EPL Limited (500135) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to EPL Limited Q3 FY '22 Earnings Conference Call hosted by Systematix Institutional Equities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Tholiya from Systematix Institutional Equities. Thank you. And over to you, sir.

On behalf of Systematix Institutional Equities, I would like to welcome all the participants to this call of EPL to discuss the third quarter and 9 months FY '22 results. From the management team today, we are joined by Mr. Anand Kripalu, MD and CEO; Mr. M. R. Ramasamy, COO; Mr. Parag Shah, CFO; Mr. Amit Jain, Senior Vice President, Corporate Finance; Mr. Suresh Savaliya, Senior Vice President, Legal and Company Secretary; and Mr. Deepak Ganjoo, President, AMESA Region. At the outset, I would like to thank the management for giving us the opportunity to host this conference call. Now I would like to invite Mr. Anand Kripalu for his opening remarks and to discuss the financial performance. Post which, we'll open the call for Q&A. Thank you and over to you, Mr. Kripalu.

Thank you very much and hello everyone and good evening. Thank you for joining this call. We delivered another quarter of robust revenue growth at 14.9% in Q3 where the underlying growth was 11.6%. So it's robust double-digit growth and this growth was broad-based across regions and categories. As far as the regions are concerned, revenue growth was led by AMESA, which is Africa, Middle East, South Asia so which will be India and the surrounding countries, which grew at 35.7% which we believe is hugely market leading; EAP, East Asia Pacific, which grew at over 20%; and the Americas, which grew at over 9%. Europe continued to be challenged where the underlying growth of Europe was just over 2% and that was as a result of a decline in the Personal Care category due to the COVID situation. However, Europe Oral Care grew double digit. Importantly, there was no wallet share loss in Europe so we expect the situation to turn around very soon. Overall, as far as categories are concerned, Oral Care grew by 7.4% and Personal Care in line with our strategy grew at a much faster 19.4%. EBITDA margin in the quarter stood at 15.7%. It was impacted by continuing hardening of raw materials and freight costs. Margins were also impacted due to higher personnel costs due to absenteeism and over time, particularly in certain geographies, because of COVID. A judicious mix of price increases and cost efficiencies are being realized as we speak. Barring any unforeseen volatility, we believe margins have bottomed out and we should see margins recover going forward. Net profit declined 19.5% compared to the previous year, but sequentially improved by 12.6%. Net of one-offs, PAT was down by 17.2%. Net-net I do want to say that the context we are in is no different to the context for the larger industry that is facing not just high inflation, but also high volatility on commodities. Through the recent tempering of input costs and all the interventions that we are doing, some of which I will talk about, we feel confident that future margins will be better than the current. Our ambition as a company is to be the most sustainable packaging company in the world. We believe that this will ensure our long-term performance and be a critical driver of sustainable competitive advantage. We know that most of our customers have made big commitments to become more sustainable and to move to recyclable packaging over the next 5 to 10 years. So this decade, we'll see a big transformation in companies that can offer sustainability as a product advantage. Hence we are driving sustainability as a company with global focus, both for our customers as well as our efforts to internally become a more sustainable organization. Now as far as customers are concerned, we continue to lead in the area of sustainable solutions. We recently added Vicco to our list of customers who partner us on sustainability and that adds to the list that already contains Colgate, P&G, Unilever, Hella and GSK. Apart from the work we are doing to provide sustainable solutions to our customers, in this previous quarter we have also continued to make strides in our journey to become more sustainable as an organization. We joined the Ellen MacArthur Foundation's new plastic economy global commitment. We became a signatory to UNGC, which is Union Nations Global Compact. We were rated B by the Carbon Disclosure Project, CDP, for climate change and water security. And importantly, we won the prestigious best government company award at the 21st ICSI National Awards Festival in the category of corporate governance, which I'm sure all of you as investors would be happy to note. So that's really about our performance under review in the previous quarter in terms of numbers and what we are doing on sustainability. Looking ahead, our objective is to drive sustained profitable growth and that remains our top priority. We have a very strong business development pipeline, which will ensure we continue our double-digit revenue growth momentum. In order to drive growth even further and as part of our continued efforts to explore opportunities not just in our existing markets, but also in virgin countries, I'm very happy to share that we are making an entry into Brazil on the back of a long-term contract with a leading multinational company. This underscores the trust that EPL enjoys with its global customers and follows a very successful model of new market entry as we have done already in the past in the case of the United States, Egypt and China. As you would expect, a comprehensive end-to-end companywide margin improvement program is underway. This includes a fresh round of price increases as well as driving mix improvement even harder. Cost saving initiatives include increased in-house manufacturing of caps and closures rather than buying them from the outside, a global interregional and interplant competition to further reduce scrap and wastage, an improved sourcing strategy being led by experts and a critical relook at our organization design to enhance not just efficiency of our organization, but also to improve effectiveness. These programs will ensure that margins improve. So despite short-term challenges faced by the larger industry, we continue to deliver strong double-digit revenue growth and barring any foreseen volatility, we also remain confident that margins have bottomed out and that the journey towards recovery is underway. Finally, I'd like to make an announcement. We are going through a change of CFO. I am delighted that Amit Jain, who many of you have interacted with already in his role as leading Investor Relations amongst other things, will be becoming CFO effective April 1. Amit has had a solid career of nearly a decade with EPL and understands this business deeply. He will take on the mandate of driving performance management even harder and in particular leading the journey on overall margin recovery, which as you will understand is the top priority. Parag Shah, our current CFO, will be leaving the business for personal reasons. He will continue to be CFO till March 31. I would like to take this opportunity on behalf of all of you on the line to thank Parag for his many contributions over this very critical period and on behalf of everybody, I'd like to wish him the very best in his future endeavors. So with that, we're opening up the line for questions.

[Operator Instructions] The first question is from the line of Sanjesh Jain from ICICI Securities.

Few questions. First on the Brazil, we said that we have signed a long-term contract with an MNC customer so can you just elaborate what will be the investment which will be required? Are we planning to put up a factory there or as we start we will source the finished product to the Brazil? What is the contract we are looking at? Because your presentation say that the opportunity of overall tubes there is 3.5 billion. How much out of it is laminate and what is the kind of market share we are aiming to get in Brazil? That's the first question.

Go ahead and finish your question, please.

Okay. Related question is on the operational. In Brazil, do we expect to initially start with the losses and then breakeven at EBITDA level or it's just a trading agreement and we will supply it so it will directly contribute to the EBITDA? That's an added question. That's on the first set. Second set is on the inflation. The raw material inflation in Q3 looks much more benign than the previous quarters while our margin continues to decline. Are we -- have we passed on entirely or we were anticipating…

You'll see an increase in commodities and the tapering of commodities has really started happening in the last 6 to 8 weeks. So a little bit after towards the end of Q3 or thereafter. What I've already said in my opening comments is in this quarter Q4, we are going for a judicious mix of fresh price increases and also some specific cost saving initiatives. Now to your point on pricing specifically, all contractual customers, the pricing will come in automatically. The rest have to be negotiated. But I will say that a good percentage of the rest of the customers, we will get the price increases for. But we are doing it as we speak and therefore, I can't give you a precise number. Now as far as gross margin is concerned, first of all, I'm sure you understand that first of all we don't really want to have a discussion on gross margin itself. Our commitment is a long-term commitment for growth, sustainable growth and margin improvement recognizing that we've had some erosion of margin, but we do believe that this has bottomed out and we should see recovery from here. But please do understand you gave have a number of 50% or 51%, please recognize that there is a translation loss in margin in a hyperinflationary environment. All our cost increases even if they convert to price increases will mean an optical margin erosion. So what was a certain margin in the past will not be the same even if we were to fully protect the profitability and even if we were to fully recover all cost increases by way of price and that's just the mathematics of it. And I want to raise this so that you recognize that there will be that kind of a shift in the optics of the numbers.

Just couple of follow-ups on both the questions. As for the Brazil side, I can understand you will give more detail later. But just to understand how the Brazil as a market who is the competition, if you can share some landscape for the Brazil. And when we say 3.5 billion tubes, how much of it is Personal Care, how much of it is Oral Case. Some color there will be helpful. That's one. Number two, on the RM inflation, I completely agree say that optically margins will come down, no doubt in that. But then the revenue growth of double digit is also not comparable. Then the real growth is actually what is gross profit margin growth, which is now at mid-single digit. Is that a fair way to look at it?

Well, obviously the revenue growth has a price and mix in it as well and I just want to say that there's obviously some price in it. There is a good contribution of mix in it as well and volume in it as well. So it's a combination of all 3 and we aren't really sharing the specific breakup of this. However, what we are giving you as a future commitment on a medium-term basis is that we have plans in place based on a strong business development pipeline to deliver what we are committing to you and that's what I would ask you to see. I'm going to hand over to my colleague, Ram, to share a little bit more flavor if you like on the structure of the Brazil market based on information that we are in a position to share.

Yes. 3.5 billion is the market size of Brazil. Brazil is a high cosmetic market. Hair care products are sold large numbers in Brazil in their Latin countries and we will have a far better chance with lead customers being our customers globally. So we have all the reasons to believe that we will be able to gather over a period of time a good market share of those products too. It's a 60-40, 60% will be Oral Care market, the large oral care; 40% will be cosmetics and other areas. So reasonable confidence that we will over a period of time continue to grow because the customer base that we are establishing will secure the profitable growth in the country.

And I'm sure if you want to appreciate that Brazil is one of the large emerging markets in the world. So it's a very large market. And therefore, it gives us a foothold and access to a very large market both from an existing market size and hopefully in terms of growth potential as well.

Just one last bookkeeping question on the depreciation. Why the depreciation has been growing at a higher pace for last 2 quarters while our CapEx remains under control, which is below depreciation? What's causing the depreciation number to rise faster, if you can explain that?

So we made investments last year also and we continue to make investments this year. And in the natural course of business when assets are put to use, you would capitalize and depreciation would begin. And if you notice our CapEx this year for the first 3 quarters is about INR222 crores. So it's investment in the natural course of business. And also this includes Creative, the acquisition that we had done, and therefore the depreciation relating to that company is also included in this base. That is not there in the prior year.

[Operator Instructions] The next question is from the line of Sameer Gupta from IIFL.

Taking over from the previous participant so now I understand that margins have pressure because of inflation, et cetera. But I just noticed the deviation in the margin performance across geographies and it is quite pronounced in Americas and Europe. So if you could just offer some bit of explanation for this wide difference in performance on margin front.

So I'll start the question and maybe Parag or Ram can add to it. Yes, we have seen erosion -- well, we've seen erosion of margins everywhere because the commodities are going in everywhere. We have seen a bit more in Europe and Americas and I just want to say that America particularly followed by Europe has been hugely challenged because of labor costs, absenteeism and overtime that we've had to pay because the choice very often was between running the plant or not running the plant. So we have made the choice to the extent we could and we still fully couldn't produce what we wanted to produce, but we have made the choice to pay what it takes to get people in. Now I have to say that in Americas particularly, we are not the only company. Pretty much every company in the U.S. is facing this challenge on labor shortage and is having to incur much higher cost. So if you see even consumer goods companies the U.S., they're showing decent top line. But because of high inflation and high cost increases, they are also showing a tempering of margins. So that's the reason why it happened. I mean we believe that the worst on COVID related challenges is hopefully behind us, nobody knows for sure by the way as we all know. But sitting where it is today, we believe that things are slowly coming back to kind of some levels of normalcy and we are confident that we have plans in place both to drive top line in those 2 regions and also to improve our operating margins as a result of that and through the right kind of operating expense control. So our internal plans are clearly to start the journey of recovery of margins that have eroded in those 2 geographies.

And this would be also true for Europe, a large part of the explanation that you gave for Americas?

It is partly true to Europe. But as you've seen from the revenue numbers, we've also had a top line challenge in Europe and that's driven by a sharp decline in the Personal Care segment that is using laminated tubes and I called that out in my opening comments. So I think in Europe, we've had more of a double whammy of slowing top line because one category has really slowed down and operating expenses as a consequence of what I said and both those have resulted, therefore, in significant margin impact. Both those, we have plans in place to start pulling back.

Very clear. Second question, sir. You also mentioned that you're very confident of this being the bottom of the margins. Now I understand that these one-off issues in U.S. and Europe -- not one-off, but COVID related issues might be over, but we are also seeing hardening of crude prices and I know that for you it is tempering of the cost of commodities, but a large part of these are also linked to crude and follow with a lag. So just wanted to pick your brains on where is this confidence coming from that these are the bottom of the margins and it cannot really go further down from here.

So listen, I have to underscore the fact that I said barring any unforeseen volatility because obviously -- so I want to put it this way. Whatever inflation has happened on commodities, I think we have plans in place through pricing and cost management to be able to deliver what we're talking about, which is margin recovery having hit the quarter. Now if you have fresh volatility, if volatility is downward, I don't think we have a problem. But if we have volatility upwards or prices going up linked to a sudden explosion in crude and so on, then obviously there will be an impact on our numbers. But what I'd like to say is this over the last 2 months, and I answered this is with the first question, we have seen some tempering of our input costs. So there are 2 things where we have continued to see inflation, which is really aluminum and one of the other polymers. But for many of the other polymers we've seen a tempering of input costs, which means it's not got any worse. If anything, it's gotten a tad better. So on a weighted basis, we've seen tempering. Now that tells us that there's some stability coming because we didn't see that stability earlier. So all I'm saying again is barring any unforeseen volatility because you will appreciate that we cannot give an unconditional message to you. But if nothing crazy happens, if it's not volatile beyond a point, then what we have said stands because I think we have management driven interventions in place to deliver what we are saying.

Last question, if I may squeeze in. Can you give a CapEx guidance for the next 2 years?

So we've always maintained that if you take a 3- to 4-year period, the average CapEx would be in and around depreciation, which would be about INR250 crores, INR270 crores if you look at a block over 3 to 4 years. So there's no different view to be given here.

So we will spend in line with the current depreciation levels over a long period of time -- over a block of 3 to 4 years.

[Operator Instructions] The next question is from the line of Sumant Kumar from Motilal Oswal.

So my question is for the America and Europe when you talked about the muted growth and 9% growth and degrowth in Europe so what has -- you are talking about the travel tube business has been impacted. So can you talk about what are the segment has impacted overall the business in America and Europe?

So Americas has been impacted significantly by travel tubes. Having said that, Americas will continue to go through this phase. I think pretty much every quarter, we have shown reasonable growth in Americas despite the large volume of travel tubes being impacted. As far as Europe is concerned, it's Personal Care tubes which I have called out already. And our confidence on recovery in these 2 regions comes from the fact that we have visibility to new business opportunities, which is our business development pipeline and what to expect in the coming quarters. And therefore, our confidence comes from that visibility. Having said that, a little bit of travel tubes is also beginning to come -- had begun to come back and then stopped with Omicron and we should believe that that also will start coming back as travel picks up and hotel stays pick up.

And the second question, when you talk about the employee cost was similar and overall impact was there because we were paying employees not coming to the plant for America and Europe. But when we analyze the overall margin impact, majorly despite growth in Americas business 9%, our margin has declined 6% and it seems majorly through the overall when you analyze your P&L or majorly through the raw material cost not through the fixed cost?

So the decline in Americas is essentially coming out of that personnel cost and the lag that is there in terms of pricing because of the fact that it takes a quarter for even the contracted customers and 1 more month where you're [ reviewing ] the prices so it's 3 to 4 months after which you get it for the contracted customers. More importantly, I think what I would like to say is again repeat what Anand said earlier, that we are in the process of further getting price increases in the current quarter Q4 and that should help turnaround things. In terms of peoples costs is also part of fixed cost. Overtime and loss of people related to COVID is a big expense and that's something that has also impacted the margin. So it is very much that. And then there is freight and packaging costs also. And we've said this before that while we made headway, as a matter of routine we do not recover freight and packaging costs as part of passthrough, but we are kind of making progress there as well.

Okay. So can you talk about the overall growth we have seen across or overall growth of 15%? Is there any volume growth this quarter?

So we're not commenting on the breakup of the growth. All I can tell you is that all 3 kinds are there in the contribution to the 15%. There is volume growth also, there is mix also and there is price also.

Okay. So volume was in there?

I already said that all 3 are there as part of the 15%.

[Operator Instructions] The next question is from the line of Trilok from Aditya Birla Sun Life Insurance.

Just 2 quick questions. When I look at the Personal Care category although you already highlighted in the initial remarks, I'm just very curious to know that Personal Care was already declining in the Q2 as well and you guys have given disclosure regarding that. However, in this quarter presentation, none of that details are available. Any particular reason for that? That's point one. And point two is I remember in the last call you had alluded to obviously taking up the price increases and passing on the inflation to the customers and sequentially basis on your disclosure, there's not much movement in the RM prices. So still not able to get the math on the margin erosion on sequential basis.

So the first is on Personal Care and the second is on margin on a sequential basis. As far as Personal Care is concerned, I mean just to be clear, I'm not sure what exactly the question is because we've grown by 19% in Personal Care and only Europe we have called out as a challenge on Personal Care. So what is your specific question on Personal Care beyond that?

So I'm referring to the geography-wise Personal Care growth in terms of revenue percentage in this quarter, which is not the part of the presentation. That's point one I was referring to that was on Personal Care. And beyond Europe decline, is there any other region which has seen muted growth in Personal Care was the subsequent question on that?

Yes, sorry. So 2 points. AMESA grew 36.9% in Personal Care, EAP grew 29.3%, Americas grew 15.1% and Europe was almost flat point -- negative or a decline of 0.7%. I just want to make an important point on Europe. In Q1 of this year, Europe declined in Personal Care by 20% and in Q2 it declined by 4.4% and now we are flat. So I hope that with these numbers, you are clearly seeing the recovery that is happening in Europe.

We didn't have the numbers for the quarter so I did not understand. And with regards to the sequential comment on that, because last quarter you guys said that you're taking price increases for the customers both on spot as well as contracted value.

So last quarter we had taken enough prices to cover the cost increases that was there till that quarter started. In Q3 we saw fresh inflation. After a certain tempering, we saw fresh inflation. That was not covered by way of price increase in Q3 itself so there was a drag as a result of that. Now some of that obviously we are aiming to get in Q4 as we are speaking and if commodities don't go any worse, then we will recover a good part of those cost increases through price increases. Now that's the reason. To recognize that in this industry there is -- you see in a normal inflationary environment, it's okay. But when you have significant volatility, recognize that it takes 3 months plus to start realizing price increases for the cost increases that have already been inserted in the business. So there will always be that scale lag that's going to happen because that's how the business model has been constructed and that has served us well actually for 3 decades by the way. It served us really well. We are just seeing this period of not just high inflation, but high volatility over the last few quarters and that's why you're seeing the kind of variation in margins as well.

And last question if I can ask with regards to the margin, I remember in the Q4 call you guys had highlighted you will not -- you guys are probably making a point that Q4 last year FY '21 was probably in the bottom of the EBITDA margin. But is there any change that you guys want to make any statement now because we have seen what happened in Q3 for the next -- without getting into any particular specific guidance, but any forward-looking range would be helpful.

Well, that's the reason why I have caveated the bottoming out of margins with the line of barring any unforeseen volatility because we don't know what we don't know. That's the reality of the situation. But barring that, we believe we have programs in place to build on the current situation that we are in in terms of the current margin delivery. And honestly, I can't say more than that at this stage.

Sure. And responding to another participant, you guys obviously said that volume growth is still there in this quarter as well and we will obviously make our own assumptions, but it's not flattish is it fair to assume at least on a Y-o-Y basis?

Yes. As said there is volume, there is price, there is mix. If everything is there, then it's not flattish.

[Operator Instructions] The next question is from the line of Douglas Turnbull from Invesco.

Maybe you could quantify for us a bit of where the margin decline has come from and so where we could expect it to go. So if you look at the total EBITDA margin decline of something like 400 basis points, how does that split between raw material costs, freight packaging, staff and other? And then if we look at where that goes going forward, in raw materials what sort of percentage passthrough do you eventually expect to see given the mix of contracted and noncustomers? And then from the other types of cost increases, how much of that can you also get through to customers in due course? What determines that, whether it's competitive environment or anything else? And so obviously help us piece back together the trajectory that you expect margins to take going forward.

I think that's a complicated question. Do you want take this offline and see what we are in a position to share against the margin drop everything, which includes the real margin drop, the optical margin drop. Then within the real marginal drop, what is it for commodities, what is it for freight and other things and what is it for operating expenses? We can only cover the EBITDA margin and then [indiscernible] because I don't think we have this ready for you offhand. Honestly, I'm not even sure we can share everything that you've asked for. But if you send in a mail, we will see what best we can do to throw some light on the question you've asked.

Who should I e-mail?

You can e-mail Amit Jain, [email protected].

[Operator Instructions] The next question is from the line of Hitesh from ICICIdirect.

Sir, my question pertains to AMESA region. We have seen a significant growth, obviously the base was also very favorable for us. But we have seen good growth in Q1, Q2 and as well as Q3. And I just wanted to know what are the growth drivers do you see in this segment? And Q4 being the -- Q4 FY '21 being the higher base, do you think kind of a sustainable growth what you clocked current quarter in AMESA region. That is the first question. The second question is that obviously you talked about the raw material prices and delay on that segment that has put pressure on the gross margin. But despite significant growth over the last 3 quarters in the AMESA region, we have seen pressure in the EBITDA margin. I just wanted to understand -- in AMESA region, I just wanted to understand apart from raw material pressure, was there anything else in the cost front which is dragging the margin in the AMESA region?

So on AMESA, I'll come back to the growth drivers and what we can share over there. Just to say that on EBITDA, actually other cost lines in AMESA have been well controlled. Recognize that the cost -- operating expenses of CSPL have come into the P&L now, which was not there in the base. But other than that, operating expenses in AMESA have been well controlled and managed. So the real variation is to do with phasing of price recovery to cover cost increases largely. So that's the real point about EBITDA in AMESA. Now on the growth drivers, you have it? So if I look at organic growth in AMESA, it is 26.5% against the 36%-odd I spoke about in my opening comments, 26.5%. So the growth is solid, it's broad-based -- by and large broad base, but also includes growth of laminate sales so there are tube sales and laminate sales in these numbers and also includes good growth of laminate sales.

Sir, my question pertains to the Q4 growth, which -- Q4 versus the current quarter, I mean we are in the higher base of the Q4 last year. Do you think this kind of growth coming in this current quarter also? I just wanted to know that.

So I am not going to go into giving guidance on growth by region. I said this before we have a portfolio of regions, a portfolio of categories we're dealing with and we are working towards making sure we deliver an overall kind of guidance that we've given you, we deliver that. One quarter maybe more from one place, less on another place and vice versa. But we cannot get into a discussion on specific growth ambitions by region.

The next question is from the line of [ Tanmay Gandhi ], individual investor.

All my questions have been answered.

[Operator Instructions] The next question is from the line of Sanjesh Jain from ICICI Securities.

First, for the Oral Care category...

Sanjesh, may I request you to speak louder.

Yes. Am I audible now?

Yes.

The first question again is on the Oral Care side. This quarter it looks like the Oral Care has declined by 17.6% on a Y-o-Y basis. The significant growth in this quarter apart from Personal Care has come from the laminate sales, which have grown by almost 2x in this quarter. What's happening on the Oral Care? Why there was such a sharp decline in the Oral Care?

Sorry, are you talking consolidated results or this question is specifically on LSR?

No, no, this is on the consolidated Oral Care revenue. So this quarter we have declined 17.6% Y-o-Y to 3.3 billion.

No. In my opening comments, I said that Oral Care has grown 7.4% and Personal Care by 19.4%. So I'm not sure where you are looking at the decline of 17% of Oral Care.

So we have the first half number, which is INR825 crores and this quarter we have disclosed for [ 7 ] months, we have done 11,547 if I get it. The 9 months from first half what we get is 3.3 billion and the same number in the base year was 4 billion.

So may I request you to send a mail on your specific question for clarification because I mean I've given you what's the right number in terms of the overall performance of the business. So you can send the mail to Amit Jain and we will answer it to the best of our ability.

[Operator Instructions] The next question is from the line of [ Shivaji Mehta ], individual investor.

Sir, my question was basically regarding whether we have explored all possible synergies with the Blackstone portfolio companies, including Piramal Glass. Do you think there is still some opportunities with the Blackstone portfolio companies or do you think that you have saturated this?

I mean I don't know how to answer that question specifically because one is a glass business and one is a tube business. And so to be direct, I'm not sure if we have explored specific synergies regards the Blackstone controlled company. But I think it's a suggestion, let me explore it with the team and see if there are some opportunities to do that because we don't have any other tube making company and the manufacturing processes and so on tend to be quite distinct. Also the customer profile tends to be quite distinct. But now that you raised this as an idea, let us explore whether we can extract some value for that.

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Pratik Tholiya for closing comments.

Thanks, Nirav. On behalf of Systematix, I would like to once again thank all the participants for joining this call and I would like to thank the management for giving us the opportunity. I would like to request the management if there's any opening comment -- sorry closing comment, you can please take that.

I just want to thank everyone for your time for having joined us on this call today. We hope we've been able to give you clarity on some of the questions that you had. And I just want to leave everybody with the message that we are absolutely excited and confident about the future of this business and I think with each passing quarter, we will be able to report that confidence. Thank you.

Thank you so much, sir.

Thank you very much. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.