Creative Newtech Limited (CNL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to the Q4 FY 2023 Earnings Conference Call of Creative Newtech limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties, which are difficult to predict. [Operator Instructions] Please note that this conference has been recorded. I now hand the conference over to Mr. Ketan Patel, Chairman and Managing Director, Creative Newtech Limited. Thank you, and over to you, sir.

Good afternoon, everyone. Welcome to Creative Newtech Limited Earnings Conference Call for the fourth quarter and full year ended March 31, 2023. I would like to start by thanking you all for taking the time to join us today. On the call with me ask Mr. Abhijit Kanvinde, our CFO; and Mr. Vijay Advani, Whole-Time Director at Creative Newtech Limited. Before we get into the business and financial performance, I would like to share some key recent developments and brief insights regarding the company. The past financial year saw several headwinds in the form of macroeconomic volatility and geopolitical tension, which impacted the overall market and consumer sentiment. However, resilience has always been a part of our DNA at Creative and that reflects in our performance during the year. The shift towards digital technology continues to drive demand for various products as more and more industries out of digital and online matters. We strive to maintain a light and agile business model with a selective strategy to build our brand portfolio, such that the offerings remain [indiscernible] of the ongoing market and consumer trends. This reflects in our brands kitty, which are niche products, which are relevant and scalable. Over the recent months, we added Cricut, a premium brand offering craftwork related [indiscernible] products, and Razor a U.S.-based gaming brand. Both of these are among the leading names in their respective fields. Some of the other recent additions include Samsung Flash Memory, Lexar and -- Fujifilm Instax. On the licensing front, we have now Honeywell licenses in 38 countries covering the APAC and the GCC region. With our growing fleet of Honeywell products such -- our expansion should bring in the scale that we have been expecting in this line of business. This in turn will help us bring brand licensing into a sizable part of our revenue and will also boost our profit margin. Given that we are present across multiple channels, it gives us substantial leverage to reach a broad market base. The synergy from Honeywell business will continue to grow this fiscal year. We've also garnered the attention of other global brands looking at brand licensing as a beneficial approach. Speaking of headroom for growth, the budget proposal and digitization and technology revamp could possibly result in a multibillion-dollar opportunity for Indian IT sector. With the budget allocation of INR 4,600 crores in PLI scheme, we expect in the coming years to get our goods manufactured in India, which will help us reduce our inventory levels and overall working capital due to reduction of number of days in logistics. Consolidated performance highlights for the quarter ended March 31, 2023. Total income for the quarter was INR 402.98 crores in quarter 4 FY '23, a year-on-year increase of 50.16%. Improvement in EB segment was supported by strong demand for brands such as Samsung, Cooler Master, Honeywell and Viewsonic. EBITDA is at INR 11.49 crores in quarter 4 FY '23, year-on-year increase of 23.92%. EBITDA margin stood at 2.85%. PAT stood At INR 6.45 crores in quarter 4 FY '23 compared to INR 5.18 crore in quarter 4 FY '22, while PAT margin stood at 1.6%. As you might be aware, last year was we rearranged our segmental structure on the distribution front to better align with our business design and status. Our business are now categorized in the following 4 segments: FMSG, fast moving social media gadgets. This comprise of new and niche products that appeal to the younger demographics and [indiscernible]. The brands are driven by social media penetration and wide adoption. This is one of the fastest growing and higher-margin segments. FMCT, fast moving consumer technology. This segment includes established consumer products that cater to personal and organizational demand such as Samsung, iBall and ViewSonic. EB, Enterprise Business. [indiscernible] products supplied to enterprise and of high volumes. Some brands in this category include MSI, Philips, AOC, et cetera. FMEG, fast moving electronic goods -- this segment covers our alliance with Reliance through which we offer home appliances -- like from brands such as BPL and Kelvinator. This segment better represent our brand portfolio, bring better clarity on high-margin and high-volume products. We periodically expand and refresh our portfolio with new niche brands and products relevant to our time. Coming to CKart, our online digital B2B e-commerce platform, it is facilitating the growth of our business while catering to existing and new customers with nominal additional costs. The platform will help us expand our partner base and volumes [indiscernible]. CKart will continue to be our one-stop solution for customers and improving the working capital cycle and profitability. Now I hand it over to Mr. Abhijit Kanvinde, who will take you through the financial highlights in quarter 4 and FY '23.

Thank you, sir, and a good afternoon to you all. I will show the highlights of our consolidated financial performance, after which we will open the floor for questions. Our financials are reported as per Ind AS guidelines. Looking at consolidated Q4 results. The company reported a total income of INR 402.98 crores, growing at 50.16% year-on-year. This was driven by strong demand for the brand like Samsung, Cooler Master, Honeywell, ViewSonic, supported by improvement in EB sector. The quarterly EBITDA stood at INR 11.49 crores as against INR 9.28 crores in the previous corresponding period, an increase of 23.92% year-on-year. The change in the product mix during the period impacted the margins. The PAT for the quarter is INR 6.45 crores as compared to INR 5.18 crores for Q4 FY '22 and year-on-year growth of 24.55%. Speaking of the full year's results now. For the financial year ended on 31st of March 2023, we reported a total income of INR 1,402.25 crores, driven by growth in the Enterprise Business and [indiscernible] with higher demand by brands like Samsung, Cooler Master, Honeywell and ViewSonic. The EBITDA stood at INR 45.12 crores as against INR 32.62 crores in the year previous corresponding year, an increase of 38.31% year-on-year. The EBITDA margin stood at 3.22%. Change in product mix offset the benefit of improved operational efficiencies, which have impacted the margin. PAT for the year is at INR 27.25 crores as compared to between INR 19.25 crores in the corresponding previous year, previous period, a growth of 41.56%. This is all from our side. We can now open the floor for questions.

[Operator Instructions] The first question is from the line of [ Sudhir Bhera ] from [indiscernible] Private Limited.

Sir, congratulations for good set of numbers.

Thank you so much, [ Sudhir ] bhai.

Sir, I just wanted to know the detail of Honeywell business. So what kind of number you have clocked in this FY '23? And what is the visibility of that particular Honeywell consumer products segment, which I think will grow exponentially from here. So can you throw some light on that business and prospect for next 2, 3 years?

Sure, [ Sudhir ] bhai. So last year, Honeywell business was close to 108 crores. In that, we did INR 79 crores of business in India and INR 29 crores of business in abroad. So out of the total business of INR 1,376 crores in consol, Honeywell business stood at 8% of our business. In the coming year, we have planned to do the Honeywell business of close to INR 180 crores for this year. And we also think that our top line will grow overall by 10% to 15%, so which will get the Honeywell business close to 14%, 15% of our overall business. Honeywell, as you know, now is available for 38 countries and we've already started our operation for Middle East. We've Middle East director also in place now. And we've currently 4 to 5 distributors in Middle East. We are also participating in the GITEX AFRICA exhibition, which is happening at Morocco. So that will also open our entry into the African countries. And for Southeast Asia also, we have Southeast Asia director in place. So I think Honeywell business from here will definitely grow exponentially. A couple of things to do that business is that because a lot of business have moved online and especially countries like Southeast Asia and Middle East, they don't have the general trade or moment of stores a lot. Their business is online and modern retail or power retail as it is called, right? So for online business, you require a lot of review so that you don't have to pay a lot of money to Amazon to acquire e-customers. And for the power retail business, you require to pay the upfront listing fees, which is a tune of AED 450,000 to AED 500,000, okay? So -- and they only list product once a year. So that process also started during this March, April months. So our business is slightly slower there. For the first quarter also, it may be a big slow abroad. But it will start picking up from the end of second quarter and the third and the fourth quarter would be very good on that business.

The next question is from the line of [ Saran Anjuala ], an individual investor.

One, couple of questions actually. So in terms of the...

Sorry, your voice is not audible. Can you come closer to the mic, please?

Is it better?

Yes, a bit better. If you could be a tad louder, it would be very clear.

Okay. Is it better?

Yes.

Yes. Okay. So my question is around the split. So even this quarter, I'm seeing that EB has maximum share? And then typically, FMSG is the area where we have higher margins, I'm just trying to understand this trend, like in terms of FMSG -- I mean, if you see this year, more or less it's kind of flat. So do you see any challenge on that front? How is the traction on FMSG side...

Mr. [ Saran ], your voice was a bit cracking, but what I could understand, I'll just repeat and you can tell me, yes or no. You said that in the split, EB, which is a lower percentage margin business, that share is higher and FMSG, which is a higher percentage margin business, that share is lower. That's what is your question. And how will we kind of grow that business. That's what you are saying?

That's correct. That's correct. Yes.

Yes. Okay. So your observation is completely right. And in the EB space, because we don't use any working capital in that space. So we get some money advanced and then we also pay in advance. And that's why whenever we have -- it's more of an opportunity business. And whenever we have that free cash flow, we do that -- we are very cognizant of that fact that it also affects our overall margin-to-margin ratio because it gives you a higher top line with lower bottom line. So from this year onwards, we are going to rationalize that business and not take it as it comes. For the FMSG business, because we had GoPro with us and we have not been doing that business for a couple of years because of COVID and then the travel and all transitions were there for that product. And also the chips, that shortage affected overall and the company retrenched a lot. In that category now we have 2 products, which we launched last quarter, one is Cricut. It's a $1.6 billion U.S. brand, completely driven by social media. Millennials are the users of that product. We just launched that product in India last month and it has shown a very good traction, which was launched only online on Amazon. And now we will start offering to that channel. But that product looks like very positive. And also, we launched Razor. Razor is the #1 gaming brand. It's a cult-like brand. Again, in the FMSG sector. That's also come -- in the last 2 months -- we launched it in the last 2 months. The sales for that brand is also there. So FMSG share overall will start -- you will start seeing that the sales there will be much higher in the coming quarter. Since you asked this question also, I would like to add 1 more thing, that in the future, and the direction from the Board for this year also is that less is more. They want us to keep consolidating on the brand distribution business, and they want us to kind of in the next 3 years' time, have 2 to 3 licensing brands and the 3 to 4 brands in the FMSG segment. As you understand that we do this distribution business for 3 main reasons: one is the foot in the door, so we can offer our products to the retailers there; second is to get higher visibility; and third is to amortize our cost. We clearly understand that at INR 50 crores business a month, we can amortize our cost and then all incremental cash flows we want to use for FMSG and our brand licensing business.

Also to add -- this is Abhijit. Our working capital cycle is based of inventory and creditors. If you -- if we calculate, last year on consol basis for the financial year FY '22, it was 51 days, it has fallen to 34 days. [indiscernible] is added because the Enterprise Business -- given that actually on low working capital situation, the money comes in advance and we pay later. So this is an improvement in working capital, which I would like to highlight.

Right, right. One question around categorization. So Honeywell India business, do we kind of consider it under FMSG? Or how is it? I know Honeywell abroad is part of consol numbers, is part of secure commissions. But how about Honeywell India, does it -- is it part of FMSG?

So in India, the air purifier and other actually falls under the FMSG space. And fast-moving electronic essential business of Honeywell would go under the computer technology space. But since predominantly the category falls under FMSG space, we have categorized it under the FMSG space.

Okay. Got it. Got it. Yes. In answer to the last question, I think you already mentioned, but I missed the -- what was the Honeywell business this year...

Okay. So the total business this year was INR 108 crores. INR 79 crores of that business happened in India and INR 29 crores of that business happened abroad.

[Operator Instructions] The next question is from the line of [ Nikhil Arora ], an individual Investor.

Congratulations on a good set of numbers. So are you planning for any fund raising in the near future like for expansion in terms of new brands in the Honeywell business?

Okay. So what we understand and I'm very new to the market, but they said that the quality of investor also is one of important tick form when it comes from the research point of view. And -- so if we get the right kind of fund or investment company, which is into, say, technology space, which can give us some advice and also the right connections into that space, we will look at raising from -- to the tune of INR 40 crores to INR 50 crores.

Also, this money is going to be utilized in expanding Honeywell business because what happens is, you know that we have to conquer for many countries. Right now, in this financial year, because without any additional money or rather with our internal accruals, we plan to expand and we've already established Singapore. We want to do Thailand, Malaysia and Indonesia. We wanted a little bit of [indiscernible] and we have to expand in GCC. That is going to be our plan for INR 180 crores. If case we take money, okay, so that entire money obviously, will be used in working capital [indiscernible] inventory. And definitely then we can fast-forward the expansion of countries and possibly in the next financial year first quarter, we will go -- we will plan to go to Africa. That is what has been in our mind. That is on our mind. So to answer your question, in case we get money, and in case we are able to, then we will try and fast-forward the Honeywell growth. If we don't, then possibly [indiscernible]. So we said that by '25 or '26 -- rather FY '26, we will at least be INR 500 crores in Honeywell or any other brand. And the total top line will be in the range of INR 2,100 crores to INR 2,200 crores. So that step will definitely happen.

My next question is about the [indiscernible]. So also I want to know like what was driving growth factor in the EB segment there. And if we see the FMEG segment, the revenues are declining. So any particular reason behind that?

[ Nikhill ] your voice is a bit cracking. You asked something about the EB segment but we could not...

The growth factor behind the EB segment. And also the FMEG segment, the revenues are quite declining. So any particular reason behind that?

A couple of things on that side. First is on the EB segment. Since it's a [indiscernible] business. And my understanding this last year was that until you are putting more money, absolute money to the brand rather than compensate, it's a good thing. But I think now the margin ratios are also very, very important. So we would -- if there's an opportunity also on the margin side on the EB business, we will slightly curtail that business. Coming to the FMEG business, our whole point is that, Honeywell, we have the Structured cabling business. The Structured cabling business has CAT5 and CAT6 cables, CCTV -- Hi-Fi cables, which are used by Honeywell themselves and also by a lot of other electrical channel operators. We started the FMEG business, so we could learn in getting electrical channel, that space. As we are trying to get into that, we find that, that channel is slightly difficult channel, more traditional outlook channel. And that's why we are not growing that business. Currently, we are having the distribution of BPL from Reliance base and Polycab also. So we are just trying to piggyback on these 2 brands to build our business. So if that we have success in, say, we are trying to do that experiment in Southern India currently. If we get the success there, then we would build that business further or slowly win that business on. I keep the Honeywell business in the FMEG business only.

Okay. My last question. I just wanted to know the Honeywell share in profit margins [indiscernible].

Okay. Abhijit...

So the share in -- you said consol?

Yes, consol. Consol.

Okay. So on this one, we would like to say, last year -- look on a full year basis -- Honeywell business and the consol businesses, they added INR 6.4 crores in the bottom line. So our bottom line was -- stand-alone was INR 20.85 crores and our consol was [indiscernible] around INR 6.4 crores of [indiscernible].

Yes. I just would like to also add that since we are in the growing space currently, there are a lot of expenses. For example, the Morocco exhibition, what we are taking part. It will cost us almost to the tune of INR 30 lakh, INR 35 lakh, the whole cost of traveling, building, booth both and also paying for the rental for the booth, that's the case. So in spite of the expense and in spite of spending money on -- in spite of spending money on getting all the regulatory compliance for the electronics products everywhere. For example, we just went to Singapore. It requires Singapore SG Mark. For that you require a certification, which costs $10,000. So including all the certification also, we have been able to post a good profit in that Honeywell business, and this is all expensed out actually and not taken as a part of capital expenditure. So now because we have also 4 categories ready, all the certifications ready. And we have to still participate in the GITEX Middle East, Dubai, which will happen in September-October. But rest of all participations we have done -- so the Honeywell profit will grow also from this year.

[Operator Instructions] The next question is from the line of [ Neha Jain ], an individual investor.

Congratulations on a good set of numbers. I have a couple of questions. Sir, I just wanted to understand what is the profit margin for each segment for this entire year, for FMEG, FMCT, FMSG, et cetera. So what are the individual profit margins for these segments?

Yes. If you look at our segmental results. So you are -- I'm giving the profit margin for the consol, say, a stronger consol segmental results. The EB segmental results had a profit margin of [ 2.71% ]. FMSG was 20.71%. FMEG has been 10.45 as a percentage, but the amount [indiscernible] anything. And FMCT, the profit margin is 5.39%; overall, it is 5.83%.

So do we have any plans as to how we are going to increase the profit margins or we see this level to be maintained for the next couple of years?

Definitely, we have plans to increase the profit margin. Please appreciate that, as we grow Honeywell business, okay, the profit margin in consol revenue will grow because Honeywell business has a gross margin of 40% to 55%. In India it's actually 45% and abroad it's more than 50%. So having our consol revenue and having our share growth, the profitability is be going to zoom up. So we've given an internal guideline that by FY '26, if you want to see the profitability, then on a consol basis, our PAT will be -- which right now is in the range of 2%, will be -- as a percentage, will be in the range of 4.5% to 5%, okay? So that's where we will be steadily growing because of Honeywell business growing, and we would like to also add 1 more brand in our licensing business, which will deliver that kind of gross margin.

Okay. I may add to just what Abhijit said, so the whole guidance is that in the next 3 years, increase the Honeywell business to almost 30% of our top line, consolidate on the brand distribution business, reduce the brand. And on the FMSG, which is also a higher-margin business, and it's also a business which is best suited for the Indian demographic currently, get 4 or 5 exclusive niche brands, which is high margin and high volume. So that's the whole plan. So in the next 2 to 3 years, step by step we have a plan of every quarter and every year. So the margins from 2% will go to between 4.5% to 5%.

Got it, sir. Got it. Sir, in terms of our working capital cycle, it has improved recently. So is this improvement sustainable? Or what is the level that we've been maintaining now that we are also growing?

Let me decode this question, Ketan. Of course, working capital cycle is improved, okay? On a consol basis -- it is around 31, 32 days, okay -- 34 days. Roughly [indiscernible] we're likely to increase the Honeywell business, yes? And Honeywell business needs a little higher working capital -- and obviously, the contribution of Enterprise Business will go down in the business -- we will settle at around 37 to 38 days of working capital going forward. That's probably our deadline.

Okay. Okay. And sir, like you mentioned before that we are also planning to bring on both -- few new niche products as part of the expansion. But apart from that, how do we like retain existing brands so that they don't typically switch distributors. So what is our strategy for that?

A couple of things. [ Neha ], it's a very good question you asked strategically. See, when you take up a brand, that point of time, the company has certain goals and the brands have certain goals. In 4 to 5 years' time, sometimes it may happen that either the company or the brand, both may outlead each other in terms of their goal. That's the time, kind of, you have to part with the brand. That's what has happened. We take our brand with kind of a view that the brand should be with us for 8 to 10 years, right? And ideally, we take up a brand where we do the whole bit of it. So whole 9 years we do so. Right from importing, to distributing, to doing the marketing, to doing the [ influencer ] part of that brand, to repair, servicing and the PR also for that brand. Everything we do. So it's a very, very integrated and a very close coordination we do with the brand on every aspect. So in case if the brand has certain issues, say, financially or the products, kind of is not required into the market because of the change of technology, that's when only the -- we have to part have with the brand. That's the case. Second, consider a product like monitor, right, that also we distribute for Samsung. Over a period of time, everybody has moved to laptop. During the COVID, everybody wanted a second computer at home so the monitor sales and the price got zoomed up. But now the monitor prices have stabilized and people are not buying another monitor for their home because they have already bought the same. In these cases, that brand sale may go down, but we factor it every year. So we have an annual operating plan and we have a quarterly operating plan. And based on that, we work. Out of that, the most important brands are there that falls into my KRA, where if the brand is very important, it is giving us high margin, high volumes, then I have to closely work with the brand to grow that. So that's the case. But sometimes it is a shear battle of that whatever you may try, but you may shortfall of a brand's expectations. And the brand may move out from you. That could happen.

And I just want to add something to what Ketan said. Strategically, we are a national distribution house. And therefore, some brands -- there is always a [ cutoff ] of gross margin as well as the top line monthly for some brands. If they are largely driven on justifiable numbers, then our Board has advised us and we calculate ROI for every brand on a monthly and a quarterly basis. So if the ROI is not justifying the investments, if the ROI is not justifying the return, then the Board has given us a mandate that we should drop off those brands gradually. So we are thinking of dropping roughly 4%, 5%, which are not making any sense to us in this financial year.

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

Sir, what I wanted to ask you is what is the raw material expense as a percentage of our sales increase Y-o-Y, which cause the gross margin to drop?

What is the raw material...

Why did our raw material expense as a percentage of sales increased Y-o-Y causing our gross profits to dip?

Yes, [ Harsh ]. In the last year, it is the whole country, right? There were 2 things: one, there was a huge shortage in the material for the first 2 quarters and also the freight cost has really gone up very high due to the China thing. So I think that's why the cost of the raw material looks higher when you compare year-on-year because of the freight cost and also the shortage, so that went higher. And a lot of time, we think that instead of increasing the size -- the brand things actually instead of increasing the prices to keep the market share constant so that people don't move to other brands. That is the primary season.

And sir, 1 more question, please. If we see our operating expenses have reduced Y-o-Y in the quarter. So could you like to shed some light?

Yes. It's the other expenses have reduced year-on-year [indiscernible] stand-alone basis. Stand-alone basis, I explained to you why they've reduced. So on a stand-alone basis, the other expenses last year was INR 33.26 crores, which has come down to INR 30.67 crores. The major reductions in the other expense has been [indiscernible] in sales promotion, INR 50 lakh [indiscernible]. And there is a reduction of [indiscernible] expense to -- from INR 5.45 crores to [ INR 3.47 crores ]. Okay. All these are the expenses, which are the promotion and sales, promotion [indiscernible] spend on behalf of the brand. So technically, there has been lot of spending in this financial year on behalf of the brand.

Understood, sir. And sir, 1 last question. Sir, what would be the breakdown of domestic versus overseas revenue?

Breakdown of domestic versus overseas. Okay. So almost -- on a consol basis, I think [indiscernible] approximately INR 875 crores will be foreign revenue and domestic would be around [indiscernible] INR 500 crores.

[Operator Instructions] The next question is from the line of [ Jacob James ], an individual investor.

I wanted to know what are the measures are we taking in order to improve our cash flow position.

Yes. Okay. So a pertinent question. This time, there has been a negative cash flow from operations through deduction of INR [indiscernible] crores, okay. Clearly, if you see a report to the balance sheet and -- if you go to the side balance sheet, there is 1 item where there is a thing, increase in Other Current Assets to the tune of approximately INR 40 crores. If you see the comparison of the Other Current Assets, almost INR 40 crores has been -- has increased in GST [indiscernible], okay? So duties and taxes receivable, the amount from INR 37 crores, it has become INR 74 crores. There has been -- there are 2, 3 components of this. This year, we will -- we will see around INR 7 crores -- INR 5.5 crores of GoPro [indiscernible] that is the part of -- part and parcel of duties and taxes receivables. The GST we paid on export of INR 24 crores, has already come in, in the month of April. And definitely, we are hoping that there is around INR 24.5 crores of MEIS and duty drawback, which is pending from government. This year, we think it will come back. So most of the money, which is invested in GST, duties and taxes receivable, we liquidate it in this financial year. And I'm sure that our cash flows from operations will be a good profitable figure. Okay? Rest, we could [indiscernible], okay. [indiscernible] there has been an investment in the duties and taxes receivable, which will come in this financial year, and we will have a positive cash flow this time for sure.

Okay. if I talk about working capital, and maybe you mentioned that some numbers on Honeywell's working capital. So if you could reiterate what is Honeywell's working capital as compared to the rest of the brands on an average?

So definitely, the rest of the brands, the working capital is in the range of 40 to 45, okay? However, Honeywell is at 60, almost 60, yes? So this position will also improve, okay? [indiscernible] Honeywell, partly, even in first 1 or 2 or 3 times, they do not give us credit. We have to spend money in advance. However, now, okay, after 2 years of buying with them now, they have started giving us credit. So the 60 days will also improve, will come to 50, okay. And rest, we are 45 days, okay? So we presume that overall, including the Enterprise Business will be at -- today we are at 34, but we will be at 37 or 38, okay, going forward.

Okay. Okay. Yes, I have 1 more question. if I -- so if we talk about our product mix, which has impacted our profit margins. So could you -- if you could highlight on the changing product mix due to which our profit margins have been impacted, if you could highlight on that?

So in the last year, compared to the last 2 last year, everything was in profit and the gaming product, because they are fast-moving, the gaming products, which are mainly Cooler Master, PNY, Colorful. They were doing extremely well because the chips are not available, the graphic cards were also in extreme demand. Last year, we saw a drop into that segment completely, the gaming segment, mainly because the same product goes into [indiscernible], the same product goes into high frequency trade on the stock market and the same product also goes into animation and other parts. So there, we saw a considerable drop on that. Second, we also saw a considerable drop on the FMSG sector. And I think that is because the interest rates went very up and our consumer group is -- Indian consumer group and our consumer group also in that segment is 35 years or lesser, which is 75% almost. And this because the 3 percentage of 60% high on the [indiscernible] loan rate, I think that effect at a bit, I think so. But I'm not sure about that. But in that segment, the buying was less. So actually from both -- post Diwali, we saw that uptick for gadgets was less.

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

I once again thank you all for joining us on the con call today and look forward to interacting with you again. Thank you so much.

Thank you.

Thank you.

On behalf of Creative Newtech Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.