Ladies and gentlemen, good day and welcome to Polycab India Limited Q3 FY 2022 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 zero on your telephone. Please note this conference is being recorded. I'd now like to hand the conference over to Mr. Gandharv Tongia, Chief Financial Officer, Polycab India Limited. Thank you, and over to you, sir. Thank you, Vikram, and a very good afternoon, everyone. I hope you all are doing well. It is a pleasure to have you on the call. As Vikram mentioned, I'm Gandharv Tongia, CFO at Polycab India Limited. Thanks for joining us today to discuss our Q3 FY 2022 earnings. During the call, we'll be referring to the presentation, financial results, and financial statements, which are available on the stock exchanges as well as investor relations web page of our website. It can also be downloaded through the link or QR code on slide nine of the earnings presentation. From our management team, we have with us our Chairman and Managing Director, Mr. Inder T. Jaisinghani. Let me now hand it over to him for his comments. Good afternoon, everyone. In the third quarter, despite a challenging business environment, we recorded the highest quarterly top line in the history of the company for the second continuous quarter, which underlines our strategy to agile focus on logistics execution and consistently deliver the best quality of product to our customers. We have utilized a demand generation capability and go-to-market strategy with a greater focus on emerging India clusters and new-age channels. We have also commenced work on developing a robust ESG framework that will align us with the best global standards and ESG guidelines principles for sustainable business practices. I now request Gandharv to take you through our earnings presentation. Thank you, Inder T. Jaisinghani.. Overall macro environment has been a bit of a mixed bag this quarter. We saw healthy demand in our B2B categories as well as institutional business on the back of an uptick in private CapEx. Demand visibility over medium to long term has been improving across sectors like real estate, infrastructure, renewable energy, manufacturing. This has led to a strong flow of fresh investment announcement, and most of the companies are going ahead with their capital projects despite the ongoing third wave. At the consumer end, while inflation is a bit worrying, lower interest rates coupled with increased income is significantly improving affordability. However, on the flip side, persistent volatility in our key raw material and fear of lockdowns presented some headwind to improving consumer sentiment. Having said that, watching the current trade sentiment, we expect economic impact of the current wave to be limited, considering less severity of Omicron virus. While there may be hiccups in terms of localized lockdowns in the first half of Q4, second half is likely to be better. We remain watchful of trends on the ground, and our teams are well prepared to come back strongly as the waves recede. Overall, we believe our trifecta of strong stimulus-supported economic infrastructure growth, coupled with improving execution efficiency through reforms like public procurement rules of the Atmanirbhar Bharat and favorable consumer demographics and trends will provide a long runway for growth. Our business and portfolio are quite uniquely placed to benefit from this favorable macro development. Before we move on to presentation and financial review, I would like to highlight that the P&L and segment numbers for the current and prior comparable periods are restated due to divestment of Ryker Base in accordance with the applicable Ind AS. All realized gains and expenses on divestment are reported under profits from discontinued operations as seen on page 10 of P&L and consolidated financial statements. This, along with few exceptional items from last year, are also presented in slide 10 of the presentation. Moving on to slide four. For the quarter ended 31st December 2021, our consumer revenue grew by 23% year-on-year and 34% on a two-year basis. On quarter-on-quarter basis, our consumer revenue grew by 12%. Q3 is the highest quarterly sales we have ever recorded. EBITDA margins improved sequentially by around 100 basis points to 10.7%, led by better operating leverage and price hikes, partly offset by 3x increase in A&P spend and input cost pressure. During the quarter, we launched several brand campaigns across TV, digital, and social media platforms. Seminars and influencers meet helped improve awareness among B2B customers, electricians, and contractors, among others. We also initiated rural outreach program through mobile vans, where we connected with customers in hinterland. As the business environment normalizes, we will continue with our branding expense. Moving on. Other expenses are broadly in line. Overall finance cost at INR 78 million and other income at INR 216 million was slightly lower. A detailed break-up of our other income, finance costs has been provided on slide 13 of our earnings presentation. Our profit before tax at INR 3.24 billion decreased by 2% while profit after tax at INR 2.48 billion increased by 1% year-on-year, respectively. On slide five, in the first nine months ended 31st December 2021, our revenue grew strongly by 41% year-on-year. EBITDA was up by 11% with 9.6% margin. Adjusted PAT also grew by 11% year-on-year. Please note the difference between adjusted and reported PAT is highlighted on slide 10. Moving on to the segment on slide six, our wires and cables business continued the sequential momentum. Sales grew by 24% year-on-year and 38% on a two-year basis. Normalizing the sales of a large order, growth was better at 28% year-on-year in third quarter. Delving deeper into sub-segments on a year-on-year basis, cables grew faster than wires in Q3, supported by strong growth in institutional business. Having said that, on a three-year basis, growth is quite broad-based. The green shoots that we saw in the month of September and institutional business continued leading to nearly 2.5x higher revenue. We are hopeful of sustaining this momentum in coming quarters. In the quarter, wire business was slightly impacted by high volatility in copper prices in early November and fears of lockdown impacting the trade sentiment in December. Consequently, the inventory levels in trade were much below normal and overall cash cycle also slowed. Despite these challenges, it is pleasing to note that blended wires and cables volume grew on year-on-year basis and also higher than pre-pandemic levels. Export business contributed 8.1% to consolidated revenue but declined by 8% year-on-year, largely on account of one large order in base year. Excluding that, the business posted a healthy 24% year-on-year growth led by Africa, Asia and Australia. We have put in considerable effort over the past few years in terms of new product development, getting approvals and penetrating new geographies. This is now materializing as we are seeing many repeat orders from large customers globally. Our focus on achieving double-digit sales contribution target over the medium term for this business remains intact. We have seen 155 basis points sequential improvement in wires and cable segment margins in the quarter driven by price hikes and better operating leverage. Overall inflation in our raw material basket was close to mid-single digits, largely emanating from copper and aluminum, while our blended price hikes were slightly higher than that. Considering the continuing competitive intensity in select segments of this business, the improvement in margins is encouraging. On slide seven, our FMEG business grew by 11% year-on-year. October saw a robust momentum, however December was impacted by weaker trade and consumer sentiment. Having said that, on pre-pandemic Q3 FY 2020, the sales are up by a healthy 57% and market share gains continued across categories. Fans had a slightly subdued quarter, however growth in lights, pumps and conduit pipes business remained healthy. Switchgears and solar continue to witness strong demand. Our deep dive initiative on widening distribution network has started delivering tangible benefits. Work on portfolio optimization, brand architecture and augmenting influencer management program is also progressing well. We have started clocking sales from e-commerce channel and we expect to ramp it up significantly over next few years. Profitability in this business has been a bit volatile in recent past, but this is largely because of a blend of external factors like unprecedented commodity inflation, demand reduction, coupled with a lot of internal changes in terms of creating the right team, right infrastructure, right media strategy, brand investment, et cetera, which aligns with our aspiration. We strongly believe this alignment is necessary to achieve the next leg of profitable growth in FMEG, which gets us to the podium. On Slide eight, other segment which largely comprises of our strategic EPC business witnessed a 21% year-on-year increase in revenue to INR 745 million. EBIT stood at INR 106 million, up 24% on year-on-year basis. While many of you may know, but just for the benefit of everyone, I would like to highlight that during this quarter we divested our entire stake in Ryker Base, which was our wholly owned subsidiary, for an enterprise value of INR 3.23 billion. Ryker played a strategic role in providing us high quality copper rods, which are an input for manufacturing of wires and cables. It started as a JV, but we had subsequently acquired the balance 50% stake when the other partner decided to exit. Consequently, the capacity became quite overwhelming, and we couldn't fully utilize this state-of-the-art facility with our own internal requirements. Our limited experience and interest in metal business and a strong focus on optimal capital allocation also suggested it was prudent to divest. After exploring various strategic options, we believed this deal was a win-win proposition as we simultaneously executed a multi-year tolling arrangement with Hindalco, which will ensure our operations and supply chain dynamics remain intact and we continue to deliver higher quality of products to our customers. Consistent with this transaction, we have also withdrawn the copper segment. In line with Ind AS, all Ryker business income has been reported as income from discontinued operations in P&L. The P&L and segment numbers are restated for prior comparable periods. Our pretax gain on investment was around INR 1.24 billion. On the balance sheet side, our financial position continues to remain healthy with net cash position of INR 6.7 billion. Debt has reduced sequentially from INR 2.66 billion as of September 2021 and to just INR 10.9 billion. Debt to equity ratio is low at 0.02x. On the working capital side, there are a couple of things to highlight. One, receivable days are at comfortable level of around 40 days. We are seeing decent improvement compared to FY 2020 and FY 2021. We will continue to optimize this progressively with the help of channel financing. Second, inventory levels are higher than normal because of two reasons. One, we were anticipating better demand in December end. However, as I highlighted, the trade sentiment went down a bit due to fear of third wave, and dealers and retailers reduced their stock levels. Second, we had done some pre-planned procurement for Q4 considering possible impact of Omicron supply chain. Having said that, we are calibrating our plans based on market demand and inventory levels to normalize by next month. As part of transformation project, we are bolstering our organization structure with great planning across levels and business. We are creating new verticals, function and support teams. This will bring in new competencies and enable us to explore new business revenues, which will make Polycab a future-ready organization. Deepak has joined us recently from Tata Group to lead the transformation management office under Project Leap. Tapan joined us from Havells to head our transformer business. If you remember, we had initiated few pilot projects to test the rural market. The results have been heartening. We believe with the right infrastructure, portfolio and people, we can leverage the immense demand potential of semi-urban and rural India. Accordingly, we have onboarded Dipak Mitra from Promart to take this initiative further. We are elated to have all the new members joining the Polycab family and our good wishes are with them. Lastly, taking our sustainability initiative a notch up, we have initiated a project with an external partner to create our long-term ESG framework aligned with international ESG protocols, guidelines and standards. This framework will provide a sustainable outlook towards the environment and society alongside business goals. Thank you. With that, I hand it over to operator for Q&A. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. To ask a question, please press star one now. We have the first question from the line of Ravi Swaminathan from Spark Capital. Please go ahead. Hi, sir. Good afternoon. Sir, my first question is with respect to the volume value mix. So what kind of volume growth we have seen either during the third quarter or nine-month number, if you can give that, it would be great. I know multiple products are there, but if you can give a broad sense, it would be great, sir. Thanks, Ravi, for your question. As you can see, there is a significant amount of growth in value. Particularly if I were to add color on the volume, I think there is slight increase despite having Domotex base, predominantly from say business verticals like HDC followed by LDC. On FMEG also, the growth is visible across all the product categories, barring fans which was slightly subdued. Okay. Volume growth might have been kind of mid-single-digit or high-single-digit, or how is it over? Yeah, I would say that most of it is because of volume. Most of it is because of value, and only part of it is because of volume. Within that, HVC is leading the pack, followed by the other businesses, cable and wire. Got it, sir. Got it. In terms of if you can give some color on real estate-led demand, infra-led demand, more color on that. Also urban rural, the how demand is, demand for wires, how it is. If you can give a broad thought process, that would be great, sir. Yeah. Let me split into two or three broad components. Let me talk about first the typical B2B business. As you would know that in first couple of quarters, overall demand from the institutional side, it was slightly subdued. In the current quarter, there is an uptick in the demand, and institutional business has recorded almost 150% growth in the revenue, followed by dealers and distributors on all the product categories across all the regions. If I give you color on the export business, there is of course an element of repeat orders, but if I remove Domotex from the base, there is overall growth of 24%. Domotex also, if I'm not wrong, in the last year, December, in the base quarter, it had almost $20 million of contribution to the top line. This current quarter also, there's a $10 million contribution. Mm-hmm. Wires, I would say, is slightly less impressive than a typical B2B business in the current quarter. On FMEG side, across all the regions, all the product categories, there is growth barring fans, which is slightly subdued. Fan now contributes almost 35% to our FMEG top line, followed by lighting and luminaires, which would be roughly around 30%. Switchgear would be around 10%-15%, followed by pipe and fitting, which will be around 10-12%. Got it, sir. Sir, my one question is basically, not only for Polycab, but for multiple electrical companies, that on one side there is the stocks of real estate seeing a very strong recovery, but products like wires, et cetera, they are not seeing very good traction. Any reason can you attribute to this basically as to why there is a dichotomy between the real estate growing but wires not seeing that much traction? We are seeing a fair amount of growth on LDC and wire side, blended, I would say around 20%-25% growth, which we have seen in few of these product categories or SKUs within these businesses. Mm-hmm. Overall, you know, availability of credit and softening of interest is also helping the housing sector and building sector. As we go ahead, it appears that in the fourth quarter after Omicron, the overall private CapEx would help us in improving the top line of the industry as well as large players like us. Mm-hmm. Affordability, I think, has reached multi-year high and it should get reflected in the demand for cable and wire business in the quarters to come. Got it, sir. Got it. My final question is with respect to the EBITDA margin. What kind of range that we can see in the next fiscal year? Can we go back to double-digit kind of margins or are we seeing something similar to what it can have, what it is likely to be this year? If you can give some thought. Yeah. Ravi, you know, our business, historically in cable and wire, we have generally hovered between 11%-13% on a sustainable basis. Mm-hmm. When we met in September quarter, I had mentioned that slowly and gradually we'll start improving on the EBITDA margins towards the. Mm-hmm. In the second half of the year, the likely exit numbers would be towards the lower end of the EBITDA margin, which we have seen historically of 11%-13%. If you dissect our current quarter performance, you would notice that the EBITDA margins have improved in the third quarter in comparison to second quarter, despite the fact that we have invested wherever we should have invested, like for example, advertisement and publicity has increased from INR 14 crore to INR 44-INR 45 crore. Mm-hmm. At this stage it seems that next year margins would be better than what we have seen in the current quarter. At the same time, I would like to be cognizant of the fact that pandemic is still not over. If there is another wave of pandemic and it has significant impact on the business, it could adversely impact the margins. By and large, at this stage it seems that we should be able to have better margins in the years to come, including the next financial year. Got it. Thank you, sir. Thank you. Thank you. We have next question from the line of Atul Tiwari from Citigroup. Please go ahead. Yeah, thank you, sir, and congrats for pretty decent set of numbers in a tough environment. Gandharv Tongia, my first question is on the, you know, pricing. So all the commodity price increases which have happened over past year or so, have they been passed on into your pricing structure of both cables and FMEG business or something still remains to be passed? Hello? Hello? Gentlemen from the management, this is the operator. We're unable to hear you. Ladies and gentlemen, kindly stay connected. We seem to have lost the line of the management. We'll be reconnecting the line. Please stay connected. Thank you. Thank you for patiently holding, ladies and gentlemen. We have the line for the management back in the call. Sir, you may proceed. Thank you. Sincere apologies, Atul, and the other attendees. Somehow we lost the connection. Atul, thanks a lot for your kind words. I think you wanted to know on the pricing side of it. What I was saying is, in our business on the B2B side, primarily on the distribution business, we revise our prices generally on monthly basis after considering two variables. One is the changes in metal prices, copper and aluminum. Second is change in foreign exchange rate, USD/ INR, and this is what we have done in the current quarter as well. On the other side of business, which is institutional and export, we generally do it on back-to-back basis. As you can see between second quarter and third quarter, there is almost 70 basis point improvement in contribution margin, which means that we have been able to increase the prices slightly more than the actual increase in the raw material cost at the product basket level. As I mentioned to Ravi a while back, we believe that in quarters to come, we should be able to improve our margin slowly and gradually. I mean, would it be the right characterization to say that most of the commodity price hikes have already been passed on, and from here on, you know, whatever price hikes you take, it will kind of trickle down to the margin number, and we will get to the more normal, you know, 11%-12% kind of margin. Is that a right representation or? Yeah, I would like to just add one element to your understanding that in our business the input cost is not constant. It undergoes a change multiple times in a year as you know because copper and aluminum is traded on LME, and that is where it is a moving price. But generally from the understanding point of view, give and take few basis points here and there, we believe that we should be able to pass on the increase in cost of input costs to our end customer. Slowly and gradually we should be able to improve on margin both at contribution level as well as EBITDA level. Slightly on a long-term view, you know this already, Atul, that we are working on Project Leap with the help of Boston Consulting Group, and there are several enablers which are in place. Once those levers are used, we should be able to improve our profitability both for B2B and B2C. However, it will take a while to fully, you know, achieve the true potential of these levers. Okay. My second question is on, you know, the channel. How many dealers and distributors you would have currently on cable and wire side and on FMEG side? What proportion of those are currently covered under channel financing, you know, scheme? How many or how much more can be potentially covered under channel financing scheme? Give and take some numbers, we are around 4,100 dealers and distributors in our family. 50% of them are on FMEG. In terms of value, advances plus channel financing put together in cable and wire, we would be around 70% of our top line. In FMEG this year it has improved reasonably well, and we are in late 40s or almost just high of 50%. Theoretically speaking, this number can go right up to 80s and 90s, and that is where FMEG channel financing penetration should improve in quarters to come. There's upside which is possible in cable and wire business as well. Okay, great. My final one is on, you know, obviously, we have seen across the industry, you know, some tapering down of demand, you know, in December and, you know, after Diwali got over. So how are things right now qualitatively? I mean, do you see demand bouncing back, you know, in fourth quarter, you know, from the retail category that you have? Or it is still taking some time. So if you could share some broad qualitative color on that particularly. Absolutely. You're right, Atul. Second half of the quarter got impacted. Predominantly, you know, last two, three weeks of December 2021 got impacted because of Omicron and pandemic. If I were to take a view today, sentiments are positive. Though in the month of December, few of the dealers decided to reduce the inventory levels in the channels. As of today, the things have improved. Dealers and distributors are inching back to normalcy. You know this data already that Omicron wave in most of the large cities has already peaked or about to peak in next few days. At this stage, it seems that the second half of the current quarter should be better than the first half of the current quarter. Overall, you know, macro elements like uptick in private CapEx should also help us in improving and augmenting the top line for the company on cable and wire side. Well, on the B2C side as well as on dealer distribution, any which ways we are focusing in improving our presence in all the addressable markets, adding our dealers and distributors, and all these initiatives would also help us in improving the top line. To answer your question, the sentiment got impacted in the month of December adversely a bit, but as of now things have started improving. Okay. Thank you. That's it. Thank you. Thank you. We have next question from the line of Aditya Bagul from Tata Mutual Fund. Please go ahead. Thank you. Good evening, Gandharv and team, and congratulations on a good set of numbers in the challenging times. Gandharv, a couple of questions from my end. Firstly, with regards to the B2B business, right, we've seen a sharp recovery. Can you help us understand what are some of the end user industries that are driving this growth? And what is your outlook over a period of the next one year, especially when it comes to the B2B part? Thanks, Aditya. Thanks a lot for your kind words, and great to see you on the call joining from another company. Thank you for that. On the B2B side, I, as I mentioned a while back, predominantly the improvement in the demand is emanating from private CapEx. As I mentioned to Ravi a while back, institutional business has recorded 150% growth, which is a meaningful number in our B2B business. On the dealer side, there are several sectors where we have seen uptick in demand, whether it is coming from real estate, infrastructure, renewable energy or manufacturing. I would say it is broad-based, and it's coming from most geographies. It's not that only one particular region of the country is contributing to the demand. It's coming from all the geographies, and that is where we have been able to also record a decent volume growth, even if we consider low base. Sure. Gandharv, just to prod this a little further, just if you can help me understand, is there a chunky nature to this B2B sort of institutional demand, or is this more industrial CapEx led demand? There is no particular one industry or sector which is contributing to this demand. I would say it is broad-based. I think the private capital spenders are not shying away from making the commitment and incurring the cost, and which is benefiting us in terms of the improved performance in the top line. Understood. Thank you for that, Gandharv. My second question is just trying to understand the premiumization trends, especially in our FMEG business. So can you just throw a little light on how you see some of our premium products, right, Levana or Hohm, and how do these fit into our Project Leap over a period of the next three to five years? Yeah. Premiumization is an important focus area as part of Project Leap. We are working on several elements. One is to ensure that we have the right product available in our product portfolio to meet the premiumization. Second is we should have right GTM and dealers and distributors who can cater to the end demand or end consumer. That has helped us in slightly improving the overall contribution of premiumized products to our top line. Fan is hovering between 25%-30%. Purocoat Fan, which was internally innovative, has also helped us in improving the overall premiumization agenda within the fan business. Similarly, for lighting, we have recorded a growth in premiumization on downlighters and others. Hohm, Silvan and Smart these are the areas where we are still working. I would expect that in the next fiscal, and that too in the second half of the next fiscal, we should have some meaningful numbers coming to our P&L through Hohm and Silvan and IoT, and that remains a focus area for us. Overall, the idea is to have a balance of premiumization as well as regular products so that we have right EBITDA and EBIT margins in the B2C businesses, and we are able to improve the margins from the current levels to almost 12% by FY 2026. Understood. Thank you so much for those answers, Gandharv, and best of luck to you and the team for the ensuing quarters. Thank you very much. Thank you. We have next question from the line of Nitin Arora from Axis Mutual Fund. Please go ahead. Thank you. Just first question on the demand side itself, though, take it that value growth is also the large proportion. Large can be 99% as well. Just talking in the last two quarters, you know, last quarter on a base of 5% decline, we did 44% growth and the copper prices were up roughly 40%-45%. Sorry, are you there? Hello? Operator, can you hear us? Yes, sir, we can hear you. Mr. Nitin Arora, would you like to complete your question? We seem to have lost the line of Mr. Nitin Arora. We take the next question from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead. Yeah. Hello, Gandharv Tongia. Can you hear me? Yes, we can hear you. Okay. So, if you can just help us understand, one, in terms of the quantum of price hike, exactly, you know, how much you would have taken in cables and wires. If you have to, you know, look at from a nine months perspective, volume growth in cables and wires, what it was. You know, if you can give the figures here. Yeah, sure, Charanjit. As I mentioned to Atul and Ravi, most of the increase is coming from value. There's some contribution coming from increase in volume. If I even consider the mix in the base, there is some improvement in volume. In terms of price hikes, in the second quarter, there was some impact on the contribution and that is why there was a contraction contribution margin. In the third quarter, there is almost improvement of 70 basis points. The raw material cost and the product basket level increased by mid-single digit. The price hike we have taken is slightly more than that, and which is what is getting reflected in expansion of contribution margin by 70 basis points. We'll continue to take pricing action to offset the increase in the input cost in the quarters to come. If we have to, you know, compare the price action, what we would have taken versus the industry, is there a gap between that? Are you trying to ask that whether the price hike we have taken is in line with the industry? Is that the question or you? Yeah. Yeah, that's it. Yeah. Yeah, yeah. In all fairness, we are the largest manufacturer of cable and wires in the country. We are the market leader, price leader, and of course a quality leader. I think we have acted like a market leader in the current quarter. We have taken the price hikes which were required to be taken to ensure that we are able to offset the input costs. It's quite possible few of the market participants have followed what we have done. Where there could be some aberration where the market participants over the years have not necessarily followed what we have done. By and large, we have taken the price hike which we felt were necessary to offset the increasing input cost. Okay. Just another question on the volume growth perspective. As we are entering into Q4, you know, generally it is more infrastructure and construction heavy and even from next year perspective, there is a thought process that maybe the activity on the government infrastructure side should continue to remain strong. Any thoughts, you know, what is the kind of volume growth which you could see in cables and wire side separately? Charanjit, you know us, we don't give guidance on future performance. If I were to provide you a long-term guidance, we are fully committed to Project Leap agenda, whereby we want to double our revenue in five years from now by FY 2026. And which would mean that INR 9,000 crore of top line of FY 2021 would be INR 20,000 crore by FY 2026. It will come from all the businesses, both B2B as well as B2C. Okay, Gandharv, just lastly on the FMEG front, we have, you know, built a very strong team, and, you know, we are getting onto a journey where we expect to grow much more faster than the industry. You know, from FMEG perspective, we have seen that the growth has not been as strong as what we are seeing for the, you know, other larger players. If you can touch upon, you know, how this journey is panning out from FMEG perspective and this new team, when do you see, you know, their activity starting to pick up. Just on the FMEG journey, if you can give some more color on the future perspective, how you plan to ramp up. On two-year basis, as I see FMEG top line performance, we have registered a growth of 57%, which would roughly mean 25%-30% organic growth. In terms of achieving the true potential of Project Leap agenda, there are several enablers on which we are working. One which I very briefly touched upon in the opening remarks is having the right resources in the management team, and that is where we have invested heavily in getting the best of the talent of the industry. In the last quarterly call, I had updated all of you that Mr. Vivek Sharma has joined us from Panasonic. He was the MD of Panasonic, and after superannuation, he has joined us as deputy managing director. Tapan has joined us from Havells, and he's leading our Fans business. Similarly, there are other team members who have joined from other large companies like Crompton and other large B2C players. These management professionals with the help of BCG are in the process of revisiting and revising and revitalizing the product portfolio, GPM, geographical expansion and augmentation of dealers and distributors. We have already improved penetration in few geographies in the current nine months. Once we implement all the items which we have identified in the blueprint, I would expect that we would be easily able to achieve the top line of B2C business by FY 2026. Also, we would be able to have meaningful improvement in the bottom line. I think we'll have to give some time to the new team members who have recently joined our family and, post that we should be able to get to the numbers which we want to achieve as part of Project Leap. Okay. Great. Thanks, Gandharv, for taking the question. I'll circle back in the queue. That's all from my side. Thank you, Charanjit. Thank you. We have next question from the line of Satwik Jain from Generational Capital. Please go ahead. Yeah, thank you. I had a couple of questions. First is, I guess you are in investment mode in the FMEG business. How are the real internal growth targets at the business level? And secondly, you had briefly told about how you are able to pass on the inflation to the end consumer. If you could throw some more light on it across the verticals. Yeah, I missed the first part of the question. I think maybe I addressed the second part, and then you can repeat the first part. I think the second part is how have we passed on the increase in the input cost to the end customer? If that understanding is right, of the question, the answer is for the dealers and distributors, we reset or revisit our list price on a monthly basis, and that is what we have done even in the current quarters. Almost all the increases in the input cost have been passed on to the end customer. For the exports as well as institutional businesses generally on back-to-back basis, and that is where we have been able to pass on the input cost increase as well to the counterparty or to our customers. If that answers your second part of the question, I would request you to just repeat it. Yeah, yeah, that was helpful. The first part was basically to be, you know, get the FMEG business that is in a scale-up mode. Internal return on capital employed targets at the FMEG level, as such. Yeah. I think you're trying to understand our ROCE target for the FMEG business, if that's a correct understanding. Right, right. objective is to improve profitability for all the businesses as well as, you know, have better capital allocation, including for FMEG or B2C businesses. As of now, as you know, there are two levers to improve ROCE. One is better profitability, and second is better capital allocation. As far as better profitability is concerned, we are targeting to get to around 12% margin by FY 2026, and we are taking all the required steps to achieve that. The second is on capital allocation. Slowly and gradually we are increasing utilization of our factories in FMEG as well as in cable and wire. If I were to illustrate this with the help of one example is Fans business, where our existing facility is almost being fully utilized, and we are in the process of setting up another facility which should be operational sometime in the first quarter of the next fiscal. That will also help us in augmenting the top line as well as the profitability. We'll continue to make efforts to improve the profitability of the B2C business and ensure that our assets are sweating to get better returns. Awesome. That was helpful. All the best for the future. Thank you, Satwik. Thank you. We have next question from the line of Devansh Nigotia from SIMPL. Please go ahead. Yeah, sir. Thanks for the opportunity. It might be a repetitive question, but when you're looking at the real estate demand, and in contrast to that, when you're looking at the demand from real estate ancillaries like fans, lighting, and wiring, it actually doesn't add up. If you can help us understand how does this lead and lag effect play out? Because ideally, is it that concurrently the existing inventory in real estate is being sold and the new construction is yet to pick up in a big way? If you could just share your thought process of how your interaction with the customers is and how the demand is actually shaping up? Yeah, sure, Devansh. As you have noticed that, in all the businesses we have recorded a significant amount of growth, in cable and wire as well as in FMEG. FMEG on a two-year basis has recorded a 57% growth in top line, and similar numbers are there in cable and wire businesses. Of course, the percentages are different because of higher base. I would not say that we are not able to see an uptick in demand or there's a disconnect between the real estate revival as well as growth in our sector. We need to look at the construction cycle in its entirety because few of our product categories, of our products are used toward the end of the construction phase, and that is where we'll have to dive into the greater details of this cycle of real estate and correlate with our industry or our company's performance. Yeah. Okay. That's it from my side, sir. Thanks a lot. Thank you, Devansh. Thank you. We have next question from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Sir, thanks for the opportunity. Sir, just one strategic question. The FMEG business that we are working on, while we are doing completely excellent, this is a highly competitive business, means fans and all these are relatively far more penetrated categories. Here the growth is to gain market share and which is again relatively a bit tough task. What is the management's thought process on businesses like kitchen appliances where there are not many big players and even the top five players have less than 45% market share. I mean, the segment is also pretty fast-growing segment. Considering Polycab's strong brand distribution, means, what is our thought process on that as a segment? I think it's a great question, Aniruddha. In the boardroom as a management team, we have deliberated on this several times. Let me give you two perspectives. If you were to visualize all the products which Polycab is manufacturing and offering to the end customer and compare with a typical electrical hardware store, you would be able to see almost all the products. When we want to move away from this product category to something like kitchen equipment, there are two or three things which are additionally required to be considered. One, the kitchen equipment are not expected to be channeled through electrical hardware stores. Second, the target audience is different. In electrical hardware store, generally, man of the house would be involved in the decision-making. Whereas in the kitchen equipment, the lady of the house would have a say. The last thing is the brand Polycab that we have today not necessarily would go well, and which is a matter of discussion, deliberation even internally with the kitchen appliances. The current thought process for the timing is to ensure that we have complete coverage of all the electrical products. As part of Project Leap, explore the exigencies and then monetize those exigencies as we implement Project Leap's initiative between now and FY 2026. What are the products, if you can say that we would be focusing on in FMEG apart from fans and maybe switches? We have several FMEG products already available. We have fans and water heaters. We have lights and luminaires. We have switches and switch gears. We have conduit pipes. We have a bit of agro. There are some adjacencies which are being explored, but nothing on the kitchen equipment side as of now. Okay. About air coolers or irons, et cetera, those kinds of products, most of the other companies are not even in kitchen appliances, but still continue to sell these products. Any plans on completing this portfolio? There are some products which are available in the product category that you mentioned. As I mentioned that these are adjacencies and these are being explored, and we'll continue to do that. If you go back to my earlier comment, the idea is to first cover all the electrical products, and then explore if at all we have to go beyond that. Okay, sir. Last question. You said in the opening speech that multiple new professionals have joined the company. What are the key KRs that they will be working on over the next two-three years? Is it, like, minimum 1%-2% market share gain in each of the product categories that we are working on? Or is it improvement in the profitability margins or, and, means what are the basically three-four key reasons on which they would be focusing when they're making investments? The new professionals who have joined the organization as well as the current leadership team is totally focused on only one initiative or agenda, which is Project Leap. The objective is to achieve INR 20,000 crore of top line, improvement in profitability, and there are several enablers to achieve this vision. For example, improvement in our dealers and distribution base, improvement in GTM, expansion of and penetration of few geographies where we don't have meaningful presence, improve exports. If I were to summarize and give you inputs in a single statement, it's only Project Leap agenda, which is what being targeted by all of us in the leadership team of Polycab. Okay. Sure, sir. This is helpful. Thank you. Thank you, Aniruddha. Thank you. We have next question from the line of Shrinidhi Karlekar from HSBC. Please go ahead. Yeah, hi. Thank you for the opportunity. Gandharv, I just want to know how far has company reached in terms of human capital addition. I see very interesting hires from the industry for new as well as existing roles. I just want to know how far has the company reached. Is the top team already in place for most of the roles that have been identified under Project Leap? I would say as part of the phase one of Project Leap, most of the senior resources have been already hired. I would not. I do not think that at this stage, under the phase one, we need to do any additional significant hiring for the top leadership. However, having said that, at the middle level and lower level, we'll continue to make investment, and that is required for initiatives like increase in overall dealers and distributors, further penetrating the geographies where we don't have meaningful presence, and so on and so forth. Right. Second question, Gandharv, is on the business from state distribution utilities. Any color on how has been recovery in that part of the market? Also, how much of company's cable and wire business directly or indirectly comes from state distribution utilities? We don't directly deal with government entities, generally speaking. Government contribution to our top line, directly would be less than 2.5%. Of course, our dealers and distributors serve these companies. There is some improvement, but since this is a secondary sale, I'll not necessarily have adequate color to give to you. To answer your question from the primary sales point of view, we don't directly have significant government supplies or government orders. Just, I'm wondering, could we have some color on indirectly how much would it be? I think there is some improvement, you know, over the period, but since it's secondary, it's difficult to give you a precise color. But generally speaking, power distribution reforms have helped and, like, will continue to help us in improving the demand at the industry level. Fair enough. Thank you for answering my question and all the very best. Thank you, Shrinidhi. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Gandharv Tongia for closing comments. Over to you, sir. Thank you everyone for taking out time, and attending this call. In case if there are any unanswered questions, please write, to us at investor.relations@polycab.com, and we would be extremely pleased to attend your queries and, provide you clarification. Stay safe and take care. Bye-bye. Thank you very much, sir. Ladies and gentlemen, on behalf of Polycab India Limited, that concludes this conference call. Thank you for joining with us. You may now disconnect your lines.