Good morning, ladies and gentlemen. Welcome to Voltas Limited Q4 FY 2022 earnings conference call hosted by ICICI Securities. 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 the 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. Aniruddha Joshi from ICICI Securities. Thank you, and over to you, sir. Yeah, thanks, Lizan. On behalf of ICICI Securities, we welcome you all to Q4 FY 2022 results conference call of Voltas Limited. We have with us Mr. Jitender Verma, EVP and Chief Financial Officer, Mr. Manish Desai, Head of Corporate Finance, and Mr. Vaibhav Vora, Manager Corporate Finance. Now, I hand over the call to the management for their initial remarks and presentation on Q4 FY 2022 performance, and then we will open the floor for question and answer. Thanks, and over to you, sir. Thank you, Aniruddha. A warm welcome to everyone. Good morning. For Voltas, the start of quarter four was- Sorry to interrupt, sir. You're sounding a little soft. Can you speak a bit louder? Hi there. Is that better? Much better, sir. Thank you. A very good morning to everyone. For Voltas, the start of quarter four was anticipated to give glimmers of prosperity and growth. However, the beginning of new year came up with its own challenges. As India and the world were accelerating vaccination drive to overcome the pandemic, another variant came up as a surprise, dithering the efforts with the apprehension of more severity than earlier variants and caused impact on the economy and health. The extended vaccinations had reduced the impact of this third wave considerably, both on the health and economy across countries. As the economic activities were returning to normalization, the world economy received other jolts caused by geopolitical tensions between Russia and Ukraine, causing disturbance in economic activity. The invasion has a spiral impact on the commodity prices. Global economic prospects have worsened amidst disruption in supply chain and due to imposition of various sanctions on Russia. Global economy now is on the edge of uncertainties arising from the ongoing geopolitical conflicts reflected in global commodity prices, including crude prices, differential pace of monetary policy normalization amid persistence of inflation at higher levels globally. Supply disruptions emanating from China's zero-COVID policy and resultant restrictions on activities will be weighing on prices and growth of this economy. For India, all these factors have caused a speedy economic recovery and caused worry given the elevated rate trajectory. The balance of payments is also expected to shift given the global monetary policies, especially that of the U.S. Fed. IMF, under the said unsettling issues, have revised its growth forecast downwards from 4.4%-3.6% for the world and from 9%- 8.2% for India. In the early months of COVID wave, extended winter and increased input costs have impacted financial results during this quarter. Our unitary cooling products segment reported a revenue of INR 1,818 crores, while project business reported a revenue of INR 692 crores and the engineering product segment reported a turnover of INR 124 crores. Our consolidated total income for quarter four FY 2022 was INR 2,704 crores as against INR 2,683 crores in quarter four last year. Profit before tax was INR 247 crores as compared to INR 321 crores in the corresponding quarter last year. Profit after tax was INR 183 crores versus INR 239 crores in the previous years. Earnings per share not annualized for the quarter ended 31st March 2022 was at INR 5.52 against INR 7.18 reported last year. For the year ended 31st March 2022, the consolidated total income was higher by 5% at INR 8,124 crores as compared to INR 7,745 crores. Profit before tax was at INR 697 crores. Sorry to interrupt, sir. This is the operator. Yes. Sir, there's a lot of background sound from your line. Okay. We will be careful. I think there is no sound, I mean, unless the line is bad. Let's take another few lines and. Sir, right now it's much better. Right. Thank you. Our profit before tax was at INR 697 crore as compared to INR 709 crore in the corresponding period last year. Profit after tax was reported at INR 506 crore as compared to INR 529 crore in the corresponding period last year. EPS for the financial year ended 31st March 2022 was INR 15.23 as compared to INR 15.87 last year. The corporate balance sheet continues to remain healthy with minimal borrowings for our overseas operations. While operational cash flow during the initial part of the year had been relatively weak due to loss of cooling product sales given the COVID induced lockdown. However, revival of economy thereafter and pent-up demand for the cooling product towards the end of the quarter helped generate surplus cash on our balance sheet. As at the year-end, cash and cash equivalents in our books stood at INR 2,835 crores as against INR 2,465 crores in the previous year. You all must have seen our snapshot of our results, so I will not be delving more into those numbers. I'll go segment by segment. For our segment A, UCP segment, quarter four and quarter one of a financial year are considered to be the strongest quarter for the year because of the seasonality. However, the segment witnessed lockdowns and restrictions for operations since last two years. Despite the fact and the hopes that this year would be clear of COVID and the industry will be able to bank on full season, Omicron at the start of the year dampened the hopes amongst the trade. Extended winters in the initial months of the quarter and increased prices of cooling products has further impacted sentiments of the channel partners and thereby the primary sales. Under the shadows of dampened demand and high inflation owing to geopolitical conflicts, a start of severe summers across length and breadth of the country brought cooling products in high demand. Riding on this demand, the quarter has seen improved value growth over the previous year, resulting into restricted de-growth for the quarter four. Unitary cooling segment reported a revenue of INR 1,818 crores as against INR 1,655 crores, representing a 10% increase over the corresponding quarter of the previous year. However, divisional bottom line has been impacted amidst increasing input costs, disruptive pricing by the competition and resistance by the trade on price increase. These factors resulted in decline in segment EBIT by 26% from INR 261 crores to INR 192 crores. Nevertheless, our focus on product placement, trust among the channel partners and the value proposition has helped us register overall volume growth for the full year. Our focus on the inverter subcategory with competitive pricing and larger number of SKUs continue to favor us. Inverter category witnessed a good traction with the customers and now contributes over 70% of all ACs sold by us, compared to 70% for the similar period in the previous year. Voltas continued its leadership in RAC category, the room air conditioner category, with the year-to-date market share of 23.4% as of March 2022. To enhance our reach and to provide a customer-first experience zone for Voltas and Voltas Beko products has been launched in Mumbai during this quarter. In addition to it, we have continued with our expansion in exclusive brand outlets, which has reached over 200 outlets, and we aim to expand further by additional 50 outlets during the year. These will provide an enriched experience to our consumers with a complete product range along with attractive and differentiated consumer offer. The commercial refrigeration vertical has delivered yet another year of growth and even surpassed volume of pre-COVID period. Growth in commercial refrigerator products was driven by expansion of mom and pop stores, change in food habits largely driven by beverages and ice cream products in tier three and four cities, and higher participation from OEM engaged in chocolate, beverages and ice cream products. In the air cooler category, limited window of sale and washout of season in the early months of the year resulted in piling of inventories at the channel partner end. However, our heat wave during quarter four has picked up demand for this economically cooling product. Our presence in all subcategories of the air cooler, balanced SKUs with competitive consumer pricing and expansion of channel network has resulted in brand increasing its year-to-date January 2022 market share to 12%. We are happy to report that our commercial air conditioning business has done well even in these uncertain times. Opening of commercial places and focus on retrofit jobs along with the retention of the customer with attractive after-sale offering has resulted in the overall value growth for the quarter and full year under review. Business took various cost reduction initiatives and value engineering processes to offset increased input costs and thereby mitigated risks, albeit partially on the margin. For our segment B, electromechanical projects and services, the segment revenue for the quarter reduced to INR 692 crores as compared to the previous corresponding quarter of INR 875 crores, primarily owing to a low carry-forward order book and reaching to the completion stage for major projects during the year. Segment results during the quarter showed a positive momentum. The EBIT percentage to revenue increased from 6.46%- 6.88%. The carry-forward order book of this segment stood at INR 5,660 crore. Over INR 2,000 crore of fresh orders were added across both domestic and international markets. The carry-forward order book for domestic projects at INR 3,638 crore contained a bouquet of orders across water, HVAC, rural electrification and urban infra activities. The international order book stood at INR 1,722 crore. Better and timely execution of projects coupled with a healthy project mix has driven performance of project business during the quarter. The division has not been spared by the increased commodity prices. However, a sensible negotiation with the customer and suppliers has mitigated the impact to certain extent. The focus on the work certification and collection has improved cash flow and thereby return on capital employed while comparing with previous years. Meanwhile, the increase in global oil prices, lifting of COVID-related restrictions and focus of the government on the infrastructure development should improve business sentiment and open up further opportunities in our operating markets. We will continue with our strategy of picking up healthy orders, which will help in delivering a consistent and sustainable performance with minimal risk. In segment C, engineering products and services, the segment revenue and results for the quarter were at INR 124 crores and INR 41 crores, respectively. Both our Mozambique and Indian operations have contributed towards improved performance on the back of the revival of the crushing and screening equipment and renewal of the maintenance and repair contracts with customers. Growing yarn exports, high demand for capital machinery both in spinning and post spinning, and a well-defined approach on improving after-sales business resulted in positive performance during the period. Price increase by principals and supply chain related disruptions continue to pose challenges. Overall, the textile sector is expected to perform better given the PLI announcement and various other initiatives directed towards growth for this sector. For Voltas Beko, in the short tenure of close to three years, the Voltas Beko brand has crossed an important milestone of one million units in the year and thereby becoming one of the first brands to reach this landmark. Cumulatively, the brand has sold two million units, wherein the first one million units took two years and the next one million has been achieved in these 12 months. The product enhancement is based on consumer insights, delivering a quality product at an affordable price. With the objective of localization, manufacturing facility has been expanded to frost-free refrigerator and fully automatic top-loaded washing machine at Sanand factory during the year. The production at the factory has also crossed one million units with better productivity and higher quality. This initiative of in-house manufacturing has helped the brand to introduce more customer-centric products, overcome supply chain disruptions, optimizing working capital and other cost savings associated with it. The brand continues its journey towards better market share, and it bodes well for its target of reaching market share of 10% by the year 2025. The recently conducted Brand Track study shows a good score in brand awareness among consumers and higher recommendation as compared to the few incumbent players in the industry. Lower penetration in the market, strength of the joint venture partners and accelerated expansion of reach will favor the Voltas Beko brand to achieve its trend objectives in a time-bound manner. As the outlook goes, hot weather will certainly help the cooling products to have an exponential growth after two seasons of a washout due to COVID. Amid this positive demand and increased input costs, fragmented market and disruptive pricing by the competition will of course have its impact on the margin. However, presence of large number of SKUs in the growing inverter category focused on the weak market, improving weighted average distribution and sensible price management shall help the Voltas brand to perform better than industry and thereby gain the market share. In case of projects business, completion of most of the running projects and internal policy of margin recognition in the initial phase of the project will affect the financials in the near term. However, a completion of business transition, a higher allocation towards infrastructure spend in domestic market and improved opportunities in the overseas market should help us in overall performance for the year as we move forward. In difficult times such as these, the resilience of our brand, the strength of our balance sheet, the competence of our time-tested systems, and the capability of our people provides a definite measure of confidence. We remain optimistic. Thanks. I will be ending my introduction at this stage and pass it on for further question and answer. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your 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. The first question is on the line of Bhoomika from DAM Capital. Please go ahead. Yeah. Good morning, sir. Just wanted to understand that, you know, after a long period of time, we are seeing some market share loss because as you mentioned in the press release and in your opening remarks that we have a market share of 23.4% as on March 2022 versus last year, 25.6%. What has driven this market share loss in the last two months? We understand that there has always been a competitive intensity in the market. If you can just talk about that. Number two, if you can talk about the price hikes that we've taken in FY 2022 and any further price hike that we've taken in the month of April, May. Thank you, Bhoomika. I think you are right in assessing that there has been a drop of Voltas's market share, and it's very evident. However, in this period, you know, when we look at the months of January, February, March, the summer specifically comes in the market of south zone. It is also a known fact that for Voltas, our major strengths are in the other zones, though we cover all the national market across the country. In the southern market, when we look at the price disruption by the other players has contributed in this fall of the market share. As we would move into the later part of the summer months, the expectations are quite positive that this you know the market share would be maintained. On the price hikes, we have taken price hikes in the month of January in the beginning. However, there is a time lag between our you know the input costs and also for other competitors to take those price hikes. We'll have to further analyze at what level of you know inventory numbers they were sitting at when they entered quarter four, which we will not be able to you know answer at this moment. Depending on that, some of the players have not taken the price hikes and that's where we are seeing the disruption to a certain extent. For us, we still continue to see the cost increases as we are all seeing on the commodity side, which increase our input costs. If these costs continue to increase as we go into the months, we will have to go for cost push price increases. Other than that, we don't see any reason. And whenever there is a you know a decline on the input costs, we would be even willing to go down on the you know to be reasonable and fair to our consumers. We are being very cautious, or rather judicious on that aspect of price increases. Sir, just to follow up on this, what would have been the price hike we would have taken in January, which got implemented through the quarter or this quarter now? With this price hike and given that the other players have not increased their prices to a similar level or maybe lower, what is the price gap that is there in the market today between Voltas and some of the other key competitors? I'll let Manish answer that. Yeah. Bhumika, to just add that if I take the full financial year with the price hike in the range of 12%-15%, we can say in terms of the effective utilization, the period will be of close to one-two months gap before the increased price gets built to the channel partner. Now, having said that, knowing the fragmented market, each player is trying to find out a place for this market to gain and to have the presence over there. Because of which it is extremely difficult to see which market, which players are playing on the price or on the other side. Our analysis says that the what Mr. Verma rightly said a few minutes back, there are regions where we have found some kind of major disruptions, generally because of the early onset of summer over there, where we have lost some of the market share. To overcome that, we have also done some corrective actions to ensure that, you know, we sustain and maintain our leadership across all regions. In terms of price gap between us and the competition, I would still say 2%-2.5% could be the easy share for if I look some of the selective markets. But to get All-India average price and all, knowing the fragmented market and the players working on different strategies, it will be difficult to quantify up front. Great, sir. There are more questions. I'll come back in the queue. Thank you very much and wish you all the best. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. If time permits, you can come back in the question queue for a follow-up question. The next question is from the line of Vishal Biraia from Max Life. Please go ahead. Yeah. Sir, could you elaborate a bit more as to what could be our exit market share in March of 2022? When you say you've taken corrective actions, what are the corrective actions and how much time do you expect to recoup the market share? Thank you. For our AC market share, we are somewhere close to 18.5%. Having the lead in the earlier periods of the year, the market share YTD we reported 23.4. These are the external data being done by the external agencies, and we normally follow that given the status and the one uniform agencies carrying out this kind of market share collection of the data. Now, having said that on the corrective actions, during the season time, we come out with various schemes and initiatives directed towards the consumer, the channel partners and the consumers. More such action requires where we are seeing supply disruptions or where we are seeing the other way around, where the demand is very high and we manufacture the market is running short of the products. All in all, there are certain initiatives like aggressive consumer subscription scheme, taking advantage of the lower borrowing costs today, which is building in the market. You have a subsidized installation scheme directed towards consumer, giving the off-the-shelf schemes to the channel partner. There are various initiatives I would not like to elaborate more on this front. There are various tactics and tools the brands are having today on the shop floor to play around to ensure that you know, the confidence and the shelf life which we desire to have it along with the channel partner. Okay. Has there been any change in competitive intensity when you moved to March or to April and May? Or does it continue to be as severe, as intense as it was in February and March? I would say that if I take the summer period, which is February to June, knowing the demographics of India, we have early summer that starts in the South, extended to West, East and North. As we move forward, given our strong presence in the North region, we are hopeful that we will be able to overcome this market share matrix and would go back to our old market share kind of leadership what we used to have. We are still leader in terms of the exit market share. However, the gap has been reduced over the second player, which probably will catch it up once we complete or exit the season at the end of June, July. Just one follow-up on the same point is that some of your peers have focused on mass market products, whereas we may be on the mass premium side. Is it that the downtrending in this, in these few months has increased and that has contributed as well to the loss of market share for us? I would say other way around. You know, given the under-penetrated market, probably the larger and all categories or the all top 8 players are eyeing for a mass, affordable kind of product. You have the premium category and the premium generally categorized as a five-star, and then you're looking for a higher tonnage, because otherwise you won't be able to differentiate as such the normal or the mass product vis-a-vis the premium one. Yes, our focus is also there on increasing our market share on a two-ton five-star category, which we are proud to inform you that we have done better over there in the last three or four months timeframe and increase our sub-segment market share over there. More is needed to do that, and we'll be definitely focusing upon that to improve or to balance the market in terms of premium as well as the mass products, so that, based on the consumer needs. These are helpful perspectives, sir. Thank you very much. Thank you. We'll move on to the next question that is on the line of Ankur Sharma from HDFC Standard Life Insurance. Please go ahead. Yeah. Hi, good morning, sir. Thanks for your time. Just harping back on the share loss, you know, on the AC side. As you highlighted, it's coming mostly in the southern part of the country. Is it just that, you know, you've seen more competition, you know, disruptive pricing? Was that the only reason and you clearly did not want to match those prices? Or was it also some, you know, element of supply chain issues, you know, some shipments from China, et cetera, also kind of, you know, hurting, you know, your share in the South? Ankur, if I look, even though when we talk about south, the south comprises of four major, cities I would say in terms of Tamil Nadu, Kerala. Forget about states, my mistake. Tamil Nadu, Kerala, Karnataka and Andhra Pradesh. We are relatively strong in Andhra Pradesh and, Karnataka, where we have seen more disruption is largely in Tamil Nadu and Kerala market, where we have seen this market being largely driven by the organized and regional retailers, where the ask on the price is generally on a higher side. This is where the, our deep analysis showing that, some actions which we have taken on this part, a bit on our in the later part of the year, later part of the quarter. I am sure that the action is working on the ground. This is the primary reason I can say. Otherwise, in case of East and West, we have sustained or we have actually improved our market share over the last comparative period. In terms of North, we continued our leadership over there. Just to add to that, Ankur, is that the supply chain from China didn't have any major impact in the sale of the product. We didn't feel any shortages or anything like that. Okay. I just have a very basic question, you know, because if demand is so strong, you know, we are even talking of stockouts possibly over the next month or so, why is it becoming so difficult to pass on price hikes? You know, typically when demand is so strong and having looked at the industry for the last 14, 15 years, typically price hikes are relatively easy to pass, right? When you look at the competition, you know, the by way of the product differentiation and as you will understand, a two ton five-star market or a 1.5 ton three-star market, the product differentiation between one brand to the other brand is there, but not at a very significant, you know, difference. In that sense, when there is one player, let's say, another competitor who doesn't increase the prices following the Voltas price increases, at that stage for the consumer, you know, there is a propensity for him to move to the other brands. We are trying to study this more in detail, and that's where we say that we are taking immediate actions on the ground to come out of this thing. It's mainly from the price disruption as it is being seen right now. To add more to what Mr. Verma said, Ankur, if you have the fragmented markets and the top 20 or top 10 players are eyeing to capture a market size in order to get the leverage on the volume, obviously you'll find that such kind of disruption will take place over there. Some of the brands when we said we have increased market, the price hike of 12%-15% when you see the other brands, probably, they would have gone into a lower price hike. Since the product differentiation is not clearly visible on the shelf of the retailer, it then all depends upon the kind of price competitiveness which is playing around in the ground. These are the obvious reasons which you are finding it over there. Having said that, we still continue with our policy as objective of balancing both margin as well as market share, because we keep saying that the market share you can't bank. Yes, the market share also will give you in terms of the scale to leverage some of the cost on which you can ride upon. The understanding is correct that, you know, as you said, you will take back the lost share by the end of the season, and the corrective action would be mostly by matching price cuts of competition. Is that how we should look at it? Or, you know, via incentive, subvention schemes, et cetera. Is that the way out or, you know? Help me if I understood this wrong. Ankur, there are various cards in your hand to play around depending upon how the market is reacting to it. Somewhere we play a price card, somewhere we play this, a differentiation. Somewhere we go for a more consumer-directed initiatives rather directly, you know, putting price into the picture. All these tools are available. When you are speaking the season time, all these tools can be effectively used to capture whatever you have the objective to attaining. Okay. Got it. Great. All right. Great. Thank you so much. All the best. Yeah. Thank you. The next question is from the line of Atul Tiwari from Citi. Please go ahead. Yes, sir. Thanks a lot. Sir, just another follow-up question on this market share thing. Can you comment who are the big disruptors in the market? I mean, in terms of whether they are domestic players or MNCs or the Chinese players. We have seen generally the fight takes place between number one and number two. Obviously, we have seen some of the loss of the market share to LG, and we all know Lloyd become more aggressive in this market. Probably we don't require to comment anything about the competition, but looking into the volume which they're eyeing to capture because of the new factory set up and all, and we have seen the results, it's publicly out, which they have reported a higher loss. Probably these two players we have lost their market share. Coupled with if I go to Samsung, to certain extent, they have a very strong stronghold in the south which also helped them to gain market share over Voltas. These are the three key players I would say, to whom we have lost the market share. As all Hitachi, Daikin and all remain in the same bandwidth where they were there a year before. Okay, sir. Thanks. On Voltas Beko, would it be possible to share FY 2022 revenue EBITDA PAT and the exit market share? I would say that we can share the data, but knowing the confidentiality and all, we would not like to put it. Anyway, it will be part of our annual accounts and reports as such. However, let me give you the indications. We are very close to a four-digit number as far as the turnover is concerned for Voltas. In terms of the exit market share, we are inching towards in case of refrigerator, we are somewhere at 3.5%, and for washing machine, we surpassed 4%. Okay, sir. Great. Thanks a lot. Thank you. The next question is from the line of Niket Shah from Motilal Oswal Mutual Fund. Please go ahead. Yeah. Thanks for the opportunity. Just two questions. One is that when you said the competition in, it is very, very high. For example, if you are selling at hundred, the competition is selling at what? Is it 5% cheaper? And is it at a price where you can't match it, otherwise the margins will really collapse? Is that the way you wanna think about? See, as I said, we are widely spread in terms of the market. You won't find the price difference by destination or the price difference across all brands in some of the markets which are largely mature or, I would say, behaving in a proper way. However, in some of the markets, we have seen the difference of almost. As I said, when I say the difference, you won't be able to get the difference in the average price index, which has been measured in terms of the end consumers. But the specific deals would have been carried out with the channel partner in order to ensure to get the shelf over there in the counter. I would say the average price difference will be close to 2.5%-3%. However, in some of the markets, it may go as high as the 5% side, and some of the markets it may go low, less than 1%. Understood. Sir, just to reconfirm what you said earlier, you said that, is my understanding correct that we expect our market share to come back to original levels by the end of the first quarter, or you think it'll take some more time? See, when I say we always optimistic in our approach, and many times you find us conservative as well when we give any forward outlook statement. In our case, we are working, as I said, we have taken some of the corrective actions. Some of the corrective actions we cannot do it knowing the margin and the reasonable share you need to have it in your financials. However, looking into all the possibilities, we are comfortable or we are looking forward to regain some of the market share which we lost in the last two months. How much and more, I would not like to quantify as such. We remain conservative and like, and prefer to deliver more than what we give outlook to the stakeholders. Got it. Sir, would it be possible to comment on margins? Because while on one side there is significant amount of raw material inflation, but on the other side, this year summer has been extremely strong. If you're able to show a disproportionate growth, then some operating leverage should benefit at some sense. How should one think about margins for the next year? That's all from my side. Thanks. See, the key phase is the still you are facing a gap between your increase in input cost and the price hike which you announced, which means that whatever comes as on a volume part, we'll try to mitigate those kind of gap or bridging those kind of gaps. In terms of margin, we are of the view that industry will see some kind of stress on this industry, on this product front. It will be difficult to quantify today at what margin and all. To go back to double digit of market for the industry and for people like us, only it will take some time. I would not like to quantify the period as such, but as I said, the effort will be first to cap upon it. Knowing the situation in which the industries and inflation is moving and having the period of June, July to go on the summer, probably we have to cautiously watch this position. Sure, sir. I'll come back with you. Thank you. Thank you. The next question is from the line of Ranjit from Mahindra Manulife Mutual Fund. Please go ahead. Yeah. Hi sir. Good morning. Just wanted to check with you, was there any disruption in terms of supply chain? Because we have a lot of imports coming from China. Would you say that there were some issue because of that, or it's largely because of the pricing only we have lost the share? Ranjit, as we had earlier mentioned, on the supply chain front, there were no major disruptions. We had planned for our supplies for the full season, and there is no disruption on that aspect except for, you know, one or two small SKUs. Some SKUs where delay was seen because of, you know, Shanghai lockdown and this and that. Majority of the summer was planned much in advance, and we fairly did well. Ranjit, if you recollect, in terms of the import as well, only few components now are remaining on our import source. Largely every other components have been localized. On that front also, the mitigation steps which were taken by us helped us a lot. As I said, there is some kind of delay. We have witnessed some kind of delay, but no disruption from the supply chain, probably there's simply no. However, let me put a cautious note on that. We have seen a good amount of growth both in March and April. I would go with the words of the other industry peer players as well. If you are seeing in excess of 100% growth till June and July, probably the industry will have a complete stockout season. Because to have a continuous growth of 100%, it is like achieving something which has not been done here. Okay. Sir, if I can ask one more, like what is our strategy now, like we have seen through this and all this price disruption. If you can share, like, as Voltas, how are you going to react to this situation? If you can, whatever you can share. Thanks. Ranjit, we are not seeing this price disruption for the first time. Some of the brands in the past also have come, disrupted the price, but it could not continue for long. I am sure each one of them are looking into the bottom line as well while furthering the business. It will automatically get settled over a period of time. Obviously when I have been a leader in this category, the kind of, as I said, some of the tools which we have, some of the cards which are in our hand, we'll play it at appropriate time to ensure that we remain healthy and leaders both in margin as well as market share. Okay. Sure. Thanks. Thank you. The next question is on the line of Ravi Swaminathan from Spark Capital. Please go ahead. Sir, thanks for taking my question. Can you give the rough break up of the UCP segment in terms of revenue between air conditioner and non-air conditioning products like air conditioning, air coolers and other products? If you recollect, Ravi, in the year beginning, we have merged the commercial air conditioner to our UPBG business, given the aligning on the risk and reward kind of matrix. That contributes around 17%-18% on the UPBG, on the UCP segment. If I remove that, the balance in the cooling product segment, we do have close to 80% going towards the air conditioner. Commercial refrigerator will have around 15%-17%, and rest is, I would say, the air cooler. Air cooler being a low-cost item, although it won't contribute significantly to the turnover. Given the advantage on the pricing side and the cost side, I would say, it will have a better contribution in the margin. Got it, sir. The benefit also not being witnessed in the current year because of the pile up of inventory at the channel partner end due to the washout of two seasons in the past. Okay. With respect to margin for the UCP business, you had given some kind of comment, so just wanted to reconfirm on that. If you are talking about the 10%-11% margin, will you be able to maintain in FY 2023, or there might be some downside risk to it because of the raw material inflation we've seen? Ravi, in today's time, it is very difficult, I would say, to expect the increase in input cost. Although we have seen softening of the commodity price, backed by the lower demand in some of the economies. However, we cannot still rule out the disruptions and inflation which is prevailing in the respective home countries. It will be difficult to say or to give any guidance. As we say in the past, that we won't like to be a leader only in the market share, but continue our leadership in the margin as well. That will be the driving factor for us as we move forward. Got it, sir. My last question is with respect to the joint venture with Highly for compressors. Can you talk about it a bit more? Also the CapEx plans that we are going to do this year and next year. Yes. If I look from the Highly perspective, although it announced during the silent period, I could not elaborate more to the investor fraternity. I would say that the Highly compressor, the investment which has come, keeping in mind, I would say it's a strategic decision. The reason behind it is because we are not expecting to have the product without compressor being there. Compressor is a critical product we all know in the air conditioner product category. It has the importance in the refrigerator and the commercial product as well. In all, looking into the availability of the compressor as well as the criticalness in terms of having the sales sustainability in this critical component, the decision has been made to invest for backward integration to have the compressor through a joint venture. The decision to go for joint venture is largely driven by the technical skill, and the joint venture partner is among the global leader in manufacturing the compressors. We have done the partnership with them for an inverter make compressor. We are not looking into fixed speed compressor because market is expected to go decline as we progress in the next one or two years aspect. In terms of the overall CapEx for the plant, both the joint ventures partners put together will have investments around INR 250-INR 500 crore as we taken in two phases. Probably just with the capacity of going close to 1 million units when we complete both the phases. Got it, sir. The overall CapEx that we may end up doing over the next one-two years, including this, JV? I would say that, if I take a mid-term view of two-three years because we committed to the PLI as well, and we are in the process of expansion of manufacturing capacity for both RAC and the CR. Put together we are not expecting the CapEx cycle go beyond INR 350-400 crore in the near term, if I take two-three years from now. Got it, sir. Thanks. Thank you. We'll move on to the next question. That is from the line of Ashish Jain. One second, I just stand corrected on the other earlier question. Not INR 250, INR 300 crores. It'll be INR 450-INR 500 crores. Extremely sorry for the same. 250 is the equity portion. Yeah. Thank you. CapEx will be around INR 450-500 crores in the next two to three years, which will take care of our PLI applications, which we did for the backward integration for some of the components. Compressor, which is a joint venture, and expansion of the manufacturing or production capacity for both RAC as well as in the commercial refrigerator. Thank you. The next question is from the line of Ashish Jain from Equirus. Please go ahead. Hi, sir. Good morning. My first question is again, you know, on market share. While, you know, your market share loss is largely in the South, you know, historically, you have shared that South is like 22% of our total revenues. Is it fair to think that, because the market share loss in South is like disproportionate in the range of 20%-25% to drive an overall loss of 6-7 percentage points, or am I missing something here? Chief, what happened is, if you the other part of the country got an extended winter, we all know. We didn't require to switch on the air conditioner in the night till probably end of February. That point of time, even when we've seen the contribution of south, which has gone as high as 30%-35%, primarily because other reasons we're not having the need of the hot summer. That increased contribution, which otherwise should have been standard 20%-22%, you're right, which has gone as high as 30%-35%. That this probably has resulted some kind of disruption which we are seeing in terms of the overall market share among the players over there. Right. Now, secondly, in terms of window air conditioners, can you just share some data in terms of how much of the industry is window ACs and how much for us is still window ACs? I know it's a pretty small number, but can you just share? No, I agree with you. Rightly pointed out by you, the share of the window has actually coming down year-over-year, and we touched to around 19%, I would say for the Voltas 19, then 20%, probably we aligned with the industry as well. It has come down from once upon a time to having 25%. In the last year, it dropped to close to 23, then 21, and we're now seeing a level of 19, 20% for the window type air conditioner. Okay. You think the proportion for the industry is also similar at 19%? No, because you can't be too much away from the market. Right. Because obviously you can't be 2x to the other market is x. Right. Right. Okay. Got it. Thank you so much, Manish. Thanks. Thank you. The next question is from the line of Sumit Jain from ASK Investment Managers Limited. Please go ahead. Yeah. Just to reemphasize, the price increase for RAC segment for the full year FY 2022 for Voltas would have been in the range of 12.5%-13% overall, right? Yeah. Now 15.2-15 or something. Yeah. Right. Now that at least one player has spoken about having raised prices in April, at least few players should be on par with Voltas in terms of price increase taken for 15 months. It is difficult to control the expectations of the move of the other competition. It is difficult for us to estimate. Yes, I know which player you are talking about, which has openly said about price increase. At the same time, we have to see has it been rolled out effectively across all markets. Because the challenge is what the leaders and the other players are facing will be faced by them as well, the other player, when you talk about the across product, across markets increase of 2.5% or what are the price increase being announced. As I said in the earlier comment, and Mr. Verma also commented, the effective rollout of the price since you announced generally takes almost 30 days- 45 days. If I want to go on a Pan India basis across the lead SKUs, that is the price being announced. That if I look from the quarter end and all, you won't get even advantage of more than 50% of the price hike has been announced at the beginning of the quarter. That's a good start, and that's a strategy all players are adopting, including Voltas, when we announced price hike in the earlier period. The 25.8% market share that you spoke about in last conference call, which is Q3 conference call, was for nine months. YTD. Right, sir. This is basically GfK, Nielsen data, which is secondary data, volume data, only MBOs, not EBOs, right? Yes, MBOs. You know very well how GfK extrapolates the data. There's only one agency carrying out such kind of analysis, because generally I don't want to explain the methodology, you know, because that methodology being adopted by them earlier as well and now. We are not pinpointing out to the terms of the methodology being adopted by them. Generally, when GfK captures the data, they extrapolate based upon the base data over there, and many times they are not able to collect the data from all retailers across countries. We take all this data in a good spirit. The reason being is because the market share is not probably the one which we are looking from this kind of data. It gives a lot of other insights in terms of the strength and weakness of the other brands, including the weighted average distribution of each brand they are enjoying in a particular market. When we take this database, we go in a much micro way in order to find out what are the corrective actions or the need-based action we require to do it. In some of the markets which probably we have to change or we have to move on terms of the distribution mode. This is volume data, right? These are the volume data. That's right. Thank you. Thank you. We'll move on to the next question. That is on the line of Keyur Pandya from ICICI Prudential Life Insurance. Please go ahead. Thank you. Hi, team. Just want to know on the demand conditions, we are hearing that demand continues to be robust. Now, are we, as a company and industry, able to source material even at this stage seamlessly? Or are there supply issues either at the Voltas end? Earlier you mentioned that there is no issue, but or at the industrial which may help us gain market share. And just, ancillary question is, are we able to source, say, final product or components locally versus the import for this kind of demand? Thank you. Basically just want to understand with robust demand, how is the supply situation, whether at the channel end or at the brand end, for Voltas and for the industry. Thank you. Let me answer first the channel one, gentleman. As we all know, today there's a huge demand of the product in the shelf. Basically the channel partners inventory will be a hand-to-mouth kind of situation. They are not getting even more than 15-20 days inventory in their warehouses. It's our reading because the continuous indents are coming, and we are seeing good amount of growth over there. If I look from the Voltas side, obviously it goes well for the brand manufacturer as well. Our inventory level has also come down drastically. If I compare with March 31st, inventory level for the capital employed, which you are seeing in a statement, and if I take the future consumption in the trend, suppose the inventory is sufficient for 45-60 days. Although the continuous inflow is still coming, because when we project something on the growth side, we plan it over a base year, and here the base year was 2019. 2021 has still seen some kind of COVID-induced lockdown and reduced demand for that matter. Industry has projected a good amount of growth. I go with the projections which all players have carried out. I said in one of the answers, if the demand continues to be more than 100% over last year, I am sure that all industry players would result or will go into the stock-out situation sooner or later. Till today, what we are seeing in the market, we are adequately covered till June, July. Okay. I would say June, because June we have the primary end actually. Understood. Understood, sir. Sir, how the proportion of say import versus say indigenous or domestic supply would have changed this year versus 2 years back or last year post these restrictions on import of ref gas split ACs? See, most of the components have been localized, wherever we find the ecosystem in place. We all know that the compressor is still one of the components, and some of the PCBs of the high denominations are still getting sourced through import. However, as we move forward, we are expecting that high amount of localization will take place to start with motors and the PCBs, followed by the compressor. In terms of the percentage, I would say that a compressor which contributes around 16%-20% of the BOM. If I look from the PCBs, we should add further, kind of 12%-13% or 15%. Still, those components are largely being sourced through import, although we have the local arrangement as well. Although their contribution is almost 35%-40% in the overall BOM, at least 20%-30% of the requirements are still getting procured locally where we have some kind of ecosystem available in India. Okay. Understood, sir. Sir, thank you a lot and all the best. Thank you. Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to the management for the closing comments. We thank all the participants showing interest in Voltas. I am sure that one hour will not be enough for all the participants given the anxiety and given the I would say the outlook and all. We are open for any question answer sessions, and you can reach out to us and we'll try to answer it at the earliest. Over to you, sir, for the. Yeah. Thanks for all the questions. I think the timing of these questions is very correct. As we have said that we are taking the corrective actions in the market, we should be coming back with the market share and continue to be the market leader on the market share as well as on the margins itself. Because as we have said that it is not possible for all the other players to disrupt the prices and continue to make losses for long periods. With that, really appreciate your time and thanks. Thanks for the same. Thank you. Thank you. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.