Ladies and gentlemen, good day, and welcome to the Orient Electric Limited Q2 FY25 earnings conference call. 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 the star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Neeraj Jain from BNP Paribas. Thank you, and over to you, sir.
Yeah, hi. Thank you, and good evening, everyone. On behalf of BNP Paribas, we welcome you all to Q2 FY25 results conference call of Orient Electric. We have with us Mr. Ravindra Singh Negi, the Managing Director and CEO, and Mr. Saibal Sengupta, Chief Financial Officer. Now, I hand over the call to the management for initial comments on the quarterly performance, and then we'll open the floor for a question and answer session. Thanks, and over to you, sir.
Thanks, Neeraj. Good evening, and a very warm welcome to all of you. I trust you had the chance to review our presentation, which we have made available on the stock exchanges and our company website. Thank you for your participation, of course, for taking the time out to review our results. Let me start with a quick overview of quarter two. Quarter two has been a tale of two halves for the industry. This is reflecting insights from various third-party reports and my market interactions. The first six weeks lacked the momentum we anticipated after a very strong summer in quarter one. This was evident in the subdued regional festivals and the online season. Rural spending in the first half of Q2 on projects and infrastructure also saw a slow start during this period.
Commodity prices fluctuations impacted the markets. However, the latter half of the quarter showed promising signs of recovery across most of the categories Orient operates in. That's including lighting, appliances, and fans. This was largely driven by the pre-season of festival build-up that began taking shape in September, both for online and offline. Given this backdrop, Orient's performance has been very encouraging. Our growth journey continues steadily across segments, and all our strategies are on track and yielding results. I'm pleased to report our top line of INR 660 crores, representing 16.5% year-on-year growth for quarter two. The lighting and switches segment clocked INR 421 crores, growing at about 8%, while ECD registered a robust growth of 21% with a revenue of INR 440 crores.
Our strategic initiatives were designed to improve our gross margin, a key indicator of our investments yielding results, and I'm happy to share that our gross margin has expanded by a healthy 240 basis points year on year to 32.4% of revenue. A better mix of products, coupled with cost optimization through SPARK project program, is continuously enabling gross margin improvements and helping us mitigate commodity shocks. We are now back to our pre-COVID levels of gross margin delivery. With a strong focus on premiumization and mix improvements, we expect to stabilize this and be in the same range. We are announcing our premiumization efforts across all categories and have initiated steps to identify key gaps and launch relevant products. Let me highlight our efforts in the lighting segment, a clearly articulated focus area for us.
Despite continuing value erosion, we are performing well in the lighting segment, with high single volume growth in the B2C segment. Our focus on introducing value-added premium products in the lighting portfolio, such as COB range of products, high wattage lamps, emergency lamps, downlighters, strip lights, and panels is helping us deliver growth. Our value-added portfolio is inching towards 60% of our overall ceiling business, which is significantly better than the industry average. We've launched our digital campaign, Thoughtfully Curated Lights for Your Home, and we'll introduce more NPDs in this value-added segment in H2. The B2B market in lighting also shows promising potential, particularly for infrastructure and smart lighting projects. During this quarter, we executed the Pune Metro project and the Wadi Highway project in Nagpur.
Our ongoing efforts to secure large orders and expand our portfolio in this domain are yielding positive results, positioning us well for continuous growth in B2B segment of lighting. While the lighting segment achieved double digits, double-digit value growth, the B2B segment grew by high double digits with healthy inquiries and a strong order book. We are leveraging our successful experience to enter new subcategories in the B2B space, such as tunnel lighting and stadium lighting. Our B2B share of business in lighting, which is approximately around 20%, is set to rise further. In our fans segment, we continue to push premiumization, resulting in a better mix, higher realization, and value growth. We've identified BLDC as a focus segment for premiumization and are seeing good results.
As we speak, we have achieved a 25% share of BLDC revenue to our total ceiling fans revenue, which, with most of our new product investments driven by the BLDC portfolio expansion, so ensure better quality and reduce complaints, we are also producing PCB for BLDC fans in-house, fulfilling around 75% of our PCB requirements through captive production. Our premium portfolio in fans today stands at about 30% of the revenue, and we aim to increase it to above 40%-45%. Our efforts in premiumization across all categories, whether it's BLDC fans, vanilla LED ceiling and lighting, tech-enabled premium products in street lighting or in appliances, are demonstrating effective strategies for better realization, stronger product mix, and better margins.
Our Project Spark program, aiming for cost leadership, has delivered INR 36 crores for the first half of the financial year, and we are committed to surpassing our target by the end of the year. This initiative is supporting gross margin delivery by both expanding and protecting it from commodity changes. Switchgears and house wires experienced muted growth in the quarter due to commodity fluctuations and pricing pressures. However, this segment has grown sequentially, and we continue to expand our distribution. We're engaging with electricians, introducing festival schemes, and conducting other market development activities to enhance our presence. In the fans, our transition of 10 MD states to DTM is completed and is stable. DTM states have outpaced the GT rates in fans and have grown by 35% for the quarter, showing market share gains in many states.
DTM now contributes about 30% of the fans' GT share of business, while MD states have also grown at a fast double-digit growth. Appliances had a strong quarter with high double-digit growth, supported by effective sales wins in e-com and quick commerce across all categories, including coolers, water heaters and small appliances. Our premiumization journey is supported by consumer centricity, with service identified as a key differentiator. We are transitioning our fan servicing from master distributors to direct company service, effectively creating a DTM for service. Currently, 21 states and union territories are serviced directly by the company. Overall, we covered 19,000 plus pin codes with the widest network of authorized service centers. Consequently, we've significantly improved our service experience, with almost 30% of the complaints resolved within 24 hours. Emerging channels of business are another pillar of growth for us.
Our digital and retail channel delivered high double-digit growth in the quarter, primarily backed by water heaters and small appliances. We're seeing positive traction and sell-offs from e-commerce platforms, indicating market share gain. Quick commerce is also gaining momentum, and we've started listing on Blinkit and Zepto in this regard. Finally, our pursuit of growth is reinforced by enhanced manufacturing excellence. Our Industry 4.0 greenfield plant in Hyderabad has been fully commissioned and is being geared up for stability, efficiency, and scale for the forthcoming season and exports for this financial year. Hyderabad plant has also been upgraded in terms of manufacturing excellence and quality.
Now, turning to our overall financial performance for the last quarter, we report an EBITDA margin of INR 36 crores at about 5.6% of the revenue, an expansion of 180 basis points year on year due to improved gross margins and better operating leverage. The PBT for the quarter was at INR 14 crores, representing a nominal growth of 2.6% after adjusting for the base effect of last year. In conclusion, we remain optimistic about our strategic initiatives and the positive impact on our performance. We are committed to navigating the evolving markets landscape while delivering sustainable growth and value to our shareholders. Wishing the best of health and happiness to each one of you for the coming festival season. Thank you, and now we are open for any questions that you may have.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset 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 Natasha Jain from Nirmal Bang. Please go ahead.
Thank you, and congratulations, sir, on a good set of numbers. My first question is, can you give us an update as to where we are in terms of our export order for switchgears in Europe? As in, have we exported our first batch? What is the preliminary feedback that we've got there, and where do you see that scaling? And also visibility in terms of TPW export to Europe from your Hyderabad plant.
Thank you, Natasha, for the questions. Let me take the first question. On the switchgears, we've been exporting switchgears to the Europe market for some time. There was a new product that we sent two months back. We're still waiting for the first feedback from consumers because this has to go to Ukraine and is in transit. Once we get that, then we expect some more orders and order inquiries to flow in. So that's work in progress. On the second question, on the TPW, we started doing exports in TPW, and that's almost about 20% of our exports in fans is coming in TPW. The Hyderabad plant is under stabilization while we build the production. That's largely for domestic that we've done in the last couple of months.
But exports, we will now get into the season and start using Hyderabad facility for export.
Sir, so should I assume that for both switchgears and TPW fans, export is a higher margin business?
So, for TPW, I can definitely say that, you know, it's a very competitive market. You know, China pricing was very, very, very competitive. So exports on TPW is not a higher margin business. While our efforts in Hyderabad would be to control the cost, but you are kind of capped on the pricing ability in the market when you go on TPW. Switchgears versus domestic, it's not that high a business, but still a reasonably okay margin that you make on exports.
Understood, sir. Sir, and my second question is on the cost savings, were 36 crores in H1 FY25. So, can you please call out as to what line items did we make the savings on? And can we expect this number to continue as a run rate going forward?
So, Natasha, you know, SPARK program is not for one particular line item, and there are. You kind of look at all the 360-degree facets of all your efficiencies. You look at everything where you can possibly save costs, and the large bit operators, you know, the VA/VE exercises that you do, process engineering, reengineering that you do. So it's difficult to say that, okay, this one part gives you more. We've done INR 36 crores in H1. Last year we did about INR 75 crores. Our aim is to, you know, definitely surpass last year's, and that'll help us, you know, deliver better margins.
INR 75 crores was for the what? For the full year.
Yeah, yeah. Last year was 75 for the full year.
Just to clarify.
Natasha, to add, these savings come from, mainly from, spread out between the consumption, raw materials, wages, power and fuel, transportation. So it's a spread of items. It is not one thing.
Understood, sir. Sir, thank you so much. That's helpful, and Happy Diwali.
Thank you, Natasha. I'm wishing you the same.
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 Aniruddha Joshi from ICICI Securities. Please go ahead.
Yeah. Thanks for the opportunity. Sir, in terms of overall market outlook, how do you see the market overall? Because we have seen a lot of people indicating rural offtake has improved or even the offtake in north and east has been better. So how do we read these means? Do you, Are you seeing really the uptick on ground and especially for our category of the products?
So, Aniruddha, as I said, you know, there were two parts of, if I were to look at quarter two, there were clearly two distinct parts. The first half was where we didn't see the momentum of quarter one flow into the quarter two, specifically for summer products. But the second half is where we've seen some green shoots, both at the urban and the rural side. We closely monitor our sellouts, both in the online and the offline space. I think we're seeing green shoots, in most of the categories that we deal in. The real test is, this year, Diwali is, first of November. The real test is post-Diwali, how does it sustain? So we've seen some festive, sellout that season.
To be fair, you know, to give any number post-Diwali would be just a guess, you know. Clearly, last couple of weeks have been much better than the entry to quarter two.
Okay. Understood. So in terms of the margins, if we look at the EBITDA margin over a period of FY 2018 to 2022 was pretty healthy. In fact, it averaged around 9%. But we have seen the margins in 2023 and 2024 have corrected materially somewhere around 5, 5.5%. In fact, this year also somewhere around 6%, most likely FY 2025 also. So when do we see the margins going back to the near the historical levels? Any indication, or how should we read about the margins? Or is there a structural headwind that's stopping from moving the margin upwards?
No, I don't think so, Aniruddha, there is any structural headwind that we foresee in the business. In fact, all the investments that we had to do to start delivering a higher double digit better than market growth seems to have been put on ground. We've got you know, investments in terms of the right functions and right, BUs that we put in. We've made the investments in Hyderabad, the structure there. So, from a cost perspective, I don't think so, and these, these are headwinds. These were the right investments. It's just that there was a lead lag effect, and that's why, you know, you see your margins in the range of about 5.5%-6%. Now, going forward, we expect all our operating leverage to start kicking in, and you will see a lift this year, better margins.
Will it go back to the earlier 9% level in the next two quarters? Maybe not. But definitely next year onwards, we should start seeing us inching towards that. And that's where a lot of our premiumization efforts are, efforts in getting the right product mix, and not just only in one category, but across different categories that we deal in. That's what will help us deliver this.
Okay. Okay, understood, sir. And, last question from my side. In terms of, while we are pretty strong in fans, I guess, 60% +, turnover, but, more expansion in other categories, I guess that's where, I guess the growth can be materially higher, considering the favorable base or a smaller base for us. So any update on the, other categories where we can have a materially higher growth, like kitchen appliances or even, other new segments that we can look at? Any update on that? That's the last question. Thanks.
Yeah. So I did spell out in that in the appliances, we grew at a very high double digit growth, both in terms of water heaters and coolers. Coolers, in fact, slightly lower base, but our growth was 5x , 6x in this quarter. So that's one segment which is helping the ECD grow overall. But the other segment, which we clearly called out and said this is our focus area, is lighting. And if you were to look at lighting and within the lighting industry, we would be amongst the only few brands which have been consistently beating the industry numbers and gaining market share.
Even now, out of the declared results, we are the ones who are now in the lighting segment, who declared about 8%, while, you know, switchgears and wires had a little muted growth, but lighting had a double-digit growth. And within that, the B2B is a clear, strong focus, and that's how we are trying to balance our portfolio, keep pushing, which is our strength on fans. We will drive the water heaters and coolers in appliances. Then lighting is clearly called out, and then lighting both plays a value-added game in the B2C side, protect the margins with where in the industry there is headwinds of price erosion, which is happening, and build our capabilities and drive B2B significantly better.
Okay. Sure, sir. Very helpful. Many thanks. And wish you all a very happy Diwali.
Again, same to you, Joshi.
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Neeraj Jain from BNP Paribas. Please go ahead.
Yeah, hi. Thank you for the opportunity, sir. Sir, my first question is on the gross margin side again. So I just wanted to better understand that like since you guided that the gross margins are expected to remain in a similar range. So the SPARK program that we had initiated for the cost takeout programs, are we calling out that that program has mostly been concluded, and that group ideally would now take us towards the stable gross margins? And the follow-up to that is that if the gross margins remain at a similar range, are we confident that we can inch up our operating margins to close to double digit levels that we had earlier aimed for?
So Niransh, thanks for your question, and I think, if you were to look at our gross margin trajectory for over the last eight to 10 quarters, we have dropped. If we were to look at in a market where there's been, which has been very competitive, we would be amongst the only few brands who inched up significantly on the gross margins. While we dropped, but we've come back very sharply. SPARK program definitely is a continuous program, and we keep finding opportunities both in the product, process engineering, and it's a program which will not stop, but we keep evolving.
The second part, which I highlighted about premiumization, which will give us a better mix, which will make sure that if there are any, commodity fluctuations or price fluctuations or competitive pressures in the market that comes in, so both these things will help us either increase our gross margins or remain within that range. The other part on the overall margins or unit margins, yes, there is investment that we've done in terms of structures and investments in manufacturing. All this will start giving us operating leverage. In the next couple of quarters, we will inch up from where we are right now, and in the next year, we should move towards our earlier level.
Sure, sir. Sir, and my second question is on the wire segment. So, I just wanted to better understand what led to the muted growth in this quarter for the wires portfolio, because generally we are seeing a better numbers from the peers group, considering that the commodity went up significantly higher during the last week of the quarter. So, that gave the incentive for the players to push up in the channel.
This is in wires, you know, firstly, there are two aspects to it. We are not a very big player in wires, and this is a segment that we've looked at complementing our switchgears business. When the commodity prices increase, you can push the wires in place. It's just that we do a lot of trading, and then at a certain point of time versus somebody who makes enough, you get a little disadvantage of how much to buy, at what rate and at what rate to push. So that's where, I think, that's what impacted us a little bit in quarter two. Now that the commodities are stable and, in fact, there's been a price downward revision, sorry, upward revision, one more that happened.
We hope to now get back in with the wires also.
Well, it's said, thank you. I'll call back with you.
Thank you.
The next question is from the line of Parth Gala from HDFC Securities. Please go ahead.
Hi, good afternoon, gentlemen. Thank you for the opportunity. Just a couple of questions. One was on the DTM states. Now, you know, all the states that we had gone directly into have more or less, more or less stabilized. Are there any more states under consideration going forward? If you can shed some more light on that.
Yeah. So Paarth, there are two aspects. One, you know, every time you do, and last time also I spoke about it, every time you do a transition, it takes a little time for the market, and the DTM market to stabilize. We've done about 10 DTM markets. One of the large ones that we did last year was Gujarat, while we did in quarter one, J&K, but those are smaller markets. Gujarat is now fully stable. We've grown by 35%, overall in our 10 DTM markets. I think more or less, we are stable. We've put in our people. We're seeing distribution expansion happening, and I think, our going direct is helping us gain and drive our own synergies and the agenda that we want to drive in the market.
As far as adding more to it is concerned, we are evaluating, and we'll keep evaluating more states. As and when we are ready to do this, we will let you know. We don't give a prior announcement to the market that we want to do.
Okay, and you know, this quarter now, the consulting cost has, you know, come off, right, but if you just look at the unallocable expense, there is still some, you know, increase from around INR 48 crores- INR 49 crores. We've gone to INR 50 crores. Can you just shed some more light on that? I mean, are there any more investments being made or it's something to do with, you know, preponement of the festive season and some ad spend on that side?
No. So there are no investments to be done, and if you were to look at it largely, there is, from an accounting perspective, I'll tell you that the EPR, which was not there last year in Q2, that's one add-on element in that. Plus, depreciation would also be there for some separate-
As a separately, but EPR would be the large one.
The first, there are some key factors. First of all, there is a couple of base effects. While you are seeing the consultancy side of it on the reduction, which is not there on Q2, but as far as the EPR is concerned, if you recall, we had done the entire provision in Q4 last year.
Mm.
This year, it is spread all over the four quarters in this. So therefore, as a result, there are these two base effects. On top of that, the other expenses also include a good chunk of variable costs, which is essentially transportation and service costs, which is proportional to the volume growth and the volume which is transported A to B, and which has a little bit of higher impact for the digital e-commerce channel as well. So all those factors are contributing. There is no separate investment either in the lineup, nor planned, nor is it happening.
Understood, sir. Yeah, that's it from my side. Wish you all a very happy Diwali. Thank you.
Parth, and wishing you the same.
Thank you. Ladies and gentlemen, if you wish to ask a question to the management, please press star and one. The next question is from the line of Naitik from NV Alpha Fund. Please go ahead.
Hi, sir. My first question is, you know, I wanted some detailed understanding about the other expenses. You know, if I look at the absolute amount, it's been quite volatile, you know, quarter on quarter. I'm not looking at the percentage, but the absolute amount. So one, I understand the consultancy cost has reduced, but now what I want to understand is what percentage of this would be variable and what percentage is fixed in nature so that we can understand the nature of the cost better?
Naitik, largely about almost 2/3 would be variable and about one-third is fixed in this.
Also there's a marketing component as well.
Yeah, including the marketing, that will be about 2/3 and not to forget, Naitik, what I mentioned in the previous question is that, please account for the base effects as well, as far as EPR is concerned.
No. So I'm just looking at Q1 and Q2. I'm not even looking at, you know, last year. I'm just looking at from quarter on quarter basis, so there is a wide variation, so that's why I wanted to understand what causes this much of a shift. So one, I understood that it's consultancy, but apart from that is what I would, what I wanted to understand.
In the Q1, the volume, Q1, please understand, is a peak period for us, for fans, coolers, the summer season, where the volume movement, the volume throughput is far, far higher.
Yeah, so 66. Mm-hmm. Mm-hmm. I got my answer also. A large chunk is variable, that's why there is a variation.
Yeah, yeah.
I got that.
The proportion of variable and fixed,
Gotcha.
Hasn't dramatically shifted.
Right. Right. Got it. So could you share the split of, you know, lighting and switchgear?
We don't usually split CapEx, but as I said, you know, we've had a double-digit growth in lighting business, and we are slightly muted in switchgear.
No, so what I where I'm coming from is, there's huge fluctuation in the margins also, which I just find growth in switchgear, which is in this quarter. So are margins significantly higher in the switchgear segment than the lighting segment?
At the gross margin level, yes, but not at the EBITDA level. As Ravi already mentioned, the share of business of switchgear and house wires are far lesser, and with the accelerated growth of lighting, lighting holds a much, higher-
Mm-hmm.
EBIT, EBIT delivery, so that's what drives the segment results.
Right. Right. And last question: You know, this pricing erosion in the lighting, what's your... How long is it going to go, or it's largely done? What's your thoughts on that?
So Naitik, we were hoping that, you know, quarter two onwards, because last year around the same time, the bulbs and battens , whatever the efficiency of DOB, which was helping bring the cost down, was passed on to the market and to the consumer. We thought that we would start seeing some slowdown in it. I think it's largely regional players and smaller brands who've gotten in, where they've compromised further on the quality and pushed the envelope down. So we hope to see it stabilize, but as we speak, it's still prevalent in the market.
Mm, yeah. Okay. Got it. That's it from my side. Thank you.
We're driving it very differently. We are focusing on the value-added part, not that we're not participating in the bulbs and battens , but we are driving the other part of the business far stronger and far better with new products and new product introductions, which is helping us navigate this price pressure in the market.
Mm-hmm. Got it, got it. Thank you.
Thanks, Naitik.
Thank you. A reminder to all participants that you may press star and One to ask a question. The next question is from the line of Rahul Gajare from Haitong Securities. Please go ahead.
Yeah, hi, good evening, gentlemen, and thanks for the opportunity. I just have one question, and maybe this is following up with one of the earlier questions on the call. I wanted to understand if you can give us a qualitative angle on the ECD growth in terms of demand, you know, whether it was coming from urban, semi-urban, smaller towns, et cetera. So that's the first part of the question. And the second part of the question is, if DTM has grown. I mean, if DTM states have grown by about 35%, it means non-DTM have grown at a single digit, so I wanted your thoughts on that also. Thank you very much.
So Rahul, you know, thanks, and I'll give you a little sense to it. First, let me take this whole conversation about DTM and non-DTM. That's only on the GT, which is the general trade part that we're speaking about. Then there is e-com other part also. So our DTM states have grown by 35%. Our MD states have grown by good double digits, okay? This on the other parts of the business, which is the emerging channels like CSD, CPC, or e-com, where we've focused on sellout and not pushed in much certain, where we've seen a single-digits growth. But we've seen growth, which has been like a secular growth all across all categories.
As far as markets are concerned, we've driven two things very hard, and which is where we've seen our results come in, is that on the new products, BLDC and premiumization, we've seen urban and semi-urban drive good growth for us. Whereas, as I said, in the second half of the quarter, we've seen some bit of green shoots in the rural part also. First half of the quarter, I would say that the rural market did not kick in at all.
Okay, thank you very much, and festive greetings from my side to the team.
Thank you, Rahul.
Thank you. As there are no further questions from the participants, I would like to hand the conference over to the management. Okay, there's a question. The next question is from the line of Neeraj Jain from BNP Paribas. Please go ahead.
Hi, sir. Just a follow-up on the EPR cost. So you had mentioned, around, I think, fourth quarter that the EPR cost for FY25 would be roughly around INR 20 crores-INR 21 crores. And so just wanted to check, so if this number has changed and how much price hike you have taken to recover this cost? That's my first question.
Niransh, we've, we're still in line with what we had projected for the year on the EPR, and that's a calculated EPR cost. We had taken one price hike in quarter one, and if you were to look at it, by and large, we had put in about 1% in the price hike for catering to the EPR impact. We have taken one more price increase in quarter three as we speak, about 10 days back, and that's largely to take care of the BIS implementation that happened on TPW and some bit of commodity increase in the ceiling that we sell.
While there is a new gazette from the government, which is now putting an environmental compensation rate, and that may have an impact, but as we speak, there are representations from the associations, both from an industry perspective or a IFMA perspective, that's gone to the government. We will wait for the response from the government to see how EPR and its constituent impact will be there for the industry. Even the industry has, you know, put forward their reservations on this, a new environmental compensation.
Sure, sir, that's helpful. Sir, lastly, on the TPW side, so last quarter we saw some kind of a capacity constraint in an inherently strong quarter. I just wanted to check that. Is that capacity constraint been resolved now, especially from the Hyderabad facility coming up, or, you know, like there is still some constraint to it?
No, no. So, with Hyderabad now functional and we scaling up in the next couple of months, we'll be, you know, we'll be fully there for our capacity requirements and for our growth requirements in the coming season.
Got it. Thank you so much, sir, and wish you good things.
Thank you so much.
Thank you. We have a follow-up question. It's from the line of Natasha Jain from Nirmal Bang. Please go ahead.
Yeah, thank you for the follow-up opportunity. So just one question on CapEx. Can you please tell us what kind of funding can we expect for current year and in the medium term?
We have, Natasha, we have already capitalized the Hyderabad project, so there is no more further projects coming up. As we always maintain that INR 50 crores-INR 60 crores is our normal normative CapEx for the year, so we hope to be range-bound around that.
Understood, and sir, in terms of working capital days, what can we expect in terms of settling in the medium term?
We have already reduced the working capital substantially end of September. It's about nine days reduction has already happened to 19 days, which is an impressive move which has happened on a like-to-like basis. We obviously strive to maintain the similar kind of rates, but only thing is that be mindful of the fact that during Q3 and part of Q4, we have to go through stock build-up for the season, and we have to go through for extra credit support also for the season pickup. So those things. And that so that will be on a like-to-like basis with the corresponding period in the previous year as well. So that same trend will continue, but yes, our aim is to maintain the working capital at these lower levels.
Understood, sir. Thank you so much.
Thank you. That was the last question for today's conference call. I would now like to hand the conference over to the management for their closing comments.
Thank you, everyone, and from Orient, we will continue to deliver better than market growth like the one we've delivered in quarter two, and wishing all of you the very best of health and festivities. Thank you, everyone.
Thank you, everybody. Wishing you all a very happy Diwali.
On behalf of BNP Paribas, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.