Ladies and gentlemen, good day and welcome to Orient Electric Q1 FY26 earnings conference call hosted by Access Capital Limited. As a reminder, all participants' lines 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 this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. Thank you. I now hand over the conference to Mr. Bhavani Kumarat from Access Capital Limited. Good evening, everyone. On behalf of Access Capital, I welcome you all to Orient Electric Q1 FY26 earnings conference call. Today, we have with us management represented by Mr. Ravindra Singh Negi, Managing Director and Chief Executive Officer, Mr. Arvind Vats, CFO, and Mr. Samar Jain, Head of Investor Relations. We thank Orient Electric Limited management for giving us the opportunity to host the call and would now like to hand over the floor to management for their opening remarks, after which we will open the floor for Q&A. Thanks and over to the management. Thank you, Pari. Thank you, Bhavani. Good evening, everyone. A warm welcome to all of you to Orient Electric 's Q1 FY26 earnings conference call. We hope you have the opportunity to review our financial results and earnings presentation, which are available on the stock exchanges and our company website. Q1 FY26 unfolded in a highly dynamic environment. At the start of the quarter, the sentiment across the electrical and consumer durable sector remained cautiously optimistic, underpinned by expectations of a broad-based recovery, infrastructure-led momentum, channel expansion across tier two and tier three markets, and a well-anticipated robust summer seasonal demand. However, the quarter presented notable headwinds for the industry. Contrary to the intense summer of 2024, India experienced relatively mild temperature levels. The phenomena started with the southern states and then continued across the rest of the country. Alongside this, the record-breaking rainfall in May, in a way, ended the summer before it even began. This unexpected climate shift disrupted the seasonal sale cycle and inventory planning across the industry. Additionally, a brief period of market softness was observed during heightened geopolitical tensions, temporarily affecting sentiment and market momentum. Despite these headwinds, Orient Electric demonstrated resilience and agility. We remain focused on agile execution, deepening market penetrations, and aligning our portfolio with evolving consumer preferences. Orient Electric reported a year-on-year growth of 2%, reflecting a tempered performance summit, a challenging operating environment, while sustaining its momentum on gross margin expansion, navigating category-specific headwinds. Our continual focus on premiumization, innovation, and channel expansion enabled us to maintain momentum across key segments. We see quarter one as a seasonal impact rather than a structural industry impact. Customer centricity embedded in our DNA guides our strategy at Orient, from product development to marketing strategies. The company continued its focus on differentiation across the portfolio, increasing accessibility across channels, enhancing customer experience, and building a robust digital strategy to guide consumers through their product research journey, increasing consideration for our brand. Premiumization enabled us to elevate customer value, enhance brand perception, and deepen consumer engagement across our categories. In the lighting segment, we continue to stay focused on to bring more value-added products, and our distribution and NPDs continue to reflect that. Our value-added products share with the overall CLUM business has remained consistent at 55%, which is in line with the leading players in the industry. In the fan segment, we launched a premium range of BLDC fans under the Tech Niche Design campaign. Our BLDC fan sales grew over 50% year on year, reflecting our commitment to energy-efficient innovations. Overall, our NPDs in the fan category now contribute more than 20% to primary sales, with our premium mix improving by almost 250 basis points year on year, accounting for about 30%- 35% of our ceiling fan sales. Our retail experience programs, Mission Orange and Project Spotlights, played a pivotal role in boosting premium product awareness and adoption through an experiential retail push, enabling touch and feel and live demos at retail outlets. Even in our heating appliances category, we've launched new premium square-foot fluoride water heaters with better features and warranties, which give uniform brand experience to the customers. We invested significantly in brand building this quarter, especially during high-impact periods like the IPL season. These campaigns reimagine fans in the context of modern homes, embracing cutting-edge technology with future-ready features, design, and finishes. Through these campaigns, we've not just showcased our premium BLDC fans differently, but presented an exciting narrative that captures the evolving preference of new age customers. While these investments have led to some increase in advertising costs, they have laid a strong foundation for a long-term margin expansion and brand equity. We will continue to spend close to 4%- 5% of our revenue to building preferences in our core categories of lighting and fans. Our strategic investments in building emerging categories also continue to demonstrate progress. While there were delays in execution of key infrastructure projects, the lighting B2B business executed several key street lighting and facade projects, such as Chhatrapati Shivaji Maharaj Museum in Maharashtra and Sarnath Temple in UP. We continue to witness a healthy pipeline of new inquiries, making us confident to sustain our growth trajectory in this segment. The consumer lighting business witnessed an industry-leading volume growth, aided by new product developments and expansion of distributor partnerships, resulting in market share gains. We also took a price increase during the quarter to part on the impact of regulatory changes, which increased our cost. Our thrust on mix enhancement continued to yield results with an improved share of value-added products. Switchgear and wires category registered accelerated performance with high double-digit growth in the quarter. Our expansion of distribution network and building the electrician program, loyalty program continues. Our channel strategy on DTM continues to deliver better results. We added approximately 1,800 new retailers under the DTM network this quarter. Our e-commerce channel continued to see robust traction across categories. We are now participating in quick commerce platforms, building on customer convenience, which validates our digital-first approach. These trends highlight the importance of channel agility and targeted portfolio interventions to navigate seasonal and category-specific challenges. Overall, the financial performance in the first quarter of FY2026 reflects both resilience and ongoing execution of our strategic priorities. We closed quarter one with a revenue of INR 769 crore, marking a 2% year-on-year growth. While revenue was below our initial expectations due to weather-related impacts, we continue to deliver better versus the broader industry. Our lighting and switchgear delivered approximately 7% growth. B2C lighting continued to outperform the industry with an overall single-digit growth in value and double-digit growth in volumes. Switchgear and wires had a high double-digit growth with lower base. The ECD segment remained stable with revenue at INR 545 crore despite fan sales getting impacted. Fans reported a muted single-digit growth, and appliances were impacted by more than 40% degrowth in air coolers. Water heaters witnessed double-digit growth. Our gross margins remained stable at 32.6%, and we are in the 32%- 34% range, reflecting the benefits of channel optimization and a refined product mix. EBITDA stood at INR 46 crore, a 15% year-on-year increase, and the EBITDA margin expanded by 68 basis points to 6%. We remain committed to creating a stronger and relevant brand, and we will continue to spend in the range of 4%- 5% of our revenues to build a well-balanced portfolio. As seasonal headwinds begin to ease and our structural growth levers continue to gain traction, we remain confident in our journey towards achieving double-digit EBITDA margins. Project Sanchay, our transformation initiative, remained a key pillar of our cost efficiency strategy. In quarter one, the program delivered a saving of INR 9 crore, underscoring our focus on disciplined execution and cross-functional synergy. Our working capital days stood at 25 days and a net cash position of INR 72 crore as of quarter one end. Looking ahead, we remain confident about the strategic levers we have put in place, with a festive season buildup likely to happen across channels in quarter two and likely improved consumer sentiment and spending. We are optimistic that festive periods will give tailwinds to our category. With this, I would like to open the floor for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Natasha Jain from PhillipCapital. Please go ahead. Thank you for the opportunity, and it's heartening to see the positive efforts playing out in your numbers, sir, especially in limiting the downside better than three years before. I have two questions. First, while your EBITDA margin has risen, both your segment EBIT margins have fallen. Can we attribute this cost entirely to unallocated expense, and would that largely be the consulting cost, which was there in the last quarter's days but absent? Therefore, going forward, can we assume this as the runway? Thank you, Natasha. Yes, I'll look at the EBITDA, and if I look at 6%, firstly, if you look at it year on year, that's a 68 basis point improvement. While the segmental results will have some impact because of overall muted sales, especially in the ECD category, and are larger than the usual inventories that we carry, overall, if you look at it from the EBITDA margin perspective, there will always be some hits and some gains, while there is some benefit of consulting that would have come, but there were larger spends on marketing that we've done. I've also given the guidance of saying that in the next seven to eight quarters, we do our efforts to attempt and get to double-digit EBITDA margins. Our quarter one and quarter two, which is the H1, sees a little lower than what we see in the H2 margins. If you look at our overall cost and everything, in fact, all the efforts have been put to bring the cost under control. It's a factor of now getting the top line in, and we are well into on our journey towards improved margins. Understood, sir. Thank you for that answer. My second question is on your lighting segment. Now, while year-on-year comparison won't make sense, on a Q2 basis, your EBITDA margin has improved very sharply. Given Q2 is a seasonally weak quarter, especially when one of your peers who is also into premium lighting reported margin decline on account of price appreciation. Now, given that you also are exposed to COB and DOB, your margins have been way better. Can you tell us how this margin improvement happened, and is it sustainable going forward? Natasha, I think you know the how's are slightly strategic in nature, but broadly speaking, our complete effort on getting the premium or a value-add mix better or improved in our categories is what is helping us improve our margins. Secondly, as I've said, we were slightly ahead of the curve from some of the other players in terms of passing on the price increase in the market, which happened due to the regulatory changes of RoHS compliance and other things. That helped us cushion any impact on the cost and other things. I would attribute it to that. Broadly, we've been in the same range of 29%- 31%, 32% on our margins in the lighting. I don't see anything structurally changing in the next few quarters, at least from our side. If there are structural changes in the industry that happen and if it impacts, that's something we can. Great, sir. Thank you so much, and all the very best. Thank you, Natasha. Thank you. The next question is from the line of Neeraj Jain from BNP Paribas. Please go ahead. Yes, thank you for the opportunity. My first question is regarding the family revenue for fans, particularly. Is it fair to understand that the family revenues are low and only industry-specific to the fans that really won't be high, considering that last quarter also we kind of alluded that there was an implication category within the Mumbai channel restocking was the category that air coolers when we saw a lot of restocking that happened. What is the family revenue position, and is it fair to assume that for fans we don't see a large inventory buildup in the channel? I presume it's for the industry. Neeraj Jain, thanks for the question. I think when I look at it and you know when you want to look at it from an overall national perspective, I think it's going to be very difficult to say. There will be pockets where different products have played differently. There are pockets where the rains have come in early, summers have been far weaker, and the product categories that get sold. Let me give you an example of South. South is largely a PPW market. Rains were higher there and much earlier than the usual levels. There will be some bit of channel corrections that would have happened in the PPW category in South. There will be some channel corrections that happened in the North and East in the ceiling fan category. Overall, I think channel has corrected its inventory. More importantly, it's not just the fans. There is this whole commonality of channel between fans and coolers also. Coolers are an inventory which is still there in the trade, and I think that has a little bit of impact on the channel inventories. Otherwise, yes, in the fans across the country in different regions, depending on the category being pushed, there is a little bit of channel inventory that would have got corrected in Q1. Got it, sir. My second question is on the fan cut or on the ECD segment again. Did I get that correctly that the price hike in the ECD also wasn't only on the lighting segment? We did take a price increase in fans in April, and that was also a large bit of commodity fluctuations that was happening. Given the fact that there was a huge amount of demand-supply gap, I think a lot of corrections or discounting or comparative pressures, that kind of got diluted within the quarter only. Okay. Thanks, sir. Just continuing to the previous question, because even I was thinking about what explains this sharp, petty dip, kind of a drop in the ECD margin. There was a BLDC fan sales increase of 20% after the numbers that include focus days and they have taken price hikes also. There is no new fancy expenses also involved in this quarter. What explains this petty dip? I think the answer is the same discounting that would have happened, right? Is there anything else? If you look at it from a marketing expense, it's up by almost 60 basis points, 70 basis points versus last year. We had invested, and I said, you know, typically 4%- 5% is what we will do in marketing. This quarter was about 5.5%, and we invested anticipating a very strong summer. We were committed to IPL spend, which I think in the long run has done the right thing to the brand equity. It was a good platform to launch a new BLDC range and the campaign, which was far more youthful and a very different campaign this season. Sure, sir. That's very helpful. We can ask one more question at the time now. Neeraj, maybe you can come back. We would have. I'll come back. Sure. Thank you. Thank you, Neeraj. Sorry, we can ask the next question. Ladies and gentlemen, please limit to two questions per participant and come back in the queue for a follow-up. Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead. Hi. Thank you for the opportunity. Can you give me the exact volume growth in B2B and B2C side of lighting? Keshav, thanks for the question. Typically, you know, we don't give exact volume. B2B largely is not a volume game. It's a project game. B2C is where the volumes matter. We've done double-digit growth in the volume side as far as this is concerned to a question on the larger side. Got it. Broadly, you're giving EBITDA margin guidance, you know, double-digit for those seven, eight quarters, but possibly what sort of margin you're looking for this year and what sort of top-line growth you're looking for? Keshav, we don't give any forward-looking guidance, but just to give a broad listing, whatever strategies that we put, we should be better than the industry, much ahead of the curve. Their growth is also reflecting in some of our market share gains in fans and lighting, which we track through a third party. We don't give a forward guidance like that. Got it. One last question from my side. As we understand, and you said fan channel inventory has reduced, but possibly still it's elevated. That is a fair understanding, and when you expect it to get normalized? As I said, these are all different nuances of regions. To my listing, I think it should be at a normalized level, and I think quarter two is a test of that. Okay. Because of channel inventory, at least the volume won't be impacted in Q2 for fans, at least for Orient Electric Limited, right? Keshav, we'll have to see that and come back. We are very optimistic given the fact that there is a festive buildup that will happen in Q2, given the fact that Diwali this time is slightly earlier than the usual. We are optimistic on that. Understood. Got it. Very helpful. Thank you so much, sir. Thank you, Keshav. Thank you. The next question is from the line of Aditya from Securities Investment Management. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, we have insourced the production of PCB. We have backward integrated it to producing BLDC motor. You know, with a strong design and customer knowledge, how has our timelines between conceptualization to commercializing a new product reduced over the years? Can we expect the pace of new product innovation increasing going forward as well? Aditya, hi. Thanks for this question. I think what we've done is there are two parts when we looked at PCB, and we got PCB in-house. A was to own the design and get a better quality, and that we're seeing from our launches that we've done. The second is from a perspective of timelines and all. At least on the BLDC side, we're seeing about 10%, 15% reduction in our NPD timeline. We intend to squeeze it further, and as we speak, there are works happening on saying how do we bring it, how do we reduce it. The larger thing is that we spend a lot of time looking at what are the consumer issues that we can solve for, and that's what we are obsessed about. We are looking at overall timelines. I hope that answers your question, Aditya. Sure. Sir, understood. If we look at our annual report, we have talked about improving our service timelines. If you could just help us understand qualitatively what are we doing to improve our servicing capabilities and how are we playing against competition in this regard. Have you reached their levels, or is there still some catching up to do? There are two things. A couple of things that we've done. The first thing is that across the markets, we've got almost about 12 states and larger areas, which are direct e-service buyers now. There are 19,000 out of the possible 19,700, 19,800 PIN codes that we've serviced last year. We've used a lot of digital platforms, and we're kind of digitizing using AI bots on our consumer touchpoints. We measure the 24-hour stats and we measure the 48-hour stats. In some of the cities in the peak seasons and category-specific, we also look at eight-hour stats. Those are things that we've done. I can't share the numbers and everything. Our stats or turnaround times within those specified have improved dramatically. We've put a lot of efforts to get our digitization and the bots put at the customer touchpoints. We've also, as management, started a program for some Samvad where we listen to consumer voice. That's the core of what we are wanting to build. It's very consumer-centric. We want to understand the voice of the consumer, and that's the large effort that we're doing. Overall, from a service point of view, we've seen sharp improvements. We're getting that feedback also from the consumers, and as we go into a continuous journey, the feedback. We've put our service partner network is almost 1,000+ service partners, which makes sure that these 19,000 PIN codes are adequately serviced and those things. Understood. How do we fare against competition in this regard? Is there still some work to do, or do we have some power with them? Aditya, It would be unfair for me to comment on it. When I talk about market shares and other things, we don't put it from our perspective. We looked at third-party data. Unfortunately, in the service, there is no third-party data which benchmarks, or at least we don't subscribe to these reports which benchmark this. My feeling is that from a consumer, and we look at it from a consumer perspective, my customers seem to be acknowledging the improvement in our service, and that's what we track it. Got it. I have just two bookkeeping questions. If you could give me the lighting business, what is the B2B and B2C mix? Aditya, given the fact that we're restricting two questions, you can come back to the queue, and I'll take more questions from you later. Sure, sir. Thank you. Ladies and gentlemen, please limit to two questions per participant and come back in the queue for a follow-up. Thank you. The next question is from the line of Sonal from Prescient Capital. Please go ahead. Hi. As I said, Sonal from Prescient Limited. I hope I'm audible. Yes, Sonal, we can hear you. Sure, sir. Thanks for taking my question. Sir, first, I wanted to understand on the ECD business. If you look at the EBIT margins Q1 2025 in this quarter, could we attribute the reason for a dip in EBIT margins? If you could just qualitatively explain the reason for the decline. I think I answered this question. I think Keshav spoke, Neeraj, somebody had asked. There are a couple of things. Obviously, there were these inventories which have gone in. There were marketing expenses which have been much higher than the usual. There's almost a 70 basis point extra that we've spent. The top line has not happened the way we were supposed to happen. There are a lot of factors which are there. By and large, as I said, it's largely an external impact, not a structural impact which is going to bring the margins down. Obviously, the other factor was also competitive pricing pressures. While we did take a pricing freeze in April, the benefits of that got kind of marginalized due to pricing pressures. There were multiple factors. If I were to give you a holistic view, these were the factors which would have impacted. Is there anything structurally impacted? No. We continue to focus on premiumization. Our NPDs now contribute more than 20% of our business. Structurally, we are on the right direction. It's a lift in the margins is what I feel. Obviously, one more thing is on the ECD margins, coolers, - 40% and above. That's a one-time impact that the industry will go through. Given demand, hopefully, it's recovered, these margins should restore to higher levels as there is a good structure essentially. Yeah, we anticipate that. Got it. Sir, my second question is with regard to BLDC. As an end user, as well as I think users as a shareholder, I think what needs understood is that Orient is actually working very hard to have a good list of products at the entry level as well as the premium level compared to the competition. Not taking it, but where are we in terms of our like-to-like products with the other two, three leading players in the BLDC fan? Are we there in terms of product pricing specifications? Or there is some work to be done there? Just wanted to understand that. There are two kinds of one data point that I'll put across is saying we've grown by 50% year on year on BLDC, which means there is traction which is coming in. We've launched almost 80% of my new launches are on BLDC. I don't know whether you're an end user or not, but I would encourage you to look at some of our new launches, whether it's Aeon VC ceiling fan. I did serve the market last quarter. That's why I was asking this. Yeah, that's why. I'm sure you will appreciate the new designs and the minimalistic aerosleeve that we've launched. We've catered to all the pricing segments and consumer needs in the BLDC. On top of our designs and aesthetics, we've also said, you know, look, fans are an integral part of your design requirement or our lifestyle requirement. We've launched almost 40 colors, and some of them are very nice, well-researched colors where we've gone to the architects, designers, consumers, and picked it up from there. We continue to do well in this segment, and it's a continuous journey, and we'll see more of it coming from our side. Got it. All right. Thank you so much for the opportunity. Sonal, thank you for being a loyal Orient customer. Thank you. Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead. That's a good set of numbers in challenging times. My first question is on lighting. In your presentation, Orient Electric has been going relatively better versus all the peers in terms of lighting growth. I just wanted to understand, and you also mentioned about distribution expansion in lighting. I just wanted to understand what came there period to period relative to this universe of lighting distribution and how much of it is quality. What I'm trying to understand is that if this market says in opportunity and this outperformance, how much, you know, how many years can it last for Orient and how many quarters do you think that, you know, there's in terms of market share gains in the lighting sector? Dhruv, thanks for your question. Let me just step back and tell you in lighting, the gains are, it's a combination of things that you do. The first and foremost is how are you understanding and solving consumer need. Second is what are the kind of products, what segments do you use. The third is a combination of technology and NPDs that you bring in. The fourth, which supports all of this, is accessibility, which is where the distribution is happening. I think if I were to go by third-party data, we are improving on our numeric distribution. We are improving on our weighted distribution. If I were to compare with leaders, I think we still have a distance to go. Some of the markets in some of the states where we've done well and caught up on our numeric and weighted distribution, there are some regions in the country where we still have work to do. I think that's a task that we've already defined well for ourselves, and we continue to expand on numeric and weighted both. It's a combination of what all that we do and what we bring onto in a holistic manner that will give us the market share gains. While the industry is dealing under the price erosion, we believe that what we have as an approach should help us gain and continue to gain market shares and values there. Sure, sir. If there is no impact on price erosion, it will continue. It may still be in the industry for quite some time, but are we seeing signs of this happening anytime soon? As I said, you know, we took a price increase in May. That has helped us in navigating some of the pricing pressures. How long will it last? As an industry, I was hoping that it should taper down. I think the rate of price erosion will now slow down, and we should see some of the slowdowns to come in. The good part for us is that we are getting volumes. If you gain volume, then you get market share. When the price erosion slows down, that whole volume to value ratios will improve, and that would give us further gains, at least on the value terms. We are optimistic about that. My second question is on you talked about fans. Obviously, you've made a very large investment there. I just want to understand from a three-year perspective, you know, how much will it add to your insourcing levels? If you can just give us the data point in terms of where you are in terms of fans and sourcing, and after the retrofit plan is fully scaled up, you know, where Orient's overall fans and sources may be, and through how much of it can add to margins as well. Thank you so much. Dhruv, between in-house and outsource, we don't disclose the data point. As I said in the last call also, we've scaled up well. There is this whole ecosystem of our strategic suppliers who've moved with us to Hyderabad. You can say last quarter when we were building up inventories for the season, almost 50% of what PPW was coming from Hyderabad. We've had a little bit of, and industries had a little bit of slowdown. That's a one lift. In the next three years, we've put enough capacities to, you know, take care of our next three years' requirements to, you know, outpace the industry. At our peak capacity, we do see cost benefits to come in, and that'll all start reflecting in our margins. The question is for the industry to start coming back to the growth, volume growth, which got impacted in a season like this. We are optimistic that, you know, season would start building up now. There is the ratcheting, ceiling fan ratcheting, which will happen on 1st of Jan. That should start seeing some volume growth for the industry. Great. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Arshia Khosla from Nirmal Bank- Institutional Equities. Please go ahead. Hi. Thank you for taking my question. Sir, my question is, like in the previous quarter, you have mentioned that we listed ourselves in the quick commerce platforms. I just wanted to understand what our products are in the quick commerce platforms and how, I mean, are the sources substantial for us? Arshia, thanks. Yes, we did. Our products are available on quick commerce, both Blinkit, Zepto, and we will also look at other platforms which are coming in. Largely, all products and SKUs which are very intuitive, convenient that the consumer would look at it, whether it's a fan in the summer that they want. We add air coolers there. We've got keys there. We've got irons there. We've got lighting products there. We've got wiring accessories there. As we scale up, and I said, we are solving for consumers and consumer convenience. This platform is meant for consumer discovery and convenience. We are participating well there. Understood, sir. Has it started adding on to our sales as of now? Yes, it has, but is it very significant in terms of, you know, if your question is that if it's quite like FMCG and especially the staples, it may not be that for the industry as of now. We do see this as a platform where consumers will look at some of the categories or some of the products where convenience and here and now is required. Understood, sir. That's excellent. Thank you. Thank you, Arshia. Thank you. The next question is from the line of Shivkumar Prajapati from Ambit Investment Advisor. Please go ahead. Yeah, hi. Thanks for having my question. My first question is, given our GTM practice in South and upcoming rollout in few more zones, what has been the observed retailer churn rate from competitors? Take Crompton or Usha or some other players. Shiv, thanks. Thanks for the question. What you don't look at is the churn because most of the retailers are multi-brand outlets. What you look at is the counter share. We are seeing up. When I say when I get a better market share, my counter shares go up. We see three parameters when we look at our success, which are lead indicators for our output of market share: MD, WD, and counter share. All three, when we do this, we look at these lead indicators. When these lead indicators, the meter starts to move up, we know that the market share will go up. It's not the churn that happens. You get a slightly better counter share. Okay. Sir, given this strategy, you know, live in multiple states, how are we measuring our cost to serve or say order sale rate compared to the legacy model? Our logistics, when we go direct to a particular market, we put up our logistics support there. We've got our own logistics performance and fill rate measurements that we track. In all our markets, whether it's an MD market or a DTM model market, our endeavor is to make sure that whether it's the end consumer or the retail, those are serviced well. In all our markets, including our MD markets, that's something that they work on. Okay. Sir, is there any category that we are considering to exit due to poor scalability or, you know, margin dilution? Not as of now, Shiv. If we ever do, we will let you know. Sure, sir. Can I keep in another question? Shiv, you can come back to the queue. Sure, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Prathamesh Rane from Elara Securities. Please go ahead. Yeah. Hello, sir. Congratulations to the group calls that tried to challenge. My only question was that, did you witness volume deeper than 40% in coolers or as an industry perspective we're talking about? Prathamesh, thanks. As I said, we've looked at, you know, when I say 40% and more, that's the value volume degrowth for us. From an industry perspective also, while I don't have industry, my third-party indication data says that industry would also be in that range. Unlike anything else, this product has a very short consumer offtake window, practically speaking, six to eight weeks. That six to eight weeks, unfortunately, got impacted with earlier than usual rain across the country. Got it. Thank you, sir. I'll call back in the queue. Thank you. The next question is from the line of Nikhat Koor from Dolat Capital. Please go ahead. Thank you for taking my question. My question is regarding solar products. Solar products are gaining a lot of traction. Are we looking to enter any solar product categories? My second question is regarding the BEE transition. Now that the fan industry will see a BEE transition from January 1, are we expecting any kind of disruption or any kind of price increases ahead of the BEE energy chain? Nikhat, thanks. As you speak, we have found the solar products in our lighting, both from a B2C perspective and from a B2B perspective, we have solar products there. Getting into more solar products, which are from an end consumer perspective, we keep evaluating it. If the question is, are we going to get into solar category? Maybe not as of now. Your second question was on the ratcheting or the BEE Star rating ratcheting, which will happen on January 1, 2025. We've got five months, and we're preparing our complete action plans to make sure that there is no disruption or the least disruption that happens. Yes, when the ratcheting happens, which is basically a two-star will become one star, and a one-star will become zero, there will be some price increase or a cost increase that will happen. It will get passed on to the consumers. There is still four or five months as an industry, you know, hopefully, because when the first time the Star rating happened, we went through a learning. I think those learnings will come handy. As we speak, we're preparing for the ratcheting. That's just to clarify, and that's only in the ceiling fan. Okay, sir. Thank you. Thank you. The next question is from the line of Niraj Kamtekar from Propesro Tree. Please go ahead. Hello, sir. I'm audible? Hello, Niraj. Yeah, Neeraj, you're audible. Sir, you mentioned that there is a flat demand in fans due to unseasonal rain. At the same time, the number of new houses built is going up. Why were sales growth is low? Was it because of more competition? Niraj, you have to understand. There are different segments. There is a new house segment, which is a certain percentage of the industry sales that happens. Then there is replacement, which is renovation-led replacement. That's another percentage of the overall sales. There is a large upgrade, stroke, you know, genuine requirements happening. That's another segment. Some segments will continue to grow, could be triggered by the housing segment and all. In the housing segment, you also have to see how many houses have got occupied because fans get used when the occupancy levels in the housing sector go up. That's one factor. Otherwise, overall, some segments or some needs of the consumer will pull it up. There were some seasonal needs which brought it down. There were multiple factors which impacted the industry. Okay. Okay. Now, what steps do we have taken to bring down the inventory? First and the foremost step that we took was, you know, make sure that we don't add to it. We didn't produce once we were very clear that the season is not looking like the way it was supposed and anticipated. We did carry anticipating a good season. As we speak, there is inventory planning and production planning, which will make sure that, you know, in Q2, we normalize our inventory levels. Okay, thank you. Thank you, sir. Thank you. Thank you. Ladies and gentlemen, please limit to one question per participant and come back in a queue for a follow-up. The next question is from the line of Neeraj Jain from BNP Paribas. Please go ahead. Hi, sir. Thank you for the opportunity again. My question was more from a long-term perspective. If you only add spend, you said that you're able to deliver that just with 4%- 5% of sales. My question has been that we have seen the ad spend going higher than the top line growth over the years. I think the ideal has been that over the years, it should actually drop down as a percentage of sales and we start as a brand, get more recognition and more customers with them. How do we look at it in terms of keeping the ad spend at a higher level to drive our sales? In that case, if we ever get to a period to get to the double-digit margin, will it keep on getting pushed further? I just wanted your thoughts on this. Neeraj, thanks. Thanks for this question. I think, you know, while we look at double digits, it's an output. You have to look at what are the inputs that we're wanting to trigger. One of the inputs that we've been wanting to trigger is saying, how do we have a balanced portfolio? How do we get some of our other categories to do much better than what they're doing? In that direction, lighting was one of the identified ones, and we are seeing the traction happening there. We're wanting to build a brand which is a larger consumer-centric brand and not just fans only. That's where the marketing spends will go to build core categories of lighting, fans, and into some of the new categories that we're pushing our efforts on. Once that happens, as a percentage will come down, both in the B2B and B2C side, we will remain far more connected as a brand in the minds of the consumer. Yes, sir. I wanted to also check, did we see any slowdown in the B2B lighting specifically in this quarter? I was just wondering that we have seen double-digit growth in switchgear wires and then multiple zero soaps, probably like a low single-digit soaps. In that case, you know, we have seen some moderation on a quarter-on-quarter basis on lighting, especially in the government catered soaps who were on a higher side. What explains this first-wide quarter-on-quarter decline? Have we seen any slowdown in the B2B for us? There was some slowdown in some of the government-led infrastructure projects, but we see it as temporary. I think, as I said, there was this temporary sentiment that went down, or there was a little bit of hold during May when there were geopolitical tensions. We do expect these to come back now. Sure, sir. That's very helpful. Thank you and all the best. Thank you very much. Pari, we'll take one more question. Thank you. The next question is from the line of Shivkumar Prajapati from Ambit Investment Advisor. Please go ahead. Thank you for taking my question again. I have a couple of questions. Are we exploring any export opportunities for our new product categories, say wires and cables or BLDC fans? At least on the fan side, different categories, including markets where energy efficient fans are there. As we speak, we do keep exploring markets, and we continue to do that. For wires, we are wanting to first build up domestic capabilities, and then we look at switchgear. Obviously, we do export some of it, and we continue to make our efforts to make sure that some of our switchgear gets more traction on the export side. Okay. Got it. Sir, how do we see Orient's position evolving in the next three to five years? Is it as a multi-category volume player or as a high-margin premium brand player? You know, we've been very consistent in our narrative around the organization saying we are wanting to be a consumer-centric brand which looks at solving consumer problems, and premiumization is a strategy that we're building. We'll have a well-balanced portfolio, and the premiumization effort, which is yielding some results, is giving us the confidence of moving towards a double-digit margin. Are we going to be a value-for-money volume brand? Definitely, no. Okay. Sir, given the emerging categories, say wires or switchgear at a nascent stage, how do we prioritize our CapEx and the marketing spend across these verticals? Right now, as I said, our marketing monies are now building two core categories, strengthening our fans category and all the efforts that we're doing on the premiumization on the fan side, and then building lighting. While we do this, this has a warm Orient as a mother brand impact, which will have a trickle-down impact on the emerging categories. Emerging categories will have a differentiated spend to be done, maybe at the retail visibility. At a new cost, when we start seeing volume there, we will then take it at a larger level. Thank you. Ladies and gentlemen, that was the last question for today. I now hand over the conference to management for closing comments. Thank you, everyone. Thank you for your questions. It keeps us on our toes, and thank you for the encouragement. We look forward for some revivals to happen. We are very optimistic given the fact that there is a festive rebound that we hope to see. Thank you so much, Pari and Bhavani, for conducting this. Have a good evening. Thank you so much. Thank you. On behalf of Access Capital Limited, that concludes this conference. Thank you for joining us. You may disconnect your line.