TTK Prestige Limited (517506) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '21 Earnings Conference Call of TTK Prestige Limited hosted by AMBIT Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ashish Kanodia from AMBIT Capital. Thank you, and over to you, Mr. Kanodia.

Thank you, Rituja. Good afternoon, everyone. Welcome to the 4Q FY '21 Earnings Conference Call of TTK Prestige Limited. From the management team, we have Mr. T. T. Jagannathan, Chairman; Mr. Chandru Kalro, Managing Director; Mr. K. Shankaran, Whole-time Director; and Mr. R. Saranyan, Chief Financial Officer. We will start the call with opening remarks from Mr. T. T. Jagannathan, post which, we will start the Q&A. Thank you, and over to you, sir.

Thank you. Good afternoon, everybody. As you might have seen from the results that we've uploaded, we've had a very, very good year. In fact, this has been the best year, considering that we had 2 months of COVID with only 10 months of operation. It has been our best year and also the quarter 4 has been our absolute best quarter, not nearly comparable to last year, but in comparison to all 4 quarters, it has been the best quarter. Our EBITDA growth has been very strong. And the free cash growth has been very strong. And so I'm very happy with the results. Now we'll take your questions.

Hello, before taking the questions, I'd like to make a customary safe harbor announcement. Dear investors, thank you for joining this call. This conference will be open to questions. We've already put on our website and also circulated the results, the jist and also extract from directors report. During this question-answer session recession, there may be some futuristic statements that will be made by the management in response to some of the questions. But these are intentions of management, and best efforts will be put in by them in realization of goals. The success in realizing these goals depends on various factors, both internal and external. Therefore, the investors are requested to make their own independent judgments by considering all the relevant factors before taking any investment decision. Now let us move to question-and-answer session.

[Operator Instructions] The first question is from the line of Ravi Swaminathan from Spark Capital.

Congrats on a good set of numbers. My first question is with respect to the kind of price increase that we have taken across cooker, cookware, appliances. If you can give a broad overview, given the fact that commodity prices have gone up. And are these price increases enough as of now? Or would we take more price increases given the fact that raw material pricing have been on an increasing trend? And can we maintain our gross margins in FY '22. So basically, if you can give a view.

Okay. The commodity increases have been happening since September and October of last year. And it has been across the board, and we have taken 2 price increases in this financial year for the appliances and one in the case of cookers and cookware. In the case of appliances, where there are plastics and electrics and there's a large amount of copper, the price increases have been between 13% and 18% overall, totally. In the case of gas stoves, it's been between 11% and 13%. And in the case of pressure cookers and cookware, it's been about 5%. Now even after that, in this quarter that we are seeing, we have seen the commodity prices run up in Q4 but luckily for us, that is something we are seeing that has abated, and it is starting now probably peaky. Our idea is to see if we can pass on the cost increases and maintain margins provided we don't see any reduction in demand. And right now, we are not seeing that danger because the cost increases have abated. And hopefully, going forward, we will be able to maintain our gross margins overall as from year-to-year.

Got it, sir. And from a demand perspective, so basically, this time, due to the second wave, rural has been hit more. What kind of mix do we have between urban and rural in terms of sales revenue mix? And do you see higher impact to sales this time vis-à-vis last year?

The rural -- directly attributable rural is very small, under 10% that we see. The rest of the goods actually go into urban India. And from there, if there are traders down-trading into rural, we don't really track it. As far as the impact of this COVID wave is concerned, we will need at least a couple of months to understand the full impact after the unlock is happening.

Can we expect a similar sales or even better sales in FY '22 over FY '21?

We cannot say anything until we are opened, and we see a month or 2.

The next question is from the line of Sameer Gupta from IIFL.

Both of my questions have been actually asked by the previous participant. So I'll ask you on your medium-term strategy. I understand that these are uncertain times, but when we look at our portfolio, look at the gap in terms of our presence and what kind of strategy are we looking at to ramp up our sales growth, anything on your total reach in terms of retail outlets, any target you can share for how you would like that to be? Any geographical color, whether there is higher presence in Southern India and you want to ramp-up in Northern India? Anything on that front would be helpful, sir.

Okay. Last year has not been like this by -- just some pent-up demand happening. Let me assure you, there are a lot of things that went behind that performance. First, to answer your question specifically in terms of distribution, we've significantly expanded our distribution in areas where -- which we identified as growth areas in the north and the east, for example, with our maximum increase in the number of outlets that we play in has happened in this FY '22 -- FY '21. And I believe that, that distribution is really standing us in good stead as we go along. All our channels have fired well in Q4, and the way we are looking at it, we will continue our journey of innovation. We will continue our journey of making -- launching newer and newer products. And establishing or maintaining leadership in all our core categories.

And just a follow-up on this. So when this -- the distribution has seen the highest increase, is it also got to do something with the disruptions in the unorganized and the smaller players and that has facilitated us in some way and maybe tomorrow in more normal times, it will be that much more difficult to continue on this journey?

No, actually not. The distribution increases have not happened because they could not get something else. The distribution increases have happened on the basis of some hard work on the field on the basis and going and actually tapping counters and putting our product there. Now the first half was largely disrupted for the smaller brands, but the second half, the supply chains were all back. But if I am going to get repeat sales from those outlets, it means that I have established a sustainable distribution in those areas.

The next question is from the line of Aditya Bagul from Axis Capital.

Congratulations on a great set of numbers. My question is specifically with regards to pressure cookers and cookware range. We've seen multiple years as the growth rates have been reasonably tepid. I just want to get an understanding from you as to -- are we seeing a structural jump up in terms of the growth rates that we are expecting? And what are the reasons behind it?

I would believe it is too early to say structural because it is only last 10 or 12 months that we are talking about. But the cookware business definitely is looking robust. On our part, as far as we are concerned, you know that we have taken 2 large steps in both the pressure cookers and cookware. One, in the pressure cookers, we moved all our pressure cookers to the new Svachh platform, and we continue to be unique in that -- on that platform. No one else has that characteristic of product, which actually prevents frothing and things getting dirty in the kitchen. That's a feature that's completely unique to us and all our pressure cookers have moved there. The second structural change we made in cookware was that we expanded our portfolio in areas which we were not playing to a great degree. For example, not -- we were earlier largely dependent on just nonstick. Our nonstick cookware portfolio got much more powerful. But in addition to that, we've added a full stainless steel cookware to the portfolio. Towards the end of the year, we added cast iron cookware portfolio. We've strengthened our hard anodized cookware portfolio. And most importantly, our exports on cookware are also doing exceedingly well. So both these categories have received a lot of attention from us. And hopefully, that growth rate we should be able to sustain.

Understood, sir. Sir, just a follow-up on the question, just if you can share what is the sort of volume growth that you've seen in FY '21, especially in the cookers and cookware segments? That would be very helpful.

So there has not been a volume growth of any significance in cookers, but we've maintained our volumes. But in cookware, this is our highest ever volume that we have looked at, and it's in high double digits in volume in spite of the fact that the first quarter almost was washed out. So really, what Chairman said in the beginning, the operating period in this year was just 10 or 9 months. And if you're looking at this, you're really looking at a substantial growth in the second -- I mean, the last 9 months of this financial year.

Understood, sir. Sir, and my last question is, in terms of our overall margin. Here again, we've seen a significant step-up close to high-teens, especially in the last 2 quarters. Is it predominantly led by our cost curtailment/operating leverage benefits or is there something materially different that you we are doing here, which can lead to a more sustainable sort of a margin?

So it's a combination of factors. One, I think the company has taken several measures to make itself more efficient cost-wise. Some of it, which will sustain, some of it will not sustain after the unlock is complete. For example, travel expenses may not be as low as they are in this year if the unlock happens. But there are a lot of initiatives in manufacturing, in other cost areas, in logistics, which we would have taken, which will actually hold us in good stead. In the -- on the material cost front and the gross margin front, I think we've taken a lot of care to make sure that our portfolio of products are able to justify the value that we are seeking from the customer and giving -- delivering better value to them even more than the money they are paying. This is through new products. This is through a variety of marketing initiatives that we are taking. And I think that we'll continue as long as our innovation pipeline is happening, and that is going to happen.

Understood, sir. That's very elaborative. So 1 last question from my end. I understand that it would be difficult for us to talk about the immediate term, but maybe if you can help us understand what is the kind of growth trajectory that we expect in the medium term, let's say, 3 to 5 years, that would be very helpful.

I think we have made our intention very clear in our vision statement, and we said this last time that if you -- we are about 1 year, 1.5 years behind from that vision statement to reach where we wanted to which was really a CAGR of between 15% and 17% in our existing organic business. And I think that is what we will strive to maintain. However, we are going through some very difficult unpredictable times for the last 2, 3 years. And what you are seeing, therefore, is a combination of those things playing out. In the meantime, what we are also trying to do is definitely deliver a disproportionate growth in bottom line, which also you are seeing.

The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.

Congratulations on a great set of numbers. Sir, question is on both cooker and cookware. It will be useful to understand the market share that we had during the year, how it has moved over the last 1 year.

Market share numbers have not yet come for the year yet. And the market share numbers are -- really can only give you trends and not anything else. From a trend perspective, -- the reason I'm saying that also is not because of anything else, because all channels are not covered, and channels are proliferating every day. So from a trend perspective, if you see, we have gained market share in both pressure cookers and cookware, and I would say at least 100 to 150 basis points in both. But I have not got the figures yet for me to say that with any degree of confidence or certainty. But the way the trends were for the first 3 quarters, we are looking at a growth in market share.

This is useful. Second, for the appliances portfolio as a whole, we had set a target of doubling over the 5-year period, could you walk us through which are the specific segments that will drive the growth? And if you could also add the initiatives that you spoke about in terms of new products in the kitchen side, especially the hobs and in the newer area? That would be useful to understand.

You know we have always -- said what our core categories are, and those 4 categories are pressure cookers, cookware, gas stoves, mixer grinders, wet grinders and induction cookers. Now which category we will use when, I don't think is a matter I would like to disclose here because it is competitively sensitive. It is -- the strategy has always been to come out with products and offerings which are significantly better and would stand out in the crowd. These are very competitive categories. And that has been the strategy, and that is the strategy which will be followed, combined with the marketing effort, the distribution effort that will follow with it.

Sure. Last question on specific category, which is mixer grinders. That is the category that we are actually seeing a lot of competitive intensity building up. Could you help us understand the initiatives that we are taking to defend and grow our market share in this category?

So the good news and bad news is, we are not yet leaders in the mixer grinder. So we are the ones who are the aggressive there. And it is definitely getting more competitive as we go along. There are some very well entrenched players in the market. We are also coming up with our own set of offerings in this market. And this is a stable, high-growth market, and we are also seeing that customers are buying more expensive products in this category, which means that the customers are open to innovation. And that gives us our sense of opportunity in that sector.

The next question is from the line of Charanjit Singh from DSP Mutual Fund.

Hello? Sir, can you hear me?

Yes, we can.

Sir, if you can just help us understand in terms of the channel mix for the quarter and for the full year? And we have seen earlier a very significant increase in proportion of sales from online. Has it stayed at that 25% or it has increased more in Q4? That's my first question.

So I wouldn't be able to give you all the details of the channel mix, except that I can tell you one thing that all our channels have grown in the Q4. And in fact, the other channels -- other offline channels have grown faster than the online channels, that I can tell you. Overall, today, online is less than 20%, it's 19% to be precise of our business.

Okay. And sir, what proportion would be contributed right now from MFI channels?

It is very small.

Okay. Sir, and the other thing is now, when we listen to the commentary of the other companies, so the thought process is maybe Tier 1 will recover faster than Tier 2, Tier 3 this time and -- because the problem is more widespread into the country. So in terms of our mix of Tier 1 versus Tier 2, Tier 3, how is that? And based on that, then how do you see the outlook for our different product categories?

So I told, I think, to somebody else that we have added distribution this year probably the maximum number of outlets have been added this year. Most of these outlets have been added in the Tier 2, Tier 3, Tier 4 towns. And our idea is to make sure that our penetration in these towns goes up and up and up because we do believe that the growth rates are faster in those geographies. Having said that, I don't think there's been any significant shift towards Tier 3, Tier 4 towns last year because the benefits of this will accrue in the years to come for us. But yes, there has been some growth in those areas, which -- and we have grown faster in the smaller pop strata than in the larger pop strata. But growth has come everywhere.

The next question is from the line of Kunal Sheth from B&K Securities.

Yes. Sir, my first question is pertaining to the distribution that you mentioned that you've worked significantly on distribution. So I just wanted to check on how do you view this? Is there a room to -- how do you look towards this? Is there a room to improve distribution further? Is there a metric where you have reached an x number of outlet out of total number of outlets in terms of reach that you follow? Or if you can give us some sense on that?

There is always room for improvement, and I do believe there is enough headroom to get more and more outlets as we go, and we are still looking to increase that distribution.

Okay. And sir, secondly, on the cooker and cookware category, what would be your assessment of a fair number in terms of growth that these categories can grow at? And given the distribution and the product action that we have taken, is it fair to assume that TTK has ability to outgrow the market for the next few years, given that we have a dominant position in these markets?

That is the intention. These are our core categories. See, pressure cookers are a very mature category. You're talking about an urban penetration in excess of 90%. So therefore, cookware is not that heavily penetrated, but it is. Now when these are very mature categories in the past, we had at best high single-digit growths in the category, right? And in cookware, also, we had low-teens growth in the category. That is where the categories are. Now when we are talking about the 17%, 18% or 15%, 17% growth, we are obviously trying to see whether it's a good year or a bad year, we are looking at how we can beat our peer group, right? And to -- and when I say that my market share has gone up, it means that I have grown faster than my peers. So that is the attempt, and that's what we'll try and do.

[Operator Instructions] The next question is from the line of Aniruddha Joshi from ICICI Securities.

Sir, just wanted to know your view on this. E-commerce was probably less than 5% to 7% of sales around 5 years ago, and now it is nearing 20% of sales. So if e-commerce continues to grow, do you see that the consolidation in the distribution channel can have impact on company's pricing power in long term? So let's say, if e-commerce or online channel becomes -- the way it is growing, let's -- if it crosses 35%, 36% of the overall turnover, do you see any risk in that? And what would be the strategy of the company in that case?

We have constantly worked on derisking our channels over a period of time, you are aware of that. Now the e-commerce growing is a matter that is not in our control. That is a customer change that is irreversible. But having said that, the e-commerce itself is evolving. The number of ways in which a person can buy digitally, e-commerce is now turning -- transforming into digital commerce. The offline stores are looking at capturing the digital commerce. So there's a lot of evolution that is happening. There's a lot of churn that might happen. Our idea is to be present where the customer is going. And as long as we can be present where the customer is growing and -- going and actually deliver a good experience to the customer, we believe we are on the right track. Rest is up to the customer. We are here to serve the customer.

Okay. Sir, another question, what would be our market share, let's say, in offline channel versus the online channel? So actually, we have seen consumer staples that online channels, though the pricing power is -- becomes a question, but still, actually, the competition is low in e-commerce. So the market share for an organized or a larger player like -- it can be higher. So what would be roughly difference in market share in offline channel versus the online channel for us?

So I cannot give you the market share because I don't have the hard facts in front of me yet. But I can tell you that we are leader both in online and offline in those categories, which I have said. Now the point that you've made that offline competition is low, I disagree with. If anything, the online channel -- I mean, sorry, you said the online competition is low. The online channels offer a ready-made platform to these lesser-known brands for want of any other word. And they give them access to a marketplace, which they otherwise didn't have. So it's a competitive world out there and we have to constantly make sure the customer sees the value in our brands. And remember, we are in durables. We're not in FMCG. So therefore, a substantially good after-sales service is very important to a customer. And that's something we've taken a long time to build, and we believe that is our true strength.

Okay. Okay. Sure, sir. Just last question. In the opening remarks, you indicated about the price hikes across products. So I missed that number. So if you can please just share that number again? Yes, that is the last question from my side.

So what I had said was, we have taken 2 price increases in appliances and 1 price increase in pressure cookers and cookware. In appliances, we've taken between 17% and 19% in electrics, and we've taken about 13% in gas stoves, and we've taken about 5% in pressure cookers and cookware.

The next question is from the line of Achal Lohade from JM Financial.

Congratulations for great performance. Sir, my first question is with respect to the gross margin expansion side, if I look at the Q-o-Q, 3Q being typically a seasonally good quarter for us. So how do we explain this gross margin expansion? Is it driven by higher price increase and the cost inflation? Or is it a promotion typically in the fourth quarter?

So as I said, it's a combination of factors. Number one, we had passed on the price increase. We had affected the price increase in the quarter. Second, we had a good channel mix, and third, we had a good product mix. Combination of that is what you are seeing as the expanded gross margin.

Understood. The second question I had, with respect to the -- in terms of the retail tracking. So we hear a lot of other companies [Technical Difficulty] sales...

I'm not able to hear you. Can you speak again?

Is it better, sir? Can you hear me now?

Yes, I can hear you now.

Sorry for that. My question was a lot of other appliances companies are talking about they are able to track the retail sales through their distributors or dealers. So where are we on that aspect? Are we able to track our retail sales, like you mentioned about the rural sales actually partly happens to urban. So is there any way to track? Have we worked on that aspect and where are we on that?

So we have a full distribution management software with which we track our sales from our distributors to our retailers. This is very well in position. We have our dashboards from our large-format stores, which actually help us track our sales. We have our dashboards with the online platforms, which help us track our sales. We have -- with rural, we have a dashboard, which helps us track our sales. So virtually, all channels, we are tracking our sales to the last outlet. We are not able to track completely from there the tertiary in terms of the general trade. The tertiary from our large format, we are able to track. Nobody can. Is that the question you had?

Right. Right. Understood. So basically, the retail sales -- the retail sales are not able to track, but the sales from the distributor or from us to the retailers, we are able to track. I hope I got it right?

Yes. Yes, correct. You are right.

And with respect to the categories like cooker, cookware, what is the stainless sale mix? Because I remember, sir, talking about the stainless steel is more durable, so the growth could see an impact even though immediate growth could be larger. So just thought on that from stainless steel product for cooker and cookware, sir, respectively?

In terms of cookers, it's about 70-30. In terms of cookware, it's 90-10 in favor of aluminum. Hello?

The shift [Technical Difficulty] what I'm talking about.

Sorry, I didn't hear that.

The shift from aluminum [Technical Difficulty] currently for cooker [Technical Difficulty]

Your line is breaking up.

Can you hear me, sir? Is it better?

Yes. Now it is better.

Sorry about that, sir. In terms of the stainless steel mix, for cooker, it is 30% currently. How do you see it over the next 3 to 5 years? Do you see it getting swapped with the aluminum?

I felt that way 24 months ago when there was so much bad publicity about aluminum. But I believe that people have understood that, that is just bad publicity and nothing else, and there is no factual things there. So I do believe that stainless steel over a period of time will grow along with the prosperity of India, but it will be a slow process. It's not going to happen overnight.

Got it. And sir, if I could ask 1 more with respect to the gas stove number for the full year, would it be possible to break it up, sir, in terms of the appliances revenue?

Sorry, again, come again, what was the question?

Gas stove revenue for FY '21, sir, gas stoves. Revenue from gas stoves?

I wouldn't like to give you that breakup at this point in time. We've given you some breakup, that's what we can stay with.

[Operator Instructions] The next question is from the line of Disha Seth from Anvil.

Sir, I just wanted to ask the gross margin expansion, which we had in this quarter, is this sustainable for the next quarter? And have you taken again the price hike for the increase in commodity prices for Q1?

I'll answer the second one first. No, we haven't taken any more price hikes. We were believing that with the rate at which that the commodity prices are going up, we might need one, but since they have started abating, we will not require anymore. In terms of sustainability, our margins that you have seen in Q4 has a combination of factors, as I said. And if those combination of factors stay, it will sustain. If there are any major channel churns, then we'll have to see how it goes.

Okay. And sir, just last 2 questions on demand outlook. How are you seeing the demand for our products? Like, is it affected due to lockdown or the momentum of work-from-home demand continues?

See, right now, there is nothing that is working. Even the online channels are not able to work without a problem. So it's very difficult for us to tell you anything. We need at least 4 to 8 weeks of operating after unlock to understand how the customer is behaving. But I don't think that the category is as mature as it is, will go down in terms of demand. If anything, it should only grow.

So we can assume that May was -- I mean, half of April and half of May was almost washout because of people couldn't come out of home and partial lockdown, or sales are happening fast?

No, there is almost a national lockdown. There is no place that is working. And you are right, half of April was gone.

All of May. Whole of May.

Whole of May is gone, really. I mean, nothing happening.

And sir, last question, just, sir, for the growth of the cookers, the only way to grow the cooker for the company is to gain market share from each other. That is only because the category is not growing so much since it is fully penetrated. Or is there space in rural demand? I mean how are we going to gain -- grow more in cookers by gaining market share?

The replacement cycle -- first, the replacement cycle has come down. People replace their cookers much faster these days. Second, people buy add-on cookers much more these days in multiple ownership. Third, the rural area is not as heavily penetrated as the urban area. And the infrastructure has started being built into the India that is allowing access to the rural markets. And fourth, the penetration of Ujjwala and all the other measures that the government is taking to get people to move to cleaner forms of cooking will mean newer kitchens coming to pressure cooking. So that is -- those are the sources of growth.

And new product innovation.

Yes. And innovation.

The next question is from the line of Manish Poddar from Nippon India.

Just 2 questions. First is, let's say, in terms of price parity in your larger products, the gap versus, let's say, the #2 or the unorganized, is that gap largely same now given the price hikes which would have taken?

No, the parity hasn't changed. If anything, the unbranded has had to take higher price increases than us in many cases, especially in pressure cookers and cookware.

Okay. And just one bit. Let's say, so if I understand, would you be able to explain how does EBITDA margin stack-up across channels?

I wouldn't want to give you those numbers.

But let's say qualitatively, let's say which channel is better than, let's say, the others?

So the online and large formats are roughly similar. The general trade and my own retail is roughly similar.

The next question is from the line of Naveen Trivedi from HDFC Securities.

Sir, my question is the product mix between 3Q and 4Q. And I find no such difference in terms of bps. But if I look at the gross margin expansion quarter-on-quarter, there is almost 400 bps of expansion. I just wanted to understand is there also some sort of a benefit of the old raw material inventory also in the gross margin this quarter?

Certainly, that was also one of the points. We did carry some inventory from the other -- from the older period. And there has been better model mix and a better channel mix and a call price increase that we've taken.

So when you say channel was favorable, you mean to say offline channel has a better gross margin than online channel for us?

I just stated that our general trade and our retail has 1 type of margin, and our online and our e-commerce has 1 type of margin. But our Q4 saw -- all our channels grow faster than online.

Fair point. Lastly, if you can -- yes, just lastly, if you can also give an A&P number for FY '21?

Sorry?

If you can share the ads and sales promotion spend for the year?

It's been around that 6% level for a long time.

The next question is from the line of Aniruddha Joshi from ICICI Securities.

Just 1 follow-up question. Sir, if you can indicate [Technical Difficulty] core categories that we mentioned, pressure cookers, gas stoves, mixer grinder and other key categories, induction cooktops, et cetera. So what it would be roughly maybe 5-year, 6-year types? If you can share these numbers, even if indicative, it's fine.

So, I didn't understand the question. Can you say that again, please?

Sir, replacement cycle, means, a person may buy a pressure cooker, when he will come back to replace that cooker maybe after 5 years or 6 years because the first pressure cooker will start -- will not be that efficient or may have some issues, et cetera or he may just want to replace that. So...

The replacement cycle for pressure cookers today is under 5 years that we are seeing, not because of not being efficient, but simply because people get bored. It's like the way you change your mobile phones. Whether it's working or not, you tend to change it. It's like that. That's something that the customer has had to do. And in our case, we are driving replacement by bringing out newer and innovative products. For example, the Svachh cooker, we brought out the [Technical Difficulty] cookers, et cetera. In many cases, they're not even replacement, they just add on price. Cookware replacements are faster because they tend to wear out faster. So nonstick cookware maybe a year or 2 years, they will replace. Induction cooktops maybe 3 years, gas stoves maybe 5 years, mixer grinders maybe 4 years, depends. Every one of its category has its own reasons for replacement. Reasons for replacement are either it's worn off, they found a better product, they need an add-on capacity, they want to use it for something else, et cetera.

The next question is from the line of Bhavin Vithlani from SBI.

So in your press release, you mentioned the Kharadi factory continues to be in the lockdown and it's like 2 quarters in a row. It'll be useful to understand what exactly the issue is now? And when do we expect a resolution?

So it is a -- they had entered into an illegal strike, which forced us to declare a lockout, right? And after that, there have been several rounds of mediation between the labor commissioner, the union and us. And that process is still on.

Sure. Any time line that we could expect on the resolution because it's been more...

See, these things are very difficult to predict -- these things are very difficult to predict. Obviously, the company would want its factory up and running as quickly as possible. We are in the meantime doing things like maintaining. We are going for periodic maintenance and other things, so that there are no major losses due to the factory being shut down. All of that is happening. But I don't think we can say that this is when we will complete this process.

Understood. In the previous quarter, you had mentioned about the expansion that you have undertaken in various categories. If you could walk us through what is the level of expansion that we are doing in cooker, cookware and appliances category? And where are we in that expansion process?

Are you talking capacity expansion?

Yes, please.

So cookware, we've almost doubled our capacity. We've just built a new plant, which we will get commissioned in the next 3 months because this COVID has actually delayed matters. We've actually doubled our capacity. In terms of pressure cookers, we are looking at maximizing the usage of machines to improve the production right now. We are saying that let us wait for some time before we can add capacity after we have seen the post second wave situation, and then we'll take that decision. In terms of appliances, all our vendors have actually doubled their capacity for supplies. You know last year, we took a very bold decision of moving all China-finished goods into India. Most of that has been complete. Those capacities have been set up so when this lockdown opens up, we will have those supplies coming in, our supply chains are in place.

Sure. Last question, what will be the revenue share from our own stores, PXL? And how are we seeing in terms of store expansion and our increase in the share?

So our own PXLs are actually around 14% to 15% of our total revenue. We are at about 620, 630 in number right now. And we are looking at seriously putting in all efforts to make sure that our expansion program on PXL accelerates in the coming years as we go along. We believe it's a serious -- seriously, it will help the brand as we go along.

Sure. And what percentage of these 630 numbers will be old and the franchise ones?

98% or 99% are franchised.

The next question is from the line of Shrinidhi Karlekar from HSBC.

Congratulations on great set of numbers. Sir, just a question on cookware category. Sir, given your current product portfolio, how large is this cookware market according to you? And how fragmented is this market?

You're asking what -- how big is the category?

Yes. So the INR 300 crore ballpark revenue we have, right? So considering those only, how large is the addressable market that we have?

We believe the addressable market is in excess of INR 2,200 crores for pressure cookers and in excess of around INR 1,400 crores for cookware.

INR 1,400 crores -- INR 2,200 crores and INR 1,400 crores you said? Okay.

Yes, yes.

Okay. And I presume it is extremely fragmented, right? Like top 5 players could be...

No. That INR 1,400 crores which I told you, sorry to interrupt you, nonstick cookware is very much smaller than that. It's around -- it's less than -- it's about INR 900 crores, if I'm right. And then there are other various cookware, like stainless steel, cast iron, et cetera, et cetera.

Okay. Yes. And sir, in terms of product portfolio in this entire cookware category, does our current portfolio largely address the market or there are -- you would say there are still meaningful gaps?

So there were gaps, which is what we're trying to address, which is what I said. We've brought in stainless steel cookware in a big way, which is a growth area. We're talking about getting into -- expanding our anodized cookware base. We're talking about getting into cast iron, which we have. And we are looking at newer segments and creating newer subcategories as we go along.

Right. Fair enough, sir. And sir, 1 question on demand elasticity to prices. So according to your own experience for decades, how does consumer react to just steep price according to you? In '12, '13, we had similar price hikes, I presume. So does -- and how is it different between cooker and cookware? And how is it different in appliances? Would you say appliances is much more a category in which consumer buying can happen compared to say, cooker and cookware?

See, India is a value-seeking market. The value-seeking customer will see through if you are trying to rip him off or rip her off with price increases that are not justifiable. TTK Prestige has always adopted a fair pricing policy, so that we can deliver value to the customer always and make sure that our market shares are protected, if not grown. That is the way we have approached the market, and the Indian consumer has always been value-seeking and has always responded positively to that.

Right. But sir, do you -- the question is really, do you think the 10% hike can cause a difference of consumption by a year because typically we...

Yes. After the price hike, we have seen a full quarter, as you have seen. And I don't think that has not -- I mean, that has created any problem for us.

The next question is from the line of Bharat Chhoda from ICICI Securities.

Congrats on a good set of numbers. I just wanted to understand more about the export business prospects and whether we would have the sufficient capacity to cater to this demand, if you could provide more color on that?

Well, we've built the capacity to cater to the expanded demand that we have seen. And I think we are largely covered for this financial year, at least. As soon as we unlock, we're going to reassess that. It's a continuous process. Our exports are doing well, and we are looking at the next couple of years as a strong window of opportunity for export business.

Okay. And sir, could you provide us a manufacturing and outsourced mix that we have overall?

48%, 52%.

48% manufacturing. 52% is outsourced?

Yes.

Okay. And sir, what would be the CapEx for FY '22?

Around INR 50 crores for now, but that's a dynamic figure. If we need more -- you know we have cash. If we need to do more investments, we'll always be happy to put it back into the business.

The next question is from the line of Niket Shah from Motilal Oswal.

Just 2 questions from my side. First, if you can just give us some update on your home cleaning business and the water purifier business, how is that shaping up for FY '21 and the plans going forward? And second question was, if you can give us some sense on what would be the contribution of products launched in the last 2 years as a percentage of revenues?

So the home cleaning business, we have divided it into 2 parts, actually 3 parts. One is the electrics, like vacuum cleaners and things like that; the second is the nonelectrics, which are the spin mops and cleaning accessories like that; and the third are the water purifiers. Now the vacuum cleaners have done extremely well last year. We've expanded seriously on distribution in terms of the nonelectrics into supermarkets, et cetera, in key geographies. It's still work in progress as far as I'm concerned. The COVID has not been helpful with this. And the third part is water purifiers, which, unfortunately, we've had supply chain constraints. Otherwise, we have some very differentiated products. Hopefully, as soon as we unlock, that is a big area of focus for us. Again, there's a lot to be done. We haven't yet achieved much there, to be honest. Sorry, what was the second part of that question? Hello?

Sir, what would be the size of the business now?

The cleaning solutions?

Yes. All put together.

It's about INR 75 crores, INR 78 crores right now.

Understood. And we are on track to achieve the INR 500 crore target that we had set out over the next 4 to 5 years?

We've said INR 300 crores -- we've said INR 300 crores. We're slightly behind schedule, thanks to this COVID. But hopefully, we will do something to make up for this lost time through something else in terms of new products. Yes.

Sure. And sir, the second question was...

We are committed to that number. We want to get there.

Got it, sir. Got it. And sir, the second question was, if you can just let us know the products launched in the last 2 years, how much do they contribute as a percentage of revenue?

I don't know if I have track -- I have that number ready. But I mean, if you look at pressure cookers, I think 90% of our pressure cookers have been launched in the last 1 year because the entire platform has been transformed into Svachh. So I mean I'm not sure if I can give a number. But yes, the new product launches we've had in each of the core categories, we've had significantly successful new product ranges that we have launched. We don't launch products, we launch ranges. And in many of the categories between 20% and 30%. In cookers, particularly because everything was moved, probably almost 90% of our sales is now on the Svachh platform.

The next question is from the line of Nirav Vasa from Anand Rathi.

Sir, my question pertains to the Prestige Lifestyle products, which we are marketing as super premium category of kitchen appliances. So any kind of -- I understand that, that business is in very initial stages. But any numbers can you give for that particular category and kind of growth and the marketing spend that we can do for that category exclusively, that would be helpful.

So actually, unfortunately, we have not been able to expand beyond what we had 2 quarters ago because of various constraints. So I don't know if I can answer that question now, maybe a quarter later, we'll be able to get a better hang of what -- where we are on this.

The next question is from the line of Dipen Sheth from Crystal Investment Advisors.

The question I want to ask is a little strategic in nature. I see your cookers' slice of the business as a mature, but leader category, fine. And obviously, cookware appliances would be the faster-growing and more bigger opportunities there in terms of being able to grow the business sustainably. Of course, cookers has its benefit as well. But my question is, as you build out the cookware and appliances businesses and they are already at something like 60%, 70% combined in the revenue mix on a stand-alone basis, what are the big challenges that you're running into on these categories? You mastered cookers and good with that, you've done some great stuff here and now it's 70% of your revenues. Is it that you -- you're running into challenges on very strong competition, big challenges on product development and innovation? Is it that the pricing aggression from competitors is high? Is it that the channels are difficult to build up? Is it that inventory management is posing challenges? Where are the challenges from, let's say, a 2-, 5-, 10-year perspective? Because I see them as also very, very high potential and a lot of good work to be done over the next maybe half a decade or a decade.

You are talking about challenges in appliances and cookware or in pressure cookers?

Yes, sir. Appliances and cookware.

So I mean there are -- see, these appliances are a much larger space to play, and they are far more fragmented. You are aware of that. In cookware, actually, we have even better market share than pressure cookers, when it comes to nonstick cookware. So the 2 are really 2 different things. There is a lot of headroom for us to go in appliances. There's a lot more scope for innovation. And therefore, that's something that we have. The challenge is, obviously, there are very few brands that have done what Prestige has done. Prestige has made the transition from a nonelectric player to an electric player. And I don't think there is any company in this country which can say that with any degree of confidence. So the challenge is we have already overcome. Where it is to be overcome is in some categories like mixer grinders, where there are very strong players, whom we have to challenge as we go along and we will do that. And we will do that with a very strong innovative product offerings, and we believe the customer is always receptive in these categories. And the category offers us that space. That has been the strategy largely going in the last so many years.

Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to the management for closing comments.

Chandru, you do the closing.

Well, thank you so much, ladies and gentlemen, for very engrossing 1 hour. Yes, we've had a fantastic quarter and a very good year. And hopefully, the unlock shall bring in a new and buoyant market for us, and we hope to do -- continue to do as well as we have. We have all the other ingredients in place as we go forward to meet that growth challenge. Thank you very much again.

Thank you. On behalf of AMBIT Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.