Ladies and gentlemen, good day, and welcome to Bajaj Electricals Limited Q4 FY 2025 earnings conference call hosted by PhillipCapital India Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Natasha Jain. Thank you, and over to you, ma'am.
Thank you, Avirat, and good afternoon, everyone. I, Natasha Jain, on behalf of PhillipCapital, welcome all of you to the fourth quarter FY 2025 earnings conference call. From the management today we have Mr. Shekhar Bajaj, Chairman, Mr. Sanjay Sachdeva, MD & CEO, Mr. EC Prasad, CFO, Mr. Vishal Chadha, COO, Consumer Products, and Mr. Rajesh Naik, COO, Lighting Solutions. I now request the management to give their opening comments, after which we shall open the floor to Q&A. Thank you, and over to you, sir.
Good evening, ladies and gentlemen. Shekhar Bajaj here. Thank you for attending our Q4 earnings call. We hope you've had an opportunity to review our financial results and earnings presentation, which are available on the stock exchange. First, I'm extremely delighted to welcome Mr. Sanjay Sachdeva into Bajaj Electricals Limited as our new Managing Director and Chief Executive Officer. He graduated as an electrical engineer from the IIT Delhi and later pursued his Master's degree in management from the IIM Calcutta. He has joined us from Unilever, where he had extensive experience to scale and lead successfully the consumer business in India, China, Brazil, North Africa, Middle East, Russia, and finally Japan. Further, he has consistently driven profitable growth in highly competitive environments, successfully turning around businesses across geographies, delivering strong business results in volatile market conditions, and strengthening talent and organizational capability.
His global experience will be of immense value to Bajaj Electricals, given our vision of continuing to grow in India while establishing a strong footprint globally. I'm confident that with his experience, coupled with the strength of our people, brand, and cultural values, we will continue to drive sustainable and profitable growth. I extend my best wishes and I'm confident that he will adapt swiftly and begin contributing meaningfully to our strategy and vision. Like we have mentioned in the past, Vishal Chadha, our Chief Operating Officer for Consumer Products, and Rajesh Naik, our Chief Operating Officer for Lighting Solutions, are driving business growth and we remain committed to continue delivering better results. On the macro front, headline inflation eased to 3.6% in February 2025, driven by a sharp decline in food prices.
Further, as per RBI Bulletin, recent tariff announcement by U.S. administration have heightened policy uncertainty, posing new headwinds for global growth and inflation. While India cannot remain immune to these developments, the progress achieved on the disinflation front gives headroom to monetary policies to focus on balancing the growth inflation outcome. The two consecutive RBI rate cuts will ensure liquidity for business in a time of uncertainty. Coming to the financial performance, it has been a strong performance in the fourth quarter, with healthy revenue and profit growth. The company has achieved revenue from operation of INR 1,265 crore as against INR 1,188 crore, a healthy growth of 6.5% over the fourth quarter of the previous year. The company's profit before tax has zoomed to INR 71 crore, which is an increase of over 191%.
Consumer product business has continued to show good momentum by delivering a revenue growth of 8.4% on a year-to-year basis, even in a delayed summer. The EBIT has jumped to INR 39 crore from INR 16 crore, which is a jump of 138%. The EBIT margins have also improved by 210 basis point to 3.9%, owing to a significant increase in gross margins. I would like to congratulate Vishal Chadha and his team for this significant increase in gross margins and for the robust performance, and look forward to continuation of this momentum over next year. While the lighting solution business revenue remains flat, I am delighted to see a strong double-digit value growth in trade for consumer lighting. I now hand over to Sanjay Sachdeva for his initial address and then to the CFO for detailed financial and operational highlights. To Sanjay.
Thank you, Chairman, for the warm welcome and kind words. I am truly honored to join Bajaj Electricals as MD and CEO. I am equally delighted to connect with all of you for the first time since I joined the company. As you know, Bajaj Electricals is a storied organization with a proud legacy and rich heritage, spanning over decades. It is built on the foundation of trust, innovation, and excellence. Its strong portfolio of trusted brands, deep-rooted customer relationships, and widespread distribution network are testaments to its enduring presence and impact across Indian households and industries alike. What particularly excites me is the company's unique ability to blend tradition with transformation. From pioneer advances in consumer products and lighting solutions, to its agile approach in embracing digitalization or sustainability.
Having extensive experience to lead businesses successfully across the globe, during my tenure at Unilever, I do see immense potential and possibilities in bringing these together to Bajaj Electricals as we chart out our next phase. I am truly excited to be part of this iconic company and work alongside a team, which I have already experienced to be talented, ambitious, and portrays a spirit of excellence. Together with the strength of our people, the power of brand, and deep commitment to our values, I believe we can shape a bold, sustainable future and create enduring values for our customers, communities, and all other stakeholders. My initial four weeks at Bajaj has involved meetings with employees, associates, strategic partners, factories, R&D center, and frontline teams. It reinforced my perception of the strength of the company, the brand, and the rich legacy.
We have a talented, vibrant, and energetic team throughout the company. This strong fundamental reassures me of the immense potential, as I said, that Bajaj holds as we move forward. It gives me confidence that the strategy, decade of Bajaj Electricals, is a winning strategy. This will unlock value and will continue to deliver strong results. We are strengthening our distribution and product strategy through focus expansion, R&D investment, and premiumization. As you know, initiatives like Project Vriddhi is driving scale and success across markets. We are also enhancing brand presence with digital engagement. We are also driving cost leadership with projects like Mulya or positioning our lighting solution vertical as a key growth driver. With a strong organization culture, a well-defined strategy, and a committed team, I am confident that we are well-positioned to shape a bold and a future-ready Bajaj Electricals.
The performance of the last two quarters is a testament to of our capabilities. With this, I now hand over to CFO for detailed financial and operational highlights.
Thank you, Sanjay. Thank you, Chairman. Good evening, ladies and gentlemen, and thank you for attending our earnings call. We hope you have had the opportunity to review our financial results and the earning presentations, which are available on the stock exchanges. Coming to the overall performance at the onset, let me reiterate that we had a good quarter with a healthy revenue and profit growth. We delivered a strong profit before tax of INR 71 crores as against INR 24 crores on a year-on-year basis, which translates into an upside of 191%. We have picked up momentum in the second half of the year with our revenues growing 5.7% as against 2.2% in the first half of the year. We are confident that we will continue the momentum going forward.
On an annual basis, we delivered a profit before tax of INR 170 crores as against INR 173 crores last year. However, please note that last year we had a one-time gain of interest on income tax refund of INR 41 crores. This year, we have an exceptional net gain of INR 21 crores. By adjusting these one-time impacts, we delivered a profit before tax of INR 148 crores as against INR 132 crores, thereby resulting in a significant improvement of 12.4%, which is commendable. Now, coming to the consumer products. The consumer product business registered a strong revenue growth of 8.4% on the back of a good demand for domestic appliances followed by fans and continued trade revival. Appliances continued to grow strong traction and grew by double digits. Within appliances, domestic appliances have shown strong growth owing to categories like coolers, which showed high double-digit growth.
Kitchen appliances, especially mixers, continue to remain under stress, even at the industry level. With the expected demand uptick, we are hopeful of better performance in the upcoming quarters. Morphy Richards continued to register high double-digit growth. Fans showed a low single-digit growth. Our CP EBIT margin has expanded to 3.9% as against 1.8% in the corresponding quarter of the previous year. The increase in margin is due to a strong expansion in gross margin of 3.6%, which has been partly offset by operating deleverage on account of higher depreciation of molds for new products and various other projects for improving our operational efficiencies. The brand investments were at 2.4%. Our transformation journey to address our product portfolio gaps, including premiumization of our portfolio, is underway and is showing good traction. We continue to improve our logistics and manufacturing efficiencies by a few basis points.
In our continued effort to improve our GTM, we have created a new structure for our fans business. This is to enhance our focus on this growing category, including the new launches in the premium segment. This initiative is expected to yield results in the coming quarters. Over the next few quarters, our focus will be to increase top line and improve the market share, while continuing to spend heavily on the brand and other initiatives like revamped GTM, VAV, digitalization, manufacturing efficiencies, et cetera. Now coming to the lighting solution. The lighting solution business remained flat due to decline in professional lighting, which also had an impact on the operating leverage. Please note that even within the professional lighting, there were some delays in order execution of urban, rural bodies. That has resulted in the decline. Otherwise, all other areas in professional lighting also witnessed a growth.
Under our revamped GTM initiative, we have delivered a double-digit value growth in general trade for this quarter, which was close to about 12%-odd, which is probably the highest in the industry. Professional lighting contracted owing to a drop in outdoor luminaires. Our EBIT was at 7.8% as against 8.5% reported during the corresponding quarter of the previous year. The brand investments from this vertical will continue to be high for the next few quarters in our endeavor to increase our market share. Coming to professional lighting, the order book stays healthy at INR 248 crores, and we are committed to growing this business. Coming to balance sheet and financial metrics, the balance sheet of the company continues to remain very healthy and strong. All the balance sheet ratios continues to be at a very optimal level.
We continue to generate positive cash flow from operations of INR 87 crores for the quarter. We ended the quarter with the surplus funds of INR 509 crores. Now, coming to the other strategic initiatives that we had highlighted in the last quarter. With regards to our export strategy and with a view to expand company's international footprint and enhance business opportunities in the Middle East and other untapped markets, the board have already approved the incorporation of a wholly-owned subsidiary of the company in U.A.E. The activity on this is on track, and we will share updates with you as soon as possible or as soon as it materializes. Further, on the proposal to explore the possibilities, opportunities and feasibility of setting up the company's manufacturing unit at a suitable location in India, the company has already commenced the evaluation and exploratory work. We'll again share the updates with you as it materializes.
This all from our side, and now we are happy to take the questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Aniruddha?
Hello.
Hello.
Can you hear me?
Yes.
Yes, please.
Loud and clear. You can go.
Yeah. Thanks for the opportunity and a really great set of numbers. So, sir, two, three questions. First to Mr. Sachdeva. What are the top three priorities that you would be working on? Whether it will be branding or like earlier there was a strategy of Nirlep and Bajaj as one brand, Morphy Richards as one brand, and there was one more premium brand the company was also working on. So whether the same strategy continues. In terms of distribution, what will be the challenges or changes you would like to bring in because Bajaj tried a lot with Mahindra Logistics also. So any plan on that? That is question number one. Question number two is regarding Nashik VRS. Is it already over or it may continue in Q1, Q2 as well?
Last question, in terms of this quarterly results, is there any change in ad spend because we see a 100 basis points drop in other expenditure also, and even the number is lower on a quarter-over-quarter basis as well. Is there any reduction in terms of brand-building efforts also? Yeah. That's it from my side.
I will go to Sanjay.
Thank you. This is Sanjay. I will start answering and then I will ask EC to take the other two questions. As I said, the strategy decade of Bajaj Electricals is a winning one, and it is showing results. I do not intend to change it, neither the strategy nor the priorities. Of course, there will be some tweaking, but it will not fundamentally change the direction of the company. This will be Bajaj brand, Morphy Richards, and Nex. All the priorities which has been mentioned will continue and we will drive growth through that. Fundamentally, the things will stay same.
Anirud, let me answer the last three questions. One, you mentioned about logistics. Yes, logistics cost continues to be high for us, and we are working on it. We have achieved about a 100 basis point reduction over the last one year or so. Having said that, there is a long way to go and we are looking at it both internally, and if required, even we will take external help to get the logistics cost to where it should be. That is as far as the logistics is concerned. Coming to VRS. The VRS in Nashik is over. Out of the 117 workers, 115 workers opted for the VRS. That is done with. As far as the other overheads is concerned, the brand spend continues to be same as last year. Last year was 2.5%, and this year it is about 2.4%.
But the overall reduction that you see is because of the operating leverage, because the total other overheads remains the same at INR 205 crores. Last quarter was INR 205 crores. Last year Q4 was INR 205 crores, and this year Q4 is also INR 205 crores because we have been able to contain a lot of unproductive spends, et cetera. Because of the operating leverage kicking in, we have gained that 1% in the other overheads.
Okay, understood. This is very helpful. Last question. The MFI issue that we were facing in terms of distribution. Is that resolved or now it is already in the base now?
Anirud, that continues. We still have an issue on the MFI front. MFIs are still not started going on full steam as it was earlier.
Okay. Any expected timelines to see any resolution or something?
Not really, Anirud. Unless there is a RBI eases the limitations that they have put on the MFIs, I do not think that demand is going to come back quickly.
Okay. This will anniversarize in June quarter or it is already done? Is the issue already in the base also?
I did not get that, Anirud.
No, means, we are facing the problem since past four quarters or already the numbers are in—
Yeah. No, we faced this the entire year of last year, and even in Q1, we are facing the same issue.
Okay. Sure. Understood. Yeah. Thank you. Thanks a lot.
Thank you, Anirud.
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Hi. Thank you for the opportunity. Congratulations on good set of margins. Firstly, on the consumer lighting, we have seen a healthy set of margins. Should we expect this margin to continue going forward? Secondly, this quarter, the revenue growth has been flat for this segment. Should we expect now upcoming quarter we will see growth in this segment?
Yeah. This is Rajesh. If you remember, we have been discussing about product mix being changed so that we can drive margins, though the price erosion was there. We continuously improve our first-level margins with the product mix, which has helped us to improve that by almost 2.5% in the FLM itself, which will continue. We are driving the top categories for the product mix, where higher margin products are being sold. That should continue.
Understood. Got it. How much was the ad spend as a percentage of sales in this year, and what is the expected spend for next year?
For the full year?
Yeah, for the full year, and how you are forecasting for next year, as you have highlighted, there is a strong focus on brand investment.
Full year. Yeah, full year is 3% for the year. Next year we plan to take it up, somewhere between about 3% and 4%.
Okay. This would be with business side all across, or it is specific for any segment, the higher one?
No, this is really throughout.
Okay, thank you. That is all.
Thank you. The next question is from the line of Praveen Sahay from PL Capital . Please go ahead.
Yeah, thank you for the opportunity. My first question is related to the channel mix. From the past few quarters, we are giving alternate channel the growth numbers, and definitely that's export or government, even the modern format retail are doing very well. If you can give some color on how is the alternate channel contribution right now for you, and where you want to see this channel contribution in the way forward.
Yeah, alternate channel is about somewhere between 40%-45%, and trade contributes the balance. As far as the growth goes, I think e-com growth during the year has not that been great, whereas we continue to do well in the MFR. Last year trade was a problem for us, but this year trade has actually bounced back, and trade is showing good growth.
This mix, you expect it to continue like a 45%-55% alternate versus GT to continue for the company?
Yes. It will be somewhere in the range of 60%-40% to 55%-45%.
Fine, sir. The next question is related to the gross margin, and in the note you had mentioned that is because of a price hike and the VAV initiative, the value initiatives and the value engineering. If you can give some more color on that, your 20 basis point improvement in the gross margin. How much is coming from the price hike and in the CP and the lighting, where you had taken the price hikes?
Praveen, we would not like to comment on that because it is actually very confidential. But the assurance that I want to give you is that we continue to work on the VAV projects. A lot of VAV initiatives have been identified, and you will see the margin improving continuously. Going ahead also, you can expect about 2%-3% savings coming from VAV and also about 2%-3% coming from the price hikes.
Okay. Fine, sir. A question related to your one-off. There is a sale of land you booked around INR 30 -odd crores. Is that over or something also you are expecting the way forward?
No, nothing as of now. If there is something, we will let you know.
Right, sir. Lastly, on the lighting, sir. Lighting, you had consumer lighting around single digit or double digit in the growth in the GTM of consumer lighting. Is it possible to give some color on how much is the volume-led growth versus pricing?
That's a good input. You must have seen that we have been discussing about volume growth, which is coming in, as the value growth was not there. But this quarter we were able to drive both volume as well as value growth, which is a positive side, and we will continue to drive that.
Is it fair to assume that whatever the price erosion was there in the consumer lighting, that has over?
We have been discussing this for the last two quarters. In lamp category as well as garden category.
Yeah. For the opportunity, [can I explain one point?]
Sorry. In two categories, it is almost at the bottom, but there is one particular category which is ceiling lights, where it will still continue for the next one or two quarters. That price erosion, still the impact will be there for a few quarters.
Okay, sir. Okay, got it. If you can give any color on the CapEx for this year, it would be helpful. Thank you, sir. That's the last question.
Sir, are we still connected?
Yeah, we are connected. The normal CapEx will be close to about INR 100 odd crores. But as you would have seen, the budget board meeting, we had said that we are also evaluating a factory for which a principle approval of about INR 300 crores has been taken. So if that materializes, the CapEx will be in the range of INR 140 crores.
Thank you, sir, and all the best.
Thank you. The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Yeah. I have three questions. First is in terms of depreciation. The depreciation has considerably increased on a year-over-year basis, but your CapEx has softened in terms of your cash flow statement. What has happened here really, if you can explain?
Natasha, in the last year, although we had spent about INR 130 crores, most of the CapEx was in the CIP, capital work in progress, because it was not used for production. This year it has all come into the CapEx because we started making products out of these malls, and hence the depreciation for the year is very high.
Understood, sir. Sir, my second question is in terms of channel inventory. Now, if I see the season has not been encouraging and secondary sales are slow for all cooling products. Having said that, how do you see first quarter panning out specially? Do you think that inventory will still continue to be high in the channel and therefore no pricing advantage?
Look, firstly, I wouldn't want to give a flavor on the full quarter.
Yeah, this is Vishal here. It is early into the quarter, so I cannot really predict or comment on how the quarter is going to proceed going forward. From our point of view, looking at the tertiary offtakes and how the offtakes happen over a period of time, we calibrate our business and our sales into the channel accordingly. We do not see any different from what we have been doing in the past so far.
Understood. Sir, my last question is for Mr. Sanjay Sachdeva. Sir, if you see the consumer durable industry, it has been marred with very heightened competition, and because of heightened competition, the price hike has not happened in this industry for a long time now. Even the premiumization or the BLDC price has not been passed on to the channel. The industry is only moving towards premiumization with non-premium products not really fitting in. Given this background, how do you read this industry as, and what are your broader level strategies to navigate through this? Thank you.
First of all, I do believe that premiumization is picking up. I also do believe that price increases have been, to some extent, the norm. We have also taken the price increases this last year. As EC was saying, there will be maybe another price increase this year. There will be, therefore, both premiumization and price increases to mitigate inflation will be there. Yes, of course, we will not pass on entire raw material inflation to consumers. Part we will absorb through savings. There will be some level of price hike. Not to forget, except for maybe fans where penetrations are pretty high, most of the category penetrations are low, and therefore building category penetrations can be a big driver of growth. Replacement market is also pretty large.
Therefore, I can see many drivers, not only premiumization and price increase, but also increasing penetration, and therefore the overall market size. Then there are always the new categories of products, whether it is, let us say, coolers now or whether it is grooming. Across, there will be many categories which will be taking off. There are multiple drivers, as I said. We do see, therefore, a huge potential of fast-moving FMEG categories.
Sure, sir. That's helpful. Thank you so much.
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thanks for the opportunity, sir. I had a question on the gross margin. We've seen some trends of gross margins quarter-on-quarter. How should we think about gross margin going forward? Is there any target that you'd like to spell out? What are the levers in your mind, apart from cost savings, in terms of gross margin? If you could also spell out what's your premium share the way you classify as a percentage of overall sales, and is there any target that you'd want to give out going forward in the next two or three years?
Dhruv, yes, you're right. A few of the levers through which we'll be targeting the gross margin. One, obviously, is the VAV exercise that we are doing, and that will continue. Secondly, the price increases that Sanjay also mentioned. Third is the premiumization. Actually, we are far behind the premiumization curve, actually, if you look at the industry. Our aim is to reach the industry standards in the next couple of years. All of these will trigger improvement in the gross margins.
Any target that you would like to give out?
As far as gross margin is concerned, no targets, please.
I had a question on the lighting side. Obviously, we have seen that for an entire industry. Specifically, how should we think about growth going forward then, right? When do you see this full realization issue sort of bottoming down? What is the kind of growth that we should expect going forward, say, in the next three years for Bajaj Electricals in the lighting vertical?
This is Rajesh again. I will not be able to give the exact number what growth we are targeting. But one positive side, as I mentioned earlier, there are two categories in consumer lighting which have bottomed almost, and only one category which is undergoing the price erosion. I think in the next one or two quarters, that will also bottom out. As we have seen in Project Vriddhi, our reach has increased, our top line has increased, and our volumes have almost increased by higher double digits, which gives us confidence that coming quarters we will continue that journey. Once that MFI thing goes away in terms of another two quarters, MFI impact will be there, what we were indicating a little while back. If that goes, then we can see the good, strong growth into consumer lighting.
Talking about commercial lighting, which Sorry, you were saying something?
No, so I have a question on the commercial lighting only. So on commercial lighting, you spelled out you have an order book of about INR 450 crores, right? So what is the execution timeline there?
He mentioned about INR 240 crores is the order intake, which unexecuted order book. The good part is that the same time when we executed last year, it was almost half. So when we said that it is delayed execution of orders, that was because there were clearance issues, which means that we have good order book, and coming next few quarters, we should be having a good growth in the professional lighting as well. May not be this quarter specifically because it is delayed. We are getting clearances this month and next month. So maybe quarter two, we should be having a better quarter.
Sure. Sir, I had a question on the alternative channels. So you spelled out that alternative channels will broadly be between 40%-45%. But I just wanted to understand if there is any difference in the profitability versus general trade that you can spell out.
No, Dhruv, generally, no. As we had mentioned earlier also, we don't differentiate the prices on the alternate channel vis-à-vis the trade. We maintain our pricing. For us, even if there is a difference, there is a very small element, but otherwise we don't see a much difference between trade and order return.
I think my last question is that, you had launched the Nex brand last year, if I'm not wrong. Just wanted to understand what's the contribution of that to your overall mix and how is that curve shaped up?
Yeah. This is Vishal here again. On the Nex brand, it's going a little slower than what we had anticipated, but it's still on the upward trajectory. And we have expanded the portfolio by launching coolers under that brand also. We have here only had fans, I talked about it in the last quarter also. We have just launched coolers into that. Furthermore, Nex is a brand, when we did consumer research, it came out very clearly that the endorsement of the mother brand as Bajaj would be something the consumers would find more reassuring. So in the communication, we are now calling it Nex as a Bajaj brand. And it's growing in line, a little slower than our expectation, but it's still growing very well and we are in this journey for the long run. We are not looking at it as short term.
It's still a young brand compared to a brand like Bajaj, which is 80 years old. So we have a long runway for it and we continue to invest behind it disproportionately.
Well, thank you so much. These are my questions and all the best.
Thank you. Ladies and gentlemen, before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Naitik from NV Alpha Fund. Please go ahead.
Hi, sir. Thanks for the opportunity. My first question is, what sort of growth are you envisaging in the consumer appliances business? If you could specify, which categories are you thinking will lead this growth for us?
Naitik, very difficult to answer because hypothetical. You never know which way the market is going. Our aim is to better the market growth. You would have seen, in Q1 also, we were aiming for good growth, but then the warlike situation with Pakistan had an impact especially in the North Zone, and I don't know how long the market is going to get closed. You never know. Our aim is to ensure that we grow better than the industry.
Right. And sir, with that, do we also expect margins in the segment to sort of have the margins to sort of reach 5% or 6% or how are we looking at this?
Yes. We have aspirations of, I think we have already given a guidance that we would like to be a double-digit EBIT business in the next three years or so. In the current year, we will be targeting somewhere around 6%.
Right. My next question is, in terms of CapEx, you have taken board approval and if we go ahead with the plan, the INR 300 crores, that would be for which product line, sir?
All across all the product lines.
Right. Okay. That is it, sir. Thank you.
Thank you. The next question is from the line of Praveen Sahay from PL Capital . Please go ahead.
Yeah, thank you for the follow-up questions. First is related to the balance sheet. In the balance sheet, there is one line item that is the investment in the JV, and that is related to the employee welfare trust. Employee welfare trust is a joint venture investment? If you can explain why is it so, or is it norm?
This welfare fund was established long back in 1981. If you remember, we had a demerger which happened with Bajel couple of years back. At that point in time, we were not quite sure under what ratio this entire welfare fund asset has to be divided. But now after that thing has settled down, we have decided that the trust will also be bifurcated in the ratio of 67% to 33%, which was the net worth ratio of Bajel and BEL at that point in time. Since we have decided that, we also now have the number of trustees in the same ratio, and that is what led to this disclosure and asset pickup in this quarter.
Okay.
It is a joint venture.
Okay. Got it, sir. Second question is related to the consultancy fee. Is that over or it is still going on?
Praveen, a lot of the initiatives are still going on. For example, the VAV, it is going to continue. We are having our GTM exercise, which is continuing. A lot of the things relating to the new initiatives like set up of a subsidiary in Ras Al Khaimah, the manufacturing. Yeah, you will see those expenses continuing for at least couple of years now.
Right, sir. One follow-up for the lighting. Professional lighting, there is a degrowth. What led to that degrowth in the professional lighting? Is that some project we had a delay or something? What exactly?
Yeah. This is Rajesh again. I just mentioned some time back, we had a good order book. If you see our order book, as CFO mentioned, it is almost double than last year. We had orders in hand got deferred because of the clearance which we did not receive from the end client, and which we are receiving now in this quarter.
Okay. Got it, sir. Thank you. Thanks a lot.
Ladies and gentlemen, before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead.
Yeah, thank you for the follow-up, sir. Just two questions. One, can you call out the EPR amount you have taken this quarter versus last year, same quarter, and FY 2025 and FY 2024 also?
EPR for this year is about INR 9.5 crore, and last year also was similar. Going forward next year, it will be a charge of about INR 18 crore.
Why double? Any specific reason? Or are we just correcting the-
No, Natasha. It all depends on what we sold seven years back. Yeah, so that's how it is.
Got it. In terms of consulting fees, sir, what is the hit that we take in our P&L every quarter?
Natasha, I do not often remember it, so I will get back to you when we meet.
Sure, sir. Sure. Thank you, sir.
Thank you. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Shekhar Bajaj again. Most of your questions have been answered, I hope. We are very happy with the performance and at least all of us are very positive in terms of looking at the future. Let us hope this war situation gets over and the market again picks up. But we are still hoping that we should continue to improve our bottom line, our profitability, and our margins, as was mentioned by EC, that our margins should go up every year so that we should come to the level of double digits in next three to four years is our objective. EBIT must go to double digit.
The conference is no longer being recorded.
Over. We said enough of talks.
Hello, Natasha?
Yes, sir, I am connected.
Hello.
Awesome. Okay.
Okay. That's it. Thank you very much all of you for participating, and we'll meet next quarter. Thank you.
Thank you so much. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.