Thank you, everyone. Can you hear me properly?

I'm going to take that as a yes.

Good evening, everyone. Welcome to our Q1 FY27 earnings call.

Thank you to the team of ICICI Securities for hosting this call. This has been an eventful quarter for us, from additions in our senior leadership to progress on our brand-related efforts to innovation-led growth and recognition of industry-first innovation.

Joining me, as was announced earlier today, after a while, is Sachin Phartiyal. He joins us back as the Head of Home Electricals after a brief stint outside the organization.

As many of you will remember, in his earlier tenure, he played a key role in building our fans and appliances portfolio. Along with Sachin, we also added Anuj Lal as the Head of our Integrated Supply Chain.

Anuj, prior to this, served as Executive Director and Vice President, Integrated Supply Chain, at Whirlpool India. The both of them bring valuable experience, as well as a fresh perspective, further strengthening our senior management team.

As you also know, many of the faces round the table are familiar, but some of their roles have changed. Rajat now looks after sales.

Shaleen, of course, looks after lighting, wires, as well as solar rooftops. Swetha, earlier the Chief Business Officer for Butterfly alone, now looks after both Butterfly, large kitchen appliances, as well as our Rayon brand.

Anand has taken over the role of Head of our Kitchen Appliances business. Of course, Kalees is doing exactly the same thing that he's always been doing, right?

Let me now get on with the quarterly performance. Crompton delivered a double-digit growth across all its business segments, driven by strong execution, successful product launches, and steady seasonal demand.

This quarter began, as with an uncertain note because of global events, with commodities facing cost and availability pressures. Through this volatility, we held on to our very disciplined approach as a leader, making timely pricing interventions and lean working capital management, combined with operating leverage and focused cost initiatives.

This has ensured that profits grew ahead of revenue. However, sustained leadership and consistent performance, as you are well aware, requires a disciplined approach across tough market conditions.

I believe that is exactly what we demonstrated under very volatile conditions. This is the discipline that has enabled us to continue to deliver strong growth with margin protection and high ROCE.

Despite adverse market conditions, indeed adverse and volatile market conditions, at a consolidated level, revenue grew 11.8% YoY to ₹2,235 crores. EBITDA was ₹224 crores, and it grew 14.2% YoY, with margins expanding by 20 basis points, reaching 10%.

Profit after tax grew 15.2% to ₹143 crores, with net margins, net profit margin, at 6.4%. Now, moving on to segmental performance, ECD business delivered 10.6% YoY revenue growth.

Over the last several quarters, as many of you are aware, BLDC has been a key focus area that is beginning to show results in the market. Our BLDC portfolio grew approximately 45% this quarter, resulting from the focused portfolio interventions that we have made in the last four quarters.

During this quarter, we launched five new BLDC fans, further strengthening our portfolio. We continued to remain market leaders in ceiling fans with market share gains during the quarter.

Pumps delivered strong performance across various subcategories with market share gains. Domestic appliances grew double digits, led by water heaters, which performed very well in both trade as well as the e-com channel.

As you are aware, over the last several quarters, we have been steadily gaining leadership positions in our water heater business in general trade. Water heaters, I'm glad to announce, now commands a clear leadership in volume terms in general trade.

As I've said earlier, this was indeed a very choppy quarter and choppy, volatile, and unpredictable quarter marked by pricing as well as availability disruptions. Through this period, we made pricing interventions, behaving like the leaders that we are, and combined with these interventions and operating leverage, ensured that our EBIT margins grew ahead of revenue at 12.1%, with a 20 basis points gain in margins at 13.5% margin.

Most of the supply constraints which arose out of this volatility were largely addressed by the end of the quarter, which now has led to a strong start in Q2. Lighting continued the strong momentum that it has gathered over the last several quarters.

This is something that I've been calling out for some time. There is a material change in trajectory in our lighting business, and this business continues to demonstrate this.

The lighting business continues to demonstrate that it is, it has a strong momentum. Revenue grew by 15.4% YoY to ₹269 crores, driven by growth in both the B2B as well as the B2C segments.

Margins in B2C segment continued to expand, but B2B witnessed a contraction in margins because of pre-contracted prices. We reported an EBIT margin in lighting of 12% for the segment.

Butterfly delivered strong results with revenue up 14% to ₹214 crores, driven by strong momentum across all channels and market share gains in mixer grinders, pressure cookers, and glass tops. Excluding the internal sales that Butterfly has made to Crompton of mixer grinders, which we've talked about in the past, Butterfly delivered an 18% growth.

EBIT at Butterfly grew by 19.5% YoY, with margins at 4.2%. Across segments, as I've already said, we have taken pricing interventions.

These range from high single digits to low double digits. These have covered approximately 80% of the inflationary pressures that we faced.

I would also like to highlight the significant progress that our brand transformation journey has made. As shared previously, we undertook an extensive usage and attitude consumer study, the insights from which have shaped a comprehensive look at our brand architecture and has helped shape a broader refresh of the Crompton brand across our product lines.

I'm happy to share that by the end of this month, you will see the first visible outcomes of this work stream. We believe these efforts will set the tone for Crompton's next phase of brand journey.

Over the next three to four months, you may expect to see a series of brand launch events showcasing the evolution and the future trajectory of the Crompton brand. Now, many of you may be already aware that there is a brand launch event that is planned on 18th of this month, for which invites to the relevant parties has already gone out.

There is actually a further capital market investor event which is on the 20th of this month. I expect during that capital market event to be able to give investors insight into the dramatic change that has been that Crompton has been undergoing for the last three, three-odd years.

You'll be able to get a real peek of what that is in fact delivering in Crompton. We'll come to that when we see some of you on the 20th here.

I just want to reiterate that we have kept to our brief, disciplined pricing approach, premiumization while leveraging our operating scale and strong execution across categories. Moving ahead, as we see, as I said earlier, Q2 has started very well, and we are continuing to witness, now that many of the volatility conditions have settled down, if not subsided, we are now beginning to see the benefits of the actions that we have taken.

I think it's fair to say that the pricing actions that we took, the market has well accepted. They have now flowed into the market quite well.

We are quite optimistic about the way things are evolving currently. With that, I will pause, and we'll take questions depending on what the question is.

I may answer that, Kalees may answer that, or any of the gentlemen here or ladies here can answer it. Right.

Hi. Good evening, Promeet, Kalees, and team.

My first question is on volume growth. Given that you spoke about high single-digit to low double-digit kind of a price increase, is it fair to assume that volume growth in ECD category would have been quite modest, if any?

If that is the case, then what could have contributed to it, given that we had a favorable base? See, like

I said earlier, Aditya, that this quarter we were impacted. Now, we run a very lean ship, as right?

Now, sometimes if the prices go up and there are supply disruptions, that can have an adverse effect. Of course, over a period of time, what we've found that if you run a lean shop, over a period of time, your ROCEs are much better and your cash flows are much better.

We've kept to that principle. I would say that because of supply disruptions, we did lose some sales, order of magnitude, maybe

₹200 crores,

maybe a little bit more, depends. Fact of the matter is that, yes, look, when you have supply disruptions, you have to ensure that, given the current availability of supply, you have to maximize your revenue.

We've kind of taken that tack, and the outcome is what it is, as you can see.

Understood. These supply disruptions would have been largely on the fans portfolio, or something else?

Actually, we had some supply disruptions in other areas as well, because if it is only pricing disruptions, then that was a different story. In this case, there was clear lack of visibility on supply of commodities and of various input materials as well.

We did have supply disruptions earlier. For instance, I spoke about lighting, right?

In lighting, we had a little bit, but when you're doing a B2B business, obviously there's a forward-looking contract that you've gotten into, and if the pricing disruptions are very large, not all of it can be recouped by pricing interventions. I'd say there was a disruption in more than one area and not only fans.

The good news is that we worked very hard. While keeping to our principles, we worked very hard over the quarter, and certainly towards the end of the quarter, many of these issues pretty much settled down, and that has enabled us to start the next quarter very well.

Sure, Promeet. Promeet, you mentioned about roughly 80% of cost increases having now been passed on.

Despite that, we have actually seen a bit of margin expansion. Does that mean that we had some low-cost inventory which kind of cushioned the impact in this particular quarter, and in Q2, costs are sequentially going to go up, and we may require some more price hikes to kind of maintain these margins?

Actually, as I said earlier, we maintain a lean ship across the year. I've seen some of the others probably have had a lot more of that, which is one-off, right?

I wouldn't say the contribution of low-cost inventory for us was very material. As you are aware, what we do do in all our situation is that we have a very active cost management program as well.

We do do that so that you can't only work on the product pricing. Even the pricing that we passed on, at least it was not our sense, perhaps because some of our peers were working from a low-cost inventory that they may have built up.

We didn't see the same kind of pricing actions that others did, but, yeah, we did pass on. I don't know if that answers all of your question, but that should give you a sense of where we were.

Sure, that's helpful, Promeet. Thank you so much.

Hi, team. Thanks for the opportunity.

First question is on the expenses side. We've seen some bit of cut in A&P, and we've also seen subsequent rise in other expenses to the tune of about 15%.

Just wanted to understand at least on the A&P part, what's the sustainable number going forward and if this is transitory? That's my first question.

Yeah. Dhruv, as I said earlier, this is a very active year for Brand Crompton, right?

It's not really something that we've cut back in one quarter. As we've said before, A&P is something that we want to consistently make.

You will see a lot of activity on Brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG that we are able to cater to, etc. On a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we had last year.

Sure. My second question is on the solar rooftop portfolio.

If I'm not wrong, I think last quarter, you had a ₹500 crore, close to ₹500 crore kind of order book. Just want to get a sense that what's the number here?

How has been the execution in this vertical so far? How should we really think about this number really going forward in the next, say, one or two years?

Thanks.

Yeah. Solar rooftop business in particular has been in a ramp-up mode last quarter.

Basically, getting all our ducks in place in so far as the execution is concerned is what I'd say. Frankly, as you are aware, out of that ₹500 crores, ₹450 crores is an order book that we expect to execute over the six, eight months, right?

I'd say that this has been a year in which we really ramped up our execution capability. This is like going from 0 to 500 in a very short period of time.

The order book pretty much remains in place. The good news is that in solar rooftops, we also have started garnering orders on the B2C side, right?

This is, of course, the entire idea of the B2G business was that it gives us the scale both in solar rooftops and solar pumps, helps us sharply ramp up execution, and that we will also use to step up our B2C presence. This was the quarter where the revenues from B2C have also started rolling in.

That, of course, is a business where it's a consumer business with very high ROCE business, negative working capital business, right? I'd say those are the two things that happened.

This quarter and the next quarter is where I would expect huge bulk of that order book to get executed. Yeah?

Yes. Completely agree.

Got it. Thank you so much.

Government's pretty clear they want to get it done by the [unclear] if they're able. Anyway, so, yeah.

Yeah. Good evening, team.

Thank you for the opportunity. First question I have, we had a low base of last year given the summer season we had.

Given the recovery we kind of saw in the month of June, how do you see this? How do you tally this?

Is really the consumption that weak, or it's only specific to the category, and are you seeing any green shoots now?

Actually, like I said, I think the consumption is pretty decent. We are seeing what happens in our business is that initially, when you take price increases, there's a sticker shock, right?

Guy comes into the store, he looks at the product, and he says, "Guys, I just came two weeks ago, and the price is now 10% higher or 15% higher," right? He says, "Guys, I don't want to buy it just now.

Maybe it'll come down," right? Having said that, the nature of our business is that most of these are only partially discretionary, right?

You really don't have an option. I think that pricing has a delaying impact, but not a demand suppression impact.

Certainly, what we are seeing is that demand remains robust. We started the quarter a little bit impacted by the supply disruptions that we were facing.

As our supply disruptions have subsided, and market has become much more predictable, we are seeing robust growth is what I'd say.

In fact, just to add to it, if you look at it, category after category, we reported a standalone Butterfly business reporting 18% growth, excluding Crompton; lighting, probably one of our best ever quarter with about 15% growth; ECD, on the back of ₹200 crores of supply shortage that we talked about, has still delivered flat growth, where acceleration of revenue on solar rooftop is yet to kick in. Overall, we see that, on the back of our pricing action that we have taken across categories, coupled with the supply challenges, business is moving in the right direction, and consumption is also positive.

Guys, when you have supply disruptions, you want to be proactive in pricing. Even in Crompton SDA business, you are aware that we have an SDA business, right, which over the last six quarters has been one of the fastest growing businesses.

We took material pricing action there, and as a consequence, the margins of that business, despite cost increases, actually done extremely well. It has gone up multifold.

Now, I'm not at liberty to disclose the number to you, but profit margins in that business has gone up multifold. You've kind of got to look at that holistic picture.

Short point, it's not a demand issue.

Got it. Secondly, if you could talk about the CapEx, how do you see it for the current year and next year, particularly given the foray into new categories?

Would there be any capital allocated for that as well? Thank you.

Right.

Guys, I have said before we have a pretty disciplined approach to capital allocation, right? I've said before, let's just understand.

We have, so far, always had a good mix of in-house manufacturing as well as outsourced manufacturing. Within in-house manufacturing, we have consistently increased our capacity with very low investments, right?

If you remember, two years ago, we announced that we had expanded the manufacturing capacity at our Baddi plant with an investment. The capacity had gone up by 50%, and we had made an investment of all of ₹50 lakhs, right?

We have similarly expanded and optimized capacity at other locations. When we've gotten into wires, this is a question that I keep getting asked, before we got into wires, we worked quite hard on figuring out what the supply chain for wires would be.

Today, as of now, we are not putting up a plant for manufacturing wires, it's not really a capital allocation issue. Having said this, we do have a plan to take our manufacturing capability to another level, right?

Now, you are aware that we have announced in the past that we are planning over the next two to three years to implement a greenfield manufacturing location with the next-generation manufacturing capability, right? As I have told you in the past, that manufacturing plant, which will also include a large warehousing unit, will spend about ₹350 crores.

Otherwise, our CapEx trends should hold.

Got it. I'll fall back in the queue.

Thank you so much.

Yes. Good evening, sir.

Thank you for the opportunity. Sir, if we look at the copper prices, which is a major input side for us, has been continuously going up.

Even after correction, it has gone up, and then it's at an all-time high. Do you think we may need future pricing actions in the future as well to support our margins?

I'd say,

like I said earlier, we have been quite disciplined in passing on price increases, right? Having said that, at least we have not seen most of our competitors or a large bulk of our competitors, frankly, follow through in the same manner.

Perhaps they were benefiting from a significant low-cost inventory, but that'll wear off, right? The approach that we have is both working inside as well as working outside, right?

Every price increase that we have in commodity, we work on both sides. As of now, do we see a significant spat of price increases being necessary?

The answer is no, partly because we've been first to the market, and the price increases that we did take have now, we believe, largely settled into the market. At least today, I am not seeing a sharp set of price increases that are still necessary for us because of the combination of the two, or actually three: price increases, cost measures, as well as our operating leverage.

I think all of those should help.

Sure. The second question is, you talked about ₹200 crores of shortfall because of the supply disruptions.

Could you elaborate which category where we face these challenges? Is it fan, air coolers?

I think we answered this earlier. It's largely fans and largely in the ECD categories where we had the shortage, Parag.

Actually, outside the ECD also, outside even lighting. Frankly, lighting was our fastest growing segment, but it would have grown even faster, as you

Supply side, is it because of the commodity inflation, or there are some other reasons also to it? See,

fundamentally, as you would know, Crompton as an organization has always been working on a sharp networking capital management, and we have been an organization that works on negative working capital. As we entered Q4, we never carry a base inventory into it.

As the war opened up, our initial assumptions were around availability shouldn't be a concern, it's only pricing. As we discovered, the commodities also took time, and we did not have the base inventory to cover it.

That took us time, and by around June end, it got stabilized, and July, we are back to normal. In spite of those challenges is what we were trying to explain across categories, the challenges we had on availability.

Sure. Thank you for the opportunity, and good luck for Q2.

Thank you. Yeah.

Hi, sir. Thanks for the opportunity.

Sir, first, a quick follow-up on the previous question of sales which we lost. How will be the channel inventory in that scenario, and would we have scope to cover up this shortfall in the coming quarters?

That will be the first question. The second is, if you can share the segment-wise growth like fans, pumps, and small appliances, how the growth has been in the quarter?

Siddhartha, as you are aware, we don't provide the subsegment results. Segment-wise results have been provided between ECD, lighting, and Butterfly.

In so far as the channel inventory is concerned, that goes with the demand pattern. We never had too much of a channel stock earlier also.

We don't think that's a concern right now too.

Got it.

It's not a particular area of concern for this quarter.

Yeah.

Particularly because we started addressing this towards the last part of the last quarter, we're Behind us. Yeah.

Now we are looking at some of these in the rearview mirror.

Got it, sir. Thanks a lot.

Hi. Thanks for the opportunity.

First question, again, on fans. Given the disruption is now behind and given that the category's seen double-digit kind of price hikes and the base of last year is okay, would 15% be a fair expectation for rest of the year in terms of how fans should grow?

Yes, Umang. As you would know, we don't provide forward guidance in terms of how do we go about it.

Yes, from a portfolio perspective, you have already seen the kind of growth that we have seen in BLDC, which we talked about in the range of about 45%. A lot of work that had to be done within the BLDC category on product and placement has just started.

The journey of BLDC for us, I would say, in many sense, is probably beginning, and there is a long, long legroom available for us to grow from that perspective. Similarly, premium fans, which is on the induction side, is also moving positively as we get into Q2, Q3 onwards.

That should provide the impetus for the growth. As we have always been talking about, regulatory challenge or the changes that is happening through BEE, we see Crompton is positively poised to consolidate the industry at the entry segment and gain market share, considering that it may not be competitively possible for people to absorb the incremental cost and pass back.

Overall, fans as a category, we do believe we are well poised. Already, some of the symptoms are visible for us in strong BLDC growth and strong double-digit growth in some of our other subsegments within fans.

The momentum should continue in both mid and long term.

Sure, Kalees. Thanks.

The second question was on solar rooftop. It seems that this quarter didn't see much execution.

Was it something to do with government or any challenges in the quarter, and are they being Yeah.

The revenue recognition for solar rooftop, we follow a methodology on installation basis. Dispatches from our end are ongoing.

It's been moving in the right frame, but revenue is recognized when the installation gets completed, which we are expecting to happen in Q2.

Fair enough. Thank you so much, and all the best.

The government's been paying us on time. In fact, they've been paying us and pushing us to continue to accelerate.

Hello? Yeah.

Thanks for the opportunity. Good evening, team.

My question is on the wire segment. Can you share the current status as to how many cities we have reached, and any initial numbers if you can share at all?

Again, we'll hold off on talking about initial numbers. As you are aware, we've launched wires in Tamil Nadu and Karnataka.

I don't know if the count of cities

We'd be in about 14 different towns and cities.

14. I'm reminded by Shaleen that we are present in 14 See, guys, I think this is a business which is with lots of potential, which is getting started.

As and when we kind of I think built out the business in these cities, we'll also expand into other areas. Early by Crompton size, it is still very small, I'm not actually going to talk about it, because, obviously, ₹9,000 crores, it's still a small business.

The idea is that this is a very large business where we have the right to win, and we are finding that we are able to leverage that right to win, of course, early days yet. Very

early days.

Sure. Thanks.

Just a follow-up question on Butterfly side. How is the competition on this segment?

There are a lot more white-label and other brands which have come up, plus Chinese plus now Ninja has come in. How are you looking at competition in this space?

Swetha, you want to answer that? Sure.

I think kitchen appliances for quite some time has been extremely competitive space. At least for the last five, six years, it's been a very competitive space where we have been having white labels and international brands have started playing in this market for quite some time.

I think how we were looking at it, I think it's quite visible in the levers that we started activating from last year, starting from the brand refresh to our brand architecture rework. In line with it, keeping the consumers as the center, I think that's when we had launched our IDEA for series coming into place, and which has actually started working well for us and contributing significantly to the growth delta for Butterfly.

From a space point of view, it is always good to have multiple brands playing in a space, because it opens up a lot of opportunity for us as a very serious player in kitchen appliances. We are looking at it very positively.

I should tell you that Butterfly is an interesting case in point about how Crompton has been evolving, the Crompton Group has been evolving. Even as I said, if you exclude the OEM work that Butterfly was doing for Crompton, the growth in Butterfly was about 18%.

Even that 18% comes on very strong growth, 20-plus percent growth in retail, in large-format retail, in e-commerce. The quality of distribution in Butterfly, and I'm telling you this because now you know the numbers in Butterfly.

We can't necessarily talk about the same numbers in Crompton because we don't fully disclose them. Each one of the key focus channels for Butterfly, the growth has been very robust, right?

It's an indication of how we've been evolving as a business.

If I can add on, Swetha. See, fundamentally, if you look at it, there's also another impact on Butterfly business.

Core channels of Butterfly business have grown ahead of 20%. If you look at it, this was the quarter that was impacted by gas cylinder issues, and oil marketing companies did not take off on gas stoves.

If you exclude that impact, Butterfly has already grown at 20% ahead.

Let's not get into what it would have grown at,

but

the point being that this is not something new. I assume you guys are aware.

Our approach to Butterfly has been back to basics. Let's grow what our core product portfolio is, let's grow what our core channel is.

Let's de-emphasize other things which can add revenue episodically, but are not consistent. That's kind of the approach.

In Butterfly's case, the induction cooktops is a relatively small portion and, therefore, doesn't benefit as much. Having said that, the core business is done very well.

Got it, sir. That's all from me.

Thanks for answering so patiently. I'll come back in the queue for follow-ups.

Thanks a lot.

Hello. Thanks for the opportunity.

Sir, two questions. One on the renewable side or the solar portfolio.

If you can just refresh what you have earlier guided in terms of where does it stand in terms of both profitability and working capital, profitability versus either absolute number or versus say the segment in which it is housed, whichever way you want to highlight. Ancillary question is so this is, as you mentioned, it is more of a timing issue in the reporting.

Now does it impact, does monsoon seasonality impact in any way or it is ad hoc business, which would always be lumpy? Okay.

In the renewable business, we are in two segments. We are in solar pumps and we are in solar rooftops, right?

Let's just take them slightly differently. The solar rooftop business, of which we started about eight, nine months ago, that's a business where we have gotten into a we've gotten a order book of about ₹500 crores.

As you guys are aware, a bulk of this is the order book from Andhra Pradesh. The nature of this of this contract is we have to implement about 38,000 rooftops in various SC, ST homes in Andhra Pradesh over the next six months or eight months at the outset.

The payment characteristics of this are that when we demonstrate to the government that we have the product, the government upfront pays us 40%, right? Then we go out and install the product.

Then at that point in time, MNRE pays us, the central government pays us, all right? This is the characteristic of our rooftop business.

As I told you, we are getting started in our the the way that it goes is that you go out and install, and then beyond the point, the revenue recognition happens. I'd say the the revenue so far has been relatively modest, but the execution has started in the right earnest, and in fact, more many installations have also happened, which, of course, should reflect itself in the following quarters.

Now, in so far as the government payment approach is concerned, we are already receiving money from the government. As we are demonstrating to the government that we have the product available to install, the government is paying us on time.

I said earlier, in fact, the government is pushing us to accelerate the installations, right, guys? You guys can add in the end, but let me just take a shot at it first.

That's the that's the way that this business works. In so far as solar pumps are concerned, this is also a B2G business where the government conducts auctions, right, and you you participate in that auction.

They give you a bunch of solar pumps to install. Those, as you install, you, you demonstrate that you installed, and you start getting payments from the government, right?

Auction, I said auction, tender, not auction, tender, right? Yeah.

That's the way that that business works. This is not with only one state, these are with various states.

As Rajat reminds me, we started initially with Haryana, then we've done a bunch of work with Maharashtra, and also now with Rajasthan in recent times, etc., right?

MP, and

MP, we've done a bunch of work with MP. There the process is that you have to install, then you have to demonstrate that you installed, and then the government pays you, right?

Our our approach to both these businesses is that we do not install so far. We have an installation partner, right?

That installation partner, as and when we get money from the from the government, a share of that money goes to the installation partner. Because of it, the gross margin in this business is pretty much the EBIT margin in this business, because gross margin onwards, the costs that are incurred are incurred by the partner.

The gross receivables from the government, whenever the government pays us, we pay our share of that to our installation partner. Therefore, the gross gross receivables from the government, by the way, is not identical to net renewables, because our share of not renewables, net receivables.

Okay. Maybe it's a little complicated, but trust me, it's a good business for us to be in.

In so far as the solar pumps business is concerned, we we did find that there was some delays in the payment of the government a couple of quarters ago. I have to say that over the last couple of quarters, that pace has certainly stepped up and continues to step up even in July.

We've kind of it's become clearer, what you have to what are the things that you have to demonstrate to the government. The government's been clear that, "Guys, as you pay, these guys will go and install more," and and so on and so forth.

I I'd say that these businesses, unlike our other businesses, don't necessarily run on a negative working capital because they are different businesses, but the ROC in these businesses is good, right? Obviously, we don't want to get into any business in which our ROC is not good, the ROC is good as as we've seen so far.

Now,

last question sorry, one last point you made, does the monsoon impact? The monsoon impacts in so far as execution is concerned.

Far as solar pumps is concerned, if you if it's raining very heavily in an area, obviously, you can't go and install a solar pump, because the place will be wet and, so that that does tend to impact, but otherwise not really so much. Maybe even a solar rooftop, if it's raining very heavily, obviously, you can't go and put up a unit at the top of the house because the cement won't dry.

Other than that, from a demand point of view, it's not really doesn't really

Understood. Sir, just one, on the profitability versus their respective segment margin.

Second question is that you mentioned that you have taken necessary price hikes, specifically in ECD where hikes required were much higher. Considering from Q1 levels, any incremental hikes, basically cumulative impact of incremental hikes, any drop in RM prices, net-net, what should we expect in terms of profitability?

No, see,

Keyur, fundamentally, when it comes to price increases, we would be disciplined. We have always said unit economics is important, and if the commodity costs increase and net of Unnati savings, if there is a pass-on that needs to be done, we'll be disciplined to make that happen.

That's not going to be left to subsidize. Coupled with that, when the revenue grows up, operating leverage also kicks in, and that should help us to move the margins in the right direction as you have been seeing.

This quarter also, you have already seen 30 bps expansion in EBITDA margin. As we move forward, we would be disciplined on that in the coming quarters also.

I don't know if you meant in solar business. In the solar business, actually, that is, as you are aware, it doesn't work to the same impact.

A large cost of this is panels. The pricing trajectory of panels has actually been coming down,

also

bolstered by the fact that now we have two businesses, both of which have large volumes, our ability to negotiate with the solar panel suppliers is better. The same thing that we talked about price cost increases don't necessarily apply to our renewable business.

Okay. Thank you, and all the best.

Ashish, you can go ahead with the next question. Ashish, can you unmute and go ahead with the next question?

Hi, can you hear me now? Ashish.

Yeah.

My question was on the ₹200 crore discussion. As you pointed out that this was largely because of just the impact on primary sales and tertiary sales has not been impacted, which would then imply that maybe the channel inventory would have depleted.

In that case, is it fair to assume that a large part of it will kind of come back in 2Q, 3Q, or this is not going to come back?

See, no, not necessarily. There is a mix of these two.

The channel inventory, as it depletes, if you're not able to make adequate primary sales, the channel will replenish from other sources, right? Let's understand that.

The market share impact, I don't think, is abiding, because that, when Crompton comes back into the market, Crompton being Crompton, obviously, it's a strong brand. As our ability to sell improves, we are obviously able to claw back that position.

Sir,

just to clear, market share, of course, it remains or it grows. This is a lost sales.

This most likely does not come back. Is that a fair

piece? Yeah.

Ashish, we are in a seasonal business, and Q1 is a season for fans, and you would have seen that some of these are seasonal impact that will not be something that you recover on a quarter-on-quarter basis. As we go into Q2, there are momentum that we are seeing in certain categories like BLDC that we said, which will continue to grow as we accelerate supplies.

I don't think you need to connect both as whether it is a demand that is delayed or supply that is delayed. It's an ongoing business call.

Got it. Just last bit on the margins part on the renewable business.

What are the margins, broadly, just compared to the categories? Because I understand it's a high ROC business, but purely from a margins point of view, because at least solar rooftop will start showing in a big way over the next two quarters.

Just is it materially different than the category margin?

It is similar to the company EBITDA margins. Otherwise, we don't disclose the subsegment-wise results, Ashish.

The gross margin is lower, but obviously, on the EBITDA line, it is similar.

Sure. That's helpful.

Thank you so much.

Sir, before we end the call, we would like to request you for some closing comments.

Thank you, everyone, for joining. You're already aware, it's been a very interesting quarter for us.

This is going to be an even more interesting quarter, I think, because of I think what you will see happening on brand, etc. If you have any queries, please feel free to reach out to Kalees, Ruchir, or Rishabh.

They're always available. Thank you, and have a good evening.

Thank you.

I said that we have a limited investor meeting where we are planning, as I said earlier, to give investors a peek into how Crompton's changed over the last three years, also give them a deeper sense of what we're doing in each category, as well as hear from the management team of Crompton. From the horse's mouth, to say.

Yeah. Hopefully, you guys will enjoy that, and at least some of you will be there.

The invitations for that, I guess, have already gone out. Yeah.

This is not something that we've done ever before, as I understand. We've been planning this for a while.

As some of you will be aware, this was planned about eight, nine months ago, didn't happen at that time, maybe a year ago, actually. Didn't happen at that time, but been a long time coming.

Thank you. Thank you.

Thank you.