Q4 23/24

Jun 6, 2024

Summary

FY24 revenue grew 5% and PBDIT rose 31%, but appliance margins remained below the double-digit objective. FY25 priorities include cost reductions, broader AC distribution, new washer ranges and refrigeration breakeven.

Ladies and gentlemen, good day and welcome to the Q4 and FY24 earnings conference call of IFB Industries Limited, hosted by Nirmal Bang Institutional Equities. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Natasha Jain from Nirmal Bang Institutional Equities. Thank you, and over to you. Thank you, Nishasri, and good afternoon, everyone. Nirmal Bang Institutional Equities welcomes you all to the fourth quarter FY24 results conference call of IFB Industries. I would like to thank the management of IFB Industries for giving us an opportunity to host the call. Management is represented by Mr. Raj Ray, MD and CEO, Home Appliances Division, Mr. P. H. Narayanan, Managing Director, Engineering Division, Mr. Soumitra Goswami, CFO, Mr. Jayanta Chanda, CFO, Engineering Division, and Mr. Arup Das, Senior Vice President. I now hand over the call to the management for opening remarks, post which we will take questions from participants. Thank you, and over to you, sir. Good afternoon, everybody. I welcome you all for IFB Industries investor call of the fourth quarter ended FY24. I am Soumitra Goswami, the Chief Financial Officer of IFB Industries Limited. I have with me Mr. Raj Ray, Managing Director and Chief Executive of our Home Appliances Division, Mr. P. H. Narayanan, Managing Director of our Engineering Division, Mr. Jay Chanda, CFO of our Engineering Division, and Mr. Arup Das, Senior Vice President. Now I will inform you about the result. First, quarter four result. Revenue for the quarter was INR 1,067 crore against last year's INR 994 crore, which is growth of 7%. PBDIT for the period was INR 54.35 crore and its percentage to revenue was 5.10% as compared to last year's INR 37.50 crore, which is 3.77% on revenue. PBDIT came across a growth of 35% year-on-year. I think PBDIT is due to revenue growth of 7% and decline in material cost by 160 basis points. PBT for the period was INR 16.23 crore against last year's loss of INR 3.35 crore. Now the annual result. Revenue for the year was INR 4,344 crore against last year's INR 4,126 crore, which is a growth of 5%. PBDIT for the period was INR 240 crore and its percentage to revenue was 5.53% as compared to last year's INR 183 crore, which was 4.43% on revenue. PBDIT amount came across a growth of 31% as compared to last year's. Increase in margin is due to 5% growth in revenue and decline in material cost by 200 basis points. PBT for the period was INR 90.36 crore against last year's INR 34.40 crore. Its percentage to revenue was 2.08% against last year's 0.83%. With this, I will request to start the question and answer session, please. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephones. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Pratik Shetty, an investor. Please go ahead. Yeah, hello, sir. Sir, first can you talk about the material cost savings and the operational cost savings that you had highlighted in your presentation 1 quarter back? The numbers don't seem to add up. Mr. Ray, can you please take this question? Yes. The two cost reduction initiatives that we were talking about, which is the material cost and the fixed cost reductions. The material cost reductions are actually all on track, as per whatever internal plans we had made. If you look at the last FY results vis-à-vis the previous year, you will clearly see the reduction in the material cost. The category mix of the material cost varies. The material cost that you see is a blended average of AC material cost and the washer material cost. As we had said, the maximum impact of the AC material cost, which is work completed in Q4, will be fully visible in Q1 and Q2 of this year. The material cost is on track. On the second point of the fixed cost reductions, where we had put down in the investor report that we had expected roughly about a 6.5 CR to 7 CR reduction on the fixed cost heads. Those work is still WIP. The full impact of that has not come in the Q4. But the work is on track, and we expect that in the Q1 and Q2 of this year, the complete benefits of those actions will be realized. Sir, if there was AC similar to, I understand that AC was higher this quarter compared to last quarter, but if it was similar as compared to last quarter, what would have been our margin with that mix? All I'm trying to understand, is there any improvement this quarter because the numbers are actually much lower? I'm a little lost here when you talk about that we have seen some improvement, but the numbers suggest absolutely opposite. Actually, it's a fair point that you're making, and I'll try and explain this. If you look at air conditioners, for example, and the material cost work that has been completed in the quarter, the impact of that material cost work you will not see in the quarter because the raw material pipelines are anywhere between 60 to 90 days. Even though you may actually complete material cost work in March, until and unless the fresh production is made in an April or a May, you will not see it reflected. The clarification that we would like to make is that whatever heads of material cost reduction that we have worked on, and this is which we had said that material costs will drop. You will see a lot of it reflected in the results in terms of the material cost percentages of last year versus the previous year. The full impact of that will be visible in Q1 and Q2. The question you asked is that, if the AC thing was okay, then what would be the impact? That question was also asked in the previous investor call. Then we had said that if you look at the level of the PBDIT losses in the last year, for example, if 160 odd crores is the PBDIT of the last year, the AC is negative. To that extent, the AC loss, even if it had been zero, the PBDIT would have been higher by that much, which is the target that we have for this fiscal year. Does that answer your question, please? Yeah, sir. A little more quantification of that would have helped that. Let's say, by when do you think we will touch double-digit margins? By when can we see IFB reporting double-digit margins? We wouldn't want to give a specific guidance on this, but because this question has been raised earlier, I'm only talking appliances now, okay? Because the rest of IFB- Right. No, only appliances. As far as the appliances side is concerned, we had two things to do mainly for the double-digit margin. One is the material cost, whereby and large we have completed all the work and now the impact has to show in Q1 and Q2. Most of it will be seen in Q1, what is left in Q2. As far as the fixed cost reduction is concerned, we have been working on it for two quarters now, and the impact also has to show in Q1 and Q2. Some part of it will show in Q1, some part of it will show in Q2. In terms of the kind of margin structures that we need to deliver, which we have discussed in previous investor calls as well, we would expect in H2 and H3, I mean, sorry, in Q2 and Q3 of this year to be able to get to those levels. Does that give you a specific answer? Yes. Absolutely, sir. And sir, last question is regarding ACs. Last year, how many ACs did we manufacture, and how much was it own brand and how much was it third party? And this year, do you think we can do four lakh, three and a half, four lakh ACs, or it will be lower? We have actually, and we put it in the investor report as well. We have increased our volume target. We had taken a target of roughly about 400,000 ACs for the year, but we have revised it to 500,000. The trends of April and May have been good, and we have reported that as well. Right. The growth this year will come from brand sales, not so much from OEM sales. OEM, even if you see the last year on the INR 200 CR odd revenues that we did in Q4, AC OEM was only about INR 8.5 CR, and we put it in the investor report as well. But the growth this year will come from IFB brand sales, and that I think is a positive thing going forward. Thank you so much, sir. And best of luck. Thank you. Thank you. Thank you. Next question is from the line of Guneet Singh from Counter Cyclical PMS. Please go ahead. Hi, sir. The losses in our associate, IFB Refrigeration, they have widened year-on-year. I mean, what is the reason for that, and by when can we expect it to break even or show us positive contribution in the bottom line? Soumitra, would you like to answer that, please? When it will be coming to break even, Mr. Ray, you have to answer. The loss in 2023-2024 in refrigeration was INR 59 crore, and we have taken share of 41.40% from that, which is INR 24.16 crore. Now, they made a loss of INR 59 crore against a total revenue of INR 151 crore. Now, Mr. Ray, if you can answer that, when it will reach the break-even point in case of IFB Refrigeration. Okay. If you see, the product availability to the market from IFB Refrigeration Limited started in June 2023. By the time the full product range which was required in phase one was completed, it was November 2023. Realistically speaking, in terms of the first season, which has actually been this March, April, May period, where really the complete product range has been available. As far as IFB Refrigeration Limited's own targets are concerned, my understanding is that within this year they will be above breakeven, not just breakeven. All right, sir. What kind of volume do we need to reach to breakeven in this agreement? To reach breakeven, IFB Refrigeration Limited needs to do roughly about 35,000 to 37,000 refrigerators a month. In terms of breakeven and other financial commitments, et cetera, for a healthy P&L, they need to get to a level of about 60,000 refrigerators a month, which is the plan that they are working on. All right, sir. What were sales numbers for AC in Q1 FY 2024? If we sell- Sorry about that. If we sell Q1 or are you talking about Q4? Q1 FY 2024 and the entire year. For Q1, I cannot share it right now, but Q4 I can tell you. Q4 figure is air conditioner brand is 85,786 and air conditioner OEM was 4,822 for quarter four. For the entire year it is 199,168 for brand and 42,256 for OEM. All right, sir. From about 2.5 lakh, we are expecting to reach 5 lakh sales in ACs in this year. Is that understanding correct? Yes. We have taken a target of 490,000 of air conditioner in the year FY 2024-25. All right. That's almost double the volumes. Mr. Ray already has communicated that 5 minutes back to another investor. Correct. This is the volume we are expecting. In the investor report, we've shared that the volumes of April, May itself have been quite high. So it's more than 100,000 ACs in just 2 months. Right. We believe that these are the volumes again. That is for the AC division and for the IFB Refrigeration division, currently in Q1 we have already seen two months and looking at the current summers, what kind of volume growth are we looking at in the IFB Refrigeration division also in Q1 and FY25? It would not be right for me to comment on the IFB Refrigeration Limited plans, but in line with the numbers per month for sustainable financials that I mentioned, those are the kind of annual numbers that are being planned by the company. All right, sir. Can we target the breakeven in Q1? It might not be Q1 per se, but most definitely it will be Q2. All right, sir. Got it. That is all from my side. Thank you. Thank you. Next question is from the line of Prolin Nandu from Edelweiss. Please go ahead. Yeah. Hi. I joined the call late. Can you help us understand what was the supply chain issue that you faced in Q4 of FY 2024? Given that this is the peak season where 60% of our annual sales in a way or more than 50% happens in this quarter, what was it that impacted us in this quarter? So you have two parts to your question. One is related to supply chain issues in the fourth quarter and what challenges we are facing currently. Have I understood this correctly? No, what I am trying to understand is that in terms of this month January, February, March, these three months are very important for the air con kind of segments, right? So, what was it that we were not able to foresee in terms of supply chain issue? That is my number one question because see, FY 2025 you have given us the number in terms of growth. What you aspire to be. But we did a call sometime in second week of February and till that time, I think we did not highlight any supply chain issue. So it must have happened in last, second half of the quarter. So what went wrong? And, we have missed out in some sense at the end of this peak summer season, right? So yeah, that is my question. Mr. Ray. Understood. Yes, please. I would like to answer this, please. If it's okay. This is Bikram Nag, yes. Hi. I think the major issue that we faced was one is I don't think that we foresaw such a jump. That's point one. More importantly, we also wanted to streamline creditor repayments. It was very important for us to streamline creditor repayments and also because we never saw this jump. Basically, the one major item which we have, which is the compressors which are being imported, we ran short. We also ran short in April, May. We could have done much, much better than what Mr. Ray spoke about 100,000 ACs being sold. We could have done much, much more. Thereafter, at the last minute, it was impossible to get in the stocks, but we just did not foresee it. Also, we took a decision internally in the month of January, said that we must streamline payments. I think both these points together caused an issue. But we have corrected that now and however, it's taking some time. Sure. Just to add to that, this is how typically the summer seasons are, right? Sometimes you will have early monsoons. No, but if you see the past few summers sometimes, dealers have been stuck up with stock and they do not list stock. Sure. All of those things happened. Sure. It was very important for us to streamline payments. I was very concerned about that. All right. Understood, sir. We went wrong here. Yeah. Correct. Now what I am trying to understand is that does it mean that we will have to wait for the next year to see what kind of an operating leverage does this business bring in? Right? Because again, Q4 of FY We are seeing the fact that it is turned, even though it is our knowledge is now, even though it is turned a bit of positive now. Sure which is April, May, et cetera, because of volumes, et cetera. I think June should be similar. Sure. Overall margin impact in April, May has been much, much better. It is not near 10% which is what I thought we will get to by the end of Q4. That has not happened. But the intent to get to 10% and driving it very hard, that is happening at all levels of the company. That is now happening as far as IFB Home Appliance division goes. Sure. Understood. You will see the benefit of this at the end of Q1. Sure. Understood. Can you help us understand in terms of retail? While we might have missed out on overall sales target, more on the qualitative kind of number, where you have in the past mentioned that our wallet share in some of the counters have been quite less, because there was no presence of, let's say, brand promoter there. Where we have a very good sales team, our market share in some of the micro market is as high as 10%. Has there been any change in terms of the presence in some of the key counters? I think we've seen improvements in that. However, what has happened is, let's say some of the key counters, the material has only gone in, I think, Mr. Ray, in the month of April, May, right, and not in March. Is the question on air conditioner, for example? Yeah, it's on air con. Okay. Yeah, air con only I am talking about. Yeah. Air con only I am talking about. I think it moved into some of the key counters significantly. And that benefit we will see, but it's moved into some of them, Mr. Ray, correct me if I am wrong, only in the month of April, May, right? Yes. At the end of the fourth quarter. Yeah. Actually, I would just like to add to what Mr. Nag is saying, is that this was actually the first season where our presence was much more broad-based than before. And that has, of course, on the problem side, led to this issue of not being able to foresee exactly how much lift would come, which is the point Mr. Nag made. But I think even the fact that the spread is much broader than before, we feel that it's a very positive sign for the rest of the year. One of the worrying things in Q4, which has been significantly corrected in the first two months of Q1, is that washer sales have not moved. We are not able to understand exactly why as yet. But washer sales in April, May, overall things in April, May is better. What we looked at was not only streamlining payments to creditors, et cetera, but also to get our ratings up, also to get ROCE up in the division. So overall, in all of those areas, there have been significant upward movement in April and May. Significant. Sure. Which we'll report in the July meeting. However, the washer sale has not moved up to the extent that we want, and we are putting a lot more emphasis on that again. ACs moved up, but there is an issue of stock. In refrigerator also, the same issue of stock came up because we did not give adequate orders for the compressors, but that has been corrected now. Sure. Understood, sir. I think you already answered this, but in terms of other fixed costs, what I wanted to understand is that you had mentioned in the last call that you are planning to work with some outside consultant. So where are we there? We have already hired someone to help us there? No, we are doing. I think we are still in discussions with them. Okay. One of the things that we saw is when we went into discussions with them and saw the various areas they will help us to focus on, et cetera, we thought before we get them onto this, there are a lot of areas we can do ourselves. We put in a team to do all this ourselves to a great extent, and a lot of benefit we are seeing we can get, we can move ourselves onto getting in terms of the bottom line. Sure. We thought, let us do this first before we get these guys into the thing, because they typically take 60 to 90 days just to get going. Sure. We just thought a lot of the things we can do ourselves, it is better not to outsource. Yes However, in certain areas of IT, et cetera, we have done some outsourcing. Sure. Understood. Lastly, on your engineering division, you had plans for some inorganic growth opportunities or inorganic acquisition as well. What is the pipeline there? Can you help us understand? We have about seven, eight companies that we are looking into. Yesterday and today, in fact, the M&A team has met one of them, and the process is on. Out of the seven, I think all seven we are interested in. The sizes are a minimum of INR 300 crores going upwards. Okay. They are all in areas, some are in areas which we are not into, but it falls under the auto comp space. Some are in stamping, which we understand well. But the areas which are niche, et cetera, which we are not in, are very interesting, and hence we are looking at those as well. So minimum size we will go for is about INR 300 CR upwards. Understood. That's the kind of, I mean, 230 odd crores is the cash that we have on the book, right? As we've said in the investor call, we'll not do anything till the cash moves up to about INR 500 CR. Understood. Also in this core stamping segment, your focus Yes will be to move into areas which are EV-neutral, right? Did I get that correct? Correct. Absolutely. All right. Okay. That is it from my side, sir. All the best, and thank you for taking my questions. Thank you. Thank you. Before we take the next question, we would like to remind participants to press Star and 1 to ask a question. Next question is from the line of Anand Mundra from SR Wealth. Please go ahead. Hello. Good afternoon, sir. Sir, I wanted to understand, post our September conference call on 15 November, we promised to investor that by Q4 we would be able to do double-digit margins. That was also not Q2, sir, it was on 15 November the call had happened. But the margins are quite different. So what is the main variance? You explained earlier about material this and that. But all these things, on 15 November, we were not able to project for 31 March, sir? Mr. Ray. Okay. The point that you are raising is a correct point. The indication that we had given is that the results would flow quite quickly. Having said that, the raw material pipeline and the fact that the full impact of the material cost has not been realized in Q4, and the fixed cost reduction, which is a key component of the double-digit margin, which is still WIP, and like I explained a few minutes back, has not been realized in the Q4, which has to be completed by us in Q1 and Q2, and hence the delay. The only point we would make is that the action heads which are committed are fully on track. However, the results are not realized as yet. My only worry is, I am tracking the company from last 5, 7 years. Earlier, I remember you said that INR 200 crore revenue per month, we will be able to do 10% margin. That was INR 2,400 crore top line. At that time, our top line was INR 1,500, INR 1,600 crores. Then the figure moved to INR 3,500 crore top line. Sir, I am not saying that always the aspiration is there for 10%, but if you pick out any conference call, sir, we always promise, but we have never delivered, sir. My only worry is, again, we have promised for Q2. So have you already taken the steps or we will reduce it? We are expecting it to be reduced in Q1 and Q2, hence the 10% margin will come. I will answer this, Mr. Ray. I will answer this. Okay. I think your question is perfectly legitimate, and this is a worry that I also have. My constant discussion with Mr. Ray, the others in the appliance division is as follows. We have gone through minutely how costs have gone up from 2016 onwards. Right. Every area from 2016 onwards, we have looked into, including how schemes have gone up with key accounts, but we have not got the required volume out of the key accounts, et cetera. All aspects of that has been done. All aspects of that is being detailed, sorry. That is being detailed. It is still WIP. We have not done a good job at this. Hence, we have lost out in margin. Hence, we have not been able to keep our commitments. Hence, the results have not been good. It is not something that I am happy about. It is not something anyone is happy about in the company, and we have to fix this. I am not giving any further commitment, but saying we are really driving towards double-digit margin. Now, on Q4, it has not happened, but you will see Q1, April, May has been significantly better, but nowhere near what we need to do. Hopefully, June, we will get closer to the target, and thereafter we should hit the target. One of the reasons now, suddenly we are not able to understand why there has been a slight slowdown in washer in the month of January, February, March. That is where we have significant margin. We are not able to understand this. However, as I said, April, May has been better. But margin-wise, April, May has been much, much better for us overall. Okay. The effect of cost reduction is still on. Sir, April to June, because your AC season is also there, washing machine season may also come. Come. Hence, your operating leverage will play. Hence, margin may come, but I do not know whether it will be sustainable in December quarter because your AC sales will be lower or September quarter. No, what happens normally in the month of December is, if you see all other companies, including Daikin, Hitachi, LG, Samsung, their AC production goes up because they push the material to the dealers. Because you can't produce so much of- So that happens generally in December, yeah. So from normal- Let's see the raw. Okay. Sir, my another question is, in April and May, we did 60,000 ACs, as you mentioned. 1.1 lakh AC for 2 months. ACs generally sell for 5, 6 months in a year. If we are selling 60,000 per month, so we will not be able to do more than 3.5 or 4 lakhs in a year. Our target is 4.9 or 5 as per the presentation. No, what will happen is, in the month of December, January, February, the dealers pick up stock. So you produce a lot more and you do that. Every company does that apart from us. I think now that the distribution is much more in place, we will be able to see throughput of this. No, I just want to add to what Mr. Nag and Mr. Raj Ray said here. You see, for us, the seasonality of the industry or the manner in which it goes up and down is relevant, but not entirely relevant because our participation in terms of the network that is available and the network that is selling a product like air conditioners is still low. Having seen in this season that we have got the throughput from the counters where we were present, we have got the product pricing combination right, the demand has been healthy. Our point that we will increase whatever we had thought for the year is not driven so much by season up and down, but by the fact that we can expand the network quite significantly compared to what it was the previous year. I hope that gives you the clarity that you required. Understood. Sir, what is our capacity in AC, sir? See, our capacity currently is 500,000 ACs with an assembly line running single shift, and some of the feeder lines running in two shifts. We are working on increasing it in line with what we require. In April and May, we were running at 100% capacity, sir? In April, we were running to full capacity. In May, actually, the plant delivery to the market was less because of the supply issues that Mr. Nag expanded on. Okay. Sir, you mentioned some INR 167 PBT loss. That was with respect to AC plant for last year, FY 2024? No, I was talking about 160 odd INR CR PBDIT for last year. That includes- FY 2024 year or FY 2023, sir? 2023, 2024. Okay. The year for which we are talking about. Yeah. That includes the negative component of the air conditioner. This point was actually made in the previous investor call as well, that even if that negative is a zero, it does contribute to a significant increase in terms of the overall PBDIT for the division. Okay. I missed. What was the negative amount, sir, in FY 2023-2024 in AC segment? Sumitro? AC PBDIT was INR 42 crore minus in 2023-2024. What Mr. Ray is telling, INR 167. INR 167 is the HAP full figure, PBDIT, included into this INR 42 crore negative figure from AC. Suppose if AC would have been breakeven, then this figure would have been more than INR 200. Okay. Understood, sir. This year, when we are targeting 5 lakh ACs, what would be the estimated PBDIT if it happens? No, we will not give that. We will not give that now. As I said, our only target is to hit double-digit margin. Everything will get covered in that. Okay. Understood, sir. Sir, one more thing, sir. With respect to refrigerator plant, so what is our capacity in the plant, sir? So- One million. Yeah, one million. With some debottlenecking, it can be increased by 10-25% more capacity. Okay. How much we are targeting to sell this year, sir? IFB Refrigeration Limited, the company, has a target of about 6.5 lakh refrigerators. Like I said- Much higher than the- Okay, mm. Much higher than a number of ACs we are estimated to in residential. It is a much larger market, the refrigerator market. If you see relatively- And sir- The refrigerator is a much larger market. What is the pricing? How the pricing is decided? Suppose the cost of the product is 100 at the company which is doing manufacturing. We are buying at 100 and we are selling at what price, sir? Sorry, this is a question. How much markup, sir, how much markup they are taking while billing it to IFB Industries? Soumitra, would you like to answer that, please? No, we are following whatever the transfer pricing guidelines are. We are within that. Sir, my only point was to understand how much losses we are making in that plant, cumulative in both the companies together. We will not make any loss when we hit a minimum volume. We are still a little I think last month, Mr. Ray, you were about okay, no? Yes. I think about 35,000-38,000 ref, and you are at breakeven. Depends on the mix, but about that. And both April and May figures are building the figures. Noted, sir. Sir, one more question, sir. What is our gross margin? Similar in both ACs and refrigerator, or refrigerator gross margins are much higher? We don't specifically comment on the gross margin structures per se. But the cooling products in general in the industry would be similar, and the washers is higher. I hope that answers your question basically. Yes. And I think, Mr. Ray, I think you tell them also that a lot of work is being done to reduce material cost, even in these two, and to drive up margins. Yes, correct. I said- Both ref and AC, that work is on. Because one of the advantages we have now is, provided, of course, we get sales, right? We have a lot of volume, and the vendors are coming forward to really give us very good terms now. That is helping us, which means essentially price, credit period, we do not have any issues. We have streamlined things as I said. Understood. Sir, actually, it is good that we have introduced these two products so we can utilize our IFB Points, and throughput would be much higher. How much sales you are targeting through IFB Points, the refrigerator and the AC, sir? About 15%. Suppose we are selling an Only 15%, sir? Yes. As of now, 15%. And if- Actually, if you see both the categories of refrigerator and ACs, the smaller network which is fed by distribution is very strong participant as far as the industry is concerned. So where the contribution of washer may be higher in an IFB store, in ACs and ref it will be slightly lesser. Though, of course, in volume terms, it will be very high. Understood. Sir, one more thing. What is our profitability- I request you to join back the queue, please, as we have other participants waiting. Sure. Thank you, sir. Sure. Thanks. Thanks a lot, sir. Wish you all the best. Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, please restrict your question to one at a time. You may join back the queue for follow-up questions. We will take the next question from the line of Manoj Gori from Equirus. Please go ahead. Yeah, thanks for the opportunity. Sir, I have couple of questions, and apologies, probably I have joined a bit late. Commenting on the overall demands, and obviously cooling products have been doing very well. If you can throw some highlight on the washers, probably what is the outlook? Also, if you can comment on the recent month market share movement, whether we are gaining, we are losing, or we are maintaining market share. Because if you look at probably in fourth quarter, our top-line growth for home appliances was roughly around 3%-4%. But when I look at AC sales have been growing at a significant pace. So washers seems to be at some pressure. Can you throw some light over there? So, Manoj, I will answer this in four points. The first point is that we are not happy with the washer sales at all. Internally, the work to ensure that the sales rises, plant capacity goes up is being driven very strongly. This is the first point. The second is that if you go by the data, which would be, let us say, GfK data. Even though we have always said that it is not a right indicator per se, but the data says that actually the market has been degrowing, which is something we also don't understand very well on why this is happening. But the data says that the market degrew last year. It also degrew in Q4. On the same benchmark, the IFB market share is increasing. We had said that we actually see a very large scope of increase because there was a segment of the 9 and 10 kg front-loading segment where IFB didn't have a product. Last year was when we started ramping up the availability of the product. Other than these three points, the fourth point is something that we've said earlier, but we really have to deliver it, is that we have our network size. The extraction from that network is potentially very high. We just have to do a much better job of getting that as far as the washer is concerned. Right. I hope that answers your question. Yes. As far as retail is concerned, we are gaining market share. Thanks. Sir, secondly, if you look at some of the brands, probably new to the industry, probably if we name them Haier or probably Voltas, Marq seem to be doing very well in washer segment of late. We probably believe that even industry giants have been facing some heat. So how do we see this competition panning out and probably the aspiration that we look at improving our profitability across categories? Does it impact us as well? Any risk because of the competition, please throw some light on. Okay. If you look at the washer segment, then the washer segment is a combination of three things, which is the front load, the top load, and the semi-automatics. IFB's participation is in the front load and the top load segments. The competitive intensity from, let's say, specific people like a Haier or a Voltas, our position has always been that there has always been competitive intensity. If you look at from, let's say, the period January 2021 till, let's say, a couple of quarters back, the competitive intensity from a Samsung and LG who are actually pricing down in a market where raw material prices were going up, was extremely intense. That competitive intensity will always remain. Now for IFB, other than this last year gain in share, which is led by the 9 and 10 kg placement, from this quarter onwards, there is a complete new range introduction happening in both front loading and top loading segments. Virtually the entire range is getting changed. The new models which are entering are more packed with features, better technology. We have looked at, let's say, over the last two, three years, whatever issues we've had in terms of the right product, price, combination, et cetera, we have tried to address all those gaps. For us, in this year, I think the opportunity comes from two specific areas, in the washer segment. One is this continuing growth in market share because of the 9 and 10 kg expanding more, which was just a product gap which had got filled. The other is, if we use the new product introductions well and the market placements happen fast, we think that that is the biggest leverage we have for getting the volumes and the market share that we should get. I would specifically not be very worried about the competitive intensity from a Haier or a Voltas, but we would be internally be much more focused on doing the execution well with the agenda that we have of the new product introduction and market extraction for the year. I hope that answers your question. Yes. Sir, lastly, I'm surely making you repeat on the margin side. If you look at, obviously, there has been some delay on what we were aspiring by Q4 about double-digit margins. We are now moving towards Q2. I just want to understand probably despite the RM prices moving up, competitive intensity obviously would have continued to remain on the higher level. Do you still remain confident of Q2 probably margins would be sustainably scaling up from the current levels despite RM prices moving up? Yes, Manoj, Mr. Nag shared, the intensity and the internal pressure on making this happen across everyone in the company is very intense. It is something that we just have to come and deliver. I think beyond that, there is nothing to say. We just have to get it completed now. Also, as I said, April may have been much, much better. Hopefully June will do even better. You will see the results, hopefully Q1 significantly better than before. It is still not at 10%, but we will get there. Sure. Yes. Mr. Gori, I request you to join back the queue, please, as we have other participants waiting. Sure. Thank you. Thank you, and wish you all the best. Thank you. Ladies and gentlemen, we request you to restrict to one question at a time, please. We have our next question from the line of Natasha Jain from Nirmal Bang Institutional Equities. Please go ahead. Yeah, hi. Thank you for the opportunity. Just one question, rather a follow-up on the previous participant's question. Sir, in terms of your fully automatic top load, what we've understood is specifically for LG and Haier, they have offloaded some products, which are DDM technology-based or other artificial intelligence-driven. In that sense, do you think that our portfolio or our products are at match with those technology? Just want to understand. Thank you. With what is being introduced, IFB will not only match, but it will be a plus. You will see that with the range that is getting introduced. Both in terms of customer benefit, technology, AI is bandied around a lot, but the real AI which a customer can meaningfully use and benefit from No, but I think, Mr. Ray, one of the points that she's saying is, I think that this thing of AI and the way they are marketing it, which is a point we have discussed internally, I think we need to do a much better job at marketing the AI stuff that we guys have. I don't think that it's being marketed as well as the others, and that's a correct concern. I think even the things you saw in Singapore recently, et cetera, I think we are lacking behind in the way we are showing the thing on the product. I think that is something we need to improve immediately. We have the technology, however, our marketing of that is not as good as others. I'm trying to say that. That is because when we do our channel checks, we do not see visibility of an IFB fully automatic top load in terms of the artificial intelligence-driven category. Maybe, yeah, that would help in terms of pushing the sales. We will fix this immediately. This is a point which, Mr. Ray, I think this is something Prithviraj could fix. Yeah, that is true. The other point that I would just like to make is that as far as the top loader is concerned, our channel penetrations are much lower than front loads. That aspect of the product that will enable the channel penetrations to increase is what is getting addressed with the new range which is rolling out. In addition to the point that you made which Mr. Nag is responding to you, this is also an additional factor that will play out with the new range introduction. However, Mr. Ray, just before Sheela goes rather, in our lab, can you please put these new stickers and all so that I can have a look at it immediately? Yeah. Okay. And how this would be portrayed to customers, I would like to see this please, fast. This point is missing. Thank you. Natasha, does that answer your question? Yes, it does. Thank you so much, sir. Thank you. We will take our next question from the line of Shubham Jain from NV Alpha Fund. Please go ahead. Hi. Thank you for the opportunity. I just had one bookkeeping question. If I look at our debt, it has come down from almost at a gross debt level, INR 200 crores to INR 60 crores, and our lease liabilities have also come down from INR 150 crores to about INR 100 crores. We do not see any year-on-year reduction in interest costs. Going forward, where do we see this interest cost going down to? If you see our paper, Abhay, it is not INR 60 crores, it is INR 40 crores, no? It is actually, as of March it is 61, and as on May 31 it is 40. April, May it is 40, and by March 2025, it will be 21. By March 2025, it will be 21.88. Correct. My question is more on the interest cost, because we have not seen any reduction in the interest cost from 2023 to 2024. If you see the interest cost part, if you see that our interest cost on borrowing, it was in FY 2024, total figure is INR 14.65 crore for the entire year. It was INR 16.70 crore in last year. It will be going down further to around, say, in case of FY 2024/2025, for INR 14.65 crore, it will be going down to around INR 6.3 crore for the whole year of FY 2024/2025. We will be getting that impact in 2024/2025. Already there is a reduction from INR 16.7 crore to INR 14.65 crore. Got it. Will we see a reduction in the non-borrowing interest cost as well? Yes, non-borrowing interest cost also will be going down because already we have made a modification in one of our very big lease agreement in our, say, for engineering division, Malad. From there, only the impact has come in the month of March 2024, but the great impact will be coming in FY 2024-2025. Because in case of FY 2024, we have only received the advantage only for one month. But that advantage, we will be getting in next year for the full year, for the entire 12 months. Got it. Can we quantify that as well? What would that be for, say, FY 2025 as per our estimates? But Shubham Jain, that is only a classification issue. No, it is a non-cash entry. Yes. Please clarify. That's a classification issue. Okay. Yes. It doesn't impact. Finance charge on the lease assets is a non-cash entry. There is no cash movement. It's an accounting entry as per Ind AS 116. What are the charges coming from the entire year, say, around, I'm telling you, INR 8.66. INR 8.66 will be going down to INR 3.11 crore in FY 2024/2025 for the full year due to this lease modification. Because we have received the impact only for one month in FY 2023/2024, but for FY 2024/2025, we will be getting it for 12 months. The impact will be much larger. Got it. That was my only question. Thank you. Thank you. We will take our next question from the line of Shreyans Jain from Svan Investments. Please go ahead, Mr. Jain. Are you able to hear me? Mr. Jain. Yes. Can you hear me? Can you use your handset, please? You are not clearly audible. I am using my handset. Am I better now? Yes. Please go ahead. Sir, my first question is, when we book our IFB Refrigeration sales, is that happening via the associate, or it forms a part of our standalone revenues? No, IFB Refrigeration is a separate Okay. Sir, continue. IFB Refrigeration sales happens through IFB Refrigeration, and some amount happens through IFB Industries. IFB Refrigeration is a standalone company as well. Right. What I am trying to get to is, when I look at your standalone top line for the full year, it is at INR 3,400 crores. It is insignificant. Yeah. It's insignificant, yeah. Okay. My second question- It will become significant tomorrow. No. My confusion was when we do the retail sales for reps, that forms a part of IFB Refrigeration. That's my question. No, retail sales happens in IFB Industries as well as in IFB Refrigeration, but not in the same market. For example, in Maharashtra, retail sales only happen via IFB reps because we get the GST benefit there. Okay. So then standalone INR 3,400 crores of sales, and when I get individual productwise top line, the top line comes to INR 2,700 or about INR 2,800 crores. There is a difference about INR 600 odd crores. Which segment is that? Which product category is that? What I am saying is INR 3,400 of- Can you please repeat the question, please? Okay. So INR 3,400 of standalone appliance sales for the full year. Out of that, if I were to break it up into productwise, front load is INR 1,260, top load is INR 470, dryers is INR 30, industrial is INR 126, air conditioners is INR 570, dishwashers is INR 56, ovens is INR 230, and home appliances is INR 20. I am saying the difference is about INR 600 odd crores. Which product category is this? I am just explaining you. IFB Home Appliance division total value, I am just correcting it. It is INR 4,014 crores for the entire year, YTD 2023-2024. Yes, I am talking about gross sales only. Correct. No, no, we talk net sales. He is talking net sales. Please talk net sales. Sir, what you report in The rest will be service, no, Soumitra Goswami? Mr. Ray? Yes. Soumitra can just read out the breakups to them. I think that will clarify it. It is actually, front load is INR 1,752 crores. Top load is INR 659. Soumitra, please talk net sales. Please start talking net sales always. We should never talk gross sales. Okay. That figure is not right now available with me. I will just come with that number. But the balance is service. We will give this to you, please. Okay. Balance should be service. Okay. And sir, you spoke about ACs, from 570, I think we can do about 1,000 odd crores next year. And reps also, you are saying from 30,000 a month, you are targeting say about 60,000. So I am saying ballpark for the year, FY 2025, we do about four and a half lakhs. And average rep realization can be around INR 15,000 is my assumption. And I am assuming INR 2,000 crores coming from AC and rep and the balance, even if I take a 6% top-line growth, which is most likely a GDP. So I think we can do about 20%-25% sales for our appliance division next year. We would not like to give guidance on this. Having said that, I am just laying out our basic philosophy from now on, which is the company must be ambitious, the company must grow significantly year-on-year, and the company must fix its margins. Now, whether that should be 25% or 15% or 50%, that is a separate point. We will not get into that now. And also the company must have significant market share wherever the company is playing in. I think this is the way company must actually move forward. We are fine-tuning management to cater to these ambition requests that the company has. I will leave it at that. Okay. That helps, sir. Thank you so much. And all the best. Thank you. Thank you. We have our next question from the line of Saket Kapoor from Kapoor and Company. Please go ahead. Namaskar, sir, and thank you for this opportunity. Sir, when we look at your consolidated numbers, there is a share of loss of associate to the tune of INR 24 crores that has gone up from last year number of 2.4 ones. So if you could just explain to us the nature of the same and the reasons for these losses. That is on account of the refrigerator business. If you see. Soumitra, correct? Yes. Refrigerator loss at the PBT level- Yes of the company is INR 59- That is on account of refrigerator. That is on account of refrigerator. And once refrigerator volume goes up, this will get fixed. Okay. Sir, in this, what is our current stake or can you give the breakup, how is this Refrigeration company is being held by the group? It is about 41%, I think. 41, 42. 41.4. 41.4. 41.4. Okay. Sir, when we look at our division segment reporting, we have our home appliances, engineering, and then a small portion of motor and steel. Firstly, sir, what are the key synergies of having these verticals of home appliances and engineering under the same roof? How are they synergized for a home appliance organization to have the engineering or the blanking part also under the same fold? If you could explain that. Naksa, you were explaining about One more point, sir. Naksa, you were explaining about some M&A part of the story with INR 300 crore type of infusion. I missed that point, sir. If you could just correlate once again. No, I was saying, we were asked a question, what sort of size, et cetera, M&A we are looking at, and I said we are looking at minimum INR 300 crore revenue company to buy. I was saying that, as far as engineering division goes. Then I was asked what sort of auto component, et cetera, and I said, we are looking at stamping businesses. Plus there are some that we are looking at, which are in the auto comp space, but not in areas we are into now, however, very interesting areas. They are all non-ICE engine, by and large. Okay. Right. Then you also alluded to this fact of some INR 500 crore number. That was a cash number or Can you come again on that? No, I was asked, we have about INR 300 crore cash now, INR 290 crore to INR 300 crore cash, et cetera. Therefore, regarding the possible M&A, et cetera, what is our plan going forward, et cetera. I said our first target is to build the cash position to INR 500 crore before we do any significant M&A. I was saying that. Right. Lastly, on the synergy part, sir. If you see over the last 12 months plus 2 months of April, May, especially in the last 5 months actually, January onwards, a lot of work has gone into fixing two things. One is the working capital imbalance, which we had. Okay, so that we have significantly fixed. There is still some amount left, which we need to prioritize on and fix. Two, our creditor payments were not in line with what we would like. That has been fixed. The third point is, we were not focusing enough on ROCE. That has been done, and April, May has been a significant improvement on ROCE, even in appliance division. Thank you. We will take our next question from the line of Moksha Shah from Agility Advisors. Please go ahead. Hello. Yes, Moksha, please go ahead. I am sorry, you are sounding muffled, Moksha. Better now? No, you are still muffled. Better now? A little better. Okay. No, we can't hear. Sorry, Moksha. It is too muffled. I'm sorry? No, we can't hear anything. Her line is disconnected. We'll go on to the next question from the line of Aviral Jain from Singular Gulf. Please go ahead. Hi. Thank you so much for the opportunity. I think most of my questions are covered, but I just had one question regarding the loss of sale on OEM side. Was it a conscious call or is it due to the supply chain issue? The OEM was not a conscious call per se because it was one customer whose overall OEM business basically was in a question mark. Having said that, it has, in this present period, been good for us because the brand sales have significantly risen. As we had shared earlier, the intention of having one or two partners on the OEM side who are helpful to utilization of plant capacity and also for constant benchmarking in terms of competitiveness on price, et cetera, externally, that intention still remains. I hope that answers your question. Sure. Thank you so much, sir. I just had a follow-up question. When you mentioned that you have seen some slowdown in January to March 30. Is that slowdown across companies in consumer appliances? No, the slowdown question was with specific reference to the washer category, and that is across everyone. But it is not for other category. Other categories like air conditioners, for example, have grown significantly. Understood. Okay. The 9kg and 10kg product segment, which was launched earlier, has been received well by the market, I am assuming. Yes, it has been received, and the upside on that is still very high. We have a lot of work to complete in terms of product placements, market reach. But yes, it has been received well. Sure. Thank you so much, sir. I do not have any further questions. Thank you. Thank you. We will take our next question from the line of Sanjay Ladda from Bastion Research. Please go ahead. Hello. Hi, sir. Thank you for the opportunity. My first question would be, as other participants has also asked the same thing, that we have a home appliance. Hello? Yes, please. We can hear you. Yeah. Okay. The other participants had also asked what is the synergy between our Home Appliances and the Engineering segment which are there in our bucket list? Also, sir, since this Home Appliance and Engineering segment are different form altogether, are we thinking to demerge the same, because both the segment are different and need different attentions. If you can throw some light from your perspective. I will answer that. Sorry. I did not answer it to the previous gentleman. Sorry about that. I will give the answer now. We started originally, my father started off as a fine blanking business, which is auto comp. We then branched into appliances, et cetera. In India, we see various business houses having businesses, where one may not be totally related to something else. We don't see any issues with this because for a very long time, if you see, the auto comp business and the appliances business is totally run by different management. As far as my role, or let's say, corporate's role goes, it is only to ensure right capital allocation to both businesses. It's only to see the governance issues are in place, is to see the risk issues are being taken into account properly, et cetera, and to help both the units to actually grow. There is no management focus between the two, which is confusing at the operating level. Nothing like that at all. If you see companies, for example, if you see various companies which are doing exceptionally well in India now, I'm not going to take names, but very large market cap companies, et cetera. Very large companies. They are in diverse businesses, even under the same company level. I don't think that's an issue per se. We have not faced any issues per se. In fact, so much so sometimes when a division doesn't do well, the other division does better. It actually helps. That's our view. There is no question of demerging. Okay. Thanks a lot, sir, for answering the same. Yeah. Another question would be then, again, the refrigerator business which we are doing with IFB Refrigeration, that is again, the associate company. Why are we not integrating the same? Yes, I can answer that. Yeah. Government of India came out with a policy to help spur investments, et cetera, and also under Atmanirbhar and all of that, which said, if you have a new company, et cetera, and if you do it within a certain time frame, then you pay 15% tax rate in that company. It was a very good move by Government of India. It was only for that reason it had to be a separate company. Point number one. Point number two, we also wanted to fully ring-fence IFB Industries Limited from issues that a company of that size and scale, as far as investments go, may face in the initial time. If you see, the banking has been kept out of IFB Industries, et cetera. When we spoke to our existing bankers in IFB Industries, they said, "Haha, funding, but you have to guarantee it." We never wanted to do all that. One was the taxation reason and one was this, and it has worked out very well for us. Okay. Sir, my last question would be- Sir, I request you to join back the queue, please, as we have other participants waiting. Yeah. Thank you. We will take our next question from the line of Abhishek Ghosh from DSP Investment Managers. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. Sir, just if we look at the front-load segment, the top line growth has been about double digit. The top loader has suffered just about muted growth. Is it anything to do with the category or your market shares? If you can just help us elaborate between the two sub-segments of front load and top loaders, because there is divergence as far as growth is concerned. I think it is a mix of the category and also the fact that the point Mr. Ray says in every quarter, which is we need to do a lot better work as far as extraction goes from counters that we are in, and as far as the numeric reach also goes. I think it is a mix of both. Except that Mr. Ray can add points. Yes. That is correct. To that, I will add just one, which is as far as the top load segment goes, in terms of the product price, et cetera, there have been issues which have not been addressed, which are getting addressed with the new range, which is getting introduced from this quarter. 70%-80% on the first spoke about 20%-30% on what I just said. It is essentially to understand, sir, it is IFB specific issues, and with the new models which are getting launched through first quarter, we will see the reversal as far as growth in top loaders is concerned. That is the way one should kind of- Correct. As far as industry is concerned, top loader in volume terms is bigger than front load. Your market shares are much lower there. Market shares are much lower. Correct. Absolutely right. Okay. So in terms of pricing strategies, since because in the front load you are having a dominant market share, in this top load segment, is there a differentiated pricing strategy that you have kind of adopted in order to be able to garner higher market shares? Any thoughts or comments on that? No, it is the same. What you are specifically asking is there any discounting that you are doing from the point of view of volume? No. Okay. Pricing remains steady, remaining the same, yeah. So it is largely on base. What we have done is, in fact, if you see, one of the things that we have done is we have improved on MOP, et cetera, and that is helping us as far as the retailers are concerned. I think you have also written a letter to us, right? If I have not mistaken. Yes, sir. Yes. Yes, sir. Yeah. Yes, sir. I think the MOP matters have been fixed. A lot of work has gone into that, and the retailers are very happy because their retention goes up. Correct. clamped down, et cetera, which was happening at the retailer level. Okay. That has actually made the trade very, very happy with us. Okay. Are you happy, sir, with the overall acceptance of the new models that has been put out at the marketplace? No, we are not happy as yet as far as the sales go, so we can't be happy. Are we happy with the product? Answer is yes, but we are not happy. If we were happy with the sales, we would not be answering so many questions. We are not at all happy. Sir, because you have alluded to this guidance, which you have called out that in Q2 FY2025 It's not even my guidance. We have given you there's a difference between intent and guidance. If you see significantly whatever we've done, including when we bought out stamping unit, let's say, day number one, we said that our plan is to get 7 crore sales a month, but it's taken us a lot of time, COVID hit, et cetera. I don't think intent and guidance should be mixed up. Having said that, I stand by my point. Our plan is to get our intent plan, et cetera, whatever you call it, is to hit 10% margin as far as appliance division goes. As far as engineering division goes, we are already at 15% and we have to further improve. There is no dilution in this. But when you say in your letter that we have misled, et cetera, that's a wrong statement. I don't want to go further into that. Sure, sir. Sir, our only feedback there would be is the trajectory has to be more sustainable. I agree. That is the only point, because there is a trajectory to the end destination, and it has to be at an improving trajectory. That's the limited point, sir, I would want to make. I am in agreement with you. Yeah. Sir, just one other point is, because we also see some of the commodity prices increasing now. Is there a need to take any price hikes or anything, just to be able to- No. In fact, Mr. Ray and me had a meeting just few days back, and one of the points I was telling him was that I saw on TV, I think on CNBC or somewhere, that a lot of the brands have started increasing price. I asked him that, "What is your plan?" What he said was that he's going to decide on this after 15th of June. We'll stick with that. We'll see how it goes, and then we'll take a call. As of now, we are not under pressure per se. Great, sir. Thank you so much, and wish you all the best for that. Thanks. Thank you. Thank you. We will take the next question from the line of Sanjay Ladda from Bastion Research. Please go ahead. Yes, sir. Thank you again for giving me the opportunity. Sir, just wanted to understand about our marketing and distribution side of the story. Since we are doing 100, 150 odd crore of marketing side to enhance our brand presence. But when we see on the ground, and you already alluded that the product which we marketing on TV or other social media, the mix or the sense of the product is not transferred to the customer. Therefore, the brand has a good market, but the pricing may differ or the things may differ. So if you can highlight about the marketing side of the story and distribution side of the story, that how we are planning to do that, and what are the steps we are taking on that side. If you can quantify that steps, it would be really grateful. Mr. Ray? Yeah. Okay. I will answer that. As far as the overall marketing spend is concerned, the point there is that it has to become much more effective. If you are a consumer and you see IFB the way you want to see it, the frequency of your seeing it increases, then the spend is effective. Otherwise, it is not effective. One head that we are working on is in terms of how to make it more effective. The spend that you see is a combination of many things. There is allocation on digital, there is allocation on in-store. In this new financial year, the marketing areas will be focused on two, three major heads, and I will just detail them for you. One is what we discussed a little while back, is the spend on the introduction of the new ranges in the front-load top-load washer category. It is a very large launch and a big changeover. In terms of the in-store elements to ensure that the customer understands why that new machine is much better than what was there before and also better than competition, there will be a significant amount of allocation for that. Then, of course, there are the other elements of opening up a newspaper and seeing it, going on social media and seeing it. The spend will be focused on that. The second is that in the second half of this new financial year, when the air conditioning next season starts, in terms of the new ranges we will add and really positioning the AC category properly, there will be spend allocation on that. The third is that the ramp-up of the refrigerator category will also require a degree of spend. The specific answer to you in terms of the effectiveness of the INR 150 crore spend, that is an area that we are working on, including getting rid of costs where we feel that the productivity is not okay, which is a part of the fixed cost reduction plan. The other is to move the spends onto these two, three major heads, which are the growth drivers for this year. Does that answer your question, please? Yes. A little while, but I can come back again on that same. Another point which you are already mentioning, and somehow this will be going from a year perspective, that we are targeting to focus on fixed cost and material cost. If you can quantify that, what are the material costs which we are looking forward, and what are the fixed costs which we are looking forward? If you can quantify that as well, it will be really helpful. You see, I think, Mr. Ray, I will take this. We will not quantify it in that manner. Having said that, if you look at material cost per se or overall cost per se, I think an internal discussion which we always have is Mr. Ray, can I talk about 2020? Yes, please. 2020 Q3, if you see. Yeah. 2020 Q3. 2021. Sorry, 2020, 2021. Sorry, 2021 Q3, if you see the results. No, Mr. Ray, it was 2020 Q3, I think. Financial year 2020, 2021. 2021. 2020 Q3, if you see the material cost, I think we need to achieve that. But my question would be how would we be targeting that? I think it's a question of two things. One is value engineering, point number one. One is better negotiation with the supplier. Two, in a lot of cases, we are doing very good resourcing work. We now have significant volume. Suppose we are buying, say, electronic chips from a supplier A, we can actually move to supplier B and we get significant reduction. The same for plastic components, et cetera. I would just like to add to that point. Ultimately, the goal of delivering that sustainable double-digit margin actually has all these elements built into it. If you see within the company, the gross contribution levels on washers would be higher than air conditioners, for example. Which means that if we have to hit the double-digit margin at a sustainable level, then the contribution from the washer category has to be, let's say, near plant capacity. If you have that baseline, then everything else is a top-up on top of that. I think when Mr. Nag is talking about that internal goal that you not deliver that double-digit margin, all these elements actually fall into that, because only when all these elements are delivered with that top line can happen. I hope that clarifies what you wanted to know. Fair point, sir. Thank you for answering that. Fair point. Thank you. Thank you. Thank you. A reminder to all the participants. If you wish to ask a question, you may press star and one on your touchtone telephone. Anyone who wishes to join the question queue may press star and one on their touchtone telephone. As there are no further questions, I would now like to hand the conference over to Ms. Natasha Jain from Nirmal Bang for closing comments. Thank you, everyone. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you very much. Thank you. Thank you. Thank you. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.