Bajaj Electricals Limited (500031) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Bajaj Electricals Limited Q4 FY '25 Earnings Conference Call, hosted by PhillipCapital India Private Limited. Please note that this conference is being recorded. I now hand the conference over to Natasha Jain. Thank you, and over to you, ma'am.

Thank you, Abhirat, and good afternoon, everyone. I'm Natasha Jain on behalf of PhillipCapital, welcome all of you to the Fourth Quarter FY '25 Earnings Conference Call. From the management today, we have Mr. Shekhar Bajaj, Chairman; Mr. Sanjay Sachdeva, MD and CEO; Mr. E.C. Prasad, CFO; Mr. Vishal Chadha, COO, Consumer Products; and Mr. Rajesh Naik, COO, Lighting Solutions. I now request the management to give their opening comments, post which we shall open the floor for Q&A. Thank you, and over to you, sir.

Good evening, ladies and gentlemen. Shekhar Bajaj here. Thank you for attending our Q4 earnings call. We hope you had an opportunity to review our financial results and earnings presentation, which are available on the stock exchange. First, I'm extremely delighted to welcome Mr. Sanjay Sachdeva into Bajaj Electrical Limited as our new Managing Director and Chief Executive Officer. He graduated as an electrical engineer from the IIT Delhi and later pursued his master degree in management from the IIM Kolkata. He has joined us from Unilever, where he had extensive experience to scale and lead successfully the consumer business in India, China, Brazil, North Africa, Middle East, Russia and finally, Japan. Further, he has consistently driven profitable growth in highly competitive environments, successfully turning around businesses across geographies, delivering strong business results in volatile market conditions and strengthening talent and organizational capability. His global experience will be of immense value to Bajaj Electricals given our vision of continuing to grow in India while establishing a strong footprint globally. I'm confident that with his experience, coupled with the strength of our people, brand and cultural values, we will continue to drive sustainable and profitable growth. I extend my best wishes, and I'm confident that he will adapt swiftly and begin contributing meaningfully to our strategy and vision. Like we have mentioned in the past, Vishal Chadha, our Chief Operating Officer for Consumer Products; and Rajesh Naik, our Chief Operating Officer for Lighting Solutions, are driving business growth, and we remain committed to continue delivering better results. On the macro front, headline inflation eased to 3.6% in February 2025, driven by a sharp decline in food prices. Further, as per RBI bulletin, recent tariff announcement by U.S. administration have heightened policy uncertainty posing new headwinds for global growth and inflation. While India cannot remain immune to these developments, the progress achieved on the disinflation front gives headroom to monetary policies to focus on balancing the growth inflation outcome. The 2 consecutive RBI rate cuts will ensure liquidity for business in a time of uncertainty. Coming to the financial performance, it has been a strong performance in the fourth quarter with healthy revenue and profit growth. The company has achieved revenue from operation of INR 1,265 crores as against INR 1,188 crores, a healthy growth of 6.5% over the fourth quarter of the previous year. The company's profit before tax has zoomed to INR 71 crores, which is an increase of over 191%. Consumer Products business has continued to show good momentum by delivering a revenue growth of 8.4% on a year-to-year basis, even in a delayed summer. The EBIT has jumped to INR 39 crores from INR 16 crores, which is a jump of 138%. The EBIT margins have also improved by 210 basis points to 3.9%, owing to a significant increase in gross margins. I would like to congratulate Vishal Chadha and his team for this significant increase in gross margins. And for the robust performance and look forward to continuation of this momentum over the next year. While the Lighting Solutions business revenue remains flat, I'm delighted to see a strong double-digit value growth in trade for consumer lighting. I now hand over to Sanjay Sachdeva for his initial address and then to the CFO for detailed financial and operational highlights. To Sanjay.

Thank you, Chairman, for the warm welcome and kind words. I'm truly honored to join Bajaj Electricals as MD and CEO. I'm equally delighted to connect with all of you for the first time since I joined the company. As you know, Bajaj Electricals is a storied organization with a proud legacy and rich heritage, spanning over 8 decades. It is built on the foundation of trust, innovation and excellence. Its strong portfolio of trusted brands, deep-rooted customer relationships and widespread distribution network are testaments to its enduring presence and impact across Indian households and industries alike. What particularly excites me is the company's unique ability to blend tradition with transformation from pioneer advances in consumer products and lighting solutions to its agile approach in embracing digitalization or sustainability. Having extensive experience to lead businesses successfully across the globe during my tenure at Unilever, I do see immense potential and possibilities in bringing these together to Bajaj Electricals as we chart out our next phase. I'm truly excited to be part of this iconic company and work alongside a team, which I have already experienced to be talented, ambitious and portrays a spirit of excellence. Together with the strength of our people, the power of brand and deep commitment to our values, I believe we can shape a bold, sustainable future and create enduring values for our customers, communities and all other stakeholders. My initial 4 weeks at Bajaj has involved meetings with employees, associates, strategic partners, factories, R&D center and frontline teams. It reinforced my perception of the strength of the company, the brand and the rich legacy. We have a talented, vibrant and energetic team throughout the company. This strong fundamental reassures me of the immense potential, as I said, that Bajaj holds as we move forward. It gives me confidence that the strategy decade of Bajaj Electricals is a winning strategy. This will unlock value and will continue to deliver strong results. We are strengthening our distribution and product strategy through focus expansion, R&D investment and premiumization. As you know, initiatives like Project Priti is driving scale and success across markets. We are also enhancing brand presence with digital engagement. We are also driving cost leadership with projects like Mulya or positioning our Lightning solution vertical as a key growth driver. With a strong organization culture, a well-defined strategy and a committed team, I'm confident that we are well positioned to shape a bold and a future-ready Bajaj Electricals. The performance of the last 2 quarters is a testament to of our capabilities. With this, I now hand over to CFO for detailed financial and operational highlights.

Thank you, Sanjay. Thank you, Chairman. Good evening, ladies and gentlemen, and thank you for attending our earnings call. We hope you have had the opportunity to review our financial results and the earnings presentations, which are available on the stock exchanges. Coming to the overall performance at the onset, let me reiterate that we had a good quarter with a healthy revenue and profit growth. We delivered a strong profit before tax of INR 71 crores as against INR 24 crores on a Y-on-Y basis, which translates into an upside of 191%. We have picked up momentum in the second half of the year with our revenues growing 5.7% as against 2.2% in the first half of the year. We are confident that we will continue the momentum going forward. On an annual basis, we delivered a profit before tax of INR 170 crores as against INR 173 crores last year. However, please note that last year, we had a one-time gain of interest on income tax refund of INR 41 crores. And this year, we have an exceptional net gain of INR 21 crores. By adjusting these one-time impacts, we delivered a profit before tax of INR 148 crores as against INR 132 crores, thereby resulting in a significant improvement of 12.4%, which is commendable. Now coming to the Consumer Products. The Consumer Products business registered a strong revenue growth of 8.4% on the back of a good demand for domestic appliances, followed by fans and continued trade revival. Appliances continue to grow strong traction and grew by double digits. Within appliances, domestic appliances have shown strong growth owing to categories like coolers, which showed high double-digit growth. Kitchen appliances, especially mixers, continue to remain under stress even at the industry level. But with the expected demand uptick, we are hopeful of better performance in the upcoming quarters. Morphy Richards continue to register high double-digit growth. Fan showed a low single-digit growth. Our CP EBIT margin has expanded to 3.9% as against 1.8% in the corresponding quarter of the previous year. The increase in margin is due to a strong expansion in gross margin of 3.6%, which has been partly offset by operating deleverage on account of higher depreciation of molds for new products and various other projects for improving our operational efficiencies. The brand investments were at 2.4%. Our transformation journey to address our product portfolio gaps, including premiumization of our portfolio is underway and is showing good traction. We continue to improve our logistics and manufacturing efficiencies by a few basis points. In our continued effort to improve our GTM, we have created a BU structure for our fans business. This is to enhance our focus on this growing category, including the new launches in the premium segment. And this initiative is expected to yield results in the coming quarters. Over the next few quarters, our focus will be to increase top line and improve the market share while continuing to spend heavily on the brand and other initiatives like revamped GTM, BAV, digitization, manufacturing efficiencies, etc. Now coming to the Lighting Solution. The Lighting Solutions business remained flat due to degrowth in professional lighting, which also had an impact on the operating leverage. Please note that even within the professional lighting, there were some delays in order execution of urban rural bodies that has resulted in the degrowth. Otherwise, all other areas in professional lighting also witnessed a growth. Under our revamped GTM initiative, we have delivered a double-digit value growth in general trade for this quarter, which was close to about 12%-odd, which is probably the highest in the industry. Professional lighting contracted owing to a drop in outdoor luminaires. Our EBIT was at 7.8% as against 8.5% reported during the corresponding quarter of the previous year. The brand investments from this vertical will continue to be high for the next few quarters in our endeavor to increase our market share. Coming to professional lighting, the order book stays healthy at INR 248 crores, and we are committed to growing this business. Coming to balance sheet and financial metrics. The balance sheet of the company continues to remain very healthy and strong. All the balance sheet ratios continues at a very optimal level. We continue to generate positive cash flow from operations of INR 87 crores for the quarter. We ended the quarter with a surplus funds of INR 509 crores. Now coming to the other strategic initiatives that we had highlighted in the last quarter. With regards to our export strategy and with a view to expand company's international footprint and enhance business opportunities in the Middle East and other untapped markets, the Board have already approved the incorporation of a wholly-owned subsidiary of the company in UAE. The activity on this is on track, and we will share updates with you as soon as possible or as soon as it materializes. Further, on the proposal to explore the possibilities, opportunities and feasibility of setting up the company's manufacturing unit at a suitable location in India, the company has already commenced the evaluation and exploratory work. We'll again share the updates with you as soon as it materializes. This is all from our side, and now we are happy to take the questions.

The first question is from the line of Aniruddha Joshi from ICICI Securities.

Really great set of numbers. So sir, 2, 3 questions. First to Mr. Sachdeva, what are the top 3 priorities that you would be working on, whether it will be branding or like earlier, there was a strategy of Nirlep, then Bajaj as one brand, Morphy Richards as one brand, and there was one more premium brand the company was also working on? So whether the same strategy continues in terms of distribution, what will be the challenges or changes you would like to bring in because Bajaj [pred] a lot with Mahindra Logistics also. So any plan on that? That is question number one. Question number two is regarding Nashik VRS. Is it already over or it may continue in Q1, Q2 as well? And last question, in terms of, like this quarterly results, is there any change in ad spend because we see 100 bps drop in other expenditure also and even the number is lower on a Q-o-Q basis as well. So is there any reduction in terms of brand building efforts also? That's it from my side.

Thank you. This is Sanjay. I'll start answering and then I will ask EC to take the other 2 questions. So as I said, the strategy decade of Bajaj Electricals is a winning one, and its showing results. I don't intend to change it, neither the strategy nor the priorities. Of course, there will be some tweaking, but it will not fundamentally change the direction of the company. So this will be Bajaj brand, Richard Murphy and next. All the priorities which has been mentioned will continue, and we will drive growth through that. So fundamentally, the things will stay same.

So Aniruddha, let me answer the last 3 questions. One, you mentioned about logistics. Yes, logistics cost continues to be high for us, and we are working on it. We have achieved about 100 basis point reduction over the last 1 year or so. But having said that, there is a long way to go, and we are looking at it both internally and if required, even we'll take external to get the logistics cost to where it should be. That is as far as the logistics is concerned. Coming to VRS, the VRS in Nashik is over out of the 117 workers, 115 workers opted for the VRS. So that is done with. As far as the other overheads is concerned, the brand spend continues to be same as last year. So last year was 2.5% and this year, it's about 2.4% but the overall reduction that you see is because of the operating leverage because the total other overheads remains the same at INR 205 crores. Last quarter was INR 205 crores last year, Q4 was INR 205 crores. And this year, Q4 is also INR 205 crores because we have been able to contain a lot of unproductive spends, etc. And because of the operating leverage kicking in, we have gained that 1% in the other overheads.

Okay. Understood. No, this is very helpful. Last question. The MFI issue that we were facing in terms of distribution. So is that resolved? Or now it is already in the base now?

So Aniruddha, that continues. I mean, we still have an issue on the MFI funds. MFIs have still not started going on full steam as it was earlier.

Okay. And any expected time lines to see any resolution or something?

Not really. So unless there is RBI eases, the limitations that they have put on the MFIs, I don't think that demand is going to come back to quickly.

Okay. And this will anniversarize in June quarter or it's already done. Is the issue already in the base also?

No. I didn't get that Aniruddha.

No, no. See, like we are facing the problem since past 4 quarters or already the numbers are in...

No, no. We faced this the entire year of last year. And even in Q1, we are facing the same issue.

The next question is from the line of Keshav Lahoti from HDFC Securities.

Congratulations on a good set of margins. Firstly on the consumer lighting, we have seen a healthy set of margins. So should we expect this margin to continue going forward? And secondly, this quarter, the revenue growth has been flat for this segment. Should we expect now upcoming quarter, we'll see growth in this segment?

Yes. This is Rajesh. If you remember, we have been discussing about product mix being changed so that we can drive margins, though the price erosion was there. So we continuously improve our first level margins with the product mix and which has helped us to improve by almost 2.5% in the [FLM] itself, which will continue, and we are driving the top categories or the product mix where higher-margin products are being sold. So that should continue.

Understood. Got it. How much was the ad spend as a percentage of sales in this year? And what is the expected spend for next year?

For the full-year?

Yes, for the full-year and how you are forecasting for next year? As you have highlighted, there's a strong focus on brand investment.

Yes, full-year is 3% for the year. And next year, we plan to take it up. So somewhere would be in about 3.5%, 4%.

Okay. And this would be on which business side all across or specific for any segment, the higher one?

No, this is throughout.

The next question is from the line of Praveen Sahay from PL Capital.

My first question is related to the channel mix from the past few quarters. We are giving an alternate channel the growth numbers. And definitely, that's export or government, even the modern format retail are doing very well. So if you can give some color on how is the alternate channel contribution right now for you? And where you want to see this channel contribution in the way forward?

So yes, alternate channel is about somewhere between 40% to 45% and trade contributes the balance. As far as the growth goes, I think e-comm growth during the year has not that been great, whereas we continue to do well in the MFR. And last year, trade was a problem for us, but this year, trade has actually bounced back and trade is showing good growth.

So this mix is, you expect it to continue like a 45%-55% alternate versus GT to continue for the company?

Yes, it will be somewhere in the range of 60%-40% to 55%-45%.

Fine, sir. The next question is related to the gross margin. And in the note, you had mentioned that's because of a price hike and the initiative, rev initiative, the value analysis and the value engineering. So if you can give some more color on that, your 280 basis point improvement in the gross margin, how much is coming from the price hike and in the CP and the lighting, where you had taken the price hikes?

So Praveen, we would not like to comment on that because it's actually very confidential. But the assurance that I want to give you is that we continue to work on the VAV projects, a lot of VAV initiatives have been identified and you will see the margin improving continuously. So going ahead also, you can expect about 2% to 3% savings coming from VAV and also about 2% to 3% coming from the price hikes.

Okay. Fine, sir. And a question related to your one-off. There is a sale of land you booked around INR 30-odd crores. So is that over or something also you are expecting the way forward?

No, nothing as of now. So if there is something, we'll let you know.

Right, sir. And lastly, on the lighting, sir, lighting, you had a consumer lighting around single digit or double digit in the growth in the GT of consumer lighting. So is it possible to give some color on how much is the volume-led growth versus pricing?

So just to give you input, we have been discussing -- you must have seen that we have been discussing about volume growth, which is coming in and the value growth was not there. But this quarter, we were able to drive both volume as well as value growth, which is a positive side, and we will continue to drive that.

To fair to assume that whatever the price erosion was there in the consumer lighting that is over?

We have been discussing this for the last 2 quarters. lamps -- sorry, in 2 categories, it is almost at the bottom, but there is one particular category which is ceiling lights, where it will still continue for next 1 or 2 quarters. So that price erosion is still the impact will be there for a few months.

Okay. And if you can give any color on the CapEx for this year would be helpful?

So yes, the normal CapEx will be close to about INR 100-odd crores. But as you would have seen in the last -- I mean, the budget Board meeting, we had said that we are also evaluating a factory for which a principal approval of about INR 300 crores has been taken. So if that materializes, the CapEx would be in the range of INR 400 crores, INR 450 crores.

The next question is from the line of Natasha Jain from PhillipCapital.

I have 3 questions. First is in terms of depreciation. The depreciation has considerably increased on a Y-o-Y basis, but your CapEx has halved in terms of your cash flow statement. So what has happened here, if you can explain?

So Natasha, in last year, although we spent about INR 130 crores, most of the CapEx was in the CWIP, capital work-in-progress because it was not used for production. So this year, it has all come into the CapEx because we started making products out of these moves. Hence, the depreciation for the year is very high.

Sir, my second question is in terms of channel inventory. Now if I see the season has not been encouraging and secondary sales are slow for all cooling products. Having said that, how do you see first quarter panning out, especially, do you think that inventory will still continue to be high in the channel and therefore, no pricing advantage?

Look, firstly, I wouldn't want to give a flavor of the full quarter. This is Vishal here. I mean it's early into the quarter, so I can't really predict or comment on how the quarter is going to proceed going forward. And from our point of view, looking at the tertiary offtakes and how the offtakes happen over a period of time, we calibrate our business and our sales into the channel accordingly. So we don't see any different from what we have been doing in the past so far.

Sir, my last question is for Mr. Sanjay Sachdeva. Now sir, if you see the consumer durable industry, it has been marred with very heightened competition. And because of heightened competition, the price hike has not happened in this industry for a long time now. I mean even the premiumization or the DLDC price has not been passed on to the channel. The industry is only moving towards premiumization with non-premium products not really picking up. So given this background, how do you use this industry as and what are your broader level strategies to navigate those?

So first of all, I do believe that premiumization is picking up. And I also do believe that price increases have been, to some extent, the norm. We have also taken the price increases this last year. And as EC was saying, there will be maybe another price increase this year. So there will be, therefore, both premiumization and price increases to mitigate inflation will be there. Yes, of course, we will not pass on entire raw material inflation to consumers, part we will absorb through savings, but there will be some level of price hike. Not to forget, except for maybe fans where penetrations are pretty high, most of the category penetrations are low. And therefore, building category penetrations can be a big driver of growth. Replacement market is also pretty large. So therefore, I can see many drivers, not only premiumization, and price increase, but also increasing penetration and therefore, the overall market size, and then there are always the new categories of products, whether it is, let's say, coolers now or whether it is grooming. So across, there will be many categories which will be taking off. So there are multiple drivers, as I said. And we do see, therefore, a huge potential of fast-moving FMEG categories.

The next question is from the line of Dhruv Jain from AMBIT Capital.

I had a question on the gross margin. So we've seen [some sales] of gross margins quarter-on-quarter. How should we think about gross margin going forward? Is there any target that you'd like to spell out? Or what are the levers in your mind apart from cost savings in terms of gross margins? And if you could also spell out what's your premium share the way you classify it as a percentage of overall sales? And is there any target that you want to give out going forward in the next 2 or 3 years?

So Dhruv, yes, you're right. So a few of the levers through which we'll be targeting the gross margin. One, obviously, is the VAV exercise that we are doing, and that will continue. Secondly, the price increases that Sanjay also mentioned of. And third is the premiumization. So actually, we are far behind the premiumization curve actually, if you look at the industry. And our aim is to reach the industry standards in the next couple of years. So all of this will trigger an improvement in the gross margins.

Any target that you would like to give out?

As far as gross margin is concerned, no targets, please.

f O kay. Sir, I had a question on the lighting side. So I mean, obviously, we've seen that for an issue for the entire industry. But specifically, how should we think about growth going forward there, right? So when do you see this whole realization issue sort of bottoming out? And what is the kind of growth that we should expect going forward, say, in the next 3 years for Bajaj Electricals in the lighting vertical?

This is Rajesh, again. I will not be able to give the exact number what growth we are targeting. But one positive side, as I mentioned earlier, there are 2 categories in consumer lighting, which has bottomed almost and only one category which is undergoing the price erosion. So I think in next 1 or 2 quarters, that will also bottom out. And as we have seen in Project [inaudible], our reach has increased, our top line has increased and our volumes have almost increased by double digit, higher double digits, which gives us confidence that coming quarters, we will continue that journey. Once that MFI thing goes away in terms of another 2 quarters, MFI impact will be there, what we were indicating a little while back. If that goes, then we can see the good strong growth into consumer lighting. Talking about commercial lighting, which Sorry, you were saying something?

No, no. So I had a question on the commercial lighting only. So on commercial lighting, you spelled out, you have an order book of about INR 450 crores, right? So what is the execution time line there?

So he mentioned about INR 240 crores is the order intake, which executed order book. The good part is that the same time when we exited last year, it was almost half. So when we said that it is delayed execution of orders, that was because there were clearance issue, which means that we have good order book and coming this particular next few quarters, we should be having a good growth in the commercial lighting as well, may not be in this quarter specifically, but because it is delayed. We are getting clearances in this month and next month. So maybe quarter 2, we should be having a better quarter.

Sure. Sir, I had a question on the alternative channel. So you spelled out that alternative channels will broadly between 40%, 45%, but I just wanted to understand if there is any difference in the profitability versus general trade that you can spell out?

No. Dhruv, generally, no. So as we had mentioned earlier also, we don't differentiate the prices on the alternate channel vis-a-vis the trade. So we maintain our pricing. So for us, I mean, even if there is a difference, there is a hard -- I mean, a very small element. But otherwise, we don't see a much difference between trade and alternate channel.

Sir, my last question is that you had launched the Nex brand last year, if I'm not wrong. So just wanted to understand what's the contribution of that in your overall mix? And how has that shaped up?

Yes. This is Vishal here again. On the Nex brand, it's going a little slower than what we had anticipated, but it's still on the upward trajectory. And we have expanded the portfolio by launching coolers under that brand also. We have there only had fans that talked about it in the last quarter also. We've just launched coolers under that. Furthermore, Nex is a brand when we did consumer research, it came out very clearly that the endorsement of the mother brand as Bajaj would be something that consumers would find more reassuring. So in the communication, we are now calling it Nex as a Bajaj brand. And it's growing in line -- a little slower than our expectation, but it's still growing very well, and we are in this journey for the long run. We are not looking at it as short term. It's still a young brand compared to a brand like Bajaj, which is 80 years old. So we have a long runway for it, and we continue to invest behind it disproportionately.

The next question is from the line of Naitik from NV Alpha Fund.

Sir, my first question is what sort of growth are we envisaging in the consumer appliances business? And if you could specify which categories are you thinking will lead this growth for us?

So Naitik, very difficult to answer because hypothetical. You never know which way the market is going. But our aim is to better the market growth. And you would have seen, I mean, Q1 also, we were aiming for good growth, but then the war-like situation with Pakistan had an impact in the -- especially in the North zone, and I don't know how long the market is going to get closed. So you never know. But our aim is to ensure that we grow better than the industry.

Right. And sir, with that, do we also expect margins in the segment to sort of margins to sort of reach, say, 5% or 6%? Or how are we looking at this?

So yes. So we have aspirations of -- I think we have already given a guidance that we would like to be a double-digit EBIT business in the next 3 years or so. And in the current year, we'll be targeting somewhere around 6%.

Sir, my next question is in terms of CapEx, you have taken Board approval and if we go ahead with the plan, the INR 300 crores, that would be for which product line, sir?

All across all the product lines.

The next question is from the line of Praveen Sahay from PL Capital.

So first is related to the balance sheet. And in the balance sheet, there is one line item that is the investment in the JV and that's related to the employee welfare trust. So employee welfare trust is a joint venture investment? If you can explain why is it so or is it norm?

So yes. So this welfare fund was established long back in 1981. And if you remember, we had a demerger, which happened with Bajel a couple of years back. So at that point in time, we were not quite sure and under what ratio, this entire welfare fund asset has to be divided. But now after the thing has settled down, we have decided that the trust will also be bifurcated in the ratio of 67% to 33%, which was the net worth ratio of Bajel and BEL at that point in time. And since you have decided that, we also had -- now have the number of trustees in the same ratio, and that is why what led to this disclosure and asset pickup in this quarter. And it is a joint contract.

Okay. Got it, sir. Second question is related to the consultancy fee. Is that over or still it's going on?

So Praveen, a lot of the initiatives are still going on. For example, the VAV, which is going to continue. We are having our GTM exercise, which is continuing. A lot of the things relating to the new initiatives like set up of a subsidiary in [Khema], the manufacturing. So yes, you will see the expenses continuing for at least a couple of years now.

Right, sir. And one follow-up for the lighting. Professional lighting, there is a degrowth. So what led to that degrowth in the professional lighting? Is that some project we had a delay or something? What exactly it is?

This is Rajesh again. I just mentioned some time back, we had good order book. If you see our order book, as CFO mentioned, it is almost double than last year. We had orders in hand, got deferred because of the clearance which we didn't receive from the end client and which we are receiving now in this quarter.

The next question is from the line of Natasha Jain from PhillipCapital.

Sir, just 2 questions. One, can you call out the EPR amount you've taken this quarter versus last quarter same year -- sorry, last year same quarter and FY '25 and FY '24 also?

So EPR for this year is about INR 9.5 crores and last year also was similar. Going forward next year, it will be a charge of about INR 18 crores.

So why double, any specific reason or we just correcting the way it's going?

No, Natasha, it all depends on what we sold 7 years back. So yes, so that's how it is.

Got it. And in terms of consulting fees, sir, what is the hit that we take in our P&L every quarter?

Natasha, I don't often remember it. So I'll get back to you when we meet.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Shekhar Bajaj, again, most of your questions have been answered. I hope. We are very happy with the performance and at least all of us are very, very positive in terms of looking at the future. Let's hope this war situation gets over and the market again picks up. But we are still hoping that we should continue to improve our bottom line, our profitability and our margins, as was mentioned by EC, that our margins should go up every year so that we should come to the level of double digit in the next 3 to 4 years is our objective. EBIT must go to double digit. So that's it. So thank you very much all of you for participating, and we'll meet next quarter. Thank you.

Thank you so much. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.