Ladies and gentlemen, good day, and welcome to the Q3 FY 2024 earnings conference call of Voltas, hosted by ICICI Securities. 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 phones. Please note that this conference is being recorded. Ladies and gentlemen, kindly note the duration of the call will be for 45 minutes. I now hand the conference over to Ms. Anuradha Joshi from ICICI Securities. Thank you. Over to you, ma'am.
On behalf of ICICI Securities, we welcome you all to Q3 FY 2024 results conference call of Voltas Limited. We have with us senior management, represented by Mr. Pradeep Bakshi, MD and CEO, Mr. Jitender Pal Verma, Chief Financial Officer, Mr. Nikhil Chandarana, Head Corporate Finance, and Mr. Vaibhav Vora, Manager Corporate Finance. Now, I hand over the call to the management for the initial comments on the quarterly performance. Thanks, and over to you, sir.
Hi. Good evening, ladies and gentlemen. This is Jitender Pal Verma. As you have already seen our results and press release, I just wanted to take you through some salient features. You know, 2023 unfolded in a manner that defied easy predictions. The initial outlook was overshadowed by the global geopolitical tensions and financial market volatility. In case of the developed world, inflation climbed to unprecedented levels, compelling central banks to embark on historically rigorous path of rate hikes before settling down to pause in the latter part of the year. The uncertainty of growth across the world kept the crude oil and commodity prices volatile for most of the year. Despite multiple headwinds globally, the Indian economy demonstrated resilience and candor in 2023.
The increase in tax revenues, positive PMI across manufacturing and services, coupled with the highest economic growth rate among world economies, stands to its testimony. Quarter three of the financial year comes with festivities across the country, augmenting demand for the various product categories we operate in. The execution of healthy order path in project business at the beginning of the year has also added to the overall revenue for the quarter ended December 2023. As a result, the consolidated total income registered a growth of 32% at INR 2,684 crore, as against INR 2,036 crore in quarter three of financial year 2023.
While product profitability has improved over previous year on account of stability in commodity prices and operating leverage, duly supported by the improved profitability in domestic business on the execution of the healthy order path, a provision on account of delayed collection and cost overrun in international projects, especially in Qatar, has impacted the overall result for the quarter ended December 2023. The profit before tax, that is PBT, was INR 24 crore against a loss of INR 80 crore in quarter three financial year 2023. Earnings per share for the quarter ended 31st December 2023, was at -INR 0.92, against a negative EPS of INR 3.34 reported last year.
The consolidated total income for the nine months year ended 31st December 2023, was higher by 27% at INR 8,477 crore, as compared to INR 6,664 crore in the corresponding period last year. Profit before tax was at INR 312 crore as compared to INR 93 crore last year. Net profit after tax was at INR 137 crore, as against a loss of INR 7 crore, owing to an exceptional loss of INR 244 crore in FY 2023, in the corresponding period last year. Earnings per share for nine months ended with 31st December 2023, was at INR 4.10, as compared to a negative EPS of INR 0.27 in the same period previous year.
During the quarter, the company has availed a term loan to finance the capacity expansion for both air conditioner and commercial refrigeration, along with investments directed towards PLI scheme. The corporate balance sheet continues to remain healthy, with the cash and cash equivalents and minimal borrowings as at the period end. Our snapshot of our results you have already seen. I'll talk about the Segment A, unitary cooling products. Quarter three of current financial year witnessed key festivals and wedding season, supporting consumer appliances in an otherwise lean quarter from a seasonal perspective. The strategic tie-ups with channel partners, price calibration, coupled with expanded product portfolio, has resulted in volume growth outperforming the industry. The planned expansion of exclusive brand outlets or EBOs has also supported and contributed to sales during the period.
Tactical consumer-centric subvention schemes and placement of in-shop demonstrators has boosted sales of higher energy efficiency products, thereby improving product portfolio towards more premium categories. The collective outcome of all such initiatives has resulted in volume growth of 27% over last year in similar period. Voltas continued its leadership in window as well as split air conditioners category, with YTD market share of 19% as of December 2023. The focus on the inverter category, improved product portfolio, reduced volatility in commodity prices, higher scale and focused approach on margin enhancement, resulted in year-on-year and sequential margin improvement for the product category. On a relatively higher base of the previous year and on account of reduced investment by the OEM, more particularly in chiller category, the growth of the commercial refrigerator category has remained tepid.
Nevertheless, the outlook for this category is promising, given the expansion of retail chains in conjunction with increased penetration of cold beverages, chocolates, and ice creams into new territories. The air cooler vertical witnessed a lower tertiary demand amidst low offtake during this non-season time. The investment in product portfolio, expansion of network channel, and tactical distributor schemes supported the primary delivery to the channel partners, thereby registering a growth during the quarter. Voltas air coolers continues to lead the second position in market share, with an exit market share of 8.9% as of November 2023, an increase of 170 BPS over March 2023. During the quarter, we witnessed good acceptance of our newly launched water heaters. Commercial air conditioning vertical performance has registered a robust growth for chillers, VRF, ducted and packaged air conditioner, both from retail and healthcare, healthcare sector.
Going forward, a mandatory quality control order compliance in few of the commercial air conditioning product category may also impact sales amid price escalation. However, increased commercial activities across the country, coupled with focus on customer retention and after-sales service, should support the overall growth for the category. To summarize, for the quarter ended December 2023, UCP segment registered revenue of INR 1,476 crore, a 21% growth in turnover from INR 1,216 crore in quarter three, financial year 2023. Segment reported an EBIT of INR 123 crore in quarter three, FY 2024, as compared to INR 89 crore in quarter three, FY 2023. That is a growth of 37%.
For nine months ended December 2023, UCP segment registered revenue of INR 5,198 crore, a 17% growth in turnover from INR 4,426 crore in nine months, financial year 2023. Segment result was INR 423 crore in nine months, financial year 2024, as against INR 332 crore in nine months, financial year 2023, a growth of 27%. In segment B, electromechanical projects and services, the segment revenue for the quarter was INR 982 crore as compared to the previous corresponding quarter revenue of INR 648 crore, a growth of 51%.
The segment result for the quarter reported a loss of INR 120 crore, due to cost escalation on periodic assessment of the ongoing projects and provisions on account of delayed collection in certain overseas projects. Domestic projects business, on the back of a healthy order book at the beginning of the year and timely execution of the projects, registered a stellar growth of 83% over last year in the similar period. Focus on certification, tight control on the working capital, and other project management related initiatives have resulted in a robust growth in the financial results, as well as improved ROCE, that is return on capital employed, for the domestic projects. The order inflow and order book for the domestic business stands at INR 482 crore and INR 5,275 crore respectively.
While domestic business has registered a stellar performance within the segment, our international project business continues to face headwinds. A cautious and risk-mitigated approach is followed for securing new orders. However, a few projects, especially in Qatar, are under stress due to obstinate delays in the realization of overdue receivables and prolongation of execution timelines. These delays have resulted in cost overrun, which has impacted the overall performance and resulted in a loss of INR 143 crore in international projects business in the current quarter. Having said that, company continuously deals with all concerned stakeholders in these projects to pursue its entitled claims and recovery of due receivables. Segment C, engineering products and services. The segment revenue for the quarter was INR 155 crore, and EBIT for the quarter was INR 50 crore respectively.
Customer-focused approach increased demand of crushing and screening equipment, owing to extensive infrastructure spending in the country, and revival of iron ore sector supported the growth of mining vertical in this quarter. Sustained prices of cotton on the arrival of new crop gave some respite to cotton spinners, resulting in revival of demand for the textile machinery equipment. The vertical continued with improved performance on the disciplined execution of the strong order book and focus on accessory sales, including auxiliary and value-added services. Investment in textile sector, on the back of the policy initiatives of the government, like PLI scheme, textile park, and revival of export demand, are an indication of positive outlook for the sector... Voltas Beko. Voltas Beko, the company's home appliances business, crossed a cumulative volume of 4.5 million units since launch of commercial sales, becoming the fastest brand to achieve this milestone.
The overall volume growth was in excess of 65% compared to the corresponding quarter in the previous fiscal. For the nine-month period, the overall growth in volume was in excess of 55%. The company's performance was aided by robust festival demand, improved consumer sentiments, growing presence in organized retail and e-commerce platforms, and product management initiatives, which have led to a premiumization of the overall portfolio. The strategic tie-ups with organized trade partners and e-commerce platforms, in addition to the traditional channels, have contributed to achieving much higher volume growth as compared to the industry. The company's effective advertising spend on TV and digital media and the rapid and extensive deployment of in-shop demonstrators has accelerated the growth momentum.
Our market share stood at 3.3% for refrigerators and 5.5% for washing machines, representing an increase of 1% and 2.1% respectively over the same period in the previous year. In the semi-automatic washing machine category, the company reported market share of 12.2% for December 2023. The favorable product mix, cost rationalization measures alongside localization of the fast-moving SKUs, have resulted in significant improvement in overall gross margins. During the quarter, the company also received significant export orders from the overseas subsidiaries of its shareholder partner. The loss per unit has been curtailed significantly despite much higher advertisement spend and in-shop activity. The growth in sales volumes and increase in capacity utilization will continue to drive improvement in gross margins and overall profitability. Outlook.
With the upcoming summers around the corner, we strongly believe that demand for air conditioners, commercial refrigerators, air coolers, and home refrigerators will be strong, and positive consumer sentiment will further support growth. The various strategic initiatives and new product launches planned for the season across categories will help us to outperform the market and shall support us in strengthening market share in a more sustainable and profitable manner. The government may curb its spends on infrastructure in the wake of the general election. However, profitable execution of the orders in hand will support growth momentum. The headwinds in our international business may continue for some time, given the extraneous factors. However, all efforts have been taken by the company may be able to reduce its impact on the segment. We remain optimistic given the various supporting factors for the businesses we operate in. Thank you.
Thank you very much. We can start the question and answer session.
Yes. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask 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 handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, please limit your question to two per participant. Should you have a follow-up question, we request you to rejoin the queue. The first question is from the line of Natasha Jain from Nirmal Bang. Please go ahead.
Good evening, gentlemen, and thank you for the opportunity. Sir, my first question is on the commentary that you made. You said that you received significant export orders for Voltas Beko. So can you just, you know, tell us where these orders came from and what were the orders for?
Hi, Natasha. Normally, you know that we have a partner, which is Arçelik, with the brand name of Beko. And as I have mentioned in our initial comments, these export orders are through them. So these are to meet their various, because they operate in all regions outside India. So all the... In terms of our agreement also, all the exports are done through them. They were for various countries in the nearby region.
See, mainly these orders are for frost-free refrigerators and dishwashers. These are the two products which, we, you know, we have exported. And, since you know, our arrangement with Arçelik is for India only, and, therefore, certain products which our factory is producing here, and if they are in demand, which other factories are not producing, so there is a opportunistic exports which is happening. And for that, the partners, based out of Turkey, they are procuring the orders, and we are executing them. That's how the system is.
Understood, sir. All right. Sir, my next question is on the UCP segment. Now, specifically for RAC, if I see your first half market share, we landed at 9.2, and then now we've again landed at 19, so pretty much flat. Now, if I see the overall UCP value growth, and if I compare it with the volume growth for either RAC or the entire UCP, there's definitely been some pricing pressure. So did it come from RAC specifically? And, basis that, did we have to cut prices?
... See, you know, first of all, I think what you said is 9.1% half yearly is something you've not probably spelled out properly. It is, you know, it's been over 19% in half yearly results as well as-
19.2.
Yeah, 19.2. You said 9.2 initially. Anyway, so it is over 19%. So first is, you know, we remain the market leaders, as you know, in the room air conditioner volume. And if you look at our primary sales growth also, which you would have seen through the balance sheet, also in air conditioning category, in the quarter three, we've grown by 27%. So I think, you know, while the industry has grown by about 20%-22%, so we have been growing, you know, faster or larger than the industry growth. And we are ensuring that our market shares and the leadership position remains intact. That's our endeavor.
If you are talking about the margin pressure, if you look at our margins in room AC category as well as overall category, it's been about the same what we have been doing.
This quarter is better.
In this quarter, in fact, it is slightly better only. So while the industry has been, if you look at many brands, I don't want to name here, but several brands have been registering losses to gain market share. Whereas if you look at our, we have remained profitable as well as we have remained leader, and we have maintained and sustained our numbers as well in market shares.
And, Mr. Verma over here, just to add what MD said, the value and the volume growth difference, what you are seeing is largely because of the product mix. The AC has been grown at a higher average rate, whereas the commercial refrigerator and the air cooler, the growth was lower. And that's why you're finding that the volume and value growth are different.
Okay, sir. So that means the UCP margin expansion would mostly have come through from the RAC category, right? Is that understanding correct?
Yeah. Yes, and right to it, right.
For this quarter, yes.
Understood, sir. And, so lastly, on the MEP as the project business, sir, since past couple of quarters and specifically in the last quarter, we've been told that the stress is going to be there, but then the level of aggressiveness would be decreasing. Now, if I see the losses in this quarter, it has ballooned, and it's greater than even quarter one and two combined. So I would want you to sort of detail out as to what's happening there, and did we—I mean, did we expect some revenues to flow through, but even that went bust? And, you know, henceforth, how should we model this? Because we're not able to understand what are the losses that can crop up following in the following quarters, in the magnitude of it. So if you can just detail out a little bit here.
So, Natasha, let me tell you one thing is if the understanding of quarter one and quarter two put together, losses have gone up in the quarter three, that understanding is not correct. Second thing is yes, we are facing some kind of headwinds in the international business, and it's outcome of the periodic assessment and reassessment what we carry out on the ongoing projects, as well as the stress situation what we are seeing in the international market, especially in Qatar, where we have a larger exposures and a delay in the receivables being seen consistently. So these are the prime reasons of the loss attributed to it. Now, the question of yours is whether we have done with all the impacts.
As we said earlier as well, it's an assessment of the projects and the outstanding, which is there in the Qatar territory. Largely, we face the headwinds over there, and the steps what we have taken should help us to contain those losses. But again, it is premature to say for the in the going forward, how it will evolve. But this is where we stand today. MD will add few words to it towards it.
Yeah. So, Natasha, you see, the projects by nature are a little, you know, it's not certain as to how, which direction they are going to end, because till the time the project completely gets over, it's, it remains uncertain, uncertain. So while our endeavor has always been to protect our interest as well as our shareholders' interest, you know, to protect the margins as well as executing the projects, you know, well on time and profitable, and that is why we are into this business. And if you look at our history, for more than four decades in this, you know, business, project business, this is the first time in last few quarters, you know, you can say about one and a half years, we have faced some headwinds, and that is largely be on account of Qatar.
Because what has happened is somebody unethically or uncalled for, they are encashing our bank guarantees in their anxieties to make quick monies or recover their monies, some, you know, contractors who we deal with. So that is what has derailed our, you know, international project business. Otherwise, if you look at overall, all other categories, all other verticals, including, you know, engineering products or our UCP segment, everywhere, we have made reasonably good profit. Except for this particular, you know, vertical where for last few quarters, one after the other, some bank guarantees have been encashed, or despite the fact we have carried out and executed the project and handed over the project, you know, as per the requirement of the client and the contractor, but our payments are withheld.
While we are attempting in best possible manner, also through legal way, we are trying to retrieve the situation, and hopefully, by the time, you know, the verdicts come, it should be in our favor. That's what we are trying to protect our interest as well as interest of our investors. So this is how it is as of today. But this is only one region, and in international operation also it is... You know, everything is coming out of Qatar. So our endeavor is to, you know, plug this. And now going forward, also what we are doing is, as a remedial action, we are becoming very choosy while selecting the projects.
We are very selective, and wherever we think that, you know, the funding, it is backed up with proper funding, it is through, you know, renowned contractor and the client, those who are good payers, sir, we are going to them only. Now, we are not taking any charge whatsoever. This is what protection we are trying to provide to you guys.
As we say that these are the provisions, and it should give us an opportunity to.
Write back.
Write back or reverse these provisions as and when we win those legal cases and get our monies back. That will be an opportunity for the future.
Understood, sir. Thank you so much. I'll get back in the queue.
Thank you. Our next question is from Bhavin, from SBI Mutual Fund. Please go ahead.
Good evening, gentlemen. So this question again is on the loss in the projects division that we have seen. So if you could just help us understand this Qatar, what was the original size of the project? What is pending to be completed, and what's the kind of cumulative losses that or provisions, as you highlighted, that we would have kind of provided for in this? And when should we expect business as usual margins in the projects division? So a backward looking in terms of what was this one or two project which went back the quantum of the project and the losses. And going forward what's the underlying margins of the projects that we are bidding, and when can we expect normalcy to start?
So Mr. Bhavin, Bakshi here. You see, if you have seen through our reports, and we have tried to elaborate in our, you know, press releases also, wherein actually largely all this has been happening in the Qatar projects only. And if you ask me, there are about 2-3 projects where we have got derailed. While if you are asking about the status of these projects, you know, most of these projects we have finished almost and handed over to the contractors, main contractor for the client. As you know, that, you know, by virtue of we being the MEP contractor, we work with the main contractor, which is a civil contractor, and then we are, in, in between, in the client and us, there is a main contractor. So we deal largely with the main contractors. And in some cases, you know, the outstanding is there.
They have not paid us our dues, and certain cases they have encashed our bank guarantees. So on account of two, and all this has been done, I would say, you know, in crude language, they are fraudulent giving none, unethical, uncalled for. While I have handed over, I have done my bit, and I have handed over the project to them, and they're using it. If you look at some malls, some buildings which we have created, this was our FIFA World Cup project. We had created a building. There were about 18 buildings we had created and handed over. There was a mall, Vendome Mall, where we have done our bit, and we've finished off the project and handed over the project. In spite of that, if somebody is encashing my bank guarantee, somebody is not paying me, actually, we are not at fault.
But yes, of course, we owe the, you know, answers to you. We are answering you, but unfortunately, this, you know, beyond our this thing, and therefore, we are very, we have, we have felt hurt. We have taken to the court, and we are trying to retrieve the situation. Hopefully, by the time, you know, the verdict comes, it should be in our favor, and we should be able to write back these provisions which we provided in the last couple of months.
Okay. So what's the total quantum of provisions that you would have done for the Qatar, these couple of projects in the Qatar?
Bhavin, if I take the aggregate amount, it may go even beyond INR 300 crore-INR 400 crore odd. Project-wise, it will vary. In fact, I'm talking about the current financial year and some of the last quarter of the financial year. And that's where we stand. The quantum of the project and other things won't matter too much to it, because that's what we stuck, and what our MD has rightly said, the legal remedies are being persuaded. If the contract is, or the cancellation of the guarantees are taking place at the end of the contract, probably this is the largest sum where we end up losing the amount of a project.
Sure. And the second question is, when can we expect business as usual, and what's the underlying margins now for the projects division that one should,
See, for the business as usual, for other regions, we are running usual business and earning usual profits. And our general guidance has always been roughly around 4%-4.5% EBIT margins for our—based on the turnover, and that is continuing in all the other areas. Even on this one, as we earlier said, that once the legal decisions are made, we should be able to get back a substantial amount on these losses which have been, or rather, provisions which have been booked until now. And usually these court cases get decided and the execution of the legal decisions get executed over a period of, I would say, 24 months or maybe 30 months.
So that, that is the kind of time period we are looking at over. But other than that, all other projects are going normally.
In terms of business as usual, if you ask me, if you look at all other businesses, they are performing better than the expectation, and they are all, every other business and vertical is, you know, dead on targets in terms of both top line, bottom line, volume, everything, except for this particular business. And here also, as I said, you would have heard me earlier when I was answering to Natasha also, that you know, we have been very, we are going very selective, where very carefully we are picking up projects now in the international segment. So I think probably going forward, this will all pave the way in the right direction, because we want to curb all this, whatever has happened.
Appreciate that. If I can ask one more question on the unitary segment. I mean, the competitive advantage for Voltas to our understanding was, cost, second was brand and distribution. So cost is an advantage. The perception that we have is diluted because of the import curbs, but it, the margin increase that we are seeing, is it that the cost disadvantage that we had, we are kind of climbing back and, is there, if you can throw light on that, and is there a possibility of, we seeing, positive direction on the margin that we saw in this quarter continuing?
Actually, you know, if you look at our price competitiveness has remained. You know, despite the fact, you know, overall in the industry, because what has happened in last, you know, about two years, the commodity prices went up very, you know, steeply. And, you know, unfortunately, because during the lockdown and after the lockdown, when the markets opened up, the, you know, industry could not pass on the, you know, the price hike of the commodity to the consumers. And therefore, overall, if you look at in the industry, the margins have shrunk a bit over the, you know, previous years. But if you look at our profitability, it's been either better than many other brands or about the same.
So I think you should believe that, you know, our competitiveness, even whatever, whether we were outsourcing from outside India or when we are producing in India, our prices have remained competitive, and we have remained profitable brand all along. So I don't think, you know, it is a matter of sourcing over here, because, you know, if you look at even today also, a lot of components still are being imported only. Everybody's been outsourcing, you know, quite a few products from outside, only 50% almost product comes from outside. So whether you are getting 50% or 60% earlier on, it's almost the same. Only thing is the commodity prices which have got high, have been absorbed by the industry, and therefore, overall, if you look at on the margin front, there's a bit of a shrinkage which has happened.
Sure. So just the direction that we saw in this quarter was a positive surprise. Is the direction likely to continue? Can we see a slight increase in the margin directionally? That's-
Direction, direction for margins, if you ask about UCP segment, I think it is, it is better only. Only, you know, if you are talking about overall company because of international operations, yes, that has, you know, gone a bit down.
So, Bhavin, if I were to just add what Mr. Bakshi said is, if you recollect in the past as well, we said we'll remain a leader in the margin trajectory as well. And sequentially, if the stability or the volatility gets arrested for the commodity, the scale should give some advantage to another 50, 60 basis to move forward. That we demonstrated in quarter three, and looks like quarter four also will support to us in terms of the volume, so we remain positive on this.
Great. Thank you so much for taking that question. Really appreciate it.
Thank you. Our next question is from the line of Ajit Motwani from Dymon Asia. Please go ahead, sir.
Yeah, good evening. Just wanted to understand a bit of a thing on market share. So sequentially, your market share is about similar 19, 19.5. So, you know, can you split it between, say, window AC and inverter? And that's first question, and what would be our exit market share for December?
So, you know, if you look at, yes, of course, we are, our endeavor has been to sustain our, you know, leadership and the market share, because currently there are more than 60 brands there in the frame, and they're fighting for a pie. So sustaining this market share itself is a, you know, is a tedious task, which our team has been able to maintain and sustain. And coming to the window versus split, roughly, windows are hovering between 35-odd percent, 35%-40%, if you look at, for last few, you know, quarters. And in the split category, our market share is somewhere around 18%-20%.
Nineteen.
Yeah, 19 odd percent. So that's how it is. And since the 90% of the business is coming in from the split category, therefore, our overall market share also remains about, slightly above 19%. That's how it is.
Good. What would be our exit market share for December?
So we will try retain this market share, because as I said, our endeavor has been to sustain our market share as well as leadership position, so we will be around this number only.
Got it. And this number when you give this is, if I understand correctly, this is multi-brand outlets market share. Here, you do not include the institutional business, right?
Yes, that's correct. That, that is correct. The...
No.
So even on the overall basis also, this market share remains about the same only, including the, you know, MBO, EBOs, and, you know, offline channel, complete online channel. This market share has been about the same 0.1% here or there. So we've been hovering around 19% and so.
And you recollect we're reporting based upon the GfK. So GfK—if you talk about the institutional sales, that generally it's a B2B kind of transaction, like when we do carry out ATM installations and all, that largely won't get covered under the GfK market participants, as market participants over there.
Got it. And on the costing front, you know, you alluded to the fact that, you know, like after the rating change and after the sharp inflation that we saw in last year, the price hikes that you took were not sufficient enough, you know, to sort of cover up. Now, as you look forward to, you know, the next six months, which are typically the season period for us, and you would have booked your inventory for the season, how much price hike will you need to take, you know, to cover those costs which are higher?
... because of rating changes and commodities. Yeah, normally we do tactical price hikes, so I would not be able to give you any predicted numbers for what percentage hikes we would be taking, because it is.
My question is not that. My question is that how much we need to take to cover up those costs and not,
So you see, what happens is, if you are talking about the price hike due to the energy efficiency going up or down, that's one part. You know, so every time, whenever energy efficiency is going up, because every two to three years, the Bureau of Energy Efficiency, Government of India, they, you know, raise the bar for energy efficiency. At that point in time, in case, what our team does is to counter that, actually, we come up with a lot of value engineering in our system through our R&D and manufacturing teams, so that, you know, a minimal percentage hike is passed on, because we want to remain competitive, and we want to offer best-in-class product and service to our consumers, so therefore, we don't want to burden the customer.
However, if something is necessary to increase because of certain, you know, the same pressures in terms of, energy labeling, et cetera, that will be passed on, but that will be minimal. But otherwise, generally, we ensure that we pass on, only the requisite, price hike. Otherwise, the rest is all covered up through our value engineering and product designing, et cetera.
Got it. Got it. Thanks. Thanks a lot, sir.
Thank you. Our next question is from the line of Siddharth Bera from Nomura. Please go ahead, sir.
Thanks for the opportunity. Sir, first question is, again, on the ACP side, you mentioned taking multiple initiatives to go ahead of the industry. So can you just talk a bit more about these areas where you see white spaces, like maybe your penetration in some of the channels like modern trade or general trade or in some regions where you are probably weaker, and some of the initiatives which you have taken which can lead to market you going ahead of the industry in the coming years?
Yeah. So to answer, you know, your question as well as, you know, the question earlier on, you know, some, you know, investors had asked as to how are we trying to protect our turf, how are we trying to improve our profitability, our numbers, et cetera. So you rightly, you know, pointed out, we are trying to address all channel partners. You know, earlier on, there was, you know, distribution, you know, which is a conventional channel, and distribution, which was popular. But now, in the last few years, especially during the lockdown period, pandemic period, and all the other channels like e-commerce channel, also the modern trade, they have emerged out very strongly.
So now our, you know, team at Voltas, we've been focusing on doing just this and trying to rope in all the partners, including modern trade, organized trade, regional trade, e-commerce channel partners, exclusive brand outlets. Everywhere, we are trying to make our presence stronger and trying to extract, you know, the requisite market share. Because unless and until we take, you know, the requisite market share and extract extraction from each one of them, it is difficult to sustain the leadership and the market share. So we are focusing on all kinds of channel partner. We are strengthening and enhancing our presence and reach everywhere, across the, across the regions and also some of the regions where these partners are stronger, there, the focus and trust is being provided additionally to ensure that, you know, we remain and sustain our leadership.
Got it, sir. And then how critical or how you are looking at pricing as a tool? Because you mentioned in the quarter also that you have taken some calibrated pricing actions. Now, going ahead, I mean, what will be more sort of important in terms of growth or margins? I mean, will you look to sort of push at better cycle lower price despite weaker margin, or how are you balancing between the pricing and the margins?
See, you would have heard me, you know, just how I said, to protect our margin and profitability, we will continue to do whatever we need to do to ensure our, you know, numbers are there. One, if you're talking about remaining competitive, because, you know, whatever, you know, even if, the competition is coming more aggressively, so we have been remaining competitive and trying to, you know, achieve whatever numbers we have to achieve and trying to achieve profitability as well. So we'll continue to do that. Our endeavor is in that direction.
Okay, sir. So lastly, on Voltas, I mean, you indicated a good pickup, but we have not seen that in terms of the earnings for this quarter. So can we expect a meaningful improvement in the profitability next year, given the push this year, or do you think that will take longer, to sort of play out?
See, if you had seen our projections in the past, for first 4, 5 years, we have decided that we will invest into the brand. Because we are setting up factories, we are, you know, ramping up our production and trying to, you know, achieve our numbers, our objectives in terms of volume as well as market share. That is our first endeavor. And because your factories have to run, factories have to get stabilized, so therefore, and we are in the initial phase of that first 4, 5 years only. So after that, you know, going forward now, next 2, 3 years, you'll see that we are, you know, breaking even and starting making profits. So yeah, of course, we are working towards it. As the volume starts building up, we will work on these.
And as we have indicated already in our answers, in our initial introduction, that the loss per unit is coming down drastically, and which is a, which is a great news for a newly coming up company. And the number of units which we have sold in the initial-
... year, I think close to 4.5 million units. That is also unprecedented for any new newcomer in the market. So, the acceptability of our products and the technological advancements which we are able to give to the consumer, they all are positive factors which really are boosting well for the brand, and therefore, we remain quite optimistic on its growth level. So ideally, if you look at, you know, you have seen our revenue growth this year has been about 45%. You know, as we continue to grow in revenue, you know, a lot of fixed costs will be met up, and we will try to generate profitability in this segment also faster. Unfortunately, what has happened is because of lockdown period, pandemic, two years we got derailed.
Otherwise, we would have by now got into the profitability. But unfortunately, or slightly, you know, we got derailed because of all this, but now we're catching up with the game faster, and you'll get to see, you know, turning around in this business also soon.
Got it, sir. Sir, this project business, what will be the total order book now? You have shared domestic, but not the total. Can you share that number?
Probably, probably around INR 6,000 crore-INR 8,000 crores we are as of now.
INR 8,000 crore.
INR 5.5-6 thousand in domestic business, and about INR 2.5-3 thousand odd in the international business.
Okay, sir. Thanks a lot. Thank you very much.
Anuradha, since we have reached the closing time, I believe, we should... I, I do agree that, the participants may have more questions. We are, we are available on a phone call, and we therefore request you to proceed with the closing, remark from MD and CEO, if anything.
So I think, you know, largely through the couple of questions which are being asked by, you know, some of the investors, I think they're covering length and breadth of the, you know, balance sheet and the numbers which we have projected and presented to you guys through our balance sheet. So while the answers have been, you know, given, provided to you, however, we are available in case you want to reach out to any one of us. You can send your queries, and we will be more than pleased to answer your queries further as well.
Okay. Thank you.
Thank you. Thank you very much.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. Now, and now disconnect your lines.