Ladies and gentlemen, good day and welcome to the Redington India Limited Q4 FY22 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Rajiv Srivastava, Managing Director of Redington India Limited. Thank you and over to you, sir. Hi, good morning and a warm welcome to everyone on this call of Redington's earnings call for Q4 and the year gone by. Very happy to be with all of you today morning. We are pleased to report another strong quarter of sales and operating margin growth. Redington achieved record revenue and operating margin for the year as our continued investments in technology capabilities, partner relationships, and our comprehensive breadth of offerings begins to pay off. Growing demand for supply chain orchestration is driving strong financial performance across our global businesses. Looking ahead to this quarter, we continue to anticipate a reasonable demand environment and expect to sustain strong revenue and margins from our recently implemented operating improvements amid the backdrop of geopolitical uncertainty, which we all know is playing out in the world. Let me give you a color on the numbers. Our revenue for the quarter stands at INR 17,324 crores, which is a 12% growth year-on-year and 13% in terms of absolutely on gross accounting basis. EBITDA growth has been 14%, which is higher than revenue, and PAT has been 15% growth, which is again higher than EBITDA and revenue both. That's on a consolidated basis for all the geographies we operate in. India grew 22% in revenue, 8% EBITDA and PAT of 8%. Whereas overseas saw revenue growth of 4%, a very strong EBITDA growth of 18% and a PAT of 20%. Those are the numbers for the quarter gone by. For the year, we said we crossed the revenue of INR 62,732 crores, which is 12% growth on gross accounting basis, and net is 10%. Very strong EBITDA growth for the year at 31% and PAT growing 69% for the year. I think both in terms of quarter and year, we've had a very, very robust performance. Let me give you a bit of a color on as to what's going on in the world from the point of technology and from the geos and regions that we operate in to give you a sense of story behind the numbers. We know that the world markets and world businesses and individuals are seeing a very strong technology adoption. We operate in India, in the Middle East, in Africa, in Turkey, pretty much across 37, 38 odd countries. At one level, you will find that most of these economies, for the last couple of quarters have been pretty positive. The prognosis, which is the future vision for these economic growth, is also positive. We can talk about a bit in terms of near-term challenges, but largely the GDP growth forecast for the year looks like quite positive for each of these countries. All of these countries are going through a very strong technology adoption. We have seen infrastructure push by governments in our region, India, Middle East, Africa, Turkey, everywhere, pretty much all locations. Organizations have rolled out years of technology projects into few months, and that really has been a serious acceleration of digital transformation or digital adoption that we've seen. This happens to be pretty much across all the sectors of the economy, manufacturing, retail, education, government policy support for all these technology products, projects, learn from home, work from home, acceleration of digital economy. Pretty much every single business is trying to leverage technology as the next lever of growth, and also education, work from home and learn from home continue to accelerate. Now, we know that there will be a shift in this as we go forward, but for the moment it's been a very strong driver. All of this growth you would find that is investment and consumption led so far. Companies, organizations, and governments have been making a huge amount of investments in each of these infrastructure push just to make sure that they can modernize, they can automate themselves. The investment and consumption-led scenario is playing out to our advantage. The technology that this is consuming is in the domain of cloud subscription and then base level foundational applications like ERP and CRM, customer experience, a very strong focus on sales automation and customer analytics. Whatever companies can do to access and reach out to their customers in a more productive manner is something which is finding immense favor as we speak right now. There is always new technology of the nature of artificial intelligence, augmented reality, virtual reality, Internet of Things. IoT is getting more and more popular as we speak. 5G-based applications, you will find that the world going forward is going to be a lot more video and voice-based, and we are trying to ride all of this. Then there's one very interesting thing which is happening in the space of very small for us yet, but very interesting space of 3D, where you can pretty much manufacture in an additive manner a variety of products that customers and consumers can consume. It is really a democratization of manufacturing as well. Those are the things that are happening from a technology perspective. We as a company are also cognizant and conscious of the fact that there is a buying behavior shift in the market. What people buy, how they buy and who they buy from is completely shifting at a very fast clip. There is a shift from product to services. Instead of buying everything in a very CapEx-dominated way, people are shifting to as a service model. That's one big shift. The other thing is from an own to a subscription model. Instead of trying to own everything and be paying for it upfront, people are trying to move towards the more subscription-oriented model. Which means you buy and consume when you want to, and where you don't have to be saddled with an OpEx cost forever in your life. I think those are the things which buying behavior shift is taking place. We are also seeing very strong shifts in business model. Traditionally, we've always been accustomed or used to a very brick-and-mortar method of buying and selling by people. That brick-and-mortar is shifting towards a much more online-dominated world and pretty much everything in between. We are entering into a world which is a true omni-channel, where the customer journeys are discontinuous, and anybody who can predict or manage the customer journeys in this discontinuous world will be an absolute clear winner. I think there are business model shifts in the marketplace, omni-channel, everything as a service. And those are the elements that we are very conscious of, cognizant of, and we will do everything as possible to make sure that we can ride this wave. With this initial commentary, let me stop over here and open it up for your comments and your observations, questions, and we will be more than happy to take everything on. I can also talk to you a bit about our strategy as we go forward, but for the moment, let me open it up for your interaction. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. Yeah. I just want to let you know, I also got my Global Chief Financial Officer, S.V. Krishnan, on the call with me and Deepika, our finance leader in West Asia. Hi, good morning. Thank you. The first question is from the line of Chetan Shah from Abakkus Asset Management. Please go ahead. Yeah, hi. Good morning and congratulations to the entire team for such a fabulous number and keep surprising us in terms of not just the business, but also in terms of the way you are managing your working capital. I have two very specific questions. One, in continuation of your opening remarks, sir, where you mentioned that we are now going for a change in the way the customer buys the product and the entire business model and the market sizing is getting changed. Could you just a little bit elaborate in terms of how this is going to play out from our mix of business? Because we'll be more focused on B2B or, within the B2B, the large client, concentrated client. They not only expect from us just the product, but also the continuation of support of the product. One is that question. Second, I wanted to understand how is the ProConnect as a business progressing? We are seeing a steady-state growth in the numbers and also the margin. If you can give us some flavor of that business, where we are and what is our big picture look like three years down the line. These are the two very specific question. Once again, congratulations and all the best for your future, sir. Chetan, thanks so much. Look, both your questions are very, very interesting. Let me give you a very, very close to what we're doing right now. Let me give you a sense of what's happening in the customer buying behavior. You mentioned clearly, I mean, the buying behavior is shifting, like I said. We used to all go and buy from shops and retailers and malls or wherever we used to. But very. Now the pandemic. Even before pandemic had started, the model started to pivot towards a convenience and customer choice model. You get the convenience of ordering from anywhere and everywhere, and you get the huge amount of choice when you sit behind and then just go through a site or a website or the options that are available on that site for you buying. So I think those are the two drivers. Convenience and customer choice are the drivers of change in business model. We see this coming very strongly. It happened in our business. A lot of our products have started to go online, and people are shifting to buying from what. Today what you do is, you walk into a shop, you go to a retail outlet, you check out the products, then suddenly you go to a website and do research online. Check online and research offline or vice versa are the game. This is a discontinuous customer journey. There is no one customer which just follows one single pattern. Customers follow multiple routes and multiple patterns, and we got to be cognizant. Now, this is a very huge analytics and very huge customer track and trace, a technology driven architecture that you need to create to be able to maximize this. This is exactly what to do in both in our B2B world, where customers can come and take a look at the products that we have on site, and they can take a look at the choices that I have got available from various banks and various vendors, and they can make a right choice. We will also give them advisory services on what is absolutely right for the business. That's a huge shift in the manner in which we are trying to fulfill the basic customer requirement of choice and convenience. That's what we are trying to do on the. Whether you buy online or offline, products get supported because support, warranty, long-term commitment to maintain the product and absolutely keep it working in the way it was designed to work. These are product attributes of all brands. That doesn't get compromised at all. Continuation of support for every consumer and customer is absolutely an experience that we cannot and can never, no brand can ever compromise on. Those are the things that are happening in the online and the omni-channel sort of a world. To your point about ProConnect, very interesting story on ProConnect. We've had such a satisfying year on ProConnect. You know, we used to be always very, you know, the ProConnect always used to come up as a story which was, a little bit up and down a bit. Last year, we took a call that we will do every single thing possible in ProConnect business to make sure the business stabilizes before we launch ourselves for an aggressive growth. That is exactly the way it played out. ProConnect turned around with a revenue growth of 9% in last year. It did an EBITDA of 17% growth and a PAT of 46% growth. These are the things that we put fundamentals in place in ProConnect business. Whether it is the right sizing of the customers, going after the right verticals in our customer, going after making sure that we have the right technology in place for fulfilling our logistics, supply chain business for transportation and warehousing, making sure that we have the right sort of operational capability in place. There's a lot of work which has gone in the ProConnect business to make sure that the business starts to look fundamentally very sound and secure. That is precisely what you're seeing in results now. Our strategy of consolidating, getting foundationally strong from a capability perspective has played out very well. Thank you so much, sir. Just one small question about the cloud business. If you can give us something about that's it from my side. Thank you so much. Okay. Look, I don't know what you mean by when you say. I can give you something about cloud. No. I just wanted to understand that how is the traction happening in that specific vertical of the business. Something which we started a couple of years back. We have a very big plan. Yes. For next five years. In that journey, where are we? Are we on track? Are we ahead of track? Because now seeing other verticals, I want to believe that we are ahead of curve in that side of the business also. Just trying to get a sense on that. No, I think it's a great question. I think you are absolutely spot on. Let us say that, when you compare it with the rest of the business, how does cloud stack up? It stacks up extremely well, Chetan. It stacks up well because our growth in cloud in last year, and cloud is a combination of products and services. We are small in services. That is a muscle that we'll build up. Overall, product and services combination of cloud has grown 41% for us last year. In FY 2022, it's grown 41%, which is much faster than my overall business. My overall business has grown 10% for the year, but cloud has grown 41%. Now, it rides on the back of exactly what I told you about the changing business models in the market, the way customers and consumers are buying everything as a service and as a subscription model. They don't have to get saddled with a investment which is not paying off for the long run. They can make quick adjustments to their operating model, to their cost structures, and still get the best in technology, what the best in technology has to offer. Our cloud story is coming around very nicely, very quickly. We partner with all the hyperscalers, which is Amazon, Microsoft, and Google. We got some very sound partnerships in place. These are the three biggest players in the world, and we are fortunate to be aligning with them to make sure that our cloud story continues to become stronger and stronger as we go forward. Just to complement what Rajiv said, we have also invested in a very, very good cloud platform which will enable no touch or a less touch level of transaction. That's also going to help us in terms of scaling the business with an optimized cost. Thank you so much, sir. I'll come back in the queue. Thank you, sir. Thank you. The next question is from the line of Dhaval Shah from Swan Investments. Please go ahead. Yeah. Hi. Good morning to the team and great set of numbers in these challenging times. I have questions on our comparison, so we did around INR 17,300 crore top line. If I were to just compare this with the December quarter, December 2020 quarter, the Q3 2021, we were roughly at the same number, like INR 17,000 crores. But if we look at the operating expenses, at that time we were at around INR 260 crore, and now we're at INR 330 crore. Which element of this operating expenses has you know seen a big increase, you know, which is getting from INR 260 crore to INR 332 crore? Secondly, our employee cost over the last couple of quarters is seeing a lot of up and down in terms of the absolute number. Any trend or, you know, how should we understand that, you know, how does this employee cost move, you know, with the top line? Like in December 2020 quarter, same was INR 250 crore, now it is INR 238 crores. These are my two broad questions. Okay. Let me give you a color on the expenses that we're doing and what we are doing in expenses. I think you will relate this to what I said earlier about investments in technology and people and how the business is moving towards everything as a service and a customer choice model. When you do all these things, we got to make sure that we pivot our business from a brick-and-mortar offline model to a omni-channel enabled model. We made a huge amount of investments, and we continue to make. You will see our investments continue to be high to convert our business to a much more responsive online model. We are setting up an online platform which will allow our customers a choice that I just talked about in a bit ago. Okay. Krishnan also mentioned to you about the choice in the cloud platform. We have invested in a very strong cloud platform where any customer or any partner can come and configure the product solutions and services they want to buy and procure and then just provision for themselves. It's such an easy self-service sort of a model, that we have launched now, and that's again a huge investment. We will continue to make sure we invest in that space, to increase our technology capability, to reach out to our customers and partners in a very meaningful way. When you pivot towards in the cloud area, when you pivot from a product to a much more product and services combination, you would find that services is a very people-dominated business. It is a highly capability-oriented, people-dominated business. You need to acquire the best of capabilities in the market to make sure that you can serve your customers much more cleanly, much more closely, in a much more integrated holistic fashion. That's what we are doing. That's the reason our OpEx costs on people, employee costs, has gone up. Our OpEx has gone up just because we've invested a lot of money in the cloud technology and the e-commerce technology platform. Plus, we are also investing a lot in our own internal tech capabilities so that we can get far more streamlined, far more optimized as we go forward. This is the best time to make the investments because if you make the investments now, you really can get the best of the investments that you make and the relations that we have for future continued robust growth in the future. We are, in a way, in a sense, we are future-proofing ourselves. This time is being utilized by us to make sure that we future-proof ourselves in a very robust manner, and continue to ride the growth curve forever. There is a shift. We acknowledge, we recognize the shift in the marketplace and positive that we caught it at the best time and we are dialing up on those shifts. Thank you. Oh. There was one more point to your question. Just on the first point with respect to the comparison to Q3 of last financial year. See, you would have seen in the last couple of years that Q3 has always been on the higher end, mainly because of certain new launches that are being done in the mobility space to correspond to the festive season. There will be some spike in revenue that time which will enable better profitability. Even in the current year, if you see for Q3, the EBITDA was much higher as well as the PAT. That's very specific to Q3. Having said that, on the expenses, Rajiv very clearly mentioned, I mean, we are making some investments for the future. That will enable some increase in cost, but we are very positive in terms of that getting recovered, in the form of higher margins in future. Yeah. I think the revenue is just a seasonality thing. Yeah. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. The next question is from the line of Krish Mehta from Enam Holdings. Please go ahead. Hi. Congratulations on the great set of numbers, and thank you for taking my question. I just have two questions. I'm sorry, Mr. Mehta. Can you please speak a little louder? Hi. Am I clear? Yes, please go ahead. Yeah. Thank you for taking my question. I just had two questions. One was on the cloud revenue for Q4 and the subscription revenue within cloud for Q4. Yeah. Look, all of our cloud revenue is actually subscription revenue only. It isn't. Our cloud revenue for Q4 is INR 436 crores, which is a 49% growth year-on-year. All of it is subscription. That's how you measure cloud. No. I'm sorry. I meant the services part of the cloud revenue for Q4. Okay. Services is a small part. Services, revenue in this is, I think about INR 20 crores. Is that? About 4.4%. Yeah, about 4.4%. Okay. Just if I could follow up on that, how do you see the services scaling up as we go forward in this financial year? Oh, yeah. Look, services is the one which is meant to scale up. That's where I said we are making a ton of our investments and employees is all around services. Cloud will scale up and so will services. Services always start small, and I'm so pleased. I can't even tell you how pleased I am right now that in a short time, we have gone to a services revenue of almost about 4.5% of our overall cloud business, which is a very, very healthy trajectory. What it is doing to us is many things, okay? It's not just about. Don't just. I don't wanna get weighed just on the size of the revenue. What it is doing to us is, it is opening us up to many, many different kinds of very deep-rooted strategic partnerships. We are getting exposed to a lot more customers. We are getting exposed to a lot more partners whom we partner and take their services to customers. We're getting exposed to a lot more system integration partners who are taking us along with them to customers to make sure that we can deliver services there. It's far more strategic at that level. Overall, hopefully, over time. Right now it's still, it's about 4.5%, but over time, I see our services portfolio going in the near term to be at least about 10% of our overall cloud business. Okay, thank you so much. That's very helpful. Yeah. Thanks, Krish. Thank you. The next question is from the line of Pushkar Jain from Sequent Investments. Please go ahead. Hi, sir. I just have one short question. I just need your viewpoint on how the go-to-market strategy from Apple will impact our business. Thank you. Look, Apple has got like any other brand, like any other vendor, every vendor has got their own GTM approaches and strategy, where they try and dissect the market, they segment the market a lot more. Apple made a very strong change to the go-to-market model beginning of last year. Okay? They shifted a lot of their business from partners like us to going direct to retail, which is e-tail of Flipkart, Amazon variety in India. They didn't make the similar change in Middle East and Africa. They made a different change in Middle East and Africa. They took away some regional distributors in Middle East and Africa. A similar theme played out that they wanted to be closer to their customers, they wanted to be closer to their partners, and all of that. Look what we did. Despite Apple going the way they did or any other brand going the way they did, our revenues in India last year grew 19%. Okay? We were able to mitigate totally, because what is happening is when a route to market is made different, a different way of addressing, there are other things which open up. Apple has a lot of products. Apple has products of the nature of MacBook. Apple has a product of iPad. They have got lots and lots of accessories, and similar so on and so forth for many other product categories. All of those started to play out differently for us. We reengineered. I mean, just as we were talking of Apple's GTM, I think what is more relevant for you and for us is how did Redington reengineer its GTM to maximize the market opportunity? We reengineered our GTM. We went in a variety of different ways to a lot more countries, a lot more geography, a lot more local presence. Enhancing a lot of capabilities at the ground, in the field, close to customers and close to partners where they exist, to make sure that we can continue the trajectory of growth. The results have really been fantastic for us. They've surprised us in a way, but they've been absolutely, and in a pleasant way, they've surprised us. We could remodel our GTM to make sure that we capitalize, continue to capitalize on the growth that we deserve. Thank you, Mr. Srivastava. Thank you. The next question is from the line of Chintan Sheth from Sameeksha Capital. Please go ahead. Thank you for the opportunity. Am I audible? Yes, sir. You are. Yes, sir. Yeah. Okay. I have two set of questions. One is on the revenue part. India business effectively grew faster, you know, given the high base of last year. If you can throw some light on, you know, which segment, whether it's IT product driven growth or it was mobility-driven growth, which helped us to clock such a wonderful, you know, revenue growth for the quarter. Second, on the international part, again, in the revenue piece, that despite, you know, Brightstar's acquisition and getting full quarter benefit for this quarter, the revenue was softer. And the same question applies to here as well, that which segment, you know, was softer, related to what we have been seeing in the past. If you can provide color on that. Second part of the question is on the working capital. If I look at the trajectory, you know, from last year to this year, our receivable days and inventory kind of inching back to the normal levels. The benefit which we are getting is driven by, purely driven by the payables being favorable to us. Given that, you know, there is a supply issue, given that you're expecting a slightly better gross margin from the market, the payable being, you know, favorable to us looks very, you know, unbelievable. I need to try to understand this piece when your supply is tight, your margins are better in the market, and yet you get a better credit terms from your vendor. If you can throw more color on that piece, that's all from me. Thanks. Yeah, yeah. Okay. You've got, Chintan, you've asked many questions, not just two or three, because each one of them is a simple, you know, strong question itself. Let us try and answer each one of them. I'll do a few, and I'll leave to Krishnan, our CFO, to handle the rest. Sure. Sure. Just to give you a sense of revenue grew faster, which products grew faster than the others. Our IT products and IT business grew very fast. It grew at 24%. Our services business grew fast at 12%. Our mobility was a decline last year. It was a -11%. Okay? Let me give you why mobility was a decline and why and within the IT products which grew, mobility was a decline because last year, in three out of the four quarters, there has been a considerable pressure on supply. You know, the supply chain in the world has been disrupted. There are a lot of commodity shortages because of which, lots of brands have been struggling with supplies. Apple has struggled with supplies. You know, last quarter they were $8 billion short on supplies. Samsung struggled on supplies. Transsion, OPPO, Vivo. In different geographies, you've got different mobility brands, and all mobility brands last year went through a huge supply constraint. I'm hoping they'll come out of it this year, and let's keep our fingers crossed. That led to a decline in the revenue of phones or smartphones or mobility business. It is borne by the fact that overall global market on smartphones degrew 6% in Q2, 6% in Q3, and 9% in Q4. For the last three quarters, global smartphone market, global mobility market has been shrinking, and it's all because of supply-led constraints. We had a drop in our mobility revenue, not surprisingly, and absolutely aligned with most of what we are seeing in the market. Our IT business saw very, very strong growth. Our IT business, our enterprise grew faster than our consumer accessories product device. Enterprise IT grew 30% last year on the back of the way you are seeing change in the cloud buying behavior, the change in the fact that enterprises are trying to run really, really large and big complex projects as you go forward. Enterprise IT has grown extremely well, and that's been a very, very good story. Whereas the consumer IT has grown 21% for the full year. Again, a strong growth. The heartening factor over here. This is something which really, really pleases me, is the fact that we outshipped the market by a factor. You know, in India, for instance, in Q4, the PC market grew 31%. Redington grew 46%. PC market in Middle East and Africa grew 8% Q4. We grew 21%. I mean, this is 2.5x the market. I think our engines, the way I talked to the earlier question on GTM, how we re-engineered our GTM, that is I think playing to our advantage of making sure that we get the growth. I think our revenue growth faster, and this is how the split of whole revenue growth looks like. To talk to you about the international business and, since the Brightstar acquisition, despite the Brightstar acquisition, how the revenue has stayed pretty much flat or the overall overseas revenue. Actually, overseas revenue has grown 5% in gross accounting terms. It's grown 5% despite Brightstar. You have to understand, two things happened. We grew much faster than the market, like I said, but the overall market came down, so holding on. Our job in that phase was how do you continue growth or stability in a stable or a degrowing market. That's exactly what we did. We feel good about the fact that we were able to outstrip the market by such a factor and maintain our growth trajectory, and Brightstar added and helped to it. Other things that could have probably helped with if we had the right level of supplies of mobility and all, I think we would have been a much faster growing business. It just, we outshipped the market, which is a great story from our perspective. Let me hand it over to Krishnan to answer the questions on receivables, favorable AP supply, you know, supply issues and so on. Sure. Thanks, Rajiv. Yeah. We have maintained our working capital, and you are absolutely right in terms of your analysis that the DSO has gone up, DIO has gone up, and the increase in DPO is what has contributed to maintaining working capital. Perfectly right. The reason why the payable days have gone up, it's also to do with mix of products. As Rajiv just explained, our IT division has done very well. Within that, enterprise has done even more better. These were the cases where I mean, the credit days from the vendors are significantly high. That has enabled us to increase our payable days. Having said that, there is a small portion which may be due to the supply model that we have had towards the end of the quarter. We did see a lot of supplies happening towards the end of the quarter, which has enabled us to liquidate those inventory. Otherwise, a significant part of it is because of the mix and the better negotiation that our business team has done with the vendors. Okay, any credit terms being turned favorable apart from, you know, what you mentioned, the mix-driven effect on the DPOs? Sorry, you are. No. I don't think there's a real revision or reworking on the credit terms. Okay. Cool. Okay. Cool. It's just that on a deal by deal basis, you rework the credit terms. The deal- Right. Deal business can be dramatically different. Since there is such a strong focus on enterprise, which is deal-oriented, so you see a better favorable AP, in that sense, yeah. See, in those business verticals, the credit days that we offer to the customer is also higher, and accordingly, the credit days that we get from the vendors are also higher. Sure. Got it. I'll join back in queue for more questions. Thank you for the answer. Thank you. The next question is from the line of Chirag Setalvad from HDFC. Please go ahead. Good morning, congratulations for a great year and for a great quarter as well. I had two questions. One was in terms of Apple, if you could highlight the performance for this quarter, and because of the change in GTM, what kind of performance could Apple deliver next year? Also considering the supply constraints in the system. That was my first question. The second was in terms of profitability. I think the company has done a remarkable job. Would like to understand what you think is sustainable overall consolidated profitability. Those are my two questions. Thank you. Okay. Let me give you a sense on both of them, yeah. Okay. Clearly Apple has been a great story. You know, Apple grew very, very fast in last quarter. They grew 33%. Growing 33% at a revenue turnover of some $290 billion, which took them to $366 billion for the year last year, was fantastic. The last quarter was, they had a slower growth just because it wasn't a launch quarter. The previous quarter was the launch quarter and S.V. Krishnan mentioned about that. We also, like as I said, our overall mobility business came down. So Apple also came down for us just because there were supply shortage situations in the quarter. Our contribution of Apple to overall revenues is a little down from the earlier times. We do see a very strong going forward because there will be new launches coming up in next two quarters. We see the supply situation. Today as well, yesterday I was going through the news yesterday and very good announcement. Apple said that they would consider to increase the production volumes from the factory in India. You guys know that they do a manufacturing through Wistron in India, Bangalore, and that could be a very good story. If they dial up the volumes, increase the manufacturing volumes from the India factory, I think we'll all be benefited immensely, and that can lead to a very strong positive, you know, supply chain gap being mitigated completely, if that were to happen in a hurry. I think Apple is in a very, very good space for us. It continues to be our largest brand and it continues to be a very positive story as we are thinking about Apple last year, now and for the next year as well. We'll continue to everything right. We are obviously making sure that our rest of the brands and our rest of the business portfolio starts to look better and healthier all the time. That's the reason I mentioned to you about enterprise growth and the cloud growth and all of that. All those portfolio are in a very good space. From a profitability perspective, the question that will the profitability of the last year continue for this year or not? I think that's a question that we will uncover as we go forward. I don't want to sound random on this because the world today is really in an uncertain space. I mean, a lot of elements in the world are in an uncertain space right now. We got to be thoughtful that we have undergone and undertaken and weathered in a very positive way a lot of storms. We continue to do that, and we'll be very watchful to make sure that our trajectory of profitability and our trajectory of revenue growth continues. There are headwinds clearly in business. There are headwinds of the nature of inflation, of the nature of commodity prices, of the nature of energy costs, a whole bunch of stuff which is creating headwinds. There are also tailwinds. I mean, fuel prices going up actually leads to a very good story from a Middle East perspective. A lot of countries are driven by that. So I think we are in a good space right now, between netting it out all the geopolitical factors for ourselves, the shortage situation which can hold up our gross margins extremely well. We will be extremely watchful and cautious, and we'll watch every single day, every single moment, because we operate in a environment today which is highly dynamic and highly volatile, and we got to make sure that we adjust our business priorities and our operating operations on an absolutely real-time dynamic basis. We feel good about where we are right now. We feel good the fact that in the near term, in the interim, the gross margin should hold up and we'll continue to watch this space. Chirag, I'm sure you would, as HDFC must be watching what's going on in the financial markets around the world and in India. I'm sure all of us will be together in this, but I feel good about where we are right now, that everything should hold up. Just a quick follow-up. What would have been the impact of the change in GTM for Apple for last year in terms of lost revenue? We would have lost about INR 3.5 thousand. INR 3, INR 3.2, INR 3.3 thousand, yeah. That impact is just in the H2, or would you have seen that in the H1 as well? It started in Q3. Started in Q2, actually. Okay. H1 Q4, H1 Q1, and then Q3 and Q4. The loss in revenue is around INR 3,500 crores. Yeah. 3,200, something like that. We more than made up. Like I said, despite that, we grew. India grew 19%. Yeah. Sure. We could make up much more than that. Perfect. Great. Thank you very much, and all the best. Thanks so much. Thank you. The next question is from the line of Mohit from Edelweiss Securities. Please go ahead. Hello. Congratulations for a good set of numbers, and thanks for the opportunity. My question is on the supply chain issues which we have been seeing in the mobility side of business, right? You said that, you know, we have been seeing this de-growth in the last three quarters because of the supply chain. Wanted to understand, you know, for how more, how many quarters more, you know, you expect this situation to continue? What are you seeing on the ground at the current level? The second question on working capital is a basic one, where we have the working capital of around 13-14 days, right? It is driven by the increase in payable days because I think we had mentioned the previous earnings call that, you know, it would come down to around normalized level of 28-30 days. It will be, again, this payable days will come down from 63 to 47-48 days, so the credit terms will get revised with the vendors from the IT segment as well. Those are my two questions. Thanks. Okay. I'm gonna, Krishnan, do you wanna take the second question first and I'll take the first? Sure. Definitely. Sure. Definitely. See, you are right. We have been saying that there will be normalization, so that's very clearly in place. As the situation becomes normalized in the market, the working capital will get normalized. Which component of that will get normalized? We think all the three will get impacted. In our view, there will be, I mean, a good increase in the inventory days and the AR days, which has been highly favorable for us in the last few quarters. Whenever this normalization happens, you will see the change across, resulting in increase in working capital. Yeah. Mohit, your question about the supply chain issues on mobility and how long will they continue. I'm hoping they will end very soon. You know, it's this quarter looks a little better than the previous quarter from a supply chain fixing perspective. Some locations in China, some factories in China continue to be under COVID-determined lockdown. Those are long-term implications that the world will continue to see. Despite that, I think this quarter, Q1, we have seen Q1 financials, we have seen a better or little improvement in supplies. I'm hoping it continues. This is not only mobility. I mean, this is also to do with. Because the components that go into the manufacture of a mobile phone are similar to the components that go into the manufacture of a lot of other technology or intelligent equipment like PC and chips and IoT and all of that. My discussions with the global leaders of companies like Lenovo and Dell and HP suggest that this shortage should get start to become a lot more easier by Q3 of this year. From October onwards, you'll see a much more eased out, a much more sort of relatively freer flowing supplies. We'll have to watch and wait and watch because which way the war will sort of start to play out from that perspective, we'll have to be very cautious. As we speak, I think it's the phone suppliers become a little better than last quarter. Thank you. Yeah. Thank you. The next question is from the line of Sandeep Dixit from Ārjav Partners. Please go ahead. Thank you. Can you give us a sense of the product concentration in your sales, as in, which are the top brands and what's their share of the revenues? You're saying the top brands, is it? Yeah. I mean. Yeah. Breakup of your sales by brands. Just some clear sense of it. Yeah. Look, our product concentration mirrors pretty much the global brand or the global play out. We've got very strong partnerships with 240, but only a handful of them obviously do much better or are contributing to the higher part of the revenue. Apple is a big contributor to our revenue, so is HP, then Dell EMC, the whole portfolio of Dell EMC, then there is Lenovo, and then there is Samsung. These are the five brands which play out the maximum for us. We don't do Samsung in India. We do Samsung in Middle East and Africa. We do Dell across some locations, not all. HP also in some locations, not all. Same with Apple. That's the way the concentration looks like. Apple, HP, Dell, Lenovo, Samsung become our top five brands. You would find this similar to the way the IT industry product-led revenues are. We mirror a lot of the world here. Fair enough. My actual question was more about the risk of, you know, let's say, Apple decided a different GTM strategy. I mean, I guess, managing risk is one of your key concerns probably now as these brands evolve. I just wanted a sense from that first. Yeah, look, that risk is forever there. I mean, this is a risk of not only Apple, it's a risk of larger distribution business that you can get disintermediated at any point in time. All good companies, you would find that they would have to mitigate the risk of disintermediation, not only Apple, but it can be anything. A model change, for instance. When the world went from offline to online, that was a risk of disintermediation to Redington. When companies like Apple decide to go in that channel or HP decides to go, "So look, we will do geography-based distribution," it's a risk to us. I think all, like all good companies, Redington also has a very good way of trying to understand the risk, read them into the future, and then apply your own, correct mitigation, approaches to minimize the risk and actually grow. You saw that happen last year. Apple took away, you know, the change in the business model had an impact on us to the extent of that much revenue. Everything for us still turned out to be at 19% growth. I think we have to be mindful. These are regular business cycles that keep happening. Sometimes a new product comes and disrupts you. Sometimes a new business model disrupts you. Sometimes a change in approach of some vendors will disrupt you. That is normal business. I'm never overly concerned about those. They're all normal business happenings. They happen all the time. As good companies, we've got to be mindful of how we try to deal with it and make sure that we continue to grow in a market which is so favorable and so potential right now. Just to supplement to what Rajiv says, that's the advantage of being in multiple markets and with multiple brands. Some of these GTM changes, strategy changes by vendor will also be positive for us. That's why you are able to see a very consistent growth across various markets. Fair enough. That's actually the RT. Can I ask one last thing? These five brands, would you say that they were about 80%, 70%, 60%? How much of your revenues would these five brands be? Just ballpark number, just to get a sense of? Less than 2/3. Five brands will be less than 2/3. Wow. Thanks. That's great. That's very helpful. Thank you very much. The next question is from the line of Ronald Vora from OM Advisors. Please go ahead. Hi, sir. Congratulations on a good set of numbers. Two things. I want to understand, you know, with Apple's change in GTM, what was our reply or our reengineered GTM strategy to kind of elaborate? Yeah, fair to say. I mean, look, I think we are giving too much credit to Apple GTM strategy is not acquired because I think every brand will do every company does what they have to do for their right way of being. We reengineer GTM all the time. Why do you reengineer a GTM, Ronald? Because the manner, like I said, the manner in which products are being bought and the manner in which products are being sold today and consumed is changing. The buying behavior is changing. There is a bunch of customers who are trying to go direct and online. I think we have a legitimate right to go and say, "Look, how do we fulfill that requirement of customer choice?" If there is a shift in the market towards a more service-dominated model, we have a legitimate right to maybe say, "How do we continue to provide service to our customers in a model which is shifting from capital expense to operating expense-driven model?" I think it's just that. We have to change our model all the time. We do it all the time to make sure that. In this specific case, you will shift us, and I'm just giving a generic answer. You will shift your focus from one particular. Assuming there is a one route, assuming Flipkart is doing something different, we have no reason or concern to really take them on. We have to figure out what we do to address that requirement. We figure out a way of trying to go more to customers, to expand our geographies, to make sure we are expanding to our partners. The typical things that our distribution engine has to do, the whole supply chain efficiency, getting closer to customers and partners, bringing more and more value adds, and we've done a ton of them. That's the reason you are seeing that nothing impacted us. It actually helped us, and everybody grew. The brands which went through a change in the. It's not only Apple. Lenovo had a change in business model last year, okay? They also went to retail directly or to online directly. So did Acer. And so on and so forth. Many brands have that. The collective outcome of all this is that we reengineered ourselves and grew 19% last year. That's something which is. I think it's a healthy business thing because it allows you, enables you to be sharper about your approaches. It allows you to be focused on yourself and make sure you're doing all the right things to provide customers the choice they deserve, provide customers the range of services they need, and be close to them and continue to grow. That really is the whole net of this. Okay. Secondly, I had this question on cloud services. You said that we have ties with all these hyperscalers. What kind of services do we provide to them? What kind of, you know, benefits do we have with them to our clients? What is the exact business that we do with them to elaborate? Look, I obviously can't share with you the kind of benefits they have with us and we have with them. That is not appropriate. I can't share that. I can let you know that we have. These guys have all of them have cloud products. Like Microsoft has got cloud CSP, Office 365, Azure services. Amazon has got Amazon Web Services. As packages which can be rolled out to any customer, any SMB, any large enterprise, any customer, any individual for that matter. I'm sure you use Office 365 on the web like I do. You buy Office 365 for INR 6,499. Six people get enabled because of that one procurement buy-in. It's such a wonderful model. That's what happening. There are a whole set of products that you sell as cloud-enabled products because they are subscription services. Second is, for mid to large enterprises, there are other range of services that need to be done, and there are many services. There are services of nature of transition services, infrastructure services, migration services, platform as a service, implementation, whole ranges of analytics. I think there is. You know, the whole model of cloud is so sort of potential and so dynamic and so, kind of smart. It's just because it provides customer choice, it provides customer ease, and it provides customers agility to deploy models. I think we've got a whole range of services and a range of products from these hyperscalers to sell to our customers. Okay. Thank you. Thank you. The next question is from the line of Anuj Jain from ValueQuest Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I have one question. Provide details on Turkey operations in terms of growth, profitability for the entire year and expectations going forward? Sorry to interrupt you, Mr. Jain, but your voice is breaking, sir. Can you please check? Hello. Am I audible now? Yes, please go ahead. My question is with regards to Turkey operations, if we can provide more details regarding growth and profitability for the full year and our expectations going forward considering the macro in Turkey. Okay. Look, Turkey has been a very good operation for us. We operate in Turkey under two. We have direct operations in Turkey, which is Redington Turkey, and then we have Turkey operation, which is through our company which we acquired in Turkey called Redington Arena. The revenue has been flattish in Turkey. You understand Turkey has gone through a huge amount of geopolitical, economic considerations over the last couple of years now. The inflation in Turkey this year happens to be at around 70%, pretty much the highest inflation country in the world at this moment. Despite all that, our revenue in Turkey has been doing reasonably well. We know we've been growing faster than the market across pretty much all categories. Arena plays largely in the volume space, which is mobility and the access products, PC and printers and surveillance security equipment. Redington Turkey, which is our 100% subsidiary, operates largely in the value space. They do cloud and other kinds of value services. I think in both of these cases we've had a very strong sort of a positioning in Turkey. Our prognosis for Turkey, which is what the import of your question looks like, we stay invested in Turkey. It's a huge market. It's a market that provides us with many, many leverages. It's a gateway to the West. It's a gateway of huge amount of innovation. I was surprised. I went to Turkey recently. I was surprised with the level of innovation that Turkey is trying to engage with on high technology, on services, on cost of service delivery. Turkey is extremely strategic for Redington, and we will make sure that they continue to grow faster than the market, which is what they've been doing over the last so many years despite a very difficult economic environment. We will leverage Turkey for a variety of other innovations that they are capable of bringing. Sir, in FY 2022, did we have losses in Turkey operations or was it profitable? It is profitable. Our Turkey operations, the profitability of Turkey operations in FY 2022 has been, Turkey operations grew 15.5% in profit impact last year, just in FY 2022 over FY 2021. Turkey has been obviously profitable. Okay. Okay, understood. Thanks. Extremely quite profitable. I really compliment my team in Turkey for the ability to manage the most volatile region of the world right now from an economic perspective. Right. That's it from my side. Thank you. Thank you. The next question is from the line of Aseem Bhardwaj from DAM Capital Advisors. Please go ahead. Yeah. Hi. Morning. Just wanted clarification on the GTM Apple change. This one was specific to smartphones in India, right? Yes. Okay. The INR 3,500 crore loss of revenue, that would be purely on the India mobility business. Also, you have mentioned that despite the Apple India revenue loss, you have grown India business by 19%. I assume that is for the consolidated India business. Just on the India mobility side, have there been any mitigating strategies put in place for the loss in Apple revenue? Look, we are obviously contemplating what we can do. It's not necessarily a brand specific mitigation. A mitigation is not a brand specific mitigation. A mitigation is overall business specific mitigation. Just a typical mitigation would be what you do with more brands, where you can provide more services, how can you reach out to more customers and consumers, what GTMs can you improve and improvise upon to reach out to more partners, more cities, more towns, all of that. I think all of that is there. Diversification in terms of number of partners that we have, diversification or addition of number of towns and locations that we do business in, diversification in number of addition of brands that we can do or more services that can provide and become a more holistic, continue to become a more holistic provider. That's what we're trying to do. All of my answers on this, I know there's been a lot of questions on this topic. All of my answers have been consistent. We are trying to make sure that we do what is right from, expansion of our business and Geo and partner and all that coverage. We reinvent our GTM to make sure we grow. Basically the loss of mobile Apple mobility revenue would probably be covered not just from mobility business but from your other IT business as well. That's the point, right? Yes. Yes. It always happens, right? Just fair to assume that, since the India, rather the Apple GTM issue was a Q3, Q4 phenomena last year, so fair to assume that even Q1 and Q2 of this year, there should be an impact in India mobility business regardless of supply chain issue? Much less. Not Q2, because like I said, Q2, Q3, Q4 were impacted last year. Okay? Okay. That YOY compare will start to become positive from this year. Just the Q1 will be, and we'll obviously manage that. Having said that, I just want to say, see, normally for these businesses, I mean, the festival season is a peak period. That's something that we had seen in the previous period itself. I don't think there needs to be any extra concern. Got it. Okay, thanks a lot. Thank you. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Rajiv Srivastava for closing comments. Yeah. Thanks so much. Really enjoyed this interaction. I think there were a wide variety of questions. It went through the business situation. It went through the customer buying, how we are trying to see the way in which the world is evolving from a technology buying as well as tech perspective, all of that. I just want to let you know. First of all, thanks so much for a very engaging interaction. We continue to do what we do best, which is we continue to make sure we are investing in our business to make it far more streamlined, smooth and efficient, close to customers and partners. A business that continues to create the highest levels of experience for every single stakeholder we deal with, our employees, our customers, our partners, our vendors, whoever else comes to our website to get a sneak into the products and services that we deliver. Our digitalization of business will continue absolutely at a very fast pace, and I'm happy that somebody asked a question on why the OpEx is going up. It will go up just because we wanna make sure that we are continuing on the trajectory of implementing and investing in tech. That's the way the world moves. It will increase because we are investing in customer outreach programs on the digital platform. That's the way the world is moving, and we are, in a way, moving ahead of the curve in some areas. We will continue our portfolio expansion. We will continue our partnership alliances, operational excellence, and we will continue to recruit the best people in the business to make sure we again are able to differentiate ourselves. We will continue as a company. This is something which I didn't talk about, but as a company, we have a very, very strong community conscience. We try and do everything from the perspective of environment, from the perspective of governance, holding ourselves to the highest standards of corporate governance, and also from the perspective of social initiatives that we do. We've got a very, very strong social program, which I can't talk about, but you guys should visit our website and take a look at that. Very strong social program, very strong governance and ethics and compliance, all of that. We want to make sure that we hold ourselves to the highest global standards on this topic. Thank you so much for joining. I really appreciate the interaction and the level of details that you guys have on the questions. Any more questions, I'll be more than happy to answer. You can mail them to us, to Deepika or to HCAP Partners, and we'll be more than happy to take them on. Great. Have a great day. Thank you. Thank you. Thank you. On behalf of Redington India Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.