S Chand And Company Limited (SCHAND) Earnings Call Transcript & Summary

On behalf of Prabhudas Lillader, I welcome you all to the Q4 FY '20 Earnings Call of S Chand Limited. We have with us the management represented by Mr. Himanshu Gupta, MD; Mr. Saurabh Mittal, CFO; and Mr. Atul Soni, Head Investor Relations, Strategy and M&A. I would now like to hand over the call to management for some opening remarks. And probably after that, we can open the floor for questions. Thank you, and over to you, sir.

Thank you. This is -- good afternoon, ladies and gentlemen. I'm Himanshu Gupta, the Managing Director of S Chand Company Limited. I would like to welcome you all to our Fourth Quarter and Full Year Results Conference for FY '20. And thank you all for taking the time out and joining us here today. I trust each one of you and your loved ones are safe in these extremely difficult times. As you are aware, the COVID-19 pandemic hit us untimely during March 2020, which is peak sales season for us, impacting the FY '20 financials adversely. We estimate that the timing of the epidemic and the lockdown cost us INR 160 crores to INR 180 crores of lower reported sales during FY '20. Do keep in mind that our K-12 business is seasonal in nature. The Q4 accounts for 75% to 80% of annual revenues. And month of March itself accounts for 30% to 40% of the annual revenues, coinciding with the commencement of the new academic session. On back of the COVID-19 pandemic, we saw school and education institutions taking precautions and shutting down early for March itself. We received orders from channel partners till mid-March, and our plants and warehouses remained in operation till 21st March 2020 across the country, fulfilling these orders. At the time of the lockdown, we still had a strong order book for schools and higher education, which could not be fulfilled during the financial year FY '20, and we expect a large portion of the unfulfilled orders to shift to H1 FY '21. While schools remain closed, we still have been able to recover a large portion of the K-12 sales in Q1, as students have been enabled with book supplies at home by schools and channel partners. However, the Higher Education segment and test preparation segment, which account 15% to 20% of our total annual revenues, the first semester is expected to start at least 2 months later than normal. And competitive examinations are also expected to move 2 to 3 months from the original schedule, which have impacted revenues in that segment for Q4 FY '20 and Q1 FY '21. The silver landing in this cloud was the strong interest that we got in our digital offerings across the group. We had launched our affordable digital learning solution, Learnflix, in January, which saw strong adoption and interest in these times. I'm happy to report that Learnflix has been only been downloaded over 70,000 times, and we already have over 15,000 paying subscribers. The app has notched-up a higher review rating of 4.2 on the Google Play Store. We expect the quality content along with the affordability for schools and students will augur well with -- for Learnflix. Currently, with content for classes 6 to 10 in maths and science is going to be further upgraded for other classes and subjects during the year. Mylestone, a curriculum business, has already signed above 400 schools for the next academic year, and we're looking to expand on this trend shown in this vertical. The schools that adopted Mylestone were, during the lockdown, enabled with online teaching tools and content for teachers and students through the app. This enabled the schools to continue the process of learning for students at no additional cost. During the lockdown period, we also focused on working with all the stakeholders, including students, teachers and schools to ensure that the learning does not stop due to this academic -- due to this epidemic. We reached out to over 4,500 schools, providing them with e-books, digital resources, videos, animations, presentations, teacher resources, et cetera, to ensure teacher continuity during the months of April and May, where physical books could not reach the students. We conducted more than 60 webinars for teachers and schools to train them on digital learning methods, which were attended by over 10,000 participants. These relationship-building measures go a long way in deepening our connect with our various stakeholders. We also saw a larger number of users pick our e-books during this period, where e-book sales more than doubled. Our catalog has more than 4,000 e-books across schools and Higher Education segment, which are currently lying across various platforms like Amazon, Google and Kopykitab. And we have also seen interest from higher education institutes and colleges of subscription of e-books for this academic year. I'm happy to share that we're already working on a new online learning platform, which is under development to deliver a holistic array of product features as we strive to enable the schools and colleges to conduct online classes. And power the features with tools for teaching, communicating, assessing and analyzing the performance of students and stimulating the minds of students with e-book digital resources, mind maps, practices, division and assessments. Slide 5 of our investor presentation carries more details about this new platform. You will hear more about the same in the coming months from our side as we partner the education institution, delivering blended learning to the students during these difficult times. We believe that we have a great opportunity in coming times for digital learning as a medium of education. We are confident of the values add that our digital solutions, along with the strong content depository, built over 8 decades, will provide. We feel that these products and services would be the future growth drivers for the group in the upcoming years. With that, I would now request our CFO, Mr. Saurabh Mittal, to apprise us all on the financial performance of S Chand. Thank you.

Thank you, sir. Good afternoon, everyone, and thank you for your time. I'm Saurabh Mittal, CFO of S Chand. I hope everybody is safe during these times. I would like to bring your focus on some of the operational highlights, which gave us support during these troubled times. Our strong focus on implementing the S Chand 3.0 plan led us to reduce our operational expenses, including employee expenses, SG&A and other expenses by 24% during FY '20 as compared to FY '19. Do keep in mind that the expenses were incurred throughout the year, keeping in mind a higher level of expected sales. On account of the disruption, we finished the year with operational revenue of INR 429 crores, down to 18% over last year. We estimate that during the time of the epidemic and the lockdown, cost us about INR 160 crores to INR 180 crores in lower revenues for FY '20 and quarter 4 FY '20. As for FY '21, we are already working on keeping costs in check. We expect paper prices to be lower by at least 5% to 10%, giving us support on the gross margin this year. Incremental sale of e-books will also help us improving gross margins. On the operational front, we expect employee costs, SG&A and other expenses to be lower by at least 10% to 20% for this year. This should result in improved levels of profitability for FY '21 on the back of operating leverage and strong cost control going ahead. Do keep in mind that we do not anticipate any cost item to be higher than FY '20 for the current financial year. The details of these can be found in Slide #9 and 10 of our investor presentation. On the investee company front, I'm happy to announce that 2 of our investee companies have raised capital during quarter 4 FY '20. Details are shared on Slide #7 of the investor presentation. With this, I'd now like to open the call for questions. Thank you so much.

[Operator Instructions] The first question is from the line of Deepan Shankar from Trustline PMS.

So first of all, I wanted to understand what is our expectation on FY '21 sales number, considering INR 160 crores, INR 180 crores of FY '20 number is also coming back to FY '21. So how do we consider FY '21 sale?

Thank you, Deepan. So in terms of giving a guidance, I'm not sure we can give our full year guidance in terms of revenue. Deepan, there is no visibility on how schools and colleges will open up this year because as we see, there is a continuous delay in terms of opening of schools and colleges. Having said that, yes, we have recovered quite a bit of the lost revenues in Q1. But whatever we used to do in Q1 is also shifted to Q2. So my sense is, of course, whatever we've done last year is across the base. But we expect, definitely, we'll do substantially better this year. But to give an exact number at this point of time, we would wait for all the educational institutions to open.

Okay. Okay. So we are not foreseeing any loss of revenues...

Yes. I was saying that we are also expecting a normal kind of a FY '21 sales season. That is built into what we say. But if this is an ongoing epidemic, we need to see how it impacts things. But our basic assumption is that this year's sales season will be a normal one.

Okay. Okay. So we are not expecting any loss of revenues due to the pandemic impact, right? So as and when the schools reopen, then the schools will start ordering on the original base?

No, sir. There will be -- this is Himanshu here. There will be some loss of sales. Ultimately, 100% of sales will not be able to recover, which we lost in the month of March and April. But we are hopeful that majority of the sales, we might be able to recover. That also depending on when the schools open and what the situation. But fortunately, for us, the online learning -- most of the schools are now starting in the first week of July. And the children are studying through online. And when you study online, the students also need some support material with that. So that support material, the textbooks are still required for the students to learn through the online method also. So we believe that majority of the sales, we will be able to recover. But I will not say 100% of the sales will be recovered.

Okay. Okay. So as and when schools open, these things we'll be able to recover. And also during March of '21, then the next year academic session, so that next year sales will also come up during the Jan to March of '21, right? So there will not be any impact expected?

Hopefully. We are again hopeful that the normalcy should come in. But again, that depends on how this COVID situation is working out because if the COVID situation hangs around much longer, then the situation might be difficult to say. But -- and if the COVID situation normalizes, let's say, even by September or October, then we are hopeful that next year should be a normal year. So this financial year, the January to March quarter.

Okay. So because of this scenario, so are we expecting some receivables to date to increase because the schools are getting these fee collection period also slower? So that impact, are we estimating something?

So yes, we -- there is a delay in terms of receivables. But I think so it will be largely controlled because our supply is also are -- where -- we've supplied material only where we've actually seen that we'll be able to collect receivables. So we've been very, very careful in terms of the kind of supplies that we are making. And only after ensuring that it is actually one of the active liquidators in the market, that supplies are going. So that way, we have been very careful with the kind of inventory that we are moving to the dealer network.

[Operator Instructions] The next question is from the line of Rishabh Chudgar from Enam Holdings.

So I just had a quick question regarding the inventory. So now in FY '20, if I look at the absolute inventory for us, it was INR 200-odd crores. So what are we planning to do for FY '21? Are we -- because as we are uncertain regarding schools reopening and all, do you want to build up more inventory? Or whatever existing inventory is, you're going to [ utilize ] first? And a follow-up to that would be, will this inventories will be relevant, or like there'll be some kind of inventory, which might not remain relevant?

Yes. So Rishabh, see, the finished good inventory as of...

March.

As of March is around INR 168-odd crores, which is, I think, so lower by at least INR 15 crores, INR 16 crores, despite having not made the full sales for the previous quarter. And I would say, 1/4 of it has already got liquidated in the first quarter. So we were targeting about INR 120 crores of inventory at the end of the year. We -- I think so by the middle of July should be around that number. Going into the next season, also, we will be very, very light on inventories, and we will first look at what we've got, and then when we will produce. So that what we did last year, we will continue this year because, again, the new education policy is for next year. So the same set of books will be prescribed by the schools in the next academic session also. So this year also, we expect the inventory to be much, much lower.

And Rishab, basically, the inventory, which you see, even the INR 200 crores have been much lighter -- much less other -- the sales would have continued. But unfortunately, the 10, 15 days that we couldn't sell the sales, those are the most important days for a company like us because as you understand, we only do business in 60, 65 days around 70%, 80% of the business, and we lost 15 days out of -- the 10, 15 days that matters. We lost around 20%, 25% of the business. So going forward also, we will be keeping ourselves light on the inventory, and as per requirement of the customers and the market. Evaluation only, we may be printing them, and we will continue to monitor the market very carefully even the primary sales there and even the secondary sales, we'll continue to monitor them very carefully this year.

Sir, of this 168, is it fair enough of the 160 when the next half season comes up that you'll be able to liquidate all of that? And then based on whatever demand is, you can like make additional kind of inventory. So that will be possible, right? This entire like...

So Rishab, we've already taken a provision of about INR 10 crores in our books in March itself for the inventory that we thought we would not be able to liquidate because, again, that season -- because of the 2 months, we could not sell the certain titles that go out during a certain period. So being conservative, we've already taken that kind of provision. And even going into next year, we will be very, very careful on what we are printing and supplying to the market.

And so as like since you mentioned about the e-books, so as schools like -- even they may not start physically, the maximum amount of them were schools [indiscernible] start the school's online classes. So what kind of demand we anticipate in the -- from our e-book segment? And what kind of margins are there in this kind of -- in the e-book segment?

So I'll break it up into 2. So as far as schools are concerned, while e-books can go, I still -- we still feel that physical books would be required by children. Children, at least till class 8 or 9, which is the larger part of our e-books. And for Higher Education, we, of course, feel that e-books would be definitely a better way to -- for students to pick up books, and since most of them already have laptops. So there, of course, we are seeing e-book subscription even coming as early as this quarter. And the margins there are definitely higher because the cost of production, the cost of supplies, there is no transportation requirements. So all of that is a lot lower. So I think overall cost in terms of e-books, there's a physical cost there. So that's more of a technology cost, which is, again, in-house largely. So there, I feel the gross margins are slightly higher. Gross margin, I expect on e-books would be more like 60%, 65%.

Okay. And so the ASP of an e-book and a physical book will be similar? Or that -- there will be, like, say, an e-book will be slightly cheaper than a physical book?

So currently, our e-book price and physical book prices are largely the same, sometimes the discounts vary. But again, depending upon the -- well, again, at present, we -- the volume of e-books is not that high. We want volumes begin to pick up, of course, definitely, we -- the pricing of e-books can be a lot lower.

Okay. Okay. And sir, can you give some details on how Learnflix is performing? Tracking of -- like I know Himanshu already mentioned that we have 15,000 paying subs. But how do you see this platform performing in FY '21?

So I will, Rishabh, tell you basically what is -- the background of this whole platform is basically, obviously, we know that there are bigger companies in the competition who are there already in the field, which are multibillion-dollar companies. So we are not competing in the same space, actually, with those companies because what the difference between us and them is, first, is the price point, which is largely different. So our price point of the product is INR 2,000 to INR 2,500. Their price point is INR 30,000 to INR 40,000 annually per class. So basically, there's a difference of 10 to 12x of that only. Second of all, we are mainly focusing our energies towards B2B2C platform. So we are selling these solutions to the schools and the schools are selling it to the students. And where the school -- the students are paying to the school and school is paying the money. The same way we sell-through our book -- the book sales. The same platform we are using. Because the problem is B2C platform is B2C unique to have a very high level of cash burn in terms of marketing, in terms of customer acquisition, in terms of all the other efforts. And which we, unfortunately, as a company, do not have the money and not willing to spend that money. So basically, our idea is to become a very affordable-branded company, which already stands as a very well known in the education market. And the schools and teachers know about our products, use our products, plus we're getting a lot of e-books free in that platform. So if you're buying a 6 to 10 class, you're getting books like Lakhmir Singh, which is a very popular book, other SK Gupta books, which are very popular and Maths. So these kind of books, you're already getting in e-books platform, free in the app. So the value of the app becomes almost free for the child, if he see to it. Because we are giving worth books more than INR 2,000 in the platform itself. And we feel the traction of this platform has been good over the last 3, 4 months. Just the schools right now are in a flux because the problem is the schools are not able to recover the fees from the students. So that is becoming a little matter of flux for us because the schools are, little right now, looking at a way to first, let us collect the fees, then we will ask fees for your learn clicks. But first, let us recover our own school fees first. So that is the only right now flux matter, which I think will be cleared in a month or so when the schools definitely have to continue the operations. They can't continue their operations without the fees of the parents -- fees from the parents. So I think Learnflix has a good traction and a good review that we are getting from the market.

And so because of this crisis, like you rightly said, a lot of parents might be not paying the schools their fees and all. So you might only have around [ INR 300-odd crores ] of trade receivables. Do you feel that some that receivables might go bad or something? Or we are going to be on top of it to make sure the 100% of the receivables get collected?

Yes. So Rishabh, the gross receivables are much higher. Our gross receivables are around INR 400-odd crores. And we've already taken a provision in the books for about INR 40 crores, INR 45 crores in terms of delayed receivable -- of that -- the receivables will not come, which I feel is already higher than it should be. Having said that, during this period of April to June, we've already collected more than INR 100 crores. And daily, we are getting good collections. So in terms of cash flows, I see a regular cash flow coming in because a large portion of what gets sold does not get sold by the school. It's largely by the channel partner who will probably deliver directly to the student or he's setting up his own bookstore or selling from the bookstore. So the school involvement in terms of adoption of the books is there. But in terms of selling books, typically, schools are not allowed to sell books to students as per the CBSE guidelines. So we are getting money from our channel partners on a regular basis. The delay was largely on account of supplies not going to the student. But now since students have started to purchase the books from mid-May onwards, we are getting our regular cash. I mean, it's low as compared to normal, but it's a very regular flow of collections that are coming in. And so far, I mean, no liquidity concerns as far as we are concerned. We have a robust cash flow for now. Operating expenses are lower. So no complaints there.

So you have said that INR 100 crores have been collected. So I think as of now, you'll be having receivables of less than INR 240-odd crores? Is this a fair assumption?

No. We have also said that, we have also made sales during this period. Opening receivables are lowered by INR 100 crores.

Okay. And sir, we -- in FY '20, our total operating costs, and over the year, I'm seeing the costs below from the cost of production of INR 40 crores to INR 48 crores, I think we have cut cost as per your strategy 3.0. So are you seeing more --is there further room to reduce the cost -- this cost further? And how much reduction can we expect?

So 2 things in that. One is some of the cost reduction items that we did last year were finally effective by August, September. So the full effect -- 12-months effect will start coming during this year. That's one. Second, there is smaller cost of 10-odd percent across all heads that we have already planned, and we already actioned in the first quarter. And finally, third, you see a lot of the costs that we used to incur would go away because, I mean, we are in -- travel costs will be lower this year. Your dealer engagements would be lower this year. Your workshop expenses, which used to be of very high amount, all have shifted to webinars. So a lot of these costs, which were physically there, I don't know about its specimen distribution. It may register...

That has also been left this year.

We'll probably end up with having a lot of e-book...

What is happening is the schools by -- we expect the schools will continue with the same booklet that they have done the last year. So they will not change the booklet. Anyway, the school syllabus is not changing, and the books will be continued of the last year only. So there will be less distribution of specimen also, promotion also. And what were you saying?

Rentals.

Rentals, yes. Rentals have also been reduced. Operational costs have been reduced. Employees have been reduced. And overall, paper prices are going down this year. So we expect that the paper prices benefit will get around 8% to 10% in terms of the rate of the paper, plus we will be using less paper in terms of consumption. So that will help us in the cash flows. So I think all these things have kind of -- some kind of a silver lining. Obviously, COVID is bad only. So -- but this is a silver lining there.

Yes. So Rishabh, overall, I think so in terms of below the line, we expect costs to be lower by at least 15%, at max 20%.

Okay. Okay. Yes because at this theme, I don't see around Q4, if we were running at a INR 55 crore kind of fixed cost so that translate into INR 220 crores. And that's the way you can see further reduction. Okay. Great.

[Operator Instructions] The next question is from the line of Prasanna Desai from Everstone Capital.

One, I wanted to understand, you guys are guiding in terms of your digital revenue being almost 25% to 30% of your revenue in 3 years. If you could help us understand of the INR 429 crores that you have for FY '20, how much of this was digital in terms of rupees crores?

Around 9% was digital. About INR 40-odd crores.

Okay. Second...

Last year, it's about in 6%, 7%, yes.

Sorry, come again?

Last year is about 6% or 7%.

It was around 7% last year.

This year, it's about 9%, 9.5%. Again, it got truncated in March because a lot of the things that we used to do, could not be shipped in March. Although, it could have been about INR 47 crores this year. But yes, over the next 3 years, definitely, it should be higher.

Okay. And just to kind of understand this INR 40 crores because you said you are 15,000 paying customers for Learnflix at INR 2,500 per annum, that would be roughly about INR 4-odd crores. How much of this would be e-books of the INR 40 crores?

See, out of INR 40 crores, Learnflix is only about, I think, INR 1 crore because...

We started that time.

Yes. So the effect to March was about -- I think, so March -- till March, we had about 6,000...

5,000, yes.

5,000, 6,000. 17,000 is the current -- 15,000 is current figure. And apart from that, e-books is about INR 1 crore, I would say. And apart from that, then we have Mylestone. Mylestone, again, curriculum solutions, which again are... [Technical Difficulty]

Excuse me, this is the operator. I think we'll check the management's line. [Operator Instructions] Ladies and gentlemen, thank you for patiently waiting. The line is reconnected. Sir, we have Prasanna Desai from Everstone Capital on the line.

Yes, Himanshu, we dropped out when you were talking about Mylestone.

Yes, sorry, Saurabh was updating you.

Yes, Mylestone. Mylestone is, of course, gone completely digitally during this period. Last year, we did about INR 15-odd crores. In the first quarter, also it's done a good amount. And apart from that, of course, we have the classroom solutions, which, again, we are transitioning onto the completely online platform. So we had almost about 600 schools on Destination Success, including the schools on the Middle East. Now those are also transitioning on -- either on to Learnflix or they are transitioning on to the Destination Success online platform. So that is about INR 16-odd crores.

Yes. I got it. In terms of the breakup of that, roughly about INR 30 crores to INR 33 crores came from here. The next question. You guys spoke about 45 -- about 1/4 of your inventory getting sold in the first quarter, and it's actually roughly about INR 40 crores, INR 45 crore, or assuming you have a gross margin of about 54%, 55%, that would translate into INR 85 crores, INR 90 crores kind of a sales, and you had INR 100 crores receivables, which you collected. So your working capital, basically, inventory plus debtors, would more or less remain at your March number as on June? Is my understanding correct?

My inventory will be lower. My receivables will also be lower than March. So I think it will be much better. It will be much better because my cash flow is lower. So yes, I think it will be lower by about...

The inventory will be lower, receivables...

Will be also lower.

Will also be lower. But I mean -- but obviously, in receivables, you would also add current sales. I think they will be...

Yes. If you're right, I did right, from INR 334 crores, I added about INR 80 crores, INR 85 crores. And from INR 200 crores, you deduct INR 45 crores.

Yes. So it will be about INR 50 crores, INR 60 crores lower.

Okay. Fair enough. The question on this, and when I read your presentation, it said about INR 30 crores is there as your raw material inventory or your paper inventory. What I had learned from you guys was the fact that sometime around October, November is where you guys will decide to get to -- generally get into the production of new books. Given where we stand with respect to the numbers on the COVID side in terms of the rising number of cases, given the government is absolutely kind of very careful when it comes to mass gathering, whether it's religious places, schools, et cetera. If the situation doesn't -- say, for example, from a school perspective or a mass gathering perspective, doesn't change significantly around September, October. Given where we are, let's assume the situation is where we are today in September, October, would you guys then go ahead with incremental inventory buildup? Or you guys will be cautious? Just to understand your mindset.

So Prasanna, we will be, again, as I've said in the earlier question, also similar answer I'm giving you again that we will be very, very cautious, and we will be working on very light inventory models. And we will be monitoring the primary and secondary inventory that is there in the market with our channel partners, our customers. And how the market is responding towards the requirements. And -- but we will be looking at a very light inventory model for this whole complete year. We will not be looking at heavy inventory, and we will be printing very, very cautiously. Every book, everything will be printed very cautiously, and we will be making sure that wastages are less, efficiencies are improved. And thankfully, the paper prices are soft enough. So that advantage will also be there with us. So overall, our production will be very, very nimble amount of feet, as I want to say on that part.

So one would want to probably take away from that conversation that you just shared with us is that you will be on the risk overside. It's not that you -- unlike in the past where you ended up on building inventory in the hope to do sales, assuming the situation where is -- where it is today, you would probably going to play on the defenses?

Very cautious. Very, very cautious, very, very careful.

Excellent. Now one more question. About INR 25 crores is what you've taken as provision on slow moving, bad debt, et cetera. I wanted to understand from Saurabh, should we, sitting as investors, look at a INR 20 crore, INR 25 crore number as a recurring number, given the size of your balance sheet in terms of inventory debtors as something as a recurring theme because that's precisely what the experience has been. So through that, I wanted to understand, of that INR 300-odd crores of debtors that you have now with that incremental sales that you've done, how much of this is actual sale? And how much of this is on a sale on return basis? So tomorrow, if the inventory doesn't get sold, does the dealer has -- can it give it back to you and therefore, convert that debtor into inventory? What is the contract share?

Yes. So of course, you can return back. But this year, we've already informed most of our dealers that they cannot return back more than 10%. But having said that, we've already provisioned, in the financials, an average return of about 17%.

The average is 20%-plus.

With about 17%, we've already taken a INR 100 crore provision this year also as -- last year also, it was about INR 100 crores. And this year also, we've taken a closing provision in books of INR 100 crores. That is why my net revenue is lower. If you look at my net revenue, it's only about INR 429 crores. Whereas, if you look at the kind of collections that I made, the actual money received during FY '20 is about INR 520 crores. A similar thing happened in 1 year back. So I think a lot of the aggressive sales that we probably did in earlier years, we've corrected most of that, and we focused completely on liquidating the channel inventory in the last 1.5 years. And that is what you can see in our cash flows. If you see -- at INR 795 crores, operating cash flows were INR 38 crores. At INR 429 crores, the operating cash flows are at INR 49 crores. And this could have been at least a INR 120-odd crores if we had got the full collection there. So we are completely working on getting the cash in faster, ensuring we are light on debtors and inventory. So in terms of your provision for [ doubtfulness ], it's about INR 45 crores. That is there already in books, which I feel is a very, very high amount as far as I'm concerned. It's -- we've taken that provision just to ensure that we don't have any further issues in terms of write-offs. I would say our average write-off for any year has not been more than INR 7 crores to INR 8 crores. So comfortably placed as far as trade receivables are concerned, I think that is a very, very -- the amount to be collected, maybe slightly higher than what is there in the books, but we've been very conservative. In terms of...

So it would be fair to say, next year, if you are sitting at the same time and one were to look at your cash flow statement, things like provision for slow-moving impairment of investment, bad debts, et cetera, will not appear? Would it be a fair assumption? Or if I count, it will be a very small number?

So this provision for -- the total investments outside the group is only about INR 20 crores, INR 22 crores. And the value of these investments is far higher. All 3 of the entities, including Testbook is at about, I think so 8x for what we've invested. Smartivity, I think, about 6, 7x of what we invested. And Edutor is probably -- started doing very well in the last year. So in terms of investments, I don't see a provision for the investments outside the group. In terms of inventories, yes, because there is the upcoming new education policy. So there may be a small provision in the next year. We will only know once the new education policy comes and what it contains, how many -- how much changes are there in that policy. But we've been conservative, and we've made certain provisions already. Receivables, I do not see any incremental provision at all. Whatever normally is there, about INR 8 crores to INR 10 crores, will continue next year, but it will not be very, very high.

And last question for Saurabh. Saurabh, you said our liquidity situation seems to be in control, given that you've collected about INR 100 crores. What would be our cash today in our end? What would be our gross debt?

Our gross debt, sir, as on today -- I will not have the exact figure. As of March, gross debt was INR 215 crores. So my sense is my gross debt as on today would be around INR 205-odd crores, if I'm not sure. It should be about INR 205 crores. And in terms of cash, we have about INR 30 crores of liquidity. So net debt would be around INR 175 crores at this point of time.

And the balance INR 70 crores would have gone towards your expenses and payables, right?