Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 investor conference call of Voltas Limited, hosted by HDFC 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 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. Naveen Trivedi from HDFC Securities. Thank you, and over to you, sir. Yeah. Good afternoon, everyone. On behalf of HDFC Securities, I would like to welcome the management of Voltas Limited to discuss the post Q1 FY 2023 results. We have with us today the senior management of Voltas, represented by Mr. Jitender Verma, EVP and CFO, Mr. Manish Desai, Head Corporate Finance, Mr. Vaibhav Vora, Manager Corporate Finance. Now I would like to hand over the call to management for their comments. Thank you. Now, sir. Hi. Thank you, Naveen, and a very warm welcome to everyone. Good afternoon. For discussing the Voltas results, we will go back a few days, you know, when the calendar year started. It started with a lot of positive momentum after continuous lockdowns and hindrances caused by COVID. However, multiple headwinds, such as pressure on account of elevated commodity and crude oil prices, higher than anticipated inflation worldwide, especially in the United States and major European economies and other geographical factors, such as a worse than anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns, and continued negative spillovers from the war in Ukraine impacted the sentiments across. Additional pain to financial conditions was also caused due to steep interest rate hikes undertaken by major central banks to help ease the inflation pressures. Back home in India, similar to global economy, end of quarter four gave rise to series of green shoots on account of stronger GST collections and PMI numbers, elevated consumer discretionary spends on vehicle sales, rise in exports, et cetera. However, the trends didn't seem to last long, as the good news was followed by widening of current account and trade account deficit, rising inflation and monetary tightening policies adopted by RBI, which dampened consumer sentiments. Although, on a positive note, IMF still in its recent forecast projected the GDP growth of India to remain stronger for the balance of the fiscal year on the expectation of a positive recovery and controlled inflation as compared to rest of the economy. In above backdrop for Voltas, the quarter was both exciting and challenging. On one hand, our top line was helped by full season period of hot weather, which supported our Unitary Cooling Products business. However, on the other side, cost overruns along with liquidity constraints impacted results in the project segment. For the quarter ended June 2022, Unitary Cooling Products reported a revenue of INR 2,162 crores. Our engineering project business reported revenue of INR 455 crores, and the engineering product segment reported a turnover of INR 124 crores. Voltas' consolidated total income for Q1 FY 2023 was INR 2,795 crores as against INR 1,860 crores in previous year same quarter, resulting in top line growth of 50%. Profit before tax was INR 160 crores as compared to INR 160 crores in the corresponding quarter last year. PAT, that's profit after tax, was INR 110 crores versus INR 122 crores in the previous year. Earnings per share not annualized for the quarter ended 30th June 2022 was at INR 3.29 against INR 3.68 reported last year for the face value per share of INR 1. We continue to further strengthen our balance sheet with minimal borrowings which remain mainly for our overseas operations. A snapshot of our post quarterly results, you have all seen and, we'll go to the segment A, Unitary Cooling Products. The Unitary Cooling Products industry witnessed a full period of seasonal sale after two years of washouts due to COVID. Being a leader in the industry, we not only participated, but we led this growth in the market by our presence and registered the lead by recouping the market share after a small bump in the end of the previous year. Capitalizing on the demand from a heatwave and on the strength of our extended dealer relationships in quarter one FY 2023, the segment has registered a stellar volume growth by 111% as compared to quarter one FY 2022. The quarter also witnessed and reaffirmed the trust of the consumers in Voltas's brand, resulting in regaining the market share of 24.1% for June 2022 exit in the overall AC market, which is a 950 basis points lead over the nearest competitor. Our focus on the inverter subcategory with competitive pricing and larger number of SKUs helped us to continue with our growth trajectory. Inverter category witnessed a good traction with the customers, and its contribution in split AC segment saw an increase from 70% in quarter one FY 2022 to 82% in this quarter one FY 2023. We are happy to inform that along with our leadership position in overall AC category, we now also lead the inverter AC market share at 21.8% as of June 2022, ahead by almost 300 basis points over the nearest competitor. In spite of having started on a positive note, unprecedented and incessant rains in certain parts of the country and early monsoon starting from south dampened demand in secondary market for later parts in the quarter. This, in combination with the fear of rising inflation, brought about a cut in the discretionary spend by the consumers. The results of UCP business also were impacted on account of high procurement costs of the inventory sold during the season, disruptive pricing by the competition, and a normalized advertisement spent in this quarter after minimal advertisement spent in the last year due to COVID. We would like to inform that BEE star labeling has been made effective by the government from 1st July 2022, and Voltas has taken all relevant steps with regards to the label change. The commercial refrigeration vertical continues to deliver yet another period of impressive growth. The growth in CR products was driven by demand of beverages and ice cream products in summer by mom-and-pop stores and expansion in trade sales. Unlike previous few quarters, we witnessed a turnaround in our air cooler sales for the industry as well as for Voltas. Overall, weather conditions boosted secondary sales and in turn, primary sales resulted in growth over the previous year. We are also happy to report that our commercial air conditioning business also registered substantial growth. Sale of light commercial air conditioning, packaged air conditioners and ducted split units drove the growth in this turnover. Business continued to take various cost reduction initiatives and value engineering processes to offset increased input cost and thereby mitigated the risk, albeit partially on the margins. For the quarter ending June 2022, the UCP segment registered 125% growth in turnover from INR 963 crores to INR 2,162 crores. The segment reported INR 166 crore in Q1 FY 2023, earnings before interest and taxes, EBIT, as compared to INR 118 crore in Q1 FY 2022, a growth of 41%. Segment B, electro-mechanical projects and services. Segment revenue for the quarter was INR 455 crore as compared to the previous corresponding quarter of INR 688 crore, primarily owing to a low carry-forward order book and most of the projects reaching to the completion stage during the quarter. The segment has reported a loss of INR 12 crore on account of cost overruns and conservative provisions, affecting results for the current quarter. For domestic projects business, the orders booked were higher at INR 225 crore as compared to INR 58 crore in similar period previous year. The buildup of contingency owing to the project extension and possible cost escalations in few projects have impacted the overall profitability of this segment. The judicious approach followed by the management towards order booking had resulted in us retaining few but healthy orders in MEP. However, going forward, with the revived hopes on public and private capital expenditure, we expect an increase in healthy order booking for the current financial year. In the Middle East, most of the big ticket and running projects are closer to the completion stage. Further, the new projects are under an early stage or nascent stage, wherein margin recognition will accrue later following the internal margin recognition policy. During the quarter, we continued to witness delay in work certification, deferral of payments by clients owing to liquidity constraints. This has resulted in some conservative provisions affecting results for the current quarter. We remain conscious of the risks entailed and remain suitably cautious and vigilant in accepting new orders in the GCC region. Over INR 660 crores of fresh orders were added across both domestic and international markets. The carry-forward order book for domestic projects now stand at INR 3,597 crores, containing orders across water, HVAC, rural electrification and urban infra activities. The international order book as at end of quarter one FY 2023 is INR 2,214 crores. Total carry-forward order book of the segment stood at INR 5,811 crores. Meanwhile, the increase in global oil price and opening of Turkish economy, along with focus of the government on the infrastructure development, is expected to improve business sentiment and open up further opportunities in our operating markets. We will continue with our strategy of picking up healthy orders, which shall help in delivering a consistent and sustainable performance going forward with minimal risk. Segment C, Engineering Products and Services. Segment revenue and results continued to report improved performance for the quarter over corresponding quarter of previous year. Segment revenue was INR 124 crores and EBIT was INR 51 crores respectively. During the quarter, performance of both Mozambique and Indian operations was satisfactory. Increase in export duty fines in the iron ore market marginally impacted demand for the capital equipment. Nevertheless, the vertical continued to maintain consistency in its performance. High demand for capital machinery in textile industry, both in spinning and post-spinning, and a well-defined approach on improving after-sales business helped achieve a significant growth by Textile Machinery division. Albeit price increase by principals and supply chain related disruptions continue to pose some challenges in the interim period. However, in the long run, the PLI benefits announced by the government and an opportunity of expansion in the export market should bode well for the textile sector. Voltas Beko. Voltas Beko continued its journey towards growth during the quarter. The brand, Voltas Beko, and trade acceptance of Voltas products enhanced the overall performance of this joint venture. The strength of Voltas distribution has been leveraged to increase touch points for the brand sequentially. The in-house manufacturing of products has helped the brand to introduce more customer-centric and value-for-money products with high quality and comfort. The value engineering across all product categories, along with healthy product mix, has resulted in the improvement of gross margin and thereby containing losses despite increased input costs and a higher advertisement spend compared to previous year. Lower penetration, consumers' preference towards premiumization and a technologically advanced product are expected the brand to further strengthen its presence in this competitive market. Outlook for the period of July to September, that is the quarter two FY 2023, is usually a lean period for cooling products. However, the start of festival period may witness a spurt in demand. It will be interesting to see the impact of myriad of factors such as inflation, movement in crude oil prices, rupee behavior and geopolitical challenges. As far as previously informed business transition is concerned, we now like to inform that all the conditions precedent for consummation of business transfer agreement been fulfilled and a closing date of 1 August 2022 has been finalized as the effective date for the transfer of MEP, mining and construction equipment and textile machinery businesses to Voltas' wholly owned subsidiary, Universal MEP Projects & Engineering Services Limited or UMPESL in short. Government has remained optimistic in meeting its CapEx commitment for FY 2023. Positive sentiments and re-resolution of pre-qualification after the transition of the business will help us regain momentum in project business to overcome some possible teething issues which may arise in the initial period of business transition. In general, to conclude, we anticipate a pickup in the pace of overall economic activity and Voltas would seize the opportunity to continue with growth momentum. Thank you. We can open for question and answer session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The first question is from the line of Nirav Sheth from Emkay Global. Please go ahead. Yeah. Thank you, sir, for the opportunity. I have two questions. First, on your market share. Congratulations on steady improvement there. Can you please highlight the way you had stated in the last earnings call that market share loss was in South? This recovery, it has been happening in South, or we have incrementally gained share in the other regions? That is first question. Second, on competitive intensity, can you share your thoughts there? With commodity prices cooling off, how far are we from normalization of margins? Yeah, these are my two questions. Thanks for your question. The market share, you know, as we had explained, you know, it was a kind of a blip, and we have continued. As we had previously also mentioned that, with the start of summer, North would be the major thrust area, as it has always been in this season. Both North and South, and other regions played part in continuing to increase this growth in the market share over the three months of the quarter. On the other side, your question was on the softening of commodity prices. We have, you know, based on our contracts and the inventories in hand, we are discussing and we have discussed new contracts with suppliers. We would start to see the impact of those positive changes in the, you know, starting, I would say, more likely from quarter three. That would be the right assessment at this stage. We have to continuously keep watching this space, how much of the, you know, changes are being passed on by the vendors to their constituents. We have already seen the copper prices have started coming down. We have yet to see on the, you know, plastics and all those discussions are going on. The major cost is on that. We would see the impacts coming in from quarter three. Thank you. Nirav, just to add what Mr. Verma said, if you recollect our call in quarter four, we have attributed a loss of market share to two primary reason. One is, obviously was South, and second thing is some kind of a supply chain disruption resulting into some of the product portfolio which we could not meet as per the demands of each channel partners. Those corrections we carried out in by mid-March itself, although reports and all have come later on. That helped us not only to recover our lost position in South, but to have a position well prepared for the other regions as well, where the season across all countries fared well in this regard on the industry now. Sure. Your comments on competitive intensity right now, how it is, compared to what it was in peak of the season? Competitive intensity, Nirav, almost remained same. There is no change in any of the laddering of the competition side. Lloyd was occupying a third position in March quarter, and they're still having the third position in the month of June at the end of June as well. On the laddering side, I would say that the gap between us and the nearest competitor, LG, has widened to 950 basis points if I take the overall AC position. The good aspect is, we were trailing to LG in the inverter category, because they started their portfolio early to the market expectations. At the end of June, we have gained our leadership there as well with a gap of 300 basis points. Going forward, our endeavor is to ensure that we maintain or we increase those spread for the basis points over the competitor and go back to our earlier market share, what we used to have in the range of 25%-25.5%. Sure. Thank you so much, and wish you all the best for the coming quarters. Thanks, Nirav. Thank you. The next question is from the line of Ankur Sharma from HDFC Life Insurance. Please go ahead. Yeah. Hi, sir. Good afternoon. Thanks as always for your time. First question again on the margins in the UCP segment. So, you know, clearly now that we also have the BEE norms coming in, I remember there was another 2%-3% kind of hike needed, July onwards to kind of cover that. If I understand correctly, during Q1, there really hasn't been any price hike, despite the pressures on the RM side. Just trying to understand, you know, how do we now kind of get back to that double-digit margins in the UCP segment? Will it be only because of RM prices correcting, you know, over the next few quarters? Or do you believe, you know, you and the industry also needs to take price hikes? Clearly, being the market leader, you lead that. Just trying to understand, you know, how the margins for the industry as a whole move from here on, because margins of pretty much every player has kind of been hurt. Ankur, if I look from the margin perspective, if you recollect that in the quarter four call, we have briefed this, that we had an exit of 10.5% in March quarter. Knowing that the advertisement expenditure is going to be on a higher side in quarter one because that's the season period where we do a higher or larger part of the sales and marketing campaign. Right. We do incur close to 3% of revenue into the advertisement campaign. Knowing that fact, we believe that, yes, the price increase also not taken place in quarter one of the current year, although it was a good time backed by the heat waves, season was doing good. Sales were, the secondary was, I would say on a much larger traction basis. However, the competitive scenario and looking into the regional distribution, or to our reading, all competitors have delayed increase in the prices and nobody has thought to pass on this increase input cost to the consumers. Given this current stalemate, the BEE table also got upgraded or updated on 1st July, resulting into some kind of incremental cost. Given that the quarter two is generally a lean period. The inventories will be there at both retailers as well as at the manufacturer end. We won't see any further price hike by any of the competitors in the near future. However, beginning quarter three, when the dealers start moving into some of the primary of building up the inventory, we may look into you know, passing on some of the increased input costs and we may initiate the process being leader in this category and what we have demonstrated earlier as well when we started doing this price hike. Okay, perfect. Basically industry profitability is not kind of gonna change structurally, right? Basically we do get back to our- Actually, yeah, structurally there is no change. Sure. Only our worry, I would not say worry, but the looking into the market scenario, if the commodity price continues to head towards southwards and we get some kind of cost advantage in procurement, what Mr. Verma rightly said in earlier question, that possibility is there from our procurement starting from quarter three onwards. However, it all depends upon how the competitions and the market is going to behave. If we are not passing on this increase, the input cost benefit to the end consumers, probably we can see a recovery of the margin for the entire industry and obviously for Voltas as well. If the competition and we need to pass on this increased benefit or the cost benefit to the customer, probably the margin will remain in the trajectory what we are seeing today, for the industry as well as in the long term for Voltas as well. Okay. Just quickly, sir, on Beko, you know, losses seem to be higher. Mr. Sharma, I would request you to rejoin the queue, please, for your follow-up questions. Sure. Thanks. Yeah. Thank you. Request all the participants to limit their questions to two per participant. The next question is from the line of Charanjit Singh from DSP Mutual Fund. Please go ahead. Yeah. Hello, sir. Sir, on the- Yeah. Uh, on the- Mr. Singh, your audio is too low. I would request you to, I mean, put your Is it audible now? Come closer. Yes. Hello. Please go ahead. Yeah. Okay. Sir, one thing is in terms of, you know, our price laddering versus the other players in the industry. As you mentioned that in Q1, you know, we didn't take the price hike, but what would be the gap now between maybe Lloyd, Samsung, LG versus Voltas in the, you know, key models? That's my first question. Charanjit, in fact, if price remains same, which was there in quarter four as well, because we have not seen a price increase, neither a further discounting by any of the players to a great extent. You may find some kind of regional balancing of the price and other structure depending upon the demand, supply and availability of the SKUs. The laddering remains same, which was there in quarter four and the quarter one as well. Obviously, Lloyd being low on the price quadrant. Samsung actually in the quarter has lost a market share compared to what they were in March. Obviously the either price or the balancing of the region demand probably creating some kind of issues at their end. We got the June data just a few days back, so further deep analysis of the same is in the process. Our overall view reading says that the landscape or the, I would say the laddering of the price has not gone into a significant change between any of the players because the market dynamics almost remain same, be a competitor or be a, or I would say, looking into the demand supply condition as well. Okay. Sir, in terms of our sourcing right now, if you can touch upon, you know, for the, you know, the RMC side, how we are managing the sourcing and, you know, in terms of the inventory levels in the channel and our side, you know, how is those, you know, positioned at this point of time? If I look from the sourcing side, what we keep on saying that we are now looking more of the localized kind of product wherein the IDUs and ODUs to the larger extent gets manufactured within India through our OEM support and some of by carrying out our own investments in the molds. I missed out your second question. What was your second question? Inventory levels. Inventory level. About the inventory levels, Charanjit. Inventory. If I look from the market perspective, it would not be more than 30-40 days as such because any which way the season is coming to an end. The channel partner also balances its inventory in such a way that they won't require to carry for a longer period of time. At the company level, the inventory will be slightly higher to take care of the BEE table change requirement, which has come from first July, to ensure that we can supply a new energy rated machines immediately in the market on becoming respective. What would be the number for us in terms of the inventory level? Inventory level, it will be somewhere around close to INR 1,000 crore what we have. As I said, largely will be of the raw material, and the small portion will be on the finished goods side. Okay, sir. Thanks for taking my questions. That's all from my side. Thank you. The next question is from the line of Sujit Jain from ASK Investment Managers Limited. Please go ahead. Yes, thank you for the opportunity. What would be the advertising and promotion spend in UCP division this quarter versus Q4 as a percentage of sales? See, Sujit, if I look from quarter one to quarter one, I would say particularly there is no comparison because quarter four is when we see a March period to start the advertisement. You know very well, this time IPL also getting started in the first week of April, which got the larger traction among the consumers and good platform for the manufacturers to have the ATL spend to be carried out. If I look from the percentage revenue, quarter four it will be in a decimal. Generally, what happens is the larger part, even though we have an annual budget on the market spend. 75% of the spend takes place in the quarter one, given the seasonality of the product. If I compare to a revenue only for the quarter one, it will go as high as 3.5% of the revenue. If I take on an annualized basis, we normally spend in the range of 2.8%-3% on the overall, on the spend side. Right. Have we done this table change in terms of pricing action? What kind of price action we would have taken as an industry and Voltas as the leader? If I look from the pricing perspective, obviously the label change will increase the input cost or increase the price of the machine. Our reading is, say, anything between 1.8%-2.3%, depending upon tonnage and the stars which you're looking for. In terms of the pricing, obviously, when the season is not there in the quarter two, the price increase will be moderated. As we move forward to the demand, we are seeing the demand is going to pick up. At least I can say the effective price rollout to the market will be probably in the mid of the quarter two or maybe in the later part of the quarter two as such. To that extent, the margins would have looked higher, right? If we had taken this at the beginning of the season, during Q1, margins should have been 1.7%. If I look from the margin perspective, there are many ifs and buts, gentlemen. And we could not do the price increase given that we were anyway on a higher trajectory in the overall price increase, which we announced for our category. We have to balance it out in terms of the regional, in terms of the channel ask, and in terms of looking into what secondary traction is from the consumer side. All this judicious call being taken when we look into the margin versus the market share for that matter. We are not there for market shares, we keep on saying. At the same time, we cannot be out of the price to the market to remain, you know, only a good brand to have it, but the traction of the secondary is not there for the brand at the channel partner end. In fact, it will lose out the confidence of the channel partner, because today, if out of four, one machine is getting sold of Voltas, the shelf life of our Voltas product on the retail shop is minimal compared to any other brand. By not having the attractive schemes or the aggressive sell-off, his working capital, his investment, the brand goes up. All these factors, gentlemen, goes into a detail, I would say, in a much more detailed calculation or detailed study before we do any act on this part. Having said that, some kind of price adjustments is given across regions, but when we are talking about price increase over here, we are talking about across all markets, across all scales. That has not taken place in quarter one. Some price adjustments where we find a good amount of demand to recover something over there, that keeps on happening across all regions and across on our channel mix as well. Thank you. Thank you. The next question is from the line of Siddhartha Bera from Nomura Holdings. Please go ahead. Thanks for the opportunity. First question is on the, again, the margin side. You highlighted that obviously ad spends and all have gone up in the quarter. How will be the gross margins if you look at the AC business on a quarter-on-quarter basis? Siddhartha, if you see our quarter four and quarter one, the margin dip is around 330 basis points. That's what I've explained towards the spend on the advertisement. In a way, indirectly, the gross margin remained almost intact between the quarter four and the quarter one. This amount of spend on the advertisement actually resulted into a slight dip, I would say, a dip in our EBIT margin. Probably this you may see across all brands, because this is a good time to have those advertisement spend, given that the season was on our side as well as the manufacturers were getting to the complete season period after two years was out. Understood. In terms of going ahead, now we are at 24.1, and as you highlighted that we will, and we have to look forward to a 25%+ market share for the year. Going ahead, how will it, what is your strategy to sort of pick it up? Will it be pricing as a catalyst or, because competition, as you said, that is very aggressive and then how do we plan to sort of work on the market share gains, keeping margins probably better? Siddhartha, being a leader in this category, probably as a brand, we have to take a balanced view, both between the margin as well as the market share. In the last quarter itself, we have given some kind of trajectory through which we are going to increase our market share month-on-month. Probably, we delivered based upon the commitment what we have given to the investors in terms of how much gain we are expecting by June. When we are talking about 20- 25 and close to it, we are looking into trajectory by July, August to achieve those yardsticks. In terms of the catalyst, I would say that there is no significant deviation compared to what we used to follow. The only issue was carrying on the supply chain disruptions and all which has been kept and which has been addressed now satisfactorily. Looking into the market dynamics and competitions and all, we play our cards to ensure that we remain healthy both on market share as well on margin. Got it, sir. Lastly, on Voltas Beko, if you can highlight on the market share side, how we have been and losses have cut down sort of yet at around INR 30 crore + level. When can we see some sort of improvement on the profitability side for the Beko? Siddhartha, if I look from the bottom line or top line of Voltas, the advertisement expenditure impact which is relevant to Voltas is true for Voltas as well. Voltas also has a good amount of advertisement expenditure in the current quarter, given the complete season for the refrigerators availability to the brand. Despite this expenditure, we have contained the loss, which means we are recovering on the gross margin steadily in this category and across all product categories because not only one category can deliver those kind of improvements. Having seen this, what we prepared for ourselves for the year 2022-2023 looks promising as of now. Although market has turned to a muted kind of demand immediately after the May end. However, unlike air conditioner appliance categories go well during festival time as well. We're hopeful that the recovery will be there in the subsequent period, which at least ensures the volume will be there on the Voltas side to deliver probably a consistent performance on the bottom line as we move forward for the rest of the year. As far as market share is concerned, market share almost remains the same as what we had in the month of March. Probably we can see more traction as we move forward. Three months will not give significant leeway for a brand like Voltas or catching up on the market share side. We'll on an annualized basis find at least we are gaining on that front as well. Got it, sir. Thank you very much. Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead. Yes, sir. Sir, just wanted to understand what is the status of our JV with Highly and the south plant as well? If you can also touch upon the current import content that we have for our total requirement in the RAC segment. Our Highly JV, you know, as we know that, it's with a country bordering with our, you know, Indian border. There it needs to go for approval to many departments within the government, and we are pushing for that and we waiting on that. There may be certain issues which we would come to know once they are communicated to us. Yeah. The south plant and the, you know, import content? Sorry, could you repeat your question? Sorry. Bhoomika. Bhoomika, you're sounding too low on the audio. Yeah, your voice is. Yeah. Is it better? Sorry. Hello, is it better? Yes. Yes. Yes. Yeah. If you could just also talk about the status of our south plant, you know, the land acquisition, the CapEx that we're talking about, et cetera. What is our current import content? Okay. Bhoomika, just to continue on the first part of the question on the Highly JV, you know, this thing. I mean, I said that we are waiting for the answers from the government. Given the current political dispensation, you know, it's like looking like it's on a slow track. Keeping that in mind, we are going ahead with our Chennai, you know, operations. We have acquired the land in the industrial zone, and the processes are starting as we speak. We should hear, you know, towards the end of, I would say, 2023 or the third quarter of the year 2024, of the financial year 2024, about the, you know, start of production there, though every effort will be made to make that much faster than that. Sure. Sir, my second question was on the EMP side. We've seen a loss in this quarter because of the provisions and things. Can we talk about what is the one-time provision and ACL loss that we've accounted for in this current quarter, and will it be recurring into the second quarter? You know, what kind of level of margins do we see rebounding into the second half as the benefit of the lower raw materials kick in? Bhoomika, if I look from the EMP perspective, we talk about the there are two aspects or there are two things which happened and resulted into a loss for the EMP segment. One is we actually build up the contingency in some of the projects, given that the kind of cost escalations and the extension of time which we are running into. Now, the question comes, should we get the extended time from the customer? In that case, this contingency will act as a buffer, and probably at the end of the project we may try to or we may release some of the contingency. The situation may arise favorably as well. However, given the fact that the extension of time actually took place compared to where we were supposed to deliver, we have to make those provisions. I would say, you can say about the exceptional, but you can take it as a kind of things which may happen in some of the projects which crosses the deadline in terms of delivering of the project site. In terms of the provisions, I would say that delinquency has created this kind of situation. We were not expecting to have it, this item appearing in quarter two because it is related to one or two projects only, not happening to the entire market as such or entire operating areas where we are doing our business. We have to be watchful in the situations. To give you answer in a one sentence, as we keep on saying that project business should not be seen on a quarterly basis. We have to have the annualized one, and we still believe that on a annualized basis will come out to be in a positive. At the margin percentage-wise, we also try to go for a 4.5%-5% what we used to say. Whatever we can do best, probably we should be able to deliver on that front. Great, sir. All the best. Thank you. Thank you. Thank you. The next question is from the line of Girish from Morgan Stanley. Please go ahead. Sir, thanks for the opportunity. Just two questions. On commercial AC and refrigerator, if you can highlight the growth that we've seen on a YoY basis. Second one, just CapEx outlook for fiscal 2023 and fiscal 2024, please. One second. You're talking about commercial refrigerator, right? Because I misunderstood on the home refrigeration as well. No, commercial AC and commercial refrigeration, both. Commercial AC and commercial refrigeration. Okay. If I look from the commercial refrigeration perspective, in fact the growth is over 21% as well as 20% if I look into the product category. To give you a perspective in the percentage terms, it is somewhere around, just a minute. I'll open the data and give it to you because. Maybe if you can say percentage of sales, whatever is convenient. Percentage of sale in the composition remains almost same. There is not much change between, I would say in terms of the overall percentage each product is contributing to the overall segment sale. If I look from the volume perspective, the commercial refrigerator has grown almost 138% over the FY 2021 volume. If I look to the FY 2020, although it's supposed to be a normal year, it's grown at 20% growth over there. Commercial refrigerator has actually seen a consistent growth, largely backed by the expansion of the market and finding place in the mom and pop kirana store, expanding to our tier three and tier four cities as well. Because the product categories are expanding those regions, like your ice creams, chocolates and other stuff. If I look from the commercial air conditioner perspective, you recollect that this industry work on an overall tonnage basis because that's where the commercial AC term is. If I look from the overall growth, the turnover has seen a growth of almost 50% over the last year. CapEx outlook, sir? CapEx outlook. If I look for the next two years, because you asked for 2020 to 2024, probably we'll be looking towards or close to INR 400 crore-INR 450 crore to put out on a capital side. This will include our expansion of manufacturing facility for both air conditioner, the commercial refrigerator, and something to work on a PLI for which we make an application. We got a sanction also rather than an application. Except the compressor, which is still, Mr. Verma rightly said, it is still under the consideration stage. Sir, Beko any CapEx has been thought through in this number or that'll be separate? We have not included the Beko expansion. This is what I said. Volta. It's only for Voltas, Girish. Okay. Okay, sir. Done. Thank you. Thank you. A request to all the participants to limit their question to one per participant. The next question is from the line of Sandeep Tulsiyan from JM Financial. Please go ahead. Hi, good evening. The first question that I have is pertaining to the primary and secondary volume growth, it's good share and secondary volume, obviously given at 111%. Versus FY 2020 normalized summer, what was the primary volume growth, and as well as the secondary volume growth, especially for the current quarter, please. Sandeep, I would give more firm answer on the primary side. On the secondary side, I could give the numbers because the growth, you know very well it is not measurable because last year was a COVID lockdown. April, May was generally on a Delta wave, so the operation was also not on an equivalent mode. I'll give more on the primary side, and I can give you secondary side, what we have seen month-on-month growth in terms of the secondary side, second one. If I look from the primary side, if I compare and you ask question whether we have gone to a level of pre-COVID, I would say that when in the month of April, the entire industry was expecting that we will grow almost 20%-25% over even FY 2019-2020 volume. We believed to be a good year or a normal year. However, we all know after the May 15th or May 20th, the demand actually started petering out, resulting into a 10% degrowth on the FY 2019-2020 volume. We are yet to get the industry data, but it cannot be so different. Therefore, our reading says the industry is also having a degrowth of almost 10%-12% if you compare with FY 2019-2020 volume. However, in the FY 2022, it's every manufacturer or within the industry showing more than 100% growth in primary as well as in secondary as well. The secondary growth would have been more than 200% given the April, May last year was under the Delta wave. Given the secondary numbers, obviously the secondary in the initial month of summer will be much on a higher side. We have seen almost 1.3 million units are getting done in April. We have seen almost close to 1 million units getting in May, and close to 7.5 lakh units going into June. If I look from the March also, March was also in excess of around 1 million. That's where the trend looks like, and it is generally the same if I look from the seasonality period. The moment you come to the June and July, the secondary starts getting filled up on a reducing side. Understood. Sandeep, this is all the MBO data, and there's two secondary which has been published by GfK through which we are relying upon the market share as well. Okay, this is the secondary data. I thought you've shared the primary data on this front. Primary data, I told you about it. FY 2019-2020, we have a degrowth of close to 10%. 10%. Industry would have declined less, right? Because we had a lost share over last two quarters from 24%. The lost share was only in March. If I take the quarter one end and all, people are comparing quarter one over here to quarter one of 2019-2020. That's where industry even would have seen, in our reading maybe a larger degrowth than us because we have gained the market share during quarter one time. Okay. Understood. Also industry will be degrown to the tune of 15%-20%, but we have to gauge the data based upon what kind of information flowing around. Understood. Just one number clarification- Sir, I have a request. Can you rejoin the queue, please? Okay, sure. Thank you. Thank you. The next question is from the line of Rahul Gajare from Haitong Securities. Please go ahead. Yeah. Hi. So now most of my questions are answered. I just, you know, want to understand how is this restructuring going to change the way we do business? You are moving businesses into a subsidiary or wholly owned subsidiary. How is this gonna change the business? If I look from the, Rahul, I understand you are talking about the way in which you are going to do the business or the presentation of the accounts? No, I'm actually trying to see on both the front, and actually it's more important to see how the business is gonna shape up rather than, you know, from an accounting perspective. Because, you know, ultimately, you know, this is a wholly owned subsidiary and, you know, this will impact the. Rahul, to answer that, sorry, I'm cutting you short because we have a last question to take this up. That's why I'm cutting you short in between. If I look from the perspective of the financial presentation, the consolidated accounts will not see any change compared to where we are today. However, if I look at the standalone, the standalone will go into a major change whereby the standalone account now onwards from second quarter will demonstrate or will have only the UCPG as a product business and international project business being part of the standalone account. This is from the perspective of the financial presentation. If I look from how the business is going to work differently, Rahul, if you recollect the entire objective of doing this or going for this restructuring or a business transition is to have an equal focus on both the businesses. Currently the management bandwidth time is largely getting put into the product business. That doesn't mean we do not have a focus on the projects. However, the kind of potential what we are seeing in the near future for the projects given the capital commitment or the infrastructure commitment from the local government as well as on the Middle East part of the country, in our strong belief that, if the equal management time being put on both the businesses, both business have a potential to deliver much more than where we are today. That's what of which the business transition being carried out, and you can see the results as we move forward in this direction in the next one or, maybe the next 18-24 months timeframe. Sir, you'll still have the international project business sitting in the standalone, you know. You'll have to segment anyway, you know. In terms of ultimately, do you intend to move the international business also into that subsidiary so that you have only consumer product business sitting in the standalone? Is that the thought process? Plans are underway, and probably we'll keep the investors updated about the same when we are coming closer to it. Okay. Thank you, sir. Thank you. Michelle, we can take only the last question now. It's already 4:55 P.M. Sure, sir. This would be the last question for today, which is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah. Good afternoon, and thank you so much. Just the one question from my side on Voltas, if you could share some numbers on the growth rate that you've seen so far and what you expect for the full year, FY 2023. With regard to the target market share we've articulated in the past of 10% by 2025, whether you think you are on track broadly to get there? Abhijit, if I look, I can give you the growth percentage and all, but as we said that the Volt bek will obviously have a higher growth in the industry. The turnover growth is closer to 50% if I look from the Volt bek side. In terms of the market share, I just answered to one of the observation that we remain almost at the March level where we were. If I look from the 2025, we are still committed to getting to a 10% market share by 2025. Our promise is based upon the progress the brand is doing now in a shorter span of time with a complete product category which we have today. We have more in-house manufacturing moving in. We'll be able to deliver the customer-centric product in a much faster way compared to the earlier import source-based model. All these initiatives should definitely help us in reaching out those market share expectations. Although you know very well in this entire plan we have lost two critical years, which has actually impacted the volume for Volt bek, but we are still hopeful that we'll be able to make it this objective by 2025 by accelerating our, I would say, the efforts in this direction. Got it, sir. Thank you so much, and all the best. Thank you. As that was the last question for today, I would now like to hand over the conference to Mr. Naveen Trivedi for closing comments. Yeah, thank you everyone for participating in this call. We would like to thank the management of Voltas Limited for giving us this opportunity. Sir, do you have any closing comments? Naveen, I would like to thank your team and the analysts for asking relevant questions and bearing with us for this time shortage. We still available for answering any questions on email, so you can send us the questions on our reported email. As we know that once the first quarter is gone, the second quarter is a kind of low season, and then we get into the festival season, it would be interesting to see how you know, inflation and consumer demand play out in this sector. We remain with that growth outlook and product innovation, which should help us, you know, being at the top of the mind of the people, something like an India Ka AC. With that, I would say we'd like to close the call. Thank you. Thank you, everyone. Thank you. On behalf of HDFC Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.