Orient Electric Limited ($ORIENTELEC)

Ladies and gentlemen, good day, and welcome to the Orient Electric Limited Q4 FY '26 earnings conference call hosted by Ambit Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Dhruv Jain from Ambit Capital. Thank you, and over to you, sir.

Hello, everyone. Welcome to Orient Electric's 4Q FY '26 Earnings Call. From the management today, we have with us Mr. Ravindra Singh Negi, Managing Director and Chief Executive Officer; Mr. Arvind Vats, Chief Financial Officer; and Mr. Sambhav Jain, Head of Investor Relations. Thank you, and over to you, sir, for your opening remarks.

Thank you, Dhruv, and a very good evening to everyone, and a warm welcome to Orient Electric's Q4 and Full Year FY '26 Earnings Conference Call. Thank you for joining us today. I will begin by outlining the operating context for the quarter, followed by our performance highlights and key actions that we executed during this period. During the quarter, industry's operating environment was primarily affected by persistent commodity inflation, ongoing labor shortage and gas supply disruptions resulting from the West Asia crisis. Additionally, a softness in demand emerged coinciding with the unseasonal rains leading to a slow start for cooling categories. Elevated channel inventory prompted dealers to approach replenishment with caution. These challenges are expected to remain important factors to monitor going forward. Amid this unprecedented situation, we delivered a double-digit revenue growth in quarter 4 and further improving our EBITDA margins. Revenue from operations stood at INR 948 crores, up 10% year-on-year, supported by broad-based momentum across our portfolio. This performance reflects a disciplined execution of One Orient approach anchored in our 3-wall strategy that focuses on multiple growth avenues while extracting synergies from our established ecosystem, underpinned by premiumization, innovation, diversification and operational discipline. Importantly, our diversification engines continue to scale, improving the quality and resilience of growth across both lighting and ECD portfolios. Lighting and Switchgear remains a structural growth engine, delivering 16% year-on-year revenue growth. Driven by distribution expansion, portfolio premiumization and steady market share gains in Consumer Lighting. The Consumer Lighting business witnessed a double-digit growth with a meaningful improvement in volume to value conversion. Our share of high-value luminaries expanded to 68% versus 63% last year, supported by strong traction in key premium categories. Professional Luminaries were largely flat this quarter. However, we continue to see a strong project inquiry pipeline across street lighting and facade projects. Our emerging growth engines, switchgear and wires scaled well, delivering high double-digit growth. Wires doubled year-on-year, while switches and switchgears sustained a good momentum as we accelerated our electrician engagement initiatives and leveraged our fans and lighting distribution ecosystem for effective cross-sell. In the ECD segment, revenue grew 7.6% year-on-year despite softness across the industry. Growth was led by a strong on-ground execution in our DTM states, driving deeper penetration and market share gains. Fans delivered a high single-digit growth, outperforming peers driven by our distribution strategy and continued focus on premiumization and product development. Our BLDC portfolio grew over 50% year-on-year and now contributes 25% of domestic ceiling fans revenue, while our overall premium mix increased to approximately 35% of domestic fan revenue, up from 30% in the previous quarter. Premiumization and innovation-led launches remain a core pillar of our growth. A key highlight of the quarter was the introduction of Aero O2, India's first oxygen-enriching ceiling fan, powered by advanced bioxy plasma ion technology. This breakthrough innovation goes beyond air circulation to deliver fresher, healthier air across all seasons. The Samvad platform launched earlier this year has further improved service delivery experience by enabling deeper consumer insights and faster issue resolutions. This also demonstrates our commitment to consumer centricity, ensuring that customers receive prompt and personalized support at every touch point. Our appliances portfolio sustained its upward trajectory with strong traction in heating and garment care appliances and delivered high double-digit growth on our e-com platform. Our overall e-com business scaled with market share gains, delivering high double-digit growth, supported by a strong assortment, effective digital engagement and healthy consumer traction. Quick commerce now contributes 10% of our digital channel. During the quarter, we scaled our presence on big basket and now covering all major quick commerce platforms. Our exports business also grew at a double-digit rate, expanding our international presence across key markets. However, we are closely monitoring the geopolitical tensions in West Asia to manage any potential implications proactively. Operational discipline remains central to our approach. In the context of commodity inflation and the star rating transition, we implemented calibrated price actions of approximately upward of 4% in Q4. Our Sanchay program continued to deliver tangible benefits, translating into INR 68 crores of cost savings during FY '26 and supporting margin resilience. Gross margin for the quarter stood at 31%, impacted by commodity inflation. Despite this, EBITDA margin improved to 8.2% and absolute EBITDA at INR 77 crores, up 15.8% year-on-year. PAT stood at INR 40 crores, up 28.9% year-on-year, reflecting benefits of operating leverage. For the full year, revenue grew to INR 3,326 crores, up 7.5% year-on-year. EBITDA increased to INR 229 crores, up 12.4% year-on-year and PBT before exceptional items stood at about INR 139 crores, up 24.2% year-on-year. Overall, our FY '26 performance validates our long-term strategy centered around premiumization, innovation-led differentiation and a structurally strong go-to-market and service ecosystem, supported by sustained investments in brand building and an accelerated digital-first approach. As we enter FY '27, our priorities remain consistent around the 3-world strategy, which focuses on scaling our diversification engines, accelerate premiumization and innovation, deepen distribution and service capability and drive disciplined execution to strengthen profitability. We will continue to drive mix improvement, cost discipline and execution rigor while staying agile to commodity pressures and regulatory developments. We expect the demand to improve in Q1, supported by a forecast of a hotter and more prolonged summer, which could drive a late season surge in demand across fan and cooling category. We implemented a calibrated pricing actions early in the Q1 quarter to address commodity price inflation, and we will continue to evaluate further steps to offset the impact of recent global disruptions. While cost recovery remains a priority, but we are conscious of preserving competitiveness. Our approach will, therefore, remain measured and responsive to market conditions, focused on protecting margins while retaining and gaining share. With these remarks, I would like to open the floor for your questions. Thank you.

[Operator Instructions] Our first question comes from the line of Aniruddha Joshi from ICICI Securities.

Congrats for a good set of numbers amid the steep volatility. So the price hike of 4% in fans seems to be very low given the inflation in input prices plus the VE norm change. So how much more price hike is required to pass on the entire incremental cost burden? Question number one. Secondly, you have mentioned about market share gains in fans in the presentation. So if you can give more color on that, whether the market share gains are in like the ceiling fans or BLDC or in a way, TPW and or overall? And any region-wise color also, if you can give either the direct market, whether we have gained or other markets we have gained.

Thanks, Aniruddha, for your question. And let me just step back and tell you about the 4% that I spoke about is something that we took about 2.5%, 3% in January. Then we took another 1%, 1.5% in March. And in April, we've taken about close to 6% price increase. So that's how we staggered it. So the 4% or a little upward of 4% that I spoke about is only for quarter 4. And if you look at it, while star ratcheting and other things had its impact, but it's -- for us, the incremental impact was slightly lesser than the industry because our products were slightly speced well. And a part of our portfolio didn't have to go much of a change. So that's where I would give the first part of the question. I've already explained that 6% is something that we've taken. As an industry, I don't think so because the situation is so volatile. The price -- close watch on the price and commodity price inflation has been kept. And if there are any further actions that needs to be taken, we will take that. In terms of market share gain, we've gained about 30, 40 basis points, and this is all a third-party report that we all subscribe to. The gain has been slightly secular for us. If you look at it in our portfolio and our efforts, it's not that we've just driven BLDC in ceiling fan and we've not upgraded our portfolio on exhaust or TPW. So it's been slightly secular across different channels, across different markets. There's been some up and down in the regions that you would say. But I would say, by and large, it's a very consumer confidence, which is coming across different channels and whether it's a digital or an offline channel that we've seen. As we move further, we are launching some more products, which are going to be industry-first, like the Aero O2 that we've done. And this will give us further gains as we move forward in market share. Trust that answers your question, Aniruddha.

The next question is from the line of Manoj Gori with Equirus Capital.

So my question is on the direct distribution model where we have replaced distributors or the distributors and we are aligning our distribution model into those respective states. How the progress has been during the year? If you can quantify with few examples for a couple of states, how the growth has been versus earlier? And probably if you can highlight if the entire benefit has been seen or we expect some more benefit to kick in during FY '27 also from this market? This is my first question.

All right. So Manoj, let me just take that question. And as we said, DTM or NB these are 2 go-to-market models that we have. And unlike any other company, we have this whole advantage of toggling between any of the 2 models, which works well for that particular market. What are we wanting to deliver? We are wanting to deliver a deeper distribution. We are wanting to deliver a better connect with the retailer. We are wanting to do premiumization. We are wanting to establish a better consumer service and a centricity, resulting in a volume, value and a market share gain. So wherever we are seeing this, we take a model and that works well there, we continue with it. So it's never going to be either a DTM or NB, it's going to be a balance of both, provided either of the model delivers what the expectation on these few parameters that I spoke about. Last year, we did Pune and Vidarbha belt. So that market has been doing well. And now as we enter into the season, we'll see the real benefits of our DTM there. Otherwise, for all the markets that we've gone and done DTM, we're seeing traction. And I said they've grown well in quarter 4 also. We don't disclose market-by-market growth. But by and large, I can tell you that these are the markets where we're getting market share gains and we're growing faster than the industry.

The second question is -- so even if you look at our discussion has been revolving around fans, lighting, which have been our core product categories. And historically, we have entered into many new categories like air coolers or even wires or even appliances like mixers, water heaters and all. If we look at relatively I'm sure like even you would agree to that, that the progress has been relatively slow as compared to the traction that we have built in fans and lighting. So what are the plans ahead and probably this will be the categories which will be driving faster growth for the company. So what is the thought process over there and how we are targeting to scale up these categories?

So Manoj, I don't know whether we've met and I've spoken to you in person or not. We've always now said there is a 3-wall strategy and a diversified portfolio approach. We are dialing up all parts of our business and looking at either the specifier or stroker go-to-market for that specifier, which could be a contractor electrician or architecture interior designer or end consumers. So we are looking at all 3 parts of the business. We start scaling up switchgears, switches and wires, and we're seeing a large traction there. We've spoken about high double-digit growth that we're seeing. For us, we've simplified our portfolio in appliances, and we are very much focused on appliances, which gel with our electrical trade. So we've grown by a very high double digit, gained market shares across different channels in water heaters, in heating categories and some of the garment care categories. So while we look at appliances at an overall value and then pass our judgment on it, but these are parts of those that we are driving well. So from an overall perspective, we are taking not just one approach of driving fans only or one demonstrated success that we've shown in lighting, we're saying different parts of our businesses will be driven because the end consumer or the link to the end consumer is different, and that's how we've been driving. So maybe in one of the conversations next time we meet, I'll explain to you in detail about our 3-wall strategy.

[Operator Instructions] Our next question is from the line of Love Gupta with Counter Cyclical Investments.

So firstly, I wanted to understand why our working capital days have increased. It's gone up to over 30 days from 23 days last year. So what was the reason for the same? Secondly, we had guided for double-digit margins over the next 6 to 8 quarters, but we have been unable to achieve the same. So what was the reason for the same? And when can we expect to reach double-digit margins?

So let me just tell you about the working capital. If you look at it, there's been a little bit of inventory that we've built up and our payables have gone up a little bit. So overall, if you look at it, that's where the reason for our working capital days going up, largely from a perspective that we were building up, we saw the disruptions in supply, and that's why we were building up a little bit of inventory for us. So that's on the working capital. The other is in terms of -- sorry, can you just come and repeat the question?

Double-digit margin.

Yes, yes. Sorry, on the double-digit EBITDA. So look, we've always given a guidance of saying 32% to 34% should be our gross margin. Given the sudden impact of West Asia conflict, given the sudden supply disruption and an immediate commodity price increase, we couldn't -- and none of us in the industry could take a price increase in March. And all of that, the calibrated increase has happened in the month of April. So it's impacted our gross margin, I would say, about 100, 150 basis points. Overall, if you look at it, there's been a lot of effect on our cost measures that we've taken. Our operating EBITDA has improved by almost 40 basis points to 8.2% and hence, we are committed towards our path to double-digit margin. So that's what I can tell you. It's been a very challenging environment. But yet in that challenging environment, we've improved our EBITDA margins.

So can we expect to reach those levels once the situation starts to normalize and supply chain is efficient again?

Given the commodity inflations to subside and supply disruptions to go, from a structural perspective, we are trending towards a double-digit margin. And our actions, our cost discipline, our execution rigor, our multi-engine growth, all that is sinking in well to take us there. Provided some of these unprecedented, unanticipated surprises don't come in, hit the industry the way it has hit us hit the industry now. But given that also, we've improved our EBITDA margins by about 40 basis points.

Sir, could you quantify what was the price hike taken this quarter across our portfolio? And if there are any further price hikes planned?

So I just said that I responded back to Aniruddha and we've taken about approximately 6% price increase in fans, about 6%, a little over 6% in lighting. So by and large, even in switchgears, we've taken about 6%. Wires is literally almost every 15 days, 3 weeks that we've been taking price increase. So we are very conscious of the fact that beyond a certain point, there has to be commodity price inflation that needs to be passed on, and we've done it in a calibrated way.

Lastly...

Sorry to interrupt. We request you to please rejoin the queue. Our next question is from the line of Saumil Mehta with Kotak Asset Management Company.

Congrats on a good set of numbers, Mr. Negi. A few questions from my side. In terms of the project franchise, obviously, we've seen significant cost benefits over the last 2 years. This year also, it is about INR 68 crores. Do you believe the large part of the cost efficiency is behind us? And within that INR 68 crores, can you broadly classify how much is material and how much is outside of material in terms of cost savings?

So Saumil, thanks. We've started this Sanchay program about 3, 4 years back. And the first year and the second year, we thought we've juiced it, maxed it out. But every time we look at it, there are opportunities that we find. This year, we've done about INR 68 crores. And there are multiple levels that we look at it. There are VAVs that we do in the product. There are renegotiations that we do and there are process reengineering that we do. So I can't disclose what is contributing what, but there is a summation of all that, that gets quantified at INR 68 crores. But as we move on, this is a continuous -- so it's not a destination, but it's a continuous journey that we are on. Commodity prices go up. You look at different alternate materials. So that's in a way Sanchay keeps us committed to that double-digit EBITDA journey and keeps us on our toes. So that's a very structured program reviewed at the highest level across the organization. There are people who are committed to deliver this.

My second question is with respect to the ECD. Would the contribution of fans in the overall ECD would have gone up, stayed flat? I'm asking on a Y-o-Y basis from FY '26 to FY '25.

Would be by and large, in the same range for ECD in the fan. We are dialing up the other part also. So we're dialing up the water heaters, we're dialing up garment care, we're dialing up room heaters in quarter 4, a little bit of extended winters also helped in that case.

Would it be fair to assume that there would be a mid-single-digit volume growth in fans as well or the number could be even higher to that extent?

Yes, there is volume value both that we got it. And largely, if you look at it, a lot of our efforts in terms of new product development, which now contributes almost 24% of our fans revenue and a real focus on premiumization that's helping us get the volume value synergized output.

My last question, in terms of the new series of fans, which we have launched, what would be the broad range pricing point, the starting pricing point? And which all key markets is where we have introduced as of now? That would be my last question.

So there's a series, there's -- I'll preempt a little bit because some of this has already hit the market. We've done a series of India's first innovation that we've done. So Aero O2, which is oxygen enriching is in the range of about INR 16,000. That's gone to key metros and key Tier 1 towns. And that's a high-priced product. Then there is Aerosilent, which is India's most or India's quietest fan, which is under 50 dB of noise levels. That's going to be across as we speak, it's getting rolled out across the country. That's in the range of about 8,000 MOP. The third is also what we've done, which is a great innovative and coming from a deep consumer insights and understanding is India's first inverter stroke a battery backup ceiling fan. It can give you a battery backup of almost 6 hours at a certain speed. So that also is getting rolled out. So some of this, plus we've got into BLDC and TPW. There's a huge range which is coming and everything will be at a different price range. But what we've done is that we've spent a lot of time solving for consumer problems, solving for consumer needs. And I think that's what is going to reflect not only our product this thing, but also in the touch, feel and the form factor that you'll see in our products. So overall, the design language is premium. Overall, the consumer benefits are stemming from the consumer insight. So a huge amount of effort which has gone in fans and in lighting also. And the similar thing that you'll see in switches and switchgear also coming in, a similar approach that you'll see in some of the products that we'll roll out in, say, our water heaters or a room heater category. So you'll see a consistent brand synergy or a language, design language an approach that will start coming in all our products.

The next question is from the line of Rachna Kukreja from SiMPL.

I have a few questions. My first question is our ambition was to improve the mix of premium products as a percentage of domestic fan mix from 30% to 40% over a few years. And in FY '26, premium products contribute 35%. Though the premium mix has improved by 5%, our gross margins have remained stable in FY '26 despite taking price hikes to offset inflation. So if you could provide what factors have restricted our gross profit margins improving despite the benefit from better product mix and price increases.

Yes, a good question. I've said it, I said it earlier also right now that the pricing or the calibrated price increases that we've taken, not only us, but for the industry that has taken, it is not offsetting the commodity or overall inflation that's hitting. So while commodity becomes the headline inflation, but there are so many other inflation or a cost increase that starts to come in. Shortage of labor resulting into low productivity is a cost inflation. Gas going up or the commercial LPG unavailability and the price going up is a commodity cost inflation. And then some of the other things that which impact the industry, a lot of our -- for the industry, the supply ecosystem is in the north. Haryana increased the minimum wages by 35%, UP followed by 24%. That's the cost inflation that comes in. So while we keep looking at commodity and say, oh, commodity is equal to commodity we, the cost of running the business or cost of production across categories, across the industries has really gone up. While we've taken calibrated increases, all of it by the industry has not passed on to it. It is -- and if you look at some of the peer results and all, while operating EBITDA has dropped, it is actions like focus on premiumization, which is helping us improve our EBITDA given the fact that we still have a gap between the cost increase and what we've taken from the consumer.

My second question would be if you could provide some color on the Hyderabad plant and its current utilization levels. Has it reduced delivery time and cover up any inventory constraints in South and Western markets? And also Hyderabad plant had an idea of growing the export business, which has grown as per the investor presentation. And within exports, how has the growth for TPW fans been? And has the mix of TPW fans improved for us. And correspondingly, has any growth in exports contributed to our gross margins?

So too many questions rolled into one, Rachna let me just try and answer. So largely, Hyderabad is now seeing traction in the utilization because a large bit of our production of TPW is in Hyderabad. Currently, it's split between Kolkata and Hyderabad. We are seeing our TPW production going up. We're seeing early signs of TPW traction coming in South. South has good -- showing green shoots of good summer. So too early to say, too early to conclude, but that's where we are seeing the traction happening. Exports has done well. We've grown by double digit on exports. TPW is a significant part of exports, but exports is also a large part on ceiling fan. And we do both from Hyderabad. Moving forward, it will be a good hub for us to continue to produce for export markets. So overall, we're seeing benefits of Hyderabad being there, the factory being in Hyderabad. It also solves for a large part of our logistics cost and speed to market much faster than having a factory either at Faridabad supplying or Kolkata supplying to South.

Our next question comes from the line of Natasha Jain from PhillipCapital.

Congratulations, sir, on a good set of numbers given an extreme volatile market. Sir, 3 quick questions. One, I wanted to understand, so fans is not as much a seasonal product as, say, a room AC. So on that line, could you help us understand what is the broader revenue split for fans on a 4 calendar quarter basis?

So if you look at it -- and you could look at this data from an absolute consumer angle first, and I think that's where we need to look at it and not from a primary perspective because those 2 could have a different cycle. From a consumer angle, about 45% of the offtake happens between 1st March to end of June. That's the consumer cycle. 55% of it happens in the balance of the year, and it could vary from region to region. If you look at it from a 4 quarter, it is not a very uniform from a primary perspective because then you mirror the cycle of production, mirror the cycle of trade loading. So those may not be the ideal comparisons to do. In between around Diwali time, you get a little bump in consumer offtake again. But otherwise, depending on whether you're doing a first-time buy or you're looking at economy, economy gets a little skewed related to season. But when you look at premium and into some of the categories like BLDC, they are far more linear, they're far more consumer offtake happens because of upgrades and renovation. So that is far more linear. But from a consumer angle, 45% happens between March to June.

Second question, could you also throw some light on the channel inventory for cooling products? Given that summer has actually picked up only from, say, mid of April, are primaries as fast as the secondaries?

So unfair for me to give you a real live quarter 1 update. But quarter 4, obviously, the buildup happens. So there is a buildup that happened, but I don't think so the buildup happened dramatically higher than any normal there. So quarter 4, the buildup wasn't abnormal. It was a normal buildup. Quarter 1, as we speak, there were a period of good 2 weeks where there was extreme hint in the North and the South. As we speak, there is South, which is going to heat parts of West, which is going on for last few days, North is a little cooler than what it is expected. But I won't comment on here and now data on primary and secondaries right now. But whatever we can read about Super El Nino, this could be -- this could see a little late surge in summers also and a little more prolonged summer that we can see. So keeping our fingers crossed, hopefully, it should be a good summer.

One last question. I mean, given almost all industries are facing abnormal cost headwinds and summer also, it was half there, half not there, sometimes it rain and sometimes it didn't. So is it fair to say that at least calendar '26 will be a year of, say, protecting margins rather than improving? And on that note, we closed FY '26 at 6.9% consolidated EBITDA. Any kind of guidance that you could give us for '27 as well?

So I would put FY '26 in 2 halves. The H1 was a real wash out. okay? I don't think so. The summers have been as weak as what it was last year. When I look at my H2 and my exit, I've exited H2 with an improvement on EBITDA margins. Yes, the challenges on commodities stay there, but all of us are putting our efforts to navigate these headwinds. Our entire focus is to make sure that we are in the premium category where the consumer is slightly more cocooned to the inflation and is willing to pay you if you provided you give them a value and a unique and innovative product. And that's the entire effort for us this year. And as I said, we are dialing up all parts of looking at the 3-wall strategy, delivering growth from all factors and not just one category. And that's the portfolio approach, which will help us.

Our next question is from the line of Rahul Agarwal from Ikigai Asset.

It's been about -- my question essentially is a bit longish. It's been about 2 years you've taken over at I'm sure you would have done a lot of changes we have noticed across new product launches, channels, go-to-market, manufacturing stuff like that. Looking at '27, I think is obviously challenging. Everybody knows that. But if we take a 3-year view, right, inflation has been missing in this industry, right? And this question is more on industry and Orient as well that given that pricing is now coming back, though driven by inflation and whatever happens from the input cost perspective, a lot of other costs you highlighted already. Ultimately, this pricing increase helps to absorb fixed costs, right? I mean, we have this Hyderabad plant sitting in the OpEx as well here, where we need to get better summers, better export demand to utilize better and absorb those costs better. We have the pricing hikes happen. Volume growth should pick up really because of summer tailwinds. Last year, summer bad. This year, summer looks okay. Does it look like an inflection point to you? The question is more from a fiscal '28, '29 perspective at INR 3,000 crores sales, INR 100 crores profits. Do you think getting back this pricing in the industry is very positive for everybody and Orient and incrementally double-digit growth with double-digit margins to something, we should now look at it much positively. Maybe timing is uncertain, but maybe 3 years out, fiscal '28, '29, you actually achieve it purely because now you have pricing tailwinds. So just some context on this, please.

Thanks, Rahul. And I remember 2 years back when we meet and I think you had a little bit of pessimism and happy to hear a little bit of optimism coming about Orient from you, and that's helpful. Let me just reflect back of what you call as pricing power. I don't see it as a pricing power. I think it's a catch-22 situation that the industry has got into it, and I'm largely reflecting from industry perspective right now. It's a catch-22 situation. When the inflations go up, do you absorb? Do you don't absorb? If you don't, what do you do? If you do, what is that the market can absorb. So I think it's not a pricing power that has come in. It's a pricing action that has been taken by the industry, which I think is a good step, whether it was forced, not forced, but it is, I think it was inevitable that nobody could absorb that. When I reflect back on what our real pricing power is, the real pricing power is when you understand consumers very deeply and you are able to give a value to the consumer for which he or she is willing to pay you. The effort in Orient over the last few years has been to understand consumers, become a far more consumer-centric organization, design, develop products, not just for basic functionality, but satisfy the need of a consumer for either a design output, which is taking care of the lifestyle needs or solve for the tech need that the consumer has. So I think not just fans across all categories, we've been able to do this. We should catch up and I should take you through our thinking on the 3-wall strategy. And hence, once you hear that, maybe you'll be far more optimistic about our journey towards INR 5,000 crores and a double-digit EBITDA there. But we seem to be on the right trajectory, but a lot more to do from a consumer expectations and fulfilling the consumer expectations and a lot of white spaces to cover, as I can say this.

To clarify, I mean, fiscal '27 margins retaining or increasing margins is going to be a function of a lot of things, how things move forward. But currently, the price hikes you've mentioned across categories, are those enough to take care of the spot pricing of input and other materials? Is that we should assume that.

It is not. And I be very honest with you, the industry has not been able to do. Industry has taken a very balanced view of saying, don't do anything which impacts the elasticity of demand because if demand goes down to bring that up takes a huge amount of effort. So a huge amount of effort will go towards bringing cost discipline to offset that gap. And that's what I think over the last -- if you look at our cost structures and cost movement, you will see some bit of cost discipline coming in our numbers. That's what we'll continue to do. But if the commodity continues to do this and we are forced to take a calibrated price increase, we will not shy away from it.

Our next question comes from the line of Love Gupta from Counter Cyclical Investments.

I just wanted to share that we have completed our Hyderabad CapEx. And do we have any plans for a share buyback or something on those lines to instill some confidence in the investor community?

No. Right now, nothing of that. Once we -- if we have anything, we'll come back and talk about it.

Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for closing comments.

Thank you, everyone. Thank you for taking your time out and joining us and your questions keep us sharp on the tools and also gives us food for thought. So thank you for this and look forward for meeting some of you in person.

Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.