Castrol India Limited (500870) Earnings Call Transcript & Summary

Can you hear me?

Yes, absolutely. Please go ahead.

Thank you. Thank you. Good afternoon, everyone. I hope you're staying safe and healthy during these difficult times. Thanks for taking the time to attend this call. Good to connect with you on this call after our first chat post our announcement of the full year results and fourth quarter results a while ago. We all know that our country and communities are witnessing unprecedented and very difficult times. And I'd like to start by saying a heartfelt thank you from the Castrol India team to all our corona warriors who are helping fight this pandemic. As a small gesture of expressing our gratitude to those -- these silent heroes, Castrol has offered complementary lubricants to them through our network of independent workshops. Coming to the business. Castrol India has managed this extraordinary situation with 3 clear objectives: protecting and keeping our people safe; supporting communities; and protecting the financial health of our business. Our office-based employees continue to work from home, except for those in operations, critical roles in our plants, who have safely resumed manufacturing to meet consumer demand, complying with the local safety advisories. We have supported several impacted communities. We provided ventilators, critical medical equipment and PPE across several hospitals in India. We supported 62,000 mechanics with a small contribution to tide through this crisis. We've helped stranded truckers with food packets, dry rations for migrant laborers and daily wage workers in and around our plants and areas of operations. We provided PPE gear and equipment for garbage collectors and police in metros. We also offered complementary sanitization services to independent workshops to keep mechanics and their customers safe for opening up with Unlock 1.0. And we've extended the sanitization offer in a similar form to our franchise workshop dealers as well. We also launched 2 social campaigns in the interest of consumers, which were very well received. The first campaign was Castrol Active Hang Up Your Keys, which was a consumer awareness campaign, urging people to park their vehicles and extend their support against the coronavirus by staying at home yet doing their best for the society and protecting what they love. The Salute Truckers campaign was to say thank you to all the truckers for their contribution in keeping India moving by ensuring supply of essential products throughout the country in these tough times. We continue to protect the financial health of our business by optimizing costs base as the demand trends impacted by COVID looking at our cash flows, evaluating more efficient ways of -- to drive margins and looking at robust working capital by managing inventory. We are fully committed to customers and have fulfilled several of their demands even during this difficult time due to our strong supply chain and distribution network. The agricultural season led to relatively good demand pickup towards end of April and end May despite the lockdown not much lower than last year. Post partial relaxation in the lockdown, the company started seeing demand pick up for products related to 2-wheelers as well. And we are closely monitoring the ongoing crisis and are working towards protecting the long-term health and sustainability of our business. With this, I'll hand over to Rashmi. Rashmi, over to you, please.

Thank you, Sandeep. So I would just like to reiterate the fact that in this time of crisis, Castrol is fully focused on strengthening its new business and finances and there's a huge focus on how can you optimize cost considering the demand situation in the market and how we can work on the working capital front to keep the cash generation impact. So we are completely focused on that, and we are still investing in the long-term growth for Castrol product. So with that, I think I'll ask the operator to open this up for question and answers. Thank you.

[Operator Instructions] We take the first question from the line of Dhaval Joshi from Sundaram Mutual Fund.

A couple of questions. We have seen such a sharp fall in the volume in Q4, which we haven't seen so far in our entire -- if you look at the last decade in terms of the decline in volumes. So can you give us any idea, any color on that, why we have seen such a sharp fall? And second, only one that would you be able to give some sort of guidance for the FY '21 in terms of volume growth?

Sorry, Janice. We can't hear Rashmi.

Ms. Rashmi Joshi. There's a question on the line.

Yes. Yes, sure. So I think in the first quarter, because of this new virus, we actually started -- the second half of the month -- half of the month had significant volumes going through. A lot of our schemes also closing in that for quarter end. As a result, you see a significant drop in volumes here, but the main drop has come only in the month of March because of the pandemic and the resultant lockdown. And we started working from home earlier and started to curtail activities earlier than the lockdown start date, which is 22nd. So that's the reason. In terms of how we see volumes panning out for 2021, so we do not give guidance numbers. I mean, in the current situation. Anyway, it's very difficult to really give any projections because things are changing every day and we don't know how the pandemic will pan out this quarter or next quarter. So I think we will wait and watch. But we are responding to various developments that are happening, and we are keeping our focus on how we can continue to service the demand that is there in the market. The good thing is that even during the complete lockdown situation, we were able to service the demand for essential products. And when the partial lockdown opened, most of our business partners opened up and -- but keeping safety in mind, they're doing everything that is possible to service the demand, and that will be our focus currently. And -- but having said that, we are working on some interesting new product launches and marketing initiatives, which is, of course, subject to things and demand picking up later in the year. Sandeep, do you want to add anything?

No, I think you've covered everything. And I think the only thing I would add is we stay true to our strategy because we believe in our strategy and continue focusing on personal mobility as we go forward.

Yes. Can you repeat the initial few lines, which actually because of your voice cracked in between, so I missed it? Can you repeat few sentence of the initial remarks of volume decline and reasons?

Yes. So I -- okay. So second half of March, usually, it delivers significant volumes traditionally every year. A lot of our schemes close in the second half of the month. And Castrol started curtailing its operations after 15th of March or so. We didn't wait for the complete lockdown to be announced. And as a result, for the last 2 weeks, we didn't see significant volumes. The last week was anyway 0 because there's complete lockdown. But we started curtailing our activities beforehand because of the c virus. As a result, the major drop that you see in the volumes in the fourth quarter is for the month of March.

Okay. So first 2 months would be as usual in terms of the marginal growth or a positive territory. Can we fairly assume that way?

Sorry, I can't hear you.

I'm saying, first 2 months of the quarter, Jan, Feb could be in a positive territory, at least. Can we fairly assume that way? Hello?

Yes. I think Rashmi may be having some issues with the connection.

Yes, I can't hear him.

Sir, just allow me a minute. I will just reconnect Ms. Rashmi. In the meanwhile you all can just go ahead with the discussion.

Yes. So I think, Dhaval to your question, I think our first -- normally we look at the quarter, we don't look at our volumes by month and by months. Focus is to -- because all our programs are run in a quarter. And that's why the focus is on the quarter, and that's why you see the impact in March. I think there has been some softness in the economy and even in the first 2 months if you look at the GDP numbers, your new vehicle sales numbers. But I think the -- as Rashmi said, the major impact was related to March, lockdown in and our kind of stopping earlier when the national lockdown was announced.

[Operator Instructions] We take the next question from the line of Srinivas Seshadri from Mirabilis.

Just a few questions. Firstly, just wanted an update on the bazaar segment as to like what is the state of the opening up of the markets from your own perspective, like is it like the retail outlets. If you can kind of give some indication whether it's like 50% of the outlets are open or 60%, 70%, whatever ballpark number on that.

Yes, Srinivas, let me take that. Thanks for your question. I think it's difficult to give a very specific number at the moment. I think what we are seeing is markets opening up, depending on city and state because every place is in a different situation. But I think most of our distributors are now kind of able to service the market and are open in some sense. But there are still restrictions in place in terms of when they can open and when they need to close, depending on what the situation is. But I think all our CNFs are operational. All our distributors are operational and, as Rashmi was saying, while making sure that they do everything possible for the safety of their people and their staff. But yes, in different varying degrees, most of our distributors are operational.

Yes. Sir, finally, just a related question, like when we look at this data on the conservation of petroleum products, it looks like it's kind of now about 20%, 30% below the levels it used to happen a year ago. From your own business perspective, like do you think it takes typically a quarter or so to come back to those levels? Because, obviously, the first thing would be people would -- I mean, the lub change would happen after certain level of activity as far as the vehicle is concerned. Or do you think it would be somewhat a matched kind of a recovery relative to the conservation of the petroleum products?

I think, first of all, I think the demand would be lower in the next few months because I think people are still being very cautious in terms of getting out. And the general level of economic activity is not as high as we've seen pre-COVID levels. I think the demand pickup will also be dependent on how the pandemic kind of moves through India and how soon as a nation we are able to deal with this crisis because, right now, the cases are going up. In terms of lubs demand, it's dependent on many factors like, for example, there is an element of a pent-up demand, okay? So people vehicles have been parked for a number of months. So before they get out, people want to make sure that their vehicles are in good shape and reliable. So there's that portion of pent-up demand. But also given the current situation, people may differ their servicing for a few months, okay, as we go forward. So very difficult to predict right now. And I think a lot of businesses are in the same situation. I think our intent is to keep monitoring the situation on a regular basis and fulfill demand that we see in the market. I think that's what our aim is.

Sure. Sure. The other question was on the depreciation value, we've seen some bit of a spike on.

Well, this is the operator. I'm sorry to interrupt. I'm requesting you to please speak a bit louder sir, so that the audio is audible?

Yes. Is this better?

Yes.

So the question was on -- for Rashmi on depreciation. So you've seen a sharp year-on-year as well as sequential spike in the depreciation amount recorded. Just wondering if there is any policy change or what has driven this higher amount in the quarter.

So this is to inform you, we have again lost the line from Ms. Rashmi Joshi. Looks like there's some network issue. So we are just trying to reconnect sir. Just allow me a minute while I just try to join back. In the meanwhile, Mr. Sandeep Sangwan, could you just...

Yes. Yes, Srinivas. I think there is a reclass element in depreciation. There's AS-116, which is impacting the depreciation and there's INR 4.5 crores of reclassification. That's why you see a different number.

Sure. Can I ask one more question? Or should I get into the queue?

I guess, get in the queue because that will give a chance to some others as well. I think Janice is trying to connect, right.

Yes, sir. I am just trying to connect with Ms. Rashmi Joshi, just trying to get an alternate number, please allow me a minute. We have Ms. Rashmi Joshi reconnected now. Ma'am you may please go ahead.

Rashmi, I answered the question on reclassification impact on depreciation. So that's fine. So just move on.

We take the next question from the line of Mr. Vipul Shah from Sumangal Investment.

Can you give me exact liters in this quarter? And what was the same figure in the corresponding quarter of last year? Hello? Hello?

Mr. Sangwan, this is just to inform you that we disconnected with Ms. Rashmi Joshi. Hello?

Yes. Yes, sorry, I mean my network is not good, sir. I'm just losing in between, yes.

Should I repeat the question, ma'am? Can you give me the exact volume in liters in this quarter?

Hello.

Hello. Can you give me the exact volume in liters in this quarter, ma'am?

Well, sir, looks like Ms. Rashmi Joshi is unable to hear us.

Mr. Sandeep can answer this question.

Yes. So, let me try and do that. So I was hoping Rashmi will be able to join. I think we don't give out specific volume number, but all I can say is it was a double-digit decline, okay? It was kind of -- we had double-digit decline, and our number was around 38 million liters, okay, which is...

30?

3 8.

And what was the corresponding figure in the same quarter of last year?

It was 50.

50. Okay.

So Janice, I think we've lost the operator now, it seems. Maybe she's trying to dial in again. She did say that she may have issues with her network as well. So let's just wait for a few minutes.

We take the next question from the line of Mr. Pavan Ahluwalia from Laburnum Capital.

I had one question in terms of how you see the portfolio evolving. So obviously, we've seen an expansion in EBITDA per liter over the last few years, and that's partially been driven by the introduction of certain types of premium products. I mean you guys have done a great job with the Royal Enfield oils and kind of higher-end oils for high-end bikes. At the end of the day, engine oil is engine oil, right? And obviously, there are small differences in high-end and lower-end oils. But are we potentially at risk with deep premiumization playing out in the next couple of years where people are a little more careful in terms of what they're doing with their pocketbook and may actually try to value engineer their oil spend downwards? And I asked this also because if you look at what Royal Enfield has done in the last few months, they've put out announcements saying they're raising the drain interval on several of their bikes. And the idea, which they've said openly, is to reduce the total cost of ownership. So just curious as to what your outlook is on the risk of deep premiumization in a slowing economy where consumer budgets will be tighter.

So let me take that on. Thanks for your question. So first of all, what I'd like to say, we have a full portfolio of products in terms of serving consumer demand at different price points, whether you look at portfolio of 2-wheeler products or portfolio of cars or commercial vehicles. And I think we would want to continue -- we are a premium-branded business, and that's been our focus, and we'll continue driving that because that also helps keep our margins at the level they are. But we are also always looking at the market in terms of how the market is behaving. And if we need to adjust our portfolio, we do make interventions accordingly. Just to give you an example, last year, we introduced a product called RX Essential for the commercial vehicles, which was at a lower end of the market, and then we also introduced a product called Active Essential, which is again at the lower end of the 2-wheeler market. But at the same time, there are premiumization opportunities in the market because if you look at the BS-VI regulations coming in, that also -- because those engines need superior oils and superior performing oil. So as the technology evolves, that will continue presenting operating opportunities as well. So I think it's -- we play a full portfolio game rather than being just a niche player.

And are you worried about margins over the next couple of years being at risk because the per liter margin is really at an all-time peak level right now? So even I don't know whether when you introduce these low-end oils or oils targeted at the lower segment, is the margin per liter lower on those? I mean I'm just trying to understand is the mixture, how sensitive is the margin to mix? And can we -- is it possible or likely that we will see a mix shift that results in a compression of the margin per liter?

So we stayed true to our strategy, which is kind of we want to grow our business, drive growth in our business and whether it is personal mobility of commercial vehicles. And I think we see healthy margins going forward. I think we'll continue to play the portfolio game and keep balancing the portfolio whether it is in the premium segment or in the lower segments. So at the moment, I think we are very confident of keeping our business growing at the levels that you've seen. So...

We take the next question from the line of Manikantha Garre from Axis Capital.

I just wanted to check on a point that you've mentioned in your press release wherein you mentioned that you have started supplying EV fluids to MG Motors and Tata Motors. How is the pricing here with respect to the BS-VI loops and BS-IV loops? That's my first question. And in relation to that, my second question is sitting at a vantage point, can you provide some view on how EV space is changing post COVID? Is it accelerating than pre-COVID levels? Most of that because Tesla stock price doesn't -- it seems to say so. And its sales also in China is accelerating. I think, it's at record levels. So please provide some thoughts there.

So first of all, thanks, Manikantha. I think on the pricing, I think I would like to comment. We have a pricing framework and a strategic pricing framework that we play with and which is based on the benefit we provide to the consumers and customers, and we base our pricing mixes at a value generation. And I think the second thing is it is early days for EV vehicles, especially in India. And I think we are happy that we're taking a good start in that space thanks to our support from Global Castrol U.K. Technology Center and Investment, and Tata Motors and MG Motors were the first kind of initiation of that. I think if I look at the future, what impact will COVID have on EV fluids, it's difficult to say right now, okay? It's a still evolving situation. But I think as far as India is concerned, EV, electric vehicles will come, but I think we're still about like 15, 20 years away from when we start seeing the scale in EV vehicles. So it's not kind of, suddenly, the world will change in 5 years' time and everything will be electric. So that's kind of our view of the future right now. But as anything else, we keep monitoring the trends in the industry, and we'll keep adjusting our strategy accordingly.

Understood. Can I ask a related question to that only? So directionally, can we think that EV fluids will be higher than BS-VI, higher than BS-IV maybe not now but in the future?

It's very difficult because the fluids are very different, okay? And depending on which way the electric vehicle technology evolves, it's too early to say anything in terms of pricing comparison against engine oil and the whole portfolio. I think the focus is on what benefits do we provide and what is the value extraction, sir.

Next question is from the line of Vaibhav Badjatya from HNI Investment.

So can you -- if I look at your gross margin during the quarter, it's not much different from what was there last quarter. In spite of basically -- even if you exclude the last quarter sharp decline in oil prices, the overall oil price trajectory was even lower in Jan, Feb as well. So can you provide a broad highlight as to what was the kind of -- is it due to the product mix or why gross margin has not improved or some pricing actions have been taken in different segments?

So I think we did take a pricing action in December, which was something that we always keep doing in our strategy, and that helped a bit. The second is I think March impact was kind of unforeseen. That was not planned, but I think it's both product mix, and the December pricing action actually has helped it in some way.

So what I meant to say that the margin should have improved. If we would have held up our pricing, the margin should have improved, isn't it?

Yes. But I think there was some softness also. A lot of our kind of incentive programs are on personal mobility. And that's where I think Rashmi was saying in the last 2 weeks of March, the impact on personal mobility was higher, which is kind of gives us slightly better margins, and that's why you see the impact that you see. It's driven more by the mix rather than anything else.

Next question is from the line of Shweta Jain from ANS Wealth.

Actually my question is answered. It was regarding the margins.

We take the next question from the line of Abhijeet Vora from Sharekhan.

I just wanted to know that what are the volumes level currently. Because like we want to understand the situation pre COVID and post COVID. As you mentioned that most of your distributors are operational now.

Yes, Abhijeet. I think if I look at the volumes, they're not at the same level as pre COVID because it's anybody's guess the way the lockdown has impacted in Q2 for most of the businesses. As we've said, we're beginning to see some demand pick up. In May, we saw demand pick up in the agricultural sector because the government opened. It was the harvest season and the government opened the agricultural sector. So we saw good demand pickup. And now I think we're beginning to see demand pick up in 2-wheelers as well. What will be the demand going forward? I think it is difficult to predict, depending on how the pandemic unfolds. But I think as a company, we are ready for our business programs to support our business, whether it is in terms of new product introductions. We have exciting things lined up for rest of the year. But -- and we have good marketing programs also. But all this is subject to how the situation lies ahead and how does the pandemic behave.

Okay. But sir, just wanted to understand because like Q1 had only the impact for the last 2 weeks, but like there was a severe lockdown in April and even in May. So like -- just wanted to check during these 2 months, like what was the percentage of volumes as compared to pre-COVID levels because it will be an important factor for Q1 volumes.

Yes.

Can I just comment?

Yes, Rashmi, go ahead.

Yes. No, I think as Sandeep has said, things are evolving every day, and we really don't give any guidance. But considering the COVID situation yesterday, we already put out a statement on the stock exchanges as to how we are looking at April and May trading. Giving any numbers at this juncture would not be right because things are just very fluid. And in any case, we don't give guidance on numbers.

Ma'am. I'm not asking for the guidance, but just wanted to understand the trend, like in April, like many companies...

We just explained. Sandeep talked about it in detail. So he said that end of April -- from end of April, we saw good take-up in demand for commercial vehicle oil because of agri season. And in May and June, we are seeing demand when the lockdowns are opening up, we see demand for 2-wheeler products. But of course, it is not at the same level of pre-COVID because the lockdown is just opening up. And this whole lockdown has an impact on Indian economy, and globally, also, there has been a move absolutely. So that is going to impact the economies in the longer term as well. So we don't know what levels of volumes we will really see and when it is going to come back. What we can do is respond to what is happening. And so we have some reasonable levels of stock ready. We have our plants working, distribution setup working. So whatever demand is arising, we'll align to that demand. And we are also having programs in place to boost the volumes going forward in terms of marketing activities and new product launches.

Okay. And then my second question is that in Q1, we have seen a decline in the raw material cost overall. So if the product mix improves, can we expect an improvement in the margin in the second half?

So, yes, if the product mix improves, we will see an improvement in margin.

Okay. And finally...

The point is whether -- the question is, we want increasing our margins regularly. The answer is no. Because we take pricing actions from time to time looking at what the competition is doing. So we might decide to give -- may take some pricing actions on products where our pricing segments are high, and that's unusual pricing strategy that is in action. Like last year, fourth quarter, we did take pricing action on commercial vehicle oil products, right? So we could do some of those things, but we could also have better mix. And the BS-VI is thinner oil. So that is going to help us in terms of mix improvement in the longer term, and that will lead to better margins, but there could be offsetting factors, and also just to grow volumes and gross margin pool overall rather than per liter margin.

Okay. And one final question. Can I get the fuel mix, was fuel in terms of what was the share of personal mobility and like other streams?

I think personal mobility was about 40%. The rest was industrial and commercial vehicle oil.

You next question is from the line of Shradha Sheth from Edelweiss.

This question might be repetitive, but still not very clear this quarter, what is the lubricant market decline if we can get? Because the volume decline seems much sharper than the last 15 days. So is it that there was a market share loss as well? And just repeating the previous participant's question, how was the trend in Jan and Feb? Were we already seeing a hit in the previous 2 months also because of the auto decline?

Okay. So as I said, the significant part of drop in the volumes came because of the second half. Usually, second half of March is quite high. Sometimes this Q could be as much as 60%, 70% of the month. Okay. So it is a month where all the schemes close, and a lot is sold in last 15 days. And because those 15 last days were not really active, in fact, last -- from 22nd onwards, everything was closed. That's almost 10 days of closure. And that led to a significant volume drop. But the softness in vehicle sales impacted -- I think that was the overall impact that everybody said. There was nothing separate forecast on that. So I would talk about the first quarter volume accordingly. And we don't talk about month-wise numbers. We keep to quarters numbers, please.

Okay. And going forward, as we understand, this is more replacement-driven business. While it might be getting pushed out because of people postponing their purchases, but do we see this pent-up demand picking up at some point of time? Or we're already seeing it happening, as we highlighted in our press release, in some segments and then again dropping in June? So have we already seen the pent-up demand happening and dropping down? Or are we yet to see the impact of the pent-up demand?

Yes. I would say it's too early to say whether we'll -- the demand will drop down now. I think the whole pent up demand probably has not even come fully as yet. So unfortunately, things are not predictable, okay? So the lockdown is opening partially, and some states are even closing their borders, then there are cyclones, there are earthquakes. So it's difficult to really predict when the demand is going to come back fully. And there are various models that we have looked at and there are various theories as to when it will come back. But it's just conjecture at this point in time. So there is no point in giving you some timing that we believe that by this time the pent-up demand will come up. And in a market where your servicing happens very often, which is 4 services in a year, you may not -- you may choose not to do that service when market opens up. So we might lose some -- at the lubricant market, we might lose that volume. Or people might decide that, okay, I still want to do 4 services in this year. Again, the consumers' behavior will depend on a lot of factors.

So what is our sense of the market, lubricant market in this year? How do we -- what is the kind of decline you see for the market?

I don't think I have a number in my mind or a percentage in my mind because things are moving, but I would ask Sandeep if he has anything to add.

Yes. I think from a numbers perspective, difficult to say. I think the only thing I can say is if you look at April was a complete shutdown for more or less, where everything was shut down, that May and June is on also partial demand coming up, so I think your guess would be as good as mine. And as I was saying if you take 2.5, 3 months out of the year, from a demand perspective, what does that mean in terms of the overall market? So I think that's how we're kind of looking at it and also kind of watching demand pick up and what may come back in July. But as Rashmi was saying, it's difficult to say any number right now. It will definitely be lower than last year even if we just take the impact of April and May and now Unlock 1.0 in June. So that will have an impact.

Sure. And just lastly, if I can squeeze in. On the cost control, any initiatives that we are taking? Because I think we said we'll be going ahead with new product initiatives and advertising and all. So are we looking at any cost control initiatives?

Absolutely, and let me pass that to Rashmi, I think she has more input on that.

Thank you, Sandeep. So of course, we are looking at cost actions, Shradha, because considering the market demand and the slowness that will be there probably we are looking at every cost line, and there are no exceptions. But what we have then at the moment is obviously the discretionary costs such as travel, et cetera, which has stopped because of the lockdown anyway. They're also working from home and various options of how we can look at other costs in terms of how we can operate differently going forward in a more efficient way. So that -- we are also looking at the whole supply chain cost bucket, the level at which our plants are operating. Can we variabilize some costs, is there anything else we can do in terms of buying better, so all of those things are being looked at. We're also looking at the working capital investment very carefully managing inventory levels with the bare minimum postponing purchases. And so all these things are being done. There's a huge focus on collection of overdue before we sell further. So I'm happy to say that we've collected most of our March overdue by now. And by June end, we should be close to normal days sales outstanding, which is fantastic. So that -- these are some of the things that we are looking at in terms of costs. In the long term, we still believe that this is a robust business and maybe this year could be difficult, but we still need to hold on to the talent that we have because we have a lot of plans to how we want to grow in the future. So there is a lot of work being done on how we can look at this business going forward, considering the current year's demand challenges. In the long term, I believe that it will still grow. So the balance and cost actions also has to be there.

And the ad spend should continue with the new product launches and all?

Yes. It will. I mean, we'll also look at what the demand is. And the timing of ad spend and NPIs will be based on how the demand is coming up. But it will be there, and we will spend as required if the demand is there.

We take the next question from the line of Bharat Sheth from Quest Investment.

Sandeep, if you can, I mean, last few years, we have been concentrating on the personal mobility, which is helping us to grow the volume, whereas CV, some kind of a decline or maybe flattish. So how do we see this mix changing, I mean, directionally in 3 years' time?

Yes. So thank you, Bharat. I think you're right in saying that we've been focused on personal mobility. We've seen good business growth in that area. And I think as far as commercial vehicles are concerned, they continue to be a key part of our business and portfolio. And I think the market situation in commercial vehicle is very competitive. And as Rashmi said, we had taken certain actions in quarter 4 last year to look at our premiums, and we took certain pricing actions. So I think difficult to say how the 3 years' view will be, but we stay committed to our strategy and continue to drive growth in personal mobility but also kind of continuing to play very competitively in the commercial vehicles segment because it is a large part of our portfolio. And we keep investing in terms of marketing program, in terms of new product innovation in commercial vehicles as well. So we'll stay committed to our strategy that we have in place. Rashmi, you want to add anything?

No, no, that's fine, Sandeep. And I think you've covered it.

And this question is for Rashmi. So is there any -- I mean, gross margin or profitability is different in CV, industrial and personal mobility?

Yes. So personal mobility is better margin products, and it has synthetics as part of the portfolio as well. So -- but of course, in commercial vehicle, now you'll have these 6 products, which can improve the margin. But overall, yes, I mean we always have better margins in personal mobility products.

And can we get some -- I mean, how is the product -- I mean, business mix, CV, personal mobility and industrial as well as OEM and bazaar.

So we actually shared those numbers. It's about 40% personal mobility, and the rest is CV and industrial. And 75% to 80% is bazaar channel.

Bazaar channel, in all the same, I mean, between CV and personal mobility.

Yes.

And I see, last -- because of this synthetic, I mean, last few years, we have seen this long drain problem and which has impacted overall, I mean, the volume growth. So now are we through with this whole cycle of a long drain?

I don't think so. I think as the world moves more to a sustainable product this whole thing will continue, also the focus on cost reduction by OEMs. So it will continue. So we have to find a way of growing despite that. And India, because India is still a growth economy, I hope even after COVID. I believe that we still have a lot of headroom to grow in personal mobility. And we have a lot of space to work on infrastructure in the country, which should give us good demand on commercial vehicle side as well.

Yes. I would now like to hand the conference over to Mr. Sandeep Sangwan for his closing comments. Over to you, sir.

Yes. Thanks, Janice, and thank you to everyone for all the questions. And hopefully, this has given you an insight into how we're looking at the business going forward in a very dynamic and uncertain situation right now. And the only thing I would say is staying back to the 3 core principles that I said in the beginning, where -- and our focus is to make sure that our people stay well and safe, and we keep supporting the communities that we operate in and provide whatever support we can. And the third is protecting the financial health of the business, and we stay committed to our strategy and also give the assurance that we are confident of supplying all the demand. All our plants are operational, and we are able to fulfill all the demand that we're seeing in the market, which is improving as we go along. But let's see how the future holds. And I wish everyone stay safe, everyone and your families stay safe. I think we -- it is the time to still continue to take precautions as we move forward and wish everyone all the best. Thank you.

Thank you. Bye-bye.