Ladies and gentlemen, good day. Welcome to the Voltas Q4 FY 2023 earnings conference call hosted by DAM Capital Advisors Limited. 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital. Thank you, and over to you. Yeah, thank you. Good afternoon, everyone. I would like to welcome you to the Q4 FY 2023 Voltas' earnings call. We have the management today being represented by Mr. Jitender Verma, Chief Financial Officer, Mr. Manish Desai, Head Corporate Finance, Mr. Vaibhav Vora, Manager Corporate Finance. I now hand over the floor to Mr. Jitender Verma for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir. Hi. Thank you, Bhoomika, and a good day to everyone else. You know, as we entered the financial year 2023 in the beginning of 2023, it was said to be a year of recovery, leaving behind the after effects of COVID, Russia-Ukraine war. While on one hand supply chain disruptions were unwinding, synchronous tightening of monetary policy by most central banks resulting increase in the interest rate and thereby controlling effects of elevated inflation. The volatility in commodity prices, signs of turbulence in the banking network are holding the economic growth across most of the countries. Despite the challenges across the globe, India continued to show resilience to the effects of various global events. The widening of current account deficit, depreciation of the Indian rupee and muted capital inflow did impact the economic growth in the later part of the year. The impact of the higher inflation rate witnessed in the consumer confidence index across segments and in particular the discretionary sectors. The policy measures taken by the central government to strengthen manufacturing in key sectors with production-linked incentives, higher allocation towards building infrastructure and softening of inflation rates shall support the economic growth in the coming quarters. Given the ever challenging environment, Voltas' product business has performed relatively better with growth across all product categories amid incessant rains and muted consumer sentiment towards discretionary spend. Our consolidated total income for quarter four financial year 2023 was INR 3,003 crores as against INR 2,700 crores in quarter four FY 2022, which is a growth of 11% year-on-year. Profit before tax and after tax was INR 214 crores and INR 143 crores respectively. Earnings per share, not annualized, for the quarter ended 31st March was at INR 4.35 against INR 5.52 reported last year. The consolidated total income for the year ended 31st March 2023 was higher by 19% at INR 9,667 crores as compared to INR 8,124 crores in the corresponding period last year. Profit before share of profit, loss of joint ventures, associates and tax was at INR 672 crores as compared to INR 808 crores in the corresponding period last year. Profit before tax, after share of profit, loss of joint venture, associates and an exceptional item was at INR 307 crores as compared to INR 697 crores last year. The exceptional items of INR 244 crores pertained to provisions made due to termination of contracts and encashment of bank guarantees for two overseas projects in Dubai and Qatar respectively. Legal proceedings have been initiated against the main contractors for recovery of these proceeds of signed guarantees and other amounts due from them. Net profit after tax was at INR 136 crores as against INR 506 crores in the corresponding period last year. Earning per share for 31st March 2023 was at INR 4.08 as compared to INR 15.23 last year. The corporate balance sheet continues to remain healthy with the cash and cash equivalent at INR 2,590 crores at the year end. A snapshot of our results for this quarter and for the financial year was already given in our detailed statement yesterday. In segment A, Unitary Cooling Products, UCP, the onset of summer season with higher temperatures in the early part of March resulted in increased demand from the consumer. The unseasonal rain in the latter part of the month deferred the demand for the cooling product. However, the weather forecast for hot summer and scorching heat witnessed in the current month has increased footfall for the product category across major parts of the country. The consumers desire to have products with advanced features and its long-term advantage of saving in energy costs. The split inverter category of air conditioner is in high demand. The expanded product portfolio of Voltas with in-house designed SKUs and competitive pricing has resulted in increased share of the inverter category to 75% from 63% during the year, and its contribution is in excess of 80% for the quarter. Based on the success of the inverter split category, the company has expanded inverter portfolio in the window category as well at strategic price points during the current season. Aggressive pricing to leverage early summer sales and garner the market share has increased competition in an already fragmented market. While we continue to be leader in the MBO, that is multi-brand outlet, for the overall air conditioner category with year-to-date February market share of 21.9%, the month market share for February month was at 18.2%. Nevertheless, secondary driven incentive program across sales channels, healthy tie-up with modern trade and organized channels, extensive network of exclusive brand outlets, EBOs, including experience zones at strategic locations, along with customer-centric exciting schemes during the season shall help strengthen the market share. Commercial refrigeration category continued its growth journey during Q4 of the year and for the year, even on a higher base with increased participation from retail chains and OEMs. Within the commercial refrigeration category, higher demand was witnessed in water coolers, water dispensers and Visi Coolers. The category is expecting to grow further considering a rapid urbanization, change in dietary preferences, demand for the frozen foods, and market expansion by the OEM of ice creams, chocolates and beverages. The company has expanded its product SKUs to cater to the demand for each segment. During the quarter, the company has made inroads for medical refrigeration products in a small way and will enhance its focus to take advantage of the increasing demand of these medical refrigeration products. Having planned capacity expansion, Voltas is geared to launch a number of consumer-focused products with enhanced features and quality in the near future. Prediction of early summer with above normal temperatures, seasonal tie-ups with modern and retail chains helped placement of air coolers across the value chain. The exclusive product has further supported tie-up with e-commerce, an evolving and preferred channel for the short season product category. Along with active channel participation, the company has introduced many SKUs to balance the product portfolio for each of the product subcategory. The efforts have yielded desired results in further strengthening brand position and securing market share of close to 9% in air cooler segment. Expansion of commercial establishments across various sectors and a growing demand for light commercial and ductable products resulted in growth for the commercial air conditioning category with improved margin. The focus on customer retention with value-added services is supported in securing long-term orders of after-sales service at a competitive pricing. On the cost front, softening of the commodity prices, although they still remain volatile. Prudent and well-thought-out sourcing has helped contain material costs to a great extent. However, the continuous advantage of the same may not be certain given the erratic and fluid demand and supply gap for the critical inputs. Nonetheless, our efforts will always be there to remain competitive and continue to provide value for money products to the consumer, considering twin objective of market share and margins. To summarize, for the quarter ended March 2023, Unitary Cooling Product segment registered revenue of INR 2,049 crores, a 13% growth in turnover from INR 1,818 crores. The segment reported an EBIT of INR 206 crore in quarter four as compared to INR 192 crores in quarter four FY 2022. For the year ended March 2023, the segment registered 33% growth in turnover to INR 6,475 crores from INR 4,882 crores with the EBIT of INR 538 crores. Segment B, Electromechanical Projects and Services. Segment revenue for the quarter was INR 746 crores as compared to the previous corresponding quarter of INR 692 crores. Segment result for the quarter reported a loss of INR 14 crores as compared to profit of INR 48 crores for the corresponding quarter last year. Segment revenue for the year was INR 2,403 crores, and the segment result for the year was INR 302 crores after the exceptional loss of INR 244 crores. Domestic projects business witnessed a healthy order booking of INR 1,910 crores as compared to INR 848 crores in similar period previous year, comprising of single largest order of INR 1,200 crores in electrical. The planned and timely execution of the projects resulted in achieving threshold for recognizing margin as per internal policy and thereby contributing to the results. Further, a tight monitoring on the working capital and focus on collection improved return on the capital for the domestic project business. Lower order path in the international project business as most of the old projects are at the completion stage impacted the top line as compared to the previous year. The region continued to witness a delay in certification and thereby collection of the outstanding amounts resulting in provisions following prudent and conservative policy. Having said, all efforts are being pursued to engage with customers to expedite certification work and improve collection of the due amount. The carry-forward order book for domestic projects stands at INR 5,799 crores, containing orders across water, HVAC, rural electrification and urban infra activities. The international order book as at March 31st, 2023 stood at INR 2,356 crores, largely in UAE and Saudi Arabia region. Total carry-forward order book of the segment stood at INR 8,154 crores, vis-à-vis INR 5,360 crores of outstanding orders as at March 31st, 2022. Segment C, engineering products and services. Segment revenue and results continued to report improved performance for the quarter, registering healthy growth over previous year. Segment revenue for the quarter was INR 142 crores, and EBIT for the quarter was INR 56 crores respectively. Segment revenue for the year was INR 522 crores, and the segment result for the year was INR 300 crores? INR 200 crores. Was INR 200 crore. After average bidding hour rate and customer focus approach has supported the growth in Mozambique territory, the removal of export levy on iron ore and increased focus on infrastructure sustained the demand for crushing and screening equipment. Textile sector continued to witness challenging environment on account of lower than usual utilization of spinning mills due to lower export orders and high prices of key raw materials, cotton and yarn. Despite this adversity, the vertical has performed outstandingly on the back of strong order book and introduction of various innovative products along with OEM. The focus on after-sale service has also supported the overall revenue growth. Voltas Beko. Revival of demand, particularly in the month of March, has resulted in the overall volume growth of 26% during the quarter. The brand has cumulatively sold in excess of 3.33 million units since its launch and has become first brand to achieve this milestone in the shortest period of time. The expansion of distribution reach, focus on more energy efficient star-rated products with wider range of product SKUs and in-housing manufacturing of the high value added products supporting the overall growth. Leveraging the strength of the joint venture partners, both in manufacturing and distribution, is helping the Voltas Beko brand to timely introduce innovative products with differentiated features and expanding distribution reach in the targeted and strategically important markets. This concentrated effort has resulted in securing a market share of 5.3%, increased from 4.4% in the month of March, with the market share of 8.9% in the subsegment of washing machine category of semiautomatic washing machine. Our objective is to have more value-added products to be manufactured from own factory and thereby control and strengthen the supply chain to improve overall margin. With this objective, trial is underway for the fully automatic front-loaded washing machine to be manufactured in-house after a successful launch of frost-free refrigerator during the current season. The lower penetration in most of the product category, consumer shift to the premiumization and technologically advanced product along with lifestyle changes bodes well for the product category and the brand to progress on the defined objective of market share in a profitable way. Outlook. Cooling products being a weather dependent and seasonal product, the summer period becomes critical for the industry and company for the growth. The current weather forecast and increased footfall projects towards a reasonable growth. The company is adequately prepared to secure the opportunity both on supply and consumer demand front, and will continue to pursue its aggressive strategy to strengthen market share in a profitable way. As you are aware that the company had planned for compressor manufacturing through joint venture with Highly International, subject to the necessary regulatory approval. As these regulatory approvals were not forthcoming, both the parties have mutually agreed to terminate the joint venture agreement. In case of projects business, we will continue to follow cautious and risk mitigated approach while collecting new orders. The execution of the orders in hand is paramount to ensure timely completion of the project within tendered margin. With an eye on sustained profitable growth, while enhancing focus on product business and project business independent of each other, the board has approved an internal restructuring of the international operations, including investments in overseas joint ventures and subsidiaries to be housed in a 100% wholly owned subsidiary. Thank you. Hello. Yes, sir. Yeah. Okay. Thank you very much. We will now begin the question and answer session. Anyone who wishes to take a question may press Star and One on their touch tone 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, in order to ensure that the management is able to address questions from all participants in the conference. Please limit your questions to one to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. We will wait for a moment while the question queue assembles. The first question is from the line of Mr. Ankur from HDFC Life. Please go ahead. Yeah. Hi, sir. Good afternoon. Thanks for your time. You know, one question on the room AC side. You know, clearly, March, because of unseasonal rainfall, we understand, you know, obviously didn't go well. There seems to be that the inventory in the channel, at least when I spoke to some of the channel partners and, you know, OEMs as well, was fairly high. How are you seeing channel inventory right now? Obviously, April we did see some, you know, heat waves, et cetera. I'm assuming some volumes would have got cleared. How are you seeing inventory in the channel? More importantly, you know, earlier we were talking of a price hike to come through maybe in April, you know, the early part of Q1. How are you kind of seeing that? Thank you, Ankur, for, you know, the particular question. See, this high channel inventory is basically, a period, you know, when you are looking at March, towards the latter part of the month of March, there were incessant rains, practically all over India. Therefore, if we just look at the point in time on end of March, there is a possibility, that in certain channel partners, the inventories were, stuck. As we sit, at this time, we have seen that, the weather has been really hot, and all the channel inventories, which were there have all got, you know, cleared up. We are all the industry, is looking at a very good season going forward in the months to come, or at least in during the summer months. As far as your second question, can you ask that again? Yeah, sure. You said something about. Yeah, yeah. pricing in April or something. Yeah. That's right. Because... Yeah, yeah. I'll just repeat myself. I remember, you know, in the last con call, you had said that, you know, we'll take or at least we'll look at price hikes in the beginning of Q1, around April, May was what you were, you know, what you said last time around. I'm just wondering, is that broadly on track? Are we or have we taken any price hikes in April or are we looking at taking any price hikes in the next month? The fact is. Yeah. I understand. The fact is, no, we have not taken any price increases in the month of April. As the future goes, we always keep looking at the price movements very cautiously. You know, certain other brands have actually gone for deep discounts, which we continue to believe are not sustainable. Therefore, we maintain our position and have not taken any discounts. At the same time, we have not increased the prices also. That's a thought and policy, we will continue to look at. Okay. Just one last question would be on the margins in the UCP segment, you know. I remember you called out, you know, high single-digit margins to kind of continue. Again, I'm talking on an annualized basis that is. Last year was closer to 8.3%, thereabout. Is that something you believe should continue at least over the next 12, 15 months? Is that how we should look at margins? In a one statement I would say or in a one word I would say, yes, that's the outlook we still maintain. However, you know, I mean the high single margin, high single-digit margins, there may be, you know, some periods when it may go down closer to, like instead of a very, very high single digit, it may stay around the same number. Slight volatility may happen. Thank you. Mr. Ankur, may we request that you return to the question queue for follow-up questions as there are several participants waiting for their turn. Ladies and gentlemen, please restrict to one to two questions per participant. Thank you. Our next question is from the line of Mr. Amber Singhania from Nippon India AMC. Please go ahead. Thanks for taking the question. Just one question from my side. Basically, when we see Voltas, we have always seen in last decade, Voltas has always been very dynamic towards the market changes and always taken steps proactively towards turning the things towards their favor in terms of market share growth. However, in last five quarters, we are seeing that we are continuously losing market share every quarter. It's been almost two season now wherein we are seeing a market share decline. Just wanted to understand, sir, where exactly are we losing out? What is the introspection that the company has and what could be the reason where we are seeing this continuing, not just one quarter, but continuing two season it happens, and what are the steps you are taking to correct it, correct this fall, as such? Amber, if I want to take your questions, I'd like to split into two. One is how are we seeing the market? Once we do analyze on that, how we are trying to react to the same. Your reading is right that the last two quarters our market share is falling out. As we said earlier as well, we have to wait for how the season to roll out. From the season perspective, you will see a good amount of traction coming during the March to June period. What we also reported, I don't know in the last investor call, somebody asked me why you're reporting YTD. I confirmed that once we come to the season we'll report both YTD and the monthly market share. That's what we have reported even during the current year when we are doing this call. I would say that the, we cannot react or we cannot completely follow the competition because we are reasonably sure that the price level at which the competition is operating is not sustainable one. Sooner or later it will bounce back. Once you do on a pricing side, you are compromising many things also in this process. We would not like to have those kind of features going or that mind not going to the consumer's mind. We are reasonably confident that the market will see a stabilized kind of operating in the near future, and then we'll try to reap the benefit of what we lost, the last one quarter. Let me assure you that we are working this market continuously. Wherever we're required and we find reasonable to take steps into it, we are doing it, keeping in mind that margin is also equally important. Sir, is it purely the price competition which is leading to this kind of fall or is there anything else also which is impacting our positioning in the market? Is it maybe the geography or maybe the product or maybe something else, or is it purely the price factor? See, if I were to put in the order of reasoning, I would say that the price becomes a more important. We all know that if the price which supposed to eye on a premium start looking into or start trading at closer to the mass market price, you may see some kind of traction the way in which we are seeing today in the market what is happening. I would say the price is more important. Second thing is every once you have the visibility or a product strength, you would like to expand to the market where you have weaker section, weaker positioning. We have seen Blue Star and few of the brands are becoming very strong in the north trend, north market and trying to put the pricing strategy on a forecourt in order to secure the market share. These are the known factors and whenever the price, whether brand would like to play or try to work on a market share, this is a normal strategy the brand has to follow, given their product will not give such kind of huge differentiation to demonstrate. This is the known practice, Amber, and we're hopeful that it will get streamlined over a period of time and all players become I would say reasonably mature in terms of operating and the driving the markets. Thank you. Mr. Amber, may we request that you return to the question queue for follow-up questions. Thank you. Our next question is from the line of Dhananjai Bagrodia from ASK. Please go ahead. Hi, can you hear me? Yeah, yeah. Very much. Yes, sir. Please go ahead. Sir, what would be your CapEx guidance for next year for 2024, 2025 broadly? up to 2024, 2025, because we are in 2023, 2024 currently. Yeah. 2023, 2024, and for the year after that. Yeah. Probably in the range of INR 350 crores-INR 500 crores, which we're largely now concentrating more on the capacity expansion and the backward integration which we have put for the PLI scheme. Since the compressor plant is now off the card currently, whereas the alternative is still under evaluation, which may take slightly a longer time. Okay. For the year after that would be how much? One year is INR 350, INR 500, next year... I've given you 18 months kind of CapEx plan from now. Okay. INR 350 crores-INR 450 crores at the layout. Okay. roughly what capacity would we get after this capacity expansion? The AC capacity will be almost double to two million, whereas the commercial refrigerator also will get double from two and a half million what we have to 500,000. Okay. Commercial ref will become half a million, right? Sir, just one more question. Let's say in what do you think would be now that we're doing standalone will be the UCP business, what do you think is a sustainable ROC for the UCP business? In terms of the levers, do we see the lever coming for margin improvement, asset turnover or net working capital improvement for the UCP business? See, if you look from the ROC perspective, since not only Voltas but many brands are now taking advantage of the PLI scheme by putting required and necessary CapEx. The ROC in a near future will definitely see some kind of impact which may get lower for their all players because you'll be up fronting the CapEx, the benefit which will flow over the next five to six years timeframe. Whereas the PLI scheme which government has announced will support to be a competitive in the market being and localized to a few components which currently we are not having it. If you ask me overall, it will be a combination of both to work together in order to improve the ROC. To give you estimation, it is very difficult to predict because every player has gone into a different direction, looking into their own strengths in terms of the backward integration. Till such time you are generating returns above your weighted average capital, cost of capital, including the cost of equity, probably it makes it's still a viable option. Thank you. Our next question is from the line of Mr. Ravi Swaminathan from Spark Capital. Please go ahead. Hi, sir. Sir, just wanted to check with you what has been the kind of growth that we have seen in Voltas back home. Sorry, we could not give email on the investors field in advance. It is around 26% for the quarter ended March. If I look for the overall, it will be in the range of 15%-18%. 15% to 18%. For the full year, right? Full year. Full year. March has seen the highest growth, if I take the, quarter breakup for the Voltas products. Okay. Has there been any price increases across refs, washing machine, et cetera, in the recent past? As we said, Ravi, we have to be unlike in air conditioner where some of the proactive role being played by the brand. For Voltbek will largely be a follower for the other brands. Since we have the LG and Samsung occupying almost in excess of 50% to 55%, the all actions in terms of pricing will closely be done following them. To give you answer in one line, no price action has been taken in the market for Voltbek product in this category. Rather, we are now looking for more star-rated products to be produced and to provide at a very competitive price in order to create another differentiation with the competition in all the categories. Got it. With respect to this compressor, manufacturing facility, would we be looking for some other partner going forward, or is there any plans to go on your own? Any sense on that? Definitely we'll be looking at alternatives and at the right time we would make the necessary announcements in that respect, because, you know, having sufficiency in compressor manufacturing would be the desired, is the desired objective. Thank you. Our next question is from the line of Siddhartha Bera with Nomura. Please go ahead. Hi sir. Thanks for the opportunity. Sir, I'll go back to the question on market share again. I mean, we had indicated that we want to go back to the earlier market share levels, but on a monthly basis, the market share has kept on dropping. What would you expect, probably for next year? These are the levels which we should expect, or do you believe, you still hold on to the earlier levels of 23%-24%, you will try to go back to next year? Siddhartha, you know, market share is one aspect. The leadership position is the another aspect. We have continued to maintain our leadership position in both in the market share as well as in the margins, as has been seen. If somebody is out there in the market looking at the market share only by, you know, raking up losses, then that is what we are saying is not a sustainable position, we continue to keep. Looking at our margin share and the balance between market share as well as margin has to be, it will be the core theme of our, you know, all the policies going forward. In that respect, we definitely have, you know, from the previous quarter of March, we had bounced back. In the low, in the low summer season, there is some tendency to, you know, lose that market share. As Manish had earlier mentioned, that when we look at the months coming in the summer seasons, that will be the time when the, you know, the regaining of the market share definitely will happen. Got it, sir. Second question on the margin side. I mean, we have seen improvement in the current quarter. Can you indicate if there has been support from the higher commercial refrigeration segment in this quarter as well, which has led to a better margin, so that may not be the case? Have we changed any supplier base so that, the cost of procurement has gone down or this is entirely organically, we have been able to sort of improve the margin? See, when you look at our segment results, they comprise of all the product categories, and different product categories have different margin rates. Therefore, to answer that specific question on whether commercial refrigeration has helped or room air conditioners has helped would be a slightly bit not correct at this point. Margin improvement has been seen across all product categories in this particular case, and we are prepared to, you know, continue with this trend. The other aspect of your question where whether we will continue to see this in the future, that is definitely the endeavor to keep up these margin rates in all the product categories. Thank you, sir. Our next question is from the line of Srinidhi from HSBC. Please go ahead. Hi. Thank you for the opportunity. Sir, in project business, we have seen a significant scale-up in order backlog. Wondering would it be possible to share some color on how our embedded margin in this backlog and how our working capital terms? Srinidhi, on the project business, yes, there has been a scale-up specifically in the domestic project line. That's also, I would say, a positive towards the fact that when we had a couple of years ago, announced that there would be a transfer of this business to the wholly owned subsidiary so that the focus can be more on the project, or rather I would say equal on the project business and product business by housing it in a separate wholly owned subsidiary. That, that is kind of confirmed with these orders. Once we have gone separate in the business on... I mean, separate in the sense that we are in the same, still the same management at the Voltas level, but there is a specialized focus on the project business. The profitability remains at the similar levels of previously stated roughly about 4%-5% as we have been stating. That would remain, though the execution would take two to three years, so it will be spread over the years. That will continue. With the same, you know, reasoning, the international business is also being, you know, organized as we have announced yesterday. It will take its own time to consummate the transfer agreements and doing all the activities which are required. Yeah. Thank you, sir. Second question I have is, sir, in terms of rationale that you give for business restructuring, you mentioned that this gives flexibility for Voltas to expand its B2C business. May I ask you to elaborate this point, as in, are we talking about going into adjacent product categories or we are talking more of existing categories that we operate in? Sorry, Srinidhi, missed your question. You are talking project or product business? No. In the rationale, sir, we also said that this business restructuring will help to focus on B2C space as well, like Voltas. Right. Right. Right. As we discussed earlier as well, while doing the domestic transfer, the larger focus will be on a B2C, which is the currently what we are doing in terms of the product categories. Yes, there are various other products also which are under evaluation, where we are looking into a potential growth and accordingly the call will be taken appropriately. When we say about it, when we done this kind of restructuring, the core objective is the management bandwidth was largely being occupied for the consumer durable businesses and project businesses. The focus was not so accurate, I would not say, with time not being so devoted towards the project business, and therefore this business being transferred with the company which will have a different set of directors, although the MD and chaiman may remain the same for both the internal structuring what we carried out. There are various product categories in the B2C which are under evolution. It will be premature to quote anything currently. We will definitely disc lose when the time is more appropriate. Thank you, sir. Our next question is from the line of Girish Achhipalia from Morgan Stanley. Please go ahead. Hi, sir. Good afternoon. Thanks for the opportunity. I just had a factual question. Commercial AC and refrigeration is how much in full year FY 2023? Also if you can just spell out the top line for Voltas. I would say in terms of contribution, I have to split into two. One is if I take the CAC contribution to the entire Segment A, in the range of it will be 17%-18%. If I look from the commercial refrigeration, the second question asked, the commercial refrigeration contribution to the segment, excluding commercial condition, will be around 70%-80% again. Okay. air coolers would be 4%-5% again, or would it be different? Air cooler would be much lesser than 5%. And the- It is a volume, but small value kind of category. Okay. Voltas top line and AC volumes, if you can help for the full year. Volume, I would not be specifically able. I can give you a range. It is in excess of 1.4 million, the AC put together. In terms of the Voltas, the top line will be in excess of INR 1,000 crore. Thank you. Thank you. Our next question is from the line of Arafat from InCred Capital. Please go ahead. Just one clarification. For the AC volume I spoke 1.4, which is roughly around 1.2 million, close to. Mr. Arafat, you can go ahead with your question. Yeah. Thanks for taking my question, sir. My first question is again on that JV which you recently terminated. I just want to understand what is the main reason. It's only regulatory approval, that thing, or there's some any other reason that you have canceled this agreement? Right. on the, I think your question is relevant to the Haier, JV. Yes, sir. As stated in our announcement, it is because the regulatory approvals had not been received up to now, and therefore I would say that was the main reason. Okay. You can understand, when the government doesn't give these kind of approvals, there may have been certain consideration in their own mind because of the geopolitical situations as we are seeing. Therefore, looking at all those things and after making all the efforts, we have decided to part ways mutually. That I would say is still the main reason. Yeah. No other- Okay. Okay. My next question is on margin of EMP segment. Although you have seen significant jump in order inflow and order book, but, sorry to reiterate on that, but what kind of margin you're looking for for 2024 and 2025 for the EMP business? See, what we have, Girish, it's a mix of again, when we say what is the old and the new project. We are very cautious, selective in the new project and that too with the building of the higher contingency given the past experience. You know very well the project cycle does continue for any other project does continue for more than two to three years. I have to blend both the old project margin and new project margin, it should reflect around in excess of 5% for the project business, at least for the year starting the next year. We have seen, in fact the current margin also is in a good kind of trajectory, but somewhere because of this liquidity stress and delayed collection and being, having, too much conservative on our policy front, given the past experience, you are seeing this kind of level of margin. Otherwise, new projects are churning out the margin closer to the tender and then tender margin is anyway because of the cautious approach. It is an enough amount of contingency and that with the higher margin percentage. Thank you. I just want to hold a minute because there was some confusion in terms of one question being asked about the AC volume and the Voltas turnover. I just want to make it very clear, the total AC volume for the year 2022-2023 is in excess of 1.4 million units. For the Voltas, the turnover is in excess of INR 1,000 crores. You can go on ask question. Thank you, sir. Our next question is from the line of Venkatesh Balasubramaniam from Axis Capital. Please go ahead. Thank you for this opportunity. Obviously you have mentioned about competition. You mentioned the name Blue Star. We are already aware of Havells gaining market share. Who are the others who are gaining market share other than these two? Are there other people? Is it Daikin? Is it LG? Or is it someone else? Because we hear all sorts of things. We also hear that Reliance's has launched BPL and Kelvinator, and it has started picking up some amount of market share in northern part of India. Is there any truth to that? Lastly, we also hear that when we go to the Tata-owned Croma shops, the people there, the salespeople say that Croma as a, the in-house brand seems to be cannibalizing the lower-end Voltas AC. Any thought on that, both being Tata companies couldn't be work out a relationship that the Croma brand itself can be driven to Voltas. Why should a business group have two different brands at the same time? Please, some thoughts on it. Let me answer the second question first. See, Croma is having their own independent entity and independent target towards what kind of product they want to manage it or they want to dealt with, and what kind of market share they are looking for. Prior playing, the private label brand is not a new concept in India. It is being prevailing for a long time. Yes, it's another competition to the Voltas. Normally, when the 40 brands are eyeing for a market share, one more brand by the private label within the group company probably will not impact much because now we're used to have a competitive scenario to fight with each one of them. The question comes is why not unite it? The question really comes because there is every brand carries some kind of perception in the minds of consumer. People have seen how the private label brand supporting to the after-sales service support because these units are having almost more than eight to 10 years life. Although people may give replacement warranties and a service promise and all, we have seen in the market how the outcome of all such kind of promises with the no committed level of franchises working with them or for any brand. I'm not talking about Croma especially, but I'm talking about all the private label brand who are working on a sub-optimal price level. How given that background, let me answer on the market share side, what you talked about it. Generally, I have seen even Lloyd is losing its grip on the market. If I take the last two to three months trend on the market share. However, if I like, if I take year-over-year and get to exit market share, yes, the Lloyd has increased the market share and the other brands who have increased over there significantly is the Daikin, who is having the market share growth in any, in over and above the Lloyd. They are leading in terms of growth, I have to put over there. Daikin is growing much faster than even Lloyd, if I have to compare similar period with the exit market share. Question has come on Blue Star. Blue Star also gained market share, but not to the level at which the graph of the GfK reflects over there. They have gained by 0.5%-0.6%. If I look from the Daikin, that is in excess of 200 basis points. Okay. Thanks for that. On the Electromechanical Projects, last year, if I ignore the Qatar and the other write-off, which was almost INR 240 crores, at the EBIT level, what you delivered was something like INR 58 crores loss. How much what was the scale of the provisions you have made in this, in the last year? Sorry, I would not be able to quantify so clearly. My, the press release what I have given to the BSE is itself talking about, before exception and after exception results. You can easily make it out where the kind of quantum of provision we made, along with the notes to accounts which we disclosed. It is a good amount of loss, the provision which we carried out. I would say out of that, two incidents are an exception, which have not been perceived by us or which have not been even thought about it, that such kind of action can take place, because we have not seen such kind of incidents in the last decade of our existence in the international operation. That takes away around INR 245 crores. The balance also I would not like to quantify as it is, but you can see from my segment result itself, which is self-explanatory. Thank you, sir. Our next question is from the line of Bala Subramaniam from Aryan Capital. Please go ahead. Hello. Yeah, please. Hello. Good evening, sir. Sir, on the electromechanical project side, we made a provision of around INR 240 crores. We may see any further provisioning, in the next coming year. We may see around INR 200 crores-300 crores of provisioning on this project. I think you need to... your voice was distorted. Could you repeat your question, please? Okay, sir. I just want to understand on the EMP side, are we going to see any further provisions going forward on the basis of your current assessments, if you think? See, I think you are confusing the extraordinary losses with the normal ECL provisions which are there in the business. To clarify, in quarter two and quarter three, there was an encashment which was done by, I would say, not so clean ways, and we have gone legal against them. That's why it is a completely an extraordinary event which happened. I can be very assured that these extraordinary events do not happen again, and therefore I do not predict that. However, there is in the segment B, if you see, there is a loss, and that is on account of normal provisions. As we, you know, we have mentioned that there are certain instances of delayed certification and de-delayed collections. That has been the main reason. As being a very prudent company, we take those provisions. Going forward, our efforts on collections and on certifications would be more, I would say strengthened. Therefore, on the basis of that, we would not be projecting or predicting any more provisions. However, when we are dealing with the third parties, there is always a case for the other side to do whatever they want to do. In that situation, one can't rule out the possibility, though from our side, the procedures will always be strengthened. Therefore, my prediction is it should not be. Sir, any reversal of any of the provisions which we made in last year or something like this, anything positive you can see? Can we see something? Definitely, again, as a normal procedure, whenever we collect, the amounts which have been previously provided for, as a prudent policy, again, you do, take those reversals. Like, for the extraordinary provisions we made, we have very clearly stated that we have gone legal against them. As and when the legal cases are decided, and I believe in that market, that may happen within a 12 to 24 months period. As and when those legal cases are decided in our favor and we are able to collect the monies, we should definitely be reversing those provisions. Thank you, sir. Yeah. Our next question is from the line of Abhijeet Sakhare from Kotak Securities. Please go ahead. Yeah, good afternoon. Thanks for taking my question, sir. One clarification with regard to this backward integration to compressors. So you know, how significant is there a cost advantage in being backward integrated? You know, now that we are sort of calling off the Haier JV, does that lead to a cost disadvantage for Voltas compared to some of the other brands that are setting up this manufacturing? Also with quite a lot of these compressor and other component manufacturing capacity coming up in India, would you expect prices of the finished products to sort of come under pressure over the next couple of years or so? You know, your thoughts on that, please. Thank you so much. If I look from the cost perspective, India is now, probably the many players in the industry are now evaluating the option of compressors. Yes, we heard about two or three brands actually, jumped into it and going to manufacture for the same. Probably, we have to wait for time in terms of how we are becoming cost competitive. The reason being is because they are all these brands are in the business of air conditioner for almost more than two decades. Now, the things are changing and they try to cope up or try to be a part of the backward integration player. That was whole process even for Voltas as well, when we decided to move and go with the, through our joint venture partner. Sum and substances, like we have to wait and watch, gentlemen, in terms of how become cost competitive because China, if I look for, which is a higher, the biggest manufacturer of the compressor, they are almost having the 90% of the world capacity, which means on the scale front, on the sourcing front, they are the largest advantage or the largest beneficiary of the same. Whereas in case of India, people are manufacturing for their own consumption, which we restrict to even less than 2 million or 2.5 million or so. Even with that, they're talking about the installing of the capacity. I would say that let's wait and watch for more time in terms of how the things are shaping up. As far as the capacity is concerned, even though the capacities are coming up, but they are coming in the, I would say size of 1 million and around 1.5 million, which means even I take the Indian air conditioner market itself, forget about refrigerator and others, which is itself heading towards in this current year, if everything goes well, around 10 million. All this capacity put together will still fall short of what only industry requires. I are reading both import and domestic market will be there for the sourcing of the compressor. If you have succeeded in the JV, some advantage would have flown in terms of control of the product and the design, I would say, securing the sourcing of the components. However, even though it's not there, we can have a long-term kind of arrangements with the any of the manufacturer. As we all know, GMCC also now started manufacturing. Their commercial production is expected now. In fact, our news is they already started in the quarter four. All these options are available for the brand in order to secure the long-term, sourcing arrangement for this component. Okay, great. Thank you so much. Just one last thing on the CapEx for FY 2023, which is about INR 180 crores-190 crores. Is it primarily in the UCP business itself? Then for the outlook that you gave of about INR 350 crores-450 crores for the next 18 months, will it be roughly possible to give us a split across the major projects into which that amount is being invested? Thanks a lot. It will be there only on two project, which is commercial refrigerator and the air conditioner. Both will be on the production capacity expansion. Along with this PLI benefit, PLI application which we made, which includes a backward integration, or I would say a component manufacturing as well at the greenfield project at Chennai. Thank you. That brings us to the end of our question and answer session. I would like to hand the conference over to Ms. Bhoomika Nair from DAM Capital for closing comments. Yeah. I would just like to thank the management for giving us an opportunity to host the call and, wishing you all the very best, and also the thanks to all the participants for being on the call. Sir, any closing remarks from your side? No. In fact, we're grateful to have these questions coming from the participants. I am sure one hour will be definitely short for the participants which are in tune of, which are a number in excess of 100 to hundreds. We are open for any kind of question, answers which we could not cover up during this investor call. I wish all of you a good day, and hope that each one of you will have a Voltas product or a Voltas product in your home in this, during this season period of time. Have a great day to all of you. Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.