Creative Newtech Limited (CNL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Creative Peripherals and Distribution Limited Q3 and 9 months FY '20 Earnings Conference Call. This conference may contain forward-looking statements about the company, which are based on beliefs, opinion and expectation of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ketan Patel, Chairman and Managing Director. Thank you, and over to you.

Good afternoon, everyone. Welcome to Creative Peripherals and Distributions Limited Earning Conference Call for the third quarter and 9 months ended of the financial year 2019/'20. I would like to begin by expressing my gratitude to you all for taking the time to join us. On the call with me today is Mr. Abhijit Kanvinde, CFO; Mr. Vijay Advani, our Whole-time Director of our company; and [indiscernible], our Investor Relations [ team ]. Before we get into the business and financial performance of last quarter, I would like to share a brief insight into our company. We are market specialist for experiential brands across India, Middle East and Southeast Asia. Our company specializes into market entry for global brands and works closely with its clients to achieve optimal market penetration and growth. Our network encompasses of all 3 channels, online, retail and general trade, thereby, giving us a strong leverage to reach out to a wider market base. Furthermore, our value-added business model covers end-to-end solutions for market research, competition analysis, to formulating and executing region-specific marketing and presales strategies for plan. Currently, we have a strong long-term association with over 20 global renowned [ plants ], which we categorize in 3 broad divisions: IT; imaging; and lifestyle and security products. The wide spectrum of products from multiple vendors also has helped our company achieve economics of scale and a single source pointing to our customers. We have identified 4 main categories: IT, lifestyle, imaging and security. One of the key brands under the IT category is Honeywell, a Fortune 50 company, which whom we deep integration in terms of contract manufacturing, distribution and marketing across India and Middle East. The Lifestyle segment has seen tremendous growth as consumer trends are moving from utility-oriented to experience-oriented box. Our wide product range encompasses TV, headphones, projectors, personal grooming products, et cetera, and we continue to expand our portfolio in the high growth segment. In Imaging, we offer a range of cameras, lenses, backpacks, imaging accessories such as [indiscernible], et cetera. This category is growing aggressively as trends in photographic change rapidly. One of the key drivers in the segment is GoPro. We had significant growth in user adoption across the urban markets in India. In Security, we strive to cater to the growing needs and demand for retail security products and are expanding in this direction passively. We are evolving into a major player in this segment with exclusive agreements with global giants in this sector such as InVue. Our focus is on offering experiential product and enhancing [indiscernible] to establish and enter new markets. We continue to aim for higher operational efficiencies and adding higher margin value-added products to our portfolio. Associations with Honeywell, Babyliss and GoPro, as steps towards that direction. I would like -- I would now like to take you through some key recent developments. We recently announced plans to launch an online digital platform for our networks offline. The new platform will enable all of our customers to showcase their inventory and trade amongst each other, facility in higher volumes and expanding the product portfolio being offered through creative territories. We expect this platform to fortify our presence as a one-stop shop for customers, as well improve our profitability and also their profitability. We will be able to have significant number of customers at a much lower cost. I'm also happy to share that we have entered into distribution agreement with several international brands across subsectors. One of the latest companies have brought on board is Panasonic, which is a global market leader in consumer electronics. We will be distributing their premium range of audio products in India. Our premium and niche brands that we partnered with recently include Cooler Master, a niche gaming hardware brand; PNY Technologies, a U.S.-based specialist in high-performance graphic cards and SSDs; and Babyliss, a premier personal grooming brand with global presence. This association not only diversify and expand our portfolio, but also enhances and testifies the company's recognition among global brands. We are already witnessing strong demand for such products in the Indian market, both offline and online. So from an overall business perspective, that's all from my side. I will now hand it over to Mr. Abhijit Kanvinde, our CFO, who will take you through the financial performance of the company in quarter 3 and 9 months FY '20. Thank you.

Thank you, sir, and a very good afternoon to you all. I will share the highlights of our consolidated financial performance, after which we will be glad to respond to your queries. Our financials reported are as per IND AS guidelines. Q3 FY '20 financial results. In the quarter ended 31st December 2019, our company achieved net revenue of INR 129.5 crores with a year-on-year growth of 29.53%. This is mainly driven by rising demand for our new and existing Imaging & IT products, including GoPro and Cooler Master. EBITDA stood at INR 5.95 crores in Q3 FY '20, an increase of 61.84% year-on-year. This was on the back of high-margin brands such as Cooler Master and GoPro, which offset the higher employee cost we incurred from the strengthening of our sales and marketing teams. The net profit for the quarter is at INR 3.12 crores as compared to INR 1.45 crores in Q3 FY '19. This represents a growth of 115.7% year-on-year. Our EPS for the quarter was INR 2.69. Now I turn to 9-months FY '20 financial results. In the 9 months ended 31st of December 2019, our company achieved a net revenue of INR 330.84 crores with a year-on-year growth of 28.97%. This is mainly driven by a strong demand for Imaging & IT products, including GoPro and Cooler Master, supported by additional new brands in the quarter. EBITDA stood at INR 13.97 crores in 9 months FY '20, an increase of 51.24% year-on-year, on account of higher contribution from higher margin, value-added brands like Cooler Master and GoPro as well as addition of new product lines. The net profit during the 9-month period is at INR 7.1 crores as compared to INR 3.72 crores in 9 months FY '19. This represents a growth of 91.12% year-on-year. Our EPS for this 9 months was INR 6.12. This is all from our side. Now we can open the floor for questions.

[Operator Instructions] The first question is from the line of Abhay Shah from IIFL Securities.

Yes. Congratulations on good set of numbers, sir. This questions were in -- from the key developments side, if you see. I want to know more. Can you hear me? Hello?

Yes, yes, yes. We can hear you well.

Yes. We can.

Yes, yes, yes. So wherein -- I was curious about -- to know more about on the products, wherein it has written, signed distribution agreement with Panasonic, global consumer electronic brand to distribute premium audio products across Madhya Pradesh, Rajasthan and can you elaborate a bit? I want to understand more about the products.

Okay. So we have always been distributing audio category products for different brands. So we do brands like Plantronics for B2B, we do Sennheiser. And Panasonic now entering the -- [indiscernible] is also there but it is now entering the premium audio headphone category. We had phones with noise cancellation and you can decide the amount of noise cancellation with hand gestures also allows that. And Panasonic is a global giant in many countries. And we thought the association with Panasonic on -- starting with the audio category can take us further and then we can get into consumer products also of Panasonic. But we can have a good sales in terms of Panasonic and have simple anchor brand, which are [indiscernible] space. So currently, our distribution contract with Panasonic is for headphones exclusively in the Western India region. And the ASP of each headphone, average headphone would come to around INR 12,000 to INR 14,000. So we are not looking at lower category headphones. We are looking at something, which are -- at an average ASP of INR 10,000 to INR 12,000.

Okay. So what would be the margins or the same [indiscernible]?

Since this comes into the lifestyle category, all is at between 12% and 14% margin.

Okay. And these headphones are used normally? Or because I haven't come across such...

No. So these headphones are actually is used normally, but nowadays, if you see, everybody wants to see it and everybody is now moving to co-working spaces like office, other places. So there are a lot of people who want that -- to get their own, if they want to use noise cancellation headphones. But they also wanted the mic because they can actually adjust the amount of noise cancellation they require. So demand for these products globally has definitely increased a lot. And in India also, we are seeing a lot of traction on this kind of product.

Some sort of numbers that this much, maybe sold out or something like that?

Okay. So Panasonic has just started. So this time, we added 3 products. We've added Panasonic, PNY and Babyliss. All put together, we have sold close to INR 4.5 crores material in this quarter.

Okay. Interesting. And what is the traction that you're looking, sir? If you can give me some numbers on it, some light on it? And actually going forward, what would be the traction of this, if it all?

I consciously feel that next year, all these brands put together, it should be between INR 80 crores to INR 100 crores.

Okay. So on the similar line products or anything else?

No. So for example, PNY is not a similar kind of product. PNY is more from the gaming industry side. And either high-end graphic -- high-end cards for processing the back end. It has also -- SSDs also, which are now very popular. So from the gaming side, Babyliss is more on the personal grooming side. And the Panasonic is much on the audio side. Just thinking that at the consumer audio and that category will grow very well. Coming as an entry that we will learn with Panasonic, and then get the [indiscernible] branch from U.S. But yes, there is definitely a good market. Media and entertainment market is really a good market for Panasonic as well as PNY.

Okay. Sir, what would be the [indiscernible] communication coming to which of the [indiscernible], if you can.

So almost everything is into the ...

I think very simple [indiscernible] categories. All 3 are in the 18% category.

Okay. Sir, I've want to -- one more thing. The one question on dividend platform. So can you just elaborate on that? How you're seeing the opportunity and how it can evolve the company?

It's a very good question. And so we have the need -- because we are a very B2B company and we sell products to our customer who, in turn, will send to a retailer or an end consumer. So we are building a platform, whereby a customer will be able to transact, discover new products and then share these products with their customers. So this digital platform will enable -- bring synchronized approach. So whenever we will introduce a new product line, the training for the new products, the discovery of that new product, the fact sheet of that new product, the customers will get it effectively. And our customers, in turn, will be able to share it to their customers in their own, companies formatting on their own company's name. So currently, we have close to 5,000 customers. Out of that, close to 2,100 customer buy material every month from us. So the pool is totally 5,000 customers to 1,100 customers by material every month from us. This introduction of the digital platform, we are saying that we will be able to add [indiscernible]. So we will be able to add considerably new customer also. But both current, existing customer also, the -- working with them will become more efficient without adding any extra manpower.

Sir, but my question on this. What would be different that you buy -- suppose I am a customer, and what is that on the fleet that I would like to shift from the traditional way that I'm dealing with you vis-a-vis the new platform? What [indiscernible] ?

I'll just give you an example. So we did a [indiscernible] with our customer. Today, our customer has 4 problems. One is they lack marketing after the online becoming so powerful. The traditional -- I mean India is still traditional markets -- are close to 80%, 85% is still traditional market. That this customer, they have 4 problems. Number one problem is that the lack in marketing, that's the first problem. Second problem is that they also have some statutory compliance issues, post DSPs, post other stuff. The customers have a larger basket of product. So for example, if our customer is there. Say, they're buying Samsung from us today, okay? And [indiscernible]. It will also -- the price will automatically tell in the [indiscernible] we have introduced Babyliss as a product. And it will ask whether you want details for Babyliss. If you say yes on that, if it ticks on that. I will say that, "Okay, we have 7 people from your organization with the same e-mail ID. So do you want us to send the information to all the 7 people or you want to send it 2, 3, 4?" If it is, send to all 7. Now we know -- everybody knows that WhatsApp is the most effective use of communications. The site will say that whether I send you a WhatsApp, an e-mail, or both. If you select for both, the e-mail will go to them. Then second time, it will ask him that, "Will you like to share this product with your customer"? This is yes, and yes to select the Creative, there will be 4 marketing creatives available there. If selected here, we have Babyliss and that creative will automatically becoming its name. For example, it is [ Ghanshyamba & Company ]. That creative will become [indiscernible] of Babyliss and then down, it becomes [ Ghanshyamba & Company ]. And then they can WhatsApp or e-mail the same creative to their customer. Post that, they can schedule trainings of their people on that. And the last but not the least, this platform will synchronize with daily software. So they don't have to worry about double data entry and other stuff. So that will also help them. And last, this customer of ours will be able to have a white label website. So they can have [ Ghanshyamba & Company ] website, which will be powered by this digital platform. And already -- so all the scope, all the wires, diagrams, everything has been written about it. The contract has already been awarded. So I think by next -- the digital platform will be up and running. So that -- so we are not going from a B2C side. We are trying to empower our customers to reach to his customer in a more effective way. Also, the website will provide him insights about what's the current price going on retail sites like Amazon and Flipkart. And also, it will allow him to create price list effectively. So for example, if you select Babyliss. And he says, "I want to put a 10% margin here, so just a 10% enterprise." This will be created in [indiscernible]. So this is a very unique concept. It will help us to first digitize our existing customers and then, because of the penetration of the Internet, anybody is looking for some form of business they want to do. So it will help us to get a lot of new customers on this. That was stage 1. Second stage is then, we can have catalog, still enable also. Because not all our customer buy 100% of our stock from us. So for example, they are buying 20% of material from us, they can put their 80% material also on this website, which over 5,000 customers will be able to buy. So it will be a platform, which will help our customers to sell their inventories, and it will also help us to sell our inventories to all the customers effectively, without adding back end, without having more salespeople. So that's the whole digital platform.

Okay. Interesting. So here, it will cover up the lifestyle stuff or everything, information technology, leasing [indiscernible]

Yes. Everything, yes.

So this idea came to us in about 1.5 years before. And we market... sorry?

[indiscernible] Sorry to interrupt you. Correct me if I'm wrong that you're trying to create some sort of a market by itself?

Yes. If I look at it [indiscernible] but this idea came to us for 1.5 years before. When we realized that we had this CRM in process, and both small team to do the [ those are the sales ] to whom we distribute the goods. So that we have a complete control of the market. So data resulted in B2B partners in India is 3 lakhs, 50,000. We cannot sell it to each and every one. To enable that, we want to make this platform comfortable. So when we select this, our distributors, it becomes easy for them to cover those [indiscernible] marketing [indiscernible].

I think it's a good setup to have. Sir, can you just elaborate more on the imaging on the part of your segment?

Okay. So one is that -- we all know that India is a country of millennials, right? Over 75% of population is less than [ 35 ]. 22% of the volume millennials are in India. The whole world, 22%. And these millennials now have -- they actually have 3 to 4 hobbies, which they follow. And then, a couple of hobbies are there, which they practice. Because they're working [indiscernible] requirement is over there, the requirement of self-respect according to Maslow's Law, that's over. Now they are looking at what's the purpose of life, about self-actualization. And that's why they follow these couple of hobbies. In these hobbies, photography is #1 hobby, which we follow. And photography, as an industry, is a 200-year-old industry, which got consolidated after the mobile phone coming into the play. So now there are consumers. They are like professional kind of consumers and people who have hobbies. They are not generic consumers. And this type of professionals, they like to, number one, buy stuff from specialists; number two, they want the community to be there. So for example, when we do our Olympus camera, then we moved the Olympus camera, guy wants to speak to an expert, then he wants [ wide ] watch trail, a bird-watching trail to be done, then he would like to talk to the community, exchange his idea, all that stuff. For example, you know [indiscernible], right? She is a veteran lady. She just took up to photography and she just bought Olympus equipment to start doing photography. So imaging as a category is a high-growth, high-margin product. But you require people who can give experiences, you require partners, distributors, who can give a great experience to the consumer because the consumer is not looking at just buying equipment. He's looking at buying the whole experience. And that's what is our specialty, and that's what making us, giving us the highest EBITDA margins in the company right now.

[Operator Instructions] The next question is from the line of Harsh Shah from Dimensional Securities.

Following upon this digital initiative. So how much money have you already spent on this and what the [indiscernible] whether CapEx or marketing spend you'll be doing this? Are you looking to get new customers on board?

So for the digital, amazing thing. Number one, we know that we don't have these pockets into that. So currently, as of now, we have not spent anything. To answer your question more elaborately, the whole cost of the digital marketing for us on a period of 5 years, including any technical team, including having back end to upload products for now will be close to INR 1.5 crores over a period of 5 years. That is 30 lakhs per paise a year. This expense could have been, let's say, double of it or 3x of it. But we have an advantage that one of our co-founder, whom we -- she comes from a software background and understand software coding very well. So we are building this platform very diligently, and we know our business very well. So we are just trying to digitize that thing. So overall, the expense for over a period of 5 years, total cost of ownership for this product would be close to INR 1.5 crores and we are not going to spend a lot of money on marketing. We are just trying to get our existing customers and new customers organically because we have a large product portfolio. So anybody who wants to start distributing our offering products to their customers, they would be able to have great benefit from this. So we are looking -- we are not looking at any big marketing budgets for this.

Sir, when you say you'll be [ listing ] your customers and they will sell it to their customers?

Yes, because we are a B2B company.

So essentially, it would mean that you will be selling your clients' product line? For instance, if I take Babyliss as an example. You will be selling BaByliss to your customers, your B2B customers, right?

Correct. So there are 2 things. One is we will be definitely selling BaByliss to our -- so right now, what is the profit? For example, when we bought BaByliss, we think out of this 5,000 customers and 2,000 customers who are on an average active every month, who will buy Babyliss, that is we decide. But when this platform comes into the place, this existing customer will come to transact. Say, for his [indiscernible] company, he will come back to Samsung. And he will discover that we have BaByliss on that. And then it is his choice whether he wants to take BaByliss further. If he wants to take BaByliss further, he can then share it with his customer. And because we signed all exclusive agreements of all type of the material is with us only. So the more our customers sell, the more our products will sell. And the amount of flexibility, which our customers can offer, we can not offer because India is still not a big digital economy in terms of payments, other stuff. So these customers get an advantage of credit, they can get an advantage of paying in 30 days, trying the products, all that. So that is one big advantage, which will happen. Second is we have online average 3,600 SKUs. Now our customers don't buy all the 3,600 SKUs. But today, all [indiscernible], all 3,600 SKUs right now are sitting on our ERP, but they are not exposed to the customer till he gets it. Now he has an option that all that 3,600 SKUs to his 300, 400, 200 customers, he can make it available as a little, a click of a button.

Okay, okay, okay. Got it. And coming to your overall lifestyle business, so if I take it as a bucket, the entire bucket towards the margin of 12% to 15%?

Yes, sir.

And tell me how much it contributes to your revenue? And what -- where do you see them going over to next 3 years as well?

So Abhijit would answer that.

Yes. Now as you know, for last 9 months that you see that in the segment -- segments that we were running, we have Imaging, IT & Lifestyle particularly as others, we have to do that because India has -- as per [indiscernible], we have to have individual contributions from -- as operating, more than 10% to be a segment, all right? So if you -- in the 9 months period -- last 9 months period, where emerging has contributed to 44%; IT has contributed to 44% of revenue; and Lifestyle & Security has contributed 12% of revenue.

Okay.

Yes. The total revenue were INR 329.53 crores.

So how do you see this comparison changing over the next few years? And I think that only contributes 12%? So when do you see that going ahead?

Okay. So it depends upon 2 things. It depends upon the product categories, what we had also in that product category. So for example, consider the BaByliss. BaByliss is just a new entrant, which is about 3 months time. Now if BaByliss does well next year, the lifestyle category can become between 15% to 18%. BaByliss, as a category, personal grooming, is a category, which is owned by our line [indiscernible]. So today, almost 60%, 70% of all grooming products are sold online. So if we are able to crack Flipkart and Amazon on that, probably, BaByliss sales will grow very rapidly. So the growth is a component of 2 things. The one is with new brand additions and how your existing brand does that. And our whole portfolio -- thought process is that we want to take the lifestyle and security category to close to 20%, 25% over a couple of years.

[Operator Instructions] The next question is from the line of [ Nayan Gala ] from [indiscernible].

Congratulations on a good set of numbers. I have a couple of questions. One is that [indiscernible] and what set us apart from them?

Can you repeat the question? We can't -- we didn't get the first sentence [indiscernible].

Hello? Hello? Can you hear me now?

Yes. We can hear you.

So according to you, you have competitors. And what is this different thing, which Creative does that sets us apart?

So 2 things I will tell you. First, I'll answer your question about the competition part. We are a very different company in terms of -- so for example, our company still have are 2. One is we are into products, which are -- give a great customer experience. So a product like GoPro or a product like Olympus or a product like Cooler Master or [indiscernible]. All will fall in this category. And second pillar is our Honeywell business, where we are licensee of the brand, Honeywell. So under that, we do a contract manufacturing for Honeywell products and we distribute in India and Middle East region. So there is no similar company to us, which does customer experiential products and also who does contract manufacturing and held brand licensing. Now for me, the customer experiential products also when you want to do customer. So you would request 3, 4 components to it. First is you require external partnerships. For example, if you want to -- today, sell a GoPro, you'd require partnerships with influencers, you will require partnership with all retailers, all online people, you require partnership with the media. How we will you require partnership with photographers, you require partnership with schools? So -- and when you require the skill sets to sell that product, you require skill set to train that product. A lot of companies are there who are city-based doing well. So there's no company like us who can do it in India, these kind of things. So in that case, we are very different. It's now what sets us apart from -- so typically, a lot of people categorize us as a distributor. So what set us up from a different distributor are our distributor will usually import a product, distribute that product and forget it. Whether we do import, distribute, training, we do marketing based on the brand extension of the brand. Then, we also do the [indiscernible] of the product, and we also do the recycling of the product. So all these components, we do and we take products, which are tough because, for example, if you want to do photography, you will have to speak to at least 100, 120 photographers, will have guest list to 10 to 12 shows a year for that particular brand. You'll have to go to all photography schools to explain them the product. You'll have to engage with students. You will have to have equipment. You'll have to do for [indiscernible]. A lot of stuff to do to build a brand. And a lot of people don't have that, so they don't have that vision in their organization or that skill set to do that. So that's what set us apart, one. Second is all the products, which we take for our distribution are exclusive to us. So either they are all-in exclusive or they are channel-exclusion or region-exclusive. But indicate a product range, which is exclusive, then only we take up that product. So that's also sets us apart from other people.

So this is human condition like we really negotiate with the plan?

Usually, the negotiation is never on price. The negotiation happens 2 ways. First is we have to understand their India strategy. And if their India strategy is fitting well, then we have to negotiate about what the marketing budget, what's the manpower and that. So we have always kept tutoring that let the brand decides the pricing, let the brand have their own marketing strategy, what they have. We'll give them all the kinds of input we want to give. The only thing we tell them is that we want to be fair to the Indian consumer. So when you sell a product, you at least help us claim RRP. So retail suggested by what is in U.S., you have the same ratio adjusted pricing in India. That's one thing, which we tell the brands.

Okay. Okay, understood. And sir, one more question. Sir, what will be the working capital cycle currently?

Okay. Now overall working capital cycle right now is approximately between 55, 60, 70, right? Yes. You can -- we can say that approximately, [indiscernible] would be [ 30 ] days. [indiscernible] will be 40 days. [indiscernible] receivables will be 40 days and around [ 20 ], [ 21 ] [indiscernible] so between 50 and 65, this is the cycle.

Okay. Okay. And sir, any plans to reduce this? Is this is the industry standard?

Yes. Yes.

[indiscernible] industry standard then, there would be not much we will do. But we are doing 3 things to reduce. One is the digital platform will help us in catalog sale also. When I mean catalog sale, is for example, a lot of our customers have some products, which we do not distribute ourself. That becomes enable for our customers. So catalog sales will definitely get our inventory down. That's the first part. Second one would be indoor digital platform. When we get additional customers at -- least friction. When I say least friction is when we get additional customers, without adding additional manpower, without filling up forms ourself and everything. Then probably, our inventory will start moving well. And this additional new customers will not be mainly on credit, they will be upfront payments. So because their quantities may be smaller. So these 2 initiatives, we'll definitely have. Our end of year actually is to get the credit cycle to 36, 37 there. This year, we had a set of benchmark that will get it to 43, 44 days. But unfortunately, we have not been able to -- better if we are still at 51, 52 days.

Okay. So one more question, last question. Sir, what will be the operating cash flow?

You want an annualized number of non-operating cash flow?

No, no, sorry. As of 9 months.

As of 9 months. Okay. Give me a second. It will be in the range of INR 9 crores.

INR 9 crores?

That's it.

And sir, what do we see for the full year?

I can -- it's here. It's a resultant of my third quarter numbers and my facts, okay? So it will be a very, very rough benchmark I can give you, or a range, I can give you, right?

Yes. So sir, can you just provide me with the range as well? That will help.

Yes, yes, yes. So approximately, between INR 13.5 crores to INR 14 crores should be my range. It's my estimate.

Sir, this is positive cash flow, right?

That's right. That's right.

The next question is from the line of [ Aiyishi Sharma ], an individual investor.

Congratulations on the number. Sir, how do we trade with China because in the latest news of coronavirus, is it anyhow going to impact us?

Okay. So my answer to this is in the coronavirus thing doesn't extend for more than another 10, 20 days, then it will positively impact us because our inventory levels will go to the lowest, because none of the inventory is coming from there. Plus the customers will be keen to take a lot of inventory because of this fear that they may not get inventory. If it extends a longer period of time, then it will not affect our quarter this March. It will affect our next quarter's growth. Number two is only 30% of our inventory comes from China, that's also from Shenzhen. Rest of inventory comes from Taiwan, Korea, Italy and other places. So if it extends, then we will have a kind of negative impact for the growth of the numbers in the next year. This quarter, we will be okay with it.

Okay, okay. And just, sir, what is the total debt, as in, in terms of long-term and working capital?

Yes. Thank you for your question. The long-term debt is approx INR 80 crores and the short-term debt is around INR 35 crores. So around INR 43 crores, we'll get to win back in the company. And today's position as of December, that [indiscernible] 1 is to 1.06, and that's not the [indiscernible].

And apart from the existing clients, do we have any more that we're going to sign any time soon?

So in a year, usually we sign 2 to 3 brands. So this year, we already signed 3 brands. For the next year also, you can expect the same. We would have 2 to 3 brands. The customers in terms of them, we grow our customers every year by 8% to 10%. Next year because of the digital platform, we think that the numbers will be huge. But I will be able to tell you only after we launch the digital platform and the success of it.

We move to the next question from the line of [indiscernible], an individual investor.

My first question is basically, can you provide me more information on the Creative Connect event?

So as I told you, we are a B2B company and we all wonder -- where is that -- how do we increase our customers' bottom line and also their reach. So last year, we thought that -- let's showcase our product and let's call our customers and our customers can call their customers, and they can see all the products. So we had 60 Creative Connect. An average of 80 to 90 people came into each event. And if you see, overall, the cost of payment was less than a lakh of rupees. So at INR 1,200, we could showcase all the products to each customer. And so for example, you have 18 customers -- 18 products being showcased. If a customer is interested in say, 4 products, then he can spend a lot of time there. The brand representatives are also there, the distributors are also there, so the customer, at one go, can get the complete idea of that. Plus, we can also see the whole basket of clearly what products we carry. So this initiative has really worked for us everywhere. And this year also, we are seeking to expand it to, say, 15 cities and [indiscernible].

Okay, okay. So I think going to be a regular activity, right?

Yes, sir. As of now, it will be a regular activity.

Okay, okay. Sir, my second question is basically, is there any new loan taken during this period that are of interest?

For the loan that we are paying, I'll pass to Abhijit to answer.

No. I didn't get your question actually.

New loans [indiscernible]

New loans. Right now, actually, with this year, these numbers are concerned, the top line is concerned and the profit, we are likely to [indiscernible] that. I do not think we will add any loan in this year, okay?

But for the last quarter, we took [indiscernible]

Which we've included, which we've included. I have already told that. So for the coming year we would [indiscernible] INR 10 crores to INR 12 crores in working capital to our service as well as [indiscernible].

Okay, okay, okay. And just my third question is, can you provide me with the ROCE for individual segment?

My overall ROCE is in the range of 16% to 18%. Individually, I'm afraid, I will not be able to provide you segment-wise.

As there are no further questions, I would like to hand the conference over to Mr. Ketan Patel for closing comments.

I thank the entire team of Creative for their untiring effort and hard work, sincerity and dedication. Also, I appreciate all of you for participating into our conference call. Please do not -- please do get in touch with our Investor Relations team for any further questions. Thank you.

Thank you.

Thank you very much.

Ladies and gentlemen, on behalf of Creative Peripherals and Distribution Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you.

Thank you.