TTK Prestige Limited (517506) Earnings Call Transcript & Summary

Very good morning. Welcome to all. We had a, I would say, it's a mixed year last year. I think we went through a lot of difficulties, but we also came out very well. The growth on the top line, close to around 24%, 24.5%. On the EBITDA, we did well. I think we were at INR 441 crores against INR 332 crores of -- INR 342 crores of last year. Close to around 17.83% of EBITDA margin was 16.5% the previous year. Our exports also did well. We grew around -- from INR 70 crores, we moved up to INR 99 crores last year. Of course, we went through a difficult time with respect to the pricing, the commodity pricing was hitting the roof in fewer places. Of course, it further went up in the last quarter where we had a geopolitical situation, but we were able to manage through some price increase which is around 6% to 7% on the kitchen -- on the cookware and 8% to 10% in our appliances and also due to improvement in efficiency in both the production and other operation levels. During the year, we also acquired around 40.8% in the company, Ultrafresh Modular Solutions, which is into kitchens and wardrobes. We acquired that in the last quarter. So that's where we stand. Our U.K. business is doing well, they had close to around INR 18 million on the top line, around 16% growth versus last year, with INR 2 million on the EBITDA with around 23% growth on the EBITDA. Of course, going forward, I think it's going to be pretty tough because with the inflation in the roofs with the avenues of spending is also more for the consumer now because hospitality which was not working for almost first half of the last year, I think that has more focus. So the disposable income in the hands of the consumer is going to be ready with us. But we are hoping, I think, with the product innovations, with our presence across all channels, we will be able to manage that. Now we'll open for questions, please.

This quarter [indiscernible] I mean, we have never seen this kind of approach last year?

Two things. I think one is the -- overall, I think in the kitchenware, I think lot of people were spending money because they didn't -- there were -- most of the period, I think they were working from home or the hybrid model. So people were redoing their kitchen. Whatever we had in the FY '21, I think a portion of it was also happening in FY '22 also. But we also came out with lot of innovative products like Svachh pressure cookers. And then we had a launch also of Svachh gas stove during this year, which is all doing well in the market. So people are looking for a lot of value-added products. They are also seeing the improvement in the value-added products and on the base products, which is also helping us on the better margin. So these are some things which is helping us.

But from mature category with high penetration, like pressure cooker, mid-teen growth or something in volume especially and value of it is higher. So what is it -- is it the [indiscernible] category cookers which is driving the sales there? What is the entry level because they are doing better? What -- which category is doing better? And what is the key reason for this, I mean, even one year back, we didn't have this kind of a breakthrough?

Look at post COVID, it actually drew the consumption for pressure cookers. They wanted branded pressure cookers which is safe and then easy to maintain and always is available. So that growth effect -- in '21, '22 with launched pressure cookers. The fact end of [indiscernible] consumer in '22. That gave us real headroom for taking share from homes. So the industry itself might not have grown. We have grown. The Svachh cooker replaced many of the older cookers at home. That's also another reason. The next one is the, we were [indiscernible] newer market for whatever reason, just before pre-COVID and during COVID also. Larger part of last year was coming through. Now [indiscernible] has come through right through this year, almost 9 months were able to get it. So there were large volumes of pressure cookers there also. These are the basic factors and then largely value added cookers, so we sold largely pressure cookers.

So what will be the increase? So you said we have outgrown the industry. Any idea what would be the industry growth rate?

I don't know because I don't think the industry grew by more than single digit.

Going forward it has been like, as we said, very mature penetrative category, low replacement, like the replacement need is fairly high. And the unorganized segment is also quite small, around 20-odd percent. So like what is your growth rates, in terms of how are you targeting? Is it high single digit?

See, in terms of volume, I would say, three digits because while the urban market is very less penetrated, another market is not fully penetrated. So there is a lot of scope in those areas.

So while you pointed numbers for this, I mean...

If you look at the population outside the urban sector, consumer who will probably -- who have got some income, we'll have to get that number right. Only 20%, 30% of them have got pressure cookers. Balance have to get pressure cookers. And with the electricity being reaching every other place and gas reaching every other place, gradually we'll certainly have demand for pressure cookers as well as induction cooktops in those areas, as well as gas stoves. So within India as a whole, we do believe that India which has not been consuming, is going to consume. If India is consuming, we look for newer products and innovations where they find a company to replace something because they find something new. Though like another mobile company, we are trying to give something better and newer every year as compared to competition. Especially in pressure cookers, if you look, we are the single largest innovator. I would not say only. Because we are making something different for pressure cookers, differently shaped, or color cookers, induction-based cookware, we were the first to bring in this one, then Svachh platform. Some other things [indiscernible] so that this will aid our replacement market first and we [indiscernible] replacement exchange scheme also during May, June, July. These are the basic factors which push it, but it is very difficult for me to put the entire database at this point in time. That is not available in India to the extent that is possible, we have got our own in-house [indiscernible] something with extra fees, something to [indiscernible] and try to create capacity for it and that's it. Beyond that, if you want me to give scientific explanation, I don't have.

And on the rural side, what would be the penetration?

I don't follow this.

The rural side, how would this penetration be?

If you to take the census data, the pressure cooker penetration is around 20% to 23%.

This is for urban users, right, 25% to 30%?

No, rural cooker penetration is 90% plus. In urban, sorry, urban. In rural, it is about 20%, 23%. But that was last census data results. The new census data results is different.

And what was urban and the rural, 10 years back may become urban. We have presence in the mid premium side. So do you think we will be able to drive penetration because I think the last bit of unorganized actually get the share in terms of the penetration...

See, the rural market wants brands. To some extent, we have dealt them. They want brands. We have Judge brand also, they want only prestige. But they may go for every other product. They might not go for a high end product.

So how would your distribution would have evolved over the last couple of years in rural areas or per se, overall, how would it evolve more and more specifically in rural areas?

Are you talking about rural area or all India basis?

Rural.

See, rural, there is no organized distribution availability. Very expensive and keep on sending distribution. The net correct money and then you know the inventory volumes. And the consumption sectors are far away from distributor centers. But there is a demand because online taught us that when address in the rural area does purchase something online whether pressure cooker or a gas stove. That will use what is there. Look at -- ever since 2012, '13, '14, there has been the direct benefit transfer and the money is being given into the accounts directly, it has created some amount of consumption in the rural areas. And microfinance also started looking at those places. Basically, they are aggregators who try to come -- go to couple of hundreds of rural homes, look at what they want in that picture so that they get a microfinance business through another -- this one. Aggregate the demand, microfinance funds them, we get the order from the aggregator and we supply, it goes there. This is the whole model even though it is predominantly the one model that goes through. We're trying our best to set up online or digital system also because those markets evolve to have physical stores. It could be a general trade store with material grades or could even be our own Prestige exclusive stores on a smaller sites, only stocking items, which are [indiscernible] rurally. These are evolving things. As you said, it is evolving. The whole thing is that the online really taught us that the demand comes from across India.

So supply chain for online in terms of the rural. So the penetration on the rural is also because of -- apart from the gas stove and electricity is apart from the distribution. So that is what [indiscernible]. So even if the demand comes, how we are going to put that demand from the online also means [indiscernible] our supply chain [indiscernible].

See, when the online demand comes, online [indiscernible]. There are no two ways about it. We have got almost 4 [indiscernible] across India [indiscernible] in my letters. And we have about 23 branches and about 23 smaller warehouses. Can [indiscernible].

What we are also doing is I think we are trying to tie up our exclusive stores into our online website, so that I think we will be able to. Whenever we get an order on our website, we were able to route those orders to our exclusive stores so that the customer will be able to get those products in a shorter duration of time. Otherwise, it may take couple of days to reach them. I think now it will be able to reach them in hours the same day. So that is another thing we are hooking on right now. We are already on a trial in a few markets. So it will go all India once we stabilize on that. So this will ensure that I think customer is able to reach out the -- get his product the same day he wants it.

The other question is since urban is 80%, 90% penetrated, right and [indiscernible] right, the thing is that whatever the thing which you will get in the rural only. And urban is largely on branded. Whatever we will see, [indiscernible] to organize over the branded [indiscernible]. And if you don't increase the trust point in the rural areas in the entire area, then the kind of penetration which we will talk, we will talk after 5 years also.

You are right. I'm not arguing with you on that point. What I'm trying to say is that any geography will be mature [indiscernible]. If it is spread across the place, the only way to do is that, it's an aggregator. If still as an aggregator, probably your factory or any factory here, as a company, we have got 23, 24 warehouses across India. In most parts, we can supply them. We have got about 16 and 17 stores, which will become 700-plus during this year. Look at that, we have [indiscernible] also. From there, into the market, we were more than 50 kilometers, 60 kilometers. We'll be able to -- if the places are online or offline, we should be able to supply them. It's still evolving. I cannot create a distribution system in the rural area for the products. I like to take [indiscernible], who can do this. Now this differs upon the aggregators. If the aggregators believes that [indiscernible] may get more margin. So it's a question of being potentially an aggregator, see whether he can find a distribution point, it's basically -- innovation is also in reaching people. It is not just in product. That we were able to put our brand as a brand for rural also because we can supply a basket of products which they need there. A brand is there, service is there. And they have seen it. They have seen other brand emerges. They were able to associate this with something classy in their homes, still willing to go for that brand. Once that is created, a pool is created. How to deliver and how efficiently to deliver it, how cost-effective, it's a matter of time with that evolution. Basically, we will find innovative ways of reaching them. We are not now just happy with only reaching through marketing [indiscernible]. We like to find other ways of it. Maybe the infrastructure is being put on roads and other places. Naturally, there will be a revolution. People are going to town and purchasing there. If you take Tamil Nadu, earlier it used to come from [indiscernible] stores. Now between Madras and [indiscernible] several brands. So they don't any more come to Madras. Then I got distribution directly. Once a store is done [indiscernible]

So what would be the contribution of rural?

3% to 4%.

3% to 4%. And if you can give a breakup of the different channels for FY '23 -- 3% to 4% you're talking in the volume terms, right?

Value. All we are talking on -- everything is on the value terms.

Even the growth which you mentioned?

Yes. All value based because the volume [indiscernible]seems very difficult for you because [indiscernible]. And again, they have got low-priced loans, high priced loans. Quite difficult for you.

But then if you look at the price inflation, then it will be kind of flatish or lower volume in this year?

No, my value is to just bring in more and more margin. I've grown in double digit in volumes.

You've grown?

Yes. If you take 26% growth in pressure cookers, about 15% is volume, 11% is value added. They did come on price increase, we did come out [indiscernible]. Very difficult for me to explain. I have got the data with me, I may not be able to explain it to you.

But increasing means you are looking at growing the rural markets, are you looking to introduce more production and lower price points and that...

No, see, the rural market, they are brand conscious. They don't mind paying a price for the brand. But given the money available, they may look only for entry-level products. See, we are not developed any specific product for rural market. We have a standard products in different price points. We have got analyst brand called [indiscernible] slightly different specifications which will not effect the functionality or quality or durability of the whole product. Maybe that's for people who want to look at price as a variable.

And going forward, pressure cooker can grow at high single digits?

Yes. That is also volume.

Volume.

And what are the production that you will initiate? What's the kind of the overall aspiration we have over there?

See, we've got a basket of products for each category, correct? That's the evolution. We [indiscernible] pipeline about 18 months for the next couple of years in collection. On a broadly basis let's say, we want to grow 15% CAGR, correct? 15% CAGR only through volume.

This new [indiscernible] distribution that they will attack on all your markets where [indiscernible] percent. So what is our complete strategy for this?

We cannot [indiscernible] Ultimately, as a national player, we can announce that when no good trade practices, enters the all-Indian market, it benefits the industry. The industry benefits, I am willing to get more shares from the same industry. The more the industry gets organized, more native place -- I mean, the place is good for the industry. I don't consider anybody as a threat. I consider everybody as a trigger. And we have a very healthy view of market assets. In 1980s, we were 80% of pressure cooker market and sold INR 20 crores. Today, I'm 25% of the market. I sell INR 1,000 crores. I prefer this.

But in anticipation are you increasing our [indiscernible].

Not necessarily. My brand is well known. I don't have to oversell my brand by introducing -- I have a standard practice of about 6% [indiscernible] has and then ad spend. I will continue to spend. I'll direct it in such a way, if there's a complex intensity, we'll will have to do it in such a way because pure adjustment is not going to take you anywhere. Unless you've got a product strategy, innovation strategy, you're not going to get anywhere. Ultimately, you must place your free time in continued innovation, continued offering, continued differentiation so that you are competent in terms of what you offer, then demand follows.

It's already 90%. So there, if the other guy comes with a pricing strategy, he can dislocate you, right?

Predictively, you are taking about.

But he can reduce the prices, right?

[indiscernible] he is going to lose money. So that [indiscernible]. We have seen -- we are the pioneers in pressure cooker. If you take pressure cooker as -- from 1948 before Prestige was born, we're maintaining the focus. We have seen as many competitions as we talk about big, small, people have come, people have gone. Ultimately, you've got your strategy, your eyes and ears are open, you will have to take it down. In our opinion, competition, gross margin. Better the competition, is it better for us.

See we have been growing faster than the industry for what time rate are you mentioned for the last year [indiscernible] our company's competitor in the last years' AGM mentioned that he has been gaining market share for the last 3 to 5 years. So what are we doing...

The whole thing is that nobody knows what is the total market. These are grown online, I meant [indiscernible]. Even that answers the question. To be frank with you, nobody has got a reliable full market data today.

No, but if you do the like-to-like comparison...

Do you have the data of all [indiscernible]

Just comparing you and your competitor...

One right way of looking at it, if you look at cooker's growth for you and if you look at Hawkins topline in growth, Hawkins over a period of time has been growing at a faster pace. There can be periods wherein it has grown at a wider different and there are periods where it has grown....

Why don't you take a 10-year analysis? Did you analyze between 2009 to 2013? And the whole thing is that I was nobody [indiscernible]. Okay. I grew so fast between 2007 and 2013. Then the basis increased. Somebody lasted in that base. When they introduced induction-based cooktop, many competitors in cookers were there. They came later there. So you don't take the overall period of moving -- the 60-month growth, we'll understand that. So the whole thing is that I don't want to be pressurized by a quarter-to-quarter or annual to annual. Periods are uncomparable. Pressure there is. I always believe that the gap can be narrower, the gap can be wider. Our idea is to keep the distance as void as possible. I cannot throw on somebody [indiscernible]. As far as I'm concerned, there are two kinds of objective the company runs with. People have invested in my company. I must give them a decent return. I must have sustainable growth beyond inflation. This is one thing. There is a competition. Who have similar parameters [indiscernible] their consumers. They would have started at a lower base, I'll start at a higher base. There are times where I'll be looking like static because my base is very high, their base is very low. And strategically, if somebody wants to enter in online format or in offline big format at a price point, I don't want to play that. If you look at the similar period, August '21, we had chances of supplying trade, good value products, supplying online as well as offline, which just started opening our entry-level products. They sell a INR 500 product or a INR 1,000 product. Right choice is a INR 1000 product and supply all the offline markets. I don't want to be the rat race at that price point. I will not make money. If somebody enters, let it be there. Will he be able to sustain. Now we have not disappointed any offline customer. At the same time, we did not fall into the trap of offering something at a cheaper price in the online market. We -- now if you compare that period, somebody who are never an online, he went into online. I didn't want to play there. He lost in offline, suffered offline. None of us have got the reliable data what is my online chat or offline chat 2 years earlier. What is online chat or offline chat, nobody has got a data. Even aggregation basis 12-month point, there's an artificial cut-off rate of every quarter in every month, you cannot run the risk. We take an overall long-term rate where we can do. It's quite possible. Sometimes competition may take an extra step that I have taken, largely on price points.

So do we believe in having the same margins in the online and the offline channels given the margin from outside channels?

Our EBITDA level, plus or minus 1% will be added here. At gross margin level, the variable variations.

What is your market share in the [indiscernible] channel?

It's very difficult to say. I don't have the share with me. But I have a decent place there. Certainly, I may not be a market leader.

Just wanted to understand this contribution of stainless steel and aluminum, are the margins similar...

At EBITDA level, they are all similar. At gross margin level, depending on product costs, we vary here and there. And stainless steel is about 25% of the company. Aluminum is 75% or 10x our raw materials.

Okay. And how is it growing? Like what was 25% of all, like...

It was some less than 10%...

It still has been growing much faster. Aluminum as a -- aluminum cost?

What you can do is you can wait for some time. I don't have data right now. Our public balance sheet will come -- reach you this Monday. Then given how much volume in terms of consumed [indiscernible], we can make thing. I don't want to give...

Inflation was very high last year. What you have passed on -- so you gross margin has remained same?

More or less, yes.

Right? And a lot of other players have not been able to do that because of...

There was price increase. Others followed little late. So there is a lag in price increases.

So in that context, I wanted to understand, you are only increased prices in Q1 FY '23. Then you had price cycle 5%, 6% and then you still have commented that I mean you will face some margin pressure in the first half of FY '23. So I just want to know, is there still some under recovery to be taken, to be captured -- yet to be captured? Therefore, we are expecting margins because in the past, I mean, in FY '22, we have seen that you passed on the prices as and when you saw [indiscernible]. And you were able to maintain, in fact, improve our EBITDA margin. So I just wanted to understand why in the Q4 call, you say that margin...

I just like -- allow me to correct me. See, we have a policy here, buying inventory when the prices, we believe are varied at this time, it grow very fine. If you look, we increased our inventory, aluminum inventory in the last 6 weeks. They came at a lower price. That has been used in the fourth quarter. My lower cost inventory as [indiscernible] March is lower than what -- that only April I'm buying something at fresh cost, which [indiscernible] a moving 12 months. It will understand. So I think [indiscernible] is a problem for everybody.

Okay. So basically, until now, we are also benefiting from the...

See, we had enough money. We would put it in bank or put in inventory. I'd rather put in inventory. That's basically once again said the amount of [indiscernible] we expect the price to further go up, and therefore, we stock it. As of now, what we see is that the standard cost, we assume for the current year, we are able to maintain ourselves for the whole year.

Taking this argument of yours forward, right, the way you are putting cash into inventory, I'm sure the channel would have done the same thing, right?

No, channels, they don't buy like that. They start -- based on their moment...

The price is expected to go up, right? Channel would also tend to buy a little bit more. So if I'm carrying...

You are right, theoretically, there is only one [indiscernible] and one channel. There are several [indiscernible], there are several channels and each has got their own working capital issue. They've got their own loans. We won't rush entirely. This is not a commodity. It's a branded product.

So would it be fair to say that the primary and secondary seats would have tracked in terms of...

Yes, yes, roughly. See even in finished goods inventory, outside you have goods, it's not very big. Otherwise, we've not collected moneys.

So channels will be increased 15%, 20% or...

We found some channels. So in your -- 30 around 30 -- if it is exclusive stores, it will be a little match.

And currently, how much is the EBO, exclusive brand outlet?

We have around 6...

Contribution to the revenue?

It's around 15% -- 15-odd percent.

If you can give the break up on the different the channels...

See, the Traditional, which is our distributor, I think roughly around 45% to 50%. Our exclusive would be around 15%. Online will be roughly around 18%. The modern formats around 12%. The rural will be around 3% to 4%, and then our government sale will be around 3% to 5%.

Okay. But the exit rate on e-comm would be lower, right, at around 15%? I think it is higher because the initial part of the year e-comm was very high. That's why...

Now it is maintained at around 18%.

It went up to 24% at some point.

So this the same number is between Q4 -- in the last 3 quarters, I've seen they have been giving this...

Q4 is more or less similar. More or less similar. It's only in the first half, I think we have seen a jump with the online.

In January online was [indiscernible] because there was partial lockdown here and there. That's why, this comparison with any period to any period, it's become very difficult because there is no base which is constant for us to make comparison.

Within one more year.

These days [indiscernible] whichever channel takes the product, I'm happy about it.

So the main growth would have trended the same compared as the March quarter?

Yes. One just...

See, last year -- we cannot compare with last year, last year, it was closed down. So if you compare the trend in the current year as compared to the immediately present quarter, we are at a level there.

Can you offer some comments on the appliances business last year as the growth was significantly slower than other categories? What is in the...

In appliances, we have grown in gas stoves quite nicely. We have grown in induction cookers quite nicely. Mixer grinder, little less. The growth is reasonably good. In our clearing solutions...

In stove and induction, would it be higher than our overall top line growth or let me say...

You mean, rate of growth?

Yes.

Yes, gas stove was 27%.

Roughly around, yes.

So mixer grinder was only 12%?

Mixer grinder, yes. That was lower than that.

So how many of these products are localized and how many are imported?

Nothing is imported.

See hardly, less than 5% is imported.

But the number that we mentioned were for full year, right?

That's full year.

No, I'm saying quarter 4 because full year will also have some impact on the lockdown in the preceding year also. So there was a data which was there in April or May this year or last year, but there was a larger outcome in the similar period last year?

We're talking about which quarter?

Fourth quarter.

The fourth quarter, this year, there was an impact in January itself because...

Probably due to the Omicron.

Omicron.

But otherwise, the growth in, let's say, Feb and March, would have been -- or let's say, in March would have picked up main in appliances?

It can make this...

And in terms of exports, we did about -- for the full year basis we did what, about INR 100 crores.

INR 98 crores.

That's been about just 5% of our revenue for quite some time. Any product which can be there and can it be a meaning number going forward which we will see...

The ratio and the total [indiscernible], it's a matter of mathematics. I cannot -- my 10% of this business is being exported, that's not the way. How can I maximize my export irrespective of the company has developed over based on our current capacity which we have built, based on the product pipeline is, based on the designs that we have. In China one policy for any cookware buyer outside India, we are largely [indiscernible] suppliers. The way they have been dealing with this and they're given there business plan for the next couple of years, we believe we can reach INR 400 crores to INR 500 crores in '25, '26. What we mean by 10%, it's just...

INR 400 crores and INR 500 crores on exports? 5x in 5 years, is that....

Yes, you're right.

[indiscernible] if domestic is going from U.S., let's say, in value term single digits, it should be 75%?

See you can do the calculation, then do the percentages, excel sheet wise. What I'm saying is these questions trap me into excel sheet. I would like to look at business. Export, this is afraid child. I want it to be the best child in the company. Gas stove is my another child. I want the best child in the company. Therefore, you can be amazing the way you are.

So let's say, in that strategy itself, particularly to supply to the [indiscernible] globally. One, obviously, you said this China pillar is one, but on our part, what's the differentiating factor vis-à-vis, let's say, somebody who is non-Chinese for that matter in terms of supplies to...

See, you're talking about is India equally attractive to any country other than China. That would be Bangladesh, that would be Vietnam, that would be Turkey who is in turmoil, the people who we are dealing, for example, they are 3 customers, 4 customers who have given certain extra amount of business last year. They already increased their area of business from India, from us. Within India, we believe we have got a large capacity. And we comply with all the ingrown due diligence, which European countries dictate, we are compliant with those fully. Therefore, in terms of governance, our factories are satisfactory.. In terms of the ability to protect their IP, they trust us. With our large company, we'll not be doing something wrong with their IP and try to sell to other country or something. So these are things which largely go by that this is a supplier, a very good supplier, has got a good capacity, a good workmanship, he will not encourage my design, he will supply. The way they indicate their business plan, we do believe that we should be able to double our current turnout to existing players and add other couple of other players going forward.

But would the margins be similar compared to the domestic business?

At ROCE, I'm looking at 40% for the company, including this. See because if you look only at margin, I'll...

Sorry, 40% is what?

ROCE.

ROCE.

But we will select in Prestige brand?

No, no. White label.

Sir, contract manufacturer [indiscernible], Sir, can you give some reasons why mixer grinders were less in FY '22 compared to some of the other appliances? And also the geographical salience of some of these products, the number I believe, mixer grinders, my assumption is that it would be more south focused, would that be...

Mixer grinder, it comes with an attachment. The regular mixer grinders which are sold in South. By and large, uniform, largely focused on South or South Indian because of the configuration production. No body used mixer grinders 15 years back. Some 0.5 market shares have come to 8% now. We are #3 as a now. It's an area where there's a gap at the entry level as well as the premium level products, which we are addressing at this point in time. And we will actually selling a lot more in non-urban areas, which was affected just before COVID and during COVID. That is coming back only during this time. So you will see a different ballgame, which we will play in the next 2 financial years. We are hoping to get to #2 level in the next 2 years. Let me see where we stand.

Who is the #1?

Preethi is #1 I think. Preethi, Bajaj is #1, Philips is #3, we are also #3, similar in terms of value according to whatever data we are able to connect.

But this sorry -- so this mixer grinder is specific to the southern market like...

We supply food process to the northern markets also.

Okay. I don't know if you are getting what I'm trying to say, that there is a slightly different mixer grinder used in South India and what we us in say, the rest of the country, right? So these are the growth categories. And where would be our market share or ranking in the non-South market?

We are quite strong in Karnataka, Andhra, Telangana.

But no thoughts of getting into wet grinder?.

We have. We have the only timer-based grinder which we launched, we are not advertised it very heavily. We'd like to see how it works in the market and then go ahead.

We have the [indiscernible]...

Utra and Butterfly, both are...

At a company level where there is obviously a peak [indiscernible] right now, there's some inflation we are facing because we bought [indiscernible] costs, we are expecting to go rural in the medium term. Where do we see our margins sustain at levels...

See, we have based our entire LRP at about 15% EBITDA level.

[indiscernible]. If we get 17%, well and good. If we're still happy with the 14%, still our ROCE will be better. The idea is to ensure the return on investment is quite good. So we have to manage our capital utilization.

Modular kitchen, any comments?

We just had investment done in [indiscernible]. They had a decent manufacture. They can also install. They've got the whole infrastructure. They got about 80 stores in India, which they want to increase in the couple [indiscernible] We will be able to sell appliances through their outlets. They will be able to sell kitchen through our outlets..

How much we have invested in that?

Total it's INR 30 crores. We have invested INR 20 crores till now. Another INR 10 crores we will invest during this...

What you have stated for '25 is the INR 5,000 crores offline, of which, say, INR 1000 crores will be in organic, what could be the areas which would be the focus for the INR 1,000 crores inorganic...

See, out of INR 1,000 crores, we have already got U.K which is about INR 200 crores approximately. So we are down by INR 800 crores. We are not looking at existing cooker company and existing business. We're looking at some of the areas, adjacencies, which we are not there. It could be [indiscernible], it could be air coolers, it could be fans, we do not know. But we need to ensure that we get an inorganic opportunity where we have certain ESPs in terms of innovation, which whether we can do it on our own or we have to get some other partner to do it, it's a matter of this one. Easier if we can get a partner, could be a small scale partner. So we'll try to encourage them to get the products for us and then we invest in the technology and the manufacturing. Now there are certain [indiscernible] talking to, but nothing is materializing, either value is very high or the government is an issue where we cannot get easily those data projects, it will take a while.

Any product action that we will look, let's say, within the kitchen, outside the kitchen? For example, in kitchen, you also have water purifiers, you have cleaning solutions, outside the kitchen your have tableware...

Tableware, we are not there.

So any plans of new product introduction, any plans of organic...

Organically, we are about pressure cookers, cookware, cleaning solutions, gas stoves, mixer grinder, induction cooktops, and [indiscernible] those are existing categories. Organically, we can grow them. It's not an issue at all. You're talking anything other than that. The whole idea, I think is my customer. What is his or her mind share and whether my brand will coexist with them. Do you look at other brand? So we believe the Prestige brand, our Prestige-supported brand can extend into things like fans, things like water heaters, kind of things, I'm not talking about white goods. These are the areas broadly we have in mind we have stated several times. There are players in this brand which we looked at. Some came close to discussion level, but then COVID came in and everything then got distracted. And people are now able to get fun to do their own things and then -- these are basically proprietors. They don't want to lose their head in it. Even if they remain small, remain small in Tamil Nadu or Karnataka. So they have a larger vision and then they believe that they can partner with a company like Prestige without losing their identity is what we have to do. It's difficult to sell this kind of -- it's very easy to form a joint venture with oversees partner. It's very difficult to form a joint venture with the domestic partner because the ambitions have asked me and ambitions of few do not match. So very realistic. For example...

Burt if we want to do this, let's say, water purifier or heaters or...

Water purifiers, we have already invested, we are doing this on our own, we're investing technology, we're investing in assembly through third parties, that we are on our own.

Have you started selling?

Yes?

Have you started selling?

Water purifiers, we are selling. It's a small portion as of now...

And that we had mentioned that in cleaning solutions, we want do some INR 300 crore, INR 400 crores.

Where are we on that?

As of now, we are at about INR 50 crores, something. INR 60 crores.

What is -- this communication was about 5, 6 years back and what is the...

Not 5, 6 years. We were engaged [indiscernible] only in 2017, '18 we entered. Then COVID came in. We had a good run deal in COVID because of the vacuum cleaner and everything. So that's kind of -- pent-up demand was not in '21, '22. We, of course -- currently, we're still not all-India. We still have to extend the distribution, we still have an ambition. Even at INR 50 crores, it is contributing new products. There is no worry about it.

How much was [indiscernible]

I don't have that data.

All of these categories are there, let's say, all of these are [indiscernible] all those, right?

As of now, we are [indiscernible]. We will be entering electrical shortly.

And in the vacuum cleaning solutions, you have...

Electric vacuum cleaners, we have got both electrical....

So just to understand, when we are saying that we can go in fan or heater or -- so anything on the kitchen appliances, don't we see that category, large category. Anything size in the category where we want to enter because the size should be very high so that you can grow. After that would be more than 500, 600. What will the size of the category where you want to enter in kitchen appliances?

In kitchen, we are -- except white goods, we're not going to be in white goods. We don't want to be in washing machines.

Correct. So in a way, we are moving out of the kitchen category to take it [indiscernible]?

Expanding your tentacles. When you say -- use teh word, moving out of the kitchen, that will give a different picture. We have to be very careful when we address such things. Tentacles will be changed to some other part. As of now, toilet is not in our claim, lighting is not in white goods. Not even tableware at this point in time.

What in cleaning solutions that we provide?

Just have a look at it. These are all cleaning solutions. There are about 35 [indiscernible]

So chimney would be part of this -- the appliances part?

Appliances.

How are we doing in chimney?

Really good. We are getting good growth. But we'll do better once we have got this modular kitchen project because that goes in modular kitchens, chimneys.

But chimneys were imported, how...

Mostly in India.

And in sales promotion, percentage is a bit [indiscernible]?

6% approximately turnover is what we expect. That's minimally we look at because we keep doing new products, we'll have...

At one point of time, you were spending around 8%...

That was -- the turnover was much less. We were talking about basically in 2019, '18, we have spent 7%, 8%. Once we got the turnover going up, we look at it as a policy 6% is what we -- we may take it to 7% or even 5% depending upon the need of the market at this point in time.

Which product do you source...

It's in India? You mean, all pressure cookers ourselves. Source has been mostly appliances.

Which will be home electrical, mixer grinder...

Yes.

And chimney....

Only very few...

All vendors are in India?

Almost vendors are in India. Very few outside India. Very, very few. That's negligible. 5% will come from outside India. Less than 5%.

Overall imports are getting higher?

No, no. It's less than 5%.

Less than 5%, which for last 2 years, a lot of spend has been mostly kitchen. So that base will be the advantages or we will see...

See, what I would say is that the pent-up demand was largely seen in FY '21. FY '22, the pent-up demand dissipate, it's largely regulated trade demand. So I would think FY '20 as the base...

You don't see a base issue or say that...

Yes. I don't want to offer that as an excuse.

What kind of growth you are looking to...

We are talking about 15% CAGR from FY '21 onwards. But this is volume.

But when we see you paying the exact price growth which is priced [indiscernible]. So this household is going to pay so much for a [indiscernible]. Any other item pays so high. How do you price...

No, I'm not addressing a price-sensitive customer segment. I'm looking at a customer who wants our brand, who wants a broomstick will last much more than what they just want. It's a game where we have to -- when you want to enter a space where you can bring commodity into your brand. That will bring into the product we offer as well as the price. There are people who are buying at that price. There is competition, I'm not saying that -- we'll have to see. Somewhere you have to keep investing yourself in order to expand your base. After all my customer is the homemaker who used to buy an unbranded broom. She wants to go to a branded. It doesn't make me use 1 year. Let us keep buying there. When you get it in supermarket. [indiscernible] supermarket I can think more assets. [indiscernible]. So it's a long-term growth. So ultimately, I cannot explain just quarter-to-quarter. We have made an entry. We'll see. We have got hardly next 10 years where you can take this.

Product at price more than [indiscernible] that's what I see...

And we are still selling the assets.

One of the players has been acquired by one of the largest players, do that distribution in places where we are also there, does it compete like sort of head-on with us? Would that make any difference to...

See, where one brand opening, another brand [indiscernible]. Both have got their own distribution states or distribution gaps. And there were products, which they have to consolidate to see what they can do. It is for investor to gain about those distribution advantages. We would not know what they want to play with.

So what are -- how much is south now in a percentage approximately? South India, how much will that be?

It's equally there, 50-50, 40-40. It keeps changing between the quarter. Largely it is divided equally.

The national player is now occupying what share in the kitchen appliances?

It's a very large -- sorry, if you take pressure cookers, you can see Prestige and Hawkins are 2 national players. Between them, they will have more than 50%.

So wanted to know your thoughts on our bank position because if they're having a Prestige cooker and then we have our Prestige bloom, is that leading to a brand dilution?

We are trying this with our customers. They don't see any dilution. So the whole thing is with that decision-making.

What's the position...

I got your question.

Who are the national player in cookware and national player in electrical appliances?

Okay. National players in electrical appliances, what product?

What are the main products?

It looks like, the induction cooktop is there, okay. These are 2 key products. In mixer grinder, who may we call national player? Preethi is largely at South. Philips is somewhere, Bajaj is real all-India. Therefore, all these people put together, including Prestige and Butterfly, we may be 40% or more.

Basically, someone like Bajaj who have 10% to 15% market share...

I don't have the data with me. Bajaj has been there for the last 60, 70 years in the business.

In cookware?

In cookware, we actually distilled it. We are high in nonstick cookware. We are high in steel -- stainless steel. Then we have got anodized cooker, but we don't have market separately for it. You have to group these 3 together. In terms of balance sheet, we have the largest value. And there is lot of other based players that [indiscernible] their rate also. It's very difficult for it to get this well. And we should be having about 35% market share as a large base player in value in terms of this 4 categories put together. This is nonstick, value-added stainless steel, anodized cookware...

Half the organized...

Half the organized.

[indiscernible]

We don't know. Because somebody sells silver plate by 25 grams, 30 grams, 100 grams. Somebody sells one single plate at INR 150, INR 200, INR 300, very difficult for you to...

And in specifically electrical appliances, in the last 3, 4 years, who have you seen on a slightly weaker pudding in terms of...

I think everybody is spending for this space in terms of price and the quality. I don't think I can underrate anybody at this point in time.

So the regional players like Sumeet and...

Sumeet is no more there.

We still get the products.

I don't know, who will still get the products?

And sir, the other thing is does your growth also correlate with the new housing activity because the new housing activity is fairly robust in terms of whatever number of house -- every time, typically a house is been constructed, tend to have an intention to add something, more complete...

See, these are the drivers for your business. Any construction industry, especially domestic rooms is very important. It is not that it's going to give demand today because if you look at the unsold houses or unoccupied houses, there's no demand further. Unless they are occupied, they won't do that. But this is one of the drivers of demand. But do you want me to quantify, I cannot quantify it because I don't know...

How much is replacement and how much is new demand, you don't have it?

See, replacement can be in 2, 3 ways. One is that the family splits, somebody gets married, he buys the new cooker. He takes the first use -- he is not the first user. He invested in a new house and separately wants something, that is one thing. Second, you want an additional cooker. People start with 2 cookers, 3 liters or 5 liters, they want to have a 7 liter. Then you want to replace your cooker with the new ones. All these 3 things give your urban demand basically. Current contributor. But what I can say is on an average, a cooker is exchanged the 5-year old. Every 5 years, people change cookers. Appliances can be -- cookware can be less than 5 years. Appliances can be 5 to 7 years, other appliances.

The [indiscernible] have been sold in the last 1.5 years and will continue to sell, that is a strong driver....

It's a very, very strong driver.

So growth for us would be fairly stronger, at least in the couple of years...

Absolutely right.

Just to add on this point, there is a huge market for this hot top and modern kind of -- yes, and even it comes with the chimneys. So in that, it's like stable and it's here and all these products are the market leaders. So what is Prestige? How to get into the consumer's mindset even?

Our Ultrafresh acquisition addresses that.

Which one?

Ultrafresh, which we acquired recently, which is a modular kitchen company, which gives end to end solutions, which is not an opposite marketing edge for us.

But then do we have those kinds of...

We will have. We already have got hot tops. They are not building -- hot tops. If you want to get [indiscernible]. We do have. But Ultrafresh gives an edge for us to sell more.

In fact, Prestige hot tops are better. But they are soundless and they give lifetime warranty, which is...

Which is an...

In the chimney part. Prestige also has chimney offerings.

Just on the footwear side, right. So on the footwear side, anything which we are doing any new sort of, any activity we are increasing or any focus in terms of increasing the growth and the [indiscernible].

You will see all in the next quarter. Okay. Thank you so much.