Sheela Foam Limited (SFL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Sheela Foam Limited Q4 FY '22 Earnings Conference Call hosted by AMBIT Capital. Joining us from the team of Sheela Foam Limited, the management team, Mr. Rahul Gautam, Chairman and Managing Director; Mr. Rakesh Chahar, Whole-Time Director; Mr. Tushaar Gautam, Whole-Time Director, CEO of India Business; Mr. Nikhil Datye, Group Chief Financial Officer; Mr. Davinder Ahuja, Group Finance Controller. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Gautam, Chairman and Managing Director of Sheela Foam Limited. Thank you, and over to you, sir.

Thank you, ma'am. Thank you very much, and thank you AMBIT Capital for hosting this call. This is Rahul Gautam welcoming you to the quarter 4 FY '22 and the annual FY '22 earnings results. So let me just begin with saying that undoubtedly the environment has been very challenging. And to be honest, it's been quite adverse with commodity inflations, with ForExes bouncing around, volatility in the raw materials which is unprecedented -- at unprecedented levels and there was also a demand slowdown. As all of you know that the summers came a bit early and then they are called from February onwards, almost middle February onwards right through to March. When the summers came, then obviously, the discretionary spending changed to fans and coolers and air cons, et cetera. And products like ours definitely took a back seat, but this is temporary, for sure. And let me assure you that the basic fundamentals of the company remain extremely strong. And all these adverse conditions that somehow kind of collected together, I already see that there are signs of these cooling off and that visibility is quite clear subsequent to the March closing considerably. The raw material volatility, which has probably impacted the maximum, is clearly a supply chain issue. We know that on a global level, the production capacity versus the demand, the balance is in favor of further production side. And that is not only true right now, but it is true right up to 2026, when we look at what the possible demands are going to be and we look at what the capacities are going to be created for both our raw materials, polyol and TDI, very comfortable. But that's on a macro level. When it comes down to moving the materials around, obviously, there have been disruptions and that has created, whether it's a shipping issue or container issue or any other or shutdown that we are experiencing as far as China is concerned, all these things have been there. But eventually this -- it has to and will settle down. We are -- also, all our expansion projects in Australia, in Spain as well as in India, the progression is well. The only little impact that there would have been would probably -- is the steel prices or the availability of some steel, et cetera, but that's only taking some time, which would also kind of settle down and may impact the cost a little bit. And there may be a little bit of delays in this coming on steel. But we will be ready -- with these production capacities that we have, we will be absolutely ready for the future. And as I've said, the adverse conditions begin to ease out and the need and requirement comes on the market. And the constraint will definitely not be in the manufacturing side. From our point, we have also restored -- in the last quarter restored the sales and marketing spends, which we have kind of held back. And the impact of that will be visible soon. During the corona times and the extended corona times, generally, the spends have been as well got lessened or were reduced as well as whatever activities that we needed to do to increase our -- sale of our mattresses through the EBOs and through the channels, those activities had to be curtailed. Now that process is already on, whether it is renewing these exclusive stores that we have or placing and training people who are selling, and we are already beginning to see some good results out of that. So with these words, I will just say, thank you very much for -- to all of you for joining in this conference, and we would be open for questions. Thank you very much.

[Operator Instructions] We'll take our first question from the line of Nihal Jham from Edelweiss.

Am I audible?

Nihal, you are audible, but the voice is kind of echoing and a bit muffled, yes.

Sorry, is it okay now?

Better. Yes.

Just 3 questions from my side. First is, you did mention sort of [ dysregulatory ] environment. If I have to specifically discuss 1 number, we can say the mattress volume growth, that has obviously seen the second quarter of degrowth. And I guess it's mainly related to, as you said, a lot of external challenges. In case, say, the Omicron impact would have not happened in Jan, would you have an assessment of how this number could have been, say, looking at the run rate in Feb or March?

So Nihal, I did sort of allude to that. You see as far as increasing mattress sales, especially through our EBOs is concerned, there needs to be a little bit of an effort prior to getting the whole thing moving. The inertia was definitely in favor of people not visiting showrooms. The -- our actions were also where we did not do things on the store front. That part has already started. And therefore, I'd say that, yes, there have been -- I mean the numbers have been on the lower side. But those numbers -- had Omicron not, I mean that's a good wish, these -- their numbers would definitely have been different. And it's not only this particular quarter that I'm talking about, talking about what we need to do prior to that, which we have begun doing now.

Understood. And if I could just maybe disclosing April may be difficult, but say, how is the run rate for March in terms of volume versus pre-COVID?

So I have no problems in talking about -- yes, March and April, there's a bit of a continuum and they are on the rise.

Sure. That's helpful. The second question was that -- I know we don't bifurcate Sleepwell and Starlite anymore, but given that the year has closed and this brand, at least Starlite, has been [ in presence ] for the last 3 years. Could you just give a qualitative sense of how each of these brands are performing? And I would assume that even you look at both of them separately internally?

Yes, we do. We look at them -- Nikhil, do we have the numbers separately for them?

Yes, we do have. So...

You have them ready or would you want to send them later?

I will send them, but directionally, we can talk about it.

Okay.

So Nihal, just to give you some idea in terms of Starlite versus Sleepwell. So Sleepwell, obviously, has a much wider range in terms of variety of mattresses that we sell, while Starlite has specifically focused on economy range. And economy range, obviously, is growing much faster, considering the price points and availability. So compared to the -- to Sleepwell, Starlite has grown faster in last year as well. Specific numbers, I can send you as a follow-up.

Yes, I would be keen and let's maybe discuss that after the call. Just one last question from my side was that if I look at the international business margin, both Australia and Spain separately, while Australia has seen a slight [ dissolution ], there has been quite a lot of volatility in Spain. If you could just highlight that and I'll be done from my side.

Nihal, could you just repeat that question? Let me say that I have understood, which is to say that relative to Australia, Spain has been more volatile. Is that the correct question?

Absolutely.

Yes. So Nihal, it is just the way that the raw material is sold. Australia, there is quarterly pricing and that -- and not even quarterly pricing, 1 month before the quarter begins, the prices are settled, which allows you to prepare for it and prepare your customers for it and the prices are held steady. That used to be the way of the world many, many, many years back. But since then, Europe has moved to a monthly pricing. And even in the monthly pricing, the time that you get is maybe 2 days or so before that. And if I cut to India, it's almost weekly or fortnightly pricing with no kind of advancement. So Australia tends to be far more stable. The only reason being that the system is like that. The way that the raw materials are available there, everybody supplies there and the stability is there.

[Operator Instructions] We will take our next question from the line of Ritesh Shah from Investec.

Sir, couple of questions. First is, I think the company has multiple legs for growth. I had like 5 sub-questions over here. It would be great if you could provide some color over here. First is exports out of India, we visited recently a facility in Gujarat, I think, it was phenomenal. If you could provide some color on the investment over there and the sort of exports that we are looking from ICDL, that's the first one. The second is, I think, in the prior call, you have indicated about "Mattress for Every Indian." how should one look at the price point of the product? And any color on distribution? That's the second point. Third question is pertaining to Indian Railways, any specific progress? Fourth is on e-commerce, basically where we are, I think, around INR 100 crores-plus. Where do we see -- what's our strategy over there? And fifth as we are a formidable brand, we can actually make good on the omnichannel. Are there any specific measures on branding where we can actually leverage our ongoing presence [indiscernible]? So these are 5 questions for you, sir.

Thank you for the 5 questions. They virtually cover the entire business. Let me try and attempt responding to each. As far as exports are concerned, yes, we started well. We invested money into a unit close to Mumbai and started producing. There have been some, what I would say, starting up kind of hiccups, like shipping and availability of containers and then the geopolitical situation changing, and therefore, the customer saying, let's put it to a little bit of a hold, then there is a start and there is a stop, et cetera. But I could just say that most of those things or the teething troubles are getting sorted out. And I look to a number without any kind of specific guidance, but a key figure kind of number as far as this year is concerned. And if nothing else, at least we are far more experienced on to sorting this. Some things are not in our hands, for example, the shipping and the availability of containers, but we will do it. I think it's not only the availability, it's also the cost of it. What used to be about $3,500, $4,000 for a container to the U.S., it's suddenly $14,000, $15,000, and therefore, the customer says hold on for a little while, let us get the prices cool off. I think it is bouncing around. This needs to settle and we will see that. On the [ end price ] mattress, the facility which we are putting up in Jabalpur, it is -- the buildings are about getting ready. The machines may be delayed a little bit, and that's on account of availability of right grades of steel. I understand from the supplier in U.K. that most of the steel and wood manufacturers are with Ukraine, but it is slowly progressing. There may be a couple of months of delay, but we would see and it should happen before the year gets over. On the [ end price ] part, you said to provide some kind of a price point. I would -- I think I've said that -- mentioned that before that we are looking at something of the order of INR 2,000 for a mattress. And this is the mattress for every Indian. On the distribution, definitely need to get -- get to need more deeper into the state. And therefore, it's even beyond the district level that we look at a block and a street level. But to begin with, we will be setting up in the 700-odd districts. I think out of them 500 which are amenable for kind of a distribution. And this will be a direct distribution to those places. The organization is getting set up. Trials and piloting and all that will begin in 2 to 3 months' time. Your third question was on the railways. So I can only say we are on track. The product is well accepted. It is -- the orders are coming in a bit slow. But the railway guidelines are that 70% orders should go to polyurethane foam and the balance 30% should really be going to the existing suppliers, which is a thermal block -- a fiber thermal block or something on a silicon foam. And the transition is -- has it come to the 70% level, no. But it's ramping up and the acceptability of the product is good. E-commerce, we have done about INR 80-odd crores this year. And if you just look at the year, the growth has been upwards of 50% from the previous year. We are not -- let's say, we are not blasting away in the sense that the outlook is that this is different from a start-up. So we want to [ off-burn ] cash, but -- and we want it to be profitable, even if it is marginally profitable. And that's why the progress still is large. I mean it's more than 50%, but it will -- it's not like doubling in a year or something. But I think we will be -- we are on track. And if we continue at this rate, it will be a -- it's already is, but will be a sizable business as far as our range is concerned. Your last point was on omnichannels. And that's exactly what is getting into place, which is to see how we can leverage the brand, how we can leverage the extensive EBO network that we have. And how can we ensure that it doesn't matter where the customer goes, your sheet gets it. I can offline talk a little more on detail on this. But that -- I think your thoughts are very similar to what is going to happen or is happening [indiscernible].

Just 2 questions. One is, sir, if I look at the cash flow statement for the company, we see investments in bonds and debentures. That's quite unusual. I haven't noticed something of that sort. How should one read into it? Is it like are we looking at some inorganic opportunity? Or is it -- or how should one read into that particular line item? That's 1 question. And the second is, if you could touch up on competitive intensity in the space, as we understand, there are multiple assets probably on the block. Is it something that we would be keen at? If at all, are there any leverage ratios that we have in mind that we would not cross, if at all, we had to pursue inorganic growth?

So on the inorganic part, I would say there are some very promising ones on the radar, some progress, too. But I will not go beyond that. And I have -- I mean previously have always mentioned that we were open, we were open for the right one, et cetera. And at this time, I can only say that it's very promising and progressing. On leveraging the balance sheet, Nikhil, would you want to respond to that?

Yes, I can take that. So Ritesh, the investment in bonds, obviously, we are also making good returns on that investment. And as we have said earlier also, the reserves are built to ensure that it provides for expansion CapEx as well as for any future opportunity, which Rahul just alluded upon.

[Operator Instructions] Our next question is from the line of Ashish Kanodia from AMBIT Capital.

Sir, in your opening remarks, you talked about that there was some slowdown in the category as well because the summer came early. But -- basis -- your channel feedback, are you seeing any kind of a downtrading from the consumers or was it that the entire category was impacted and there was no market share loss?

So Ashish, I can say with lot of certainty that there was no market share drop at all. I mean if there would, they would actually be on the other side. And the category per se did. So 2 things. One, the market -- I mean this is how you define the market size, but the market size diminished a little bit and it also moved on the lower end of the average sales prices.

Sure, sir. Secondly, in terms of -- given that the demand trend has been slightly muted, so do you need to provide any more support to the channel, whether in terms of higher margins or maybe in terms of higher marketing or selling spend? So -- I mean do you believe that there's a need to invest more into the channel or provide higher margins for the channel?

So the way that we've structured, Ashish, providing higher margin to the channel is because most of our channels is on an exclusive basis. And therefore, those when the consumer walks in or the customer walks in, he is well attended to. And it's not that the extra margin would drive the retailer to do better than what he is doing. Clearly, the problem was on the footfalls and the footfalls not only for Sleepwell showrooms but footfalls into the mattress category of segments. Something that needs to be done is on increasing those footfalls and also for improving the conversion that is happening within the shop. So both are in progress, you would see that. And our process for the [indiscernible] proving the conversion part of it, that has started in a big way on -- at the retail showroom. And I'm sure that when we do the next quarter call, it will be -- yes, you will have a different feeling about it.

We will take our next question from the line of Resham Jain from DSP Investment Managers.

Sir, I have just 1 question. Currently, we are doing this CapExes across India, Spain and Australia. And all these capacities will be able, maybe by the end of this year, different points. So from the growth perspective, over the next 3, 4 years, how are you seeing the trends like your internal ambition in terms of growth plans given that we are aggressively investing across all the geographies?

Thank you for that question. On the CapEx, yes, we are doing in all the 3 geographies. And each geography has a little bit of a different flavor to it. Let me begin with Australia. Australia, it started off with providing comfort to our existing suppliers because it was dependent on 1 unit. And Australia is also a very well spread out country. And therefore, another unit in Adelaide really brought us much closer to the Western part of Australia, et cetera. But having said that, people believe that Australia is a mature market, settled and nothing much will happen and nothing much will grow. We've been also having restricted capacity where we were doing. And therefore, for us to bring in any kind of aggression into selling or acquiring more customers was tough. And therefore, once this unit comes in, we will go with a little more aggression in the market. There are 2, 3 other changes that we are seeing post corona as far as Australia is concerned and that is that some manufacturing is coming back into the country. Our furniture manufacturing and some of the mattresses which are imported out from outside which are bed-in-a-box kind of thing, that's actually coming back into the country. So we expect that to deleverage. Exact numbers, I would probably be able to tell you a little later in the year that we have to [indiscernible]. On Spain, we are already at the 100% capacity level. And therefore, we had to increase the capacity, and that is by only improving some [ curing ] states and some storage spaces, et cetera, and maybe some conveyers to move the foam around. It would enhance our capacity by 30%, 35%. And let me just say Spain happens to be a very small part of the large European market. And therefore, this 30% to 35%, we should be able to get that as soon as we begin to kind of produce this, which should be the end of this year. I know that the Spanish EBIT numbers have been under stress as far as the last quarter is concerned, and that's primarily the raw materials that are fluctuating. But we have already begun a process of -- because we are in a position where we have -- the capacity is limited, we're already looking at sort of sorting out the customers and looking at preferential sellings, et cetera, to improve the number. But the fluctuation part is also -- will settle down. Third is India, which is the Jabalpur capacity, completely new facility and with a new technology. And that technology, I have spoken before, is unique to us. Almost globally, it is unique to us. It helps us to produce newer grades of foam. It helps us to take care of the environment much better. It's a greener process. And it also helps to bring some costs down. And primarily on the "Mattress for Every Indian" [indiscernible] which we will be starting, a little delayed on it. And I would not expect it to start by the end of this year, but it will be more before the financial year-end. And it will, as we've already shared the numbers before as to what we look at in the next 2 to 3 years' time for that to happen.

Okay. So sir, I was just asking in the context that all these plants are coming, so like 3, 4 years, our internal growth ambition is -- any ballpark number, if you can help it?

So Nikhil, I'm not sure whether I'm allowed to or not to speak to those numbers, but guidance -- or Tushaar, you can give an AVP number...

I'm not asking for a guidance, but generally...

Yes. Fair enough. No, no. I think...

Is it like 10%, 15% or 15%, 20% or -- ballpark range I'm looking for.

So Tushaar, can you just give a number on that?

Yes. So my -- I think the overall number to look at anywhere between 15% to 17%, 18% would be a fair number.

CAGR?

CAGR.

Okay. Understood. And the last one is we have seen some, as you mentioned, volatility because of raw material and all our margins are a little soft. Do you expect this to normalize over the next couple of quarters? Or do you think that this will be -- it will be difficult to comment on raw material, but do you think it's coming back anytime?

Resham, whenever I've tried to hazard a guess, I've been wrong. So I would -- but I would still say that because we have the advantage of some high insights that would have happened post the year close, it is coming down and it's in public domain. For example, TDI prices in the last 15 days have come down by 10%.

We'll take next question from the line of Ritesh Shah from Investec.

Sir, I had a specific question pertaining to [ ILCL ]. When we set up a facility, normally, when we have contracts when we cater to exports, is the pricing typically on FOB or CIF basis? You did indicate that the container rates moving from $3,500, $4,000 to $13,000 round, and it could potentially impair only INR 100-plus crores. I hope it is a quarterly run rate, it's just not for annum. So I would like some clarification over there. And when we are targeting exports, like, how does the commercial work typically? Is it on an FOB basis or is it on a CIF basis given the volatility in the freight market?

So Ritesh, prices are on an FOB basis. However, because -- and even if the customer has to arrange for the containers, the cost of containers eventually gets added to him and, therefore, he tends to delay it, hoping for it to kind of come down. But our prices -- Tushaar, is that correct? It's on FOB basis?

That's correct.

Yes. On FOB basis. And...

Delivered to the port in [ foreign standards ], that's our responsibility, that's correct.

Right. So the [indiscernible] on board.

That's right.

Ritesh, I -- all I can say is -- when you -- in Hindi if you say [Foreign Language] INR 100 crores becomes the run rate for the quarter. We are being a little conservative because we've been just bitten a little bit on the export, it was a new business, and there was something else which kind of happened on the supply chain side or on the logistics side. Therefore, a little conservatively, I said we would look at a 3-figure mark. But the capacity for -- to produce the product and the ability and the way that it is seeming, it should be more -- far more.

So would it be like INR 400 crores per annum? Would that be a fair number or upwards of that?

Ritesh, I don't want to give a number. As I said, there are so many ifs and buts which are there. I mean the -- all I can say, the capacity to manufacture is there, the ability for that market to pick up is there. But in between, there are so many things. I mean for example, if something positive that has happened, I would say, it is the exchange rate, which is, what is it, hovering around INR 77-plus to $1, which used to be INR 75. There is something positive that has happened. Now we need to look at all the other aspects. I would just restrain myself to maybe give you a better number by the next quarter.

Sure. Sir, just to understand this further, if I have the capital, if I deploy that capital to set up a facility in Mexico, would this model be also of interest to the U.S. vendors, which we are targeting? So I'm just trying to understand from a competitiveness standpoint, China Plus One, I think India benefits, but when it comes to South America, are we as competitive given freight will also be against us on a delivered cost basis?

On a normal...

Rahulji, I can take that, if you want?

Okay, please.

Yes. So broadly, I think the issue is this disruption of raw material which is happening disproportionately at the moment. So if I look at polyol TDI prices, I think for the first time that any of us recall, there is a 16%, 17%, 20% premium in Europe versus Asia and the U.S. is kind of somewhere in the middle, but then you have the freight costs, which are also disproportionately high at the moment. But if I look at any stable state, for sure, India or even Spain supply is cost effective compared to Mexican supply. The historic raw material stability across the -- not stability, parity across the world, which is whatever are the normal 1% or 2% or 3% differences on a monthly basis that happened across geographies and whatever is normalized rate.

Sure, sir. If I may just dig in a little more. Sir, when we say competitive, it is on what particular variable? Is it like the technology is different? Or is it the labor cost? Or is it the invent rate? Or is it electricity? How should one understand that?

So it is -- it's all of the above. But raw materials, again, I would say not so much. But on the overheads, on the electricity, on the manpower cost, for example, a spring mattress that we do out of India, which is the facilities somebody said that they visited recently. I mean the manpower component of that product, just because of the complexity of making that product, in North America will be extremely high. It's just -- it's not possible to do it, I mean, in terms of cost effectiveness. In Spain, where we kind of have an advantage is, of course, it's probably one of the cheapest cost. European supply is not very expensive at all in terms of labor. But again, like Rahulji said, the core technology in which we are investing as a group with the variable pressure technology, that gives us the cost advantage on cost and product quality advantage on the final foam product.

So it's a mix of all of those. It depends on what product we're talking about, from what geography.

Perfect. And just one last question. Sir, can you please elaborate more on Indian railways? I think that opportunity is very, very big. If you could provide some details on exactly where we are. I understand Indian railways have zonal divisions. Are we supplying to certain parts in Northern or Western? And where exactly we are and what can be a blue-sky scenario over here, say, 3 years out if things had to work out?

Rakeshji can take that. Yes.

So the supply to railways has started. So we have done with [ weighing ] coaches every month, supplying to the [indiscernible] manufacturers. And this is going to the coach factories. So the railways is a transition, like Rahulji said, there are 2 existing materials which are there -- which have been there for quite a long time. . So there is a transition which is happening, which is taking longer than it should like a typical -- like a government organization. So that's where we are today. On the potential side, so in India, I mean we look at total 7,000 coaches and also the chair car business. So that is the potential, which can -- which will be [indiscernible]. So I would say that the beginning is good. The product is acceptable. The coach factories are happy with the fitting, with the comfort factor with the consumer, the fire and safety norms. But it's just that it is taking time to realize the potential.

I'll just add to that, absolutely right that our product is the best combination of comfort and safety. That is possible. So the railways recognized it. Their research organization recognized this and the various coach factories recognized. They have begun to place the orders. And it's only a transition time that, that is taking. The directions or the guidelines laid down by the railways, 70% materials, they would -- by and large, they would never stick to 1, they would want to have some alternate, that's the requirement for them. So it's from that state.

We will take our next question from the line of Nihal Jham from Edelweiss.

Sir, just clarifying the 15% to 18% number that you mentioned earlier, in relation to what parameter was that?

15% to 18% of CAGR?

Yes.

Tushaar, you mentioned that. Would you take that question?

I think the question was on a 3 to 4, 5 years outlook on revenue, with all of these investments and capacity enhancements that are going to happen, what should we look at.

That is helpful. That's good. The other question was that if I look at the technical foam performance for this year, we've seen a very strong growth. And I assume that is despite 50% of our business coming from the auto sector, which is, I think, still to get to pre-COVID recovery. So have we added any new segments or new customers, which is leading to this kind of growth in this segment?

Rakesh, would you take that, please?

Yes. So Nihal, can you just repeat the last sentence?

Rakeshji, I was checking that for the technical foam segment, we've seen a very strong growth this year, which has even exceeded pre-COVID. And my understanding was that majority or at least 50% of it was coming from the auto sector, which is, I think, still to touch pre-COVID level. So is it that we have added new customers or new segment to this -- to the technical foam business, which has led to this kind of strong growth for us?

Just a quick clarification, Nihal. Are you talking about the complete financial year?

Yes, for the complete financial year, we've done INR 450 crores of revenue from that segment.

Yes. So previous year, 2.5 months were a complete washout, no?

But even if I look at FY '20, we did around INR 320 crores. So even if I compare on that.

So again -- so Tushaar, you want to take it?

No, no. Please go ahead.

Okay. So you're right, Nihal. So 2 things have happened. One, the same customers have started consuming more, which is reflective of the growth in automobile sector. So that is one strong thing. Second, yes, we've added 2 more customers, large customers, to our portfolio. And -- so the technical foam auto is about -- yes, you're right about 35%, 40%, but there are also other segments which have done well for the technical sales, which is on the acoustic sides, which is on the shoe side. So those also had done well. So all put together has given this growth. That is one important thing. Plus, I would also just be mindful that there is also -- because of the raw material increase, so there also has been an increase in the ASP. So that has also contributed to value growth.

That is helpful. And those 2 customers are the auto or the nonauto segment?

Which one?

You mentioned 2 -- you've signed up 2 more large customers.

So I'm saying there have been some auto customers who were kind of partly buying, so they have increased their share with us completely. So that is we have got the complete share of those customers. And that's on the auto side. And on the other side, we -- like I was saying, acoustic and the other industry that we supply to, so they have also done well and which is, again, the factors of the domestic demand, the China Plus One. All those kind of things have played out in the market.

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the floor back to Mr. Nikhil Datye for closing comments. Over to you, sir.

Thank you so much. So thank you, everyone, for actively participating in the earnings call. As we always say, all these questions help us also to introspect and recheck where we are heading our strategy and definitely helps in having valuable inputs from your side. So thank you for all the questions. Before we close the call, I just want -- would like to mention on behalf of the management that the year gone by has many black swan events, be it corona shutdowns, crude going up and down in the last quarter, again told will come again, Russia-Ukraine war. So it has been a very volatile environment. Going forward, in the medium term, while this volatility may continue for some time, but our outlook on the industry, specifically for furniture and mattress industry, which falls under discretionary spend, remains quite strong because of the favorable demographics and rising affluence in the Indian population. Per capita consumption of foam, it's still very low compared to other markets. So there is a large room to grow, and that's where lot of new initiatives, be it [indiscernible] exports or even e-com will kick in to capitalize on that opportunity. Our value drivers for growth in the immediate financial year will be a clear focus on the core brands. Margins will remain modest, they may expand further from here. Capacity expansion in international business will unfold. And opportunities for acquisition is something which we will continue to work on, and there are a few which are very serious. In addition to that, we are building an organization which is future-fit and purpose-led. And we will continue to have more focus on our commitments to environmental, social and governance-related responsibility. So ESG commitment will continue to be the backbone and strong foundation of our company. So with those remarks, I would like to conclude this call, and thank you all once again for participating. Have a good evening.

Thank you. Thank you, everyone. Thanks a lot.

Thank you, members of the management. Ladies and gentlemen, on behalf of AMBIT Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.