Ladies and gentlemen, good day and welcome to Voltas Limited Q3 FY 2026 earnings conference call, hosted by PhillipCapital. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Natasha Jain from PhillipCapital. Thank you, and over to you, ma'am. Thank you, Sagar, and good evening, everyone. On behalf of PhillipCapital, I welcome all of you to the third quarter FY26 earnings conference call of Voltas India Limited. From the management today, we have Mr. Mukundan Menon, Managing Director, K.V. Sridhar, Chief Financial Officer, Nikhil R. Chandarana, Head Corporate Finance, Sumana Tripathy, Head SP&A, and Vaibhav Vora, Head Commercial. I would request the management to give their opening remarks, post which we shall open the floor for Q&A. Thank you, and over to you, sir. Thank you, Natasha. Good evening, all. Glad to connect again for the quarter call. So just to give you a brief, Voltas strengthens leadership in Q3 backed by room air conditioner recovery and sustained performance from other verticals. Global conditions in 2025 remain unsettled, with geopolitical tensions, new tariff actions, and periodic supply chain detours creating volatility across input categories such as energy, base metals, and select electrical components. At the same time, uneven global growth, currency and commodity fluctuation, and persistent policy uncertainty tempered sentiment across several markets, even as emerging economies, most notably India, continued to demonstrate relative resilience driven by steady consumption and sustained public investment. This environment shaped a mixed demand backdrop for consumer-facing categories and infrastructure-linked sectors, forming the macro context in which Voltas' consumer and projects business operated during the quarter. Voltas Limited announced its financial results for the quarter and 9-month ending 31st December 2025. Through this quarter, the company's performance was anchored by the room air conditioning business, driven by healthier channel activity following the GST rate cut and buying ahead of the BEE star label transition, as customers anticipated price hikes on the new label. The projects business continued to lend stability through consistent execution and strong order pipeline, reinforcing the continued lend stability through consistent execution and a strong order pipeline, reinforcing the strength of Voltas' diversified portfolio. Management remained focused on market leadership in the cooling segment, regulatory preparedness, and disciplined performance across businesses. At an overall level for the quarter, total income was at INR 3,130 crores against INR 3,164 last year. Profit before tax was INR 116 crores after factoring in the labor code impact versus INR 191 crores in Q325. Net profit was at INR 84 crores against INR 131 crores last year. For the nine months ending December 25, the total income was INR 9,552 crores compared to INR 10,890 crores last year, same period, and profit before tax was INR 373 crores versus INR 848 crores in the corresponding period last year. Net profit was at INR 257 crores compared to INR 599 crores last year, same period. In terms of the segment performance, a bit in depth, in terms of segment A, unitary cooling products, the segment delivered a relatively steady performance in both volume and revenue, despite inherent seasonality and the impact of a shortened second summer. The room air conditioner business continued to anchor segment A, maintaining Voltas' leadership position with 17.9% year-to-date market share and benefiting from strong channel activity following the GST reduction and buying ahead of the upcoming BEE star label transition. Growth during the quarter was driven by structured network expansion with micro-level targeting, improved channel readiness, and sharper retail and digital activation across priority markets. These changes are expected to drive consumer upgrades in the coming quarter, providing a positive flip to demand and product mix improvement. Complementary categories such as air coolers, water heaters, and fans, though facing some headwinds due to inventory overhang, continued to build relevance through refreshed lineups, wider retail reach, and sharper digital activation, reinforcing Voltas' comfort solution positioning and broadening the non-seasonal share of cooling products. Together, these initiatives support brand preference and strengthen category resilience into the upcoming season. Within segment A, commercial air conditioning continued to act as a growth contributor, supported by corporate, commercial, and industrial demand with healthy traction across product categories and AMC business. Commercial refrigeration delivered a softer quarter amidst lower product offtake and competitive intensity. The focus remained on sharpening the offer in priority segments and stabilizing the mix to support sequential improvement. Together, CAC and CR reinforced the diversification within UCP and helped balance seasonal volatility in room cooling. Segment A margins in Q3 reflected the seasonal profile of the quarter and the competitive environment, with profitability shaped by higher channel and customer support. In the coming quarter, management remains focused on mix improvement, cost optimization, and structured network expansion to support sequential recovery. The company is fully ready and realigned for the new BEE efficiency table with refreshed lineups and calibrated pricing architecture in place and is geared to meet seasonal demand with aligned production plans across Pantnagar and the new Chennai factory. Production capacity utilization, operational efficiency improvements, and supply chain actions have been tuned to support faster ramp-up into the season and improve availability of priority SKUs. Voltbek Home Appliances. Voltbek delivered a solid Q3, sustaining broad-based momentum across washing machines and refrigerators, led by dominant semi-automatic segment and a clear step-up in fully automatic top-load alongside a stronger showing in the frost-free segment in an expanded energy-efficient, locally manufactured lineup. In refrigerators, Voltbek's overall market share stands at 6.2% year-to-date and in washing machines at 8.2% year-to-date, reflecting improved portfolio relevance and tighter in-store execution. Voltbek will sustain momentum through a focused brand-led premiumization strategy, combining high-impact consumer engagement and an expanded energy-efficient portfolio across categories to deepen preference and conversion across priority channels while steadily broadening the franchise towards a full-scale home appliance platform that complements Voltas' end-to-end home solutions. In parallel, ongoing pricing and cost optimization initiatives across the portfolio are intended to support margin resilience as scale builds through the season. Together, these developments reinforce Voltas' progression from predominantly seasonal cooling business to a year-round full-stack consumer durables enterprise supported by a broader innovation-led portfolio and disciplined operational execution. Segment B, electromechanical projects and services. The domestic projects business continued to book and execute orders across all verticals, underscoring engineering depth and multi-vertical presence. Prudent selection of projects backed by on-time handovers, tighter project governance, and cash conversion facilitated the margin expansion. The international environment remains competitive for fresh wins, but delivery momentum supported by a mix of ongoing projects and disciplined project engagement. During CY25 year-to-date, Voltas secured new orders and lifted the order pad, and the international project business reported sequential exposure reduction, reflecting tighter commercial controls and collection. With a robust consolidated order book of around INR 6,100 crores and a healthy order pipeline, the segment is well-positioned to drive steady growth and deliver consistent performance over the medium term. Segment C, engineering products and services. The mining and construction equipment division delivered steady top-line growth, supported by continuity in operations and maintenance contracts and sustained demand for passkeying, crushing, and screening machinery. Going ahead, the mining and construction equipment service annuities and a healthy inquiry funnel provide performance visibility. The textile machinery division business was adversely impacted by macro backdrop, notably the 50% US tariff imposition on certain textile products, which weighed on MSMEs and led to production cuts and softer domestic demand for yarns and fabrics. Execution of pending orders, strong after-sales run rate, and post-spinning momentum helped cushion the effect. Looking ahead, TMD remains focused on after-sales, post-spinning mix, and disciplined delivery while looking forward for a recovery in the core spinning category. Balance sheet and working capital. Working capital was tightly managed in Q3 with improved inventory and receivables ahead of upcoming season, supported by availability of priority SKUs and steady project billings and collections. Commercial controls, selective order intake, and exposure reduction further supported a stable position despite uneven demand pockets and a competitive environment. Overall, the company exited the quarter with a balanced working capital profile. As Voltas enters Q4, focused on execution and seasonal readiness, the company is fully aligned to the new BEE efficiency table with a refreshed RAC lineup and calibrated pricing, and is geared to meet peak season demand with aligned production plan across factories, including the new capacity ramp-up at Pantnagar in Chennai. The priority is to boost all demand sources, core retail, organized trade, and institutional while optimizing resources across manufacturing, supply chain, and channel. The projects business will continue to selectively book and execute across all verticals in which we are present, supported by a healthy bid pipeline and a stronger project governance. Overall, the strategy remains simple and focused, be regulatory ready, scale efficient into the season using the expanded manufacturing footprint and convert demand with sharper in-market activation and disciplined delivery across businesses. In terms of margin, we are committed to further optimize cost through value engineering, better inventory planning, while being cautious about the impact of commodity and currency fluctuations. Thank you. Sir, should we open the floor for questions? Yes, please. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. If you would 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. Participants are requested to limit their questions to only one question per participant and to not add any additional questions in the same. Our first question comes from the line of Aditya Bhartia from Investec. Please go ahead. Hi, good evening, sir. My question is on you kind of referred about raw material inflation and rupee depreciation impact. My question is, what kind of price increases do you think are warranted? Given that we are coming from a fairly weak season, do you think that the industry would be in a position to pass on these price hikes or part of that may need to be absorbed by the company? You also mentioned about cost optimization. What are the measures that you can undertake to kind of partly offset this impact? Thank you. Thanks for the question. I think it's a valid one given the environment that we are in. So see, this quarter will be a slightly mixed one in terms of navigating the old model sales and also the new model sales, right? So we would sort of be having a very balanced approach in terms of trying to navigate the pricing. Will the commodity and the currency fluctuation have an impact on the pricing? Definitely, yes. There will be an impact of the pricing. But how much and when to sort of pass on is something it's a very dynamic decision that we'll have to sort of look at it fairly almost on a daily basis. And I think the pricing decisions will have to be fairly dynamic. So to put a number would be difficult, but is there an impact on the pricing? There is an impact on the pricing. We are looking at it ongoing basis and will take a call accordingly. I think the new table also, I think, will take some time for also the pricing also to stabilize on that front. That, I think, will also take a few months given that this quarter is likely to be a mix between old table and the new table sales. Understood, sir. Thank you so much. Thank you. Our next question comes from the line of Manan Goyal from ICICI Securities. Please go ahead. Hello. Yes, we can hear you. Yeah. So this is Aniruddha Joshi here. So my question is, what was the exit market share at the end of either November or December, if you can share? You have shared YTD market share. And secondly, was there any excess trade discount given to clear the inventory at the end of December? And last point, there is a very strong market share across both categories, refs and washers. But despite that, the profitability still remains in a way still in red. So how do you see the profitability? Earlier, there was an indication by end of FY26, it should be profitable. So how should we read about Voltas Beko? Yeah, that's it from my side. Yeah. Thanks, Aniruddha. So this is Mukundan Menon here. So on the market share, our exit market share for the month of December is also at 17.9%, which coincidentally coincides with our YTD market share also, which is at 17.9%. So if you recall, when we began this calendar year, that is the January to March quarter, we had a market share of 15.8%, and that has grown to 17.9%. So over the last 12 months, we've gained market share of roughly 2.1%, which is a good, I think, it holds us in good stead. In terms of schemes, yes, most of the channel partners had a lot of inventory with them, and it is imperative for us to help them to clear the stock. So the schemes were progressively being given to them during the quarter three. But as we approach summer, these schemes will start becoming a little more market demand related. So indeed, to facilitate the secondary sales, schemes and discounts were offered in quarter three, which is reflecting in our margin profile also, if you see. Going back to Voltas Beko, the story is a little different. The other primary focus is to gain market share, which we are doing consistently. Refrigerators, we are at a market share of 6.2%, and this is a gain of roughly 1.1% over 6.2% for the YTD number. However, the exit November number, the December number we haven't seen as yet, is a better number at 6.8%. And the washing machine market share, YTD is 8.2%, but the exit November number is again a very healthy 10.2%. So the focus is about gaining market share, about making our presence feel. The profitability, in a way, the scale is slowly getting us to a place where in the very near future, we will see this get into at least a break-even kind of situation. Okay. Sure, sir. This is very helpful. Many thanks. Thank you, Aniruddha. Yeah. Thank you. Requesting all the participants to just limit themselves to just one question and to not add any additional questions within the same questions, please. Our next question comes from the line of Natasha Jain. Please go ahead. Thank you. So just one question. Given that we have one of the highest assembly capabilities and the season for calendar 2025 was bad, so I assume that we were also left with a higher number of inventory. And given that sequential growth for Voltas in UCP has been quite high, is it fair to assume that channel is sitting with larger inventory of Voltas? And by that logic, is it again fair to assume that if and when summer picks up, market share growth for Voltas in 4Q will be sharper than peers? That's it. Thank you, sir. Yeah. So Natasha, very well said. The second point is the market share will see a very positive trend because of the volumes that the primary billings that we have done is also significant. So the market share gains will be visible in quarter four for sure. Inventory of Voltas, my sense is that we are talking about a few weeks, 5-6 weeks of inventory is there in the channel. And it's just a matter of time by March middle, I suppose the entire inventory will get finished. So that's the way we see it. So it's not a very high number because the summer season is going to pick up. Between February when the summer begins from Kerala and then moves on towards the western region and Tamil Nadu, Karnataka, and comes into Maharashtra, I think we are talking about a clear 45 days, less than 45 days for the inventory of our channel partners to sort of deplete completely. Thank you, sir. That's helpful. Thanks, Natasha. Yeah. Thank you. Our next question comes from the line of Girish Achhipalia from Morgan Stanley. Please go ahead. Yeah. Hi, sir. Mr. Mukundan, I had one question on the price hike that the system and you would need because of the copper being where it is, aluminum being where it is, and the rupee being where it is. My estimate says that it could be between 12%-14% basis the commodity move as well as the new norms that have kicked in and also some e-waste tools, etc. So if you can comment, I know this is going to be a mixed quarter, some old inventory, some new inventory, but once the new inventory comes through, is that a fair assessment of price increases needed? And how much has already been taken, if at all, in the month of January? Thank you. Thanks, Girish. Actually, Mr. Sridhar will. Thank you, Girish, for the question. I think it's sort of comparable to the first question that sort of came up. So this quarter will be a mixed one between old table and new table. So obviously, the costs will be different, as you know. And by the time the prices stabilize as part of the new table, I think it will take maybe a couple of months, I think. And that's likely to be the case, and that's what our sense is also. So we'll have to sort of do a wait and watch. But to your primary question, is there an impact of commodity and currency? There is. Okay. To that extent, there is. But the exact quantum and how the price transition will happen, that I think we'll have to do a bit of wait and watch. We are sort of monitoring it almost regularly. Any pricing decisions, we are linking it to the market requirements. There is an impact of currency and commodity hedging. But sir, can you point, I mean, directionally? Am Am I right in the ballpark for the new rules that have been applicable and the commodity, if they were to remain for the new inventory that you place in the system, is that fair? Sorry to interrupt. The commodity price remains. Sorry to interrupt. I'm actually asking the same question. I'm actually asking the same question only. No, yeah. So Sagar, we'll answer that. So essentially, Girish, the thing is that the table change impact on the pricing is a little different for the three-star and is a little different for the five-star. Three-star is a little lesser, but five-star is a very, very significant increase. So the increase will impact on the five-star will be more. Now, the impact of the commodity, the copper, and the dollar, these are the moving pieces in this entire thing. So the overall numbers will be a summation of these three things: table change increase for three-star plus the commodity and copper for the same, the table change impact for the five-star, and the copper and the currency impact for the same. So typically, five-star will be a much higher number. As Sridhar said, it's still too many moving parts in the overall thing. We are unable to really quantify the number to whatever you mentioned. But the fact of the matter is these all will impact the sort of the pricing, certainly, because these are not small impacts. These are not small numbers by any stretch of imagination. Yeah. Best wishes, sir. Thank you. Thank you. Thank you, Girish. Thank you. The next question comes from the line of Naushad Chaudhary from Aditya Birla Sun Life Mutual Fund. Please go ahead. Yeah. Hi. Thanks. One question on the project business, sir. This business is consistently order book, consistently declining, though we are adjusting the domestic and international portfolio. But on an overall basis, this business seems struggling. So I just wanted to understand, when do you see by when the order book slide should stop and from when we should start experiencing growth in the order book? And is this business has a potential to be a INR 10,000 crore business? And if yes, how much time will it take to reach those scales? So Naushad, see, this project business has got two parts, as you rightly pointed out. There is a domestic, and there is an international business. So the general thing is that across both these businesses, the domestic and the international, we have been very careful in terms of picking up projects over the last 12 months, I would say. So we've been very prudent in selection of the clients. There are proper guidelines and frameworks for that in terms of nature of client, the credentials of the client, the payment terms, the margin profile, and the exposure of bank guarantees, the liquidity damages. We work around multiple things. So if you ask, the size of the order book might have diminished, but the health of the order book is very, very healthy compared to what it was a year ago. So we've been very prudent, and we have been extremely prudent, especially in the international business, where we have been very careful in selection of the clients. And essentially, we are going after projects where we get a sort of a preferred sort of vendor thing compared to others. So we are not really bothered about the overall size of the order book because these are generally order books which sort of get built over a period of two and a half years or so. In terms of the domestic projects, again, if you see, there are three different verticals. There is a mechanical and electrical and plumbing MEP vertical. The second one is the water vertical, and the third one is the electrical and solar vertical. The electrical and solar, as well as the water vertical, predominantly operates in the government space. These are long gestation projects with a fair amount of sort of a working capital locked up for a larger period of time. We have been very prudent in picking up jobs in this category, and we've been very selective about it. However, in the mechanical and electrical and plumbing, we have been picking up fairly good, healthy jobs in the manufacturing segment. We are also focusing on the data center segment. These are the general industrial segment, and data center are the segments which are very fast track, quick completion, very low risk, and in terms of profitability also, it's a quick turnaround. We have been prudent in this. The size of the order book is less important compared to the health of the order book. That's the way we see it, Naushad. Can we see growth in? Sorry to interrupt. Naushad sir, may we request you to return to the queue for follow-up questions, please? Thank you. Our next question comes from the line of Akshan from Fidelity. Please go ahead. Yeah. Hi, sir. Congratulations on a good show on the market share. Just wanted one clarity from you on how should we be thinking about margins in the unitary business? It's been a tough year right now. We've been used to making 8%-10% margins here. Given what you know in terms of cost pressures, in terms of channel inventory, not in Q4, but just generally over the next year or two, what's the kind of margins should we be thinking about? Should the margins go back to 8%-10%, or do you think we should first focus on getting top line right and then focus on getting the margins right? That's the only question. Thank you. Sridhar here again. So I think a fair question. I think in terms of where we see whether it's market share or margins, I think it's never quite possible to sort of give either or answer, to be fair. I think it both has to be sort of balanced. While we don't want to lose out on the market leadership that we have, we want to sort of focus on. At the same time, we have to continue to focus on the margins also, right? So in terms of if you see, the intent is to sort of focus on the cost reduction initiatives very, very prudently in a very institutionalized manner, look at any pricing opportunities that we have. We're also looking at mixed opportunities in terms of from a product portfolio point of view. So we're looking at all multiple aspects in terms of trying to see how we can sort of focus on the margin improvements also. So it's not either or in all fairness. It is an and, and the focus has to be there on both. Obviously, top line has to happen and also in terms of market share growth. At the same time, focus continues on margins also. Sorry, just continuing that question. There is no doubt that incremental margins will sort of improve and obviously. Sorry to interrupt. Akshan sir, may we request you return to the queue for that? Sorry, my question wasn't answered. I'm just seeking a clarification on the same question. Yeah. That's fine, Sagar. Yeah. Tell me. Yeah. Yeah. Please go ahead. Sorry. Sorry. Just sort of want to leverage on that point a little more just to when we think about margins. So you're saying incremental margins will move up with all the initiatives that you outlined, which is a fair summation and a good strategy. I'm just trying to understand the trajectory of that because from where we are to, let's say, where normalized margins were is a decent gap. So I'm just trying to understand, should our expectations be towards 8%-10% right away, or should it be over a period of time? That's the only clarification. So the recovery would be sequential as we sort of discussed, right? And also, there are too many moving parts, unfortunately, in this piece. I think the commodity inflation, the currency depreciation. So there are multiple moving parts and also the table change impact also. So there are multiple moving parts in this. Intent is to sort of get better. Will it be a sequential improvement? There will be a sequential improvement. When and what we will reach, unfortunately, it will be maybe too soon to sort of quantify. That's the only point where we are. But intent is to sort of definitely get better and come closer to the expectations that you have. Akshan sir, does that answer your questions? Yes. Yes, it does. Thank you. Thank you so much. Thank you so much, sir. Thanks, Akshan. Our next question comes from the line of Renu from IIFL Capital. Please go ahead. Yeah. Hi. I have only one question. So what would be your strategy for the domestic MEP portfolio? How is our market share set up? And what is your strategy of getting Voltas back on the mainstream with market leading share and margin from a medium-term perspective? Yeah. So Renu, you're referring to the domestic MVP project segment? No, overall domestic. Yeah. No, no. The domestic MEP or the HVAC portfolio that we are looking within the project part of the business. Not water, not electrical, solar, core MEP. Understood. So as I said, we have decided that we will focus big time on the MEP part of the infra project. That is less of water, less of electrical, the way you have sounded. And essentially, within MEP also, there are two or three different customer categories. One is the industrial and data center category, which we call manufacturing and data centers. And the second one is the commercial buildings, which is to do with shopping malls and so on and so forth. And there's a third category, which is metros, airports, and so on and so forth. So the focus currently is that we want to have a larger pie of the manufacturing and the data center market. We are also looking at a steady flow of these are generally fast track projects, which will quickly give a turnaround within less than 9-12 months. We are also looking at the metro and such infrastructure projects, which are generally spread over a longer period of time but come with a lot of comfort with respect to the price variation clauses and the risks are very limited in this. So a mix of these two and a little lesser focus on the commercial is what we are looking at. And of course, the electrical and the water segments are areas which we have been very careful now, and we are cherry-picking the projects that we wish to do in this category. Akshan, what is the current market share and target? Sorry to interrupt. Renu ma'am, Renu ma'am, sorry to interrupt. Just in this area, generally, these market shares don't get tracked because, for example, MEP, the overall size of the market and the overall sort of yeah, we don't capture that data from an external. There are no external data things. It is all depending on the orders that you quote and the orders that you win versus the orders that you lose. We have some internal thing which we. Assessment of the market share. Yeah. We're very difficult to say because it could be even wrong because there are many projects which we would not even know that have been bid. It's possible. It's possible that. Understand. Thank you so much, sir. Thank you, Renu. Thank you. Appreciate it. Thank you. The next question comes from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Sir, thank you for taking my question. Sir, some of your peers have interpreted the BEE norm change slightly differently, i.e., that they can continue to sell those ACs for a slightly longer period of time, and in which case, they have actually not liquidated that inventory. Now, my question is, assuming all that's true, in the fourth quarter, which is the current quarter, is it fair to assume that whatever you sell in the primary market will be higher cost inventory compared to companies which have old inventory basically benefiting? So I'm just trying to understand, in the fourth quarter, is there a possibility that on the primary side, we may have slightly softer revenue? And as you rightly highlighted, that by the time we get to summer, it will all normalize. Is that a fair assumption? Yeah. Pulkit, yeah, just one more. So there is, I think, the BEE norms. There was a Gazette which came in a year ago, which none of us had even noticed that when we got closer to the end of the year, all the industry woke up to that and realized that it prohibits you from manufacturing the new products from 1st of January, 2026. But both the brand, that is, the manufacturing brands, as well as the channel partners can sell this till June end. So most of us had a sense of this sometime by November end. We got to know that this is the rule. So most of the brands have stocks of the old label products, and so do we have stocks of the old products. And depending on when these stocks like, for example, there's a bunch of product SKUs in the three-star bucket. There's a bunch of SKUs in the five-star bucket. Depending on when these stock levels deplete to zero, the new label products will be introduced into the market. And so each brand, all the brands are almost on an equal level playing field with respect to availability of the old stock versus the new stock. All of them have started manufacturing new products right from November. But obviously, the focus would be to liquidate the old label stocks before you start selling the new label stocks. Does that answer your question, Pulkit? Absolutely. That's very clear. So effectively, you are at even keel with others when it comes to the fourth quarter channel inventory. Yes. Yes. Okay. Perfect. Thank you for that answer. Yeah. Thank you. The next question comes from the line of Umang Mehta from Kotak Securities. Please go ahead. Hi. Thanks for the opportunity. Just building on to the last question, you mentioned about micro-targeting markets, also greater focus on modern trade, GT. In this performance that you've shown in Q3, have you added any new accounts on MT institutional? You mentioned about some gaps you had in the past with your first interaction with us. Could you share any insights on this? Yeah. Actually, so what we embarked on is we started tracking almost 29,000 counters across the country which sell these products spread over 19,000 PIN codes. And we have a very structured network acquisition plan which we have put in place. We have added a decent number of channel partners either directly as a direct billing point. We have also added a fair amount of counters through our distribution network. That's as far as the general trade is concerned. In terms of modern trade, we have a fair presence across all the three modern bigs we call the three bigs, the Reliance, the Croma, and the Vijay Sales as modern trade in our terminology. We have got a presence across all of this. The focus now is to have a higher share of their wallet. So that's the focus now. There is a bunch of roughly 85 or so regional retailers where we see that our presence can be improved. So there's a major focus in entering many of the regional retailers, especially in the south and the west markets, which are heavy on the regional retailer space. So we are making good progress on that as well, actually. That's as far as the channel partners is concerned. Institutional sales is essentially we do a decent number in institutions. This comes from things like banks. It comes from builders. So we are making very good progress there as well. Understood, sir. Thank you so much. Thank you. The next question comes from the line of Davishi Mehta from ICICI Prudential Mutual Funds. Please go ahead. Hello. Hi, sir. Hello. Yeah. Sir, as per my calculation, due to commodity price rise, the cost as a percentage of BOM is actually increasing by 8%-9%. And as a percentage of selling price of VC, it will be somewhere around 6%. So correct me if I'm wrong. But basically, how does Voltas think to pass this on? And additionally, even BEE norm will also have around a 5% cost increase. So overall, how do we think on pricing going forward? Yeah. So Tavishi, what you said is the BEE norm, as I just explained a little while earlier to a question regarding the price increase which Girish had asked. So essentially, the price increase is also the three-star has a different impact. The five-star has a far more sharper increase impact. So that obviously will get passed through. The commodity and the dollar, actually, both of them are on an upward trend, as you can imagine. Essentially, copper, aluminum to the impact of aluminum is not on the overall BOM is not that heavy. But copper is a big sort of item on the BOM. So again, model-wise, this changes because there is some amount of copper which goes into a three-star. There's another amount of copper which goes into a five-star. We are assessing the impact of all this along with the third dimension, which is the dollar impact. As our CFO, Mr. Sridhar, mentioned, we are monitoring it very closely. Then closer to the time when the new model products start getting introduced into the market, we will take a call on this. But the direction is that actually there is going to be a price increase. Many of these will have to be passed through to the channel partners through consumers. Just to add to what Mr. Menon said, as you know, as you mentioned, we also are working on a clear cost optimization program also. So that is also a setup that we will have to sort of factor in. It's a fairly dynamic situation, a mix of products being sold. So we are monitoring that and will take the pricing decision appropriately, factoring all these variables. Can we expect some price increase in coming quarter, or it will be? Mr. Mehta, sorry to interrupt. May we request you to turn to the queue? Yeah. To add, there would be an element of price increase. There would be. I mean, that much I think we have clarified. There would be. How much is something we will have to sort of see depending on all the variables. Yeah. The price increase increases the reality, Davishi, and the quantum amount and when the exact time when the new products will come into the market are the moving pieces in this entire thing. We also have some cost-down projects which we are doing where the overall price will increase. Obviously, it will increase, actually. The number is a little early to say as of now. Sure. Okay. Thank you. Thank you, sir. Thank you. The next question comes from the line of Bala Subramanian from Arihant Capital. Please go ahead. Good evening, sir. Thank you so much for the opportunity. In MEP, our data center share is less than 5%, and we are aiming to 30% in the medium term. What specific orders or tenders you are pursuing in this space, and how does district cooling fit into your MEP strategy and your partnering with international players for technology side? Thank you. Yeah. So MEP, the data center thing is just it's just opening up. We are doing a couple of projects now, actually. And the sales funnel for the data centers is also very healthy. So we're bidding for quite a few projects. And as I mentioned earlier, the focus is to win data center projects using a combination of 2, 3 levers. One is essentially, as you know, a data center needs the cooling equipment, which is chillers. And mostly, it is screw chillers or Centrifugal Chillers where we have made significant progress with a new technology partner alliance, which I mentioned in the last meeting. So we probably offer the best energy-efficient products in the screw category. And we also offer the best energy-efficient products in the centrifugal category. Centrifugal has two variants. One is the regular centrifugal chillers, and the second, oil-free chillers. Across these three segments, we have probably the most energy-efficient products. Energy is a big portion of the OpEx of our data center. So we are very confident of getting these chiller orders from the data center. And we are bidding this together with our MEP division, which is mechanical, electrical, and plumbing that entire group. So that makes us a single-source vendor to the data center. So this cross-functional, the cross-divisional approach to this entire data center, we will move towards the overall share where it will go to 30% so soon. I'm not sure. But the direction is very clear. And we are seeing some fairly early good sort of tailwinds for us in that thing. District Cooling, also because of our presence in the Centrifugal Chillers, this District Cooling essentially comes with the District Cooling comes with a centrifugal kind of scope mostly and a few of Screw Chillers. There again, because of the most energy-efficient chillers in both the categories, we have a fair chance of getting a higher share from this. This is normally dominated by the three American brands, which are York, Trane, and Johnson Controls. And we have a fair chance to compete with them in this space as well. So I think over the next 12 months, this entire story will pan out, Bala. I got it, sir. Thank you so much for the detailed answer. Yeah. Thank you. Thank you. Thank you. The next question comes from the line of Akshay Gattani from UBS. Please go ahead. Hi, sir. Thank you for the opportunity. Given Voltas now have decent in-house capacity, so what will be your strategy for this upcoming season between insourcing and outsourcing for manufacturing? And do you expect the higher backward integration, which is there in the Chennai plant, will start to flow into better margins if the demand for upcoming season turns out the way you're forecasting? Yeah. So actually, the backward integration of Chennai has already started playing out. As I had mentioned in the last, I think, meeting that we had, there are many things which we were not backward integrated in Pantnagar, which we have backward integrated in Chennai. One is the entire sheet metal work, which is the outdoor body. Second is the powder coating and the painting of that outdoor thing, which is again a high-value addition sort of process. The third is the entire indoor unit plastic injection molding of that internal plastic parts and a fully backward integrated coil and fin shop. We used to have partly the coil and fin shop in-house, and we used to do some sort of buying of the coils and fin assembly also in Pantnagar plant. So the entire play of the Chennai backward integration will play out fully. In terms of the outsourcing versus insourcing, Akshay, the thing is that our window air conditioners, as we have been doing all along, have always been outsourced from the local OEM manufacturers. And we continue with that sort of the same thing. We are not making any change. However, the split air conditioners, which is essentially now predominantly the inverter splits, we are doing it in a way that there are two things. One is there's a steady sort of visibility about what will be certainly required. That is in-house. And some of the spikes and the ups and downs which come during a very good summer, those are generally being catered by the OEM. So it's a blend of both. And we are taking a very judicious call in terms of picking up how much of these from the OEMs. And we have also been very judicious about picking up from the right OEMs in terms of geography. There are some products which are closer to the west market, some products which sell more in the south market. So we have been very selective in picking those OEMs which cater to the products in that market. So very, very carefully planned out this season, Akshay. Got it. This is very helpful. Thank you. Thank you, Akshay. Thank you. The next question comes from the line of Dhruv Jain from Ambit Capital. Please go ahead. Hi, sir. Just one data point. All my other questions have been answered. If you could just spell out the capacity utilization of the current Chennai plant and in the upcoming season, what is the level at which you expect it to run? Capacity utilization. Actually, it is almost 90%. So we have two plants. One in Pantnagar, which is operating at, I think, 100% thing because it really has been juiced out like crazy. And the Chennai plant, we have built a capacity of 1 million units, which we have expanded to 1.5 million units. And we are in the process of doing that. Another 1 or 2 months, that 1.5 million capacity will be done. Our sense is that this summer season, we would have maximized the capacity utilization to almost between 85%-90%, 90%, 90% or so, Mr. Jain. Yeah. Sir, if you could just talk about the CAPEX plans for the 2020 business. Just one word. May we request? Okay. The The CAPEX plan for yeah, essentially, Mr. Jain, you're saying as an organization, or it is mainly for room air conditioners? If you could break it into both, that would be great. Sorry to interrupt, Dhruv, sir. Yeah. So can we take this offline, Mr. Jain? If you don't mind, we'll just. You can reach out to the team. Yeah. Sure. Sure. Sure. Sure. Sure. Okay. Sure. Thank you for understanding, Mr. Jain. Thank you. We will take the last question from the line of Sunny Gupta, an individual investor. Please go ahead. Sunny? Yeah, Mr. As you said, there was a pre-buying in December quarter. So will this affect sales in first January month with the January 2025? So actually, the pre-buying in December actually was, in a way, a very positive thing for us. We were very pleasantly happy with the result that we have done. And a little bit of this might be the January thing, but as of now, we are not seeing any decline in our numbers. So it's probably laying a runway for a good January and hopefully for a good February and March, Mr. Gupta. Yeah. Thank you. Yeah. Ladies and gentlemen, I now hand the conference over to Ms. Natasha Jain for closing remarks. We have. Thanks. Actually, we have our CFO, Mr. K.V. Sridhar, making his closing remarks now. Thanks. Thanks all for the participation. Just maybe a few comments towards the end. So I think all these priorities, I think, position Voltas to enter the season with sharper readiness, stronger execution muscle, and a more efficient operating base. As cost optimization efforts take effect, the company expects to strengthen margin resilience and create a more leveraged financial profile. With this foundation, Voltas remains well placed to enhance its leadership in the cooling segment while steadily expanding its portfolio as a comprehensive diversified cooling home appliances and engineering project solutions provider. Thank you. Thank you. Natasha? Yeah. Yeah. Yeah. Yeah. I now hand. Yes. Yes, ma'am. Sorry. Please go ahead. Yeah. Participants can disconnect their lines. Thank you so much. Thank you, Natasha. Thank you. Yeah. Thank you. Yeah. Thank you. Yeah. Thank you. Thank you all. Yeah. And Sami. Thank you so much, everyone. On behalf of PhillipCapital, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you.