Surya Roshni Limited (SURYAROSNI) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Surya Roshni Limited Q4 FY '21 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Raju Bista, Managing Director of Surya Roshni Limited. Thank you, and over to you, sir.

Hi, am I audible?

Yes, sir. You are audible.

Hi, good afternoon, everybody, and a very warm welcome to everyone present on the call. Today, I'm joined by our Executive Director and our Group CFO, Mr. R N Maloo; Tarun Baldua, who is also Executive Director and CEO of our Steel Division, Steel Pipe division; and Mr. Nirupam Sahay, who is also Executive Director and CEO of Lighting and Consumer Durable Businesses. And also our SVA, who is our Investor Relations advisers. And I hope everyone must have gotten an opportunity to go through our financial results and investor presentation, which has been uploaded on the stock exchange as well as on our company website. I hope you and your family are keeping safe during this pandemic times. The second wave of COVID, which started in March has been much more severe than last year. We have been following the necessary guidelines to safeguard our employees and also ensuring that our operations are running smoothly. Surya is very conscious of contributing to the society and to the nation. And recently, in pursuit of our responsibilities to help the country during the rapid surge in COVID cases, Surya Roshni played a small part by repurposing its existing oxygen unit at Gwalior Lighting Plants to produce medical-grade oxygen and provided to the local administration for use by hospitals and by many more individuals who are in urgent need of oxygen. And I think so far, we have donated more than 12,000 jumbo oxygen cylinder and hoping to do more in coming times. The first half of the year, a complete year was a challenging period during -- due to this COVID pandemic, led this interruptions. However, we have witnessed a sharp recovery in demand during second half of the year, which has enabled us to record a strong growth for this quarter as well as for the full year. In this difficult time, we have performed better than our peers and operationally, we have seen substantial improvement in working capital management, EBITDA margins improvement and even in the EBITDA per se. So I will now share some performance highlights for the quarter post. And after that, I will ask Mr. Maloo to share his thoughts on the financial performance of the company in detail. In the Lighting & Consumer Durable business, we are confident of maintaining the steady growth that we have witnessed in last few quarters. As you all know that Surya is the second largest lighting player in the industry, and we are looking to further strengthen the position. We have identified certain key areas, which I believe will add us in our next leg of growth. The most significant being to drive LED leadership across consumer and performance professional lightings and focus on smart lighting products and solution as well. The share of conventional lighting in the total sales is expected to be reduced further in the next few years, which will be replaced by increasing sales of LED products. And we are looking to consolidate leadership in GLS, FCL, florescent tube light and component while also continuing to be a key OEM supplier. In Consumer Durables, we are focusing on growth -- growing on [indiscernible] and appliances multiple in next few years. It is important that we achieve these goals. We also invest in areas like marketing and brand building. We give utmost importance to customer feedback and [ believing ] offering the highest quality product in the market. Our innovation and development capabilities as the technology and innovation center in Noida are well-leveraged as we keep ourselves aligned with the current and future need of the market. We have undertaken certain automation process to improve efficiency and productivity. Talking about the operation for the quarter. Sectors like favorable product mix, reduction of replacement cost in lighting division and lower ESL government sales, cost efficiency and proactive price hike to counter the increase, which you will have seen in raw material cost has resulting in significant margin expansion. We are focusing on certain products like LED, [ battery ], downlighter and high-value product mix, which also have very good growth potential in coming times. The Consumer Lighting, Professional Lighting and Consumer Durable business continue to drive our growth as we keep on introducing new products, which is helping us to transition into being an FMEG company. Consumer and Professional Lighting continued robust traction in the urban areas and are focusing on penetrating the market further in Tier 2 and Tier 3 cities. We are also keeping ourselves future ready by developing our own range of smart lighting, which we launched this quarter. The PLI scheme proposed by the government of India will be a game changer for a manufacturing player like us, Surya Roshni. A PLA scheme will enable us to augment our manufacturing facility further through backward integration that's reducing component imports. We are confident that along with implementation of this PLI's team and various government initiatives like Make In India, Aatmanirbhar Bharat and [ Vocal for Local ], we will be able to deliver a multifold top line as well as profit growth for the Lighting and Consumer Durable business. And Steel Pipes and Tubes business, the capacity utilizing has been optimal for our all segments. We have a very good order win, especially in oil and gas sector, for the LPI products, and we have a healthy order book for the same also. The higher realization and contribution from the API segment have reflected in higher EBITDA margin per tonne for this quarter in Steel Digital. We are participating in all tenders under the various government initiative like Jal Jeevan Mission across India and received a good quantum of order for the same. The export market is picking up after this COVID and is expected to grow to over like more than 25% in FY '22. The expansion of 3-line LPE coating as Kachchh Anjar is completed, and we have started commercial production by 31 March and the expansion of 72,000 metric tonne capacity of Section 5 up to 300 by 300 mm DFT technology at Gwalior unit is going as per the schedule. And the third galvanizing plant has been started in Hindupur from March itself. So I am pleased to report that the initiatives taken by our finance department also has done an extraordinary well to reduce our [ debt ] and because of which our credit rating has been upgraded to a top-notch rating of A1+ for Short-Term Banking Facility and even for Commercial CP Paper. Looking beyond the short-term challenges, we remain confident about the opportunities across all businesses, focus on value-added products, offering along with improvement operating efficiency, which enabled us to achieve growth and create value for all of our stakeholders. We believe in -- we also believe in rewarding our employee hard work and considering the same. This time also, the Board of Director has recommended a fresh ESOP scheme for 2021 of 8 lakh shares to be implemented through the Trust route. This is in addition to the 8 lakh Employee Stock Options granted in 2018. I will also like to announce that to reward our company shareholder, Board has recommended a final dividend of INR 1.5, which is 15% for equity share on bed of equity capital for the year 2021, subject to the approval of shareholders. This takes the total dividend payout for the current financial year to 30% including first on interim dividend of 15, which was paid in November 2020. We, as an organization, are fully committed to continue this positive momentum. And this much from my side, now I would like to ask Mr. Maloo, who is a group CFO to update you on financial performance in detail. Mr. Maloo [indiscernible].

Thanks for joining us on the call today. Let me take you through the quarterly financial update on our revenue has increased by 29% to INR 1,722 crores, and our EBITDA grew by 33%. We saw a substantial improvement of 60% in case profit and 96% [ NPAT ] for the year. Our revenue was INR 5,561 crores as compared to INR 5,471 crores in FY '20. The EBITDA grew by 7% to INR 384 crores in the financial year FY '21 as compared to increase INR 358 crores in FY '20. We continued our efforts to reduce our net working capital and have been successful in improving the sales to 59 days in quarter 4 FY '21 from 91 days in quarter 4 FY '20. So that has given us an improvement of 32 days. Our inventory days has also reduced by 17 days to 46 days in FY Q4 '21 from 63 days in Q4 FY '20. The debtor days has reduced by the mandate to 40 days in quarter 4 FY '21 from 47 days in quarter 4 FY '20. We saw an improvement in our ROCE and ROE for quarter 4 FY '21, ROCE increased to 17.8% compared to 11% in quarter 4 FY '20, an improvement of 680 basis points. Similarly, for quarter 4 FY '21, ROE increased to 17.5% compared to 9.8% in quarter 4 FY '20. That has shown an improvement of 770 basis points. If we do on a 12-month basis, so during the last 12 months, our ROCE has improved by 190 basis points to 12.7% for FY '21 from 10.8% in FY '20. ROE has improved by 315 basis points to 12.1% in FY '21 from 8.6% in FY '20. No need to maintain debt quarter 1 was expected by COVID-19. Talking about the Lighting and Consumer Durables segment. For quarter 4, our revenue grew year-on-year by 17% to INR 356 crores. Our EBITDA grew by 62% on a year-on-year basis to INR 40 crores. We reported a growth of 102% in our case profit to INR 39 crores as compared to quarter 4 FY '20. The profit before tax of Lighting and Consumer Durables segment restored an improvement of 175% on a year-on-year basis and changed at INR 31 crores. The LED products registered a growth of 11% in quarter 4, and there was high growth across all other business segments also, that is Consumer Lighting, Professional Lighting and Consumer Durables. We are working continuously on margin advancement initiatives for our conventional products, particularly GLS. We have taken price hike to counter the increase in raw material prices time to time and we have been able to sustain profitability across our product lines. Replacement of LED lighting has been reduced to single-digit percentage and our channel financing effort has also eased merger to our target. We were able to reduce the working capital days in quarter 4 '21 in Lighting and Consumer Durables divisions to 67 days from 138 days in quarter 4 last year -- quarter 4 FY '20. So that has given us improvement of 71 days. The ROCE has improved to 26.3% in quarter 4 FY '21 from 9.7% in quarter 4 '20. Moving to the Steel Pipe & Strips segment. Our revenue of this business during quarter 4 FY '21 grew by 31% year-on-year basis to INR 1,366 crores as compared to the same period last year. The EBITDA per tonne has shown further improvement of about 22% to INR 4,051 per metric tonne in this quarter as compared to INR 3,490 per metric tonne. The case profit for the segment has also improved by 42% in quarter 4 FY '21 to INR 67 crores from INR 47 crores last year. PBT for the quarter improved by 65% to INR 47 crores as compared to INR 28 crores in quarter 4 FY '20. As mentioned by our MD, we have commenced commercial production of the second PLP coating line in our Anjar plant. The capacity expansion of large asset pipe with Direct Forming Technology, DFT at our Gwalior plant is ongoing, while the third galvanizing plant at Hindupur has started from March '21. With all this, we are confident that these strategic initiatives as well expansion will help us to further strengthen our position in the market and also increase our profitability in times to come. During the quarter, Steel Pipe & Strips has also shown improvement in working capital as well as ROCE. The net working capital days for quarter 4 FY '21 stands at 56 days, reduced at 56 days as compared to 76 days in quarter 4 FY '20, an improvement of about 20 days. The ROCE has increased to 15.2% in quarter 4 FY '21 from 11.6% in quarter 4 FY '20. During the last 12 months, through our consistent apart, we have been able to strengthen our balance sheet by reducing our debt, which is reduced by about INR 374 crores. And in all quarters [indiscernible] reduction, this has resulted in lowering of our debt-to-equity ratio just 0.52%. The finance cost has also reduced to INR 70 crores from INR 114 crores last year. This complies with substantial improvement in profitability should lead to an upward positioning of our businesses and further savings in the finance cost. With this, we open the floor for questions and answers.

[Operator Instructions] The first question is from the line of [ Sudhir Vera ] from Right Time Consultancy.

Congratulations for exceptional [indiscernible] numbers, sir, and very strong cash flow and efficient management of working capital. I have two questions. One, pertaining to Lighting and one pertaining to Pipes division. Sir, in Lighting, I think companies undergoing structural [ fit ] from B2B to B2C. So what kind of growth do we expect in FY '22 and really to lead to the margin accretion, our margin will go up in this current system in view of a strong competition from established players like Havells, Crompton and Bajaj, et cetera? And another question with respect to Pipe division is we have done some 7.7 mce metric tonnes. So what kind of volume growth we expect in current year? And will that have a margin of more than INR 4,000 per tonne currently, in view of our 3-line expansion and galvanizing expansion? So how much it will lead to the increase in the margin from INR 4,251 we have achieved in Q4?

[Foreign Language] Otherwise, it could have been better than more than 11%. So I can tell you one thing, the trade business, which EBITDA margin is already more than 14%, so we are focusing more into our trade business. So certainly, this will gradually grow up. [Foreign Language]. So I think this is okay for the first question. [Foreign Language]

[Foreign Language]

[Foreign Language] June, it will pick up. And the entire full year, we are targeting 24% volume growth in Lighting division. [Foreign Language].

[Foreign Language]

[Foreign Language]

[Foreign Language] Sudhir ji, just to tell you that the yearly EBITDA is INR 3,525.

The next question is from the line of Kunal Shah from Carnelian.

[Foreign Language]

[Foreign Language]

Just to add that in CapEx, we are also considering lighting and steel pipe, everything put together and whatever is possible in case of PLI, depending on the steel, which is to be spelled out fully by the government. And in the matter of trade payables, this year, our imports has been higher. And that has resulted into all imports are secured on user basis. So that is one of the reason. Another reason is increase in share prices and the high purchases in the month of March. So these three are the reasons for increase in trade payable. The steel prices have increased by about 70%. So if you discount all these things, then it is equivalent to the [indiscernible].

Sir, and just one more question on the Lighting segment, sir, basically [Foreign Language] how are we planning to give further push to Surya brand to make it a more popular B2C brand nationwide?

[Foreign Language]

In the Consumer Durables business, in the last year 2021, we grew at over 30%. So there's been significant growth, which has been a result of a very focused strategy. So we're focusing on a few key categories. We're increasing our distribution, and we are spending on marketing. So these are the three things, which have led to that kind of growth in the last year. And the plan is to continue that momentum going forward. And to your question on advertising and marketing. Yes, the plan is to significantly up our spend in terms of advertising and marketing for both our consumer business as well as our professional business but focused primarily on our consumer lighting and Consumer Durables business going forward. So we are very confident that the kind of growth that we already displayed in the previous year, despite the impact of quarter 1 last year, due to COVID, we've still shown a growth of 30%-plus. We believe that we can continue that momentum in the coming years as well, and therefore, grow the share of Consumer Durables business as a part of our overall lighting and Consumer Durables business.

So you would want to add a little bit more on how the distribution, I mean, some numbers around distribution, how we are adding or ramping up distribution across different -- basically reasons that would be kind of pretty helpful as well.

We are focusing on a few regions. So particularly in the South, we are very strong in Lighting. In Consumer Durables are focusing on increasing our distribution reach in the South. We're also focusing on what we call high potential low market share areas around the country. We've done a very scientific exercise to identify where there is high potential, and we have relatively low market share, so we're targeting those. I don't want to get very specific town names because that's, obviously, a little bit strategic. But I can tell you that it's still the South and it's high potential low market share across the country wherever we find those opportunities. In terms of numbers, again, I don't want to share exact numbers, but we are increasing our distributors by close to about 15%. We've increased them about 7% in the previous year. We'll increase them another 15% in the coming year. So that is the kind of distribution reach expansion that we're doing for Consumer Durables.

[Foreign Language]

The next question is from the line of Jignesh Kamani from GMO & Company.

Congratulations for the set of numbers. Just on the Lighting segment, if you think about Consumer Durables mainly the trend, which is 23% of the lighting revenue, sizable is the same and which is the [indiscernible] strong quarter for the [ trend ]. And compared to 2Q -- compared to 3Q, fourth quarter is a lower number of can say, days in terms of a lockdown in which much of [indiscernible]. Despite that, our lighting revenue has declined 4% Q-o-Q. So what extent the decline -- sequential decline in the Lighting revenue?

So the decline in the Lighting revenue is purely a result of the first quarter. So if you see the Lighting results in quarter 2, quarter 3 and quarter 4, they've been extremely healthy if I look at just the lighting part.

Fourth quarter decline versus third quarter, like fourth quarter will be around INR 355 crores kind of a pricing revenue versus the third quarter of INR 369 crores.

Yes. So that is purely an element of seasonality as well. So there is a seasonality element based on Diwali dates. So normally, quarter 3 for the Lighting industry as a whole, not just for Surya Roshni, is always slightly higher. So this is a natural thing. It's nothing odd about it. Every year, there is a distinct seasonality bump up in quarter 3 for Lighting, particularly, and for Consumer Durables because of a lot of gifting during Diwali.

But if you take out 3Q has a lockdown and September month was can say underutilized because of the lockdown and the weak footfall. While fourth quarter has not had any lockdown. So and the [indiscernible] strong quarter in fourth quarter. So have you lost anything on the fourth quarter in terms of revenue compared to our competitors?

Not really. So we didn't really see any major impact of lockdowns in September as well. So quarter 3 was more or less a normal. We grew at 16% in quarter 3, and we grew at 17% in quarter 4. So very steady growth and growth across all the businesses, Consumer Lighting, Professional Lighting and Consumer Durables in both quarters. So no, we wouldn't really have loss making, it's purely the seasonality impact.

Okay. Second thing, Surya brand is very strong in the Tier 2, Tier 3 area and rural area. And the time second wave of COVID area is much more severe in the Tier 2, Tier 3 and the rural area compared to the first wave. So do you think the impact will be much sharp for this time on this our revenue profitability? And recovery will take much longer time because the COVID is restricted to Tier 2, Tier 3 area?

So yes, there will be some impact, obviously, because it's when the time COVID has hit. But as you can see in the numbers, the numbers are declining in the metros and Tier 1 towns already, and we expect that same trend to happen even in Tier 2 and Tier 3 towns. So we don't believe there is an overall impact in the year, unless, of course, God forbid, there is a wave 3 that happened later in the year. But given the trends as we see it today, we've taken into account the impact of April, May, and we still believe, as the MD shared, we're still sticking to the same budgeted figure of 24% growth in Lighting and Consumer Durables despite an impact of April and May. These are our growth targets for the remaining quarters.

[Foreign Language]

The next question is from the line of Abhishek Gosh from DSP Mutual Fund.

Sir, I have three questions. Am I audible? Hello?

Yes.

Okay. So I have 3, 4 questions. First question is around your Consumer Durable, Lighting division [Foreign Language] 70% lighting, non-lighting at about 30%, if you can chart out, you have mentioned briefly that fans, wires and cables but those three, four key products [Foreign Language] wires and cable is a little different market from that of maybe a lighting and fans while the channel may be similar. If you can just help us understand, would be helpful, sir.

Yes. So what we are doing for Consumer Durables, as you rightly pointed out, at this stage, Consumer Durables, we have an outsourced strategy. We kept it deliberately asset light. But what we've done is we are working with established homemakers and we have exclusive designs for Surya Roshni. So the focus on quality and on design is very strong, and it is led by us as a company and the outsourced suppliers then supply as per our specifications in terms of design and quality. So we've maintained that ever since we started the business back in 2014, '15. In terms of wires and cables, like you said, we have the advantage of having our own plants in Kashipur and in Gwalior. So the wires and cables manufacturing, you will set up in our own premises. So that is the plan that we will use our own services to set up, manufacture it. And we will leverage our existing distribution. In the case of wires, the existing lighting distribution will work. And in the case of cables, the distribution that we have for Prakash Surya, the sister business, that would really help us along with the steel pipes, we can also sell our cables. So right now, there are other brand is going with our steel pipes, we can sell our cables with our steel pipes. So in that sense, we'll be able to leverage our existing distribution for both wires and cables. So the contribution that we expect from the Wire and Cable business, as you know, that's a very large market. So we expect to get a significant amount of value from that as well, while continuing to grow the Consumer Durables business at 30% plus year-on-year.

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

The other thing is, Nirupam ji, you mentioned a point that you want to increase your distribution by 15% without getting into specific numbers. If you can just help us understand, will it be moving from -- sorry, Tier 3, Tier 4 cities to Tier 1, Tier 2 cities? Or is it a geographical expansion that you're doing that in certain states when you are not there? If you can just help us understand that.

Yes. So that was the reference to Consumer Durables. Like I said, specifically, we are focusing on the South region, where we believe that we can really improve our distribution and get more sales and we've identified pockets across the country of what we call high potential low market share areas, but this is spread across the country. So South in particular as a whole, as a region and then these high potential low market share areas across the country. And the 15% was in terms of number of distributors, so increase in number of distributors by 15%, which naturally will then lead to a significant expansion in retail outlet as well.

So I was just trying to understand one thing, Nirupam Ji, are you moving incrementally the distribution addition will happen in Tier 1, Tier 2 cities or still Tier 3, Tier 4 cities that is the only thing that I wanted to understand.

So we will be doing it in both. There will be a particular focus on increasing in the metros and in particular regions. So it will be spread out across Tier 1, Tier 2 and Tier 3.

And just one last question in lighting. Do you believe that additional -- or selling in hypercompetitive market like the top Tier 1 cities, because then every virtual brand is there. The effective margins are lower there, is that a thing? If you can just help us understand that.

We actually have very healthy margins in LED lighting in Tier 1 as well as in Tier 2. So whenever we sell, we actually have significantly healthy margins in LED. We don't see any impact of the hyper competition in the metros on our margins. We're able to drive both growth and margin improvement, in fact, over the last couple of years.

And last question. [Foreign Language]

[Foreign Language] Tarun Ji, am I right?

Yes. You are right. Just I would like to add here. [Foreign Language] that we are choosing on the basis of the realization what we are getting in product-wise. So API product realization is highest in all our products category. And therefore, we are shedding the some days of outstanding, and those are the conformed days only. There is no delay from the PSU government organization. So we are doing there in that sense.

[Foreign Language].

The next question is from the line of Manish Bhandari from Vallum Capital.

I have a question on this PLI scheme. [Foreign Language]

[Foreign Language]. Nirupam Ji, will you please explain?

Yes. So the final scheme has still not been announced by the government. They've given a primary outline, but the full details [indiscernible] but we've done our working anyway based on whatever we understand of the final scheme. Since we are already into in-house manufacturing and component manufacturing, we believe that we can take full advantage of the PLI team in terms of component because now it is focused purely on components and [indiscernible] finished products. So the total outlay for LED lighting is about INR 1,300-odd crores and it's split across 5 years in terms of percentage. So we are waiting for the final scheme to work out our final numbers, but all we can assure you is that we will definitely leverage it to the maximum and we have an advantage because we already have our in-house manufacturing and component manufacturing in place [indiscernible] incremental investment rather than greenfield investment that is required from our side.

[Foreign Language]

About 75%.

[Foreign Language] So is there a wishlist on all incremental business, which you are going to do, MCB, wire, PLI? [Foreign Language] So that should be significantly higher from where we are spending today for that division.

[Foreign Language] So accordingly, we have maintaining this estimate, and this is going to be more than 25% ROCE on CapEx.

Sure. My next question is regarding the export. [Foreign Language] And this year, we are at INR 700 crores. So is it possible that we can be a INR 1,000 crore export company in next 2 years? It's now potential and opportunity between Europe and UAE, which is a key market for you?

[Foreign Language]

[Foreign Language]

Mr. Bhandari, sorry to interrupt, your voice is breaking up a lot.

Hello? So I wanted to ask, have you seen this trend in the steel pipe business where the small players are losing market share to a bigger player like you just because of the working capital intensity, which has gone up in the business and the cost of acquiring steel has gone up. [Foreign Language] where you can gain market share or the other alternate player can gain market share in India in the next 2, 3, 4 years?

[Foreign Language]

Sure. Sir, my last question, now we have the benefit of all the total top management now at the conference call. [Foreign Language]. So where do we stand on the demerger or is that viable? And do you want to put this as a part of your strategy [Foreign Language]?

[Foreign Language]

The next question is from the line of Bhavin from Kotak.

I had three questions essentially. First is on the financial side. We had massive working capital reduction and debt reduction. So one question is, are this sustainable now? The terms of trade that we are dealing with both in Lighting or Steel with sustained range? Or do you expect as the lockdown opens up our terms of trade can [indiscernible]? On the Steel side, my question was, while we are seeing this potential for growth and all, but if I just look at -- I estimate based on our distributors. I think quarter-on-quarter, we've seen some volume reduction over the last 6 months in spite of economy opening up. So just wanted, why volume was considerably lower than expectation in the March quarter and what steps are we doing to reverse that on the Steel business? Lighting one question I had was, we've been at around INR 1,200 crores, INR 1,400 crores revenue for the last few years, and a lot of steps are being taken right now. If you have to reach INR 1,200 crores, INR 1,400 crores to INR 2,000 crores, INR 2,500 crores in the Consumer Durables side driven by Lighting, are all the trends in place for you, including distribution, product innovation, what are the steps that you really still need to take forward to really achieve that INR 2,000 crores, INR 2,500 crores top line in the consumer side? Those are the three questions. Would really love an answer to those.

[Foreign Language] This year, we have come down to INR 717 crores, which includes them and the working capital as well. [Foreign Language]. So anything else, Bhavin?

The next question is from the line of [ Bhavan ] [indiscernible] from SIMPL.

Congratulations on a very good set of numbers, debt reduction. [Foreign Language]. Sustainably savvy double digit margin guidance [Foreign Language]

[Foreign Language] So anything, Nirupam Ji, you would like to add?

No, fully covered.

Sir, this import prices has also reduced in the industry -- lighting industry. So that has also resulted into.

That will also help, too. Yes.

The next question is from the line of Mahes [indiscernible], an individual investor.

Great results. Congratulations. Just had a couple of questions. You mentioned that backward -- vis-a-vis PLI there will be some sort of investment in backward integration. So I just wanted to understand that what will be the major of this backward integration? Also, what is our current import content in the LEDs?

Nirupam Ji?

So the import content for the industry as a whole is close to about 50%, 55% even today that's reduced over the last 2 years, but it still remains around at 50%, 55%. So our import component for LED particularly, remains in that range between 45% and 55%. On the PLI, it is now purely focused on component manufacturing. So what we will focus on also is incremental investment in component manufacturing. And the reason that we said that we can do it is that we already have our setup in place so we don't need to set up anything new for that. All we need to do is invest in incremental investment in production of components. That's what we're going to do now.

But also [indiscernible], for example, as I understand, the LED itself is a huge investment thing, the chips -- it requires a fab, right? So what's the nature of components we are looking at for investing? So what is it that will be making ourselves, which we are now importing?

So we will look at a lot with the components that go into it, so not maybe the LED chips because that is a complicated process, but every other component that goes in LED is in scope.

[Foreign Language]

Okay. My second question is [Foreign Language], what is the future for [indiscernible] 3, 4 years, I mean I'm not seeing that. Because it has been not very profitable plant.

[Foreign Language]

The next question is from the line of Bhavesh Chauhan from IDBI Capital.

Sir, congratulations on a great set of numbers. Most of my questions are answered. I just want to know what is our target in the next 3 to 5 years? So where you would like to be? One you have already explained that you would like to be a debt-free company and improve your margins on LED front. Apart from that, in terms of sales or something, if you can share?

[Foreign Language]

The next question is from the line of [ Patek Chaudhry ] from [indiscernible] Investment Advisors.

[Foreign Language]

That's correct. The figure is INR 280 crores.

For the conventional business?

Yes, for conventional business. This includes all components.

[indiscernible]

No, no, no. This is conventional Lighting, GLS, FPL and components. Because we have a large OEM business as well now, we are supplying conventional lighting to a lot of the branded players. So this includes our own sale as well as OEM sales of conventional lighting.

[Foreign Language]

So this will reduce from INR 280 crores to INR 150 odd crores?

INR 200 crores to INR 250 crores. Correct.

Correct. Over the next 4, 5 years, we expect it to keep reducing and go down to that level.

[Foreign Language]

[Foreign Language] LEDs is almost projected to grow by more than 40% in FY '22. Is that the correct understanding?

No. So our Consumer Lighting and Professional Lighting businesses will grow at 20%, around 20%. Our Consumable Durable business will be significantly higher, 30%-plus. And then we also have the OEM business and the PVC business, et cetera. So those will also grow. So LED lighting will not be 40%, it will be closer to the 20-odd percent.

And what will be the volume, the -- okay, the volume growth will be significant?

So the volume and value, like we said, is pretty similar now. So there's not too much of a difference. So the volume and volume growth will be around 20-odd percent.

And this will post -- this year's Q4 FY '22?

Correct.

And LED, if I understand correctly, is around INR 650 crores of sales for us?

Correct.

[Foreign Language] What sort of time frame are we targeting for this?

It's not the case. [Foreign Language]

[Foreign Language] Okay. [Foreign Language]

[Foreign Language]

Sir [Foreign Language] more than 20%-plus for the next few years year-on-year. [Foreign Language] sort of increasing our market share, no?

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] 11.5%.

Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to Mr. R N Maloo for closing comments. Over to you, sir.

Yes. We thank everyone for participating on the call. We hope we have been able to address all your queries. For any further information, we would request you to get in touch with us or with SGA, our investor relations partners. Stay safe and stay healthy. Thanks to all.

Thank you. Ladies and gentlemen, on behalf of Surya Roshni Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.