Ladies and gentlemen, good day and welcome to Polycab India's Q2 FY22 earnings conference call. As a reminder, all participant 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 the conference call, please signal an operator by pressing star then zero on your touchtone phone. We would like to remind you that certain statements made by the management in today's presentation may be forward-looking statements. These forward-looking statements reflect management's best judgment and analysis as of today. Actual results may differ materially from current expectations, based on number of factors affecting the business. Please refer to the safe harbor disclosure in the presentation. Please note that this conference is being recorded. I now hand the conference over to Mr. Gandharv Tongia. Thank you, and over to you, sir. Thank you, operator. Hello, everyone, and thank you for joining us today. I am Gandharv Tongia, CFO at Polycab India Limited. On this call, we shall discuss the Q2 results, which was approved in the board meeting held on Friday. We will be referring to the earnings presentation, financial results, and financial statements, which are available on the stock exchanges, as well as investor relation page of our website. It can also be downloaded through the link or QR code on slide nine of earnings presentation. Joining me today from the management team; we have our Chairman and Managing Director, Mr. Inder Jaisinghani, on the conference call. As always, I will request Inder bhai to share his thoughts before moving on to the presentation. Over to you, Inder bhai. Good afternoon, everybody. We have healthy Q1. A robust sales growth was underpinned by the market share gains across categories. Given the strengthening macroeconomic fundamentals, we see a massive opportunity to spread our wings across B2B as well as B2C categories. By leveraging on our strong brand equity and increased consumer affinity for our products, structural reforms focused on infrastructure development, I guess, will be for most of the product categories. We are also in the process of building Polycab of future, the company with robust governance practice, top talent, and a strong business model, a customer-centric culture, and a purpose to serve the community. We will strive to continue the path of profitable and sustainable growth and contribute to success all our stakeholders. I now request Gandharv to take you through our earnings presentations. Thank you, Inder bhai. Looking at the economic environment, Q2 has been reasonably good. The sequential improvement we saw since unlocking last quarter has largely persisted. Overall demand in B2C categories like wires and FMEG remain upbeat in line with improving consumer sentiment. Increasing retail prices has been a slight hindrance, but these are also the times which breed the best of innovation. Our cables business is seeing higher competitive intensity as the demand environment, though improving, continues to remain a bit suboptimal. Increasing government focus on infra activity, strong real estate demand, and good demand visibility across various end-user industries will likely improve the sales momentum further in coming quarters. We have noted relatively better levels of new CapEx announcement in past three quarters, more so from the private side. As these projects come under execution phase, we do expect it to provide a fillip to cable and wires demand. We are quite optimistic about structural reforms like the recent Gati Shakti National Master Plan or National Infrastructure Pipeline, Revamped Distribution Sector Scheme, et cetera. We believe it is likely to create a very conducive environment for infra activity over the medium term. Inflation is a word we have been hearing quite often of lately, and rightly so because we have seen unprecedented levels of commodity price volatility in the recent past. Most of our key raw materials, like copper, aluminum, and PVC, they still continue to trend up. While it is difficult to provide an outlook on inflation, we are certainly prepared with what we can do and what is in our control. We are trying to cut a fine balance between managing profitability and customer affordability. Overall, for this year, we believe our main priority will be aggressive market share gains as against margin improvement. This will also be supported by our new growth initiatives in Project LEAP. Moving on to presentation with slide four. For the quarter ended 30th September 2021, our consolidated revenue grew by 48% year-on-year. On quarter-on-quarter basis, our consolidated revenue grew by 36%, while if we were to compare it with pre-pandemic Q2, we have realized a 40% growth. Perhaps it is the highest Q2 number we have ever recorded, and even higher than March quarter, which typically tends to be seasonally advantaged. These numbers really reflect our acute focus on driving top line, supported by distribution expansion initiatives. EBITDA declined by 3% year-on-year on a relatively stronger base. Margin, though lower on a year-on basis, has improved by 237 basis points compared to last quarter with favorable operating leverage. A&P spends were broadly stable, while our staff costs at INR 1 billion or 3.4% of sales were lower due to higher top-line performance. Other expenses were lower on account of cost savings and better absorption of fixed costs. Overall, finance costs at INR 88 million were lower versus Q1, while other income at INR 264 million was largely stable. A detailed breakup of our other income and finance costs has been provided on slide 13 of our earning presentation. Our profit before tax at INR 2.6 billion and profit after tax at INR 2 billion decreased by 7% and 9% year-on-year respectively. On slide five. In the first six months ended 30th September 2021, our revenue grew strongly by 52% year-on-year. EBITDA was up by 19% with 8.8% margin despite adverse operating leverage seen in the first quarter. PAT was down by 19% due to few one-off gains in Q1 FY21, as highlighted on slide 10. Moving on to segments on slide six. Our wires and cable business grew 46% year-on-year and 35% on pre-pandemic year. Overall demand environment continued to stay in the sequential recovery and is inching towards normalization. In terms of products, growth was broadly uniform on year-on-year basis across cables and wires. From a channel perspective, domestic distribution-driven business sustained its healthy growth momentum. Institutional business continues to remain subdued. However, green shoots were seen in the month of September. Improving investment in infra and construction projects along with our business development initiatives under Project LEAP, gave us some optimism to believe that institutional business will improve over the near to midterm. Export business grew 12% year-on-year, contributing 8% to overall revenue in the second quarter of this fiscal. Excluding a large order in the base period, growth was healthy at about 50% year-on-year, led by U.S., Australia, and Africa. Logistics challenges related to unavailability of containers continue resulting in higher cost and execution delays. We remain committed to double-digit sales contribution target over the medium term for this business. During the quarter, overall inflation in our raw material basket was in mid-single digits, largely emanating from aluminum and PVC, while our blended price hikes were in low single digits. Despite that, profitability has improved on a sequential basis on account of better operating leverage. We are facing tremendous amount of volatility in most of our key inputs, something which we haven't seen in a long time. This, coupled with deleveraging on account of lower sales during lockdown, which has led to consolidated EBITDA margin of 8.8% in the first half of the current year. This is, of course, lower than what we believe is a sustainable range. However, with improving demand environment, we are hopeful of a better second half for both top line as well as bottom line. For the full year, we may be around the lower end of the normalized range. Having said that, as things normalize towards the end of this year, we do believe there is a potential upside to improve margins in the coming years. On slide seven, growth momentum in FMEG business improves further. On a year-on-year basis, the business grew at 41%. On a biannual basis, it posted a strong 75% growth. While improving consumer sentiment helps, their strong performance was amidst an otherwise challenging environment marked by raw material inflation and seasonality. Our strategic intervention to unlock latent synergies has been playing out well, and we saw good bounce back in switches and switchgear. Fans, which is our larger business, was affected during the quarter on account of seasonality. Lights, conduit pipes, and pumps business posted healthy growth, while other businesses, including switchgear, solar, and water heaters, were about 2X on last year's base. Customer centricity and proactively engaging with influencers remain an important focal point to drive long-term relevancy of Polycab brands. CRM tools are being augmented to increase GTM efficiency, improve data analytical capabilities, and drive meaningful innovation in the market. Profitability has improved sequentially on account of improved operating leverage, pricing actions, and premiumization despite severe input cost inflation and higher A&P spend. On slide eight, other segments, which largely comprise of our strategic EPC business, witnessed a 37% year-on-year increase in revenue to INR 796 million. EBIT stood at INR 145 million, up by 58% on a year-on-year basis. The copper segment as disclosed in financial results largely reflects Ryker Base, which is our wholly-owned subsidiary. While the revenue grew by 83% year-on-year, the utilization levels of our Ryker plant continues to remain relatively low as the capacity is higher than our internal consumption. Having said that, we'll continue to explore various options in terms of increasing external sales, strategic partnerships, et cetera, to optimize production costs and improve operational efficiency and thereby improving our returns. Onto balance sheet side, our fundamentals continue to remain strong. Net cash position has increased sequentially to INR 8.7 billion. The debt-to-equity ratio is comfortable at 0.05x. Working capital days have improved compared to March and June. We will continue to calibrate this going forward. On slide 16 and 17, we had introduced Project LEAP in our Q4 results around mid-May, and are happy to share some more progress updates today. For the benefit of everyone, Project LEAP is a multi-year program that includes a range of strategic themes and initiatives focused on growth, profitability, and long-term capability building for the organization across B2B and B2C businesses, with a goal of achieving greater than INR 200 billion or INR 20,000 crore sales by FY26. We have partnered with global management consulting firm BCG, who will help us drive this transformation. We are about six months into the project and things are progressing well. In order to build on this early momentum and set up for long-term success as the program broadens in scope and execution, we have set up a transformation management office comprising people with diverse knowledge and capabilities across our business and functions, and who will be fully dedicated to and accountable for the success of this program. We are creating internal KPI dashboards that start from the top and cascade down the organization. Putting in place this structured and rigorous system to measure and track progress will allow us to provide you with regular updates on actual performance of the program's initiatives versus our targets. This will also enable us to be agile as we execute, continuously measuring impact, evaluating performance, and reprioritizing early as and when appropriate. While we are still in the very early stage of the program and a number of things are in planning stage, we have launched execution for some key workstreams and are already seeing quick wins being realized that put us in a strong position for the months ahead. We are excited to share some specific details on some key themes of the transformation program and our progress to date as follows. Firstly, on organization structure. We have identified a set of mission-critical organizational enablers that will be core to successfully executing these initiatives and delivering our goals over the long term. One of them is recruiting and retaining best-in-class talent. We have recently hired for several senior positions in the digital, supply chain, HR, and businesses. We are delighted to have Vivek on board as Deputy Managing Director. He is an industry veteran with over 35 years of rich corporate experience and extensive knowledge spanning across consumer, electrical, and durable sectors. We also have Vipul Aggarwal joining us as Executive Vice President, Supply Chain. We are excited to have these new members of the team on board to help drive this exciting upcoming journey for Polycab, and extend our good wishes to them. To sum it, we have started investing and aligning our organization structure, which will enable us to realize our aspirations with robust governance and clear accountabilities. The second area is Go-To-Market. We are currently conducting a nationwide reach analysis, having already mapped over 600 districts to identify gaps and potential opportunities to expand our distribution reach and drive growth for our business. Distributors and dealers are being appointed in new towns as we significantly step up the pedal on expanding our distribution infrastructure. For example, in our wires business, if we just look at the last three months versus the second half of the last year, the average pace of new dealers and retailers addition every month has doubled. We are not just focusing on a numeric increase in distribution. We are also putting in a lot of effort and building capabilities to fundamentally change the way we used to operate. We are doing this by focusing on secondary sales rather than conventional primary sales-driven approach. At this point, despite being a distributor-driven sales model, we have reached a stage where we are able to track over 60% of secondary sales in B2C business and nearly 40% in B2B business. We are also strategically reorganizing sales teams in every cluster, as well as bolstering them with new business development support teams in order to improve our connect with end users and know the customer needs better. This will certainly provide long-term tangible benefits as we incorporate a customer-centric approach throughout this hierarchy. Our dealers and distributors are one of the crucial enablers of our growth. We have always believed in growing together and for multi-generations. Along these lines, we have now created a robust process framework that will help us identify the right partnerships with common goals. It will also ensure these partners can earn optimal returns on their investments. Third priority is portfolio optimization. We are conducting an important exercise to map our portfolio versus customer needs, as well as current market offerings. The insights from this exercise are providing a strong clarity and focus on where to play and what to offer, right portfolio and line structure in order to deliver on our growth ambitions. We have identified several white spaces in the economy as well as premium segments that need to be addressed. This is more relevant in current times when inflation has shifted price brackets and changing dynamics of customer affordability. Accordingly, we have done the background work at design and production level, and we will be launching several new products at distinct price points in coming quarters. Augmenting our brand architecture in B2C business goes in parallel to this exercise. Currently, the focus is on improving brand appeal through targeted branding initiatives, but we will also introduce new sub-brands in select segments during the current year. We have also commissioned multi-year brand intelligence studies, which will help us shape our brand architecture and energize new product innovation. Lastly, on digitalization. Currently, our key focus is to augment customer relationship management or CRM architecture. Data analytics will play a vital role in our journey, and hence we are revamping processes and software, which will help us improve data management and maintenance for better assessment of competition, improve our win ratios, and enhance overall sales force productivity. We are also delivering IT infrastructure in B2C business for seamless integration for primary and secondary, which will enable better servicing of customers and outlets and provide increased demand visibility. Project LEAP is a long-term transformational program, and the initiatives we have designed will take some time to deliver results. We are excited by the strong and sustainable value that they can create in the long term for our shareholders and broader set of stakeholders. We look forward to engaging with you along this journey, and will aim to share similar periodic updates as we continue to make progress towards our long-term goals. Thank you. With that, I hand over the call to operator for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from 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 Ravi Swaminathan from Spark Capital. Please go ahead. Hi, sir. Good afternoon. Thanks for taking my question. My first question is with respect to if you can give a broad volume/value breakup of the wires and cable segment. Basically, we are seeing some 45% growth. How much would be led by price increase? How much would be led by volume growth? I know a lot of sub-products are there within wires and cables. If you can give a ballpark number, it'll be great. Thanks, Ravi. Thanks a lot for asking that question. If we go business by business, I think in FMEG, it's a fair balance of volume and value. Whereas in the case of cable and wire business, the overall growth, most of it is coming because of the value, because of the increase in the underlying cost, and a part of it is only because of volume. Within the businesses, the overall underlying number could vary. For example, LDC and wires would be slightly different from HVC, because HVC is slightly dependent more on institutional business, which still remains slightly suboptimal. Overall, FMEG, I think, is a fair balance of volume and value. In the case of cable and wires, most of it is because of value. Most of it is because of value. Okay. FMEG would be 50/50 volume. That proportion would be something closer to the reality? Yeah, it would differ from business to business, but broadly, yes, that would be the range. Sure, sir. The second question is, copper prices continue to climb up over the past few days also, or weeks. Just wanted your sense as to what kind of EBITDA margins that we might settle at for this year, given the fact that commodity pressures are not relenting. Is there any chance of going back to 13% margins, which we had done last couple of years? We are likely to settle somewhere between this quarter's margins and the 13% back? You're absolutely correct, Ravi. Traditionally, in cable and wire business, we have seen an EBITDA range of between 11%-13%. As of now, considering the input cost pressure, it seems that we would probably exit towards the lower end of this particular range as far as this fiscal is concerned. Over the midterm to long term, we believe that cable and wire margins will bounce back. Having said that, in FMEG, anyway, things are improving. In the last quarter, FMEG recorded a loss. In the current quarter, FMEG has done almost 5% of EBIT, and we believe that as we progress, we would be able to further improve on FMEG EBIT and EBITDA margin. Profitability is a focus agenda as part of Project LEAP, but as of now, because of the pandemic, we are trying to maintain a fine balance and equilibrium between the top-line growth utilization and bottom line. That is why you would see that our second quarter revenue is higher than the entire first half revenue of the last year. Got it. Thanks a lot, sir. Thanks. Thank you, Ravi. Thank you. The next question is from the line of Naval from Emkay Global. Please go ahead. Yeah, thank you for the opportunity. Gandharv, I have two questions. First, on the competitive intensity, what you alluded to in cable segment. What is your view? Is it short-lived? Can this get extended to next year also? Any thoughts there? Because that will also define your margin improvement trajectory as well. Broadly, Naval, it seems that this year, because of the utilization levels at the industry level, and the pressure of raw material cost, copper, aluminum, PVC, and steel. Our company's EBITDA margins would be towards the lower end of the historical EBITDA margins of 11%-13%. I think from next year onwards, things will start improving, and we should be able to go back to the conventional 11%-13% EBITDA margin range. The recent new projects which have been announced, more particularly from the private side, would also help us in improving the execution and profitability, both at the industry level as well as at the company level. The competition is from small regional players or from larger players? If capacity utilization is low, commodity is hitting. I would imply that your smaller players in the industry will get evaporated. I mean, they cannot manage this kind of cost inflation, unlike what a company at your level can. Absolutely. I think it's a fair observation. I think the largest players are able to improve their performance in these challenging times. The unorganized players are generally finding it difficult to survive, more particularly because of availability of credit and higher input costs. Predominantly, it is competition among the large organized players. The unorganized players are not necessarily able to play any active role, at least in the current times. Sure. Second question is on supply chain/procurement. Have you made any changes for procuring future copper in order to safeguard yourself with continuing inflation, or everything remains unchanged as we are operating right now? On supply chain, I think there are two aspects. One is availability, and second is pricing. Because of our long-term association with our vendors, predominantly the international ones, we don't necessarily see any major challenge in terms of availability. We remain probably number one customer for most of our vendors and the largest customer as well. On pricing, any which ways, the industry has evolved over the period, and there are standard processes which have been put in place at the industry level. Most of these are linked with the international indexes. For example, in the case of copper, it is linked with LME and I think most of the players are continuing to get guided by that established mechanism of pricing. Sure. Last question is on FMEG. Now there's an increased focus on premiumization as well. Any target on what can be the revenue contribution like you always give on exports? Anything on premiumization in terms of FMEG, what can be the total eventual contribution to revenue, say if not in a year's time, but 2-3 years down the line? This is a great question. We are also internally deliberating and discussing about it. We are clear that premiumization is going to be one of the strategic levers to improve, one is our presence, second is improve profitability. I would probably like to park this particular question for the year-end. By then, we would have matured thought process in place under Project LEAP, and then hopefully I would be able to give a quantified target. This remain a very specific target and focus area for us at Polycab. Sure. Thank you and all the best. Thank you, Naval. Thank you. The next question is from the line of Chintan Sheth from Sameeksha Capital. Please go ahead. Thanks a lot for the opportunity, and congrats on the recent numbers given the circumstances. One question is on the current demand environment, given the festive season is on play. What kind of pricing pressure or competition we are looking at, specifically on the distribution B2C side of the business? Overall, the environment has improved. The customer sentiments are positive because of vaccination drive, unlocking and festival season. On the B2B side, I think government focus on infra plus structural reforms are helping. In terms of B2C business, we have been able to pass on almost all the cost increases. In the traditional cable and wire business, we had not been able to do that, but it seems that as we proceed in this year, we should be able to pass on most of the increases. You know this business model already. Generally, for the distribution business, the list price is revised once in a month, to generally the first week of the month on the basis of copper LME and foreign exchange rate between USD and of the previous month. Most of the players are following that. At times, there is a bit of a lag or at times, because of competitive intensity, you are not able to take the complete price hike, but over the period, generally, the companies are able to pass on the cost increase or decrease to the customer. Are we seeing any demand pressure because of the sudden continuous price hikes in the distribution side? Are we seeing end consumer demand getting depressed because of the increase in prices? It depends on the sentiment and the perception. At times, the customer feel or the end customer feel that the copper price will go up in the next month, and that is where they'll probably pre-pone the procurement or if their view is vice versa, then they'll postpone the procurement. Generally, on analyzed basis, it doesn't have any significant impact. As of now, it seems that it will not impact the larger players like us, but the smaller players probably will struggle to maintain their profitability and top line. Lastly, on the Silvan side, any update you want to provide how things are scaling up there after the acquisition? We have formed a core team to integrate Silvan with our IoT offering. We have already completed our 100-day execution of the plan. Between now and the year-end, our objective is to integrate the traditional FMEG business with the Silvan IoT business so that we can provide it to our customers as a service, and Hohm then will be a key aspect of this overall offering. I think from next year onward, we should start getting some visibility on the business in terms of numbers. This year will be probably more on preparing for the growth and finalizing our GTM and related activities. Right. Lastly, if I can pitch in. The copper segment, because it is very difficult to predict the quarterly numbers, if you can just guide us, how should we look at both on revenue and profitability point of view? Ryker is our fully owned subsidiary, and what they do is just turn the copper cathode into copper rods. Copper rods is, of course, then used for manufacturing of cables and wires. As of we are using probably one-third of the installed capacity, and that is where this particular capacity is underutilized. We are exploring ways and means to either improve the capacity utilization by improving the internal consumption or looking for third-party tie-ups through joint work or other arrangements to improve the margins and cost of operations there. We should look at it as a natural extension of our cable and wire business, where instead of procuring copper rods, we have decided to procure copper cathodes, and we are trying to convert it in-house. Right. No broad guidance, how should we look at it for the full year in terms of run rate on revenue side? I think difficult to comment because its utilization is significantly lesser than what otherwise we would expect considering the installed capacity. As I mentioned in my opening remarks, we'll continue to explore ways and means to improve the profitability. We as a business, what we need is a good quality copper rod, and that is where this particular unit is helping us. We'll continue to explore ways and means to improve the utilization and improve the return ratios emanating from this particular unit and the copper segment. Sure thing. Thanks and all the best. Thank you. Thank you very much. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, we request participants to please limit their questions to two per participant. Should you have any follow-up, you may be requested to rejoin the queue. The next question is from the line of [Pritesh Chheda] from Lucky Investment. Please go ahead. Sir, I have one question. With respect to this 600, 700 basis point erosion in gross margin that we see, just wanted to understand what is the lag in terms of the price increases that may have taken, and what are they in the wires and cable side? What is the extent of the raw material price inflation for you, if you could give us maybe on an overall basis? Usually, in our past instructions or communications, we have always mentioned that the copper and the pricing is back to back, just wanted to reassess why this 600, 700 basis point of deviation. Is it that we need to take another 7% price hike to offset it, or where are we on that cost curve vis-à-vis the price curve? Thank you. Thanks a lot for asking this and highlighting. As I mentioned in my opening remarks, at the product cost basket level, the increase in raw material cost between Q2 vis-à-vis Q1 is in mid-single digit. The price hike which we have been able to take is in lower single digit. That is where you would see the contribution contraction between Q2 and Q1. Q2 of last year, we were sitting in a better place, and that is where it was a slightly different set of numbers. The other thing which I would like to highlight is copper and forex is what is generally considered at the industry level as well as at the company level for the purpose of revising the list price. This time around, since last few months, we have seen price hikes across or cost increase across all the commodities. For example, you take steel, aluminum, PVC, and that is where it becomes a bit of a difficult thing to increase prices on account of all increases in key raw material. The other thing is we have to balance what is called top- line and bottom- line utilization, and that is where strategically we are trying to maintain an equilibrium between the three. If you see last year's first half revenue, it is lesser than the second quarter of this year's revenue, and that is where we are trying to manage the two. Having said that, historically, we have played in 11%-13% of EBITDA margin in cable and wire business. It seems that as of now, we would exit this year towards the lower end of that particular range. FMEG business has already started recovering from last quarter's loss to this particular quarter, 5% EBIT margin. Over the mid to long term, we should be able to bounce back to our regular margins. From there, under Project LEAP, we should be able to further improve. Okay. Just clarifying here, which means if it was for copper, it is usually back- to- back, and there is not much of a lag in your opinion. Because the inflation is flowing through other materials as well, we are seeing this gap between the price increases and the cost increases. Is that the assessment? Yeah, that's the correct understanding for the second quarter. Awesome. Is there any inventory loss in the quarter by any chance, which also takes up the gross margin, brings down the gross margin number by any chance? No, as you know, this is already, when you procure copper, at that stage you don't price the inventory. There is no price risk which you carry when you have any inventory which is there in your system. Okay. Thank you very much, and all the best to you. Thank you. Thank you very much. Thank you. The next question is from the line of Atul Tiwari from Citigroup. Please go ahead. Yeah. Actually, my question was on a similar line. To your mind, how many quarters it would take for the cable and wire business margins to revert back to the normal range of 11%-13%? I understand market dynamics is complicated, and the commodity prices are also volatile. The situation is dynamic, but as things stand today, taking everything into account, how many quarters it would take if you could give some area on that? Yeah. You know this industry, Atul. Whenever there is an increasing trend in commodity prices, that is where at times there is a slight impact on the EBITDA contribution margin. Whenever there's a decreasing trend, it positively contributes to contribution margin and EBITDA margin. Having said that, I think I would like to reiterate that this year we would probably exit towards the lower end of the traditional cable and wire EBITDA margin of 11%-13%. Over the mid to long term, we should be able to bounce back to historical margins, and from there, we should be able to improve with the help of Project LEAP. Okay. Thanks. Thank you, Atul. Thank you. The next question is from the line of Manoj Gori from Equirus Securities. Please go ahead. Mr. Gori, your line is in talk mode. Kindly go ahead with your question, please. Hello. Yes, sir. Please proceed with your question. Yeah. Sir, first of all, congratulations on good top-line performance during the quarter. Secondly, what I'm trying to understand is what's happening on the cable side. Obviously, in the opening remarks, you sounded very optimistic on the mid to long-term growth prospects. When do you see the demand to normalize in volume terms, and how do we see from next three to four quarters point of view? Thanks, Manoj. Thanks for highlighting and complimenting us on our performance. We believe that as of now, give and take few basis points here and there, we are already at pre-pandemic levels for most of our businesses. And we believe that because of positivity in the customer sentiment, unlocking festive season, and push by the government, and increase in private CapEx, the second half is going to be better than the first half, both in terms of top-line performance as well as bottom-line performance. Right. In this case, when you say you would be delivering somewhere around 11%-13% lower end of the range, so by and large, we should be back to normalized margin level. Is this assumption right? Yeah, we should be able to touch that in the midterm. From there, we should be able to improve under Project LEAP. Right. Sir, can you throw some light, like any developments or any progress on the export side, like how things are panning in U.S. and the other markets where you are trying to set up the similar kind of distribution model? That would be my last question. Thanks, Manoj. Exports, as you know, remain our focus initiative. We have been able to develop several products which comply with the local jurisdiction requirements. For example, for U.S., for Australia, in certain cases for EU. We have also identified dealers and distributors in few geographies, and they would help us in expanding our local presence. We believe that exports would continue to increase in the near to midterm, and we should be able to get at least double-digit contribution from exports to our top line. Thank you. The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead. Hello, sir. Sir, my question is, in terms of the price hikes versus the market, how much there has been a gap, what we have taken a price hike in cables and wire segments versus what street would have taken? In terms of you also touched upon the competitive intensity, if you can touch upon the market share, what it is right now, and this competition we are facing is from what kind of players, which has risen up? That's my first question. Great. Thanks, Charanjit. On the market share, we believe we would have gained market share. But I think to assess it in a quantified manner, I think we should wait till the year end, because that is when we'll have visibility of data of all the large players. On the pricing, as I explained to other participants, at the input cost level, if we see the product portfolio, I think the cost increased by mid-single digit, and we have been able to take price hike in lower single digit. That is where there's a contraction in contribution margin. This is because we wanted to balance top-line growth utilization as well as bottom- line. As a result of which, our second quarter top line is greater than the top- line of the first half of the last fiscal. It seems as of now that we should be able to have significantly better second half than the first half in terms of top-line performance as well as bottom-line performance. Okay. Sir, my next question is on the FMEG segment, in terms of the price hike, especially in FMEG, what's the quantum there you would have taken? And secondly, in terms of scale-up in the fans category. Sorry, Charanjit. Operator, I think we lost Charanjit. Mr. Singh, if you can please repeat your question. Hello, can you hear me, sir? Please go ahead. I would just request you to please repeat your query. Sure, sir. Yeah. On the FMEG segment, if you can highlight, what are the price hikes you have taken on that front in different categories? In terms of our now capability of new manufacturing plant for fans coming up, how that can help us scale up in the fans market, maybe specifically catering to the southern market? In the case of FMEG, we have been able to increase our prices in line with the increase in the input cost, and partly we got benefit from operational efficiencies, which we have unlocked as part of Project LEAP as well as Project Udaan. The new capacity, which is expected to commission in the current year, would help us in improving our reach. We firmly believe that we can be a top three player in the fan business, and that is where this new facility will help us in getting into the top three positions. Okay. Sir, just lastly, on this ₹20,000 crores of target by FY26, if you can just give us a little bit more granular picture into what is our expectation on domestic. I think exports is also one of the very important pillar for this growth. What's the kind of scale-up which we are looking in exports and how we are preparing ourselves for that export opportunity? Yeah. It's a great question, Charanjit. Thanks for asking. I think other participants would also have similar thoughts. I mean, these are early days. We have a broad roadmap for INR 20,000 crore available as of now. What we are trying to do now is challenge that internally and ensure that all the teams at the corporate level as well as the business level are totally aligned. I think there are a few product categories where we don't necessarily have significant presence. To illustrate, say, for example, special cables or import substitutes or EHV, where we can see exponential growth. There are a few product categories where we would see better than industry growth. If you are okay, Charanjit, I will probably park this question for the year-end, and then we'll come back to you and give you more granular information. Okay. No problem, Gandharv. Thanks for taking my questions. Thank you very much. Thank you. The next question is from the line of Abhishek Puri from Axis Capital. Please go ahead. Yes, sir. Thank you for the opportunity. Just wanted to ask regarding this INR 200 billion revenue target, how much could be the contribution you're looking from FMEG, if you can specifically mention that. Secondly, you have actually delivered industry-leading growth in FMEG as well as in cables and wires over the last two years, aggregate, if we see that as well, not only one year growth. The margin performance has been weaker than peers. Are we taking a strategic approach of focusing more on growth and gaining market share currently, and then using the operating leverage in future to bounce back on profitability? What is the approach? Has there been a change in approach for us? Yeah. As far as FMEG contribution to our top- line target of INR 20,000 crore is concerned, I think broadly the B2C business is a priority. We ventured into FMEG business almost five, seven years back, and we have already delivered industry-leading growth, both at the top line level as well as at the bottom line level, and we believe that we would be able to further unlock value there. As I mentioned, Charanjit, please give us time till the year-end, and we would like to then give you more granular information in terms of the breakup of INR 20,000 crore. On the profitability, I think what we're trying to do in the current year, particularly, is maintain a fine balance between the top line utilization and bottom- line. As far as mid-term outlook is concerned, we believe we would be able to go back to traditional historical 11%-13% cable and wire EBITDA margin. In the case of FMEG, we should be able to further unlock the value. I think by fiscal 2026, we should be able to reach to 10%-12% type of margin in FMEG business. Margin guidance you have already given. Gandharv, just wanted to check your strategy basically. Are we looking at gaining market share or we are good to increase prices and sacrifice a little bit of top line growth for second half or for next year? How are we thinking about it? Over the mid-term, the objective is to ensure that we get industry-leading growth while maintaining the margins in cable and wire business. As far as FMEG is concerned, we should be able to expand on margin. Under Project LEAP, this is one of the important agenda item where we want to ensure that we have healthy market share gains while maintaining and improving margins in all the business categories where we have presence. We stand by 12% guidance of margins in FMEG over the next three years, right? Yes. All right, great. Thank you so much and have a great day. Three to five years under Project LEAP. Thank you. The next question is from the line of Shrinidhi Karlekar from HSBC. Please go ahead. Yeah. Hi, and thank you for the opportunity, and congratulations on good performance on top line and working capital. Gandharv, I just have one clarification question. In terms of margins, are you guiding that for full year FY 2022. Company should be able to meet lower end of EBITDA margin guidance of 11%-13%? Which itself imply kind of a 12%-13% margin in H2. Just clarification on that. The guidance is for the second half, that we should be on the lower end of the margin. It's quite possible the aggregated 12-month number is slightly lower than this. These are interesting times. We will try our level best to improve on margins, but as of now, if we were to give guidance, my guidance is that second half, we would be more towards the lower end of the margin. Fair enough. Midterm guidance doesn't change at all, right? Gandharv, whatever you endeavor under your long-term planning as well as short-term, that doesn't change with what commodities have changed, right? Yes, absolutely. Okay. Gandharv, last one, if I may. There's a very good improvement on inventory. Just want to know, is it a structural improvement that you wanted to do, or is it just that the growth at the latter end of the quarter surprised, and that's why it is lower than optimum? How should one read that? It just appears like a very good improvement on the inventory side. Is it something you targeted, or is it just an outcome of growth latter half of the quarter? Inventory is a focus agenda, and we are trying to optimize. We have to do two things. One is we have to ensure that for the purpose of growth, our channel partners are able to get our supplies almost immediately, and that is where we have to maintain finished goods inventory at the right places across the country, whether it's depot or regional warehouse or the manufacturing location. The second aspect of it is optimize so that our inventory carrying cost can be reduced or can be within the acceptable norms. This is what we are trying to do throughout the year. Recently, we have strengthened the team. We have hired resources from leading companies in our supply chain, and we believe that there is a scope for improvement on inventory, more particularly on RM and semi-finished goods level. As far as finished goods are concerned, we'll probably have to continue to carry inventory to ensure that we are able to meet our expectation in terms of availability. This is the result which you can see in the second quarter, where the inventory levels have significantly reduced from the first quarter. Yeah, great. Gandharv, is it fair to say that relatively higher inventory on the raw material as well as semi-finished goods is, in a way, cause of relatively higher volatility on margin? Is that fair to say? If your raw material and semi-finished good inventory comes down with your targeted programs, is it fair to assume that probably your margin would be less volatile? Generally speaking, there is no correlation between the two because, as you know, this industry, the commodity is procured at provisional price, and it doesn't have any P&L implication. Whenever you price the inventory, and generally you do that when you have visibility on the selling price, it becomes a pass-through, and that is why inventory levels at RM or SFG level has generally no bearing on the profitability or contribution of that particular period. Fair enough. Thank you, Gandharv, and all the very best. Thank you very much. Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go ahead. Yeah, hi. Good afternoon, Gandharv and team. Just couple of questions. Firstly, under the FMEG, what feedback you are getting and collecting information from other companies that entry-level competition under FMEG is increased and generally, premium has done better. That demand is quite steady, but entry-level competition under fans and FMEG categories are quite high. Would you agree to this, and what's your analysis of competition behavior? Going ahead, does it really impact our own new product launches here? That's first question. This is true for all the businesses, particularly ultimately after the pandemic, because most of the businesses are trying to balance utilization, top line and bottom line. We have seen in few pockets there that the competitive intensity has gone up, including FMEG businesses. You would have noticed that in the second quarter, we have been able to improve on margins, and we are maintaining our pricing points. Premiumization will probably help us in improving our performance, but from a customer's point of view, we want to provide him better product at a price which is competitive. Got it. Essentially, in terms of FMEG margins, it will still continue to go up, right? Even though the competition on entry level is higher. Yes. Okay, got it. Secondly, any update on the channel financing for cable and wire and FMEG sectors? How's that progressing and what are your targets for this year, next year? Thank you. In cable and wire, we are hovering between 60%-70%. This can slightly go up. As far as FMEG is concerned, depending on the business, we are between early 30s to late 30s, and we can take it up at least to 50%, and we are hoping that we should be able to do that by the end of the current fiscal. Okay, perfect. All the best. Thank you so much for answering my questions. Thank you, Rahul. Thank you. The next question is from the line of Venkat from 3sigma Financials. Please go ahead. Thanks for taking my question, and congratulations on good set of numbers in a challenging time. The first question I wanted to ask is, are we having e-commerce sales? If we are having e-commerce sales, are the margins very different? We don't have traditional e-commerce presence as of now. For example, we have the online e-commerce players, through there we don't have any significant presence. We have taken some baby steps in last 10, 12 weeks, it will take a while to reach to a level which is acceptable from a brand and a company like us. Having said that, in our traditional cable and wire business, 70%-80% of our dealers and distributors place orders through our dedicated app. To that extent, we have online channel available for them. On the e-commerce business, the way it is generally constituted and understood, we believe that we should be able to make a significant growth in next five years under Project LEAP. Sometime next- More from FMCG, actually. Yes. Our target is to get to 10% e-commerce contribution to our top line under Project LEAP. You are absolutely right that it has more meaning associated with B2C business, and that is where, in the past, not necessarily have taken adequate amount of steps, but in last few months, we have done a bit of work. We have hired resources with right set of talent. We have invested on technology and having the right sort of IT enablers, and we expect that from next year onward, we should be able to get some results out of it which are meaningful. Seems like we lost the connection for the current participant. We move to the next question from the line of Devansh Nigotia from SIMPL. Please go ahead. Yeah. Hello. Please go ahead. We can hear you. Please go ahead. Thanks for the opportunity. Sir, in FMEG, if you can just highlight on the premium portfolio, because I mean, there have been quite a lot of new launches in last three, four months. How is that trend been and the product acceptance and the learning from it, because premiumized category was, I think you've largely launched in last three, four months. Yes, absolutely. Premium is a focus agenda within the fan business. As I mentioned to one of the participant, that by end of this year, we should be able to give you a target number of premium business contribution to FMEG business. If I just to get more color to you, within fan, I think we are in 20s or just above 13 as far as premium contribution is concerned, which can go up. The recent acquisition in the form of Silvan and launch of Hohm would help us in improving premiumization. As the last participant was inquiring about e-commerce, e-com will also help us in improving premiumization. As of now, there are some products where we have good presence, but I think, as we go along, we should be able to improve on premiumization across all the B2C categories. In case of fans, I just wanted to re-clarify the new capacity was supposed to come up. In that case, the target margin that we've guided for 10% in FY 2026, isn't it too conservative? If you can just throw some light there. Yeah. Fan capacity will be operational in the current fiscal, in the second half of this year. As far as margins are concerned, the guidance is that we should be able to touch almost 10, 12% in five years from now. That is where you would have seen that the second quarter of this year, our EBITDA margins are significantly better than the first quarter. Okay. Directionally, if you can just throw light on other FMCG products other than fans, how things have been in lights and smaller products like appliances and pumps also. Across all business categories, we have been able to record a decent amount of growth. Fan was slightly impacted because of seasonality, but light, conduit pipes, and pumps recorded a healthy growth. If I talk about the smaller businesses, for example, switchgear, solar, and water heater, they were almost 2x of the last year's base. Okay. Thank you a lot, sir. Thank you very much. Thank you. Next question is from the line of Sandeep Jain from Aditya Birla Capital. Please go ahead. Mr. Sandeep Jain, your line is in talk mode. Kindly go ahead with your question. Mr. Jain, please proceed with your question. As there is no reply from the current participant. Thank you. I now hand the conference over to the management for their closing comments. Thank you for taking out time and attending this call. In case if you have any follow-up questions, please feel free to reach out to us at investors.relations@polycab.com. We would be pleased to attend your question and provide you additional clarification and input. With that note, wish you a very happy Diwali, and please stay safe and healthy. Thank you. Bye-bye. Thank you. Ladies and gentlemen, on behalf of Polycab India, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.