Thank you operator. A very good afternoon to everyone present on the call. I'm Gandharv Tongia, CFO at Polycab India Limited. Thank you for joining us. On this call, we shall discuss our operational and financial highlights of Q1 fiscal 2022. Please note, during this call, we will be referring to the presentation, financial results, and financial statements which are available on the stock exchanges as well as investor relations webpage of our website. It can also be downloaded through the link or QR code on slide eight of our earnings presentation. From our management team, we have with us our Chairman and Managing Director, Mr. Inder Jaisinghani. Let me now hand it over to Inder Bhai for his comments. Good afternoon, everyone. First quarter performance has been encouraging despite the challenges posed by lockdown in many states. We were able to record much better business compared to last year. We remained vigilant in the managing costs and navigating the volatile demand environment. More importantly, we are progressing well on our strategic agenda and achieving new milestones, which will drive transformation over mid to long term. We continue to serve communities and fulfill our purpose of meaningful ways. I now request Gandharv to take you through our earnings presentation. Thank you, Inder Bhai. As you all are aware, the business environment has been very dynamic in the previous quarter. Despite that, we have been able to achieve decent performance owing to resilient business model. On the good side, construction activities continued for better part of the quarter, albeit at a slower pace. All thanks to a calibrated approach taken by government in terms of lockdowns. Project and industrial activities started trending up as caseload subsided from its peak. Our learnings from the past also helped us improve our supply chain and production, which remained largely unaffected. Consumer sentiments remain positive, and we believe there could be some pent-up demand in coming quarters. On the flip side, raw material volatility continued. The inflation in our input basket was in low teens during the quarter, and our blended price hike was in high single to just double digit. In mid-June, sharp correction in copper prices caused further complications to an improving demand scenario, as dealers refrained from stocking in anticipation of price cuts. Accordingly, inventory levels in distribution channel dipped significantly, with secondary sales tracking ahead of primary sales. We believe this is a temporary sentimental setback, and primarily will eventually catch up with underlying demand. July seems to be panning out better than previous months. Retail outlets across the market are largely open at the moment, and activity is picking up. We continue to believe that second half is likely to be better than the first half of the year, similar to last year. Of course, assuming that third wave, if any, doesn't severely impede the economic progress. Moving on to presentation, with slide four for the quarter ended June 2021. Our consolidated revenue was up by 93% year-over-year. EBITDA increased by 144% year-on-year with 153 basis points improvement in margin. Cost-saving initiatives were more than offset by unfavorable operating leverage and input cost volatility. This limited the EBITDA margin to 10.3%. Having said that, I would like to reiterate that the right way to analyze our operating profitability would be on analyzed basis, as several dynamic factors can weigh on quarter-to-quarter margins. Our staff cost at INR 959 million or 5.1% of sales was higher than last year, but broadly at par with Q4. A&P spend at INR 78 million or 0.4% of sales was optimized concerning the subdued business environment seen in Q1. Our finance cost at INR 122 million was lower by 25% year-on-year. Other income at INR 253 million was down by 25% year-on-year due to one-off interest income gain in the base quarter. A detailed breakup of our other income and finance costs have been provided on slide 12 of our earnings presentation. Our profit before tax at INR 982 million was up by 151% year-on-year. NPAT at INR 1,053 million was down by 36% year-on-year, again on account of one-off gains in base quarter as explained on slide nine. Normalized PAT is 10x up last year. PAT margins in Q1 stood at 4.0% against a normalized margin of 0.8% in the same quarter last year. Moving on to segments. On slide five, wires and cables revenue doubled over the last year despite the multiple challenges. In domestic business, cable outperformed wires in Q1, that was partly on account of relatively favorable base. Distribution as well as institutional business grew over 100% year-on-year, with institutional being marginally better again on softer base. Though from an overall market perspective, we believe the institutional business still continues to see remain subdued, due to relatively lower number of large scale projects. As I mentioned earlier, in June, we saw sharp correction in copper prices. This impacted the trade sentiment, particularly for primary sales of retail wires just when markets had started to open up. Exports business grew 12% year-on-year. Its share of overall revenue improved sequentially to 6% in first quarter versus 4.5% in previous quarter. The growth was driven by Asia, Australia, U.K., and Africa. Logistical challenges due to shortage of containers globally continues. Overall segmental profitability for wires and cable was impacted by raw material inflation and adverse operating leverage. On slide six, FMEG revenue increased by 39% year-on-year. The business momentum was affected by closure of retail shops across many large cities. Distribution expansion continued with greater thrust on digital marketing campaigns. Innovation-driven product development and improving competitive positioning remains key focus areas. We have a healthy pipeline of new products across categories. Fan, which is our largest category in FMEG, grew in healthy double digits. However, lockdowns in April and May, which are key summer stocking periods, impacted for a second consecutive year. Within fans, portfolio mix continued to improve towards premium. Light business grew with higher emphasis on augmenting portfolio across price pyramid. Switchgear saw strong growth, however, switches remained subdued. With learnings and success from a strategic intervention in switchgear, we are now in process of integrating switches with light business, which will help us unlock synergies through operational advantage and distribution overlap. Solar and conduit pipes saw healthy traction. Overall segment profitability was largely impacted by adverse operating leverage. Raw material inflation is being counterbalanced by pricing action and cost consciousness. While many of you may be aware of this, but for the benefit of larger audience, I would like to update you all that Polycab was acquired Silvan Innovation Labs. It is a Bangalore-based technology company focused on providing cutting-edge automation offerings for homes, offices, banks, retail outlets, hotels, and other spaces. Silvan pioneered the concept of home automation in the Indian residential market and has a proven track record with many prominent real estate developers. Acquisition of Silvan augments our R&D and innovation capabilities. It will enable us to address evolving consumer needs. HOHM and Silvan put together gives a strong foothold in IoT space and is in line with our ambition to become a forefront consumer-centric company. Moving to slide seven. Other segments, which is largely our strategic EPC business, clocked INR 575 million in revenue, up by 19% on year-on-year basis, but decreased by 25% on a sequential basis due to impact of pandemic. Segment margin stood at about 11%. This other segment, as disclosed, the financial result largely reflects Ryker Base, which is a part of our backward integration initiative. We continue to explore options to improve utilization rate at Ryker plant in order to optimize production cost structure at Ryker. Moving on to financials from slide nine onwards. Our net cash position stood at over INR 6.7 billion as of June end, which was 3.3x of same period last year. Working capital is a mixed bag. While receivables levels have been quite good, inventory levels were higher than normal, as we were anticipating better demand scenario in June. Our numeric distribution metrics continued to trend positively. Even during lockdown, we were able to onboard many new dealers, especially on the B2C side. Project Shikhar, which is implemented in five markets in its first phase, is helping us penetrate new retail outlets and improve shelf space. This was supported by aggressive digital marketing campaigns, which helped in increasing brand awareness and connect with consumers. These campaigns across digital formats have cumulatively made over 24 crore impressions during the quarter. Project LEAP continues to make good progress, and we hope to share some updates in the next quarter. I'm also delighted to highlight that our power cable test laboratory at Halol is accredited by National Accreditation Board for Testing and Calibration Laboratories, or NABL. It is possibly the only private laboratory in India having a wider scope of more than 4,000+ tests covering multitude of national and international standards. It is also the first laboratory capable of testing a single cable length from 50 meters to maximum to 4 kilometers. The test certificate issued by this lab would be accepted worldwide as per the agreement with NABL. Lastly, given the kind of building blocks that we are putting in place and our strong brand equity, we are very optimistic of a stronger performance on top line as well as bottom line in the coming quarters, particularly in the second half of the year. With a clear strategic focus, we remain excited about our group future growth prospects. With that, I conclude my opening remarks, and we will be pleased to answer your questions now. Over to you, operators. Thank you very much. We will now begin the question and answer session. The first question is from the line of Ravi Swaminathan from Spark Capital. Please go ahead. Hi, sir. Thanks for taking my question. My first question is with respect to the price hike that on a blended basis that you would have taken over the past six months in the cables and wires business. If you can give that. Thanks, Ravi. Ravi, you know our business model. In the case of cable and wire business, generally, we revise our price list on a monthly basis. There are two variables which are considered while deciding the price list. One is the increase in average copper LME prices in the previous month, second is the change in the foreign exchange rate. Both were considered even in the current quarter. On a blended basis, the raw material cost would have increased by in early teens, whereas the price hike which we have taken is just touching the double digits. There's a bit of a negative delta there, which is also getting reflected in the contribution margin in the current quarter period. Got it. Would we wait for commodity prices to cool off over the next six months, or is it likely that we'll go ahead and take the differential price hike, which is yet to be taken? Yeah. The model which I just elaborated is essential to our business. We will continue to follow the same model. Ravi, you and me have discussed this several times. In our business what happens is on a quarterly basis, there are at times some dynamic factors which can weigh in on quarter-to-quarter margins. That's the only thing. If I were to take an annualized view, I don't expect any material change in the contribution margin. If you recollect, even last year first half, the contribution margin and EBITDA margin were slightly softer. In the second half of the year and overall for the entire year, it was comparatively a better number. We'll have to, at times, take an annualized view. Directly, I believe that in quarters to come, particularly in the H2, the numbers are going to be relatively better than what we are seeing today. Got it, sir. With respect to the FMEG business, basically, there has been a EBIT level loss which has been there. Is it because of the fact of lack of operating leverage because of lower than par turnover? Is it because of a combination of also delays in taking price increases across products too? You're absolutely right. It's primarily because of negative or adverse operating leverage. One of the reasons is the employee cost. Ravi, you would be able to recollect that last year we didn't offer any increment to our employees, whereas in the current year, we have given that, and partially it is more like a two years increment rather than a one year increment. That is where the fixed cost for the corporate laborers as well as our employees has gone up. The second one is the A&P spend, though it was calibrated, is slightly higher than the base quarter, which is also getting reflected because A&P is primarily attributable to our B2C business, not to B2B business, that is where these numbers are allocated to the segment. These are the two main reasons, operating leverages because of fixed cost and as well as A&P. On the contribution, there is no significant or material difference, sir. Okay. Got it, sir. My final question is with respect to the CapEx, sir. Next two years, that is FY 2022 and 2023, what kind of CapEx we are likely to use? Will it be the INR 300 crore range per annum? Absolutely. In the current year, we are anticipating almost INR 300 crore of outflow. In the current quarter, we would have incurred outflow of INR 80 crore or thereabout. Next year, I think it is slightly early to give any guidance. We will probably wait for a couple of quarters towards the end of the year. We will come back to you for the next fiscal. This fiscal, I think, should be around INR 300 crore, broadly. Okay, sir. Thanks. Thank you, Ravi. Thank you. Before we take the next question, we'd like to request participants to please limit your questions to two per participant. Should you have a follow-up question, we request you to rejoin the queue. We take the next question from the line of Naval from Emkay Global. Please go ahead. Mr. Naval from Emkay Global, you may go ahead with the question. Yeah. Am I audible? Yes, sir. Please go ahead. Okay. Thank you for the opportunity. Gandharv, I have a couple of questions. First, if I compare your FMEG revenues with the market leader who also reported numbers yesterday, on a higher base, they are like flattish on two-year CAGR, and we are down around 11%. On a low base also, this is a weak kind of number. Can you elaborate, was this because of regional specific things where you are heavy on west and west was more impacted with Maharashtra for lockdowns or there was something else over here? That is my first question. Thanks, Naval. Naval, we are in this business since last six, seven years. Comparatively, we are a smaller player. The industry size is almost 60,000 crore INR, and we did almost 1,000 crore INR, which is around 1.5% of market share we have across several product categories. Within that, the largest is fan. Sales got impacted because of localized lockdown in this particular current quarter. That is there. Second is, since our base is growing year after year, you would have seen the revenue CAGR is hovering between 35%-40% on a over a five-year period. That is also impacting the overall number. On that growth of B2C business, including FMEG and retail wire, we remain positive. The projects like LEAP are also going to help us in augmenting the top line. We are in the process of augmenting the distribution, more particularly on the smaller towns and in the quarters to come, I'm sure these initiatives, for example, LEAP or Shikhar, would help us in improving the overall top line. That was the distribution side. On the product side, the brands like HOHM or the Silvan acquisition, which we have done recently, would also help us in augmenting the product portfolio, and we would be able to get into the premium product categories because IoT is going to be our premium offering. Overall, looks like that we are here to experience the best of consumer business, both at retail wire as well as FMEG, and we remain positive on both these businesses. Okay. Second question on other operating expenses, although you have given the schedule. Any specific reason sales are down 38% sequentially while other operating expenditures are down only 18.5%? If you want to give your insights, whether this is one-off, and operating leverage will bounce back strongly once the revenue recovers, or there was something else to it. You're right, Naval. Primarily, it is operating leverage only. As I mentioned to Ravi also in the previous question, the increase in fixed cost in the form of employee remuneration as well as payments for contractors was affected from the current quarter, whereas the top line was not necessarily good from that perspective, and that is where it has impacted negatively on the operating leverage. Other than that, I don't think there is any specific line item which requires specific mention. Other expenses are broadly in line with what we had anticipated. Understood. Lastly, can you give your insights on region-specific momentum in sales or demand recovery, what you have seen in 1Q East, West, North, South, and how they are trending in the current quarter? As far as current quarter is concerned, it's too early to comment. It's barely 20, 21 days, but sequentially, it looks like that the current month is better than the previous month. The other thing which I could clearly call out is that's not necessarily reflective of the overall monthly performance because not necessarily 20 days would be reflective of the entire month's performance. On the regions, I think South got impacted. Other than South, all other regions have done well. South, I think we can attribute to the localized lockdown, which was there in the southern states. Other than South, I think almost all the regions have recorded a significant growth across all the product categories. Got it. Thank you. I'll come back in the queue, and all the best for ensuing quarters. Thank you, Naval. Thank you very much. Thank you. The next question is from the line of Dhaval Shah from Girik Capital. Please go ahead. Hello. Yeah. Hi, sir. Sir, can you give us your outlook on the wire and cables business separately? What do you think about each segment? You mentioned the institutional demand is lower, so just more clarification on that. Just more of the demand levers for the cables business, given the spending by the government is going on. There are a lot of spending happening on the solar park as well, so I assume there will be some new demand coming from that segment as well, and we are leaders. What sort of demand visibility do we have for this year and the next year, along with exports? I'll come to the second question. Sure. That's quite comprehensive. Thanks for asking. Let me talk about the macro drivers. Cable and wire, if you visualize, are consumed in almost all the sectors. You think of any infrastructure, any new expansion, greenfield, brownfield, any new office, everywhere you'll need cable and wire. We are the only company in the country which can provide all types of cables and wires, and our distributors are well-placed to attend almost all the requirements which a consumer would have. The other thing is, generally speaking, we have ability to provide the required material almost there just in time or within a day or two, and that is a significant differentiator between us and our peers in the industry. You are aware about the initiative which the government is taking in terms of reforms. I would not like to spend time on that in this call, but I'm sure you're well aware about that. That will continue to help us in improving the GDP, the overall consumption of cable and wire. It helps the sector as well as a company like ours, which is a market leader by far. On the supply side and the GTM side, what we are doing as part of Project Shikhar and Project LEAP is we are focusing on increasing our reach, increasing our number of dealers and distributors, catering to the requirements in the geographies where we don't necessarily are present or are currently under index, for example, the smaller towns. Both the government initiatives and our initiatives in penetrating the market would help us in improving the rate. You would have already seen our March presentation where we had talked about that cable and wire, we expect to grow on a five-year basis at 1.5 times of the industry growth. It could differ from a year to two, but overall, our five-year horizon, we are hopeful that we will be able to do that, and that is why we are working with BCG under the Project LEAP framework to do that. That was on the overall cable and wire. Correct. If you look at FY 2020, we were at around INR 7,500 crore top line. FY 2021 was INR 7,600 crore. Now here, we already have a 30%-35% of inflation built into this when we talk about the future numbers. What sort of guidance would you give us in terms of, say, by next three-year period, where do we see this business reaching, building in the inflation? This is what we had covered as part of Project LEAP when I presented to the investors after the March results. On five-year, this is, we expect that we will be able to touch almost INR 20,000 crore of top line, where the core of our business will grow at 1.5x of the industry growth. We have factored in the inflation or movement in the commodity prices when we have computed this number of INR 20,000. As I mentioned in the March call as well, allow us to come back to you with next level of detailing in the second quarter, where I would be able to give you additional color on these numbers. Okay. On the cable side, you don't see any sort of problem in terms of your demand, right? Like coming from the new factories being built or all your demand drivers are seems to be in place? We are confident on the growth. India is a multi-decadal story. It's not only at the company level, even at the industry level, we are confident of the growth. Got it. Okay, fine then. Now, in my second question with the FMEG side, so we did around INR 192 crore top line this quarter, and compared with second quarter FY 2020 also, we were around this level only, but there we did not go into loss. Is it that a large part of the price hike is yet to be passed on, and plus, also we have a larger cost structure compared to the two years back, and that's why we have a loss in the FMEG? Yeah, as I mentioned to the earlier participant, it's primarily because of increase in fixed cost, and that is also increase in the employee cost or the contractor cost. Last year, we didn't give any increment to our employees, which was given this year, and this was slightly more than which otherwise you would expect on an annualized basis. That is one reason. The second is the A&P spend has slightly increased, and A&P predominantly is for our B2C business. Of course, B2B business gets a bit of a rub-off effect of A&P, but primarily it is for B2C business. These are two main reasons because of which the EBIT margins have gone into a negative trajectory. I'm still confident of the guidance which we provided in the last call, that in two years' period, we should be able to get to high single-digit EBIT margins for FMEG business. Okay, great. Good to know. I'll come back in the queue again, sir. Thank you. Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Hi, good afternoon. Congratulations for a decent set of results. I had two questions. Firstly, wanted to understand contribution margins a bit better for Polycab. To start with, is there any link between copper prices and gross margins? We, as analysts, try to link that and quarter- on- quarter, obviously, as you said, it's better to understand on an annual basis. Overall, is it fair to say that a rising commodity scenario where copper is going up, gross margins fall and it's vice versa, it's true? Is that correct? Not really. As I mentioned to Ravi, as part of his first question, we have broadly two or three types of businesses within cable and wire. I'm talking from channel perspective. One is distribution, where we factored in previous months' foreign exchange rate, USD-INR connection rate, as well as copper LME, and revised the list price. The second was export business, where the dynamics could be different, where you quote the price and then according to price. Third is distribution, where generally you take back-to-back positions. These are three things which we follow consistently. At times, you take calibrated approach in the pricing, and this is what was done in the current quarter as well. The increase in raw material cost at the basket level was almost in early teens, whereas the price hike which were taken in the current quarter was just touching the double digit. That is where you can see a delta or a negative delta on the contribution margin. Generally speaking, on annualized basis, we have not seen significant difference in the margins. That is what is important. The other thing is, at times there is a mix change. If you are attending customers which are far away from your plant, you end up incurring some additional freight costs. If there's an increase in the export business, which is generally there in few of these quarters, the freight incident also plays in. There are two dynamic sectors. You are aware about this. We are probably the largest consumer of copper in India, and we have pricing ability to price the copper at the most appropriate time, and that is where we don't generally see any significant risk because of the risk management framework which we have in place. Correct. Fair to say that the normalized level of 25% obviously comes back as and when the entire pricing thing is passed through, and overall, we see a normal sale environment in India. Broadly, we should be back in terms of cable and wire, gross margin should be back to normal levels. Fair to say that? Absolutely. Okay. Second question was on inventory. At INR 2,600 crore looks very high than normal for Polycab, given the history, and debtor at INR 900 crore obviously looks very low versus history, versus normal levels. Could you help us understand this change? Yeah. Both of these numbers are not sustainable. Let me deal with receivables and then I'll come back to inventory. After softening of copper prices in mid of June, slowly sales started getting impacted adversely, and that is where we continued to collect on the outstandings of the sales which were made in the earlier months. There was a dip in the overall sales in the month of June, and that is where the number of days of receivables or the absolute amount of receivables slightly looking lower. I don't think it's a sustainable number. Of course, with the help of channels and I think for penetration, we would be able to bring it down, but not on the basis of what we just experienced in the quarter gone by. On inventory, I think two, three things. One is, since softening of copper prices adversely impacted our sales, it has indirectly resulted in increase in our finished goods. Second is, we were expecting and we are still expecting that in the quarters to come, we will have uptick in demand. This is what, if you recollect the experience even in last fiscal, where the Q2 was better than Q1 and H2 was better than H1. That is where there's slight aberration in our inventory levels. As I mentioned in earlier quarters as well, inventory continues to be a focus area for us. We learned that during the IPO phase as well, that working capital is an area where we can do better, and I firmly believe that we can do that better. In the quarters to come, we should be able to normalize it and have a better handle on it. Obviously, there is some buildup because of temporary issues, which will obviously normalize over the next nine months. Broadly, there is no case of inventory write-offs, right? It has never happened in the history, right? Never, ever. Okay, perfect. Thank you so much. All the best, Gandharv. Thanks. Thank you very much. Thank you. The next question is from the line of Devansh from SiMPL. Please go ahead. Hello. Yeah, sir. Thanks for the opportunity. Sir, just wanted to understand on two opportunities. One is EV cables and second is the telecom cables, which can be for 5G next year. In both, if you can just elaborate on the technological preparedness and the manufacturing preparedness as of now, and how are we seeing this opportunity, and what is the kind of interest that we have in participating in these opportunities? I'm sure you would have heard about our telecom division, which we have. We already have optical fiber manufacturing facility, and we have executed several projects, one in Gujarat, another in Bihar, on optical fiber. We are slowly and gradually expanding on our telecom footprint. These are early days to give you any specific guidance, but we remain positive on the overall growth potential of this particular vertical. As I mentioned as a response to one of the questions, I think by the second quarter, we should be able to come back to you with nitty-gritties of few of these items, where we can give information publicly. Okay. Okay, sir. That's it from my side. Thank you. Thank you very much. Thank you. The next question is from the line of Atul Tiwari from Citigroup. Please go ahead. Yeah. Hi, Gandharv. Thanks a lot. One question on margins. I'm just trying to understand the sort of volatility that we have seen in this quarter. From the time when this commodity rally started, okay, how much your RM costs have gone up in percentage terms, and how much price hikes you have taken, and how much more price hikes you will need to take to kind of fully pass on everything? That is one. If you could just kind of walk us through that, why did company not take enough price hikes to kind of maintain, say, 11% or 12% kind of margins? Why was there a bit of a mismatch? I mean, we understand that on a full year basis, the mismatch will be kind of made up, but why it could not happen during the quarter? What was the operational issue or strategic reason behind this? Sure. Probably, Atul, you'll feel like I'm repeating what I mentioned to another participant. In the current quarter, at the RM basket level, the cost price increase, both of copper, aluminum and other raw materials put together was in low teens. The price hike which we have been able to take was almost touching the double digit, and that is where there is a negative contribution delta, which you are seeing in the P&L. Being specific in the current quarter, what happens is when you're working in a dynamic period where you want to manage both profitability as well as top-line growth, at times you take decisions of balancing the two with an assumption that higher sales will help you in getting better margins at the EBITDA level. What do I mean by that is if I am able to increase the top line, I would be able to utilize my plant more effectively. That would mean that my fixed cost absorption would be better, and that is where the EBITDA margins would be slightly better. It's a play between contribution and EBITDA, and at times we do that. This quarter was also one of those quarters where the pandemic impacted several of the geographies. We have all types of cables. We have retail wires as well as we have cables which are used by industrial houses, B2B products and all that. All of those reasons affected the margins slightly in the current quarter. As you would have seen even in the last three years, the H1 margins were slightly lower EBITDA levels, but on annualized basis, as well as if you consider the H2 margins were better. We are still confident of going back to our normal margins as we progress in the current quarter. Okay. Just one last one. What will be the number of dealers and distributors and the retail touchpoints that the company is reaching now? What are some of the medium-term targets on that? How much of that channel is now covered with channel financing? That is my last one. We are around 4,000 or dealers and distributors at the country level and around 165,000-170,000 retailers. In terms of channel financing in cable and wire, we are hovering around the same percentage of 65%-70%. However, in the case of FMEG, we have been able to make some progress there, and now we are hovering between 25%-30%. We are hopeful that in FMEG, we would be able to further penetrate channel financing, and improve it by the end of the year. Okay, great. Thanks a lot. That's all. Thank you. Thank you. The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, you are audible. Charanjit, please go ahead. Just one thing, in terms of in our overall business split, what is the proportion which is coming from the institutional segment? In terms of general price hikes, when we talk about an institutional segment, at what pace it follows, is it coming with a big lag? Generally in the other normal channel, what we have seen is that pricing is being passed on at a very rapid pace in the cables and wire segment that we see. How the pricing mechanism works especially for the institutional side? Thanks, Charanjit. That's an important one. Generally, around 85% of our business is distribution and 15% is institutional. Institutional, generally, you take the copper price as and when you get the approval on the sales from the institutional client, which means practically back- to- back, and that is where there's no lag. The lag which I was talking about on a monthly rest was for distribution business, where we increase the list price on a monthly rest after factoring in the LME, as well as connection rate, which was there in the previous month. There's no such mechanism in the case of institutional, it's order on order basis, and generally we take back to back position on the basis of orders confirmed by the clients. Okay. Now you also talked about this initiative with BCG on GTM and various other initiatives. If you can just elaborate in terms of by when we see that our targeted goal, which we have to achieve with these initiatives, what's the target timeline? If you can elaborate one on the GTM and any initiatives which are also on the cost front, which you are trying to do through these consulting firms. Yeah. Just second. Sure. Thanks, Charanjit. There are three initiatives which we are running as of now. One is Project Udaan, which we embarked on almost one year back, which is a cost optimization initiative. The entire cost base of the company is within the purview of this particular program, and we have already identified saving potentials translating to 80-100 basis points, and these initiatives are in the process of implementation, and we should expect getting the credits to our P&L accruing over the period of one or two years. That was the first on Project Udaan, which is cost optimization. The second one is Project LEAP, which is a multi-year transformational program. The end objective is to get to INR 20,000 crore of top line by the end of fiscal 2026, which is five years, and which is slightly more than double of what we achieved in fiscal 2021. This covers almost all the facets of the organization, not only GTM, how we are going to shape the B2B, B2C, what type of processes we will have, what type of digital footprint we'll have, what type of organization we'll have, what type of new product categories that we decide to enter into, we will get to. In the March quarter, I had mentioned that by Q2 of this year, we'll come back to all of you and highlight the progress. The third one is Project Shikhar, which is again, our distribution program where we want to penetrate identified geographies and ensure that we are able to get a higher share of wallet or higher share of sales from the identified distribution targets, which primarily would include channel expansion, having engagement with the influencer and the expert program. This program will cover almost 300 cities in next two years or so. Okay. Sir, just lastly on the fan side, our mix in terms of the base versus value versus premium, what is it right now? In terms of the insourcing versus outsourcing, how it will change in the next one year time frame? Premium fans are now almost in high teens, and this proportion as we go along would go up. Most of the fans are getting manufactured in our Roorkee facility. We are also in the process of augmenting fan manufacturing facility and another facility is getting erected in Halol, in Gujarat, and expected to be operational later in the current year. There is very small amount of fans which are manufactured with the help of third-party suppliers, but their contribution to the top line at this stage is insignificant. Most of it, or almost all of it is getting manufactured in-house. Okay. That's all from myself. Thank you. Thank you. Thank you. The next question is from the line of Ankur Sharma from HDFC Standard Life Insurance. Please go ahead. Yeah. Hi, sir. Good morning. Rather, good afternoon. Just a few questions. First one on Q1 numbers in the cable and wire segment. How much was the volume growth and how much was the price growth in that 97% growth that we've shown on the top line? Thanks for asking this. In our business, slightly difficult to compare that way because one kilometer of aluminum cable will cost significantly different if you compare that same cable if it is manufactured with copper. That is where volumetric data is not necessarily the best way to analyze our complete performance. If you were to analyze our performance, there are two or three ways. One is, of course, you can check peer performance and our performance. The second is you can check what is the movement in LME prices and foreign exchange rate and compare that with our growth. Volumetric data will probably give you misleading information. Okay. Fair. Differently, I think you said wires haven't done as well as cables during the quarter. What was the mix of wires and cables in this quarter? There is no significant change in comparison to previous quarter. We are broadly in the same range. Okay. If you're looking for a specific number, it will be around 50%, 51% types. Okay. I think on the margin outlook, you said that while Q1, obviously margins were fairly weak because of the lag in passing on the higher copper and RM prices. What do you believe would be a more sustainable number, say, 2022, 2023? Do you go back to that 12% kind of EBIT margin range? Is that the number you have in mind? On analyzed basis, generally we have been talking about 11%-13% of EBITDA margin. If you see fiscal 2021, we were able to beat that guidance. As I mentioned to others, that we are working on Project LEAP and give us time till second quarter. It's quite possible that we would be able to give you more granular information on Project LEAP and then on actual basis, on half yearly or yearly basis, we'll come back to you and update you on the actuals against that guidance. Okay, fair. Just one last one, if I may, and I think this was discussed earlier in the call as well, in terms of recovery and demand on the cable side. If you could just talk about, are you seeing large projects on the manufacturing side, on the infra side, any pickup over there? Primarily on the B2B, that is starting to happen, which kind of gives you confidence that over the next few quarters you start seeing a fairly sizable pickup on the cable business. If you could talk about either the inquiry levels or how is the current demand situation looking? You're right. Overall, in the current quarter, the institutional business has picked up. Having said that, the larger projects are probably still on a slow track, but the smaller projects, we have some visibility, and that is where we can see a bit of uptick in demand, both at order level as well as at execution level in the institutional side of the business. Having said that, I don't think we have reached to the pre-COVID levels, and we'll have to wait for some time before we finally conclude whether we have reached to the pre-COVID levels or not. Okay, great. Okay, sir. That's all from myself. Thank you. Thank you. Thank you. The next question is from the line of Sanjaya Satapathy from Ampersand Capital. Please go ahead. Yeah, hi. Thanks a lot for taking my question. You have mentioned about your margin, which way that we should not really look at quarter one and look at the full year. You have mentioned that your margin was affected because of the copper price volatility. Can you just tell us that whether all those are behind us, that is copper price are stable and your pricing actions are more or less done, that way, Q2 will not have any such exceptional situation which was there in Q1? Yeah. Let me just explain the business model so that you are able to appreciate what we are doing here. 85% of our business comes from distribution, in the case of distribution business, the list price is generally revised on monthly rest. When we do that revision, we factor in two things. One is change in LME prices in the previous month as well as change in exchange rate. There's a one-month lag which is there. At times in dynamic situation like these, you take calibrated approach while balancing the price hike and profitability and as well as the top-line growth. This is what we have witnessed. Generally speaking, pluses and minuses are offset within the fiscal. If you see on an analyzed basis, the margins are not significantly different from earlier periods. That is what I was mentioning to the other participant, that if you take an analyzed view, you will not see significant change. Because of this one-month lag and, at times, dynamic approach of balancing top line and bottom line, at times you would see some aberration between one quarter or the other. No, that I understood. I'm saying that are those kind of behind us, it's just a small maintenance kind of a question from a near-term point of view? That is what I was trying to understand. The second thing that I wanted to understand is that, your peers are also reporting results and their numbers and your numbers are appearing as very different. I understand that it could be because of some technical factor like your geographical mix or many other such things. What we really want to understand here is that your competitive position, and your strategy of growth and gaining market share, are you confident that you'll be able to kind of silence your critics or whatever you say, sometime very soon? Are you fairly confident that you are doing better than your peers, because you have a superior business strategy in terms of growth? Thanks for highlighting that. As I mentioned in my opening remarks, we remain absolutely confident and comfortable on our strategy and execution. We have anyway highlighted our ambition under Project LEAP, which is INR 20,000 crore top line in five years from now, and growth in one particular product category of 1.5x of the industry and another product category of 2x. I have no reasons to doubt our ability to achieve those numbers. Okay. Thanks a lot. Thank you. Thank you. The next question is from the line of Bobby Jayaraman from Falcon Investment. Please go ahead. Hi. Could you talk a bit about how you're going to penetrate the FMEG market categories like fans, given larger players like Havells and Crompton are already well-established. What's your strategy? Is it pricing-led or product-led? If you could talk a bit about that. Thank you. I'm sure you're aware we are already in top six or seven in fans. We forayed into this business five, six years back, and since second or third year, we are EBIT positive in fan business. We are working on several initiatives. One on the GTM. We want to ensure further penetration, both at distribution and retailer level. Second is on the availability of our products across different pricing parameters. Third is in-house production, which gives us confidence on the quality as well as the value for money for our consumer. You'll be pleased to know that our field returns in fans are lowest in the industry because of the stringent quality parameters we have in place. The another important thing is the recent initiatives, both on the IoT side through Silvan and HOHM, and the e-commerce initiative where we want to get to the next generation of the consumer. We are extremely positive on the uptick in the demand in the fan business for our company. What is the IoT fans or appliances, what differentiates that from the products in the market? There's a complete basket of offering where app-based products are available, which can be operated with the help of app or with the help of web. This is not only restricted to fans. Almost all the products, whether you think of water heater, you think of lighting or fans, almost everything can be operated, and this way is being marketed under the brand HOHM. The recent acquisition of Silvan will help us in getting to home automation, and that is where the entire home automation product portfolio will also help us in improving our FMEG product sales, which would include, among others, fans as well. Is this automation? These are the products which are manufactured in-house, made in India with strict quality supervisions, and that is where the field returns are best in the industry. Yeah. The question I have is whether this kind of automation is something that's demanded by consumers, because even in advanced markets, I don't see these kind of products. When someone buys a fan, they essentially want a fan that is breezy, doesn't break down, and is priced reasonably. They don't want a lot of fancy settings and IoT and all that. Is it customer driven or are you, by any chance, over-engineering these products? Yeah, I understand from your comment, that's probably one school of thought. If we go by the broad industries or IoT market, it was almost INR 2,600 crore in 2020. It is expected to grow at 30% CAGR. I won't be surprised if it reaches INR 10,000 crore by 2025. It could well very much continue, if not what presently, even after 2025. In this pandemic, all of us have experienced that IoT or web-based applications and rising connectivity is the only way to look at the product development, and that will help. All right. Thank you. Thank you. The next question is from the line of [Kedar Kelje] from Fortis Group. Please go ahead. Thanks for the opportunity. Sir, my first question is, again, on the FMEG business. Sir, if I compare your Q1 FY 2021 revenue, that was about INR 137 crore, and we have almost done 20%-30% higher revenue. Actually, operating leverage should have been much better as compared to Q1 last year. Why is it that our loss has more than doubled at the EBIT level in the FMEG business? Yeah. The absolute amount are slightly misleading because of the base. If you see the type of organization which we have in place for FMEG and the increments which we have given, that is where the operating costs have gone up incremental last year, and that is where you can see the EBIT margin negative trajectory. Another thing which I should specifically call out is A&P spend, which has moved over the period. For example, we used to incur IPL spend, which got reflected in few of the quarters' P&L. In this particular quarter also, we have incurred some A&P spend, which is getting reflected in the P&L of FMEG business. On the base quarter, the A&P spend was almost negligible. Okay, sir. Thank you. Sir, second question is on the EPC business. Sir, on the other segment, that is the EPC. Are you confident of maintaining this revenue run rate in EPC and the margins, will it be stable at around 11%-12%? EPC is not a core business for us. We do it as a natural extension of cable business. It is [on focal]. We are cognizant of the fact that we are not an EPC company. We are a B2C company. Whatever small business we do as natural extension of cable and wire, we are hopeful that we will be able to continue with high single-digit, low double-digit type margins. Okay. Thank you, sir. That's it. Thank you. Thank you. The next question is from the line of Rajesh Kothari from AlfAccurate Advisors. Please go ahead. Good afternoon, sir. Sir, I have two questions. One is there any inventory mark-to-market losses in this quarter? There are no mark-to-market losses because we follow hedge accounting. In the case of hedge accounting, if there are any relationships which are established, then it is accounted under OCI. That is where there is no significant impact. On a generalized basis, always there will be some ups and downs because the inventory is linked with LME and in any of the month end, quarter end, there will be movement in LME. There's no significant one-off in the overall mark-to-market or hedging accounting in the current quarter. Since you are saying, since it is already hedged and therefore it doesn't impact the margins, then why the higher raw material prices impacts the margins? Sorry, I'm a little bit confused. Yeah. If the actual cost of procurement vis-à-vis the price hike which we have taken was calibrated, and that is where there's a delta, which is getting reflected in the contribution margin. As I had mentioned to one of the participant earlier Rahul, at times in a dynamic quarter like these where there is a significant impact of wave two, you optimize on top line with anticipation of better EBITDA margins, because you would be able to leverage on the fixed cost, and that is where you take these calls. The contribution margin, if you see, has dipped by 200 basis points in the current quarter. Basically, what kind of price hike is required to compensate for the higher raw material? Might be that now that is completely gone because the raw material cost has already started coming down, and therefore you may not be able to do price hike. What is gone is almost lost kind of margin. That's the right way to look at it? That is why I highlighted in earlier responses as well, that in our business it's best to see on an analyzed basis, because there will be some pluses and minuses, and overall on a 12-month basis, we are generally able to maintain the contribution margins. If you see last year for that matter, the first half EBITDA margins, if I'm not wrong, were around 12% or thereabout, but in the second half it was 14%. That is how the overall margins are comparatively maintained on analyzed basis. No, that I understood. What I am trying to ask is little bit different. What I am saying is that the raw material cost has increased, but you are not able to take the similar kind of a price hike due to whatever reasons. What was the difference? That's point number one. Point number two. It is getting reflected in contraction in contribution margin. Okay. Understood. The FMEG business, there also we have seen the similar numbers. If I look at, for example, Havells, the another company probably in the similar segments, there the margin profile and everything is quite significantly different compared to our company. What would be the primary reason for FMEG segment apart from the operating leverage? Because the revenue decline is not that much. It's mainly operating leverage. As I mentioned to the previous participant as well, the increase in fixed cost, primarily the nature of increase in employee cost as well as the subcontractor cost, and increase in A&P spend has impacted adversely the EBIT margin of FMEG business. As I said, we would be able to reconnect. In the last quarter call also I had mentioned, and I'm continuing with the same position, that in two years from now, which is fiscal 2023, we are confident of getting into high single-digit EBIT margins. Yeah, of course. Last question from my side, in terms of the employee cost, which is roughly about INR 92 crore, and there you mentioned that you've done some increase in employee cost, something which I could not understand because your Q4, it was INR 96 crore, and in Q1 is INR 92 crore. I could not see any increase compared to Q4. Does it include any one-off bonuses or any such elements? The first quarter last year was INR 81 crore, and the first quarter this year is at INR 96 crore. That is where you can see there is an increment, which is visible. Okay. On a QOQ basis, there is no such increase. I was actually wondering that since the revenue declined so much, there are no basic steps to reduce the other cost. If I look at, for example, revenue from INR 3,000 crore, it declined to INR 1,800 crore. Correct? If I look at the operating leverage actually, to that extent, there is no significant increase in your other cost. I'm just trying to understand the picture here. Is it that we are now basically becoming like a normal cost base, and from this cost base we'll work on? Yeah. I think two things, Rajesh. One is, in our business, always the fourth quarter would be best from the sales contribution to the analyzed revenue. In our experience, at times, fourth quarter has contributed anywhere between 28%-32% to analyzed revenue, whereas the first quarter, I'm not talking about the year affected with pandemic, I'm saying generally speaking, the first quarter contributes only 20%-22% of the top line, that is where it's slightly unfair to compare Q4 top line with the Q1 top line. The second thing is, in the fourth quarter last year, there were some incentive provisions which were accounted for, the details are this, that in the first quarter of June 2020, we decided not to give any variable to our employees considering the pandemic. Considering the performance of the company on annualized basis, management decided to continue with the variable payment, and this was accounted for in the fourth quarter. There are a couple of such one-offs, including Ind AS 19 adjustment, like statutory leave encashment. If you normalize that, you can see there is an increase in employee cost. For example, June of 2020 was INR 81 crore, and June of 2021 is almost INR 95 crore-INR 96 crore. Specific whether we have reached to the normalized cost, yes and no. Yes, because we are there, but on no, because as I mentioned to another participant, we will continue to make investment on our go-to-market strategy. We will continue to expand on distribution, penetrate the markets where we are currently under-indexed. For that, we would need additional working hands, and we'll make that investment. We'll not shy away from making those investments. Great. Wish you all the best. Thank you. Thank you very much. Thank you very much. We will take that as the last question. I would now like to hand the conference back to Mr. Gandharv Tongia for closing comments. Thank you, participants, for taking out time and attending this call. In case if your questions are not attended, please feel free to write to us at investor.relations@polycab.com, and we will be pleased to attend your questions. Thank you. Thanks a lot for your time. Stay safe and take care. Thank you very much. On behalf of-