HPL Electric & Power Limited (HPL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the HPL Electric & Power Q3 and 9 months FY '22 Earnings conference call hosted by Elara Securities Private Limited. [Operator Instructions] I would now like to hand the conference over to Mr. Harshit Kapadia from Elara Securities Private Limited. Thank you, and over to you, sir.

Thank you, Dennis. Good afternoon, everyone. On behalf of Elara Securities, we welcome you all for the Q3 FY '22 and 9-month FY '22 conference call of HPL Electric & Power Limited. I take this opportunity to welcome the management of HPL Electric & Power represented by Mr. Gautam Seth, Joint Managing Director; and Mr. Rishi Seth, Managing Director. We will begin the call with a brief overview by the management after which we will start with the Q&A session. I will now hand over the call to Gautam for his opening remarks. Over to you, sir.

Yes. Thank you, Harshit. Good evening, everyone, and thank you for joining us on this earnings call of HPL Electric & Power to discuss the financial and operating performance for the third quarter and 9 months ending the financial year 2022. At the outset, I hope all of you and your family and loved ones are healthy, safe, and sound. To give you an update on Q3 FY '22 performance, the company's revenue grew by 15% year-on-year to INR 280 crores during Q3 FY '22 with the economy returning to normalcy, coupled with the rise in consumer spending. EBITDA during the quarter stood at INR 37 crores, the EBITDA contracted marginally in Q3 FY '22 due to the rise in raw material prices led by supply-related shortages of chips, higher metal, and industrial plastic prices. The other expenses increased due to the higher marketing spend. However, lower employee expenses restricted for the margin contraction. Our cash profit stood at INR 21 crores during the third quarter. Discussing our segment-wise performance, the metering business contributed INR 113 crores to the top line during Q3 FY '22, impacted by the shortage of semiconductor chips and key raw material components. The chip supply-related disruption is expected to improve post Q2 FY '23. HPL is in a sweet spot to benefit from the government's ambition towards the installation of 25 crore smart meters across the nation by 2025. The Consumer and Industrial segment surged by 25% year-on-year to INR 168 crores, led by an increase in spending and resumption of construction activities in Q3. The Switchgear segment grew by 9% year-on-year to INR 54 crores. The Lighting segment revenue grew by 14% year-on-year to INR 74 crores in Q3. The Wire and Cable segment surged by 95% year-on-year to INR 39 crores in Q3 FY '22. The B2C business enjoys the 66% revenue share of the company's top line in Q3 as against 61% in the previous year. Thanks to the strong in-house R&D capabilities, the company has been making swift inroads towards exports through its diversified product portfolio. As a result, HPL's exports grew by 25% year-on-year in Q3 and 41% in 9 months FY '22 despite COVID-19 restrictions in several countries. The company's export order book remains strong as it is ties to tap the opportunities in the export market. Now to give you an outlook for the rest of the financial year 2022, the HPL order book remains robust and at an all-time high of INR 879 crores ensuring revenue visibility for the coming quarters. Additionally, the company has over 275 crores smart meter orders which are likely to be executed in the coming quarters. The smart meter industry is one of the beneficiaries under the government's ambitious Atmanirbhar Bharat initiative. The installation of smart meters is likely to accelerate with the centers funding to the state under the national smart grid mission and IPDS, backed by revamped distribution sector schemes. The smart meter industry has received the much-desired boost with the government's drive towards allocating INR 225 billion to install INR 25 crore smart meters across India, under the INR 3 lakh crore power distribution scheme. Acknowledging the fact that there are 37.3 lakh smart meters have been installed till date, the government is likely to float large tenders in the coming quarters for installation of smart meters to meet its ambitious target. The company is continuously evaluating and bidding for metering tenders in the pipeline. HPL Electric is confident to bag new orders in the near term. HPL Electric's electrical equipment vertical caters to various market segments through its diversified product portfolio. The company maintains a favorable stance for its consumer and industrial business growth trajectory, led by reopening of the economy, positive consumer sentiment, and introduction of new products. HPL Electric's management strives to maintain a balanced approach towards the company's leverage and liquidity profile. The company benefits from its low CapEx stance as it has adequate capacity for fueling its medium-term growth plans. The consumer business is gaining traction backed by a diverse product portfolio, robust distribution network, and brand building initiatives. On that, I would request the operator to open the floor for Q&A. Thank you.

[Operator Instructions] The first question is from the line of Monica Arora from ShareGiants Wealth.

Sir, as we see that the government has increased its focus on the infrastructure development, so do we see any rise in tenders by the government or from the DISCOMs and all, especially when we are talking about smart meters?

So when we look at the overall scenario in the smart meter business, there is definitely an increase of tenders which are coming, both the central as well as the state level tenders which are coming out. So in terms of value, of course, it's difficult to estimate, but anything, if you look at the near term business, we would expect almost more than 1 crore meters coming out per annum. And the government, of course, has fixed a very ambitious target under the various schemes what it has. And also, apart from that, the government has been allocating various budgets towards the procurement of the smart meter. So eventually, the target is to reach to the 25 crore prepaid smart meters by 2025, it may -- the rollout may be a little delayed. But overall, if you look at and even by end of 2023, the 10 crores meters being installed is, of course, a huge requirement or asked by the government. And thereafter, what we see is a lot of tenders which are coming out. So as an estimated rough value like what the industry is talking about is anything about over 10,000 crores right now, the various tenders, which are in circulation.

Okay. Okay. And sir, we see that there are chip shortages globally. So how is the mitigating that shortage?

So in case of the chip shortage, it is currently still going on. We were hoping that by April or May, it will get reduced, but it is not happening like that because the capacity, the demand is going above the supply. So -- but as HPL, if you have seen in the quarter in which we are reporting, we have had higher production and sales of our smart meters. And that is continuing to do even in this quarter. And so we are hoping that every quarter, we'll be able to grow up our demand and that is what it is going. But maybe within a period of 5 to 6 months, we expect that things will be starting to get normal, and it will take around 12 months by which it will be fully normal.

Yes. Although apart from this, we are also -- we have already -- we have covered for many months -- in terms of the forward booking with various global suppliers, we have almost -- our next 12 months requirements are already booked with supply, but as we see the shortages coming and normally, these are all very large global suppliers, but it's something universal across various industries. But despite of that, still, we expect in the next couple of months, the overall situation should improve, and that should help us because we already have a strong order book, as well as a large inquiry base.

Okay. Okay. And just if I could squeeze in one more question. What is, like -- not a ballpark figure if you can give me. What is the kind of market share we command in the smart meter segment? And any measures taken by the company to improve which shares over the like I'm asking about a long-term period?

Okay. So the smart meter segment has just started. So in 2022, we saw the ball rolling and the smart meters there. And we can say right now that we have a substantial share, because the major tenders are yet to take off. They are here to come. So once the major orders will be decided, then the market share will get to know. But right now, we have a substantial market share.

Okay. Okay. And are you seeing that traction is there in this, like these orders are supposed to come in near future?

Not traction. It is full-blown traction. And the orders are -- the tenders in the pipeline are in very large volumes, as Mr. Gautam was just saying so. And it is -- it will take another just 3, 4 months, and the finalization will start at a very fast pace because the deployment also has to be done very quickly. So everything is now moving, the entire chain of events is moving very fast to see that the orders are placed quickly and the deployment starts very fast.

Yes. Yes. Just to add to what Mr. Rishi was saying, we are taking a lot of proactive measures to ensure that our market share traditionally, in the earlier part of the -- in the conventional meters, we were always at 20%, 25%, but now the company has -- we have worked on our design, on our R&D, our manufacturing capabilities are all in place. So a lot of work has been done in the past 2 years to ensure the readiness to exploit the big opportunity of the smart meters. So when -- as and when it gets rolling, we are confident of grabbing a large market share in this. And -- but as the overall -- the smart meters evolved, -- so that would really help the company to grow in terms of revenue as well as the margins here.

[Operator Instructions] The next question is from the line of Kritika Jain from Sequent Investment.

Sir, as there has been a drive-in raw material price lately, so are there any plans or have you taken any price hikes for any product, or are they going to take them in the future?

Yes. So we have already initiated the price increase in all our -- across all segments. And we are -- from March or 1st of April, they will get implemented. Across segments, all price lists have been increased, and they have been circulated -- they are in the process of getting circulated into the market.

Okay sir, understood. Also, sir, what is our vision for the B2C segment for the coming quarters?

Yes. So since -- if you see since the last almost 6 quarters, there has been a good traction and growth across all our B2C segments, which consists of the lighting, the switchgears, wire, and cables. And even going forward, we are -- we will continue to see the same kind of traction going forward. So I'll just take up more individually on each of them. So if you look at the Wire and Cable segment, the last quarter has seen almost a 95% surge in that. Of course, some part of the increase can be attributed to the raw material cost going up. But nevertheless, there is a huge increase in the overall volumes and the quantity of materials being sold. So even looking at the immediate Q4 and as well as maybe the next 1 year, we would see -- continue to see the wire and cable segment growing up more because even the building segment is resuming, we are seeing certain activities pick up in many areas, especially in Tier 2 and Tier 3 cities, but also the overall retail part is going up. There has been a slight slowdown if you see in the second half of -- in the last part of December and the beginning of January because of the third wave coming and certain markets getting closed down. In fact, even if you see the Delhi market was practically close for 2 weeks with the odd-even and the night curfews. But now again, things are getting back. So overall, we would see this quarter gaining back on the volumes and happening. Switchgear, of course, has been seeing a steady growth in the first 9 months of this year. We've had a 28% growth in the Switchgear segment. So we would continue to see that happen even going forward in the next almost more than a year that would happen. The exports have been picking up and a large part of our sales in export markets to the 42 countries is our Switchgear. So we have been talking about it many times that our R&D since we do R&D on a large scale, we have compliances to the global standards. So that helps our Switchgears to get accepted in many countries, and especially in all the IC countries, which are there. So Switchgear also, we do see good growth. Lighting also we have seen good growth, although we saw a good Diwali. But even after the Diwali sales, the volumes are continuing to grow. So overall, just to summarize on that, the overall B2C business has been seeing good traction over the last 1.5 years. And even going forward, we see a good runway or good traction going forward. The one thing we need to remember is that especially in the Switchgear and in the Wire and Cables, these segments are prone to the commodity increases or the volatility in the industrial plastics and the metal prices, which are there. So in terms of that, those volatility will always remain. But despite that, the overall demand growth has been there, and we expect that to happen. The lockdowns have also seen certain readjustments in terms of brands, the unorganized segment has been shrinking. And I would say, going forward, the branded players HPL Electric is -- comes in that where we are known for our technology and quality. So we will definitely expect to go forward. And as in your last question, Mr. Rishi was sharing that we have been -- we are due to take another price increase in this quarter. But over the last 9 months also, we have -- there have been almost 4 to 5 increases in the wire and cable prices, even certain switchgear products have gone up. So as and when we see the prices of commodities going up, they get generally passed on to the consumer with a lag. So obviously, we have to see the competitive scenario as well of how -- what the competition is doing or how the market is reacting. But overall, these increases are being passed on to the consumer.

[Operator Instructions] Next question is from the line of Harshit Kapadia from Elara Securities.

So at the outset, let me first congratulate the management for giving a very good set of results in this challenging times and especially when compared to some of your peers, both on the revenue front as well as on the margin front.

Yes. Thank you.

And with that, the first question which I wanted to ask in terms of gross margin, we have seen a very limited amount of decline when we looked at how those you said, especially when the commodity prices are rising. So I just wanted to get some perspective, is this largely because of the price hikes you have taken in the last 9 months? And if you can highlight the quantum of the hike that you have taken? And something if you can highlight in Q3 specifically and going into Q4, do you further expect the commodity -- any price hike to happen on the commodity, as right now flattened a bit, there is no such increases needed? And secondly, on the revenue mix part of it, is this also a reason why the gross margins haven't seen a decline that much?

Yes. So of course, we -- as a company and with many of our segments, so we have been hit on the commodity prices going up. So there's no doubt in that. So we have seen all the metal prices going up. Our business is also dependent upon copper, we are very large users of all industrial plastics, whether it's polycarbonate or nylon or anything. So definitely, that has impacted. Now when you study our results, you will find that in the stand-alone company, HPL Electric, there has been an increase in consumption as well. And that is mainly because of the prices going up. But the overall, if you see on a consolidated level, the subsidiary, Himachal Energy, that has seen -- despite the certain increases in the commodities, that has seen so a better margin and as well as the consumption coming down. And I would say the overall margin increase is on 2 factors: one, better realization and better margin orders being executed at that time; and second is that certain old stocks, which were there, which were not moving now due to perhaps because of the COVID delays, those moved out in this quarter. So that gave us incremental margin, as well as the consumptions going down. So overall, if you see the -- yes, the gross margins have been down only in a -- fractionally down, and they remain at around 36.4%. But yes, internally, if you look at it, the commodities have had an impact on that. As a company, we are also -- one of the ways to improve our margins is definitely the revenue mix. So we are continuously working in each of the 4 segments to improve our revenue mix with a view to enhance the margin. Although, apart from all the products what we have seen in the Q3, wires and the lighting have just about maintained the margins. But in meter, we saw an improvement in margin. So of course, meters does not have too much of a metal play into them. But yes, plastics, or even as we discussed from the chip shortages, they definitely have an impact on the overall cost of consumption as compared to the sales. But there, the revenue mix as we see the smart meter traction coming better and our own internal product mix changing into smart meters, definitely, there will be a margin improvement going forward. So we have seen certain margin improvements in that year. So that is how it is. And definitely, yes, we have been impacted, although we are each time looking to pass on the pricing. In terms of wires, probably I will not have the immediate numbers in the last 9 months. But in the last 1 to 2 years, I think we've had a number of increases, maybe 15x to 20x the prices have gone up. 2, 3 times they have also come down in between whenever we have seen the global prices stagnate or even come down a bit. So generally, the prices in the wire segment are getting passed on to the consumer with a gap of maybe just 15, 20 days. Switchgear, we have seen almost one increase in the earlier part and one increase we will see in Q4 happening. Lighting also we have seen increase -- at least 2 increases happening. So more or less, the increases have been anywhere between 5% to 10% in the other segments. So wire, of course, has been higher. And that is how it is. In our utility segment, where we are looking at the tenders since the commodities have been volatile and have been going up since the last 1.5 years. So the newer tenders, what we are quoting, those have been quoted with keeping in view the prices -- the increased prices or the volatility, which is there. And also the shortages of any additional cost which it involves to procure those materials. So of course, there, we cannot pass on an immediate basis. But yes, we are aware of it as and when the prices are going up. And all the new tenders which have been participated have those costs covered up here.

So this was very helpful for a detailed answer. So what you mean to say is, you are able -- you can withstand this kind of gross margin and there's strong profitability that the margins can move upwards as the time passes?

Yes. Our EBITDA is around 13.3%. But looking at the volatility, it may be difficult to just give a guidance that we would probably just maintain it, although the efforts will be always there. But anywhere between 12% to 13% is somewhere which are sustainable EBITDA margins, which should happen. But then we are looking at -- when we look at the revenue growth that is something which seems much more certain. So in absolute terms, the EBITDA amount would really be going up. That's for sure. The percentage could vary depending upon the product mix as well as the volatility in the overall commodities.

Fair enough sir and my second question is on the other expense part of it. I believe that has increased, almost doubled in your revenue growth. Would that be because of largely the spend coming back because of the festive reason? Or is there any other cost element which is abnormally down this quarter? And is there any one-off kind of a thing?

So if you look at -- in-depth, there are almost 3 expense heads, which contribute to almost more than 90% of the increase. And if you look at the R&D and the meter testing, what is there because smart meters requires a lot of testing and R&D efforts. They have almost gone up by INR 2.77 crores in this quarter, as compared to last year. The advertising and sales promotion expenses have gone up by INR 3.25 crores. This is, again, based on certain local level advertising, which we have resumed now, which was on hold post the COVID. But of course, this has -- we have seen certain good incremental sales in the last 6 quarters. So I think on the B2C side, yes, we are looking to continue and spend this kind of money or invested in the brand. In terms -- then the third expenses on the freight, which has gone up by almost INR 0.75 crores. So roughly almost INR 7 crores of expense has gone up under only these 3 heads, and that's what -- when you see -- when you see the increase almost from INR 23 crores to INR 31 crores. So that has gone up. But yes, we are continuously reviewing the expenses as well apart from looking at the revenue growth, we also need to keep that under check. So just so that overall, we are able to maintain and grow the margins here.

[Operator Instructions] The next question is from the line of Preeti Nagpal from Global Investment.

Yes. Sir, what is your margin expectation in the next 2 years, margin and revenue?

So for the current year FY '22, because we are just already in the fourth quarter, so we would expect the growth to continue. In fact, in the first 9 months, our overall revenue growth is about 21%. So we do expect the revenue this year to be anywhere between INR 1,000 crores to INR 1,050 crores net of taxes. So this is how -- so we overall see the trend continuing for this year. Next year also, we do expect the overall growth to be in excess of over 20%. So anywhere we should be adding over INR 250 crores in the next year in terms of the revenue. We already have a good order book to start off with. This, of course, is subject to the availability of chips, which we hope that by the second half of the next year, it would improve. But if the demand really goes up or anything unexpected happens, then it could be a different way. But overall, we see that happening. We are also in the COVID times where things have been a little uncertain, but somehow the way it appears now, we seem to have the whole thing behind us. But if something unexpected happens, that may hamper it. But from a revenue point, we see the growth to happen. In terms of the margins, as I said earlier, I think anywhere between 12% to 13% on EBITDA margins, we see them to continue. That is the way look at it now. But definitely, efforts are there to make sure that things can -- that we improve. So maybe the commodity increases or the volatility does not last for long or it may even reverse back. So anything that happens can give us a better positive beyond that. So that is how we look at the next 2 years, yes.

Okay. Sir, could you throw some light on your distribution network? And are you planning to expand it going forward?

Yes, we have almost 800 to 900 dealers. And I've said it earlier also that we are looking to -- although we are looking to enhance our reach across the country, but over the last couple of years, we have, in fact, reduced our billing points. In fact, we have even got -- we have even improved on the quality of our dealers. We have got them under channel financing. So a lot of work has happened. But the real distribution network can be judged by the increase in the retailer base. So we are -- we already have over 40,000 retailers now who are authorized retailers, and that is continuously going up. So we have put in a new way of monitoring, our own staff, which are covering those retailers, as well as a complete system is there where we are geotracking the whole big plans, how the coverage is happening to the network. And this is something which is continuously going up. In the past also, we have said that in the near 2 to 3 years, we would like to at least expand to more than 100,000 retail points across the country. And I think we are on task with that. In terms of revenue, of course, you have seen the B2C growth in the last 6 quarters. So I think that is as a result of the activities which are happening on the network expansion.

[Operator Instructions] The next question is from the line of Kritika Jain from Sequent Investment.

Sir can you share a broader picture on the export market for the coming quarters as our exports are picking up, so could you please share that?

Yes, surely. Since last 2 years, we have seen the export market pick up pretty well, but also in -- that was despite the COVID restrictions, what was there throughout. But now since the overall the global markets are opening up, so we do expect even better growth going forward. What we have done since the last 2 years is that we have expanded our product portfolio going into the international markets. There is a lot of focus on testing and certifications happening. In fact, in the next quarter, we expect our entire range of domestic products, be it the MCBs, the RCCBs to get global certification. It's almost done. The last few tests are left. So in a way, we are very -- strategically, we have been working since the last 2 years on our product range, the go-to-market strategy. And therefore, we have been penetrating. With the COVID behind us, we are seeing that within the next few months, the exhibitions and the travel is resuming. So that would again help us to reach out to the global market share. So in all, we expect, at least for the next 1 year, we do expect the overall business to pick up in the export side as well.

Okay, sure. So also, could you share your capacity expansion plans, given that there would be an increase in tenders and orders?

Yes. In terms of our capacities, we -- we have been operating them around at 60% to 70%, depending upon the various product lines and the ranges what we have. Now if you see broadly, we -- we have, in the past, built up our capacities, and we have been utilizing them. Only certain routine CapEx needs to happen. But otherwise, broadly, our capacities are in place. In terms of -- if you see specifically in the Wire and Cable segment, we have seen an increase in the capacity utilization. We still feel that even in the next couple of quarters, we will really be going beyond that as well, beyond the current levels, probably there, we are even a little above 70% of our capacities. In terms of metering, which is our -- main product, we can easily be around 60% of our capacity. But in the past, sometimes we have even enhanced those. And today, we are -- we can do even more than 1 crore meters -- more than 10 million meters in a year. So in terms of our capacities, we already have those capacities in place. In fact, in meters, we are even -- we have even automated in certain parts of our smart metering lines. So we are pretty geared up for the opportunities we see coming ahead. When you look at switchgears and lighting, again, the capacity utilization as and when our sales are going up, the capacity utilizations are definitely improving. So when we look at it from here on, the business to go up by over 20% in the next year. So I'm sure the capacity utilizations would even get better from here.

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

Sir, this is dwelling on the meter [Indiscernible] Sir, earlier, PPT have highlighted that the pipeline of INR 10,000 crores. I just wanted to understand how much how period do you are talking about for the tender pipeline because earlier we used to give INR 2,000 crores, INR 3,000 crores was a reign for a 3-month period? So that would be the first question.

Yes. Now if you look at the way the tenders are coming out under the various schemes, these are all coupled with the various services which are attached to that. So these are more coming out now as a system. But if you look at the overall -- the tender inquiries which are coming out for the tender, so these are huge now. So there is a huge change in the overall scenario in the last 3 months. Although in terms of actual orders coming out, there have been a couple of them, which have been finalized, but still a very small portion only has been finalized. So a lot of it is very active. The government has come in -- has come up a lot of guidelines on -- even on the standard bidding document and other things. So a lot of clarity is there, and the vision and the push is very clear by the government and the state governments to come up with this. So going forward, we will see certain exceptional rises in terms of the tender activity, as well as the orders and some of these orders do have -- they have a lead time or even the execution time stretches beyond a year. So that is how it's going to come out with. Of course, it's just an estimate from our side, but if you look at the industry estimates, what was there about 6 months back and what is today, definitely, there is a huge increase in that. And I think this is still a very conservative figure, as we go ahead to the next year, by mid of next year, probably this figure could be much, much higher.

And sir, this is only smart meter -- as a product of smart meter solution, 10,000 crores?

It is with the solution. It is with the solution. So with the IT infrastructure or the software or the services or the maintenances, which are involved with that, this does involve the entire thing happening. So any tender which comes out, which is under evaluation, and if the services are also being evaluated, then it improves the amount.

Understood. And so how much would be smart meter is a product within this as a ballpark number, if you can suggest?

It is sometimes a little difficult to give a ballpark figure. But yes, if you are to assume something, so maybe 60% to 65% could be the meter cost as a business, and then there are the additional services which may extend even to a larger -- longer period.

Okay. And a follow-up question on the smart meter is, in your budget also, there was a large amount of import duty hikes -- sorry for that. For the meters, as well as on the company side. So I just wanted to get some perspectives for the overall smart meter market in India, how much is imported, do you have any sense on that? And in HPL also, how much is it manufactured in India, how much is import done by HPL, if you can share some insight, that would be helpful.

Yes. So if you look at the budget, what has happened, the smart meter, the government has put in duties of 25% on the smart meters. So that is, of course, in line with the government's initiative of Atmanirbhar Bharat where they would like the smart meters, like many other things to be manufactured locally. So I think that broadly make sure that, henceforth the smart meters would be -- whoever supplies it would be manufactured in India. Also what the government has done is that they have picked up almost 6 to 7 critical components, and over the next 3 to 4 years, they have given out the way that how the duties would go up with that, so that these eventually -- the incentive is that these components also would be manufactured in India. And I think that's a very positive step by the government to encourage the local manufacturing. And I think that is where we as a company stand to gain -- so the government has done that in a very positive manner. So as a company, we are very well backward integrated. We do complete electronics, complete plastic manufacturing. So entire fabrication, everything happens. What we are dependent upon outside and on imports is the electronic components and the semiconductor chips. So that comes from outside. But otherwise, as a manufacturing, whether even if there are certain critical components, so there are already, companies and various supply chain OEMs who are doing the manufacturing in India. So although there were people who were still importing from outside, but with the government's new initiative, of increasing the customs duty and encouraging the local manufacturing, this will eventually get shifted to India. So I think it's a very big positive for HPL Electric with the move that government has done in the current budget here.

And just to understand the cost dynamics of this. So is it increasing this, duty of 25%. Now are we at par with the import of smart meter cost or still the...

Harshit, I missed the initial part of your question. Can you just repeat it, please?

Sure, sure, sir. So I just wanted to check on the costing part of it. So with this increase in this 25%, in the increase in cost. Now are we at par with the import what do you manufacture in India or still the manufacturing cost is still a bit higher than import costs?

No, I think -- of course, there could be -- of course, we have no data on what people who are importing. But one thing for sure that with the 25% custom duty, which will be effective from first April. With that, obviously, the cost -- the details coming from outside will not be competitive for sure. So the shift will come back to the manufacturing happening in India, yes. So I would say, to make in India would be much more competitive than to just imported like this. And apart from that, there are also another 7 components where their costs would start going up here. So that again will make it much more beneficial for people to start manufacturing here.

The next question is from the line of Kritika Jain from Sequent Investment.

So just one more question from my side. Basically, what are the measures that we are undertaking to strengthen our brand visibility, given the fact that B2C contributes to over 50% of our top line?

So we have been doing a lot of activities, but I would say, post the lockdowns and the COVID, we have, on a short term, changed our advertising and the business promotion strategy. So we have been working on local level, a lot of needs happening, whether they are electrician or retailer needs. A lot of local activities we have been doing it, looking at the way the COVID lockdowns was there and other things. We felt that was something which was good. We've even invested in a lot of marketing people going and reaching out to the retailers, to the end consumers. So a lot of activity was based on that and on a local level, state-wise publicity happening. So I think that has given us good results. If you look at the last 6 quarters, there has been a good increase quarter-on-quarter in the entire B2C business. So going forward, although these activities would continue. But we will look at the way the situation is coming out and then look at any bigger ad spend here. So our aim is, of course, digitally, we have been very active right throughout the lockdown and also in every kind of social media platform, how to engage with our consumer, sending the mailers and other things. Those have been pretty active because we feel that the way of doing business has changed now, people -- there are different ways to reach out to the end consumers. So this is something which we have been really looking at it. And so with -- yes, so overall, the distribution system and the retailers and the dealers have also been increased. So lot of direct activities have happened here. And I would say for the near-term future, we will be continuing with some of these initiatives only and to reach out to the brand. And then once the overall business is at a much more sizable level or the markets are good. But overall, the market demands are back in the market, the market is good. So as we see more and more sales coming through and the growth is happening, definitely we are open to investing into the brand in a much bigger manner.

[Operator Instructions] Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Harshit Kapadia for closing comments.

Yes. We would like to thank the management of HPL Electric & Power for giving us the opportunity to hold this call. And also all the investors and analysts for joining for this call. Any last word, closing remarks, Gautam, sir?

Yes. I would just like to add that the company is -- we look forward to tap the underlying opportunities in both the segments, be it metering or the consumer and industrial business, and thereby create value for our shareholders there. So I thank all of you for joining us on this call. Please reach out to Dickenson World or to us directly should you have any further queries. I wish you all a great evening. Stay safe. We can now close the call. Thank you.

Thank you. On behalf of Elara Securities Private Limited, we conclude today's conference. Thank you for joining. You may now disconnect your lines.