Eureka Forbes Limited (543482) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Eureka Forbes Limited Q4 FY '23, FY '23 Earnings Conference Call. We have Mr. Pratik Pota, Managing Director and CEO; and Mr. Gaurav Khandelwal, CFO, Eureka Forbes, with us. [Operator Instructions] Please note that this conference is being recorded. Before I hand it over to Pratik sir, please note the disclaimer. Certain statements made by the management in today's call may be forward-looking statements. These forward-looking statements reflect management's best judgment and analysis as of today. The actual results may differ materially from the current expectations based on a number of factors affecting the business. I now hand the conference over to Mr. Pratik Pota. Thank you, and over to you, sir.

Good afternoon, everyone. I'm pleased to welcome you all to the first investor call for Eureka Forbes after the company's listing last year. We thank you for your patience and understanding. These calls will now be a regular feature of our calendar. In addition, we will also be engaging with our investors and the wider community outside of these quarterly calls as well. Since this is our first earnings call, we thought it would be appropriate to share some more information about EFL and the more recent developments in the company. Let me first start off with a wider context. As you're aware, we operate in the space of pure water, clean earth and pure air. The categories of water purifiers, vacuum cleaners and air purifiers play a critical role in enabling the health and hygiene for our communities, families and individuals. These categories, however, have very low penetrations in India and therefore, offer considerable headroom for growth. Additionally, these categories will see tailwinds from the enhanced post-pandemic consumer sensitivity towards health and hygiene and from programs on universal electrification and pipe water availability, which will provide a strong platform to drive growth and penetration. We believe that at Eureka Forbes, we are well placed to lead and participate in this growth. We are pioneers in the cleaning and water categories in India with a 40 years-plus heritage. In Aquaguard, we have a power brand that enjoys tremendous consumer trust and acceptance. Our omnichannel presence, including a direct sales network and our nationwide service network give us unique advantages and position us well for driving sustained multiyear growth. Recently, we began working on a new transformation strategy that will drive growth, improve profitability and unlock value for the business. This exciting strategy, titled Project Udaan, will propel us towards our vision of transforming into a vibrant D2C health and hygiene leader, delivering sustained and profitable growth. Let me say that again. It will propel us towards our vision of transforming into a vibrant D2C health and hygiene leader, delivering sustained and profitable growth through a strong product portfolio, best-in-class innovations and obsessive focus on customer service, all delivered through our digital-first model. Towards this, I would now like to outline the new strategy and the themes that we are working on. Our first strategic pillar is to grow the water business, both by growing the category as also by driving differentiation and premium innovations. Water purifiers in India have a very low penetration of only 5%, and we will focus on driving accessibility, relevance and affordability to address the category barriers and drive growth. Our recent campaigns launched in quarter 4, titled Nal se kapda hatega toh Sar se kapda hatega, aimed at the cloth and sieve users, along with products priced affordably starting at INR 6,499 were steps in that direction. In addition, we will also drive premium innovations to serve customers who are becoming more discerning and design conscious and looking for new differentiated products and new features from what they buy. The second pillar of the strategy will be to grow the categories of cleaning and air. In cleaning, there is both a category growth task as also a premiumization agenda, and we will grow the business through a portfolio that addresses both. Given the increasingly poor air quality across the country, we believe that air purifiers offer significant potential and our role here will be to nurture and incubate the category and drive consumer education and awareness. The third strategic theme is about transforming our customer experience. Today's customers expect control, convenience and speed, and we have several initiatives lined up that will give customers a much better and completely reimagined experience. We will give customers the ability to schedule and monitor their service and provide ratings and feedback. In addition, we'll also equip a service network with digital tools that will in turn help them provide seamless service delivery to our customers. Our fourth pillar is about operating with leaner cost structures and a much more efficient operating model. We have put in place a structured program to drive efficiencies and execution is underway in the areas of productivity, cost negotiations, and control on spends. Our scope of work covers not just cost, but cash optimization as well, to create the headroom for growth and for investments. Technology is now all pervasive and being digital first is our fifth strategic pillar. We believe digital will play a critical role in leveraging our 8 million-plus customer base and the large network of field force and channel partners. We have embarked on a digital strategy aimed at improving customer experience, employee and partner experience as also at driving agility. Our digital assets are being rebuilt and will be optimized for delivering convenience, engagement and commerce to our customers. Finally, our army of proud, passionate and committed Eurochamps will be the sixth and the most critical pillar. We are building a team that will be an exciting amalgam of experience and fresh talent, and this will be critical in driving the transformation agenda. We have strengthened the leadership team by hiring at various levels across functions and across the organization. In addition, we are building the culture focused on customer centricity, collaboration, agility, ownership and accountability. In summary, we are excited about the opportunity of driving growth and profitability on the back of innovations and improved customer experience and a more efficient operating model. I will now turn my attention to quarter 4 FY '23 and full year FY '23. In quarter 4, consumer demand continued to be subdued and was reflected in our top line growth. Our net revenue stood at INR 508.1 crores, a decline of 8% over last year. During the quarter, we launched a new range in water purifiers, including Aquaguard Superio, Blaze and Eden. We also launched our latest range of robotic vacuum cleaners. Our EBITDA in quarter 4 FY '23 was INR 47.4 crores at 9.3% of revenue and a growth of 35.6% over last year. Our operational efficiency initiatives reflected in a sequential and year-on-year improvement in our EBITDA margins. Most importantly, our Q3 and Q4 margins reflect a decisive shift in our margin trajectory, up from our past levels of low to mid-single digits. Similarly, better cash management enabled reduction in our net debt by 70% plus, thereby creating headroom to invest in growth. We aim to significantly step up our CapEx in FY '24 to support the growth and retargeting agenda. On FY basis, net revenue came in at INR 2,080.4 crores, a growth of 2.2% year-on-year. EBITDA for the year stood at INR 131.7 crores at 6.3% of revenue. In summary, we have started off on an exciting transformation journey, Project Udaan, that will fundamentally reshape our business, unlock growth and profitability, and help us evolve into a D2C health and hygiene powerhouse. We look forward to sharing updates with you about this in the quarters ahead. I will now hand you over to Gaurav, our CFO, who will provide more color on the financial performance and the numbers. Over to you, Gaurav.

Thank you, Pratik. Good afternoon, everyone, and thank you for joining us. Starting off with the quarter 4 performance. During the quarter, our revenue was INR 508.1 crores, and we grew by 8% on a year-on-year basis. This was due to a combination of a soft demand environment and some impact of transformation, including portfolio rationalization. EBITDA grew by 35.6% year-on-year to INR 47.4 crores, leading to a margin of 9.3%, an expansion of 300 basis points versus previous year and also a sequential improvement by 61 basis points. Improvement in year-on-year EBITDA margins was driven by a combination of cost initiatives and a relatively soft commodity environment. Net debt reduced from INR 177 crores as at end of March '22 to INR 50 crores as at end of March '23, a 72% reduction. This was on the back of focused transformation initiatives in the areas of digital collection and improved inventory management. And this was reflected in our finance cost, which reduced by 47.9% from INR 6.7 crores to INR 3.4 crores in quarter 4. We believe that the combination of an improved margin profile and lower debt gives us headroom for growth investments. Aided by EBITDA margin expansion and lower finance costs, our PBT before exceptional items grew by 120.9% to INR 35 crores. PBT margin for the quarter was at 6.9%, an expansion of 400 basis points year-on-year. During the course of the year, we've made several choices to ensure focus on our core portfolio. Continuing with that in quarter 4, we recorded an exceptional charge of INR 9.1 crores related to closure of non-core product lines. PAT was INR 16.3 crores compared to INR 8.2 crores in Q4 FY '22, an increase of 98%. I now move on to the full year performance. Our revenue for the year was INR 2,080.4 crores, up 2.2% year-on-year. EBITDA for the year grew 20.2% to INR 131.7 crores. EBITDA margin was 6.3%, an expansion of 94 basis points year-on-year. Depreciation and amortization expenses increased to INR 55.3 crores compared with INR 31 crores last year due to the full year impact of amortization of intangible assets. PBT before exceptional items grew by 19.5% to INR 67 crores. PAT was INR 17.1 crores compared to INR 26.3 crores last year, with the drop being attributable to exceptional charges. To summarize, we have embarked on an exciting journey of transformation under Project Udaan. With our strong brands, omnichannel presence, wide service coverage and the energy of our Eurochamp and partners, we believe that we are well placed to drive long-term growth and profitable growth. The initial impact of our early initiatives is visible in our profitability and cash flows, and we intend to make steady progress on other transformation fronts as well. On that note, I would now like to hand over for Q&A.

[Operator Instructions] The first question is from the line of Vimal Gohil from Alchemy Capital Management.

Yes, sir. And great to have you guys on the first ever conference call.

Mr. Gohil, sorry to interrupt you. Please increase the volume of your device.

Yes, is it better now?

Yes, sir. Thank you.

Yes. Great. Sir, my first question is on the overall demand environment. While you highlighted that it's been soft, but are you seeing some signs of improvement of late? That's question number one. And the question number two is on margins. While there has been significant improvement, how do you think about it from here on? And what will be the primary levers of margins going forward?

So I'll take on the first question and request Gaurav to chip in on the margin question. On your first question about our expectation of the change in trajectory, as I mentioned in my opening remarks, we have been faced with a reasonably tough macro environment in the last couple of quarters. We expect that with the coming festive season, that demand environment should begin to improve. We are seeing a few green shoots, but I would say not appreciably so. And we expect the demand curve to shift only coming the festive season. Gaurav?

Yes. Commenting on the margins. So we see margin expansion over a period of time as an outcome of all the work that we do under our transformation agenda of growth and customer service. Having said that, we do recognize the need for operational efficiencies. And hence, one of the strategic pillars is about leaner cost structures. We have put in place a structured program to drive efficiencies. And as we speak, execution is underway in several areas, as an example, productivity, cost negotiations, and strong control on spend. The first step in this journey is reflected in our quarter 3 and quarter 4 results, which represent a break from our past EBITDA trajectory. Also, I would want to add that our work in this area would not just be limited to cost, but would also encompass cash initiatives to keep providing the fuel for growth investments.

So Gaurav, where do you see the levers come? I mean, considering the fact that the demand is going to remain slightly challenging for a couple of quarters, where do you see the levers coming from? And what are the challenges? Because my assumption here is that you would have also taken up some legacy related issues in the company. So how are you meeting those? If you can just help us understand that.

Yes, I think the margin expansion would be a combination, as I mentioned, of growth and improving our customer service. But again, cost continues to be an area of focus, and that is something where the work will be ongoing. So that would remain a lever available for margin expansion. And of course, growth would add on top of it.

Just to add to that, I spoke about the transformation into being a digital first organization. As we start implementing our digital solutions, it will have an impact on improving productivity and cutting costs. So even outside of the growth lever, we feel reasonably confident that we have the elbow room to improve productivity and to cut the inefficiencies and wastage and improve margins.

[Operator Instructions] The next question is from the line of Swati Hiroo from Ratnabali Investments.

So like you just mentioned, the water purifier industry has a penetration of about 5%. So clearly, people are not perceiving this to be a necessity in their homes. So you being a market leader, like how do you plan to address this challenge?

Thank you, Swati. Thank you for the question. And yes, you're right. Despite the fact that the water quality in India is distressed, the penetration in the country of water purifier is still 5%. Urban has a higher penetration of 12%, rural is 3%. If you double check on the non-users, there are broadly three segments that emerge. One is a segment of customers who use cloth filters, cloth and sieve. They believe they are taking some action to at least remove the physical impurity, but they take no other action. Then there's a large segment of customers who use boiling as an intervention, and a large segment of customers who also use bottled water. There remains a small cohort of customers who also take -- who make no intervention, who just drink tap water. We have identified the category barriers and the triggers for each of these segments. For instance, the customers who use cloth and sieve filters, the barriers that we have, while unlocking their behavior, there are two barriers. Fundamentally, they believe that they're taking some action and that they are doing something to improve the quality of water. In their case, a campaign, that we reach out to them and tell them that cloth filters are not enough. They do not kill bacteria. They do not kill viruses. And on top of that, we have provided a solution that's affordably priced, starting INR 6,499 for a UV product, combined with distribution expansion and combined with outreach through an aggressive advertising campaign. So identifying barriers to category growth, investing in the right products at the right price points, supported by category creating communication and distribution expansion will be the levers of growth for us.

Okay. And what would be the management's guidance, say, on top line and bottom line 3 years down the line?

Swati, I think, I want to step back and reiterate what I said in my opening remarks, that we are fortunate to operate in categories with tremendous headroom for growth. We also are fortunate to have a customer base who is becoming increasingly sensitive and aware about the importance of health and hygiene. As we address category barriers, as we drive innovation, we expect to see sustained multiyear growth in all our categories. We would refrain from providing the guidance, but suffice it is to say that we see a long runway for growth across all categories, across all consumer segments, not just in category growth, but at multiple price points. As we know, India, there are price points, there's a penetration task and a category growth task. There's equally an upgradation task and a differentiation and premiumization task. And we will participate in all these segments and address all the consumer opportunities. So there is no paucity or scarcity of growth opportunities, and we are excited by the prospect.

[Operator Instructions] The next question is from the line of Harshit Kapadia from Elara Capital.

Congratulations for a strong margin performance in this challenging environment. So two questions from my side. Since you have rationalized your categories, I believe we have closed some of your categories like HC and probably Coronaguard. Are you going to further see any kind of a write-off happening in this financial year FY '24? That is the first question. And secondly, at the AGM, Eureka Forbes AGM, Pratik sir had mentioned about that you would want to benchmark your margins to the industry level. Now, when you consider your nearest peer as your benchmark or do you consider consume electrical industry as a benchmark?

Can you repeat the question, please, the last part? It wasn't very clear.

Yes. So when you had mentioned at the AGM, you generally would want to achieve your margins very much close to your industry peers. Are you referring to your closest industry peers? Or are you referring only to the electrical industry peers, just to get a sense?

Yes. Thank you, Harshit, for your question. So on the first one, what we've done so far as far as the portfolio is concerned is exited those product lines, which were of a scale, which did not contribute meaningfully to the business. So it's about Health Conditioners, it's about Coronaguard, it's about our securities division and most recently about a B2B Forbes cleaning service portfolio. So that is something that we've made a choice around it. Going ahead, we will continue to keep looking at the opportunities that are there to see what are the margin accretive choices that can be made and basis that we would keep taking decisions.

Harshit, if I can comment on your second question about our benchmarking. We benchmark and we look at peers both who are more proximate in the categories that we operate in and also the largest space of consumer developers and the even larger space of consumer companies. As we look at our margin opportunity, we have to keep two things in mind. There's, of course, the need to improve profitability to make sure we reduce wastage, increase productivity, drive digitalization, get the right portfolio mix and the right cost structure. There's also equally the need for us to make sure we make the right investment choices. And the margins that we will, therefore, arrive at will be a combination of these two. I think we made the point in our opening remarks that we see headroom for margin expansion and also we see headroom for significant growth. And that will be the journey for us in the years ahead, in the quarters ahead, to drive sustainable and to drive profitable growth for our portfolio.

Fair enough, sir. Just if I could slip in one more question. We have seen -- if I look at Eureka Forbes for the last 10-year period, FY '12 to FY '16, we have seen a CAGR of close to 11% to 12% in revenue growth. But last 5 years, FY '17 to '21, the growth has been more or less challenging for Eureka Forbes. So if you can highlight what has been the issues that Eureka Forbes was having? And also, how are some of the issues being addressed by this new management? And what is the market share present of Eureka Forbes and any target that you have in mind to achieve market share in water purifier space?

Yes. So let me try and address that one question, which actually was three questions, Harshit, but let me just try and respond to that. I think on your first question that in the recent past, Eureka Forbes has had a bit of a growth challenge. There are two or three reasons for it. First of all, in the vital environment, in the last 4 or 5 years, there have been challenges in terms of demonetization followed by GSTs and of course, the last couple of years of COVID. So there's been a structural challenge that the category has faced itself. Apart from that, there have been two or three challenges that Eureka Forbes has had to deal with. The first one is, I think, the underinvestment we made in innovation. And we've allowed ourselves to slip versus competition. So that is something that has clearly hurt us, number one. Number two, the fact that we have downsized some of our channels to drive efficiencies and to cut costs. And I'm talking of 2018, 2019, not in the recent past. Without creating the commensurate strength in other channels that has impacted business as well. We recognize the need for us to build a strong portfolio of products, which are differentiated, which are competitive, which restore thought leadership. And you will see us driving innovation very aggressively in the period ahead. Innovation that will both grow penetration at the bottom end of the market, but equally importantly, drive premium propositions, both in water and in the other categories. On your question of market share, I think we are fortunate to have an omnichannel presence that straddles retail, straddles direct, and of course, straddles e-commerce. And we are fortunate to have a strong market share in all of these channels. And as a result of which we are strong market leaders both in water and in cleaning. And our objective going forward is, of course, to make sure that not only do we drive category growth, but we also increase our share presence in all these categories. That said, I think it's important to recognize that the battle here is not as competitive as it has to be one of driving overall category growth. But we will remain competitive and we will drive share gain as well.

The next question is from the line of Charanjit Singh from DSP Mutual Fund.

Thanks for the good show in terms of the numbers on the margin front. So my first question is, sir, if you look at the channel mix, how it has changed once we have taken over and we used to have more and more of direct channels, which got impacted during the COVID and how those things are shaping up? Second is on the service part. Service part is an important part in this business. How large is that currently and with a very strong on the feet or ground presence, how we see that service part also scaling up within this overall business pie?

Thank you, Charanjit. Let me respond to your first question to begin with. Like I said earlier in my response to Harshit, we have a strong channel mosaic across direct sales. But as you know, we were the pioneers. We have a strong presence in retail, both general trade and modern trade, and we have a strong and growing presence in e-commerce. Over the last 1 year, we've made attempts and we made interventions in strengthening our play in each of these channels. In our digital sales channel, we have empowered the team with strong and high-quality digital leads. We are enabling them in the future with digitally enabled sales tools, which allow them to drive much higher productivity. The direct sales channel, as you know, is a source of strength for us and differentiation for us. It's a channel where we have a customer in dialogue with us for almost 45 minutes to an hour. And it's a very powerful asset that we intend to use to drive conversions, especially of premium water purifiers and of new concepts, which require category education, consumer education and category creation. So that's on direct sales. In retail, both in general trade and modern trade, our focus has been on driving on-ground execution excellence, in driving distribution expansion, and ensuring that we have visibility and we have the right portfolio in both of these channels. In e-commerce, we are fortunate to have a very strong relationship with all key marketplace players. And we built a portfolio of products that have allowed us to deliver very strong growth and also to gain share. So overall, from a product point of view, we have a strong presence across all channels, and we have distinct plans and very specific plans at growing our revenues, growing our share through each of these channels. Coming to the service question that you had, you're absolutely right. Services are a very, very important channel for us. It is a source of customer connect. Hundreds of our business partners and thousands of our technicians across the country help us forge an ongoing relationship with millions of customers. And we are using this network, as I mentioned earlier, reinventing the service experience and the customer experience through digital enablers. I think all of us know that today's customers, they live in a world where they're going to expect 10-minute grocery delivery as normal. They expect on-demand service, service at their fingertips, they expect control, they expect visibility. We will transform and reimagine our entire service experience to deliver all of this, to deliver convenience, to deliver control and above all to deliver productivity to our customers. And therefore, elevating the customer experience will be one big part of our strategy. I think with the network that we have, on-ground network, our partners, our employees, complemented with powerful digital enablers will allow us to completely reimagine the customer experience.

The next question is from the line of Nitin Arora from Axis Mutual Fund.

I'm sorry, I'm again harping you on growth. As you said that you are the market leader, you see enabilization of digitization, you will get the category also growing, you will gain market share also. But just leaving aside all these things, last 10 years category growth itself has been 10%, 12%. So just in your sense, what do you see a change in the category growth? If you can throw some light on that, that will be really helpful.

Nitin, I think it's a fair question and it's a good question, for what is the likely outlook of the category in the future. And of course, as I mentioned earlier, the category has structural tailwinds that are going to help the category move forward. The tailwinds I spoke about of growing hygiene needs and awareness, the pipe water availability, electrification, all the structural tailwinds. I think it's up to players like us to then ride on these tailwinds and created propositions for customers, create moments of conversion, which allow our customers to convert much faster. I think, it would be fair to say that without putting a number on it, I mean, eventually, the number that the category will grow by will be a function of multiple things, including macros. It would be hard to put a number down, but it would be fair to say that the groundwork and the base is ripe for a breakout in terms of growth, well above the numbers of 10%. Yes, but when will it happen? How fast will it happen? Hard to say. Because there are other variables at play as well. But structurally, I think the category is well poised to move, to grow at a faster pace. Again, I want to sort of caveat that by saying that it's a function of multiple things, some within the control of the industry players, some outside, but the structural tailwinds are out there.

Got it. Second aspect in terms of your distribution. So do you see further the channel which you spoke about? Do you have still headroom to grow your distribution or rather than just bearing the fruit of your distribution by having more stickiness to customer conversion? Or do you see distribution also expanding? You have that scope there as well?

Nitin, absolutely. I think there is significant headroom for us to grow our distribution presence and our footprint in the country across all our channels. Let me start by talking about the channel where -- which is -- which connects through trade, which is general trade channel in the country. I think as we start growing the category, as we start putting the right products and the right price points, we create a virtuous cycle by which we'll also help grow the category distribution and the category footprint. Today, we are still available as a category in a small proportion, small percentage of the small domestic appliances universe. And therefore, there is abundant headroom for us as a category and indeed as a company to grow distribution in retail. That's number one. Number two, indirect sales. As we work through the network of our own employees and our direct channel partners, we see room to grow the footprint, penetrate more markets and drive, like I said earlier, the new categories, premium propositions and the new concepts. The e-commerce, of course, as we all know, is a story of channel growth and channel expansion, both in metros and in small towns, and we are seeing tremendous tailwinds for the category and for us in the channels. Lastly, the service network. I think, we have a strong presence in the largest -- among the largest service networks in the country. As we grow the product portfolio, we will, in turn, create the enabler for the service network to expand as well. So I mean, just to summarize, I think there is abundant headroom that we see across all channels in driving distribution growth, in driving availability growth and driving execution excellence.

That's helpful, Pratik. Just one, if I can squeeze in. And generally, in your P&L, we see a service charge, which is a very high number. And I'm assuming the services part is on your payrolls versus -- I'm not talking about the unorganized, but let's say, a decent-sized market share player. We don't see the service charges on this P&L that much. And I'm assuming it's their way of they doing their servicing business -- way of doing servicing business. Is this going to materially change going forward? If you can throw some light on that? That's my last question.

Sure. Nitin, I'll step in. So first, just to throw some color on what this charge represents. So this is largely the charges that we pay for installation, for complaint handling, for call handling, et cetera. This is what this charge is about. I just want to clarify that this is something that the people who do it are not on the roles of the company. They are the ones who work with our business partners. What we've seen so far is that this is an area which is absolutely amenable to digitization. As we digitize our processes, as we improve our tasks, as we get more and more customer-centric, we will see that cycle playing out, our complaints going down, our turnaround times improving. And this is one area where we believe that digitization will play out in terms of bearing efficiencies over a period of time.

If I can just add to that and just give one more sort of contextual point there, Nitin. Today, roughly -- just a little over 50% of our complaints and our calls still come through a call center. That number has been reducing over the last few quarters, as you can imagine. But there is abundant room even now to move this number up and to move most of the traffic to our own digital assets. As that happens, we will improve -- of course, we'll reduce costs, we'll improve reliability, improve speed and in general, improve the overall customer experience. And there could be many examples like that, if we could cite to talk about the headroom we have in driving efficiencies there. But equally important in improving the overall customer experience.

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

Two questions. One, can you articulate our distribution structure? What are the touch points that we are having over a period of past 3 years, how it has increased? And how do you see the distribution changing over next 3 to 4 years? That is one question. And secondly, some of the products that we have in the automatic vacuum cleaner...

Sorry to interrupt you, Mr. Joshi. The audio is not clear. Please use the handset.

Yes. I'm in -- on handset only. Is it okay now?

Yes, please go ahead.

Yes. Sir, the first question is about the distribution, how it has changed? And what is our distribution strategy as far as the number of outlets, distributors? And how do we see the going forward that? And second question is also on some of the products which we have introduced are automatic vacuum cleaners, et cetera. So do you see really, there existing market for such kind of products? And again, if you can indicate our market shares, which are there across key products? Yes, that's it from my side.

Let me attempt to answer both of them. On the distribution structure, we have four channels that we work with. The first channel that we have is our direct sales channel. Eureka Forbes was the first company to introduce a direct-to-home sales channel 40 years ago, and that remains one of our larger channels for us. Within that, we have both our company employees on network and also network managed by our direct franchise partners. So that is a direct sales channel. We also have a retail network, which goes to distributors and from them to retail outlets across the country. We also have the modern trade channel, where we have direct accounts that we work with, both national modern trade and regional modern trade. We also have direct dealers whom we service directly. The third channel that we have is e-commerce with the marketplaces that we work with. And the fourth channel that we have is a large channel, which has service. And that we work through our service partners, who in turn employ service technicians. So those are the four channels that we work through. Over the years, as you can imagine, e-commerce and retail have grown in contribution because they've grown faster. And direct has become smaller, but still remains a significant part of the revenue mix. On your second question, Aniruddha, on the products and the vacuum cleaners. If I look at the vacuum cleaner category and pull out a little bit, as I mentioned in my opening remarks, the category still has low penetration. One reason for that is there is, in India, the habit of using domestic help for household cleaning. However, in the last 3 years, for obvious reasons, I think everyone realized the importance of having a cleaning solution, which was outside of the domestic help context. And all our research shows that the space of convenient cleaning is going to become very large. And when we say convenient cleaning, we mean cleaning that is less laborious, that is automated, and that allows the homemaker or the family member to have the house cleaned either primary cleaning or top-up cleaning with minimal effort. So the space of convenient cleaning, robotic vacuum cleaners, upright vacuum cleaners, we believe we will see strong growth over the next few years. And we intend to participate in that. Equally, the conventional vacuum cleaners are also seeing some tailwinds for similar reasons, but albeit at different price points, a different price point. So therefore, certainly, I think there is a market for premium and convenient cleaning products, both robotics and upright. And we will -- we have a portfolio and we're building a stronger portfolio in these spaces.