Q1 19/20

Aug 7, 2019

Good afternoon, everyone, and I would like to welcome on behalf of Axis Capital all of you. We have with us from the management today, Mr. Apoorva Parekh. We'll start with a small introduction about the quarterly results. And after that, we can take the question and answers. Thank you, and over to you, sir. Good afternoon, everyone, and thank you for joining the conference call today. Despite challenging demand conditions, we have delivered resilient performance driven by consumer franchise expansion in rural and small towns, earlier pricing actions and moderation in input costs. We remain cautiously optimistic in the medium term of delivering consistent, profitable, volume led growth. The net sales for the quarter grew by 11% with underlying sales volume and mix growth of 6.3%. This was driven by 6% growth in sales volume and mix of Consumer and Bazaar product and 12 growth in volume and mix of Industrial products. Net sales growth during this quarter was on a base of 21.9% growth in the first quarter of previous year. Gross margins during the quarter improved by 1.3% over the same quarter last year and by 0.6% over preceding quarter. The current spot prices of our major raw material that is vinyl acetate monomer is about $870 as compared to quarter one twenty twenty consumption cost of around $980 EBITDA before non operating income is INR $4.18 crore and grew by 16.4% over the same quarter last year. EBITDA as a percentage of net sales is 23.7% as compared to 22.6% in the same quarter last year. Profit after tax grew by 7.7, excluding income from intercompany transfer of intangible assets and effect of tax thereon in the same period last year grew by 19.2% over the same quarter last year. Now I will come to the consolidated performance. Net sales grew by 10.3% over the same quarter last year. EBITDA before non operating income grew by 15.7%. Profit after tax grew by 22.2% over the same quarter last year. Moving on to subsidiaries business. In case of domestic subsidiaries, MENA, Percept and CP reported decline in sales in EBITDA due to market conditions. During the previous year, Aika Pedilite had acquired brands and technical know how of certain wood finish products from holding company that is Pedilite. Like for like sales growth after excluding these products is 18% over the same quarter last year. EBITDA growth is on account of improved margin due to scale up of local manufacturing and some ForEx gains. In case of international subsidiaries, Bangladesh and Pidilite Lanka have reported good sales growth. EBITDA growth in Bangladesh is lower due to higher manufacturing and SG and expenses to support future sales growth. Sargent Art, a division of PIDILITE USA, reported good growth in sales and EBITDA mainly due to favorable trend and growth of sales to key customers. The subsidiaries in Thailand and Egypt reported flat sales due to competitive pressures and market conditions. We can now start with questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. The first question is from the line of Abnish Roy from Edelweiss. Please go ahead. Sir, congrats on good set of performance. My first question is on Neenah. So in Q4 also, the sales growth was not there, it was a dip. And this quarter, it's a very sharp dip of 13%. So in the same market condition, if Consumer Bazaar can see good growth, Industrial can see good growth, why should this business suffer and, in fact, decline? You said the market condition. So apart from the macro slowdown in terms of commodity intensity, if you could highlight, is there anything which is impacting your numbers there? Abnish, as you know, Neenah Percept is a waterproof services company. They service clients in real estate segment, commercial projects and also into infrastructure. So amongst all sectors, real estate and infrastructures are stress sector as all of us know. While we continue to have good order book and also new orders, there is a significant stress in this segment, and hence, we have to be cautious in terms of taking up and executing some of the projects. So market condition for which Neenah and Percept is seeing is somewhat different than what the overall Pirelite or our industrial business sees. And hence, they are seeing a little bit more challenging market condition, which have impacted the sales growth. If you go back one year during the same quarter, I think the growth of and Percept when they were two separate entities was close to 30%. On that high growth base, there has been some correction due to this challenging market conditions. Sir, two follow ups on this. So one is in terms of percentage of sales, how much is coming from new buildings and how much is from the older ones? Almost everything or substantial amount comes from construction. So construction is one. So there is a real estate, then these commercial projects like manufacturing plants, mall and other things like that, which we can call as commercial construction. And the third segment is infrastructure. But all of it is new in nature. Very, very little would be of the nature of repair. Unless if there is a very large project, which requires repair, Nina in Percept focuses on new construction related activities. So a follow-up on that. If now the slowdown will continue for the coming quarters, is there any change in terms of business plan in terms of focusing on the older ones? And second, is there a conscious strategy because liquidity crunch is there? So are you also saying no to some orders because you may not get the payment? Yes. So first of all, to answer your second question, yes, clearly, we are very cautious in terms of financial exposure, and we do say no to projects if we believe that there is a financial risk. That is one. Second, as far as going forward, we are trying to improve our contribution of sales into non real estate sector. So we want to increase our business into other segments of construction and have a lesser focus on the real estate. So that is how we plan to change the profile. However, we are not planning to take a repair project. Now just to give you an idea, obviously, the potential in this segment is very construction happens in India. There is a temporary period of stress. In that period, we will see our sales impacted. However, the potential in this segment is significant. And we are the leader in this segment. So while we will increase our contribution of sale from non real estate segment, real estate will also continue to remain important. My second question is on the consumer bazaar volume and mix growth. So on a 20% base, 6% is a good number. So it's a 26% growth on two years basis. Now if I see most discretionary consumption, there is a big slowdown. So could you elaborate where you are getting this kind of growth? And is there the GST related market share gains, which is panning out? And are we coming to an end on that so there could be a slowdown in terms of the volume growth? No. Also, you need to see that last year's 20% growth also had some benefit of GST slowdown in the previous year, right? So when we say 20% last year, which was a very good growth, that was also on a lower base of GST impacted sales in twenty seventeen, eighteen, right? So that is just to set the numbers right. Second is that where have we gained? Believe that our market position continues to strong in most of the sectors that we operate in. I would not say that there is a very significant impact due to transfer of business from GST. But our growth comes from our normal initiatives like distribution into smaller population centers, premiumization of our products, adding new products in each of our segments, focusing on demand growth, including advertising and other things. So basically, it is coming from several different areas. And sir, last question. Bangladesh, SG and A has increased and margins have come down significantly. Is this because of competitive reasons? Or is it just some festive related or a new launch which has happened? There are two reasons. In Bangladesh, one is we are setting up a second manufacturing plant, which is close to getting commissioned. It will be commissioned soon during this quarter. So there are certain expenses that we have had to increase in terms of our staffing and other expenses, which are due to the increased activity, which is likely to happen. And otherwise, SG and A is just a shift from across the quarter. There is no material impact. Our focus there is still, first, is to build a strong top line in that country. And our margin profile is very healthy. So quarter to quarter, we may have some differences like that, including some higher expenses related to startup of new plant. And this new plant is on extra capacity as in your capacity utilization was an issue? Is this a new product category? It is both, but our existing plant, which makes our main products, the capacity has now reached the limit. So we need new capacity for growth as well as some new products that we are adding. Okay, sir. That's all from my side. Thank you. Thank you. The next question is from the line of Avi Mehta from IIFL. Please go ahead. Hi, Apoorva and team. Just wanted to kind of first understand the sales growth front. I mean, I go back to the fourth quarter conference call, you had indicated that second half growth rates are more an indication of the underlying demand growth. Now volume growth in the first quarter suggests some weakness from this level in the Consumer Bazaar. Just wanted to kind of get your comments on what exactly has driven this weakness? And is it more demand? Or is it some segment? If you could help clarify that. No, I think we believe that the demand conditions has been challenging also in this quarter. So that is the situation as you may have also seen with results of other companies. So we believe that there is some general slowdown and some challenges in demand. That I would attribute as the main reason. Is this across the segments? Or is it Rajdin, Waterproofing or any sun or any particular sub segment that you would want to call out? Little bit more pronounced into sectors related to construction. Okay. I would say that, yes. So waterproofing, etcetera, is Waterproofing and also a lot of our other products are used for interior and construction related activities. Adhesives also go into that segment. So to that extent, it has had an impact. Okay, okay. So the second bit is, is there underlying demand momentum continuing to remain challenging? Or has there been any signs of change from thereon? For second quarter, it has only been one month, and I think it will not be fair to comment on the second quarter. We will have to wait and see the full quarter before we make comment on that. And what do you look forward are things that you think can drive a pickup? Or have you kind of revisited your yearly expectations? Or no, you believe that you're still on target because of ABC? I just wanted to of get your thoughts on that. Yes. Our effort is to continue to focus on fundamentals and our own growth initiatives. So we have not spent too much time trying to evaluate that and then try to reset some internal numbers. We continue to focus on our initiatives. And we believe we have several growth initiatives. So we are working we are doing our best on that. Now there are some external factors, which we have no control, so we don't end up spending too much time on that. But we continue to for example, we continue to make new advertisement, we continue to introduce new products, we continue to expand our distribution, we continue to focus on international markets. Now these are some of the growth initiatives which we continue to put our efforts on. Okay, sir. That's fairly helpful. The second bit, sir, is your comment about expansion into rural. You highlighted as one of the drivers or aiders for growth rate. Is it got to do with more our Parlance direct reach or that you're kind of getting into given what we hear about liquidity constraints in the market? Or if you could help explain what exactly is the sense of this expansion? Is it more the quality of distribution? Or is it more number of outlets that you're focusing on? All of it. Basically, as we know, we have been saying this for last few years is that our focus is on what we call as emerging India, basically the small towns of India and rural area. And we have a whole new distribution model there. Categories or businesses of PD LITE, we take them together to smaller towns, having a common distributor, having a common sales team with the effort that we cover as many towns as we can. And within town, we have a much better width of distribution and also better market development by reaching out to more end user. So essentially, we have been doing and we continue to put greater resources into smaller towns and rural areas in terms of both sales and distribution efforts and market development efforts. So but this is along the same line, the Rurban that we used to kind of focus on, it's the same line that you're talking about, right? It is what we used to call as Rurban. There is a Rurban and there is a small town in India. So basically, there is a small town is what we define as anything with population less than 200,000. And then there is a rural area, which is typically what we call as Roorban, which is below 50,000. So we have focused effort in these two areas. One is small town and second is Woodburn, where we continue to put more resources to achieve better growth rates. It is in line with what we have been doing for last few years. Sir, and lastly, on the VAM price, clearly, there's a very, very sharp moderation that we are seeing. And just wanted to understand, would it be fair to argue that there is margin benefits that kind of are still there? Or is there anything that I might be missing in kind of taking the simple assumptions? No, I think your assumption is correct that the current spot prices are lower than our average consumption cost of the first quarter. So the raw material prices continue to be benign. And hence, it should help us favorably. At the same time, we did take some pricing actions in the first quarter, as I said in my opening statement. So we did reduce prices of some of the products, which consume WAM. So some of that improvement in margin, we did already pass it on to the customer because the reduction in cost has been fairly sharp. How much was it, sir, on a portfolio level, if you could you be able to share? And this was it done in the start of the quarter, so 1Q is a fair representation of that? Some initiative of pricing were taken right from start of the quarter, means the impact was in all three months. In some of the product categories, it was possibly from May. Okay. And just a quantum? The overall price reduction impact may have been about a couple of percentage points on the overall sales. Okay, sir. Okay, perfect. I'll join the queue for the other questions. Thank you very much. Thanks you. The next question is from the line of Arnav Mitra from Credit Suisse. Please go ahead. Yes, hi. Thanks for the opportunity. Just carrying on the question on the margin front. So even with the price reduction that you've taken, you possibly will have very strong gross margin expansion. So as you look into FY 2020, do you think that will slow down into EBITDA? Or there are initiatives where you can potentially reinvest some part of it in terms of growth driving activities? So first of all, as we see expansion of gross margin, some of that we will pass it on in terms of pricing action as we have already done in the first quarter. And some of it, we may invest in terms of higher spending on advertising and some of the other activities. However, as and when we have had low raw material prices, if you really look at PD LIGHT over last many, many years, whenever we have very low raw material prices, our overall gross margin and EBITDA margin do expand. So it would certainly benefit us. But if the reduction is very sharp, some of it will be passed on in terms of both pricing action and increase in certain expenses. All right. And other than VAM, the other key raw material that you use, the overall RM basket, is there deflation in all the other parts of the RM basket also? Just wanted to get a bit of sense on that. Yes. So there has been reduction in number of raw materials. Some raw material have increased also. But broadly, if you see as an index, there has been reduction compared to Q4 as an overall basket. Okay. And my last question was on staff cost. So on the staff cost side, stand alone, the growth is higher than the sales growth for the last few quarters. So what is driving that? And does that situation continue where you will see this high teens kind of staff cost growth in FY 'twenty? See, our staff cost increase has been is higher. Just I'll like to answer it in two ways. Overall, our staff cost is higher because of the nature of our business. Our business is of the nature where we have many, many smaller businesses, many, many niche businesses, which require their own sales and marketing network. And hence, our staff cost overall a little bit higher than possibly comparable companies. Second, the increase has been higher is that we are sort of improving both our overall capability as well as starting for some of the growth areas in which we want to invest in coming quarters and years. So some recruitment is done ahead of time. And second is, there is an overall effort to improve the capability within Pedialyte, including hiring of lot of young managers in all areas like finance, sales marketing, R and D and other capability improvement initiatives. Having said that, we are also taking a close look at our staff cost. And if we believe there are areas to optimize and improve, we will certainly do that. Okay. Thanks so much. All the best. Thank you. The next question is from the line of Jay Doshi from Kotak Securities. Please go ahead. Hi, thanks for the opportunity. There is an update on the exchange today that you received an in principle approval from the Board for forging some joint ventures in the business areas of technical motors, epoxy growth and wall technologies. Could you give us some idea of what these areas are and what are the opportunities in these areas and are you looking at entering into some of these things? So Jay, these are some of the as exactly the release to the Stock Exchange goes, this is an principle approval from the Board to enter into JVs with separate companies for the products and technologies, which are mentioned in the release. So as we know, in the construction related area, there are many, many different types of technologies and product categories, and there are some very good companies who have very good technologies. And we are planning to enter into joint venture with them to further advance our business. Like in the past, we have done in our tie up with PD LITE, IKA and otherwise or Jovat, we have been tapping into companies with good product technologies to help further our growth. In terms of the names of the company and further details, we will share as soon as the joint venture agreements are signed. Until that time, we cannot share more agreement, but it's in process. It should happen in few days. And as and when actual agreements are signed, we will share more details. And will this be on the B2B side of the business or it will be B2C products? Largely in terms of the what we call as our Bazaar segment. So it is Bajaj segment, but it will also have some usage into large construction as well. Thank you so much. I look forward to hearing more on this later. And good luck for the next quarter. Thank you. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi, thanks for the opportunity. Sir, we are picking up from many consumption categories this quarter that the growth momentum was largely front loaded. So as the quarter progressed, there was a deceleration visible. So was it the same in our case? Or was it different? I would not like to comment on the growth on the months within a quarter. I would not like to generally go in that direction, no. Not that way, sir, because the outlook on economy because of liquidity issue also changed materially in the second half of the quarter. And hence, a lot of optimism that lot of companies had in the first half vanished in the second half. So from that perspective, are you seeing serious crunch liquidity crunch in the economy or in your channel partners in the second half of the quarter? Really, I think commenting exactly on what is happening now and all generally as a company, we would not like to do that. And also saying how was it in the first half of the quarter and second half, we really cannot comment and give a color on this. As we have already said, we find that overall demand condition has been somewhat challenging, but we are cautiously optimistic that things will improve and demand will improve. Same thing more than that, we don't have any comments on that. Sure. So second, a lot of activity has been seen by I mean, for a while now, but this quarter, it was visible more by paints player in Construction Chemicals segment. So are you seeing competitor intensity in our segment also increasing? Because these guys are largely these players are largely into remedial side of the business. So just if you can share some observation competitive intensity in the segment. As we have shared earlier, paint companies have been active in construction chemicals for last few years. What they have focused on is the use of construction chemical by painters. They have a strong presence in paint channel and also with painters. So paint companies have largely focused on developing products, which painters can use as waterproofing, a waterproof coating or a waterproof primer, waterproof putty. So a lot of their focus has been in that area. And in those segments, they have been able to expand market and achieve sales. Sir, what percent of the market will be fresh and what will be the remedial in nature? See, rough estimate, again, without any sort of published or reliable data, we would think two third of market would be new and one third would be remedial. Okay. This is helpful, sir. Thanks and all the rest, sir. Thank you. The next question is from the line of Harish Shah from CJS CIMB. Please go ahead. Amit Ployth here. Thank you for the opportunity. Sir, just on this Consumer Bazaar segment EBIT margin, you indicated there is an intangible income represented. Can you explain some about this? So this was in the last year in the first quarter, what we had done is, Pirilite had a brand of wood finishes called Woodfin, which was a Pirilite's brand. When we entered a joint venture with this company called Aika, we entered a fifty-fifty joint venture with Aika and the name of the company is PD LITE Aika to manufacture and sell premium wood finishes. Once we entered that joint venture, the wood finish brand woodfin owned by PD LITE was then sold to the joint venture. So that was the transfer that we did. The trademark and the related goodwill was transferred to this joint venture to operate from. And hence, last year, we had a onetime gain on the sale of that trademark from PD LIGHT to PD LIGHT IKA. Okay, okay. And sir, on the overall pricing cuts that we have done, do you want to highlight any specific categories that you've done? Or is it across the board? We have done the pricing actions in woodworking, adhesives, some of the construction chemical products. So some of our major product categories, we have taken some pricing action in the current quarter due to significant reduction in raw material costs. Yes. And just lastly, on the overall outlook, considering that the demand looks to be weak, are we looking at incentivizing trade more going forward in terms of versus a pricing action? So see, we are taking some normal initiative that you can. But if the demand scenario is weak, then the trade actions have limited benefit because then the offtake will not happen. So you can have some temporary benefit from some incentivization. But demand it all depends on the demand scenario. So we are cautiously optimistic that demand scenario will improve. And that's why we are not doing anything which is out of ordinary or unusual. Okay, sure. Thank you. Thank you. We'll move on to the next question that is from the line of Ashish Shah from Tata Capital. Please go ahead. Thank you for the opportunity, sir. Sir, on other expense, the growth has been slower versus the other expense growth has been lower versus the top line growth. So is there any one off or it is just because of our cost cutting initiatives? No, it could be some one off item last year and some cost reduction impact, but I would not look too much into other expenses on a quarter to quarter basis. There is always some legal and professional expense or some other onetime assignment or expenses of that nature. It is made up of many number of expenses. So I would not look too much into it. Fair enough. Sir, on the EBITDA, so this time, we had a very strong EBITDA, partially helped by raw material prices and some other lower other expenses. So going forward, do you expect do you think there is further scope for margins to expand? I know, sir, that this quarter, we have the raw material prices have gone down further, and we plan to use some of these benefits to lower prices and for growth initiative. But from here on, is there a scope for margins to improve? See, if you look at our historical numbers, our margin, as we have always said, we like to operate in a band of around 2% to 24%. But however, many times when the raw material prices are very low, our margins are higher than 24%. So there is always a possibility that it can be higher than 24%. But it depends on number of factors, including the sales growth and overall material cost scenario. So it is always possible as it has happened historically. We have to see. The next question is from the line of Avi Mehta from IIFL. Sir, first was the Industrial segment. Now we've been seeing a steady growth rate in this segment for the last few quarters. Does this suggest that our journey of moving improving the product mix is more or less done? I mean, we've kind of done the hard work. Now obviously, there'll be incremental, but most of that impact on sales growth rate is more behind us. Would that be a fair way to look at this, sir? No, I would not say that journey is over. See, industrial products are always evolving and you need to continuously ensure that your products and technologies keep on evolving as customer needs change. And also the competitive scenario can change from product category and segments also over a period of time. So it is something that we watch very closely and we take various initiatives to continuously upgrade our product mix and customer mix. Having said that, some of the recent high growth, including this quarter has come our pigment business has done quite well. There is a clear increase in demand. Partially, this could also be for the fact that manufacturing of some of these product categories has reduced in China. And there is a greater preference towards India. So there is a certain benefit because of that as well. But we remain consistent in our industrial business approach that we are focused towards superior product and customer mix. We want to have a reasonable margins and return on capital. So that is how we operate in this business. But current trend has been favorable. And would you say this is a reasonable number in terms of the margin that you want to be in? Or you think this is still much inferior? How should I look at that, sir? No, I would not say that. I think we have been comfortable with our industrial product margin. But again, because since we operate in large number of product categories within industrial product, which is like industrial adhesion, leather chemicals, textile chemicals, pigment powder, there is a fairly wide range of product. And hence, product mix can play a significant role. But generally, we are comfortable with the margin in and around this range. Okay, sir. Perfect. The second, which is just some bookkeeping questions. So if you could share the ad spend number for the quarter and likely CapEx for FY 'twenty? Advertising and sales. So advertising and sales promotion spend for the quarter was around INR75 crores. INR75 crores. And sir, CapEx expectation for FY 'twenty, what should I assume, sir? See, CapEx would be of about 2% to 3%, around you can say around 3%. Now in some year, it could be higher if we commission a new manufacturing plant, but you can say somewhat like 3%. And sorry, one more bit on the tax rate, sir. You had highlighted 32%, 33% because some tax exemptions. That is what I should assume for the year as well, right, sir? Yes. Okay, perfect, sir. Thank you very much, sir. That's all from my end. Thank you. The next question is from the line of Suresh Baddezi from Centrum Broking. Congratulations for good numbers. Thank you. I have three questions. One is on VAM. We have seen the significant reduction in the VAM prices. Generally, we tend to have some VAM holding. So would you be able to share what kind of holding we have with the high price and or is the whole holding is at the lower price? I don't have the figure of the current VAM holding. Normal inventory, we will have about one, two months of inventory possibly. But if you look at the rates, the WAM rate was lower in the last quarter. They have somewhat further reduced. So we will have a little bit higher inventory than the latest spot prices. That is for sure. I don't have the exact quantity of one being held right now. Okay. I'll take it offline. The other question I have, if I look at your industrial and consumer bizarre growth, somewhat you've highlighted at least that rural and Tier two, Tier three you're trying to expand. So is that the distribution reach has a further scope? And maybe if you can share what is our coverage in terms of touch points? This small town and rural is a very, very large geography and very large population, and it is further growing. So our efforts is to have direct distribution in as many towns as we can, and we have been making steady progress. As far as potential, yes, there is still substantial potential to expand the distribution further because almost 65% to 70% of Indian population lives in villages with population below 10,000. So that is a very, very substantial population where direct reach is very difficult and there is a lot of scope for us to grow. So is there a target your sales team has got that you will target certain number of villages less than 10,000? Well, we have a target, which is every year to incrementally increase the distribution. So every year, we make steady progress on distribution. Due to obvious competitive competitive and other reason I would not like to spell out the exact number of outlet we are covering and we plan to do in next year or two. But what I'm saying is we are making we have been making and we continue to make efforts to expand our direct reach into smaller population centers. So I'm just trying to pick up and extend this. So is there any similarity where you have a common distributor for consumer bazaar and industrial in the rural towns? Yes. In smaller towns, all our distributors are common. Most of them are common. So in smaller towns, most of our distributor of Consumer Bazaar and Consumer Products are the same. So is it fair to assume that your growth in consumer bazaar will replicate the similar growth into the industrial and construction chemical in the rural? No, no. The distributors are common for consumer and bazaar consumer and bazaar, that's what I said. So there's nothing to do with industrial. And having a common distributor does not result into the same growth rate. The growth rate would largely depend on the demand scenario and number of other factors. Distribution is just a means for us to have a common infrastructure to take our products to smaller town. But the demand scenario in consumer and bazaar product is not always the same. So it depends on the demand scenario as well. Got it, Akhur. Just last question. On the raw material basket, you said right now, Vaam is the largest part, which is under which is declining. But is there anything which is inflationary? You mentioned which are the products or which are the raw materials are under an inflationary There are some intermediate products that we use for our pigment business where there has been some increases. There are some polyvinyl alcohol type of product, which have seen some inflationary impact. So we have a very wide and diverse raw material basket where things like vinyl acetate, monomer and acrylates are on a bit of decline. However, there are some chemicals where there has been some increase as well. Like as I said, polyvinyl alcohol or carboxyl or some of the other raw materials, there has been an increase as well. But overall, as a basket, our raw material cost has reduced. I got it. Okay, thank you and all the best. Thank you. Thank you. The next question is from the line of Deepak Jain from GM Financial. I would want to know your NPD pipeline and what is there next in innovation basket. Deepak, we cannot share with what is coming. We have new products, which are planned in almost all product categories, and we do it on a continuous basis. But I cannot disclose the new products, which are likely to come. Deepak, are you done with your question? Yes. The next question is from the line of Ashish Shah from Tata Capital. Sir, one quick question. Sir, if you can throw some light on the inventory at the dealers or such thing which is happening on the ground? Or is it everything normal? We started by saying there is challenging demand scenario. So if there is a challenging demand scenario, inventory level with dealers would have gone up a bit. Again, that is not something we can accurately track. It is inventory at dealer level. We track the inventory at our distributor level, which we do on a replenishment basis, so it remains at the same level. So I do not have a track of the inventory at dealer level. But if the demand scenario whenever the demand scenario is challenging, their inventory level will go up a bit. But would that have any impact on our future sales? I mean, thinking out loud. It would be, Ashish, very short term. If there is some inventory, first of all, they would not increase their inventory too much. In our case, they order the product. If they don't need it, they don't order it. So essentially, inventory level increase or decrease can have some impact, but it is not very significant. It is possible that if their inventory level has gone up, they can reduce their purchase by a few days. That could happen. Okay. Fair enough. Fair enough. Thank you. Sure. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Gaurav Jaganini for his closing comments. I just would like to thank once again to everyone for joining the call. Thank you, everybody, for joining the call. Thank you. Bye bye. Have a good day.