Q1 2027 Crompton Greaves Consumer Electricals Ltd Earnings Call

Speaker #3: Should we start the call? Yes, Anirudh, we can start the call.

Speaker #4: Captain, can I say your name just for the record?

Promeet Ghosh: Can I say your name just for the record?

Speaker #3: Yeah. So, thanks, Vishal. On behalf of ICICI Securities, we welcome you all to the Q1 FY27 results conference call of Crompton Greaves Consumer Electricals Limited.

[Analyst] (ICICI Securities): Yeah. Thanks, Vishal. On behalf of ICICI Securities, we welcome you all to Q1 FY27 results conference call of Crompton Greaves Consumer Electricals Limited. We have with us today senior management represented by Mr. Promeet Ghosh, Managing Director and Chief Executive Officer, Mr. Kaleeswaran Arunachalam, Chief Financial Officer, Mr. Sachin Phartiyal, Business Head, Home Electricals, Mr. Shalin Nayak, Business Head, Lighting, Solar Rooftops and Wires, Ms. Swetha Sagar, Chief Business Officer, Butterfly Gandhimati Appliances, Mr. Ruchir Jain, Head Investor Relations, Corporate Strategy, FP&A, Mr. Rishabh Jain, Deputy General Manager, Investor Relations, and Mr. Anand Kumar, Head of Pumps and Kitchen Appliances. I hand over the call to Promeet, sir, for his initial comments on the quarterly performance, we will open the floor for question and answer session. Thanks, over to you, Promeet, sir.

Speaker #3: We have with us today senior management represented by Mr. Promeet Ghosh, Managing Director and Chief Executive Officer; Mr. Kaliswaran Arunachalam, Chief Financial Officer; Mr. Sachin Fatial, Business Head, Home Electricals; Mr. Shalin Nayak, Business Head, Lighting, Solar Rooftops, and Wires; Ms. Shweta Sagar, Chief Business Officer, Butterfly Gandhimathi Appliances; Mr. Ruchir Jain, Head, Investor Relations, Corporate Strategy, FP&A; Mr. Rishabh Jain, Deputy General Manager, Investor Relations; and Mr. Anand Kumar, Head of Pumps and Kitchen Appliances.

Speaker #3: Now I hand over the call to Promeet sir for his initial comments on the quarterly performance, and then we will open the floor for the question-and-answer session.

Speaker #3: Thanks, and over to you, Promeet Sir.

Speaker #4: Yeah, thank you, everyone. Can you hear me properly? Okay, I'm going to take that as a yes.

Promeet Ghosh: Yeah. Thank you, everyone. Can you hear me properly? Okay, I'm going to take that as a yes.

Speaker #3: Yes, sir. Yes, sir.

[Analyst] (ICICI Securities): Yes, sir.

Speaker #4: Good evening, everyone. Welcome to our Q1 FY27 earnings call. Thank you to the team at ICICI Securities for hosting this call. This has been an eventful quarter for us.

Promeet Ghosh: Good evening, everyone. Welcome to our Q1 FY27 earnings call. Thank you to the team of ICICI Securities for hosting this call. This has been an eventful quarter for us, from additions in our senior leadership, to progress on our brand-related efforts, to innovation-led growth and recognition of industry-first innovation. Joining me, as was announced earlier today after a while, is Sachin Phartiyal. He joins us back as the Head of Home Electricals after a brief stint outside the organization. As many of you will remember, in his earlier tenure, he played a key role in building our fans and appliances portfolio. Along with Sachin, we also added Anuj Lall as the Head of our Integrated Supply Chain. Anuj, prior to this, served as Executive Director and Vice President, Integrated Supply Chain at Whirlpool of India.

Speaker #4: From additions in our senior leadership to progress on our brand-related efforts, to innovation-led growth, and recognition of industry-first innovation. Joining me, as was announced earlier today, after a while, is Sachin Fatial. He joins us back as the Head of Home Electricals after a brief stint outside the organization.

Speaker #4: As many of you will remember, in his earlier tenure, he played a key role in building our fans and appliances portfolio. Along with Sachin, we also added Anuj Lal as the head of our Integrated Supply Chain. Anuj, prior to this, served as Executive Director and Vice President, Integrated Supply Chain at Whirlpool India.

Speaker #4: Both of them bring valuable experience as well as a fresh perspective, further strengthening our senior management team. As you also know, many of the faces around the table are familiar, but some of their roles have changed.

Promeet Ghosh: Both of them bring valuable experience as well as a fresh perspective, further strengthening our senior management team. As you also know, many of the faces around the table are familiar, but some of their roles have changed. Rajat now looks after sales. Shaleen, of course, looks after our Lighting, Wires as well as Solar Rooftops. Shweta, earlier the Chief Business Officer for Butterfly alone, now looks after both Butterfly large kitchen appliances as well as our Re-on brand. Anand has taken over the role of Head of our Kitchen Appliances business. Of course, Kalees is doing exactly the same thing that he's always been doing, right? Yeah. Let me now get on with the quarterly performance. Crompton delivered a double-digit growth across all its business segments, driven by strong execution, successful product launches, and steady seasonal demand.

Speaker #4: Rajat now looks after sales. Shalin, of course, looks after lighting, wires, as well as solar rooftops. Shweta, earlier the Chief Business Officer for Butterfly alone, now looks after both Butterfly large kitchen appliances as well as our Rheon brand. Anand has taken over the role of head of our kitchen appliances business, which was— Kalish is doing exactly the same thing that he's always been doing, right?

Speaker #4: So, yeah, let me now get on with the quarterly performance. Crompton delivered double-digit growth across all its business segments, driven by strong execution, successful product launches, and steady seasonal demand. This quarter began, as you know, with uncertain cost and availability pressures.

Promeet Ghosh: This quarter began, as you know, with an uncertain note because of global events, with commodities facing cost and availability pressure. Through this volatility, we held on to our very disciplined approach. As a leader, making timely pricing interventions and lean working capital management, combined with operating leverage and focused cost initiatives. This has ensured that profits grew ahead of revenue. However, sustained leadership and consistent performance, as you are well aware, requires a disciplined approach across tough market conditions, and I believe that is exactly what we demonstrated under very volatile conditions. This is the discipline that has enabled us to continue to deliver strong growth with margin protection and high ROCE. Despite adverse market conditions, indeed adverse and volatile market conditions, at a consolidated level, revenue grew 11.8% Y on Y to INR 2,235 crores.

Speaker #4: Through this volatility, we held on to our very disciplined approach. As a leader, making timely pricing interventions, and lean working capital management. Combined with operating leverage, and focused cost initiatives.

Speaker #4: This has ensured that profits grew ahead of revenue. However, sustained leadership and consistent performance, as you are well aware, require a disciplined approach across tough markets—exactly what we demonstrated under very volatile conditions.

Speaker #4: And this is the discipline that has enabled us to continue to deliver strong growth with margin protection and high ROCE. Despite adverse, indeed adverse and volatile, market conditions, at a consolidated level, revenue grew 11.8% year on year.

Speaker #4: To Rs 2,235 crore, and EBITDA was Rs 224 crore. It grew 14.2%, with margins expanding by 20 basis points, reaching 10%.

Promeet Ghosh: EBITDA was INR 224 crores, and it grew 14.2% Y-o-Y, with margins expanding by 20 basis points, reaching 10%. Profit after tax to 15.2% to INR 143 crores, with net profit margin at 6.4%. Moving on to segmental performance. ECD business delivered 10.6% Y-o-Y revenue growth. Over the last several quarters, as many of you are aware, BLDC has been a key focus area that is beginning to show results in the market. Our BLDC portfolio grew approximately 45% this quarter, resulting from the focused portfolio interventions that we have made in the last 4 quarters. During this quarter, we launched 5 new BLDC fans, further strengthening our portfolio. We continued to remain market leaders in ceiling fans with market share gains during the quarter. Pumps delivered strong performance across various subcategories with market share gains.

Speaker #4: Profit after tax grew to 15.2%, to ₹143 crores, with net profit margin at 6.4%. Now, moving on to segmental performance. ECD business delivered 10.6% year-on-year revenue growth.

Speaker #4: Over the last several quarters, as many of you are aware, VNDC has been a key focus area in the market. Our VNDC portfolio grew approximately 45% this quarter.

Speaker #4: Resulting from the focused portfolio interventions that we have made in the last four quarters, during this quarter we launched five new VNDC fans, further strengthening our portfolio.

Speaker #4: We continued to remain market leaders in ceiling fans, with market share gains during the quarter. Pumps delivered strong performance across various subcategories, with market share gains.

Speaker #4: Domestic appliances grew in double digits, led by water heaters, which performed very well in both trade as well as the e-com channel. As you are aware, over the last several quarters, we have been steadily gaining leadership positions in our water heater business in general trade.

Promeet Ghosh: Domestic appliances grew double digits, led by water heaters, which performed very well in both trade as well as the e-com channel. As you are aware, over the last several quarters, we have been steadily gaining leadership positions in our water heater business in general trade. Water heaters, I'm glad to announce, now commands a clear leadership in volume terms in general trade. As I've said earlier, this was indeed a very choppy quarter, and choppy, volatile, and unpredictable quarter, marked by pricing as well as availability disruptions. Through this period, we made pricing intervention, behaving like the leaders that we are, and combined with these interventions and operating leverage, ensured that our EBIT margins grew ahead of revenue at 12.1%, with a 20 basis points gain in margins, at 13.5% margin.

Speaker #4: Water heaters, I’m glad to announce, now command a clear leadership in volume terms in general trade. As I’ve said earlier, this was indeed a very choppy quarter.

Speaker #4: And a choppy, volatile, and unpredictable quarter, marked by pricing as well as availability disruptions. But through this period, we made pricing interventions, behaving like the leaders that we are, and combined these interventions with operating leverage to ensure that our EBIT margins grew ahead of revenue at 12.1%, with a 20 basis point gain in margins.

Speaker #4: At a 13.5% margin, most of the supply constraints, which arose out of this volatility, were largely addressed by the end of the quarter. This has now led to a strong start in Q2.

Promeet Ghosh: Most of the supply constraints which arose out of this volatility were largely addressed by the end of the quarter, which now has led to a strong start in Q2. Lighting continued the strong momentum that it has gathered over the last several quarters. This is something that I've been calling out for some time. There is a material change in trajectory in our lighting business, and this business continues to demonstrate this. The lighting business continues to demonstrate that it has a strong momentum. Revenue grew by 15.4% YOY to INR 269 crores, driven by growth in both the B2B as well as the B2C segments. Margins in B2C segment continue to expand, but B2B witnessed a contraction in margins because of pre-contracted prices. We reported an EBIT margin in lighting of 12% for the segment.

Speaker #4: Lighting continued the strong momentum that it has gathered over the last several quarters. This is something that I've been calling out for some time.

Speaker #4: There is a material change in trajectory in our lighting business, and this business continues to demonstrate this. The lighting business continues to demonstrate that it has strong momentum.

Speaker #4: Revenue grew by 15.4% to ₹269 crore, driven by growth in both the B2B as well as the B2C segments. Margins in the B2C segment continued to expand, but B2B witnessed a contraction in margins because of pre-contracted prices.

Speaker #4: We reported an EBIT margin in Lighting of 12.4% for the segment. Butterfly delivered strong results, with revenue up 14% to ₹214 crore.

Promeet Ghosh: Butterfly delivered strong results with revenue up 14% to INR 214 crore, driven by strong momentum across all channels, and market share gains in mixer grinders, pressure cookers, and glass tops. Excluding the internal sales that Butterfly has made to Crompton of mixer grinders, which we have talked about in the past, Butterfly delivered an 18% growth. EBIT at Butterfly grew by 19.5% Y-o-Y with margins at 4.2%. Across segments, as I have already said, we have taken pricing interventions. These range from high single digits to low double digits. These have covered approximately 80% of the inflationary pressures that we faced. I would also like to highlight the significant progress that our brand transformation journey has made.

Speaker #4: Driven by strong momentum across all channels, and market share gains in mixer grinders, pressure cookers, and glass tops. Excluding the internal sales that Butterfly has made to Crompton of mixer grinders, which we've talked about in the past.

Speaker #4: Butterfly delivered 18% growth. EBIT at Butterfly grew by 19.5%, with margins at 4.2%. Across segments, as I've already said, we have taken pricing interventions; these range from high single digits to low double digits.

Speaker #4: These have covered approximately 80% of the inflationary pressures that we faced. I would also like to highlight the significant progress that our brand transformation journey has made.

Speaker #4: As shared previously, we undertook an extensive usage and attitude consumer study, the insights from which have shaped a comprehensive review of our brand architecture.

Promeet Ghosh: As shared previously, we undertook an extensive usage and attitude consumer study, the insights from which have shaped a comprehensive look at our brand architecture and has helped shape a broader refresh of the Crompton brand across our product lines. I'm happy to share that by the end of this month, you will see the first visible outcomes of this work stream. We believe these efforts will set the tone for Crompton's next phase of brand journey. Over the next three to four months, you may expect to see a series of brand launch events showcasing the evolution and the future trajectory of the Crompton brand. Many of you may be already aware that there is a brand launch event that is planned on 17th of this month, 18th of this month, for which invites to the relevant parties has already gone out.

Speaker #4: And has helped shape a broader refresh of the Crompton brand across our product lines. I'm happy to share that, by the end of this month, you will see the first visible outcomes of this workstream.

Speaker #4: We believe these efforts will set the tone for Crompton's next phase of its brand journey. Over the next three to four months, you can expect to see a series of brand launch events showcasing the evolution and future trajectory of the Crompton brand.

Speaker #4: Now, many of you may already be aware that there is a brand launch event planned on the 17th and 18th of this month, for which invites to the relevant parties have already gone out.

Speaker #4: There is actually a further capital market investor event which is on the 20th of this month. I expect during that capital market event to be able to give investors insight into the dramatic change that is being under that Crompton has been undergoing for the last three odd years.

Promeet Ghosh: There is actually a further capital market investor event, which is on the 20th of this month. I expect during that capital market event to be able to give investors insight into the dramatic change that Crompton has been undergoing for the last three odd years. You'll be able to get a real peek of what that is in fact delivering in Crompton. We'll come to that when we see some of you on the 20th here. I just want to reiterate that we have kept to our brief, disciplined pricing approach, premiumization, while leveraging our operating scale and strong execution across categories. Moving ahead, as I said earlier, Q2 has started very well, we are continuing to witness now that many of the volatility conditions have settled down, if not subsided. We are now beginning to see the benefits of the actions that we have taken.

Speaker #4: So you should—you'll be able to get a real peek of what that is, in fact, delivering in Crompton. So we'll come to that when we see some of you on the 20th here.

Speaker #4: I just want to reiterate that we have kept to our brief, disciplined pricing approach—premiumization, while leveraging our operating scale and strong execution across categories.

Speaker #4: Moving ahead, as we see—as I said earlier—Q2 has started very well. And we are continuing to witness now that many of the volatility conditions have settled down, if not subsided. We are now beginning to see the benefits of the actions that we have taken. I think it's fair to say that the pricing actions that we took, the market has well accepted.

Promeet Ghosh: I think it's fair to say that the pricing actions that we took, the market has well accepted. They have now flown into the market quite well. We are quite optimistic about how things are evolving currently. With that, I will pause and we'll take questions. Depending on what the question is, I may answer that, Kanishka answer that, or any of the gentlemen here or ladies here can answer it. Thanks. Yeah?

Speaker #4: They have now flown into the market quite well, so we are quite optimistic about the great things that are evolving currently. With that, I will pause and we'll take questions, depending on what the question is.

Speaker #4: You know, I may answer that, Kalish may answer that, or any other gentleman or lady here. I can answer it. Thanks. Yeah.

Speaker #2: Yeah, we can start the question queue. Those participants who have any questions, please raise your hand. The first question is from Mr. Aditya Bhartiya. Please unmute your line and go ahead with your question.

[Analyst] (ICICI Securities): Yeah, we can start the question queue. Those participants who have any questions, please raise your hand. First question is from Mr. Aditya Bhartia. Please unmute your line and go ahead with the question.

[Analyst] (Coalition Team): Hi, good evening. Prerit, Coalition Team. My first question is on volume growth. Given that you spoke about high single digit to low double digit kind of price increase-

Speaker #3: Hi. Good evening, Promeet, Kalish, and team. My first question is on volume growth. Given that you spoke about high single-digit to low double-digit kind of pricing trends, is it fair to assume that volume growth in the ECD category would have been quite modest, if any?

Promeet Ghosh: Yeah

[Analyst] (Coalition Team): Is it fair to assume that volume growth in ECD category would have been quite modest, if any? If that is the case, what could have contributed to it, given that we had a favorable base?

Speaker #3: And if that is the case, then what could have contributed to it, given that we had a favorable base?

Speaker #4: Like I said earlier, Aditya, this quarter we were impacted. Now, we've done a very lean shift, as you know, right? Sometimes, if the prices go up and there are supply disruptions, that can have an adverse effect.

Promeet Ghosh: Like I said earlier, Aditya, that this quarter, we were impacted. Now, we run a very lean ship, as you know, right? Now, sometimes if the prices go up and there are supply disruptions, that can have an adverse effect. Of course, over a period of time, what we found, that if you run a lean shop, over a period of time, your ROCs are much better and your cash flows are much better. We've kept to that principle. I would say that because of supply disruptions, we did lose some sales. Order of magnitude, maybe INR 200 crores.

Speaker #4: But of course, over a period of time, what we found is that if you run a lean shop, over a period of time, your ROCs are much better.

Speaker #4: And your cash flows are much better. So, we've kept to that principle. I would say that because of supply disruptions, we did lose some sales.

Speaker #4: Order of magnitude maybe 200 crores. Maybe a little bit more. You know, depends. But fact of the matter is that yes, look, at the when you have supply disruptions, you might you have to ensure that given the current availability of supply, you have to maximize your revenue.

[Analyst] (Coalition Team): INR 200 crores.

Promeet Ghosh: Maybe a little bit more. It depends. Fact of the matter is that, yes. Look, when you have supply disruptions, you have to ensure that given the current availability of supply, you have to maximize your revenue. We've kind of taken that tack and the outcome is what it is, as you can see.

Speaker #4: So, you know, we've kind of taken that tack, and the outcome is what it is, as you can see.

Speaker #3: Understood. Understood. And these supply disruptions would have been largely on the fans portfolio, or something else?

[Analyst] (Coalition Team): Understood. These supply disruptions would have been largely on the fans portfolio or something else?

Speaker #4: Actually, we had some supply disruptions in other areas as well. Because, you know, if it was only pricing disruptions, then that would have been a different story in this case.

Promeet Ghosh: Actually, we had some supply disruptions in other areas as well. If it is only pricing disruptions, then that was a different story. In this case, there was a clear lack of visibility on supply of commodities and of various input materials as well. We did have supply disruptions earlier. For instance, I spoke about lighting, right? In lighting, we had a little bit, but when you're doing a B2B business, obviously there's a forward-looking contract that you're working into and that sometimes can, if the pricing disruptions are very large, not all of it can be recouped by pricing intervention. Yeah, I'd say there was a disruption in more than one area, and not only fans. The good news is that we worked very hard. While keeping to our principles, we worked very hard over the quarter.

Speaker #4: There was a clear lack of visibility on, you know, the supply of commodities and various input materials as well. So we did have supply disruptions earlier.

Speaker #4: So for instance, I spoke about lighting, right? In lighting, we had a little bit. But when you're doing a B2B business, there can be this—you are in, you are obviously, there's a forward-looking contract that you've gotten into.

Speaker #4: And that sometimes can, if the pricing disruptions are very large, not all of it can be recouped by pricing intervention. So, yeah, I'd say there was a disruption in more than one area.

Speaker #4: And not only fans. But the good news is that we worked very hard. So, while keeping to our principles, we worked very hard over the quarter, and many of these issues have pretty much settled down.

Promeet Ghosh: Certainly towards the end of the quarter, many of these issues pretty much settled down, and that has enabled us to start the next quarter very well.

Speaker #4: And that has enabled us to start the next quarter very well.

Speaker #3: Sure, Promeet. And Promeet, you mentioned that roughly 80% of cost increases have now been passed on. But despite that, we have actually seen a bit of margin expansion.

[Analyst] (Coalition Team): Sure, Promeet. Promeet, you mentioned about roughly 80% of cost increases having now been passed on. Despite that, we have actually seen a bit of margin expansion. Does that mean that we had some low-cost inventory which kind of cushioned the impact in this particular quarter, and in Q2, costs are sequentially going to go up and we may require some more price hikes to kind of maintain these margins?

Speaker #3: Does that mean that we had some low-cost inventory which kind of cushioned the impact in this particular quarter? And in Q2, costs are sequentially going to go up and we may require some more price hikes to kind of maintain these margins?

Speaker #4: Actually, quite, you know, as I said earlier, we maintained—we are, we maintained—a lean shift across the year. So the impact of low-cost inventory, unlike, and I've seen some of the others probably have had a lot more of that, which is one-off, right?

Promeet Ghosh: Actually, as I said earlier, we maintain a lean ship across the year. The impact of low-cost inventory, and I've seen some of the others probably have had a lot more of that, which is one-off, right? I wouldn't say the contribution of low-cost inventory for us was very material. As you are aware, what we do do in all our situations is that we have a very active cost management program as well. We do do that so that you can't only work on the product pricing. Even the pricing that we passed on, at least it was not our sense, perhaps because some of our peers were working from a low-cost inventory that they may have built up. We didn't see the same kind of pricing actions that others did. Yeah, we did pass on. Yeah.

Speaker #4: So, I wouldn't say the contribution of low-cost inventory for us was very material. As you are aware, what we do in all our situations is that we have a very active cost management program as well.

Speaker #4: You know, so we do—we do do that so that you can't only work on the product pricing. Even the pricing that we passed on—at least, it was not our sense—perhaps because some of our peers were working from a low-cost inventory that they may have built up.

Speaker #4: You know, so we didn't see the same kind of pricing actions that others did. But yeah, we did pass on. So yeah, I don't know if that answers all your questions, but that should give you a sense of where we were.

Promeet Ghosh: I don't know if that answers all your questions, but that should give you a sense of where we were.

Speaker #3: Sure, that's helpful, Promeet. Thank you so much.

[Analyst] (Coalition Team): Sure, that's helpful, Promeet. Thank you so much.

Speaker #2: Yeah. Next, we have a question from Mr. Dhruv Jain. Please unmute your line and go ahead with your question. Also, requesting participants to restrict their questions to two per person.

[Analyst] (ICICI Securities): Yeah. Next we have a question from Mr. Dhruv Jain. Please unmute your line and go ahead with the question. Also requesting participants to restrict the questions to two per limit.

Speaker #2: Thanks.

Promeet Ghosh: Yeah.

[Analyst] (ICICI Securities): Thanks.

Speaker #5: Oh, hi team. Thanks for the opportunity. First question is on the expenses side. So, I mean, we've seen some bit of cut in A&P and we've also seen subsequent rise in other expenses to the tune of about 15%.

Dhruv Jain: Hi, team. Thanks for the opportunity. First question is on the expenses side. We've seen some bit of cut in A&P, and we've also seen subsequent rise in other expenses to the tune of about 15%. Just wanted to understand, at least on the A&P part, what's the sustainable number going forward, and if this is transitory? That's my first question.

Speaker #5: So, I just wanted to understand, at least on the ANP part—you know—what's the sustainable number going forward, and if this is transitory?

Speaker #5: That's my first question.

Speaker #4: Yeah. So, you know, as Dhruv and I said earlier, this is actually very important for brand Crompton, right? So it's not really something that we’ve cut back on for one quarter and then, you know, that's not something that we—as we've said before—A&P is something that we want to consistently make.

Promeet Ghosh: Yeah. Dhruv, as I said earlier, this is a very extensive for brand Crompton. It's not really something that we cut back in one quarter and that's not something that we, as we've said before, can be something that we want to consistently make. You will see a lot of activity on brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG that we are able to cater to, et cetera. On a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we'd had last year.

Speaker #4: So, you will see a lot of activity on the brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG that we are able to cater to, etc.

Speaker #4: So, on a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we had last year.

Speaker #5: Sure. And my second question is on the solar rooftop portfolio. So, if I'm not wrong, I think last quarter you had a ₹500 crore—close to ₹500 crore—kind of order book.

Dhruv Jain: Sure. My second question is on the solar rooftop portfolio. If I'm not wrong, I think last quarter you had close to INR 500 crore kind of order book. I just want to get a sense that what's the number here? How has been the execution in this vertical so far? How should we really think about this number really going forward in the next, say, one or two years? Thanks.

Speaker #5: I just want to get a sense—what's the number here? How has the execution been in this vertical so far? And I mean, how should we really think about this number going forward in the next, say, one or two years?

Speaker #5: Thanks.

Speaker #4: Yeah, so the solar rooftop business in particular has been in a ramp-up mode last quarter. So, you know, basically getting all our ducks in place as far as execution is concerned, is what I'd say.

Promeet Ghosh: Yeah. The solar rooftop business, in particular, has been in a ramp-up mode last quarter. Basically getting all our ducks in place insofar as the execution is concerned, is what I'd say. Frankly, as you are aware, out of that INR 500 crore, INR 450 crore is an order book that we expect to execute over the six, eight months.

Speaker #4: And frankly, as you are you know, as you are aware, out of that 500 crores, 450 crores is like is an order book that we expect to execute over the six, eight months.

Speaker #5: Absolutely.

Dhruv Jain: Absolutely.

Speaker #4: Right? So, I'd say that this has been a year in which we really ramped up our execution capability. I mean, you know, this is like going from zero to 500 in a very short period of time.

Promeet Ghosh: I'd say that this has been a year in which we really ramped up our execution capability. This is like going from zero to 500 in a very short period of time. The order book pretty much remains in place. The good news is that in solar rooftops, we also have started garnering orders on the B2C side. This is, of course, the entire idea of the B2G business was that it gives us the scale both in solar rooftops and solar farms, helps us sharply ramp up execution, and that we will also use to step up our B2C presence. This was the quarter where the revenues from B2C have also started rolling in. That, of course, is a business where it's a consumer business and a very high ROCE business, negative working capital business. Yeah, I'd say those are the two things that happened.

Speaker #4: So the order book pretty much remains in place. The good news is that in solar rooftops, we have also started garnering orders on the B2C side.

Speaker #4: Right? So this was—this is, of course, the entire idea of the B2G business: that it gives us the scale, both in solar rooftops and solar pumps.

Speaker #4: You know, helps us sharply ramp up execution, and we will also use it to step up our B2C presence. And this was the quarter where revenues from B2C have also started rolling in.

Speaker #4: That, of course, is a business where, you know, it's a consumer business, and very high ROC.

Speaker #1: Are business negative working capital business . So yeah , I'd say those are the two . Things that happen . These quarter and the next quarter is where I would expect a , I mean , huge bulk of that order book to get executed

Promeet Ghosh: This quarter and the next quarter is where I would expect a huge bulk of that order book to get executed. Yeah.

Speaker #2: Yes. Would you agree?

Dhruv Jain: Yes. Agree to agree.

Speaker #1: Got it . Thank you so much . And the government . Government is not If they are able . Anyway . So yeah

Promeet Ghosh: Yeah.

Dhruv Jain: Got it. Thank you so much.

Promeet Ghosh: The government pretty clearly got impacted by that.

Dhruv Jain: Exactly.

Promeet Ghosh: If they are able. Anyway, so yeah.

Speaker #3: Yeah, next we have a question from Mr. Archibald. Please unmute your line and go ahead with your question.

[Analyst] (ICICI Securities): Yeah. Next we have a question from Mr. Achal Lohade. Please unmute your line and go ahead with the question.

Achal Lohade: Yeah. Good evening, team. Thank you for the opportunity. The first question I have, if you look at, we had a low base of last year, given the summer season we had. Given the recovery we kind of saw in the month of June, how do you see this? How do you tally this? Is really the consumption that weak or it's only specific to the category now? Are you seeing any green shoots now?

Speaker #4: Yeah . Good evening team . Thank you for the opportunity , first question I have , , you know , , if you look at we had a low base of last year , given the summer season , we had .

Speaker #4: And , given the recovery , we kind of saw in the month of June . , how do you see this ? How do you tell you this is really the consumption that weak or it's only specific to the category in .

Speaker #4: Are you seeing any green shoots now?

Promeet Ghosh: Actually, like I said, I think the consumption is pretty decent. What happens in our business is that initially when you take price increases, there's a sticker shock. A guy comes into the store, he looks at the product and he says, Guys, I just came two weeks ago and the price is now 10% higher or 15% higher. He says, Guys, I don't want to buy it just now. Maybe it'll come down. Having said that, the nature of our business is that most of these are only partially discretionary. You really don't have an option. I think the pricing has a delaying impact but not a demand suppression impact. Certainly what we are seeing is that demand remains robust. Yes, we started the quarter a little bit impacted by the supply disruptions that we were facing.

Speaker #1: We are . I think it's a . Like I said , I think the consumption is , , is pretty decent . , we are seeing both of the You know , what happens in our business is that initially , , when you take price increases , there's a sticker shock , right ?

Speaker #1: So a guy comes into the store, he looks at the product and he says, "Guys, I just came out two weeks ago and the price is now 10% higher or 15% higher."

Speaker #1: Right . And he says , guys , I don't want to buy it just now . Maybe it will come down right . So , , so that the , the having said that , the nature of our business is that most of these are , , only partially , , discretionary , right .

Speaker #1: So you really don't have an option . So I think the pricing , , you know , has a , has a delaying impact , but not a demand suppression impact .

Speaker #1: , certainly what we are seeing is that , , demand remains robust . And , and our , , yes , we've had , we started the quarter a little bit impacted by , , the supply disruptions that we were facing .

Promeet Ghosh: As our supply disruptions are subsiding and market has become much more predictable, we are seeing robust growth is what I'd say.

Speaker #1: , you know , but , , as our demand as our supply disruptions are subsided , , and , you know , market has become much more predictable .

Speaker #1: We are seeing robust growth, is what I said.

Kalees Arunachalam: In fact, just to add to what he said, look at it category after category. The segments. Butterfly starts with we reported a standalone Butterfly business reporting 18% growth, excluding Crompton. Lighting, probably one of our best ever quarters with about 15% growth. ECD on the back of INR 200 crore of supply shortage that we talked about has still delivered INR 12 crore, where acceleration of revenue on solar rooftop is yet to kick in. Overall, we see that on the back of our pricing action that we have taken across categories, coupled with the supply challenges, business is moving in the right direction and consumption is also positive.

Speaker #2: Yeah . In fact , , just to add to it , if you look at it Category after category , after the segments , are butterfly starts with B reported , a standalone butterfly business reporting 18% growth , excluding Crompton lighting , probably one of our best ever quarter with about 15% growth on the back of 200 crores of supply shortage that we talked about are still delivered .

Speaker #2: 12 crores where acceleration of revenue on solar rooftop is taken . So overall , we see that on the back of our pricing action that we have taken across categories , coupled with the supply challenges , business is moving in the right direction and consumption consumption is also positive

Promeet Ghosh: Guys, pricing, when you have supply disruption, you do have to be proactive in pricing. Even in Crompton HDA business, you are aware that we have an HDA business, right? Which over the last six quarters has been one of the fastest growing businesses. We took material pricing action there, and as a consequence, the margins of that business, despite cost increases, actually done extremely well. It has gone up multifold. Now, I am not at liberty to disclose the number to you, but the margins in that business, profit margins in that business, has gone up multifold. To short point, it is not a demand issue.

Speaker #1: You know , pricing when you when you have , , supply disruption , you do have to , you do have to be , I mean , you know , you want to be a proactive in pricing , even in Crompton as a business , you are aware that we have SDA business , right ?

Speaker #1: , which over the last , , six quarters has been , , you know , one of the fastest growing businesses we took material pricing action there .

Speaker #1: And as a consequence, the margins of that business, despite cost increases, have actually done well. They have gone up multifold.

Speaker #1: Now , I'm not at liberty to disclose the number to you , but the margins in that business profit margins in that business has gone up multifold .

Speaker #1: So you kind of got to , Look , look at that holistic picture to short point , it's not a , it wasn't , it's not a It's not a demand issue

Achal Lohade: Got it. Secondly, if you could talk about the CapEx, how do you see it for the current year and next year, particularly given the foray into new categories? Would there be any capital allocated for that as well? Thank you.

Speaker #4: Got it . , secondly , if you could , , , talk about the CapEx , how do you see it for the current year and next year , particularly foray into new categories ?

Speaker #4: Would there be any capital allocated for that as well? Thank you.

Promeet Ghosh: Guys, I have said before, we have a pretty disciplined approach to capital allocation, right? I have said before, let us just understand. We have so far, always had a good mix of in-house manufacturing as well as outsourced manufacturing. Within in-house manufacturing, we have consistently increased our capacity with very low investments, right? If you remember, 2 years ago, we announced that we had expanded the manufacturing capacity at our Baddi plant with an investment. The capacity had gone up by 50%, and we had made an investment of all of INR 50 lakh. Right? We have similarly expanded and optimized capacity at other locations. When we have gotten into Wires, this is a question that I keep getting asked. Before we got into Wires, we worked quite hard on figuring out what the supply chain for Wires would be.

Speaker #1: Right . I have said before , we have a I , , we have , , a pretty , , pretty disciplined approach to capital

Speaker #1: Right . I have said before , we have a I , , we have , , a pretty , , pretty disciplined approach to capital allocation , right ?

Speaker #1: So , , I have given the said before , , you know , let's just , let's just understand e we , , we have so far , , , always had a good mix of in-house manufacturing as well as outsourced manufacturer within in-house manufacturing We have consistently increased our capacity with very low investments .

Speaker #1: Right . So if you remember , two years ago , we announced that we had an expanded the manufacturing capacity at our plant .

Speaker #1: We then investment , it had the capacity had gone up by 50% , and we had made an investment of all of 50 lakhs .

Speaker #1: Right , we have , , in , you know , we have similarly expanded and , you optimized capacity at other locations . So , and when we've gotten into wires .

Speaker #1: This is a question that I keep getting asked before we got into wires. We were quite hard on figuring out what the supply chain for wires would be today.

Promeet Ghosh: Today, as of now, we are not putting up a plan for manufacturing Wires, so it's not really a capital allocation issue. Having said this, we do have a plan to take our manufacturing capability to another level. Right? Now, you are aware that we have announced in the past that we are planning over the next two, three years to implement a greenfield manufacturing location with the next generation manufacturing capability. Right? As I have told you in the past, that manufacturing plant, which will also include a large warehousing unit, will spend about INR 350 crores. Otherwise, you shouldn't expect to see whatever. Our regular manufacture, our CapEx trends should hold.

Speaker #1: As of now , we are not putting up a plant for manufacturing wires , so it's not really a capital allocation Having said this , we do have a plan to take our manufacturing capability to another level .

Speaker #1: Right now . You are aware that we have announced in the past that we are planning over the next 2 to 3 years to implement a greenfield manufacturing location with the next generation manufacturing capability , right .

Speaker #1: And as I have told you in the past that , manufacturing plant , which will also include a large warehousing unit , will spend about 350 crores Otherwise , , you know , you shouldn't expect to see , , about our regular manufacturing CapEx trends should hold

Achal Lohade: Got it. I'll fall back into queue. Thank you so much.

Speaker #4: For it , I will fall back Thank you so much

[Analyst] (ICICI Securities): Next we have a question from Mr. Parag Khare. Please unmute your line and go ahead with the question.

Speaker #3: Yeah . Next , , we have a question from Mr. . Please unmute your line and go ahead with the question

Parag Khare: Yes. Good evening, sir. Thank you for the opportunity. Sir, if we look at the copper prices, which is a major input side for us, it's been continuously going up. Even after correction it has gone up, and then it's at an all-time high. Do you think we may need pricing actions in the future as well to support our margins?

Speaker #4: Yes . Good evening sir . Thank you for the opportunity , so .

Speaker #3: If we look .

Speaker #4: At the copper prices , which is a major , , side for us has been continuously going up . I mean , it's even after , you know , correction , it has gone up and then it's at an all time high Do you think we may need future pricing and pricing actions in the future as well to support our margins

Promeet Ghosh: I'd say like I said earlier, we have been quite disciplined in passing on pricing increase. Right. Having said that, the way that, at least we have not seen most of our competitors, large well-profiled competitors, frankly, follow through in the same manner. Perhaps they were benefiting from a significant low-cost inventory, but that will wear off, right. The approach that we have is both working inside as well as working outside. Right. Every price increase that we have in commodity, we work on both sides. As of now, do we see a significant state of pricing increases being necessary? The answer is no. Partly because we've been first to the market, and the price increases that we did take have now, we believe, largely settled into the market.

Speaker #1: You know , I say like I said earlier , , we have been , , quite disciplined in passing on pricing increases , right ?

Speaker #1: We said that the way that , and at least I , we have not seen , , most of our competitors , or large bulk of our competitors , frankly , follow through , , in the same manner .

Speaker #1: But as they were benefiting from a significant low cost inventory , but that will wear off right ? , the price , the approach that we have is both working inside as well as working outside , right ?

Speaker #1: So , , every price increase that we have in commodity , we work on both sides , , as of now , , you know , do we see a significant spate of pricing increases being necessary ?

Speaker #1: , the answer is no , partly because we've been , you know , first to the market and the price increases that we did take have now we believe , largely settled into the market , at least today .

Promeet Ghosh: At least to date, I have not seen a sharp set of price increases that are still necessary for us, because of the combination of the two, or actually three, price increases, cost measures, as well as our operating leverage. I think all of those should help.

Speaker #1: I have not seen , , a sharp set of price increases that are still necessary for us . , because of the combination of the two .

Speaker #1: Or actually three , , price increases costs , measures , as well as our , , operating leverage . , I think all of those should help .

Parag Khare: Sure. The second question is, you talked about INR 200 crores of shortfall because of the supply disruptions. Could you elaborate which category where we face these challenges? Is it fan, air coolers?

Speaker #4: Sure . And the second question is , , you know , you talked about 200 crores of , , you know , , shortfall because of the supply disruptions .

Speaker #4: Could you elaborate which exam , which category , where we face these challenges ? Is it fan air coolers

Kalees Arunachalam: No, I think we answered this earlier. It is largely fans, and largely in the ECD categories where we had the shortage product.

Speaker #2: No , I think we answered this earlier . It's largely fans . And largely in the categories where we had the shortage

Promeet Ghosh: Actually, also it's the ECD. It's even lighting, really. That's right. Frankly, lighting was our fastest growing segment, but it would have grown even faster, I assume.

Speaker #1: Actually , outside the So And frankly , lighting was the fastest growing segment . But it would have been it was grown even faster .

Speaker #1: I assume

Parag Khare: Supply chain, is it because of the commodity inflation or there are some other reasons also to it?

Speaker #4: So supply chain . Is it because of the commodity inflation or . There are some other reasons also to . It

Kalees Arunachalam: See, fundamentally, as you would know, Crompton, as an organization, has always been working on a sharp networking capital management, and we have been an organization that works on negative working capital. As we entered Q4, we never carry a base inventory into it. As the war opened up, our initial challenge assumptions were around availability shouldn't be a concern, it's only pricing. As we discovered, the commodities also took time, and we did not have the base inventory to cover it. That took us time, and by around June end, it got stabilized. In July, we are back to normal. In spite of those challenges, is what we have delivered, is what we were trying to explain across categories, the challenges we had on availability.

Speaker #2: Fundamentally , as you would know , Crompton , as an organization has always been working on a sharp net working capital management . And we have been an organization that works on negative working capital .

Speaker #2: So as we entered Q4 , we never carry a base inventory into it . And as the war opened up , , our initial challenge assumptions were around availability .

Speaker #2: Shouldn't be a concern . It's only pricing . But as we discovered , the commodities also took time and we did not have the base inventory to cover it .

Speaker #2: And that took us time . And by around June end , it got stabilized . And July we are back to normal . So in spite of those challenges is what we have delivered is what we were trying to explain across categories , the challenges we had on availability

Parag Khare: Sure. Thank you for the opportunity, and good luck for Q2.

Speaker #4: Sure . Thank you for the opportunity and good luck for Q2

Kalees Arunachalam: Thank you.

Speaker #2: Thank you

[Analyst] (ICICI Securities): Yeah. Next we have question from Siddhartha Bera. Please unmute your line and go ahead with the question.

Speaker #3: Yeah . , next we have question from Siddharth Bera . Please unmute your line and go ahead with the question

Siddhartha Bera: Yeah. Hi, sir. Thanks for the opportunity. Sir, first, a quick follow-up on the previous question of sales which we lost. How will be the channel inventory in that scenario, and would we have scope to cover up this shortfall in the coming quarters? That will be the first question. Second is, if you can share the segment-wise growth, like fans, pumps, and small appliances, how the growth has been in the quarter?

Speaker #5: Yeah . Hi , sir . Thanks for the opportunity , sir , , first , a quick follow up on the previous question of , , sales , which we lost .

Speaker #5: , given , , how will be the channel inventory in that scenario ? And would we have scope to cover up this , shortfall in the coming quarters ?

Speaker #5: , so that will be the first question . And second is , , if you can share this segment wise growth , like France pumps and small appliances , , how the growth has been in the quarter .

Kalees Arunachalam: Siddharth, as you're aware, we don't provide the segment-wise results, or rather, the sub-segment results. Segment-wise results have been provided between ECD, Lighting, and Butterfly. Insofar as the channel inventory is concerned, that goes with the demand pattern. We never had too much of a channel stock earlier also. We don't think that's a concern right now, though.

Speaker #2: So that we don't provide the segment wise , , results , , which , or rather the subsegment results , segment wise , results have been provided between E , C , D lighting and butterfly .

Speaker #2: , insofar as the channel inventory is concerned , that goes with the demand pattern . , we never had too much of a channel stock earlier .

Speaker #2: Also, we don't think that's a concern right now, to

Siddhartha Bera: Got it.

Promeet Ghosh: It's not a particular area of concern for this quarter.

Speaker #5: Got it .

Speaker #1: It's not a concern for the it's not a particular area of concern for this quarter .

Kalees Arunachalam: Yeah.

Speaker #6: Yeah .

Promeet Ghosh: Particularly because we started addressing this towards the last part of the last quarter.

Speaker #1: Particularly because we started addressing , , this towards the last part of the last quarter . So this is kind of weird . We now we are looking at some of these in the rearview mirror

Kalees Arunachalam: Lining up.

Promeet Ghosh: Yeah. Now we are looking at some of these in the rearview mirror.

Siddhartha Bera: Got it, sir. Thanks a lot.

Speaker #5: Thanks very much

[Analyst] (ICICI Securities): Next, we have question from Mr. Umang Mehta. Please unmute your line and go ahead with the question.

Speaker #3: Next , we have question from Mr. Umang Mehta . Please unmute your line and go ahead with the question

Umang Mehta: Hi. Thanks for the opportunity. First question, again on fans. Given the disruption is now behind, and given that the category is seeing double-digit kind of price hikes, and the base of last year is okay, would 15% be a fair expectation for rest of the year in terms of how fans should grow?

Speaker #4: Hi .

Speaker #7: , thanks for the opportunity . , first question again on fans . , given the disruption is now behind . And given that the category C in double digit kind of price hikes , , and the base of last year is , , okay , , would we , , would 15% be a fair expectation for the rest of the year in terms of how fans should grow ?

Kalees Arunachalam: Yes, Umang. As you would know, we don't provide forward guidance in terms of how do we go about it. Yes, from a portfolio perspective, we have already seen the kind of growth that we have seen in BLDC, which we talked about in the range of about 45%. A lot of work that had to be done within the BLDC category on product and placement has just started. The journey of BLDC for us, I would say, in many sense, is probably beginning, and there is a long, long leg room available for us to grow from that perspective. Similarly, premium fans, which is on the induction side, is also moving positively as we get into Q2, Q3 onwards. That should provide the impetus for the growth.

Speaker #8: ,

Speaker #2: From , as you would know , we don't provide forward guidance in terms of how do we go about it ? , but yes , , from a portfolio perspective , , we have already seen the kind of growth that we've seen in Bldc , , which we talked about in the range of about 45 percentage , a lot of work that had to be done within the bldc category on products and placements has just started .

Speaker #2: So the journey of Bldc for us , I would say in many sense , , is probably beginning . And there is a long , long , , leg room available for us to grow from that perspective Similarly , , premium plans , which is on the induction side , is also moving positively as we get into Q2 , Q3 onwards , , that should provide the impetus for the growth as we have always been talking about regulatory challenge or the changes that is happening through BWP , we see Crompton is positively poised to consolidate the industry at the entry segment and gain market share .

Kalees Arunachalam: As we have always been talking about regulatory challenge or the changes that is happening through BEE, we see Crompton is positively poised to consolidate the industry at the entry segment and gain market share. Considering that it may not be competitively possible for people to absorb the incremental cost and pass back. Overall, fans as a category, we do believe we are well-poised. Already some of the symptoms are visible for us in strong BLDC growth and strong double-digit growth in some of our other sub-segments within fans, and the momentum should continue in both mid and long run.

Speaker #2: Considering that it may not be competitively possible for people to absorb the incremental cost and pass back , , so overall fans , as a category , we do believe we are well poised .

Speaker #2: , already some of the symptoms are visible for us in strong growth and strong double digit growth in some of our other subsegments within plants and the momentum should continue in both mid and long run

Umang Mehta: Sure, Kalees. Thanks. The second question was on solar rooftop. It seems that this quarter didn't see much execution. Was it something to do with government or any challenges in the quarter and are they being Yeah.

Speaker #7: Thanks . And the second question was on solar rooftop . , it seems that this quarter didn't see much execution . Was it something to do with government ?

Speaker #7: or any challenges in the quarter ? And , , are they . Yeah , yeah .

Promeet Ghosh: Yeah. The revenue recognition for solar rooftop, we follow a methodology on installation basis, dispatches from our end are ongoing. Revenue is recognized when the installation gets completed, which we're expecting to happen in Q2.

Speaker #2: The revenue recognition for , solar rooftop , we follow a methodology on installation basis . So dispatches from our end are ongoing . , it's been moving in the right trend , but revenue is recognized when the installation gets completed , which you are expecting to happen in Q2 .

Umang Mehta: Fair enough. Thank you so much. All the best.

Speaker #7: Fair enough . Thank you so much and all the best .

Promeet Ghosh: The government's been paying us on time. In fact, they've been paying us and pushing us to continue to accelerate.

Speaker #1: And a government will be paying us on time . In fact , they've been paying us and pushing us . To continue to accelerate

[Analyst] (ICICI Securities): Next we have a question from Mr. Vishal Goyal. Please unmute your line and go ahead with the question. Mr. Vishal Goyal, please unmute your line and go ahead with the question.

Speaker #3: Yeah . Next we have question from Mr. Vishal Goyal . Please unmute your line and go ahead with the question Mr. Goyal , please unmute your line and go ahead .

Speaker #3: The question

Vishal Goyal: Hello. Thanks for the opportunity. Good evening, team. My question is on the Wires segment. Can you share the current status as to how many cities you have reached and any initial numbers, if you can share at all?

Speaker #4: Hello Yeah . Thanks for the opportunity . , good evening team . So my question is on the wire segment . , can you share the current status as to how many cities we have reached and any initial numbers , if you can share it all

Promeet Ghosh: Again, we'll hold off on talking about initial numbers. As you are aware, we launched WIRES in Tamil Nadu and Karnataka.

Speaker #1: Again , we'll hold off on talking about the initial numbers , but , , as you are aware , the , , we launched wires in Tamil Nadu and Karnataka and Karnataka , Karnataka .

Vishal Goyal: Karnataka.

Promeet Ghosh: Karnataka. I don't know if there's a count of cities.

Speaker #1: , I don't know if there is a count of cities . , yeah , we'd be in about 14 different towns and cities .

Kalees Arunachalam: Yeah, we've been about 14 different towns and cities.

Promeet Ghosh: 14. I'm reminded by Shaleen that we have presented 14. See, guys, I think this is a business which has lots of potential. We're just getting started. As and when we kind of, I think, build out the business in these cities, we will also expand into other areas. Yeah, by Crompton size, it is still very small, so I don't know actually going to talk about it because obviously INR 9,000 crores, it's still a small business. The idea is that this is a very large business that we have the right to win, and we are finding that we are able to leverage that right to win. Of course, early days yet.

Speaker #1: 14 so I'm reminded by Charlene that we , , we are presenting . 14 to see guys , I think this is a business , which is , , lots of potential , which getting started and as , and when , , you know , we kind of , , I think read out the business in these cities will also expand into other areas .

Speaker #1: So yeah , I mean , early , , by Crompton , , size , it is still very small . So I'm not going to actually going to talk about it because , , you know , obviously 9000 crores , it's still a small business , but the idea is that this is a very large business that we have the right to win .

Speaker #1: And we are finding that , that we are able to the , , you know , we are able to leverage that , , you know , right to win , of course , early , early days yet

Vishal Goyal: Sure. Thanks. Just a follow-up question on the Butterfly side. How is the competition on this segment? There are a lot more white label and other brands which have come up, plus Chinese, plus now Ninja has come in. How are you looking at the competition in this space?

Speaker #4: Sure . Thanks . And just a follow up question on , a butterfly side . So how is the competition on this segment ?

Speaker #4: , you mean like there are lot more , , white label and other brands which have come up , , plus Chinese plus now Ninja has come in .

Speaker #4: So how are you looking to competition in this space ?

Promeet Ghosh: Shrishti, you want to answer that and

Speaker #1: If you want to answer that , I .

Swetha Sagar: I think kitchen appliances for quite some time has been extremely competitive space. At least for the last five, six years, it's been a very competitive space where we have been having white labels and international brands have started playing in this market for quite some time. How we were looking at it, I think it's quite visible in the levers that we started activating from last year, starting from the brand refresh to our brand architecture rework. In line with it, keeping the consumers as the center, I think that's when we had launched our IdeaFor Series coming into place, which has actually started working well for us and contributing significantly to the brute sales for Butterfly.

Speaker #5: So .

Speaker #8: I think , , kitchen appliances for quite some time has been extremely competitive space , at least for the last five , six years .

Speaker #8: It's been a very competitive space where we have been having white labels and , , , international brands have started playing in this , , market for quite some time .

Speaker #8: I think , , how we were looking at it , I think it's , , quite visible in the levers that we activated , started activating from last year , starting from the brand refresh to our brand , , architecture work .

Speaker #8: And , , in line with it , , you know , keeping the consumers as the center . I think that's when we had launched our idea for series coming into place and which has actually started working well for us .

Speaker #8: And contributing significantly to the growth of , you know , for butterflies . But from a space point of view , it is always good to have , you know , multiple brands playing in this space because it opens up a lot opportunity for us as a very serious kitchen appliances .

Swetha Sagar: From a space point of view, it is always good to have multiple brands playing in a space because it opens up a lot of opportunity for us as a very serious player in kitchen appliances. We are looking at it very positively.

Speaker #8: We are looking at it very positively.

Promeet Ghosh: I should tell you that Butterfly is an interesting case in point about how the Crompton group has been evolving. Even as I say, if you exclude the OEM work that Butterfly was doing for Crompton, the growth in Butterfly was about 18%. Even that 18% comes on very strong growth, 20-plus% growth in retail, in large format retail, in e-commerce. All the quality of distribution in Butterfly, and I'm telling you this because now you know the numbers in Butterfly. We can't necessarily talk about the same numbers in Crompton because we don't fully disclose them. Each one of these, the key focus channels for Butterfly, the growth has been very robust. Right? It's an indication of how we've been evolving as a business.

Speaker #1: I should tell you that , , butterflies an interesting , , you know , case in point about how Crompton has been evolving the Crompton Group has been evolving .

Speaker #1: , even as I say , if you exclude the sales that , , the , the OEM work that butterfly was doing for Crompton , , the growth in butterfly was about 18% .

Speaker #1: But even that 18% , , comes on very strong growth . You know , 20 plus percent growth in retail in large format retail , in e-commerce .

Speaker #1: , so , you know , all the , the quality of distribution . , in , and I'm telling you this because now , you know , the numbers in butterfly , , we can't necessarily talk about the same numbers in Crompton .

Speaker #1: , because we don't fully disclose them , but each one of these , , the key focus , , channels for , , for butterfly , the growth has been very robust , right ?

Speaker #1: , and , , so , you know , it's a , it's , it's an indication of how we've been evolving as a business

Vishal Goyal: Understood. Thanks. I'll fall back in the queue.

Speaker #4: Understood . Thanks . I'll follow back in the Q

[Analyst] (ICICI Securities): Next we have a question from Mr. Samir Gupta. Please unmute your line and go ahead with the question.

Speaker #3: Yeah . , next we have question from , , Mr. Samir Gupta . , please unmute your line and go ahead with the question

Samir Gupta: Hi, I hope I'm audible. Good evening, everyone, thanks for taking my question. Sir, firstly, I know this has been discussed by many participants, still a few lingering questions here. INR 200 crore lost sales, just trying to understand. At least the channel would still be carrying inventory, while running a tight ship is great, firstly, the channel inventory should have sufficed for the supply chain disruptions. While running a tight ship is great, does this episode change our approach towards inventory management, particularly going into the largest season of the year?

Speaker #9: Hi . I hope I'm audible . Good evening , everyone , and thanks for taking my question . , sir . Firstly , on the , I know this , this , this has been discussed , , by many participants , , but still a few , few lingering questions here .

Speaker #9: So 200 crore loss sales , just trying to understand , , at least the channel would still be carrying inventory . , and while running a tight ship is great , so firstly , I mean , , the channel inventory should have sufficed for the supply chain disruptions .

Speaker #9: And while running a tight ship is great , but does this episode change our approach towards , , inventory management , particularly , particularly going into the larger season of the year ?

Kalees Arunachalam: Samir, first and foremost, channel inventory is an outcome of tertiary sales. What we are discussing here is about a primary sales loss for the company. A tertiary sales, whatever channel carries, would have been adequate, that is what we see in category after category on our tertiary growth. I don't think these are apple-to-apple numbers that are comparable. Second, in terms of how do we look at the inventory management strategy, these are typically one-off black swan events, for which we cannot change the business model of the company. I think for many years, our business model on being asset-light has been very productive, that has been giving results quarter after quarter. We don't want to revisit that just because of a one-off.

Speaker #2: Samir . , first and foremost , , channel inventory is an outcome of a tertiary sales . What we are discussing here is about a primary sales loss for the company .

Speaker #2: So a tertiary sales , , whatever channel carries would have been adequate . And that is what we see . In category after category on our tertiary growth .

Speaker #2: So I don't think these are Apple to Apple numbers that are comparable Second , , in terms of how do we look at the inventory management strategy ?

Speaker #2: , these are typically one off black swan events for which we cannot change the business model of the company . I think for many years , our business model on , , being asset light has been very , very productive .

Speaker #2: , and that has been giving results after quarter . And we don't want to revisit this , , that just because of a one off , obviously , wherever required , if we have to take a higher portion and make some course corrections , we will be open to reviewing that as we move forward .

Kalees Arunachalam: Obviously, wherever required, if we have to take a higher portion and make some course corrections, we will be open to reviewing that as we move forward.

Samir Gupta: Got it. Basically the end consumer level sales would not have been lost is what you're saying.

Speaker #9: Got it . So basically , the consumer level , net end consumer level sales would not have been lost is what you're saying .

Kalees Arunachalam: Yeah.

Samir Gupta: Less than one.

Speaker #1: Yeah , not as much . Not as much obviously . Obviously . So this is primary sales . Baba . We're talking about primary sales .

Kalees Arunachalam: Obviously. This is primary sales, Baba. We are talking about primary sales. Yeah, guys, insofar as our approach to running a business, let me assure you, running a tight ship like we do at Crompton is not easy to do. It's something that we worked on for many years. That is also the reason why we have the kind of ROCE that we do. Especially if you take out the Butterfly investments, you can see the kind of ROCE that we generate and the cash flow that we generate. Yeah, there'll be some quarters where having a huge inventory will help you get into the quarter because you will have low-cost inventory. There'll be another quarter when the prices go down and you'll have another impact. There is a lot of value we found over the years to have a lean inventory.

Speaker #1: And yeah guys , this , , insofar as our approach to running a business , let me assure you , running a tight ship like we do it is , is not easy to do .

Speaker #1: It's something that we worked on for many years . , and that is also the reason why we have , , the kind of rock that we do , especially if you take out the , , butterfly investments .

Speaker #1: You can see the kind of rock that we generate and the cash flow that we generate . So yeah , there'll be some quarters where , you know , having a huge inventory will help you get into the quarter because you will have low cost inventory .

Speaker #1: There'll be another quarter when the prices go down , and you will have a , you will have a another impact . So , you know , there is there's a lot of value .

Speaker #1: We found over the years to have , , a lean inventory , .

Samir Gupta: I understand, sir. My apologies, because I interpreted it as the end consumer sales lost-

Speaker #9: I understand , sir , my apologies because I interpreted it as the end consumer sales lost . , that's why the , the , the question , , second is on the , the , on butterfly .

Kalees Arunachalam: No, no

Samir Gupta: that's why the question.

Kalees Arunachalam: No, no.

Samir Gupta: Second is on Butterfly. 18% growth looks great, but this quarter did have some tailwinds in terms of higher demand for induction cooktops. And if I look at your competitor, TTK, they have done a 34% growth this quarter. One, was this segment also impacted by supplier disruptions? You did mention market share gains, but the market leader has reported a faster growth. Or is it again, primary, secondary, or a geography disparity that we are looking at?

Speaker #9: So 18% growth , , looks great , but , , this quarter did , had some tailwinds in terms of higher demand for induction .

Speaker #9: Cooktops . And if I look at , , your competitor TDK , they have done a 34% growth this quarter . So one was this segment also impacted by supplier disruptions ?

Speaker #9: You did mention market share gains , but , , the market leader is , , has reported a faster growth . Or is it again , primary , secondary or a geography , , you know , disparity that we are looking at ?

Kalees Arunachalam: You want to answer, Swetha?

Swetha Sagar: Sure. I think our core category business, which almost contributes to about 85% of Butterfly's turnover, I think we've grown significantly in line with what competition has grown. That's the first thing. Second thing is with respect to induction cooktop, our growth is not backed by induction cooktop at this point in time. Because like we have seen in the past quarters also, our auxiliary categories were something that strategically we decided to accelerate them only from Q2 onwards of this year. Our growth is steady state coming in from key categories in which we are serious about, and our market shares also have been sustainably doing better for last few quarters for us.

Speaker #1: Are you

Speaker #6: Sure ?

Speaker #8: So , I think our core category business , which are almost , , I think contributes to about 85% of butterflies , turnovers , I think we've grown significantly , , in line with what competition has done .

Speaker #8: So that's the first thing . So second thing is with respect to induction cooktop , our growth is not backed by induction cooktop at this point in time .

Speaker #8: Because, like we have seen in the past quarters, also our auxiliary categories were something that we have strategically—we decided to accelerate them only from quarter two onwards of this year.

Speaker #8: So our growth is steady state coming in from key categories in which we are serious about . And our market shares are also have been , , sustainably , , doing better for the last few quarters for us .

Swetha Sagar: Now, if we break it down into a few categories where if we would want to benchmark it against, maybe our pressure cookers and glass top gas stoves have done much better than what we see from our peers at this point in time. Specifically, since you mentioned about Prestige, I think they are market leaders in induction cooktop, and I think they have made the maximum out of it. We don't play significantly in that particular category at this point.

Speaker #8: Now , if we break it down into few , , , categories where if we would want to benchmark it against maybe our pressure cookers and glass top casters have done , you know , much better than what we see from our , peers at this point in time .

Speaker #8: Specifically , since you mentioned about prestige , I think they are market leaders in induction cooktop . And I think they have made the maximum out of it .

Speaker #8: And , , we don't play , , you know , significantly in that particular category at this point .

Kalees Arunachalam: I think we can add on, Swetha. See, fundamentally, if you look at it, there's also another impact on Butterfly business. Core channels of Butterfly business have grown ahead of 20%. If you look at it, this was a quarter that was impacted by gas cylinder issues and oil marketing companies did not take off on gas stoves. If you include that impact, Butterfly has already grown at 20% ahead. That's not related to what it could have grown at.

Speaker #2: I can add on to the , , see , fundamentally , if you look at it , , there's also another impact on butterfly business core channels of butterfly business have grown ahead of 20 percentage .

Speaker #2: If you look at it , this was a quarter that was impacted by gas cylinder issues and oil marketing companies did not take off on gas stoves .

Speaker #2: So if you include that impact , butterfly has already grown at 20 percentage ahead

Speaker #1: To what it would have grown at , but , , the point being that , This is not something new . I assume you guys are aware our approach to butterfly .

Samir Gupta: Yeah

Kalees Arunachalam: The point being that this is not something new. I assume you guys are aware our approach to Butterfly has been back to basics. Let's grow what our core product portfolio is. Let's grow what our core channel is. Let's de-emphasize other things which can add revenue episodically, but are not consistent. That's kind of the approach. In Butterfly's case, the induction cooktops is a relatively small portion, and therefore doesn't benefit. Having said that, the core businesses have done great.

Speaker #1: , has been back to basics . Let's grow what our core product portfolio is . Let's grow . What are core channel is , , let's deemphasize other things which can add the revenue episodically .

Speaker #1: , but I'm not consistent . , so that's kind of the approach , but , , in butterflies case , the induction cooktops is a relatively small portion , , and therefore doesn't benefit as much as ours , but having said that , the core businesses have done very .

Speaker #6: Well . Yeah .

Samir Gupta: Got it, sir. That's all from me. Thanks for answering so patiently. I'll come back in the queue for follow-ups. Thanks a lot.

Speaker #9: Got it sir . That's all from me . Thanks for answering . So patiently . I'll come back in the queue for follow ups .

Speaker #9: Thanks a lot

[Analyst] (ICICI Securities): Next, we have a question from Mr. Keyur Pandya. Please unmute your line and go ahead with the question.

Speaker #3: , next we have a question from Mr. Pandya . Please unmute your line and go to the question

Keyur Pandya: Hello. Thanks for the opportunity. Sir, two questions. One, on the renewable side, our solar portfolio.

Speaker #10: Hello . Thanks for the opportunity , sir . Two questions . One on . The renewable side or solar portfolio . , if you can just , , refresh , , what you have earlier guided in terms of where does it stand ?

Promeet Ghosh: Yeah.

Keyur Pandya: If you can just refresh what you have earlier guided in terms of where does it stand in terms of both profitability and working capital. Profitability versus either absolute number or versus, say, the segment in which it is housed. Whichever you want to highlight.

Speaker #10: , in terms of both profitability , , and working capital profitability versus either absolute number or versus , say , , the segment in which it is housed , whichever way you want to , , highlight , , and ancillary question is , , , so this is , as you mentioned , it is more of a timing issue in the reporting , , now , , does it impact ?

Promeet Ghosh: Sure.

Keyur Pandya: An ancillary question is, as you mentioned, it is more of a timing issue in the reporting. Does rains, monsoon seasonality impact in any way or it is ad hoc business which would always be lumpy?

Speaker #10: I mean , does it monsoon seasonality impact in any way or , , it is ad hoc , , business . I mean , which , which would always be lumpy

Promeet Ghosh: In the renewable business, we are in two segments. We are in solar pumps and we are in solar rooftops.

Speaker #1: So , , in the renewable business , we are in two , segments . We are in solar pumps and we are in solar rooftops , right ?

Keyur Pandya: Sure.

Promeet Ghosh: Let's just take them slightly differently. The solar rooftop business, of which we started about 8, 9 months ago, that's a business where we've gotten order book of about INR 500 crores, as you are well aware.

Speaker #1: And so let's just take them , , slightly differently . , the solar rooftop business of which we started about eight , nine months ago , , that's a business where we have gotten into , , we've gotten , , order book of about 500 crores .

Speaker #1: As you guys are aware , this is the order book from Andhra Pradesh . The nature of this , Of this contract is we have two , , implement about 38,000 rooftops in various homes in Andhra Pradesh over the next six months or eight months .

Keyur Pandya: Yeah.

Promeet Ghosh: A big part of this is the order book from Andhra Pradesh.

Keyur Pandya: Yeah.

Promeet Ghosh: The nature of this contract is we have to implement about 38,000 rooftops in various SC/ST homes in Andhra Pradesh over the next six months or eight months at the outset. The payment characteristics of this are that when we demonstrate to the government that we have the product, the government upfront pays us 40%. Then we go out and install the product. At that point in time, MNRE pays us. The central government pays us.

Speaker #1: At the outset , the payment characteristics of this are that when we , are demonstrate to the government that we have the product , the government upfront pays us 40% .

Speaker #1: Right ? Then we go out and install , , the product . Then at that point in time pays us the central government , pays us , right ?

Promeet Ghosh: This is the characteristic of our rooftop business. As I told you, we are getting started in. The execution, or the way that it goes is that you've got to go out and install, and then beyond a point, the revenue recognition happens.

Speaker #1: So this is the characteristic of our , , rooftop business . As I told you , we are getting started in our execution the way that it goes is that you've got to go out and install .

Speaker #1: And then , , , beyond the point , the revenue recognition happens . So , , I'd say the , the revenue , , so far has been relatively modest , but the execution has started in the right earnest .

Keyur Pandya: Right.

Promeet Ghosh: I'd say the revenue so far has been relatively modest, but the execution has started in the right earnest, and in fact, many installations have also happened.

Speaker #1: And in fact , most , many installations have also happened , which of course should reflect itself in the following quarters . Now , insofar as the government payments are , you know , approach is concerned , we are already receiving money from the government as we are demonstrating to the government that we have the product available to install the government is paying us , on time .

Keyur Pandya: Correct.

Promeet Ghosh: Which, of course, should reflect itself in the following quarters. Now, insofar as the government payment approach is concerned, we are already receiving money from the government. As we are demonstrating to the government that we have the product available to install, the government is paying us on time. I said earlier, in fact, the government is pushing us.

Speaker #1: And I said earlier , in fact , the government is pushing us to accelerate the installation . Right ? Absolutely . So , , you guys can add the in the end , but let me just take a shot at it first .

Keyur Pandya: To accelerate

Promeet Ghosh: to accelerate the installation. Right?

Keyur Pandya: Absolutely.

Promeet Ghosh: You guys can add in the end, but let me just take a shot at it first. That's the way that this business works. Insofar as solar pumps are concerned, this is also a B2B business where the government conducts auctions. You participate in that auction. They give you a bunch of solar pumps to install. Those, as you install, you demonstrate that you installed, and you start getting payments from the government. Right?

Speaker #1: So , you know , that's the that's the way that this business works insofar as solar , , pumps are concerned , this is also a business where the government deducts auctions , right .

Speaker #1: And you , , you , you participate in that auction , they give you a bunch of , , you know , solar farms to install those , , as you install you , you know , you demonstrate that you installed and you start getting payments from the government , right Auction , auction , tender , lot auction tender .

Keyur Pandya: Exactly.

Promeet Ghosh: Auction, I said. Not auction, tender. That's the way that that business works. This is not with only one state. These are with various states. Rajat reminds me, we started initially with Haryana, then we've done a bunch of work with Maharashtra, and also now with Rajasthan in recent times, et cetera. Right?

Speaker #1: Right ? Yeah . , so , , that's the way that , that business works . , this is not with only one state .

Speaker #1: These are with various states as well . Just reminds me , we started initially with Haryana , then we done a bunch of work with Maharashtra .

Speaker #1: And , , also now with Rajasthan . And in recent times , etc. . Right . So MP and MP , we've done a bunch of work with MP there , , the process is that you have to install , then you have to , demonstrate that you installed and then the government pays you right out .

Keyur Pandya: MP also.

Promeet Ghosh: MP. We've done a bunch of work with MP. There, the process is that you have to install, then you have to demonstrate that you installed, then the government pays you. Our approach to both these businesses is that we do not install so far. We have an installation partner.

Speaker #1: , our , , approach to both these businesses is that we do not install so far . We have an installation partner , right ?

Promeet Ghosh: That installation partner, as and when we get money from the government, a share of that money goes to the installation partner. Because of which the gross margin in this business is pretty much the EBIT margin in this business, because gross margin onwards, the costs that are incurred are incurred by the partner. The gross receivable from the government, whenever the government pays us, we pay a share of that to our installation partner. Therefore, the gross receivables from the government, by the way, is not identical to net receivables. Not renewables, net receivables. Okay? Trust me, it's a good business for us to be in. Insofar as the solar pumps business is concerned, we did find that there was some delays in the payment of the government a couple of quarters ago.

Speaker #1: So that installation partner , , as , and when we get money from the , , from the government , a share of that money goes to the installation partner because of which the gross margin , , in this business is pretty much the Ebit margin in this business because gross margin onwards , the cost that are incurred are incurred by the partner and the gross receivables from the government .

Speaker #1: Whenever the government pays us , we pay a share of that , , to our installation partner . Therefore , the gross , gross receivables from the government , by the way , is not identical to net renewables because our share of renewables , net receivables , okay , maybe there's a little complicated , but trust me , , it's a good business for us to be in .

Speaker #1: , in so far as solar farms , are business is concerned , I , we , we , we did find that there was , , some delays in the payment of the government a couple of quarters ago .

Promeet Ghosh: I have to say that over the last couple of quarters, that pace has certainly stepped up and continues to step up even in July. It's become clearer what are the things that you have to demonstrate to the government. The government's been clear that as you pay, these guys will go and install more and so on and so forth. I'd say that these businesses, unlike our other businesses, don't necessarily run on a negative working capital because they are different businesses. The ROCE in these businesses is good. Obviously we don't want to get into any business in which our ROCE is not good. The ROCE is good, as we've seen so far. Now, one last question. Sorry, one last point you made, does the monsoon impact it? The monsoon impacts insofar as execution is concerned.

Speaker #1: I have to say that over the last couple of quarters , , that pace has certainly stepped up and continues to step up the even in July .

Speaker #1: , so , you know , we've kind of it's become clearer . You know , what you have to what are the , things that you have to demonstrate to the government , the government has been clear that , guys , if you , you know , as you pay , these guys will go and install more in the , , and so on and so forth .

Speaker #1: So I would say that , , these businesses , unlike our other businesses , don't necessarily run on a negative working capital because they are different businesses , but the rock in these businesses is good , right ?

Speaker #1: So obviously we don't want to get into any business in which our rock is not good . So the rock is , , good .

Speaker #1: As you've seen so far . Now . Sorry , one last point you made . Does the monsoon impact the monsoon impacts insofar as execution is concerned ?

Promeet Ghosh: So far as solar pumps is concerned, if it's raining very heavily in an area, obviously you can't go and install a solar pump because the place would be wet. That does tend to impact, but otherwise not really so much. Maybe even a solar rooftop, if it's raining very heavily, obviously you can't go and put up a unit at the top of the house because the cement won't dry. Other than that, from a demand point of view, it doesn't really impact.

Speaker #1: So so far as solar pumps is concerned , if you , , if it's raining very heavily in an area . Obviously you can't go and install a solar pump because the place will be wet and , you know , , so that , that does tend to impact , but , , otherwise not really so much , maybe even a solar rooftop if it's raining very heavily .

Speaker #1: Obviously you can't go and put up a unit at the top of the house because the cement won't dry , but other than that , from a demand point of view , it's not really doesn't really .

Keyur Pandya: Understood. Sir, just once on the profitability versus the respective margin segment margin. Second question is that you mentioned that you have taken necessary price hikes, specifically in ECD where hikes were required were much higher. From Q1 levels, any incremental hikes? Basically cumulative impact of incremental hikes, any drop in RM prices? Net, what should we expect in terms of profitability?

Speaker #10: Understood . So just one . So on the profitability versus the respective margin segment margin , , and second question , , I is that you mentioned that you have taken necessary price hikes .

Speaker #10: , specifically in SCD where hikes are required were much higher . So , , considering , , so from Q1 levels , any incremental hikes ?

Speaker #10: So basically cumulative impact of incremental hikes , any drop in prices , net net , what should we expect in terms of profitability now .

Kalees Arunachalam: Fundamentally, when it comes to price increases, we would be disciplined. We have always said unit economics is important, and if the commodity costs increase and net of Unnati savings, if there is a pass-on that needs to be done, we'll be disciplined to make that add up. That's not going to be left to subsidize. Coupled with that, when the revenue goes up, operating leverage also kicks in, and that should help us to move the margins in the right direction as we have been seeing. This quarter also, you've already seen 35 expansion in EBITDA margin. As we move forward, we would be disciplined on that in the coming quarters also.

Speaker #2: So , , you fundamentally when it comes to price increases , , we would be disciplined . We have always said unit economics is important .

Speaker #2: And if , , if the commodity cost increase and net of savings , if there is a pass needs to be done , we'll be disciplined to make that .

Speaker #2: not going to be , , left to subsidize . Coupled with So that's that , when the revenue goes up , our operating leverage also kicks in .

Speaker #2: And that should help us to move the margins in the right direction . As you have been seeing . So this quarter also , you have already seen 30 plus expansion in EBITDA margin .

Speaker #2: , as we move forward , we would be disciplined on that in the coming quarters . Also .

Promeet Ghosh: I don't know if you meant in solar business. In the solar business, actually, that is, as you are aware, it doesn't work to the same impact. A large cost of this is panels. The pricing trajectory of panels is actually coming down.

Speaker #1: I don't know if you meant in solar business , , in the solar business , actually , that is , as you are aware , , it doesn't work to the same impact , a large cost of this is panels .

Speaker #1: The , pricing trajectory of panels is actually coming down . Yes . Also bolstered by the fact that now we have two businesses , both of which have large volumes .

Keyur Pandya: Yes.

Promeet Ghosh: Bolstered by the fact that now we have two businesses, both of which have large volume. Our ability to negotiate with the solar panel suppliers is better. The same thing that we talked about price, cost increases don't necessarily apply to our renewable business.

Speaker #1: So our ability to negotiate with these solar panel suppliers is better. So, the same thing that we talked about—price and cost increases don't necessarily apply to our renewables.

Speaker #6: Business .

Keyur Pandya: Okay. Thank you, and all the best.

Speaker #10: Okay . Thank you and all the best

Rishabh Jain: Ashish, you can go ahead with the next question. Ashish, can you unmute and go ahead with the next question?

Speaker #5: , Ashish .

Speaker #11: You can go ahead with the next question Ashish , can you unmute and go ahead with the next question

[Analyst]: Hi, can you hear me now?

Speaker #12: , hi . Can you hear me now ?

Promeet Ghosh: Yeah.

[Analyst]: My question was on the INR 200 crore discussion. As you pointed out that this was largely because of just the impact on primary sales and tertiary sales has not been impacted, which would then imply that maybe the channel inventory would have depleted. In that case, is it fair to assume that a large part of it will kind of come back in Q2, Q3, or this is not going to come back?

Speaker #6: Yes .

Speaker #12: Yeah . So , , my question was on the 200 crore discussion . So as you pointed out that this was largely because of , you know , just the impact on primary sales and tertiary sales has not been impacted , which would then imply that maybe the channel inventory would have depleted .

Speaker #12: And in that case , , is it fair to assume that a large part of it will , , you know , kind of come back in 2Q3Q or , , this is not going to come back

Promeet Ghosh: See, no, not necessarily. There is a mix of these two. The channel inventory, as it depletes, if you made some primary sales, if you're not able to make adequate primary sales, the channel will replenish from other sources. Let's understand that. For a bit, there will be a momentary replenishment of stock. The market share impact I don't think is abiding because when Crompton comes back into the market, Crompton being Crompton, obviously it's a strong brand. As our ability to sell improves, we are obviously able to claw back that position.

Speaker #1: , no , not necessarily . There is , is a mix of these two , , the channel inventory as it depletes , if you are , you made some primary sales .

Speaker #1: If you are not able to make adequate primary sales , the channel will , , replenish from other sources . Right ? So let's understand that , , so , for , for a week , there will be momentary , , whatever replenishment of , of , , but the market share impact , I don't think is abiding because that , you know , when Thompson comes back into the market .

Speaker #1: Crompton Crompton obviously it's a strong player . So as our , , our , as our ability to sell , into fear , obviously able to claw back , , that position .

[Analyst]: Just to be clear, market share, of course, it remains or grows. This is like a loss sale. This most likely does not come back. Is that a fair-

Speaker #12: So , so just to be clear , I mean , I , , market share , , of course , remains , , or , you know , , grows , but this is like a lost sales .

Speaker #12: This most likely does not come back . Is that a fair ? Yes .

Kalees Arunachalam: Ashish.

[Analyst]: Yes.

Kalees Arunachalam: Yeah. Ashish, we are in a seasonal business. Q1 is a season for fans, you would have seen that some of these are seasonal impacts that will not be something that you'll recover on a quarter-on-quarter basis. As we go into Q2, there are momentum that we are seeing in certain categories like BLDC, that we said, which will continue to grow as we accelerate supplies. I don't think you need to connect both as whether it is a demand that is delayed or supply that is delayed. It's an ongoing business call.

Speaker #2: Yeah . We are in a seasonal business and , , Q1 is a season for fans . And you would have seen that some of these are seasonal impact that will not be something that you will recover on a quarter on quarter basis .

Speaker #2: But as we go into Q2 , there are momentum that we are seeing in certain categories , like Bldc that we said , which will continue to grow as we accelerate supplies .

Speaker #2: So I don't think you need to connect both as whether it is a , demand that is delayed or supply that is delayed .

Speaker #2: It's an ongoing business calling .

[Analyst]: Got it. Just last bit on the margins part on the renewable business. What are the margins, broadly just compared to the category? Because I understand it's a high ROCE business, but purely from a margins point of view, because at least solar rooftop will start showing in a big way over the next two quarters. Is it materially different than the category margin?

Speaker #12: Got it . And just last bit on the margins part on on the , you know , renewable business , , what are the margins ?

Speaker #12: I mean , broadly , just compared to the category ? Is it , , because I understand it's a high risk business , but purely from a margins point of view , because , you know , at least solar rooftop will start showing in a big way over the next two quarters .

Speaker #12: So just , , is it , , you know , materially , , different than the category margin ?

Kalees Arunachalam: It is similar to the company EBITDA margin. Otherwise, we don't disclose the sub-segment-wide results, Ashish.

Speaker #2: It is similar to the company EBITDA margins . Otherwise we don't disclose the segment . Subsegment by the results are

Promeet Ghosh: The gross margin is lower, obviously.

Speaker #1: The margin is lower , but obviously , , but the , on the EBITDA line , it is similar .

Kalees Arunachalam: EBITDA line.

Promeet Ghosh: On the EBITDA line, it is similar.

[Analyst]: Sure. That's helpful. Thank you so much.

Speaker #12: Sure . That's helpful . Thank you so much , sir .

Rishabh Jain: Sir, before we end the call, we would like to request you for some closing comments.

Speaker #11: Before we end the call , we would like to request you for some closing comments

Promeet Ghosh: Thank you everyone for joining. As you know, you are already aware, it's been a very interesting quarter for us. This is going to be an even more interesting quarter, I think, because of what you will see happening on brand, et cetera. Further, if you have any queries, please feel free to reach out to Kalees, Ruchir, or Rishabh. They're always available. Thank you, and have a good evening.

Speaker #1: , thank you , everyone for joining . , we as you know , you are already aware , it's been a very interesting for .

Speaker #6: Us .

Speaker #1: This is going to be an even more interesting quarter , I think , because of , I think what you will see happening on brand , etc.

Speaker #1: . , and , , further , , if you have any queries , please feel free to reach out to Carlos or Rishabh .

Speaker #1: , they are always available . And , , thank you and have a good evening .

Kalees Arunachalam: Thank you.

Speaker #6: Thank you

Promeet Ghosh: Sorry, I said.

Speaker #1: Very I , I said that we have .

Kalees Arunachalam: Something recorded.

Promeet Ghosh: I said that we have a limited investor meeting, where we are planning, as I said earlier, to give investors a peek into how Crompton's changed over the last three years. Also give them a deeper sense of what we're doing in each category, as well as hear from the management team of Crompton. From the horse's mouth, so to say. Yeah. Hopefully you guys will enjoy that, and at least some of you will be there. The invitations for that, I guess, have already gone out. Yeah. This is not something that we've done ever before, as I understand. Yeah. We've been planning this for a while. As some of you will be aware, this was planned about eight, nine months ago. Maybe a year ago, actually.

Speaker #6: A , .

Speaker #1: We have a . Limited , , investor meeting where we are planning , as I said earlier , to , , give , , investors a peek into how grounders changed over the last three years .

Speaker #1: Also , , give them a sense of a deeper sense of what we're doing . Each category as well as share from the management team of Crompton .

Speaker #1: So from the horse's mouth , so to say , , so yeah , hopefully you guys will , , enjoy that , , and at least some of you will be there .

Speaker #1: The invitation for that , I guess have already gone .

Speaker #6: Out . Yeah .

Speaker #1: This is not something that we've done ever before . As I understand . , so yeah , we've been planning this for a while .

Speaker #1: As some of you will be aware , we had this was planned about 8 or 9 months ago , didn't happen at that time because of some other , , maybe a year ago .

Promeet Ghosh: It didn't happen at that time, but been a long time coming.

Speaker #1: Actually , it didn't happen at that time , but , , been a long time coming

Kalees Arunachalam: Thank you.

[Analyst]: Thank you.

Speaker #2: Thank you , thank you , thank you , thank you , thank you , thank you .

Rishabh Jain: Thank you.

Promeet Ghosh: Thank you.

Rishabh Jain: Thank you very much.

Kalees Arunachalam: Thank you.

Rishabh Jain: Goodbye

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