Polycab India Limited (POLYCAB) Earnings Call Transcript & Summary

[Presentation] A very good morning. I am Manita Carmen Gonsalves, Company Secretary of Polycab India. Welcome all our Shareholders, Executive Directors and Independent Directors who have joined us via video conferencing. A warm welcome also to Mr. Inder Jaisinghani, our Chairman and Managing Director; Gandharv, our Executive Director and CFO; Bharat Jaisinghani, our Executive Director. Inder Sir to conduct the proceedings, I would like to inform the shareholders that the video conferencing platform for joining the AGM commenced at 8:30 a.m., which is 30 minutes prior to the scheduled time of the meeting, and it shall remain open for another 15 minutes after the conclusion of the AGM. In view of the circulars issued by the Ministry of Corporate Affairs, the Annual General Meeting is being held through video conferencing. The requisite quorum for convening the Annual General Meeting is present. Hence, I request Inder Sir to commence the formal proceedings of the 27th Annual General Meeting of the company.

Good morning. I welcome you all on 27th Annual General Meeting of your company. I would now request other directors and auditors present at the meeting to please introduce themselves.

Good morning. I'm Bharat Jaisinghani, Executive Director of Polycab India. I'm attending the AGM from Polycab's corporate office located in Mumbai.

Good morning. I'm Rakesh Talati, Executive Director of Polycab India. I'm attending the AGM from Polycab's registered office in [indiscernible].

Good morning. I'm Gandharv Tongia, Executive Director and CFO at Polycab, attending the AGM from Polycab's corporate office in Mumbai. May I request Nikhil to introduce himself?

[Audio Gap] Polycab India. I'm attending the AGM from London, United Kingdom.

Thanks, Nikhil. May I request the independent directors to introduce themselves?

I'm R S Sharma, joining this AGM from my residence in Gurgaon, I'm the Independent Director on the Board of the company. I'm also the Chairman of the Nomination and Remuneration Committee. Thank you.

Good morning. I'm T P Ostwal attending the meeting from my residence. I am Chairman of the Audit Committee and also Chairman of Risk Management Committee of the company.

Good morning. I'm Pradeep Poddar. I'm an Independent Director on Polycab India Limited as well as the Chairman of the Stakeholders Relationship Committee. I'm taking this call from my residence in Mumbai.

Good morning. I'm Sutapa Banerjee, Independent Director of the Board of Polycab. I'm taking this meeting from my residence in Mumbai. Thank you.

Good morning. I'm Manju Agarwal, Independent Director of Polycab India Limited. I'm attending the AGM from my residence located in Noida. Thank you.

Good morning. I'm Bhaskar Sharma, Independent Director of Polycab India I'm attending the AGM from my office located in Mumbai. Thank you.

I require the auditors to introduce themselves, Bhavesh Bhai, if you are around? Dilip Bhai if you are around, can you introduce yourself?

Yes. Sure. Good morning, all. Myself, Dilip Bharadiya, Founder Partner at Dilip Bharadiya & Associates, I'm the secretarial auditor of the company, and I'm attending this meeting from my location -- my residence in Mumbai. Thank you.

Thank you, fellow directors and auditors for the introduction. Dear shareholders, FY '23 [indiscernible] as a proof of our steady pursuit of excellence, we had reached new milestones, [ soaring to up ] [indiscernible] hike in revenue, operating profit and profit after tax for the company. The achievement are the direct reflection of our philosophy and our i-Power work approach, where integrity accountability and collaboration and deeply implanted in corporate ethos. Guiding every single action we undertake, looking ahead, we remain resolute in our commitment advancing our market position through a strategic initiative and amplify our organizational digital and functional expertise. Now I request Gandharv to provide an overview of the past year and update everyone on our various strategic initiatives.

Thank you, Inder Bhai. Good morning, everyone. I would like to extend a very warm welcome to all present at the 27th Annual General Meeting of our company. In my presentation over the next few minutes, I would like to highlight the company's performance for the year gone by and provide an update on various strategic initiatives. FY '23 was a special year in numerous aspects, especially as it marked the first full normal year after the disruption caused by COVID-19. Against the backdrop of global prevalence, India's remarkable progress stands as a beacon of hope for the world. Likewise, Polycab India has undergone a transportive journey. We achieved a significant milestone by surpassing the revenue threshold of INR 140 billion, growing by an impressive 16% year-on-year. This growth achieved on a high base with relatively lower commodity prices, [indiscernible] the strong market demand and the exceptional execution capability of the Polycab team. Notably, this growth was achieved without compromising on margins. Our EBITDA grew at a remarkable pace of 46% year-on-year with EBITDA margin improving by 270 basis points to reach 13.1%. This success translated into our highest yearly PAT at INR 12,823 million, marking a phenomenal growth of 52% year-on-year, making us the most profitable company in the consumer electrical space. On the segmental performance, the wires and cables business grew 17% year-on-year in FY '23. On the back of a strong volume growth, both domestically as well as internationally. The domestic distribution business, which grew by 20% year-on-year was benefited from the merger of HDC and LDC verticals. Profitability within the segment was robust with EBIT margin at 13.1%, an improvement of 340 basis points over the last year. Overall, the demand environment for the wires and cables business remained strong, supported by government measures and revival in private CapEx. FMEG business had a soft year on account of the realignment of distribution channel exercise undertaken during the year. As part of Project Leap to enable improved pace of future business growth as well as weak consumer demand due to continued high inflation. Revenues were flat year-on-year for FY '23, while segmental EBIT margin turned negative during the year, largely on account of higher A&P spend, staff costs and input cost pressures. With the distribution realignment completed, we are confident of improving top line and bottom line from fiscal '24 and are committed to achieving 8% to 10% annualized EBITDA margin in this business by fiscal '26. Meanwhile, our other business segments, which largely comprises of our strategic EPC business, grew by 22% year-on-year in FY '23 with EBIT margins at 12.1%. We expect the annual sustainable operating margin in this segment to be in high single digit over mid- to long term. Moving over to the next slide. Slide 2. Here, we have presented the key highlights for the year. I already talked about the improvement in EBITDA margins in spite of the volatile commodity price environment. During the year, we also continued to work on optimization working capital days, one of our key areas of focus since listing. Successfully reducing it further to 50 days, a reduction of 11 days from last year. The reduction was achieved on account of improvement in channel finance penetration in the business. For the wires and cables business, the channel finance penetration stood at 83% during the year, up from 75% last year. A natural outcome of improvement in working capital days is an improvement in cash flow, leading to higher cash available for the business. The net cash on balance sheet increased by 72% this year over the last year to be at INR 18.9 billion as at end of the year. An important use of the cash available to the company other than for CapEx is to reward our shareholders through dividend payments. In line with the business growth and as has been our trend since listing, we have increased our dividend payout for the year to 23.5%, and paying dividend of INR 20 per share, a 43% increase over INR 14 per share paid last year. The last but a very important highlight for the year is the strong growth achieved in international business. which registered a growth of 50% during the year to stand at INR 13.8 billion, contributing to 9.8% of the company's total revenue versus 7.6% last year. One of our goals within the Project Leap was to achieve a top line contribution of 10% from the international business. During the year, we expanded our global footprint to 70 countries. With tremendous increase in expense globally in sectors such as renewables, oil and gas infrastructure, the company is confident of growing the international business further, strengthening our foothold in various international markets. Moving to next slide. This slide will give you overview of our performance on certain key parameters since listing. The company's revenues have grown at a CAGR of 15% over the 4 years, growing from INR 80 billion in fiscal '19 to crossing to INR 140 billion this year. The remarkable growth has been achieved in a profitable manner with EBITDA margins improving by 120 bps from 11.9% to 13.1%. From a paltry INR 450 billion net cash in hand in fiscal '19 and negative net cash prior to that, we have improved our cash flows, optimizing our working capital and reducing debt to have INR 18.9 billion of net cash on balance sheet as at end of fiscal '23. From being largely a domestic player, the company has evolved into an international player being 1 of the top 10, 12 wires and cable companies in the world, aiming to be among the top 5 in the near future. Our international business has grown 6x in the 4 years since the listing to now contributing to almost 10% of the company's overall revenues. Domestically too, we have seen healthy growth in our market share from 18% in fiscal '19 to 22% to 24% in fiscal '23. And while we have progress, we have also generated value for our shareholders with Polycab being one of the leading wealth creator in the country with market capitalization growing at a CAGR of 58% since listing and dividends growing at a CAGR of 63% as presented in this slide. Moving on to the next slide. Let us talk about our key transformational project called Project Leap. As you all are aware, we embarked on this project post fiscal '21, partnering with BCG, a leading global consultant to work on a range of strategic themes and initiatives focused on growth, profitability and long-term capability building for the organization across B2B and B2C businesses with a goal of achieving INR 200 billion of top line by fiscal '26. Under the project, we have been working on various streams clubbed into 4 key strategic themes namely: customer centricity; go-to-market excellence; winning with new products; and setup of organization enablers. We have made tremendous progress in each of these key areas over the past 2 years. I will take you through each of these topics one-by-one. Under customer centricity, we have been redesigning our business operations, keeping the customers' needs and convenience at the center. Keeping the same in mind, we had undertaken the merger of our HDC and LDC verticals last year, realizing the customer as well as distribution overlap between the 2 segments. Our robust performance during the year in the cables business was an outcome of this strategic manoeuvre. On similar lines, during the year, we merged the Fans vertical with Lights & Luminaries and Retail Wires with Switches and Switchgears. These moves will increase cross-selling opportunities and improve efficiency from fiscal '24 onwards. To better understand our customers and meet their needs, we have deployed our dedicated team. This effort has led to a significant increase in direct quotes from Polycab, showing our improved control over pricing and direct customer interaction. We have also implemented a structured approach to serve strategic key accounts in real estate, OEMs, data centers and special cable industries providing customized solutions. Under the agenda of improving our go-to-market strategy, we have been focusing on enhancing our distribution reach in B2C business, and increasing presence in white spaces for B2B business. We successfully entered into 146 cities where our B2B business was limited. And additionally, we onboarded 317 and 371 new distributors for our retail wire and FMEG businesses, respectively. Identifying distributors with cross-selling potential has been a priority as well as working closely with distributors experiencing slow growth or decline. To further bolster our market position, we have been strengthening our presence in alternate sales channel like modern trade and e-commerce, specifically targeting Tier 1 and Tier 2 cities. Overall, these initiatives underline our commitment to enhancing our GTM strength by expanding our reach, optimizing distributor performance and leveraging alternative sales channels. As part of winning with new product strategy, we have revamped our entire fans portfolio. With premiumization at core, we are focusing on more design and aesthetic oriented product portfolio with fans up to 5-star ratings. We have also shared our strategy for the Switchgear segment with focus on gaining market share. Following the sale, we took price revision for 10kA portfolio to ensure parity with competition as well as launch new 6kA MCB products. Following success of Etira wires, we have launched the Etira brand in the switches segment as well as to capture the price-sensitive customer base. Overall, we have robust product pipeline across segments supporting our future prospects. On the setup of organization enablers, we are pursuing a structured distribution addition, planning and monitoring focus on technology to exemplify as well as simplify the entire process. We are also leveraging technology to manage the key cost drivers in the FMEG business to drive up its profitability. We have also set up our digital vertical focused on advancing our business initiatives. Our digital council setup under vertical is looking after implementation of all the initiatives of this vertical through a detailed B2C and B2B digital roadmap. Also, towards the end of the year, we also upgraded our ERP technology to the latest version of Oracle. This will allow us to utilize relevant business insights in real time and deliver more accurate business decisions. Moving to the next slide. Now coming the topic extremely important for us and which will form the bedrock of our business operation in the future, which is our ESG strategy. Polycab has finalized its ESG framework, aligned with international ESG protocols, guidelines and standards, along with the ESG charter. The ESG framework will be ingrained into company's ethos, with all business decisions taken now onwards focused on sustainability, on the pillars of environment, social and governance principles. On this slide, we have presented our ESG strategy and approach. The ESG material topics have been identified, keeping in mind our business, as well as its effect on the environment and the society as a whole. The ESG council, consisting of various functional heads, will be responsible for implementing the policies formulated under the framework with the help of ESG working group. The Board, along with the CSR and ESG committee, will be responsible to monitor the implementation of the framework. We have taken various internal goals across different ESG material topics, and we'll be communicating the progress we make on each of those goals in our annual report. We will also be looking to get an ESG rating from a well-known ESG rating agency during the current year. While the company has always been aware and focused on carrying out this business in a sustainable manner, we believe that implementation of a structured ESG framework will enable us to build resilience in the business, transform culture and create long-term value for our stakeholders. To conclude, I would like to thank all our shareholders, customers and other stakeholders, who have shown immense support and trust towards the company over the course of its existence. The macro environment remains strong, and the company is fully prepared to leverage on its strength to capitalize on this opportunity. More importantly, along with business growth, it will be our endeavor to transform Polycab into an enduring and sustainable organization through a strong focus on our new ESG framework. Before handing over the proceedings to Manita, I would like to play a short video highlighting the year gone by. [Presentation]

2023 convening the 27th Annual General Meeting has been circulated to the members. Then, I take the notice as read. The auditor's report for the financial year '22-'23 issued by BSR & Co. LLP, statutory auditors of the company, does not contain any qualification, reservation, adverse remarks or disclaimers. And as such, the report can be taken as read with the consent of the members. Hence, with your permission, I'll take the auditor's report as read. Further, the secretariat [Audio Gap] the members. With your permission, I take them as read. I am pleased to bring to your notice that the company had provided remote e-voting facility to its shareholders of the company in respect of businesses mentioned in the notice. The remote e-voting facility was kept open from Tuesday, June 27, 2023, 9 a.m., till Thursday, June 29, 2023, 5 p.m. Members who have not exercised their voting electronically through remote e-voting can vote at this meeting through the e-voting facility provided by NSDL. The Board has appointed BNP & Associates, Practicing Company Secretaries as the scrutinizer to scrutinize the e-voting process in a fair and transparent manner. The final report on the voting shall be submitted by the scrutinizers within 48 hours of conclusion of the Annual General Meeting, and the results thereof shall be declared immediately upon receipt of the report of the scrutinizer. The combined results of the votes cast by the members through remote e-voting and the e-voting at the meeting on all resolutions, based on the report of the scrutinizer, once finalized, will be informed to BSE Limited and National Stock Exchange of India Limited. And also, it will be uploaded on the company's website, www.polycab.com. I now hand over the proceedings to the Chairman and CFO. Sir.

Thank you, Manita. I will now call out the names of the shareholders who have registered as speaker to express their views and ask questions. We will attempt to answer all of them, once all of the shareholders have spoken. Please limit your questions to 2 per participant in the best interest of time of all other shareholders attending this meeting. I request our first speaker to please express his views, Mr. [ Mahes Salpe ].

Yes. Thank you. Good morning, all. My name is [ Mahes Salpe ]. Firstly, I would like to extend my congratulations to the management on the occasion of the 27th Annual General Meeting of the company. I have diligently reviewed the comprehensive 430-odd page annual report, which has effectively addressed majority of my inquiries. I want to commend the team for preparing this outstanding and informative annual report. My question for the Board today is more on a macro level. I would like to understand, what is the outlook for infrastructure development in India and its implication on the electrical industry, given the demand for both our business segments, it's largely linked to the infrastructure growth in the country? Thank you.

Thank you, [ Mahes ]. I will now go to the next speaker, Mr. [ Koushik Sahukar. ] Please unmute your line, Mr. [ Koushik Sahukar ].

Am I audible, sir?

Yes, you are. Please go ahead.

My video is not coming, sir?

But we can hear you, sir. Please continue.

Good morning, everyone. I am honored to have the opportunity to speak today with all you today. I want to start by thanking the Board of Directors for giving me the chance to address you all once again. As we you would already know, my name is [ Koushik Sahukar ], and I am chartered accountant from Mumbai. I have been facing [ physical turns ] due to dystonia, which has affected my -- [ 60% ] of my body is paralyzed, back in my right hand, my right leg and left foot. However, I have never let these challenges hinder my passion for accounting. However, I do need your support to continue to be self-reliant. I have been reaching out to you for the last few years. But it seems my request has gone unheard. I understand you may be -- you may have been busy with other things, but I would like to know the reason why my request has not been given the attention it requires. I want to make it clear that I'm not looking for any freebies or free money or handouts. I'm simply asking for help to ensure that I can continue to work to the best of my abilities as a practicing chartered accountant, have value, independent and self-reliant. And I hope that you can appreciate my desire to maintain the independence. Thank you for considering my request. I strongly believe that with your support, I can make different changes to our organization and positively impact society. I currently await your response and sincerely appreciate the time and attention you have given me today. If you are interested and willing, I would greatly appreciate the opportunity to meet with you in person.

Thank you, [ Koushik ]. We wish you a speedy recovery. I'm now moving to the next speaker, Mr. [ Mukesh Khandelbal ]. Mr. [ Mukesh Khandelbal ], please unmute your line.

Good morning, honorable Chairman, sir. Good morning, all directors and shareholders. [Foreign language].

[Foreign language] Moving to the next speaker, may I request [ Aspid Besaniya ] to unmute your line and go ahead?

Can you hear me?

Yes, please go ahead.

I am [ Aspid ] from Bombay. So congrats on your very good results, and I hope you continue to do that well. But after 3 years, you are expecting only 200. But just now, it's about 140. So that means you are expecting very low growth in the next 3 years. And secondly, why inventories have gone up so much? And thirdly, April [ EGE ] has incurred a loss this year. So what is the reason for that? Sir, next year, please hold the AGM physical, although [ MCMA ] increased the date. Thank you very much, and all the best for the future.

Thank you so much, Mr. [ Besaniya ] for your three questions and feedback. We have taken a note of it. We'll move to the next speaker. May I request [ Mr. Mihir Ravindra Jain ] to unmute the line?

Am I audible?

Yes, you are. Please go ahead.

Okay. First, respected Chairman and Board members and my fellow shareholders, my name is [ Mihir Jain ]. I'm from Mumbai. Firstly, I would like to thank the management and the company for a handsome dividend of INR 20. It is heartening to see the company rewarding its shareholders in line with its own growth. On the topic of growth, I believe the company has a huge opportunity in its FMEG business segment, in which we are still a comparatively smaller player. Given that the management has stated that we are now done with the distribution [ reject ] within this business, which had affected the segment performance over the past couple of years, what kind of top-line and bottom-line growth is the company targeting from these businesses in the future?

Thank you, Mr. [ Mihir Ravindra Jain ]. We'll now move to the next speaker, Mr. [ Manjit Singh ], please unmute your line.

Sir, [ Manjit ] is not online. Can we move on to the next speaker?

Yes. Mr. Vishal Amlani, may I request you to please unmute your line. Mr. [ Vishal Amlani ]?

Hello, am I audible?

Yes, you are. Please continue.

Good morning, everyone. My name is [ Vishal Amlani ], and I'm speaking from Bombay. Firstly, I would like to thank our Chairman, Mr. Jaisinghani, and the entire Polycab team for the exemplary work and results delivered over the last year. ESG is the new buzzword going around. And as mentioned in our annual report, our company has taken several steps to ensure a more sustainable future. So could you please elaborate and provide details as to how we aim to achieve these goals?

Mr. [ Vishal Amlani ], thank you for question. We'll come back to you in a while. May I request the next speaker, Mr. [ Ankur Chanda ], to unmute the line.

Sir, [ Ankur ] is also not available. Can we move to the next speaker?

Sure. Now I'm going to the next speaker, Mr. [ Arvind Vaykar ]. Mr. [ Arvind Vaykar ], are we audible?

Can you hear me now?

Yes, yes. Please go ahead. We can hear you.

Yes. Chairman, all the Board of Directors and the employees of the Polycab, I would like to congratulate you for an excellent all-round performance. I can see -- happy to see highest-ever revenue, highest ever PAT, highest-ever [ resources ] and highest-ever export. I'm sure the target set of INR 200 billion by 2026, it will be easily achieved and -- as I can see that the team is totally charged. Actually, I -- frankly speaking, I have only one question, but more suggestion on that. Question is that, I've observed that your [ OPM ] percentage is hovering around 12% to 14%. But then, how will you improve this [ OPM ]? I feel -- no, it's just a suggestion because I worked as a General Manager in Cable Corporation of India for quite some time in Mumbai. I know that basically, the LT cables are for the masses, whereas EHV and the specialty cables are for the classes. And you get a better margin when you hand over -- you work on specialty cables like EV or your defense, railways, telecom, data center, marine cable, et cetera. So you will get more margins there and profit will be better, it will improve. Similarly, you were -- first, it should be more on export. Of course, your export, you have done exceptionally well. But you should further enhance it by setting your cables to U.S., Europe and Asian market. One suggestion that as far as the FMEG sector is concerned, it is more of a trading, FMEG sector. But in that also, I must tell you that your solar inverters are superb. You should concentrate more on -- again, there are also specialty -- FMEG is not for the -- you should not go for the classes, you should go for the masses. My thrust is that you should be talking, targeting how to improve the profitability. Turnover-wise, you are talking about a very moderate growth, 15%, et cetera, it's a moderate growth. I am not worried about that, and that is good. Even your target of INR 200 billion by 2026 is quite moderate, it is easily achieved. But what you should be concentrating more is to how to improve the profitability and the bottom line of the company. That is what is very important. I can always offer my services. Of course, we have -- of course, [ as chief ] have retired now and having a reasonable knowledge about the industry. I'm not saying I'm fully knowledgeable, but some knowledgeable, but I can always contribute. One more suggestion which is not listed here, I wanted to tell you that, I'm sorry, your AGM is -- the management of the AGM is not really good. I'm putting it slightly bluntly. I have seen the AGM of companies like Asian Paints and [ TCS ] and a number of things. First and foremost thing, your platform, Webex, is not good, you should switch out to Zoom or something like that first. Second thing that -- I can see that none of the speakers are easily visible. The video has been switched off. We are hardly in control. Third thing, we were not informed that what is our sequence number, when will it happen. So what they do at Asian Paints, they do a very good -- they form a small WhatsApp group of all the participants. And they keep on giving them information. "Yes, your number will be this. Your number is this. Now next number is here, please ready the chat." So something like that, I want to -- I have seen that last time also, I have seen that your AGM performance, especially the platform and the things are not good, you must improve on that. This is just a suggestion, please take it with the right spirit. Don't think that you -- I know everybody likes to see only the good things about the company. I have seen everything is good, let me tell you that. You are superb, everything, performance-wise, you have done exceptionally well. This is just a small suggestion. If you do it, it's better. If you can't do it, also, I am happy about it.

[Foreign language].

Thank you, [ Ananjit ], and thank you, [ Vaykar ], for your feedback on the AGM proceedings. We'll certainly improve in the next year. And now moving to the next speaker, Mr. [ Sajal Marjilya ], please unmute your line and go ahead.

Hello? Can you hear?

Yes, please go ahead.

[indiscernible] Chairman and Board members. Thank you for organizing the AGM digitally, so that shareholders like me can join the meeting without any hassle. My question is with respect to use that digital technology in our business. According to the world, companies in manufacturing sector are increasingly using technology to improve on business performance and efficiency. I would like to know how our company is thinking on leveraging the latest digital technology within our business.

Thanks a lot, [ Sajal Marjilya ]. I've been told he was the last speaker. We will probably now take questions one by one and start answering. The first question of [ Mahes ] was on the outlook for the infrastructure development in India. So as all of us are aware, the outlook for infrastructure development in India appears promising, with the government's commitment to investing in sectors like transportation, energy and rural development. And that is visible via increasing higher budget allocation to these sectors year after year. These initiatives aim to enhance connectivity, promote economic growth and improve the overall quality of life. Consequently, the demand for electrical products is expected to rise significantly as these projects require various electrical equipment and solutions. This presents a favorable opportunity for companies in the electrical industry, including our company, to contribute to the development of critical infrastructure and capitalize on the growing market. If I now go to the next question, I think that was around the competition. I think there is healthy competition in both cable and wire as well as in FMEG, and it is good for the industry as well because it brings out the best among the -- all the players, and it is good for the customer. We are already a market leader in cable and wire. As you would have noticed in my presentation that we are enjoying almost 22% to 24% of market share. If you were to talk about FMEG, we have market share between 2%, 3% to 4%, 5%. And over the period, because of the strategic initiatives which we are taking, we believe that we will be able to significantly improve the market share. As part of Project Leap, we have understood that there are several areas where we have to improve. We have to improve on customer centricity, we have to improve on customer insights, R&D and innovation, we have to improve on digital penetration in our business, and we have to slightly improve on the professionalization of the entire organization. And slowly and gradually, we are moving in the right direction, the right pace. You would have noticed in my presentation that our top line has increased from INR 8,000 crores to INR 14,000 crores in the last 4 years and profit has almost tripled, this shows that the initiatives are resulting into benefits to the company, and we would like to assure each and every shareholder that in the years to come, we will be able to further hasten the pace of the execution. Moving to the third question. I think that was of Mr. [ Aspid Besaniya ]. He was probably trying to highlight 3 aspects. But let me club his question and Mr. [ Mahes' ] questions on the FMEG growth. We have Bharat here. Bharat, the question was around FMEG performance in the last year and the outlook for the next year and what are the initiatives we are taking to improve the top line of FMEG business as well as the bottom line. Over to you.

So FMEG business is a very important part of our strategy, and we want to surround the electrician and the retail trade with more products, and we want to give the customer more. It has given us initial success over the last few years. And as a part of Phase 1 of [ VJGOV ] distribution that -- and manufacturing capabilities, this is something that we have worked upon in the last 1 year under Project Leap, and we've been able to achieve success, and we are moving towards the right path. The next phase, we are with Ogilvy and Interbrand and a lot of influencer-based activities. We've been working at the retailer level for better demand generation; and two, communicate with the customer and tell the customer more about Polycab and reach closer to them with better service and better products. So over the next few quarters, we see that the Stage 1 of the strategy has played out. And as we implement the next phase of the strategy, we will see better expected results from us.

Thanks, Bharat. And the other thing which we have done in the year gone by is we have merged the verticals. And in fact, a year before that, we had merged HDC and LDC. And in the current year, we have merged switches and switched gear with the wires business and created power BU. Similarly on the FMEG, we have [ fan and ] lighting. I'm now going to request Nikhil to give his insights on the benefits which you are expecting from these mergers. Over to you, Nikhil.

I think the whole purpose of merging these businesses is to gain synergies from the channel, gain synergies from marketing. We utilize our marketing spends better. We are able to bundle products for the customers. Our focus has been to focus on secondaries and to focus on tertiaries for the customer. And therefore, we merged these businesses to bring in significant synergies. And therefore, that's what we've been trying to [ achieve ].

Thanks, Nikhil. Thanks a lot. Moving to Mr. [ Vaykar ], I think he has highlighted a couple of very important topics. One is operating margin, and that his observation is absolutely right, that is around 12% to 14%. And in line with our strategic initiative, we are focusing on businesses like exports and specialty cables. Exports, as you would have noticed in my presentation, is almost 10% of our top line. And we expect in years to come, we will continue to deliver better on exports front. He highlighted that FMEG is a trading business, which is probably true for the industry, but not for us. We are a true Make-in-India brand. Almost all the products are being manufactured in-house in the country. We have manufacturing locations in Halol, which is in Gujarat; Daman, Nashik and Roorkee. And I would probably assume that almost 98%, 99% of our products are being manufactured in-house, so we are not a trading organization as far as FMEG is concerned. He's right that specialty cable is an important opportunity, and we are focusing on that. I think the other feedback on the stock split and bonus, the Board will appropriately consider that and come back to the shareholders whenever the decision is taken. I think there was a feedback on ESG. ESG, as I had included in my presentation, will continue to be a focus area because we believe that environment and social both are important ingredient of each and every decent making. And ESG will be integrated into our daily business operation. This is in line with our commitment to sustainability, and we have engaged a reputable consultant to develop a comprehensive long-term ESG framework. This framework will serve as a guiding post for our sustainability efforts, ensuring a structured approach. One of the key steps is to develop our [indiscernible] metrics, which has been developed, and it will help us in identifying the critical topics such as increase of use of renewable energy, improving diversity, focusing on training and skill development. These topics will receive our utmost attention and efforts, and we will reflect all of these in our annual reports in the years to come. And this will be monitored by the ESG and CSR committee as well as by the Board. I think these were the questions which were asked. I would now request Manita to continue with the proceedings.

So thank you. I would request Inder sir to please conclude, since all the questions have now been answered. Sir?

I wish to thank all my fellow shareholders for the enduring support. I would further request the shareholders who are attending the AGM today and have not cast their vote by remote e-voting to cast their vote on the e-voting platform over the next 15 minutes. I greatly value the collective contribution made by the entire Polycab team to help the company leaping to tomorrow. Lastly, I placed a record our appreciation to the cooperation and support extended by everyone, directly or indirectly, including our auditors, government agencies, stock exchange, regulators, banks, dealers, customers and our well-wishers and above all the biggest assets of the company, which is our employees. Once again, thank you all for participating at the AGM. Have a nice day.

Thank you, Inder, sir, for chairing the meeting. I would also like to thank our independent directors, executive directors and CFO. Lastly, thank you, shareholders, and we look forward to your continued support and cooperation. With the permission of the chair, I do hereby conclude this meeting. Thank you once again.