Ladies and gentlemen, good day, and welcome to the Polycab India Limited Q1 FY 2024 earnings conference call. As a reminder, all participant lines will be in the 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Gandharv Tongia, Chief Financial Officer. Thank you, and over to you, sir. Thank you, operator. Good afternoon, everyone, thank you for joining us. I hope all of you are staying healthy and safe. I am Gandharv Tongia, Executive Director and CFO at Polycab India Limited. On this call, we shall discuss the Q1 FY 2024 results, which were approved in the board meeting held yesterday. We will be referring to the earnings presentation, financial results, and financial statements, which are available on the stock exchanges as well as on the investor relations page of our website. Joining me today from the management team, we have our Chairman and Managing Director, Mr. Inder Jaisinghani, and our Head, Investor Relations, Mr. Chirayu Upadhyaya. Let me now hand over the call to Inder bhai for his comments. Good afternoon, everyone. We have had an excellent start to fiscal year 2024, registering strong sales growth as well as a robust domestic form of profitability. Favorable macroeconomic environment, along with supportive structural measurement measures, have translated into healthy demand for our product categories, which bodes well the future as well. The commendable work done by our team with Project LEAP through focus on the customer-centricity, whereas GTM initiatives as well as new product development have synergized very well with the encouraging market condition, resulting into our highest ever first quarterly revenue and profit in the company's history. With the current on-ground demand and market outlook, I'm confident that this year will be highly rewarding for us, creating significant value for our stakeholders. Now I request Gandharv to take you through our earning presentation. Thank you, Inder bhai. Before I take you through the quarterly performance, let me give you a flavor of the macro environment. Amidst the heightened global uncertainty, Indian economy has showcased remarkable resilience, with growth surpassing many large economies. Favorable domestic policy environment and government-led structural reforms have positioned India as a promising economic bright spot. Key indicators, such as manufacturing and services PMI, have consistently exceeded long-term averages, while growth momentum is also evident in GST collections, diesel consumption, air and rail passenger traffic, et cetera, reflecting India's robust economic standing during challenging times. Furthermore, the domestic demand environment has started to realize the benefit from receding inflation, which has now remained within the RBI's tolerance band of 2%-6% for four consecutive months, raising hope for an end to the tightening cycle. Consumer demand in urban markets remains steady, and a potential pickup in monsoon will further support the rural markets, which have been showing signs of recovery in recent months. Moving on to the earnings presentation, please refer to slide number four. For the quarter ended 30th June 2023, our consolidated revenue grew by 42% year-on-year on account of strong volume growth in the wires and cables business. EBITDA grew by 77% year-on-year, with EBITDA margins at 14.1%, a growth of around 280 basis points year-on-year. The company registered PAT of INR 4,028 million, a growth of 81% year-on-year. PAT margin stood at 10.4%, an improvement of 230 basis points over that of the same quarter last year. As Inder bhai mentioned in his opening remarks, this is our highest ever first quarterly revenue and profit after tax. As evident, this quarter's performance surpasses even our third quarter figures from last year's, a feat unprecedented in our history, highlighting the remarkable scale of our achievement. However, do note that the growth percentages seems visibly higher on account of a soft June month last year, whereby sales were affected during the end of the quarter due to a sudden decline in commodity prices. A detailed breakup of the other income and finance costs have been provided on slide 21 of the earning presentation. Moving on to slide five, the wires and cables business accounted for 89% of our sales during the quarter, with FMEG contributing 8% and other segments, which mainly comprises of the EPC business, accounting for the remaining 3%. If we slice up the business on geography, the domestic business contributed to 91% of the total sales for the quarter and the international business contributing the remaining 9%. We will now go deeper into business performance of each segment during the quarter. Please refer to slide number seven. During the first quarter, the wires and cable business grew by 46% year-on-year on the back of strong volume growth of around 50%-60%. Domestic distribution-driven business sustained its strong growth momentum, while institutional business exhibited remarkable growth acceleration. Geographically, growth was broad-based, with highest growth coming from North region, followed by west, south, and east. In terms of contribution, highest revenue came from west, followed by south, north, and east. The wires and cable industry is witnessing robust domestic demand, supported by government measures, improving private CapEx, and strong real estate uptake. Government's CapEx plan of INR 10 trillion investment in fiscal 2024 for infrastructure growth is running at full throttle. By June 2023, that is within the first three months of the financial year, 54 central public sector enterprises and five departmental arms of the central government, with an annual CapEx target of INR 100 crore and above, have utilized 32%, that is INR 2.34 trillion, of their fiscal 2024 CapEx target of INR 7.33 trillion. The Ministry of Road Transport and Highways had made significant strides, utilizing 38% of its INR 2.58 trillion budgetary CapEx allocation. Meanwhile, the Railways has already spent 33% of its INR 2.4 trillion budgetary CapEx allocation, signaling strong progress in capacity utilization. Additionally, the government has set its sight on achieving an impressive 80% utilization of budgetary CapEx by December 2023, underlining the commitment to growth of the nation through infrastructure growth. Furthermore, even the state governments are joining the CapEx upcycle after lagging behind in fiscal 2023. By June 2023, center has already disbursed over INR 300 billion of the sanctioned INR 600 billion, 50-year CapEx loans to states, with a focus on boosting state-level capital expenditure. The government is further planning to sanction the entire INR 1 trillion of non-captive budgetary CapEx and disbursing half of it by July end. CapEx done by state till May end was higher than similar period last year and is expected to increase to be around INR 8.4 trillion during fiscal 2024. This financial support has the potential to create a ripple effect, invigorating local economies and fostering holistic development across the country. As consumption gradually improves, the private sector, too, has increased its CapEx plan. In fiscal 2023, private sector CapEx announcement surged to an impressive INR 26 trillion, nearly doubling from the previous year's figures. Such sectors such as chemicals, air transport, and renewables have been leading the charge in these robust investment decisions. In Q1 fiscal 2024, private sector CapEx addition amounted to approximately INR 5 trillion, with transport services, chemicals, and power sectors playing a significant role in this growth. The healthy capacity utilization of the manufacturing sector recorded at 74.3% by end of calendar year 2022, has spurred corporates to move beyond maintenance CapEx to discretionary CapEx. This shift is reflected in the CapEx-to-depreciation ratio for listed corporates, which rose to 1.6x in 2023 from 1.3x in 2021, demonstrating their willingness to invest in expanding their operations. Notable private players, including large EPC companies, are anticipating substantial growth in their order books. The real estate sector to sustain its impressive growth momentum, helping our wire sales. According to a report, the top eight Indian cities witnessed the highest volume of residential launches in the first half of the calendar year 2023, compared to any other half-yearly period in the past eight years. Residential unit sales were equally robust, registering the second highest sales volume in almost a decade. As per another report, out of the total 2,181 acres of land transacted between January 2022 and May 2023, around 84% or around 1,822 acres, has been allocated for proposed residential developments, showcasing the confidence of real estate developers in continuation of the real estate upcycle. Which bodes well for our wires and housing electrical appliances segments. Office market transactions, too, are showing improvement in momentum, with 14.8 million sq ft transacted in second quarter of calendar year 2023, the highest quarterly tally since Q1 calendar year 2021. In conclusion, the current landscape presents a highly conducive environment for exponential business growth in the wires and cable segment in the medium to long term. Internally, the company has undertaken various initiatives under Project LEAP to take the maximum advantage of this ongoing opportunity and achieve industry-leading growth. On B2B side, we continue to increase our presence in under-penetrated districts, enhancing our distribution reach. In FY 2023, we expanded to 146 such white spaces, and we are targeting to penetrate further 140 white spaces during the current year. We are also employing surgical targeting of select weak markets with different GTM strategy, as well as region-specific targeted product development. Our NPD efforts are also bearing fruits, as Class 5 wire, including Etira, which was introduced to capture the price-sensitive customer segment in the semi-urban and rural areas, has been received extremely well. Our premium segment wire, Green Wire, too, is doing well. To further enhance efficiency, we also have established various focused GTM verticals across sectors, which will yield meaningful results over the next few years. Our goal has always been to achieve growth without compromising on profitability, and this has allowed us to not only maintain margins, but improve on it whenever the opportunity arises. During the quarter, profitability within the segment was robust, with EBIT margins at 14.8%, an improvement of 330 basis points over last year. Better margins were driven by judicious price revisions, better operating leverage, and strong growth in international business. Moving to slide nine. Revenue from international business grew by 88% year-over-year, contributing to 8.9% of the consolidated revenue. This growth was primarily fueled by strong demand in the U.S.A., Australia, and Europe, with key sectors like Renewables, Oil and Gas, and Infrastructure driving the momentum. During the quarter, the company leased its first warehouse in U.S.A. on the eastern coast and will gradually lease more warehouses to cover all geographies, in line with its strategy to shift to a distribution-led model in the international business. Over the years, we have invested significant efforts and resources in building robust capabilities for international business expansion, and we are now realizing substantial and tangible benefits from these endeavors. As a testament to our progress, the company has successfully expanded its global presence to over 72 countries. Please refer slide number 11 for an update on the FMEG business. FMEG business had a strong quarter as weak consumer sentiment weighed down on sales. The segment showed 3% year-on-year as well as sequential growth, as benefits of channel realignment started to play out. Fans business exhibited healthy growth sequentially, as older non-BEE compliant inventory with channel partners was mostly sold off, leading to fresh sales of newer BEE compliant inventory during the quarter. From January to June this year, since the transition to the BEE norms, we have introduced almost 80 new SKUs in the market, with 20 more in pipeline to be launched in the second and third quarter of this financial year. Switchgears and conduit pipes and fittings businesses, too, showed sequential growth, tapping onto the continued strong momentum in the real estate sector. Within switchgear pricing revisions we undertook in 10 kA MCBs last quarter, has helped us improve price realization in this quarter. The new 6 kA category MCB launched last quarter, is already contributing to 20% of incremental sales done during the Q1 FY 2024. Post-merger, with the wires vertical, we are focused on improving switchgear sales through cross-selling. For this, we have identified top retailers of wire business which are not yet selling switchgears, and will be aggressively pursuing cross-selling through them. Switches business continued with its impressive growth as benefits of improved availability through in-house manufacturing continues to play out. The Etira segment launched in the switches category is generating good response from the market. Lights and luminaires business de-grew marginally on a sequential basis on account of the continued pricing correction in the LED segment. Till date, prices have corrected by almost 10%-12%, with further correction expected as well. In this business, we have plans to launch about 50-60 SKUs in the second and third quarter of the current year. On the geographical front, the western region, the company's stronghold, demonstrated positive growth both on year-on-year as well as on sequential basis, while southern and eastern regions, too, showed sequential growth. Segmental EBIT margins during the quarter continued to be in negative territory, shadowed by fixed costs in the absence of scale. However, the quality of earnings have improved, with channel financing penetration now at 91% for the FMEG segment. The company continues to invest in brand building through increased advertising and promotion, such as sponsorship of ICC events, TV commercials, distributors and retailers' needs, digital marketing, et cetera. The company is committed to improve both top line and bottom line in the business through our focus on areas such as product innovation, influencer management, premiumization, and distribution expansion, among others. Let's move to slide 13, which gives us an update on our other businesses, which largely comprises of our strategic EPC business. We clocked revenue of INR 122 crore in Q1, a growth of 63% year-on-year. Profitability grew by 47% year-on-year, with segmental margins at 12.5%. Annual sustainable operating margin in this business is expected to be in high single digit over mid to long term. That was the update for the quarter. To conclude, the company's dominant wire and cable business continues to experience robust demand, and we are well prepared to capitalize on this favorable opportunity. Looking ahead, we anticipate the momentum to persist throughout the remainder of the year, helping us achieve growth over the strong base of last year. Thank you, and we are now open for questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Atul Tiwari with Citigroup. Please go ahead. Yes, sir, thanks a lot, and congratulations on yet another very strong quarter. My question is on FMEG business. Obviously, I mean, we understand that the demand was a little soft, and as a result, the revenue growth was about 2%-3%. One would have expected, you know, a slightly higher revenue growth, especially given your base, that this business is still smaller, you know, compared to some of its peers in the marketplace. Even last year, you know, we had kind of a flattish revenue and when the company was undertaking the redistribution channel overhaul. Could you, I mean, throw some light on, you know, what kind of growth we can expect this year and the next year in the business, given that the channel rejig is over? Sure. Thanks, Atul. On the FMEG side, what is continuing to play out is that the consumer demand is muted, what has been the case for the past two to three quarters, while the inflation is on its downward trend. What is generally the case is that whenever people have more cash in hand with them, you generally see them making more small ticket size purchases, discretionary spending in the beginning, and then go on towards more high ticket size spending. That is something even what is going to play out. We expect that going forward, maybe in quarter two, quarter three onwards, you'll start seeing that consumer demand to come up in the FMEG segment as well. As far as our internal issues are concerned, we are done with the channel rejig, and we are in the process of further improving our channel distribution as well. We are as Gandharv mentioned in his opening remarks, we are introducing new products. New SKU launches are lined up for the next couple of quarters as well. Through all of this, we expect that our top line as well as bottom line will start improving gradually from this year itself. As far as our growth is concerned, as you are aware, We have committed that we want to achieve an EBITDA margin range of about 10% in the FMEG segment by FY 2026, and we will continue to work in that direction. Okay, sir. My second question is on the working capital. Obviously, I mean, we understand that when the growth is very strong, you know, it is kind of natural to expect some working capital buildup. Just, you know, trying to clarify that this buildup is temporary, or should we expect a slightly higher working capital this year? No. This increase in working capital that we have witnessed for this quarter is temporary in nature. As you would have seen, our inventory on books has increased, and that is something that we have done on purpose because we are expecting that kind of demand going ahead, and we don't want to be caught off guard wherein we are not able to supply cables whenever there is opportunity in hand. The whatever increase in working capital that you have seen this quarter or going ahead, is temporary in nature. Going ahead, 50 days- 55 days of working capital cycle that we achieved a couple of quarters back is something that we are very comfortable that we will be operating in that region. Okay, great. Thanks. Thanks a lot. Thanks, Atul. Thank you. Our next question comes from the line of, Ravi Swaminathan with Spark Capital. Please go ahead. Good afternoon, sir. You have a very good set of numbers. My first question is with respect to the growth in the cable and wires businesses. How has the growth been this quarter? What has been the growth in the cable side and the wire side, and the mix of the cables and wires? Sure. Thanks, Ravi. Both cables and wires have done exceedingly well. Both have grown in excess of what was anticipated on previously. Yeah, cables have grown faster than wires. For that, if you recall, by, for FY 2023, our mix between cables and wires was at about 70%, 30%. This quarter, cables would have gained about 100 basis points-200 basis points on that. Cables would be 72%, 73%, and wires would be the remaining. That's the kind of number? Yes. Okay. Within, say, I mean, the cables, side, how much would be intra, how much would be industrial, how much would be real estate? Can you give a broad, kind of, mix, and how each of these segments have grown? That'll be great. Ravi, as you are aware, on the cables, cable side, we largely operate through a distribution channel, wherein it is actually the distributor who gets in the final order from the end customer. While we are moving in a direction wherein we are employing our own people on the ground and trying to get secondary orders from these clients, but that, as of now, is comparatively smaller portion. I won't be able to give you an exact pie or proportion of what the amount or demand is coming from which sector. Certainly, I can guide you that the top two to three sectors which are contributing to cables growth are your infrastructure, your roadways, highways, railways, and then there is electricity transmission distribution, and there is real estate. Okay, any of these segments would have kind of grown by almost like doubling or something this quarter, or it's like it's a uniform growth that is there across all sectors? Look, like I said, it, this will be the top three contributing sectors. We don't have a proportion or neither for this quarter nor for last quarter, that I can give you an exact growth number of which sector would have grown or contributing more in this quarter. Okay. With respect to exports, any target for this year in terms of revenue, say, I think first quarter we had done close to around INR 300 odd crore. Will the year-end target be around INR 1,500 crore or something of the sort in terms of revenue? Are we seeing any large orders, one-off orders or something that is there in the pipeline? We continue to work on our international business. That has been an area of focus for us for quite some time, and we are now seeing the results of that continued focus. We are targeting to through our availability or the number of countries that we are present in every year. In that sense, you'll see the amount of international business that we are doing to gradually increase. Within Project LEAP, as you are aware, when we started in FY 2021, we had taken this target that by FY 2026 we want to achieve about 10% of contribution through the international business of the overall top line. We are more or less very near to that target. We are operating somewhere in the range of 8%-10% over the past two to three quarters. What we have realized is that the international opportunity is quite large, and it might be possible that the contribution might increase, but we will have to see and recalibrate that, and we'll have to come back to you. Yeah, we are seeing very good opportunity on the international business. Okay. My last question is with respect to the gross margins itself. Usually, wires carry better margins than cables seem to have grown faster than wires. In spite of that, the gross profitability has improved by around 150 basis points year-on-year. Is it that the entire profitability of the entire cables and wires solutions are seeing a significant improvement that has led to this, any your thoughts on it? Definitely, both of them have seen improved margins because as you are aware, normally, when the commodity prices are on a decline, every player in the industry sees some kind of improvement in margin. That improvement in margin is across product categories, so that is one thing. Second is, of course, your scale. When you are, when your scale increases at this stage, your economics of scale kicks in, and because of that, your operational leverage improves. Because of that as well, the margins have improved. The third point is with the international business, which is again, a better margin business, and which again, has improved as compared to what we had in Q1 of last year. All three this combined has helped us in improvement of margin. Okay. Exports are represented in this higher margins at an EBITDA level or gross level than regular business, if my understanding is right, or is it higher? I'm sorry, I didn't get your question. Exports, are they 200 basis points, 300 basis points higher than regular cables and wires business, or that India business, or is it more or less? Different product categories would have different better margins. Like renewable cables, they are much higher margins, whereas your normal power cables, while they have better margins than what we make on domestic, they are comparatively lesser. Overall, you'll have that kind of premium over what we make on domestic. Got it. Thanks. Thank you. Our next question comes from the line of Manoj Gori with Equirus Securities. Please go ahead. Yeah, thanks for the opportunity, and many congratulations for a strong set of numbers. My question here would be on the, as you highlighted in your opening remarks, like last year in the June month, we saw some channel inventory destocking, and accordingly, that would have positively impacted to some extent. Can you highlight that number? Also, if there was, last year there was channel destocking, it means like probably in 2Q or 3Q, there would have been channel normalization, which would have led to better primary sales as compared to secondary sales. Can we expect some impact or probably we should see secondary and primary going in line in the coming quarters? That would be my first question. Sure. Manoj, in Q1 of last year, what happened in towards the end of the quarter was that the commodity prices, which were very high post the Q4 of last year, because of the external circumstances, they came off. Your copper, which was at about $10,500 per metric ton, came down to as low as $8,500 per metric ton, similar decrease was there in aluminum. This started to play out from June onwards. Because of that, the base of Q1 last year was comparatively weaker. Yes, from Q2 to Q3 last year, the commodity prices had comparatively been normalized. In that sense, yes, that kind of base effect will be there. In terms of growth, like Gandharv mentioned in his opening remarks, we are seeing pretty good demand on ground, and we are also working on various strategic initiatives on Project LEAP. We are confident that through all our steps we are taking, we will be able to get hold of all this opportunity that is coming up in the cables and wires, and we'll be able to grow over there. Right. If possible, can you quantify what was the impact in the June month last year? We wouldn't be able to quantify. I don't have those numbers specifically in hand. Yeah, like I said, it was 1 month after the three months, so you can maybe, take an approximate, approximation over there. Right. Thank you. My second question would be on the overall, if you look at the growth profile. We have been very strong, and, given that the RM prices are largely steady, we have been reporting strong set of margins. Even today, if you look at getting into 2Q, probably it would be difficult to forecast the copper prices. Given the current trends, can we expect a similar kind of margin profile in the coming quarters? Because you continue to remain very upbeat on the demand scenario, and RM prices are relatively far more settled as compared to the volatility that we were seeing in the previous years. Manoj, you know our business. As far as copper price volatility is concerned, we have our hedging framework in place and risk management in place. To that extent, any volatility in copper prices or aluminum prices generally has no bearing on our profitability on annualized basis. Having said that, you know, historically, we have been working in a EBITDA range of 11%-13%. We believe we'll continue to play at a similar range. A while back, Chirayu highlighted that we are getting benefit of operating leverage, and if we are able to fully utilize that leverage, it's quite possible that there's at least one percentage point improvement in that range. But to answer your question, we don't see any impact on annual basis. Changes in the metal prices. Thank you. That's what I was referring. Probably now we are moving on the higher end. You answered that. On the FMEG side, probably going forward on sequential basis, probably from Q2 or probably from 3Q, should we see improving trends, obviously you have already indicated the first quarter trend on profitability and overall on the sales front, right? You're right. Till fiscal 2026, we anticipate that we're going to be able to get to 10% EBITDA margin in FMEG space. I think year after year, there's an improvement. Not necessarily every quarter we would be able to register growth, but directionally, every year, we should be able to get, you know, positive movement between now and also 2026. Yeah. Thanks a lot, Gandharv, and wish you all the best. Thank you, Manoj. Thank you. Our next question comes from the line of Girish Achhipalia with Morgan Stanley. Please go ahead. Yeah, thanks. Gandharv and team, congrats on a great quarter. I just wanted to understand one small thing from your annual report. I read that you are amongst the top 10 in the world in the cable and wire category, and you aspire to be in the top five. I wanted to understand what is the gap currently that exists in terms of dollar billion? Secondly, I mean, because you want to ramp up your international business, are there any specific geographies and specific cable wire product types that you are likely to kind of expand into? Finally, the related question was that given the growth that you're seeing, are you know, in the process of giving us some new CapEx assumptions for the next couple of years? You know, the global cable and wire business, India is very small, in that it's almost $250 billion market. U.S. is almost 20% of that, and India is in low single digit. To that extent, Indian companies are not necessarily comparable with the top five companies in the world. Directionally, what we have done over the last few years is from being a simple cable company, we became largest cable company, simple wire company, to we became largest cable and wire company. Now we are trying slowly and gradually to have a sizable footprint across the globe, and directionally, we should be able to get to top five companies in few years from now. As far as CapEx is concerned, I think we are comfortable with the guidance of around INR 600 crore on annualized basis. You are already aware that we are in the process of setting up a factory for EHV, and we have a tie-up in place with a partner from overseas. We are setting up facilities to meet and satisfy export requirements and demand, and then some maintenance CapEx and some CapEx on FMEG side. The another thing which I would like to highlight is, you know, when we were working on this Project LEAP, and these were initial days, sometime in early 2021, we felt that since the annual turnover in those days used to be around INR 9,000 crore, we felt that INR 20,000 crore is a good target to have by fiscal 2026. Within two years, we have reached to almost INR 14,000 crore of annualized revenue. We believe in next two, three, four quarters, we'd like to recalibrate that guidance and see whether we want to revisit a timeline of fiscal 2026 to achieve INR 20,000 crore, and if that happens, whether there would be any consequential impact on any other guidance which we have given so far, including CapEx. Just one follow-up, Gandharv. Whilst you were working on Project LEAP, obviously, we were just coming out of COVID, and your annual report also talks about supply chain disruption on cable and wire front. Obviously, you are focusing a lot more on exports, in the last few quarters. Wanted to understand directionally, is there any specific geographies and any specific product segments that you are likely to more target? Two sets opportunities. One is developed countries where they have reliance on imports. To give you examples, it is countries like U.S. and Australia, there are some pockets both in Middle East and EU. The second is large EPC players, because when they execute large projects, they need cable, and we are comfortably placed to meet their expectation and requirements. That's the overall outlook on the exports. In terms of the product categories, I think this entire piece around green and renewable energy is an area where there is an active demand, and we have facilities in place to meet the expectation. These are slightly margin accretive as well. Thank you so much. All the best. Thank you. Thank you. Our next question comes from the line of Sonali Salgaonkar with Jefferies. Please go ahead. Hi, team. Thank you for the opportunity, and congratulations on the great set of numbers. My first question is regarding the volume growth of cables and wires. Now, is it fair to estimate that the volume growth in your cables and wires business would be about 55%? If so, how much of that could be contributing from domestic, and how much from exports, please? Thanks, Sonali. In terms of volume growth, you're correct. Depending on various product categories and geographies, the volume growth would be somewhere in the region of 50%-60%. This is on a combined basis. Both domestic as well as international combined, this is where our average volume growth was in this quarter. Understand. Secondly, on the pricing revisions, please, how much or how many rounds of pricing revision have you taken during the quarter Q1 and also in July, [if there's any]? Sure. During the quarter, the commodity prices haven't been that much volatile. We undertake the revisions only when there is a good amount of volatility. The overall reductions that we would have taken during the quarter would be about low single digits. Okay. Any activity in July? Nothing so far. Got it. My third question is regarding the ad spends. Now, if I look at your annual report, on an absolute basis, your ad spends in FY 2023 have increased by about 54% year- on- year, and at 0.9% of your sales versus 0.7% last year. Where do you think they can normalize, considering that, you know, you are wanting to create more stronger visibility in FMEG? Right. We are incrementally investing a lot on brand building, especially for our FMEG and our B2C categories. Therein, we are doing various steps, some of which were mentioned by Gandharv in his opening remarks. We have tied up with ICC as a sponsor. We are doing various influencer management needs. We are doing retailer needs and also forth. What we are thinking internally is that we'll be increasing the spend going ahead. We'll be spending somewhere in the range of 3%-5% of our B2C top line as A&P spends are going ahead. It will vary in this range. Okay, got it. Just, lastly, on your B2B mix of your overall sales, is it still at about 65% or a bit lower? No, it is similar to where it was. Got it. All the best, that's all from my side. Thank you. Thank you so much. Thank you. Our next question comes from the line of Renu Baid with IIFL Securities. Please go ahead. Good afternoon, team, and congratulations to strong results. My question is on the core cables and wires business. I think in the last couple of quarters, because of very strong spots in demand and insufficient investment by industry peers, the lead times for supply has significantly increased, because of this Polycab was able to benefit. How is the situation now in the industry? Has the demand/supply situation now relatively eased off? In your view, this kind of imbalance is likely to persist for how long until the next round of capacity expansion comes in? Thanks, Renu. Renu, you know our company, we are known for our quality and availability. We have always invested in these capabilities, since the last several years. We believe that is our unique characteristics and edge. We continue to develop on that. I would not be able to comment specifically on what our peer companies are doing. We believe that if we want to deliver industry-leading growth, we'll have to continue to build on these core capabilities of the organization. Currently, what is the capacity utilization are you running for the cables and wires portfolio overall? It would be around 60%-70%. If you include the factories, it could be slightly higher than 70%, but it's generally in the right range. Sure. Secondly, when you look at the overall business FMEG, the consumption has been fairly weak for the market itself. Now that we are coming out of the old inventory, issues, in the fans category, what is your strategy to have a much more steady market share in this range? What has been the kind of price increases that you've taken for the new BEE-rated fans? In terms of FMEG, we are kind of working on two, three different things over there. We are working on improving our distribution channel. We are working on product differentiation. Like Gandharv mentioned, we've already introduced about 18 new SKUs since we since we transitioned to the BEE norms. We are also working on our influencer management team. Through all of these three things, we are working on improving our market share in the FMEG business. As far as price increases are concerned, nothing, no increases have been done or revisions have been done in this quarter. Whatever increase or happened in last quarter, which was in about mid-single digits, that is the only thing pricing revisions that has happened till now. Sure. Lastly, if I can ask, clearly a lot of strategic initiatives that you have taken has been translating in significantly higher value growth for us. Having seen the environment, the macro tailwinds, in your view, can this strong double-digit volume growth, which is 20%+, stay for the next nine to 12 months? Of course, I wouldn't be able to give you a specific number or guidance in terms of what kind of volumes growth we will achieve, but what I can tell you is that our strategic initiatives that we've taken in Project LEAP, they are working quite well for us. The on-ground demand that we are seeing is something that is also on good pace and is looking ahead. As in, as in when or how the on-ground demand plays out, we'll be able to capture the maximum growth out of that through our strategic initiatives. Got it. One more, if I can ask on, incrementally for the strong free cash that you're generating, apart from the CapEx plans and spending on A&P and product development, branding, et cetera, where do we plan to deploy this large cash share? Our largest part will continue to be the CapEx. As you mentioned, we would need, we'll be making more CapEx in setting up our EHV plant. We'll be utilizing CapEx for expanding our FMEG facilities as and when required. We'll be requiring to set up new facilities for our exports as well. CapEx will continue to be the largest utilization level for the cash. Over and above that, as you are aware, our dividends year-on-year has kept on increasing, and that is what we is our internal policy. The actual amount of dividends will continue to go on increase. Third utilization will be maybe an M&A. If we come across some or the other company in both either FMEG or wiring cable category, that can add significantly to our abilities, we are open to acquire such companies. Of course, some amount of cash we'll keep as buffer on our balance sheet. Through all four of these, we'll be utilizing our free cash flows and the cash on balance sheet. Sure. Thanks much and all the best. Thank you. Thanks. Thank you. Our next question comes from the line of Amit Mahawar with UBS. Please go ahead. Thanks. Congratulations on great set of results. I have two questions. First is, broadly, we also do a lot of direct project supplies in domestic market in cable and wire. What would be the broad share of that, if you can help us? The, if you look at our domestic wiring cables, revenue this quarter, about, 9% odd was through institutional sales, and the remaining was through our distribution center. Sure. Thanks. Second question, maybe, you know, Gandharv or Inder bhai can comment. What are the thoughts on the channel- led, you know, export business that they're thinking on? Because branded wires is largely, you know, a unique phenomenon in India. You know, any thoughts on how do we see the attractiveness of branded wires in, say, U.S. market or any other global markets? Thank you. to interact with you when you are part of a new organization. As of now, the focus is more on cable business. Wires generally is a very competitive market in most of the international opportunities areas. We believe we should continue to remain focused on the cable side of it, and probably in few quarters from now, we will see if we can get to a slightly premium wires product portfolio, which would add value for the international customers. For the timing, the focus is on the cable sector Okay. Okay, thank you, Gandharv, and, good luck for the future. Thank you, Amit. Thank you. Our next question comes from the line of Amarnath Bhakat with Ministry of Finance of Oman. Please go ahead. Yeah, hi, guys. Once again, congratulations for a consistent set of numbers from quarter after quarter. I have two questions specifically. One is with respect to BCG reports, which you started, I think, two years back. Has that study been completed and implementation, where do you are in terms of implementation of any recommendation coming out of it? Thank you for your question and kind words. This actually, in a way, not a report, but a project, and it's a joint project which is being executed by Polycab as well as by the BCG leadership team. In the first few quarters of the project, we had laid out the priorities and defined the blueprint and strategy. This project was initiated in May of 2021, and two years down the line, most of the strategy either have been implemented or are being implemented. What you see as a result is the improved performance in the P&L, for that matter, say fiscal 2023 or the first quarter of the current fiscal. Yeah, as a follow-up to that, what I'm trying to understand, because now it's very clear that with Polycab really going beyond the boundary of India and started stretching its hands and legs in the international market. Hopefully it will be quite aggressive as the time passes by. I'm trying to understand in terms of two things, will there be any product diversification strategies, which may include maybe some premiumizations of some of your existing products, or entering into new products, for example, digital retailing or something similar, which can improve the efficiency into the electricity or energy-related sectors, including the emerging sectors like hydrogen or electric vehicles. In that study, is there any plan to move Polycab from a current business to much more value-added side of the business, especially considering the demands coming in India as well as from the export markets? Yeah. Thank you. That is, in fact, one of the objectives under the Project LEAP. There are some white spaces where we are not present, for example, Extra High Voltage. To that extent, there's a bit of a diversification which is being done now, and we are setting up the factory. The second thing is we have the, probably the largest R&D and product innovation team in the country. We have fair amount of backward integration, which we have achieved over the period. Practically, almost all raw materials are processed in-house, and that is when we convert those materials into finished goods. That gives us capability to innovate products at a rate which is better than the industry. That's the reason we believe we have almost all types of SKUs, both in cable as well as in wires, which one can think of, right from power to data and so on and so forth. There are some additional avenues which are available, for example, EV cables, some opportunity which is available in terms of premiumization of wires and retail wires. Same is true for products like fan and lighting, and we are making focused efforts to diversify to ensure that we are able to add value to our customers as well as we are able to get to better margins. The another example is special cables. This is a business which we have recently developed in last two, three years. To illustrate the type of achievements which we have done under cables, special cables vertical is we had supplied cables to INS Vikrant, which was a battleship, which was commissioned by Indian Navy. We have supplied cables to high-end utilization industries, for example, refineries and automobile. To summarize, we are similarly working on diversification with a focus both on the domestic as well as on international market, and we'll continue to hasten the pace of such development. Thank you very much. Fine. Second question would be, as you are guiding for a more or less consistent amount of CapEx for the next three years, and hopefully the bigger CapEx will be for which you are doing renewables, your ROE and ROCE profile, which was just during 2021 and 2022, probably due to low market condition and higher CapEx, which is probably increased a bit in 2023. How we will look at the ROE and ROCE profile as your CapEx continues for the next two, three years and your margin profile, hopefully, as you are saying, will improve as well. Can you get better return on capital profile compared to the current ones? I think two parts to that question. One is how best we utilize our existing set of factories, and second is whether there is a scope for improvement in margins or not. Historically, we have been working with, in the range of 11% - 13%, and as Chirayu alluded to a while back, because of better operating leverage, it seems that we should be able to improve it by almost a percentage point. The utilization of the factories have improved over the period, and we are now committed to CapEx closer to the required period, rather than, you know, rather than sooner, and which is also helping us in better utilization. Directionally, it seems that the numbers should ideally improve. I mentioned to one of the participant a while back, that as part of Project LEAP, we had guided for INR 20,000 crore of top line by fiscal 2026. On the basis of performance in last seven, eight quarters, we believe that we would have to recalibrate that guidance. We should be able to come back to the group in, two, three, four quarters from now. If we do that, probably there would be a positive impact almost on the all the ratios. Thank you. Our next question comes from the line of Achal with JM Financial. Please go ahead. Yeah, thank you for the opportunity. Congratulations for the great numbers. Sir, just a couple of questions. One is, you know, with respect to the mix in terms of copper and aluminum, is it fair to say that we would be somewhere around 65%-70% aluminum wires, versus copper? Would that be fair assumption? Thanks, Achal. Thanks for the kind words. As far as mix between copper and aluminum is concerned, it will be more or less 50/50 between the two. 50/50. Okay. In terms of the channel financing, you know, what is the quantum? You've mentioned some 83%. Is that in terms of number of distributors under channel financing arrangement or in terms of value of your sales, 83% is under channel financing? The number is in terms of value of sales. Okay. Is it possible to give the quantum? What is the extent of channel financing as of 30th of June? Would that be like INR 800 crore, INR 700 crore-INR 800 crore or less than that? About 83% for cables and wires, and 91% for FMEG was through channel financing. You have the top line numbers, you can just calculate through that. All right. Just one more question. Can you hear me, Achal? Yeah, yeah, I can hear you. Am I audible, sir? Hello? Operator, are we audible? Hello. Yes, sir, you are audible, sir. operator, can you hear me? Yes, we can hear you, Achal. Okay. Just last question. You know, if you look at the growth, the volume growth, what you're implying is 50%-60% for this quarter. I think that is partly to do with the low base, like you mentioned. Is it possible to get some color in terms of if you look at a four-year CAGR, what would that be? Would that be 25%-30%? Would that be 10%-15%? Generally, Achal, as you are aware, normally volume growth in cables and wires business, they range between 1.5x-2x of real GDP growth. In years like this, wherein there is increased demand because of various reasons, you can we witness higher volume growth, but otherwise, what we've been guiding is will remain true for most of the times, 1.5x-2x of real GDP growth. Correct. That's a long-term growth, right? I mean, for the industry, in general, right? 1.5 x- 2x. Right. That is correct. Both cables and wires combined. All right. All right. Mm-hmm. Thank you so much. I wish you all the best. Thank you so much. Thank you. Our next question comes from the line of Praveen Sahay with Prabhudas Lilladher. Please go ahead. Yeah, thank you for taking my question. The first one is related to the gross margin improvement. One of the reason you had mentioned the commodity price decline, which also led to the improvement. In the coming quarters, can we assume, some price, correction with the commodity we expected? Praveen, I guess even you would agree that nobody will be able to guess where the commodity prices movements will be, right? Depending on where the commodity prices are moving, whether they are going up or down, we pass on that kind of to our end customers. What generally happens is that whenever the commodity prices are in the downward moment, we are kind of clean on our margins. That is something that has helped too for this quarter, but that will vary quarter on quarter, and we'll have to see how the commodity prices play out to come ahead. Okay. The second question related to the inventory. The higher inventory is because of anticipated higher growth only, or there is something else to that as well? No, the major reason is because of higher anticipated growth. The second reason for that was that we are expecting a couple of smelters from where we procure copper to go into their annual maintenance shutdown. Because of that, we have preponed our procurement of copper for the scenes. That is not at the annual. Every year they go for a maintenance. Is it something new come up or? The annual maintenance is something that they go for every year, and that is why we normally, just ahead of when the annual maintenance is scheduled for, we increase the amount of inventory, raw materials, and we procure copper ahead of time. Got it. Lastly, on the As you are mentioning about the export and to meet the export demand, you will go for a expansion. What's the plan like a brownfield expansion or the greenfield expansion plans for the export demand, you know, the CapEx? We have our facilities in place for manufacturing the cables and cables which are required for various different geographies. As we anticipate an increase in demand, we'll need to add additional facilities, which can be both brownfield as well as greenfield, as and when, as and when we see fit and what kind of requirements we have ahead. Okay. Thank you, and all the best. Thanks, Praveen. Thank you. Ladies and gentlemen, that was the last question. I would now hand over the conference to Mr. Gandharv Tongia for his closing comments. Thank you, participants, for taking out time and attending this call. In case if you have any follow-up questions, you can write to us at investor.relations@polycab.com, and we would be glad to attend your questions. Thank you so much. Have a great day. Thank you. On behalf of Polycab India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.