Ladies and gentlemen, good day and welcome to Voltas Limited 3Q 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 star then zero on your touchtone phone. Please note that this conference is being recorded. Participants in the call, please note that the duration of the call will be only for 45 minutes. I now hand the conference over to Mr. Krishnan, Head of Research from Nirmal Bang Institutional Equities. Thank you, and over to you, sir.
Thanks, Inga. On behalf of Nirmal Bang Institutional Equities, I welcome you all to the 3Q FY25 Earnings Conference Call of Voltas Limited. The Voltas management is being represented by Mr. Pradeep Bakshi, MD and CEO, Mr. Jitender Verma, CFO, Mr. Nikhil Chandarana, Head of Corporate Finance, and Mr. Vaibhav Vora, Head of Treasury. Over to the management for opening comments.
Hi, good afternoon, everyone. This is Jitender, and I'll give a brief snapshot of our numbers for this quarter, and then we can move on to question-and-answer session, which Mr. Bakshi and myself will help answer. So, as you are aware, that October to December 2024, the global economy experienced stable but subdued growth with a projected annual growth rate of 3.1%. The United States saw upgrades in its economic forecast, and other economies, particularly in Europe, faced downgrades due to geopolitical tensions and financial market volatility. In India, the economy continued to grow, driven by strong performance in the services and agricultural sectors. However, inflationary pressures, particularly in food prices, posed challenges, leading to a cautious monetary policy stance by the Reserve Bank of India. Despite global uncertainties, India's economic fundamentals remain strong, positioning it as a key player in the global economic landscape.
For the cooling products, the October to December period is traditionally a lean period. Demand during this period is primarily driven by festive season or a second summer in the country. In this backdrop, during the quarter-ended 31st December 2024, the consolidated total income for Voltas grew by 18%, aggregating INR 3,164 crores compared to INR 2,684 crores in the same quarter last year. Profit before tax soared by 699%, INR 191 crores from INR 24 crores. Net profit after tax also saw a substantial increase, climbing to INR 131 crores from an after-tax loss of INR 28 crores in the corresponding quarter last year. Earnings per share, not annualized for the quarter-ended 31st December 2024, was at INR 3.99 compared to negative INR 0.92 last year. The company performance for nine months continues to remain robust.
The company reported a 28% increase in consolidated total income, reaching ₹10,890 crores, up from ₹8,477 crores in the same period last year. Profit before tax surged by 172%, hitting ₹838 crores compared to ₹312 crores previously. Net profit after tax also experienced a significant rise at ₹599 crores, up from ₹137 crores in the corresponding nine months of last year. This marks the highest-ever nine-month profit in the company's history. Earnings per share for the nine months ended 31st December 2024 was ₹18.14 compared to ₹4.10 in the same period the previous year. A snapshot of our results for this quarter and for the financial year has already been given. I take a brief on segment A, which is our Unitary Cooling Products, UCP.
Considering the seasonality of the cooling products business, the segment has given strong performance, reporting both volume and revenue growth despite a shorter festive window due to two major festivals falling in a single month. The segment reported a revenue growth of 20% and 42% compared with quarter three last year and nine months last year, respectively. Anticipated strong summer demand and support from our in-shop demonstrators helped us achieve better performance for all products, with the room air conditioner category experiencing good demand. Both window and split air conditioners saw reasonable growth during the fall. Voltas continues to remain the market leader in both split and window air conditioners, recording an exit market share of 20.5% as of December 2024. The commercial refrigeration segment faced some headwinds.
While all the CR product categories reported moderate growth, sales push to liquidate the inventory and challenges in the market stemming from reduced capital expenditure by customers have led to a drop in margins during the year and the quarter. Growth in the current quarter was driven by higher sales in Visi Cooler, combo, and glass top freezers. Our product portfolio, especially for cold room, is garnering attention with a healthy pipeline of orders. With the slowdown during the year, ramp-up of production in our new factory remained low, the impact of which added to our cost. However, with fresh orders in pipeline for our CR products, we envisage favorable outcomes from this category in the next few months. Like air conditioners, the air cooler segment also witnessed a strong quarter in spite of low season.
Quantity tie-ups with distributors and sub-dealers keen for season supported placement of both air cooler and water heaters. Market share in the air cooler category was reported at 11.1% exit in September, positioning Voltas as the number two brand in September 2024. In the water heater segment, partnerships with distributors and sub-dealers have also contributed to strong performance. The commercial air conditioning vertical recorded constant steady performance during the quarter, driven by sales of VRF and ducted ACs. The higher volume of margin-accretive product sales, value engineering initiatives, and the current mix of AMC jobs have positively impacted our bottom line. With a positive conversion of product sales to AMC jobs and high-order pipeline of retrofit jobs, the vertical is expected to continuously deliver consistent growth in the business. Elevated commodity prices and a steep depreciation of USD-INR exchange rates had an impact on profitability.
Our planned consistent investments in retail advertising costs continue to deliver anticipated results. Consumer-centric financing schemes significantly contributed to sales growth this season. Simultaneously, various value engineering initiatives and cost control measures have contributed to stable margins. In conclusion, UCPBG segment revenue for the nine-month period grew by a remarkable 38%, reaching INR 7,155 crores, up from INR 5,198 crores in the same period last year. Segment result also saw a significant increase of 30%, amounting to INR 548 crores compared to INR 423 crores of PBT in the corresponding nine months of the previous year. For the quarter-ending December 2024, segment revenue grew by 20%, totaling INR 1,771 crores compared to INR 1,476 crores in the same quarter last year. Segment result for the quarter was INR 104 crores against INR 123 crores in the corresponding quarter last year.
Our newly established air conditioner facility in Chennai continues to ramp up as planned and is gearing up for the season, and we anticipate operational efficiency to boost our business in coming months. Segment B, Electro-Mechanical Projects and Services. The segment revenue for the quarter was ₹1,190 crores compared to ₹982 crores in the previous year's corresponding quarter. The segment result for the quarter showed a positive ₹57 crores, a significant improvement from a loss of ₹120 crores during the same period last year. Over the nine-month period, segment revenue increased by 17%, reaching ₹3,019 crores compared to ₹2,585 crores in the same time frame last year. The segment result for the nine months was strong, amounting to ₹170 crores, a substantial turnaround from a loss of ₹221 crores last year, primarily due to provisions made on receivables in the last corresponding period.
During the current quarter, project execution across verticals and geographies was sturdy. Focus on completion certificate and various project management initiatives continues to boost bottom-line growth. The domestic projects continue to expand their order book and maintain a positive outlook. For the domestic project segment, we secured an order of INR 1,438 crores during nine months, with the current order book standing at INR 2,862 crores. In the international project sector, operations in the UAE and Saudi Arabia continue to perform well, contributing positively to both revenue and profits. We continue to remain vigilant towards collection as part of our approach to doing business. As of 31st December 2024, the carry-forward order book for international business stood at INR 1,956 crores, predominantly in the UAE and Saudi region. The total carry-forward order book for the segment was INR 6,818 crores as of the same date. Segment C, E ngineering Products and Services.
For the segment, the revenue increased to INR 437 crores from INR 431 crores the previous year. Segment results were INR 121 crores against INR 158 crores during the same period last year. For the quarter, segment revenue was INR 130 crores compared to INR 155 crores in the corresponding quarter last year. Segment result for the quarter was INR 37 crores compared to INR 50 crores the previous year. The Mining and Construction verticals showed positive momentum on the top line, ensuring continuity in operations and maintenance jobs, as well as sales of Powerscreen machines. However, revenue mix and challenges in job renewal and healthy margins limited the ability to translate top-line growth into bottom-line growth. Extended and certain new contracts in Mozambique continue to provide strong and optimal performance from the vertical.
Fluctuations in cotton and yarn exports, low offtake in capital expenditure across the sector, and continued underperformance for the industry resulted in a revenue decline for the vertical. Demand and margins for our agency business remained under pressure through the year. However, our after-sales and post-spinning business showed positive performances. Voltas Beko, our international JV, continued to outshine with a consistent growth month over month. During the current period ended, the industry reported only a single-digit growth in washing machine and a negligible growth in refrigerators. However, performance of products across Voltas Beko remained remarkable. Business reported a volume growth of 59% in the quarter and 56% in the nine months of the financial year. Steady and robust growth resulted in an improvement in market share across categories, with the latter surpassing the 10% mark during the quarter.
This growth was further complemented by a significant increase in market share during the quarter. As of year-to-date November 2024, our market share improved to 8.3% for washing machines and 5.1% for refrigerators. We are further delighted to share that our performance in semi-automatic washing machines superseded our expectation and has become the second-largest player in the product category, with an exit market share of 16.7%. Further, as per third-party reports, our dishwasher category has also been recognized as a market leader in this category in e-commerce. Leaning on our manufacturing prowess, we endeavor to localize all refrigerator manufacturing in India and become a fully made-in-India brand. With the premiumization of technology across all product categories, we would be able to drive the growth ahead.
Our washing machine category, with a wide range of product categories and SKUs, will help us to increase our market share towards our goals and targets. In terms of profitability, increased volume and various venues in the office helped us improve our margins and minimize losses. Voltas Beko continues to work towards minimizing loss per unit, aiming for EBITDA breakeven in the near future. Voltas Beko remains committed to enhancing its market presence across various product categories through customized market penetration strategies and growth initiatives. These efforts include expanding distribution reach, adopting channel-specific tactics to enhance market presence in key regions, and maintaining a strong focus on boosting e-commerce and omnichannel development. Our JV has also initiated engagements with quick- commerce platforms, which will add to the growth for our products.
On the cost front, localizing production for a larger portion of its product portfolio, implementing product efficiencies, value engineering, and optimizing the product mix have contributed to a positive outlook. With the summer around the corner, we remain optimistic and expect robust demand for all our product categories, and we hope that the demand will remain strong and positive consumer sentiments will further support the volume. The various strategic initiatives and new product launches planned for the season across categories will help us further improve our performance in the market and shall support us in strengthening market share in a more sustainable and profitable manner. Optimization of our manufacturing facilities and cost efficiencies will remain key drivers of profitability during the ensuing period. For the projects business, we will continue to remain diligent and cautious for tendering the jobs.
During the year, as informed earlier, as a part of internal restructuring, the company's direct investment in existing subsidiaries is being transferred to a step-down wholly-owned subsidiary of the company. Post-transfer of these investments, the economic interest of the company in the aforesaid overseas subsidiary companies continues to remain intact. We will continue to monitor the market cautiously and are very optimistic in our performance across all businesses we operate in. Thank you, and we may open the session for question and answer.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, you may rejoin the question queue. Participants on the call, please note that the duration of the call will be only for 45 minutes. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Umang Mehta from Kotak Securities. Please go ahead.
Yeah, hi. Thanks for the opportunity. My question was, what was the mix of RAC, commercial AC, commercial refrigeration, and air coolers during the quarter? And could you please quantify the impact of liquidation and commercial refrigeration as you ramp up a new factory on your current quarter's margin?
So current quarter, RAC has been around 60-odd%.
Commercial refrigeration has been around 15%. Air cooler has been around 5%, and commercial air conditioning has been balanced. Got it. And any color on how much impact did the liquidation of inventory in commercial refrigeration and the slower ramp-up in commercial refrigeration factory had on your current quarter's margins? So when we're referring to the overall sales that we are talking to, not just liquidation of any inventory, overall channel pickup and channel sales have been comparatively lower. So liquidation, when you are saying, actually, we have been rather building up the inventory in our endeavor to prepare for the season. We are not having any excess inventory, which we are trying to sell, barring some odd models where we may have some redundant inventory, but that's very minimal. But largely, most of the inventory which we have been producing is for the season. What is this?
I understood.
Actually, sir, the place where I was coming from was that on a steady-state basis, is this margin compression likely to continue in Q4? That was the main reason to ask this question.
Could you repeat your question? I think there was some disturbance. We couldn't hear you.
Sure. So in the press release, you have mentioned that in commercial refrigeration, there was some liquidation, and you also mentioned that there are some cost impacts because of a slower ramp-up in your commercial refrigeration new unit. So going forward, do you expect these things to normalize, or this pressure is likely to continue?
Definitely, there is an overall whenever you set up a new factory, there is a kind of a learning curve. So all that would normalize going forward, and all the pressures which had been there, the outlook is looking much positive on that. Got it.
Just a second. What has happened is in our new factory of commercial refrigeration, because initially, there were some teething issues for which the production was not at full swing. However, we are ensuring now earlier on, we were producing only one particular category out of the factory. Now, the fast-selling commercial chest freezer, which are the convertible freezers, etc., which we have started producing. So therefore, it has taken a while to start producing in full swing in that factory, and therefore, there was a little additional cost on account of that in that factory. And when you are talking about liquidation, as I said, in the new factory, it is not there. However, some stocks which are a little aged, that we have tried liquidating, and therefore, that has taken a small toll on our profitability in that segment.
Got it. Thank you. Just a second question was on your Capex. Could you quantify how much are you planning to spend, particularly on your compressor factory? By when will it be up, and likely incentives you are expecting in terms of PLI?
So you see, I'll tell you firstly, if you look at, we have recently set up our Chennai factory has started commencing production, where we had already spent about INR 400-odd crores. Besides this, we have also earmarked additional roughly around INR 400-odd crores, INR 400-450 crores, which is for compressor manufacturing, as well as ramping up our production from 1 million to take it to 1.5 and then 2 million. So we are earmarking all those Capex aside, which is going to come in in the next one, one and a half years from now.
But if you are talking in particular about compressor, so far, compressor finalization has not happened, and therefore, it might take a little more while. But rest of the other machineries and ramping up about whether it is injection molding or sheet metal work or copper tubes and heat exchangers production, etc., that investment continues, and that will get over in next, at best, 10 to 12 months from now. So this is how the CapEx will get spent. Compressor is about INR 250-odd crores, which will take a while because we are looking for some technological partnership, etc., which is taking a while until unless it is done, we will not be able to commence production of compressors. So that's how it is. We'll come back to you as and when we are ready with that plan.
Sure, sir. Thank you, and all the best.
Thank you. Before we take the next question, a reminder to all the participants to limit their question to two per participant. The next question is from the line of Naushad Chaudhary from Aditya Birla Sun Life Mutual Fund. Please go ahead, sir.
Sir, hi. Two clarifications. Firstly, on the backward integration strategy point of view, so I think we are doing a lot of products which are very, I think, easy to make and can be easily outsourced. So what gives us confidence that making it in-house would give you better ROC versus outsourcing it?
So firstly, I think let me make it a bit more clearer if we were not clearer earlier. Earlier on, we were a trading company largely, or at best, we were assembling when originally our Pantnagar production was happening at that plant, which was set up in 2007 or so.
And now, with setting up of Chennai plant and also a lot of new machinery installation in Pantnagar, a lot of backward integration has already happened. So much so, the Chennai plant is almost 100% backward integrated plant. So the sheet metal is being done inside. The injection molding is being done inside. And from copper tubes to creation of heat exchanger is being done inside. Even so much so, the coil part for the copper tubing is also being done inside. So I don't know why there is a probably sort of misunderstanding that we are not a backward integrated plant. We are very much a backward integrated plant. But if you are actually taking me to a point where you are saying that backward integration will mean that creation of compressor inside and creation of full controller inside and motor inside, yes, that is not there.
But that is the case with almost all the brands. Generally, not everybody is benefiting compressor inside and controllers inside and motor inside. There is still the large part of it is being outsourced by each one of us. So that's how it is.
Okay. I'll take this one offline. Second, on the Voltas Beko, sir, we have been indicating that because of the operating leverage, this entity should become breakeven and then become profitable. But if I look at actually from a gross margin point of view, we work on a very thin gross margin in this business, and I don't see. Can you help us understand which line items would help you? Because in terms of operating leverage, because I believe we are already operating at very good efficiency from our operating leverage point of view.
We have to work on the gross margin side here in this business.
Yeah. So I understand where you're coming from. Actually, yes, we had also anticipated that by the end of this year, in the last quarter, probably we will be reaching to the EBITDA breakeven, which our endeavor is still there. Probably by the month of March, we should be able to hit that number. However, let me also share with you as to what has happened during the course of the year. One is in our and if you look at our gross margins also in this category, we have already increased by almost 300-400 basis points in the margin in this category on the gross margin front.
However, at the same time, since we were ramping up, accelerating our numbers and we wanted to increase the market share, all along, if you look at, for the last more than three, four quarters, we've been giving guidance that our endeavor is towards accelerating the numbers and widening the size of the industry and scale of the numbers, and thereby achieving more market share. If you look at, we have gained on the market share front. We have gained on the volume, and we have also gained slightly better off. We are on the margin front also. As I said, it's roughly around 400 basis points we have increased during the course of the year. However, at the same time, to do this, we had to spend a lot of money in brand building, advertisement, because Voltas Beko is relatively a newer brand.
Also, as you know, that we have entered into all the channels in the last few months, including the modern trade, e-commerce, and all. And therefore, the cost of entering into those channels and leveraging and extracting from there is a bit of a costlier affair. So therefore, that has slightly derailed our plans. But we are very much in line, and as we move into the next year, you will get to see this result coming in, and we can vouch for.
Thank you. Reminding all the participants to limit your question to two per participant. We take the next question from the line of Dhaval from Axis Mutual Fund. Please go ahead.
Thank you for the opportunity. Just one bookkeeping question for Jitender, sir. Does the reported depreciation of 18-odd crores reflect the entire CapEx of the commercial ref capacity expansion in the Chennai plant?
If not, what will be the peak depreciation number? Per month?
The reported number is based on whatever has been capitalized up to this period, and you will see that this is for the relevant period only. Yeah.
Sir, if you can just help me with the peak number, that will be really helpful to understand.
Can you repeat your question, please?
What will be the peak number once the entire capitalization of the CapEx for both these CR and Chennai plant comes through? What will be the number once the entire CapEx is capitalized?
It should be roughly about INR 75 crores, INR 70-INR 75 crores for the full year for all factories, actually, and for Waghodia, Chennai, Pantnagar, wherever CapEx have been spent and CapEx has been utilized. That is what is being considered here.
Thanks, sir. That's really helpful.
Yeah.
Thank you. We take the next question from the line of Ankur from HDFC Life. Please go ahead.
Yeah. Hi, sir. Good evening. Thanks for your time. Again, on the UCP margins and the sharp fall that we saw of about 8% to about 5.9%. So just to clarify, as you did say, there's been some impact from the commercial ref segment here, and typically, this is also seasonally the quarter. But if you could just also help us understand what were the RAC margins, and I know you've been sharing that number also in some of your con calls, and what's the impression on those as well? And more importantly, what's your guidance for this segment going forward? Are we sticking to that guidance of a high single digit?
So it's quite a bit of a long question. There are so many questions embedded in it.
But let me give a generic answer to all your questions embedded into one question. Firstly, when you are asking why there is a pressure on UCP margins, so we were trying to gain the market share, and therefore, we were spending money on ISDs, BTL advertisement, ATL advertisement. If you look at, through the year, we have been spending money to continue to remain relevant for the business and the scaling of the number. So our cost has been incurred on advertisement, in-shop demonstrators, and also from sales promotions. Even during the off-season also, festival season also, we spent money in building up the brand. So that is one thing which is slightly. But this blip is only very small for a particular quarter. Only if you look at on a nine-month basis, our results have been pretty good. INR 312 crores last year to INR 848 crores.
Even in the quarter also, if you look at from INR 24 crores, we have moved to INR 191 crores as a company. The only thing is a little bit blip would have happened in one or two verticals because, as I said, we wanted to sustain our leadership position and gain on the market share and increase the numbers. You look at our growth, kind of growth which we have registered in this particular segment is humongous. Yeah. Almost we have been growing Voltas Beko as well as most of the UCP products, room air conditioners, air coolers, and now more than 50%-60% growth we have been registering all along these nine months. So I think you would like to appreciate that particular fact, and therefore, there's a bit of cost involved in building up these numbers.
Your guidance, sir, on the segment margins?
Generally, we will remain around this high single digit. Our endeavor would be by the end of the year as a company, and on the segment also, we'll try and retain high single digit in the last quarter as well.
Okay. Great. Thank you so much. Okay.
Thank you. Before taking the next question, a reminder to the participants, please limit your question to one per participant. We take the next question from the line of Siddhartha Bera from Nomura. Please go ahead.
Yeah. Thanks for the opportunity, sir. So the first question is on the Chennai plant. We understand this plant also has the PLI benefits. So can we expect that you will also accrue this from next quarter, or when can we see that getting booked in the financials?
So, I'll tell you, originally, when we had applied in the first PLI, that time we had applied two kind of applications. One was for the compressors, which unfortunately could not happen for some reasons. However, additional one was a smaller amount which we had done, which has largely been consumed, and I think dividends have started coming in. And again, we have applied second time, which has just got approval. Our applications have got approval. Again, we have filed two applications, and they are the fresh ones, which is for augmenting the capacity in Chennai by setting up injection molding further, enhancing injection molding, sheet metal, copper tubing, heat exchanger, etc. And also, another one is for fresh application for the compressors. So I think for Chennai plant, if you are asking in particular, probably next year onwards, the benefits will start accruing.
So, in the next quarter, I don't think anything is coming in from Chennai. But yeah, some leftover for Pantnagar, which we've already spent, could get in the quarter four. That is how it is.
Got it, sir. And any price hike did we take in the current quarter, given that there are many cost headwinds you are seeing in the current quarter? So, will it be possible to highlight anything we have done here?
No. We haven't taken any price hike in last quarter, quarter three, because as it is, it's a leaner quarter for especially the air conditioners. And as I told you, our endeavor is to increase the scale of the numbers, and we have not done anything on that.
And probably we'll see as we go along in our journey, if there's a continuous pressure from the commodity side and also the forex, etc., etc., then we'll have to look at as to how much can we retrieve through the value engineering and how much do we need to pass on. That balancing this thing strategy will be applied to this, and we'll look at it as it comes to us.
Thank you, sir. The next question is from the line of Srinidhi Karlekar from HSBC. Please go ahead.
Yeah. Hi. Thank you for the opportunity. So would it be possible to comment just the profitability of your AC business, how it has moved sequentially on a year-on-year basis, just the AC business?
AC business, probably how it has increased over the last few years.
No, no. How it has behaved in this quarter on a year-on-year basis and on a sequential QoQ basis.
So actually, it has shrunk a bit over the last year's same quarter. Last year's same quarter, we were nearing 8%, and this year it's about 5.9% or whatever, 6% approximately. So I told you the reasons earlier. I just explained in the previous question also. I think.
It's not for the segment, sir. Within the segment, just the AC part of it, because there were some liquidation impact and the new ramp-up in factory impact. So I was just wondering if we can get the clean RAC business, how it has behaved in terms of profitability. That would be really helpful.
So it's been about the same 200 basis points. It has come down, and I told you the reasons.
More ISD earlier on also, because I'll tell you some of the examples, smaller examples I can cite. Last year, we did not advertise during the off-season. Also, in-shop demonstrators, because as we have entered into all these new channels, emerging channels, modern trade and all there, we had to provide additional in-shop demonstrators and BTL activities were to be carried out. That actually has been additional spend over last year, so I think that is what has eaten into a bit of a profitability, and as we go forward, because these channels are emerging and continuously evolving, and especially in the southern and the western part of the country, we need to have their presence.
And as we told earlier, also the guidance was that we need to extract from each of these channels the legitimate share, because if we are hovering around 20-odd% market share, we would want to extract from each of these channels. And we were at a very small level in some of these counters. And also, southern India, as you know, earlier on, we were not the brand leaders. We wanted to reclaim and regain our leadership position in that also. So therefore, we had to spend all these activities to strengthen the brand in these areas and in these channels. So that is what has taken a bit of a toll on the profitability by about 200-odd basis points in quarter-on-quarter basis this year versus previous year.
Thank you, sir. The next question is from the line of Aditya Bhartia from Investec. Please go ahead.
Hi. Good evening, sir. So my question is again on these additional costs. If my memory serves me right, we had started working much more actively with modern trade in fourth quarter of last fiscal. We didn't see costs spiraling up as sharply in the first half of this fiscal as we have seen in the third quarter. Or is it that in first half, because we had very strong growth, operating leverage, because of operating leverage, we didn't really see the impact in EBIT margins? And in third quarter, we have seen a much more pronounced impact.
So last year, it was just beginning. We were just entering into them. And I would remember that we could not enter with all of them. In fact, all the regional retail and modern trade partners, we were not fully available.
Even if you ask me, even today also, we are not available in all of them. And our effort is towards entering into all of them and to be meaningful with all of them and getting our reach as well as extraction from all these modern trade and regional retail counters. We are available in about 75%-80% of them. So balance had to be. So as we go along in our journey, you will get to see there is more investment happening on all these fronts. And see, if you were to compare, earlier on what was happening is during the off-season, we used to remove in-shop demonstrators from the outlet because our product was only the seasonal product. But now, with all the categories, we have strengthened our product portfolios.
We are into full-fledged consumer durable range, except for electronics, as well as we are into air coolers and many other categories like water heaters. So therefore, round the year, we need the in-shop demonstrators. So this is the additional cost. Probably, I think we are ignoring on that fact. If you look at our ISD number, it's I think probably doubled up, doubled up then previous year during the course of this year. So all this costs, actually. And also, advertisement was being done in only the main season, peak season, summer season, IPL and all. But now, with all these consumer durable products available, we have to spend during the festival season also because it is meaningful to have our presence for our consumers. So that is all, I think, probably we need to take cognizance about.
Thank you, sir. The next question is from the line of Rahul Gajare from Haitong Securities. Please go ahead.
Yeah. Hi. Good evening, sir. Sir, I have a question on your project business. Now, your order backlog is closer to INR 6,800 crore. You also indicated the domestic order intake at closer to INR 1,400 crore. Is it possible you can indicate how much is your order intake in the international? Because mathematically, it appears that you have had either cancellation in your international orders because there is a continuous decline in the international backlog.
For the international business during this period, we have not taken any orders as you have indicated. The INR 1,400 crore which we mentioned is the domestic business order intake for this period. The total outstanding orders which stand is about INR 6,800 crore. And out of that, about INR 2,000 crore is for the international business. There is no cancellation of orders.
There has been no cancellation. Only execution of orders has been happening. And that's why you see there is a big uptick in the turnover volumes also. As we had earlier indicated in our previous calls, that our focus at the moment in the international business is on consolidation and doing a better KYC to get good orders and only execute good orders with the best profit. So we are continuing with that strategy, and we will continue to take projects which fit our criteria as we had been saying that. And that was only natural because of a couple of hits which we had in the last year and last two last year. And that's why you see over the last nine months, and we expect it will continue that we do not get surprised with any hits and all.
So just to add to what my CFO has just now said is, there are twofold strategy which we have adopted in the international business. One is we wanted to remain vigilant towards collection of our old dues, as we have stated earlier also, because in certain places, the collections or the exposures had gone a bit higher, and we wanted to collect those money, and therefore, the focus was towards that, which remains still a very, very important aspect of our business in this strategy. And when we are saying that consolidation, as in we wanted to, we are expanding our business, or we want to do business in two main geographies, which is UAE and KSA. So there, we have been executing three, four large projects and some smaller projects put together, 10, 12 projects which we have been carrying out.
Therefore, we were prudent in selecting projects in those geographies. So right now, it's about INR 2,000 crores, and we are looking at, in case there are meaningful projects funded by the right clients, we will look forward to increasing or picking up projects in those geographies.
Thank you, sir. Ladies and gentlemen, we take that as the last question for today. I would now like to hand the conference over to the management for closing comments.
So I think all in all, if you look at this year, it has been pretty good. First nine months have given us a lot of good momentum on sales, numbers, volume, revenue. Even the profitability has been almost three times than what we had done, two and a half times than what we had achieved last year, and we will continue to strengthen our product portfolios.
We'll continue to strengthen our numbers, continue to keep expanding the size and scale of the industry as well as Voltas brand. In the project businesses also, we will try and execute projects whatever are towards closure and collect our dues in the last quarter to be able to deliver what we have committed to the shareholders. Thank you.
Thank you.
And just for your information, UCP segment this quarter, whatever little bit downward trend you would have seen is it's a seasonal factor, and we are likely to catch up in the quarter four.