Pidilite Industries Limited (PIDILITIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Pidilite Industries Limited Q3 FY '22 Earnings Conference Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Arun Baid from ICICI Securities. Thank you, and over to you.

Good evening, everyone. I welcome you all on behalf of ICICI Securities for the Q3 FY '22 [indiscernible] for Pidilite Industries. We have from the management side Mr. Bharat Puri, Managing Director; and Mr. Sunil Burde, [ Vice Domestic ] Accounts. Now I hand over the call to Mr. Burde for his opening remarks, post which we can open for question and answers.

Thanks, Arun. Good evening, everyone. The current quarter raised robust double-digit revenue growth led by staggard pricing actions and steady demand conditions. Growth was broad-based across Consumer and Bazaar and B2B, with growth in urban geographies outpacing rural geographies. Consumer and Bazaar reported growth across all categories and B2B growth led by the continued momentum in industrial activities. We continued investments in our brands through higher A&SP and have maintained EBITDA margins within our historic range through judicious pricing, rising volumes and operational efficiencies. Now I will begin with a summary of the financial performance for the quarter and 9 months ended 31st December 2021. On a consolidated basis, net sales at INR 2,841 crores for the quarter grew by 24% over the same quarter. Gross margins continue to get impacted on account of uninhibited increase in input costs, resulting in all-time high prices for most of the principal raw materials. Material cost as a percentage to net sales is higher by 1,119 basis points versus same quarter last year and 173 basis points versus sequential quarter. Continued unprecedented inflation and input cost initiated calibrated pricing actions to maintain margins in a healthy range. EBITDA before nonoperating income at INR 550 crores declined by 14% over the same quarter last year, driven by input cost-led contraction in gross margins by 11.2% and higher spend on A&SP. Profit before tax and exceptional items at INR 487 crores declined by 19% over the same quarter last year. Now moving to stand-alone financial performance. Stand-alone net sales at INR 2,407 crores grew by 24% over the same quarter last year, with underlying sales volume and mix growth of 9.4%. This was driven by 9% growth in sales volume and mix of Consumer and Bazaar and 13% growth in sales volume and mix of B2B. Domestic Consumer and Bazaar grew by 10.1%. Our key raw material vinyl acetate monomer procurement rates have continued to increase during the quarter and is in the range of INR 2,000 to INR 2,525 per metric ton. Currently, rates are at $128.50 or [indiscernible] per metric ton and Q3 '22 consumption rates were at $1,968 per metric ton versus Q3 '21 rates of $876 per metric ton. Material cost as a percentage of net sales for the quarter is higher by 1,119 basis points over the same quarter last year and 226 basis points versus sequential quarter. EBITDA before nonoperating income at INR 480 crores declined by 16% over the same quarter last year. Our subsidiary performance, in case of our overseas subsidiaries, modest revenue growth in Asia, Americas declined on a higher previous year base. During the previous year, sales were higher on account of pent-up demand as well as benefits by the government to consumers during COVID. Margins continue to remain under pressure due to higher input cost. Domestic subsidies in Consumer and Bazaar reported good sales growth. Performance of domestic subsidiaries in B2B have improved sequentially on account of recovery in real estate and construction-related activities. Pidilite Adhesives Pvt Ltd achieved sales of INR 149.5 crores for the quarter with EBITDA margins of 32.2%. Compared to the previous quarter, margins have declined by 2.7% on account of persistent steep inflation in input costs, partially mitigated by price injections and other cost-saving initiatives. Going forward, we expect near-term demand conditions to be a little more challenged given the disruptions as a result of the pandemic as well as input inflation to continue. However, we see demand conditions improving as well as input costs moderating by end of the current quarter, beginning of the new financial year. We remain confident of the medium- to long-term potential of the Indian home improvement sector and our ability to deliver profitable volume growth. Now we can open the floor for questions.

[Operator Instructions] The first question is from the line of Abneesh from Edelweiss.

First question is on vinyl acetate monomer. So from a peak of $2,500, now it is more like $2,000. So wanted to understand your comments that by Q4 end or Q1, you expect raw materials to start correcting and gross margins to bottom out. What is it coming from? What is the confidence level? Is it based on the global liquidity drying up? Or the supply-demand situation is getting more profitable, more supply is coming, the logistics is becoming easier? Could you elaborate on that?

See, Abneesh, basically, what we are expecting is we have already seen some softening in January as far as vinyl acerate monomer is concerned. Our belief is that once the Winter Olympics in China over, this is what the experts tell us. And therefore, the supply situation normalizes a lot more because it is not demand that has gone up substantially to the constraints in supply. Presuming it takes about a month for supplies to start stabilizing, it is thus our belief that, hopefully, if all things go well by the end of March, we will start seeing more softening as far as vinyl is concerned.

Sure. Second question is on your segment-wise sales. So this quarter and for 9 months also, surprisingly B2B has grown faster in terms of sales as well as Consumer and Bazaar. Is it just a base issue? Or here, the demand is also higher from the volume growth perspective versus in Consumer and Bazaar both 9 months and Q3?

See, basically, it is largely the base effect. Last year, B2B declined much faster, then came back much slower. If you look at the 2-year CAGR, Consumer and Bazaar is far healthier than B2B.

Right. And final question on rural, you have said it's still growing in double digits, but you have alluded that some slowdown is happening. So from a budget perspective or from a government perspective, what would be the expectation which can drive rural back to faster growth than urban in your segment?

Yes. I think the simple key is putting money in the hands of the ruling consumer. Clearly, if you look at simple inflation, Abneesh, I mean, if you look at the cost of constructing a house in rural India this year versus last year, if you see the increase in price and steel or cement and a lot of these other basic raw materials, the prices have gone up far more substantially than in many years in the past. And therefore that is, in a sense, is hurting the consumer, whereas the produce prices have not gone up by any -- by the same amount. Therefore, our belief is that as long as there some stimulating rural India that we manage to put some more money into the hands of the consumer, that is what will help rural India. Having said that, I must say that unlike FMCG, we believe we still have a fair runway of growth even in more difficult conditions simply because our products still have a greater scope of penetration and still greater scope for adoption in rural and semi-urban this year.

Sir, one last follow-up on the raw material and that's the final question. So we have seen VAM correct from $2,500 peak to now $2,000. But still, it is up sharply and gross margin pressure is visible. But my question is different. So when we have seen sharp deflation in any year, does Pidilite take sharp price cut also? Why I'm asking this is FMCG price cut is very rare. You have bought FMCG also, you have augmented Pidilite obviously. So in Pidilite sales, if you could take us back to the earlier scenario when there was still deflation, how has been the price cut by Pidilite or is just a damage increase has happened?

See, what tends to happen is while the price cut, we normally tend to therefore pass on prices so that our premium vis-a-vis competition as well as the semi-organized sector does not exceed a certain amount. So while we maintain our premium, what tends to happen is that if you look at the -- over a large period of time, all of it does not get passed back, but a substantial part of it does get passed back.

[Operator Instructions] Next question is from the line of Avi Mehta from Macquarie.

I just had a few questions. First, if you could update us on the pricing. Last quarter, I remember you had said that we have passed on 70% of the inflation. Could you help us, how much is passed on? Or if possible, a VAM price number of how much cost has been passed on?

Very difficult to say, Avi, because again we operate obviously across the series of divisions and the pricing is different in different divisions because of different raw materials. But at a broad level, we would have passed some 70% to 75% of. We have taken some further pricing in the beginning of January. Now if raw material prices were to remain at these levels, which is -- if it come down to $1,500 to $2,000 level, we will not need any further pricing and we will go back into our margin range. But we would appreciate right now that living in a volatile world, I mean every day we have one new headline, sometimes it is Russia and Ukraine, sometimes it is some further problems in the Middle East. I would simply just say wait and watch. We are -- obviously, we have the ability to price. We will remain conservative. But as of now, presuming there are no black swan events, we don't see any substantial need for pricing going further from here as long as we reach a steady-state situation.

Sir, if I may just kind of push this a little further. So what you kind of said is that input -- we expect the input cost to moderate from end fourth quarter, first quarter, start first quarter. So would it be fair to argue that gross margins have bottomed out now and should kind of start expanding in Jan while demand remains the question? Is that what is the way to read that comment?

I would say, Jan, you will still consume what you have bought in December. From February, especially March, I think gross margin should tend to improve, presuming all other things remain equal and we don't have any further [ like ] shocks.

Perfect. Perfect. That's clear. The last bit, I just wanted to kind of get your comment on this crude. I mean, does that in any way you think have a risk? Or is there a supply chain, because of that, that prices move up anyway too high. So you are not so concerned about crude price rising to about $90 now?

No. I think that surges on crude pricing because a lot of our [indiscernible] is obviously from petrochemical and it depends on where [indiscernible] some really high level. So I won't say we're absolutely concerned about the rising oil price.

No, no, no. Sorry, not the rising crude. At current price, so at $90, $100, you were still okay, right? I mean, obviously...

I would say around $100, I won't say we are okay. $90, we're okay. But as it goes further up, again, we will be under pressure.

Okay. And just a bookkeeping, sir, could you repeat the VAM pricing? I kind of missed that. So what was the third quarter's impact? This is the last piece.

Third quarter last year, our VAM pricing was close to $1,000 a ton. This year, it is -- the December price was $2,500 a ton. But the average would be close to $2,000.

$2,000. And our consumption was around $2,000 [indiscernible] right? And current prices at around?

Around $2,000 right now, yes.

Next question is from the line of Chanchal Khandelwal from Aditya Birla Capital.

Am I audible?

Yes, you're audible.

Firstly, congrats on a good set of number and consistent performance. My question is you have done a lot on operational efficiency and look at the way you manage the other expenditure. If you can just highlight what are the cost savings you are doing apart from the [ expense ]? Was there a huge amount of operating expenses [indiscernible]?

See, as you would appreciate, across the whole board, we have actually all through the pandemic period kept a very close watch on costs and hopefully become far leaner and far more efficient, with the exception of discretionary costs like advertising, et cetera, which we still spend when we believe we have the need to. Across virtually all our hedge of cost, we have been fairly stringent. So at an overall level, I would say that presuming raw material prices were to come back to normal levels, et cetera, we would actually emerge as -- minus raw materials also, as a far stronger and far leaner and more efficient company, continue all the cost savings we do. Whether it be freight, whether it be warehousing, whether it be any other miscellaneous costs, whether it be in sales, whether it be in supply chain, we have actually pretty much done a zero-based budgeting across the board.

Sure, that's interesting. But the margin band which you used to talk about 20% to 24%, do you -- I'm seeing at FY '24 because of the cost savings, this margin band will continue to surpass even if the raw material supply could turn back. Is my reading right?

It could happen. Again, all depends on -- you see, given the volatility today, it's very difficult to say where raw materials will be, where crude will be. But yes, I mean, as our overall cost base, exclusive of raw and packaging materials, we clearly have become far more efficient and will try to get a leverage.

Sure. Last question from my side. Given what paint companies are doing in the construction and [indiscernible], do you think going forward -- I mean one way to look at it is that the market itself is growing. Do you think that can become a challenge to us at some point in time? Because most of them are trying to be very aggressive in the start.

See, that is inevitable. And we've seen this aggression not for the last 3, 6 or 9 months, it's been there now for a number of years. However, when we -- our stance always is, as leaders, our greater job is to expand the market. I mean, today, if you look at any indicator of waterproofing in India, India is tremendously underpenetrated. Even today, it's only 4 out of 10 homes that do any formal waterproofing or proper waterproofing. And therefore, we -- competition is actually hopefully expanding the market. I think there is a large runway for growth for each of the organization. Remember that paint companies tend to play much more in the renovation and the space when repainting happens, they don't tend to play in the new construction because that's where cement, steel, et cetera, new construction comes in. So they play in not the full market but part of the market. But there is, in our belief, scope for all. And finally, those who have the strongest brands, the greatest reach and hopefully satisfy the consumers more will keep winning. And if I look at our growth rates, I have nothing to complain about.

Next question is from the line of [indiscernible] from Aditya Birla Sun Life Insurance.

Just 2 quick questions. In the initial comment, you just mentioned about the demand being a little challenging. So could you just elaborate on that point? Because we thought the situation is just getting better for most of the industry. That's the first question. Maybe I'll answer the second one a little later.

See, very simply on demand right now, the newest variable is the third wave of the pandemic. You would appreciate that in any areas of home improvement, these are eminently postponable. It's not -- unless you have a [indiscernible] need, you can always postpone. And what we are finding is from the end of December and in January, as you've got these closures and night curfews and weekend curfews and so on and so forth, et cetera, there is some impact as far as demand is concerned. And as I spoke about earlier, there is also definitely some amount of income distress in rural India. That's what is really the sense, therefore, impacting the demand in the short run. However, if you take a little longer-term, even a medium-term view, if you look at India's housing stock shortage, if you look at the need for renovation and the fact that consumers have to spend a long time at home are now spending on renovating and upgrading their homes, we are very optimistic on the medium-term future of home improvement industries [indiscernible] setbacks in the next 3 months. But frankly, over a longer period of time, I think all [indiscernible].

Understood. And second is more from a longer-term perspective. So you guys strengthened the leadership team over the last -- as you [indiscernible] over the last induction in that particular -- in the team. So is there any thought process with respect to you not taking the lead role? Are you taking sort of a little over sighting the whole role going forward? Or what's the plan? If you can just share your thoughts on that from a longer-term perspective really quickly, yes.

See, from a longer-term perspective, we've always said that any good far-thinking company must look at both the present and the future and set ourselves up for the future. We've got our whole succession plan in place for the future where we've got a strong bench website. In a sense, making sure that we have enough time that transitions are extremely smooth and hopefully [indiscernible]. So I still have a long period of time to go, but it is always great to have like a good bench strength and therefore keep operating across a variety of fronts with a higher degree of aggression.

[Operator Instructions] The next question is from the line of Ritesh Shah from Investec.

Sir, a couple of questions. One is we have 4,800-plus distributors, 44 warehouses. Is there anything that you are doing on the distribution side, one, adding discount or second is optimizing? The reason I ask is company is a formidable brand. We have a good presence. Is there something wherein we can actually do better to enhance our reach or...

See, one of our objectives, Ritesh, is we want to be by far the deepest-reaching home improvement company. And we have, therefore, a number of initiatives, whether it be in emerging India, whether it be in rural, whether it be the [indiscernible] bias. We believe, for example, today, pretty much all -- forget the towns, all villages, between 5,000 and 10,000 also, we now have a direct presence in [indiscernible]. We, for example, now actually got over 2 lakh dealers on our Pidilite Genie app who are actually ordering electronically. If you look at our reach, therefore, on a consistent basis, quarter-by-quarter, we keep enhancing it and getting deeper because we believe that's a source of competitive strength and we are one of the few organizations that have a wide enough portfolio to be able to access not only profitability but also being able to reach these from a logistics point of view. So clearly, reach and the quality of distribution will remain a focus for us for at least the next 3 to 5 years.

Sir, anything different that we are doing from a technology standpoint to actually optimize it? Is there a part of cost which actually can be [indiscernible] and which can actually come to the margin profile? Or anything that we are doing over here which actually enhances our reach as compared to the competition, given we have a presence since quite long?

See, basically, what we are doing is because we are able to combine and go as one Pidilite to the smaller town, that gives us economies of scale. That also gives us quality of distributors because then we are one of the prestigious distributorships to have in the smaller places. And what we are also doing is this is all digitally equipped. So actually, all of these distributors are actually on auto replenish. None of my sales force takes any order or the old listing of actually taking manual orders. Everything is on auto replenishment. The sales force is also actually on tablet and actually working on a speedometer, which is gamified. So we've got a fairly deep degree of digital penetration right to the last outlet, largely making sure that we're the first to reach there and hopefully stay there. We've obviously done the approach GSP. We've done the warehouse optimization, where we should have our warehouses and where we should have -- that is an ongoing exercise anyway.

Sure, sir. Sir, my second question was on competitive intensity. Most of the cement mills, now they also aspire to be in a more attractive space, wherever Pidilite is. I did some basic product-to-product mapping across companies and there is a lot of overlap, be it [indiscernible], grouting, waterproofing, silicon sealants. But when it comes to, say, construction chemicals, primary construction, how should one understand basically that we will continue to have the right to win? I appreciate the market will continue to grow. But when it comes to Pidilite offering in the marketplace, how is it that we'll distinguish against a cement mill, where they can actually also look to bundle the product along with cement or white cement or [indiscernible]?

Sure. See, if you look at it worldwide, all cement companies tried construction chemicals and, over a period of time, most of them have divested their construction chemical businesses. If you look at all the major players in, therefore, waterproofing and construction chemicals, they tend to be specialized companies like [indiscernible]. They're not [indiscernible] companies. Largely because the mechanics in one 4-liter or 20-liter can is very different from selling a truck full of cement. And both of these normally don't tend to go together. Having said that, we keep a close watch on the cement companies and see where -- in a sense where they could have advantage over us or where they could not. But as of now, what we are saying is this is again a field where it's a cycle. People will go in when they realize that listen is the new really worth the client makes some decisions because the volume -- when you are used to a volume play, it's very difficult to do a value play. So what we are looking at is making sure that we have a product advantage, the brand advantage. And see, we have our network, which is moving forward aggressively. Now how this will pan out, say, in the new construction space? Literally the cement company, because they tend to offer maybe basic products, they're not in the specialized [indiscernible] at all. So therefore, over a period of time, time will tell whether we last in this market or not.

Sure, sir. Just an extension of this. Sir, when it comes to the last-mile retailer, are we looking to tap into more -- aggressively into more points basically as cement mills actually increase or get more aggressive in the space?

Definitely, yes. We are making sure that, again, we are reaching, for example, we now have over 7,000 outlets in villages between 5,000 and 10,000, which are called Pidilite [indiscernible]. These are purely with the objective of educating the consumer and be over a period of time, making sure that the first experience that the consumer has in our product range with our products.

The next question is from the line of Kunjan Gupta from Client First Wealth Management.

This question is about the point in the cash back. So the other brands like Astral bonds, they're offering direct coupons, cash coupon. So are we planning on doing something like this? Because carpenters are liking those products. Hello?

Yes, you are audible. Please go ahead.

Yes. Sir, my question is other brands like Astral bonds, they are offering cash coupons and more points than [indiscernible], I guess. So are we planning to be more aggressive on those?

Yes, Kunjan. We're just starting your question.

Am I audible now?

Yes, you're audible now.

Sir, my question is about the point in the cash back. So other brands like Astral bonds, they're offering a cash coupon, I guess, if I'm not wrong. And carpenters are liking those products above [indiscernible]. So are we planning something on that?

See, we already had that program. We have a Fevicol Champions program where we have a whole range of gifts. When it is required, we can convert that into cash. Our planker brands, which is both Blue Coat and [indiscernible] also had a stable approach. So frankly, they're just -- am I audible?

Yes. Now you are audible, sir.

Did you hear my reply or not?

Yes, half of it.

See, basically, what I'm saying is this is something that we have a full [indiscernible]. We have a whole digitally enable gift redemption when it is required, when carpenters require, [indiscernible] and then convert that to cash. So our planking [indiscernible] which is Blue Coat and [indiscernible] also had this. Really, this is not something new that Astral is doing. This is something that is [indiscernible].

Mr. Puri?

Yes. Can you hear me clearly?

Sir, your voice is slightly breaking, sir. We couldn't hear the last bit.

[indiscernible]

Is it better now?

Yes.

So Kunjan, what I'm saying was that as far as cash backs and redemption and gifts, et cetera, is concerned, this is a normal practice in the industry. Our planking brand, we have a Fevicol Champions Club. This is not something new. All of us have been doing this for some time.

Okay. So if we compare it to the [indiscernible], so are you offering better like carpenters are likely both better and above [indiscernible], if I'm not wrong?

Sorry, say that again.

If we compare to [indiscernible], the cash coupons, are we offering cash coupons just like [indiscernible]?

We offer -- for example, at times we offer cash. At times, they have a loyalty scheme. Like you have loyalty points with an airline, so we have loyalty points. We -- so over time, people can buy actually large gifts for their home, et cetera. So we have a full retinue of stuff which we do.

[Operator Instructions] The next question is from the line of Rashi Rathod from Sykes & Ray Equities.

Sir, I wanted to know about your current capacity utilization and your manufacturing facility utilization.

See, currently, Rashi, we are at about between 70% and 80%, depending on various products, depending on the product line. But as we speak, we have just completed expansion in 5 of our current brownfield factories. And as we speak, we are constructing 9 new factories as far as Pidilite is concerned. So in many ways, we are completely ready for the next phase of growth. By the end of March next year, we will be back to between 60% and 70% capacity utilization and having a good 2- to 3-year runway for growth.

Okay. So in the last con call, you had mentioned you had 12 new projects coming up. So what is happening to those projects? And where are these projects actually coming up, in which part of the states?

So of the 12 projects, some have already got -- have moved forward. But we have -- for example, we have a massive factory, which has got commissioned in Vizag, which is the largest factory in South India. We have plants, for example, coming up for some of our powder products in -- 2 in Southern India, 1 in Ludhiana, 1 in Lucknow, 1 in Ajmer. So in different places, we have 3 new plants coming up in Gujarat, 1 for tile grouts, 1 for Tenax and 1 for expansion of our current ranges. So across both Western, Southern and Northern India, we've got plants coming up and Vizag is, in a sense, Southeast.

Rashi, does that answer your question?

Yes.

The next question is from the line of Mr. Arun Baid from ICICI Securities.

Sir, just wanted to understand one thing. Do you believe, based on whatever you see today, that in next year we will be looking at, at least double-digit volume growth and going back to our historical range of margins? Whatever we see today based on [indiscernible] and demand.

It's very difficult to say, Arun, because we have these new variables within the Russia, Ukraine, the crude. If you had asked me the same question a month back, I would have said looks quite likely. But right now, I would say let's wait and watch, let's wait every month. Because right now, it's -- all of these factors are actually outside India. We have very little influence on a lot of these factors, but they are going to impact both crude prices and raw material prices. So I would just wait and watch, but I would say we are cautiously optimistic.

Assuming those scenarios don't go as bad as people fathom, then we would be there, right? Assuming...

Yes. Raw material prices come back to the same level, we will be back up and running, yes, absolutely.

Any segment where you are seeing more traction right now given the market? Any particular segment where you see more traction?

Actually, across the whole construction, both renovation and fresh construction space, we are seeing good activity. So actually, the growth is fairly broad-based across pretty much all of our divisions.

Ballpark, what percentage of our total revenues will be linked to new construction? Broad number, if you just dig it?

Very difficult to say. I would say 2/3 is renovation, 1/3 is new construction.

[Operator Instructions] Next question is from the line of [ Hiren Kumar Desai ], an individual investor.

So I assume that our products form fairly small part of the overall cost in a renovation or house construction or something like that. So is it still difficult to pass on the cost to the consumer as much as we are seeing in the input costs?

No, it is not difficult to pass on, Mr. Desai. It is just that we have been conservative because we don't believe it is a long-term trend. Because we believe these are supply disruptions that have happened because of global factors. But overall, key that, for example, the difference between our value and volume growth, you can see that we have already taken pricing close to about 15%. So passing on price is not the issue. We just, in a developing economy, our belief is you must be conservative because inflation is the single biggest tax that the consumer pays. And over a larger period of time, it tends to impact volume growth.

Okay. And sir, the second question is, are we looking to get into some adjacent areas or products or into new geographies whereby we can -- it can help us sustain volume growth and overall growth?

Yes. We are definitely, on a consistent basis, we keep going into newer categories. For example, we are putting up a factory for tile grouts, which is a completely new category. We are putting up a factory for marble [indiscernible], which is another new category. So on a consistent basis, Mr. Desai, Pidilite, our policy is we have a set of core categories, we have a set of growth categories and we have a set of pioneer categories, categories which are new where we develop the market. So we are constantly, you will see us every year enter at least 2 to 3 new categories on a regular basis. That is part of our strategy going forward.

And the second part of the question was related to new geographies.

New geographies, absolutely, yes. In fact, if you look at our -- now our international sales have crossed the INR 1,000 crores. We are doing extremely -- our focus is the world's emerging markets. In markets like Africa, we got fairly good rates. We're setting up. We've just built a new factory in Kenya, with a new factory second in Bangladesh. So [indiscernible] keeps spreading. We now have 14 factories outside India.

Thank you very much. As there are no further questions, I now hand the conference over to Mr. Arun Baid for closing comments. Over to you.

I would like to thank the management for allowing ICICI Securities to host the call. Thank you. Mr. Puri, do you have any closing comments to make?

No. I think most of them have been asked in the questions, right? I think no closing comments as such. We remain true to our model. Our focus remains profitable volume growth. And we're, given the sector, fairly confident of the prospects of the sector and, therefore, we remain optimistic.

Thank you very much, Mr. Puri, sir. Ladies and gentlemen, on behalf of ICICI Securities, that concludes today's conference call. Thank you all for joining us, and you may now disconnect your lines.