Redington Limited (REDINGTON) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to Redington India Limited Q1 FY '23 Earnings Conference Call. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Srivastava, Managing Director, Redington India Limited. Thank you, and over to you, sir.

Good morning, everyone, and welcome to our call for quarter 1. You would have seen our numbers that were disseminated yesterday, and we are pleased to report another strong quarter of sales and operating margin growth. Redington achieved record revenue and operating margin for any first quarter of the year as our continued investments in technology capabilities, partner relationships, and our comprehensive breadth of offerings begins to pay off. You would have seen that on a global basis, our revenues have grown by 25%. This is on a net accounting basis. On gross, it will be 27%, while our EBITDA has grown 34% and PAT has grown 33%. And this actually points to the fact that continuing demand -- growing demand for supply chain orchestration is driving strong financial performance across our global business. We know that tech adoption has been at an accelerated pace across pretty much every segment of the market that you can come across, though there was a softening of consumer demand this quarter. But apart from that, across enterprises, across MSMEs, mid-market and government education, tech demand has been fairly robust. And this -- and we continue -- and we continue to anticipate a reasonable demand environment and expect to sustain revenue -- strong revenues and margins from our recently implemented operating improvements amidst the backdrop of geopolitical and financial uncertainty. We know that shift to digital has been strong and continuing. In fact, I've said this in the last -- shift to digital is a macro trait, either a growth shift or a survival paradigm for most companies right now, including governments and they improve efficiency, they improve productivity, and they allow you to do much more in your businesses. So that's something which is playing out in a very good way, and we are trying to leverage to our advantage as much as we possibly can. Also, the fact that the economic environment in the geographies that we operate in has been fairly all right. Even though the global GDP growth, the global growth was dragged down by IMF, in this quarter, between last quarter and this quarter, the growth was dragged down from 4.1% to 2.9%, but still in the economies, in the geographies we are operating in, every country has seen or has been guided a very positive growth -- GDP growth for the rest of the year. So I think that plays to our advantage. Also, the fact that in most of the countries that we are operating in, the demand is led by investments by governments, investments by organizations in those countries and also a huge amount of consumption that is taking place in these countries. So I think both of those are playing to our advantage right now and that's helping and supporting us. I'm going to -- and just to let you know, our growth has been fairly broad-based this time. All the regions that we operated in, India, Middle East, Africa, Turkey and South Asia, every region has pretty much played out in a good way. Every region has contributed to the growth. Also, every region has contributed to -- and every product category, so we've had a broad-based growth by region. And we've had a broad-based growth by categories of products, which is IT, whether it is volume or value, mobility and our services portfolio. So all of that has turned out to be extremely reasonable in this quarter. Let me step back and stop over here. You've seen the results, and I'm opening up to any questions or any comments that any of you might have.

[Operator Instructions]

Just so you know, I've also got my Chief Financial Officer -- Global Financial Officer, S.V. Krishnan on the call with me, and our financial analyst Deepika on the call.

[Operator Instructions] The first question is from the line of Nitin Padmanabhan from Investec.

Congrats on the strong quarter. I have quite a few questions, but I'll just ask two and fall back in the queue. The first is Redington has always prioritized risk over growth, right? And if you just look at the landscape over the next to a few quarters from your lens, do you think that growth comes risk at this point in time. And is there any change in philosophy in terms of how you manage risk, right? That was the first question. The second question is on, obviously, the working capital, which has gone up. If you could give us some breakdown on receivables, inventory, payables and what led to such a quick sort of shift in working capital days. The broad assumption was that it will be a little gradual, but it's been quite quick. So just wanted to understand the context there as well.

Okay. Let me give you a color to both the questions, and I'm going to also requesting our Global CFO, Krishnan to chip in afterwards on that. To your question about risk over growth or growth comes rest, I think it's always going to be a very balanced sort of portfolio for us. We are a company which is very focused on what's going on in the market. In every single geography, every single country we operate in, we have to always assess the opportunity landscape and what it takes to get to that option landscape and balance it to what. We are never going to be reckless because that's what has given us growth over the last so many, many years. And we are going to be very outside in and maximize the context of the market opportunities that are coming in. Just to give you one example of that, Nitin. And like I said, it's a great question because it really plays to the way in which we operate as an organization. In the last quarter, we started to see a shift from the work from home and learn from home started to reduce, whereas the consumption in the offices, small and medium enterprises, enterprises, large customers, government, education, schools and universities all started to go up, and we had to shift our model and pivot our model to make sure we capitalize on that. Now that's a no risk strategy, but it's maximizing the market opportunity from a growth perspective. So we are always going to be balanced. There are countries right now in our portfolio, which happen to have a higher risk profile, Nigeria, Kenya, Ghana, Egypt, all of them, okay, and we are making choices to make sure that we stay in the right direction there, okay. So that's from a risk as a growth perspective. We are very balanced, but we are very, very focused on maximizing the market opportunities in a very good way. The second is working capital has gone up. Clearly, it has gone up. If you recall in the last conference that we had same time a quarter ago, we had guided that our working capital will stick in the range of 28 to 35 and right there, it is -- and it's sticking at the early part of that curve. We know that the global markets right now, whether they are financial markets, geopolitical economic landscape, all of them, all of those are little disrupted right now. We do see that interest rates are hardening up. We see inflation is going up. We see commodity prices really high. We see supply chain is disrupted all of this will contribute. And then there are many equipments which are not getting supplied in time. So your supply and delivery for project orders is going to get hampered or going to get constrained a bit, so just the integration is going to become challenging. So given all of that, we understood that the working capital will go up. It will normalize somewhere. And the way we had guided, it stays exactly right at the early part of that curve right now. So I think we are pleased that we are pleased with the situation, and that's the way it is playing out exactly the way you expect. Krishnan, you want to add?

[indiscernible]

I'm sorry to interrupt, sir. Your voice is breaking.

Okay, is this clear now?

Yes, sir.

Okay. So as you know, the net working capital by end of the quarter, it was about 28 days, split into debtor days of about 52 days, inventory days of about 32 days and creditor days of about 56 days. I want to ascribe one important reason as to why there is a spike in working capital as Rajiv alluded to you. See, in the enterprise space, what we see is, there are short shipments. And since there are short shipments and the balance shipments are taking time because of the general shortages that we see in the industry. We had to store these stocks and we couldn't bill. That has enabled us to increase our inventory days. So this is something which is very unique. It'll continue for some time till this shortage situation goes away. But there is no concern at all on this in our view. And also, as the enterprise performance, the IT value performance has been better, as you know very well, this also tends to increase their debtor days and at the same time, we will also get in higher creditor days which can cushion a bit in terms of increase in debtor days. So as Rajiv said, we are well within the trade, and we don't see any concern in business.

Sure. That's helpful. And any change in provisions for the quarter?

Okay. So the provisions for the reasons that I have stated had gone up in the case of inventory. Inventory provision for the quarter has been at about 0.55%, which is mainly because of some of these part shipments that had come in where we had to provide for it. We had an option of changing the inventory provision model because we don't think these will be taken a second but we thought it would be prudent not to make a change, and we had gone ahead. So that has increased the provision percentage for this quarter, which -- I mean, once the product gets sold, it will get reversed. In the case of receivables, the provision percentage for this quarter has been 18 bps, 0.18%. That's also slightly higher. I want to mention two important points here. One in the case of India. In Q4, there was a provision that we had created last quarter. And I mean we knew the money will come but it is going to take time. A substantial portion of the money has been received in the current quarter and the provision got reversed. There is a similar transaction in our overseas business, where while we are still confident in terms of collecting because of the aging that we should provide for it and that provision has added on to it so that the overall provision is about 18 bps, Nitin.

[Operator Instructions] The next question is from the line of Pranav Kshatriya from Edelweiss.

Congratulations on a good set of numbers. My first question is regarding the growth. I mean, we were anticipating some sort of slowing down growth in India Mobility segment. But if I look at that is the one which has driven the growth in this quarter. So what has led to that? Because I was thinking that we had this change in GTM, which should slow the growth. And your commentary also suggests that enterprise has driven the growth, but the numbers suggest that India Mobility is sort of driving the growth. So that's my first question. Second question is on the sustainability of the margin, if I look at the margin and if I incorporate the 18 basis points.

Mr. Kshatriya, sorry to interrupt. Your voice is echoing.

Yes. So if I look at the margin profile, the margins are at significantly higher, considering there has been 18 basis point provision. So what will be the sustainable level of margin, given I think most of the costs are now normalized? Or are there one-off costs which you want to call off? Because our last interaction suggested that you might be looking at investing more in creating capability, and that's why we were sort of expecting the margins to go down. And lastly, I mean, working capital trajectory, if you can comment on that. That's it from my side.

Okay. Many questions. I think about the working capital, but we can give you more color to that. But let me give you a sense as to growth and is the growth driven by India Mobility or is it driven by many other things? Growth is driven by Mobility overall. Clearly, there is a mobility which has grown faster than any other part of the business. But our value part of the business has grown 30% okay, which is a very, very, significant and serious growth. Value business, it generally don't see such a huge amount of growth because that's a much more stable sort of a product line and category. But our value part of the business has grown significantly. Then our cloud has grown even faster than that. Our cloud has grown 48%. And it is equivalent to our mobility growth. I think the question that came up last time in the call, and many analysts, many of you had asked that question about the impact of Apple GTM and how is it going to impact the revenues of [indiscernible] and all that. And if you recall we had answered that question, it wasn't Apple alone, it was Apple and Dell and Lenovo. And everybody makes changes to their GTM. And it is only fair. I told you that it is only fair for them to make changes to the GTM to suit the model that they have. And we at Redington have to do a variety of different things to make sure that we continue on our course of growth. And there are many elements and your question is very deep. There are many elements that allow us to stay on the track of growth and also stay on the track of profitability. Sustainability of margins that is one-off of costs, we are making investments. We made investments into our many areas of technology, people, platform last couple of quarters we've been making, and we'll continue to accelerate those investments because those are fundamental to our business. And what we are doing in that space is, we are making investments in technology that allows us to become more productive and more efficient, very straight line sort of an equation. We are making investments in shifting our business model from a pure-play brick-and-mortar to a more online or a customer choice model, which is an omnichannel model. We have made our shift towards the cloud platform. You know we've got a very strong cloud platform where more than 11,000 partners are transacting pretty much every day now -- every month now. And that's a very, very strong mode of working. All of those are models which allow you to do more with a much more optimized operation. We've set up -- in the last quarter, we've set up our shared services, which has consolidated the operations of Redington, the entire country to enable us to become far more efficient. And just so you know, I'm really not sure how many of you would probably know. We generate more than 3 lakh invoices every quarter. We process more than 3 lakh orders every quarter. And all of them is getting done now out of my one single shared services center at the back end and how cool and efficient can that be. So look, there are many, many, many such initiatives that enable you to become far more optimized and efficient in your business than otherwise. So that's the way we see our trajectory. That's the reason of growth because the value has grown very significantly because cloud has grown significantly because all our tech investments and efficiency investments happen to be continuously sort of scaling up and going up. To give you a sense on whether they are sustainable or there one-off kind of a profit margin and all that, I think we are granting ourselves to be very, very efficient and very maniacal, focused on our costs. And we are also cranking ourselves become more efficient, but we also have a view to where the world is headed right now. We know for sure that the global supply chain, the global financial markets, everything is disrupted. So providing a sort of guidance to you for the long run is going to be a very difficult, tough ask to do. We did extremely well in Q1. We have a good hold on where our Q2 is headed. And so that's all that we can be as prudent business players in the market for a long time. And as any reasonable business, you would expect us to be very, very strongly and maniacally focused on delivering short run in a very healthy way. And having every single -- every single quiver -- or every single arrow in our armor to make sure that we have covered ourselves for the mid to long run. So I think those are the ways in which we are trying to think of our business. Everything has to be in a good, sustainable way. We will -- you will continue to see us make more investments and not less. And to your question about working capital having gone up, we answered that. Krishnan, do you want to add anything more to that, please?

I think it was answered clearly. In working capital, I mean I just want to make all of you know, we are at it. There is no need for concern. And if there are any business-related situations, we will handle in the best possible manner. We will not leave any stone unturned as far as the efficiency is concerned. And the point on cost Pranav, what I want you to know in spite of the additional costs that we are incurring towards the capability building, still you can see the increase in cost is well within control. In a way of speaking, what we had done in Q1 is a bookish performance. Revenue has grown strongly, gross margin has grown even at a better pace. The OpEx growth has been lower than both revenue and gross margin, resulting in the operating profit being better. So I mean we will be at it, don't worry.

Yes. And also to your point, I think the current environment will not anyways, allow you to make long term sort of really long-term prediction from that perspective. So our range of working capital stays in that of 25 to 35 sort of a day there.

[Operator Instructions] The next question is from the line of Krish Mehta from Enam Holdings. [Operator Instructions] I believe we have lost the line of Mr. Mehta. Let's move on to the new next question, which is from the line of [ Athreya ] from [indiscernible].

Sir, I just wanted to know -- I mean, as to whether the Mobility segment grew year-on-year in the rest of world market or how is the performance there been? That is my first question.

Yes. Mobility grew in the rest of the world as well. Mobility has grown by 24% it has grown in the rest of the market.

Sure, sir. And I mean, in the past few quarters, we had incorporated new subsidiaries in Bahrain, Jordan, et cetera. So what is the medium-term perspective? Or how are you planning to grow in new geographies? And can you just talk about the new products, the solar product and our AWS partnership as well?

Okay. And again, I think, thanks so much. And that's a great segue, great question, wanting towards how we're thinking about our business. And clearly, our business has two dimensions of -- two or three dimensions of growth. One is, in the distribution business, you add more products, you will surely grow or you add more geographies, you will grow or dual combination with 2 in any geography you will grow. So in countries like Jordan, Bahrain, there are requirements that we must set up our business expansion there. And we are setting up our business expansion. You're absolutely, bang right, Jordan is a subsidy that we're looking at. And there will be a few more countries there, we will try and grow to expand our reach and coverage. We understand the game well. We know how to set up our distribution business in any of these countries. And we are using tech enablement -- technology enablement to make sure that we can accelerate our penetration into these countries. The products are similar. The products are the products that you get a contract for from any of the brands. So we try and do value. We try and do volume. We do in IT and mobility products in any of these countries for whichever product we start with getting a contract from a brand, from a vendor and we start to penetrate in that market. So that's our philosophy. That's our growth paradigm right now. We are in the countries that we are in, but we are looking to make sure that we can expand our coverage in a lot of these other countries there.

Sure, sir. And is it possible for you to give some more color on the -- how would our cloud business is working and it is shaping up and our partnership with AWS as well?

Yes, I'm going to give you that. You had asked that question -- and I was going to cover that. And solar as well, okay. So let me cover solar and then I'll cover cloud. Is that okay?

Yes, sir. Sure.

Okay. Now solar is a very strong business now. You know that globally, there is a strong pitch towards sustainable energy, very strong pitch towards green energy. And India has made some significant commitments to World Forum on sustainability of trying to make sure that 50% of the energy generated is green energy, by 2030. So I think that's a very, very strong commitment we have made. That pitches solar to be a very, very strong deployment implementation and all the solar projects have to be done at a very, very fast pace. So because of that, our solar business grew more than 400% last year. And in this quarter, Q1, it has grown about -- it has grown about 190%, close to 190% it's grown, solar business in Q1. We do very -- lots of activities in solar, we do classic distribution of the solar panels, invertors, and the products that go into the making of a solar plant. But we also have a bit of advisory services over there. So we are extremely differentiated. We pretty much are the only unique in this space because, we are the only organized distribution partner, which also does consultancy and advisory services to a whole range of partners who set up small and big solar plants. So that's one thing which is being out. We -- hopefully, we can expand this business as we go forward because the geographies we play in are literally the sunshine capital of the world. So there is a huge amount of potential possibility, which exist there in the solar business. Your point about cloud. And our cloud has been a very good story for us in Q1. In Q1, our cloud business across all the geographies, countries we operate in, has grown by 48%. And that's a very strong story. Our managed services and cloud has grown by 62%. And those are both very good outcomes. We have struck a partnership with AWS for all the regions we operate in India and Middle East and Africa. And those are very strategic, we've got very strategic sort of a play or partnership with AWS and also with Google and Microsoft to resell their products, but also scale up in trying to add competencies and those competencies then allow us to do a lot more with our customers and partners. We move far more, engage and enrich with our customers and partners. So this is a strategic collaboration agreement called SCA with the Amazon Internet Services Private Limited, which allow take a range of the products and also enables deployment and...

I'm sorry to interrupt. Your voice broke. Can you please, repeat the last sentences which you said.

I said we have a strategic collaboration agreement, SCA, with Amazon Internet Services Private Limited, which allows us to offer the range of products, management platforms and services to our customers and partners. It enables us to become far more capable because we add technical capabilities to ourselves to deliver these products and services to a partner. So we feel very good about the fact that the world is headed in the direction of cloud and so are we.

[Operator Instructions] The next question is from the line of Krish Mehta from Enam Holdings.

Congratulations on a good quarter. The first question I had was a follow-up on the cloud business, if you could provide the margins for the cloud and cloud managed services for the quarter?

The cloud product resell comes at a similar margin, Krish. It doesn't really give you a very, very huge, differentiated margins. It will be in the range of 5%, 7%, 8%, depending upon which product of cloud you're selling and which banner cloud you're selling into, which customer or which segment of the market. It goes in the range of 5% to 8%, 9%, not more than that at a cloud product level. Services are a different ballgame altogether, Krish. And services stretches from a very rudimentary fundamental entry-level infrastructure services of provisioning, which will give you a margin of 10% to 15%. But if you scale up the services to the level of migration and platform and software as a service, then you start to get into the game of 25%, 28%, 30%, 35%, 40%. So depending upon the complexity of services, and we are building our capabilities to do the entire range of services. Right now, we may be less on the more complex services and a lot more on the entry level services, but we breed capabilities now to deliver and deploy the more complex services of migration nature, which will give us much, much higher margins.

And just to add on to what Rajiv said, from a working capital perspective, there is no -- I mean, either no [ do in terms ] of working capital. So both the businesses resell and the services portion in terms of ROCE, it will be quite attractive.

Okay. And my other question was on the net debt and cash balance. If you could provide that for Q1?

Can you repeat, Krish? We missed your question, please.

Could you provide the net debt and cash balance for the quarter?

So the net debt figure end of Q1 is about INR 744 crores, which is roughly about 0.1x of negative net debt. And the cash balance -- okay, I don't have the ready-made number. It's about INR 1,100 crores, INR 1,200 crores.

[Operator Instructions] The next question is from the line of Aasim Bharde from DAM Capital Advisors Limited.

So just a couple of questions. Firstly, can you talk about what should be a sustainable EBITDA margin for the consolidated Redington Group going forward? Would it hover at level just shy of 3%, maybe a little higher the year after? And what would keep margins at these levels? Will it be more on the enterprise sales bid, which brings its own working capital and higher interest cost? Or would it be more services-oriented?

What did you mean by the second part of the question? First part was, what will be the sustainable EBITDA margins? And the second part of the question?

And what would drive it basically? Would it be more enterprise hardware bit that would keep it higher or services also because services today is still just 1% of revenue.

Okay. All right. Good one. Look, we'd mentioned in the earlier part of the call that guiding or projecting EBITDA or like any sort of profit profile for the long run right now is going still. Just the way the global market situation is evolving, just the way the current operating environment for us is. We're not going to be projecting it you. But right now, just so you know that the way we're trying to balance out our operational efficiencies costs and our -- and our product portfolio is helping us to stay in the range that we are in right now. And Q2 seems to be on a good track so far, okay? That's so much from a sustainability of -- long term, you've got to be thoughtful about how you guide long term. The second is a driver for the margin. And there are a few things that drive our margin, Aasim. One, clearly is, what you said is services versus non-services. But you're right, services is a very small portion of what we do today. It's about 1% of the overall revenue that we do. There's always going to be a small portion, right? But a large part of our margin is the mix of this. If our mix shifts from volume products to value, and you saw this in this quarter, our volume grew 14%, but value grew 30%. If value continues to grow faster, then value inherently provides you a better margin profile. That's one. Second is, if our cloud business is going to be as good and as steady as it is happening right now, it will help us to continue to improve margins as stated. The third is if our [ proliferated ] logistics business fails up, it will continue to help us with no margins. Our solar business immediately comes at a much higher gross margin than the other parts of the business. So I think margin is a play of geography and a combination of mix of products that you end up doing. And we are always speaking, always trying to do whatever we can to manage the mix and the geo play to get to the margin requirements that we have in the company. So I think that's how we are trying to balance out this sort.

Okay. And just a follow-up. So how long do you anticipate the enterprise cycle to last from today?

My -- and this is like you're asking me to crystal gaze, but I will. And let me give you a sense of crystal gazing on this. My sense is there is such a lot of adoption of technology and such a lot of digital transformation that is taking place across pretty much every sector of the business right now. Governments are investing and they know that if they had not invested during the COVID times, countries would have shut down. Companies are investing because if they hadn't done that, they wouldn't have survived the 2 years of COVID downtime, okay. And so people have got to a point where business and technology has almost become inseparable. Earlier, people used to have a different -- technologies, and the two were kind of quite linked. But now we're getting to a...

Sir; I'm sorry to interrupt. Could you please repeat the line which you are saying?

Okay. What I was saying was, earlier, there used to be a time when GDP and technology growth were kind of intertwined and linked together. But now we're at a point where digital growth has been delinked from GDP growth and companies are using technology to either stabilize their operations or grow faster, get into new product categories, do innovation, launch new territories and geographies. So it has become pretty much absolutely the most crucial thing for businesses to survive. If you take a look at adoption across the world at a cloud and we know that companies like Amazon, Google and Microsoft in the cloud domain, just in the cloud domain, they are growing about 35%, 36% year-on-year, okay? At that level of higher revenues of $50 billion, $60 billion, they continue to grow at about 30%, 35%. So the cloud adoption is fueling the growth for lots and lots of technology providers. Cloud adoption across the world so far is sub-20%, global cloud adoption is about 18% right now, 15% to 18% of the workflows having put on cloud. So I feel that the technology buying cycle of the enterprise customer variety and the mid-market SMB variety continuing in the future for a much longer time. This cycle is here to stay for a bit here.

Okay. And just second and last question. Any comments on supply chain...

[Operator Instructions] The next question is from the line of Chintan Sheth from Sameeksha Capital.

A very good set of numbers. Congratulations for that. Sir, two set of questions. One is on the working capital. If I look at the past trend, our net working capital typically builds up in Q1 and then kind of tapers down by the end of the year. Is that the phenomena will likely to play out this year? Or do you see that this is stable, as you mentioned in your opening remark that we are still at the fringe of our guidance of [ '20 to '35 ]? That's one. And second, on the -- within the SISA, SISA Group, I see that our South and South Asian market is trending towards loss. Just want to clarify whether the net profit or profitability of that region has kind of impacted during this quarter? And how -- what is the outlook there given the geopolitical issues in Sri Lanka, Bangladesh and regions we are in, if you can provide that?

Okay. So on the working capital front, yes, I agree with you in Q1, normally, it will be higher, not because of any other factors. It's mainly on account of revenue being soft in Q1, but you would have seen this quarter, revenue has been quite, quite strong. But having said that, the main reason for the spike in the working capital, as I said, is on account of the parts shipments that we have received in the IT value space, which we think in about 1 or 2 quarters once the situation gets normalized, this will also get normalized. So that's -- so I mean it's not just a normal Q1 phenomena. That is on added to that is this point also. With respect to SISA, see, SSA has been degrowing. We have spoken about it in the past, mainly because of the movement of the vendor model, from offshore to onshore as far as the India part of the business, which was a significant part of the SSA business in the past. So that movement has enabled us to rethink even our own structure in terms of, is this to be monitored centrally out of India and we looked at as one unit as SISA. That's how we have gone ahead with this structure. So what you will see overall now since it's an integrated unit, we can look at the growth in this form. But more specifically to Sri Lanka and Bangladesh, yes, Sri Lanka is impacted a lot. But our business in Sri Lanka is not quite significant. And we are now playing a very safe game where it is -- our risks are covered is where we are participating. Otherwise, it's not. However, I mean, Bangladesh and few other markets we think is looking very attractive and there are big opportunities, and we would want to do a deep dive in that space. But I would want Rajiv also to add, the things you find.

Yes. No, I think you've answered a lot. See, our presence in South Asian markets is only in 2 or 3 countries. We just do Bangladesh, we do Sri Lanka and do a bit of Nepal as well, okay? And that's obviously Sri Lanka is a cautious approach right now. Go slow -- and -- but Bangladesh, Bangladesh is not challenged. I don't know where you hear from that Bangladesh is in a difficult situation. Bangladesh is -- they're obviously coming up with policy regulations and framework as they grow. But it's a very happening market. And we will -- we are expanding our operations and we are expanding our play in Bangladesh. We are trying to do many, many different things on products, solutions, services, logistics, and setting up a name in Bangladesh entity for ourselves so that we can really mine the market as the market starts to grow. It is in a very, very good situation. I have traveled to Bangladesh a few times and they're really, really looking very positive right now.

Sure. And just a bit on Turkey, given the currency situation.

And then just to round up on the other South markets. Right now, we play in these countries, but there's obviously going to be a potential to play for us in the other, little more mature economies of Singapore, Malaysia, Thailand, Philippines, Vietnam, Myanmar, those kind of countries. So I think it's a huge potential that exist and we're going to exploit that. Sorry, go ahead with the question on Turkey.