last two years, frankly, it's a question to be answered, the one big change that didn't go as we would have wanted it to go was the at the level of the Managing Director/CEO. The previous Managing Director superannuated. He was 60, was about 62+. And he had to retire. He retired. We brought in a new Managing Director. For For whatever reasons, that didn't pan out. I think some choices that we made perhaps were not aligned with what the individual his incumbent's choices were. So things didn't work out. I don't think it reflects in a huge way on the organizational dynamics. You can't take one decision which doesn't pan out the way you want it. So that's as simple as that. The second big transition I will talk about is when our head of lighting business, he quit. These are the two big ones. Obviously, the lighting head's going simply was a function of that individual's aspiration of wanting to be MD of a company and the opportunity which we at our company could not have afforded to him. It's as simple as that. When, obviously, somebody like our lighting head who'd been with us for 10 years moves away, it's a question of loyalty and the people left with him. But let me assure you, there's nothing wrong with the organizational policy or structure per se. It's not over 2 years. It's certainly from the time that the old MD superannuated and the new one came in, and then the dynamics started. But it doesn't mean that we are at all complacent about what our company needs to be doing. In case you've not noticed, for the fifth year consecutively, the company has earned the Great Place to Work certification. That tells you about where the company is. But the problem is, new people are seeing the attrition at the level where it's the most visible. But the company, I think, we kept strengthening our HR processes, our people approach, how we deal with people. So that's been worked upon. And it will always be a working process. We'll never say we've arrived there. But yeah, what happened during the last year I mean, an unfortunate accident. But I think we've gotten over that, and we are beginning to move forward. And as I answered the other question, new leadership should be in place. As soon as the decision is there, we will come back to all of you and let you know because that's the first thing we'll have to do to announce to everybody that there is a new leader in place. But otherwise, please don't be too anxious about where the organization is. If we have grown despite all that and the organization was not in place, do you think we would have delivered the kind of growth that I've just reported to you? I think the credit is to the group that, despite these things, we managed to keep our efforts, our eyes completely focused on what the job is. And that's what has resulted in these improvements in top line and our gross contribution. They had not come out of thin air. If the organization was not there, it won't have come. I hope you agree with that. It's not collapsed at all. Okay. So number two, coming to you're asking a question about how will we respond to competitor strategy, somebody's value player, somebody's a premium player. Well, each competitor will choose the markets and the customers they want to address. We have been one of the oldest fan brands in India. We cater to multiple, I would say, strata of society. The only thing which I can assure you is that we certainly do not want to be playing in the market to gain share through cutting prices. So we want to be an aspirational product at every price point, which is the difference. Will we be there in the economy? Yes, will we be there in base? Yes. Will we be there in premium? Yes. But everywhere, we'll want to be at a certain premium at that price point in that cut of the market. That's what our strategy will be. It'll be hybrid. Depending on which market, which city, which counter needs what, all the effort that we're making right now is actually going granular with the needs of the market and the consumer and cater to that and not get locked into, "Oh, one brand does it. Another brand does it. Where are you going to go?" We are in the market for the longest time. Even if there are a few missteps here and there, we have the capability to correct them very quickly. Thank you. Thank you so much, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to only two questions per participant. Next question is from the line of Rahul Gajare from Haitong Securities Private Limited. Please go ahead. Yeah. Hi. Good morning. And thanks for the opportunity. I understand last year has been difficult. But I was trying to see a slightly longer-term picture where revenue has grown by about 10%, profits have actually declined by about 2% over the last 6 years, even since the merger. And during the same period, new players have joined who've scaled up pretty well. So now, taking a slightly, say, longer time frame, say, over a 5-year period, what is the kind of growth that you would be happy with, both at the top line and bottom line? And if you can talk about the roadmap and if that also means widening the product portfolio further. That's the first question. Well, when we sort of finish, we talk about what our growth plans would be or growth plans are. I've just outlined how we are investing further to improve our back end a lot more. I did talk about the new production facilities that we've added. I did talk about the entire change in the supply chain that we're doing. I did talk about the service. I talked about branding. And what have I not talked about? Going direct to markets, in the markets where we so all of that is being done. It's a multi-pronged strategy. In terms of what growth we'll be happy with, I just mentioned, we'll keep targeting, at least in our largest market, which is the largest business even now, fans, a growth rate will be close to double or whatever the market or the industry growth rate. That's what our target has to be and needs to be going forward. Our bottom line, obviously, given the fact that we are perhaps not where our bottom line should have been. We've been behind a few other players. We are very conscious of that. The moment we're able to fix the market share and the volumes, operating leverage, as it's called, I think everything else will start falling in place in terms of margin also. That's exactly the struggle that we've had in the last quarter. While we are able to grow not just quarter, last four quarters, while we've been able to grow sales, we've not been able to improve or report improved profitability. That, as I mentioned, is a sign of the investments we keep making to make sure that the growth that we're gaining keeps gaining more and more momentum. That's all I can tell you about it. I can't sit down and talk about the detailed strategy because strategy group, the companies, do keep a little confidential before the rest of the market comes to know what exactly we're planning to do and what's there in the public knowledge, I'm telling you. But we would not be satisfied with the rate of growth at which the industry grows. We'll certainly want to do a lot more than that. Fair enough. I appreciate that. Sir, my second question is, is it possible you could split your fans' revenue and share, basically, between regular and premium and how each category has grown for you and how the new product contribution has improved over the last, say, three years? And this is where your A&P and all will actually tell. So how much you've spent on A&P last year and FY2023? I think that's the last question. Thank you. I'm not carrying all three-year data with me right now to answer the question on this call. Sorry. I don't have it. But the last three years, in the published reports, the results are there in everybody's hands. I can pick up. You can pick up and see what we've done. Last three years, yes, our spend on advertising and promotion was not as robust, as strong, as it should have been. That is a fact. But the fact of the matter is, we also have been trying to sort of correct some of the other things. Here is the sequence that I believe we will keep following for a little while. Not that we are not doing A&P, but we are perhaps not spending as much money as some of our competitors are. That's a fact, right? Some of the newer players that you talked about, when you say they have scaled up pretty well, excepting for one brand which took a totally different platform, which was relatively new to the industry, I don't think any other new brand has scaled up well. Let me challenge you on that. Everybody else has not scaled up. Only one brand. I don't want to name it here. So it's not that everybody else is scaling up, and we are being pushed behind. Not true. A&P has been moderated. Yes. But it's because of one sequence. I believe our product must be best quality. Availability of the product to the right counter is essential. Our after-sales service needs to be best quality. And it needs to be supported by A&P. If we purely do A&P, not being internally in a position to address the opportunity that we create, it's a waste of money. So we are being very careful in spending money on advertising and promotion in sync with what we are able to deliver to the market. As the business grows, obviously, the advertising promotion experts in this particular year are going to be hired. You're already seeing on IPL and elections, we are going to be putting our new PVC. And you'll be able to see how much money is being spent here, definitely more than the last two, three years. So as we see the improvement in volumes and margins, we will need to spend on the brand as well, which we're beginning to do. But when you say A&P, let's also remember that the Project orange that I spoke about, we have done thousands of shops all across India. That's very much part of advertising. It may not be seen on TVs, but it's very much when we are going micro-local in our out-of-home in the mofussil towns in India, that's also advertising promotion, not visible to the investors, but that's going on. I hope that answers your question. Number three-year numbers, I'm not carrying. But I know they have been below par, below the industry. I agree with that. No worries. Thank you and all the very best. Thank you. Thank you. Next question is from the line of Praveen Sahay from PL Capital. Please go ahead. I think this will have to be the last question because we have plenty, it's already 11:00 A.M. So I'll take this question since it announces. And then, I think we'll have to stop. Thank you. Okay, sir. Next question is from the line of Praveen Sahay. Please go ahead. Yeah. Thank you. Thank you for taking my question. So very precise, sir. On the fans segment only, as you had already mentioned, that the South India contributes one-third of your revenue. And now, you are coming with the Hyderabad capacity as well. So your focus area is to increase the South contribution the way forward, to improve the growth rate out there with this capacity, or to more focus on the cost-saving or the margin improvement side versus this? And the second is, how much is the contribution of your D2M states right now? Okay. Well, when you ask me about what our approach would be, it's never either/or. It's always both. Hyderabad plant is going to, obviously, give us newer products, better products, and also the cost savings. But it also needs to sort of help us in terms of expanding our markets, not just in the southern part of India. See, South India, we have taken up as a project. I think we've done very well. Our market share has gone up. But I think the market is so large that perhaps, right now, we still are the largest in northern India. Second is now South India. Because South India market is much larger, I think first goal would be to at least get the kind of market share we have in north to get that in South India. That itself is a large goal. Secondly, the other market in which we have, for whatever reasons, in the last couple of years, we've become a little weak is Western India, which, again, was a very large market for fans. So it's not about just going south India. We need to keep growing in south India and also growing West. Would it happen without cost savings and improved quality? Obviously, not. So that also will happen. So it's both, not either/or. Thank you. Any color on D2M states contributions, sir? Sorry. What contribution? The direct-to-market state's contribution by. Oh, okay. Yeah. Yeah. So as we speak, our direct-to-market sales have already reached about 30% of our sales done through general trade, about 30%. Thank you, sir. All the best. Yeah. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question of the day. I now hand the conference over to management for closing comments. Over to you, sir. Thank you. No more closing comments beyond one, thanking you once again. And secondly, for asking questions to us, which keep reminding us as to what the areas of concern for all the investors are. We take good note of that. I provided all the answers for which I had ready information. But let me reassure you that some of the anxieties that have kept in about the stability of the organization, the ability of the company to bounce back if there is a little shock in the I think inherent capabilities of the company over its long legacy. It's not a new company. We're talking about a company which is going close to 100 years old, not as a legal entity, but in terms of the product that we've been selling. All those processes are strong. They are being strengthened further. We are going to be investing in every little thing in our organization, in the products, in the markets, in the consumers. And end of the day, that will bring us better returns for the shareholders as well. So that effort will never lag here in this company and in this group. Hope that gives you some confidence in the way we are approaching. Thank you so much. Thank you. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you, everyone. Thank you. Thank you very much.