Voltas Limited (VOLTAS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q1 FY '21 Earnings Conference Call of Voltas India Limited, hosted by Phillip Capital India Private Limited. [Operator Instructions]. Please note that this conference is being recorded. I will now hand the conference over to Ms. Natasha Jain from Phillip Capital India Vive Limited. Thank you, and over to you, ma'am.

Thank you, Ms. Muskan. Good evening, everyone. I'm Natasha Jain on behalf of Phillip Capital. Welcome all of you to the First Quarter FY '27 Earnings Conference Call of Voltas India Limited. From the management have Mr. Mukundan Menon, Managing Director; Mr. K. V. Sridhar, Chief Financial Officer; Mr. Nikhil Chandarana, Head, Corporate Finance; Ms. Suman FD&A and Mr. Manish Somani, Head Finance Controlling. I request the management to give their opening remarks, post which we shall open the floor for Q&A. Thank you, and over to you, sir.

Good evening, all. This is Sridhar here, CFO, Voltas. I'm glad to connect this evening with our earnings call. to give us overall summary, Voltas delivered a strong performance in Q1 FY '27, significantly outperforming competition and further strengthening its leadership in the coating segment. The company achieved a 17.3% secondary market share in room air conditioning for FY '27 until for the first quarter and widened its lead over the nearest competitive 4 percentage points reinforcing its position as the undisputed market leader. Strong execution across marketing, product management, channel expansion, manufacturing capacity and supply chain readiness supported the performance. During the April to July -- June quarter, the global economy continued to face geopolitical tensions, elevated LNG prices and persistent inflationary pressures, conflict in the Middle East added to commodity and currency volatility and supply chain uncertainty. Against this backdrop, India continued to demonstrate resilience supported by domestic consumption infrastructure investments and strong underlying macroeconomic fundamentals. The Indian consumer durables industry witnessed steady demand during the quarter continued demand for cooling products, Tom air conditioners remained a key growth lever supported by the summer season, aided by increased penetration and expanded demand across Tier 2 and Tier 3 markets. Against this operating environment Voltas delivered a substantially strong performance compared to the previous year supported by growth across its key businesses and disciplined operational execution. The company achieved a significant milestone by selling 1 million RECs in just 81 days. demonstrating the strength of its brand, product portfolio, distribution reach and execution capabilities. Goldbeck also emerged and important growth we were substantially outdoing the industry and recording its highest ever quarterly sales in both value and volume. The projects and engineering business provided further resilience and balance underscoring the strength of the Voltas diversified portfolio. For the quarter ended 30 June 2026, Volta recorded consolidated income of INR 4,765 crores compared to INR 4,021 crores in QY FY '26. Profit before tax was INR 285 million was INR 203 million in the previous -- same for the same period last year. Net profit was INR 213 compared to INR 141 crores last year. Now if we go into the detail of the respective segments. In terms of segment A, Segment A delivered a strong growth of 33%, led by exceptional performance in the room air conditioning business. RAC volumes grew by 45% year-on-year, significantly outperforming the industry and key competitors. As mentioned earlier, the secondary market share was 17.3% for Q1 of '26 and progressively strengthened its competitive position through the quarter. For Q1 '26, the company wide market share lead over nearest competitor to 4 percentage points reinforcing the strength of its brand equity, product positioning, distribution network and execution capabilities. A sharper brand and marketing strategy was an important contributor to this performance. The refreshed brand positioning supported by sustained investments across television, digital, retail and consumer touch points, strengthened consumer engagements and brand salience. The true 1.5 tonne cooling capacity campaign and industry-first initiative highlighted the superior 5,000 watt cooling capacity of the Voltas 1.5 ton air conditioners, enabling consumers to make more informed and value-driven purchase decisions while enforcing the brand's credentials around all full cooling and performance. Product management and innovation remains central to the growth strategy. the refreshed RAC portfolio led by AI-powered Vertis click AC series introduced in March 2026, offered differentiated features across AI adaptive cooling, Ogo fencing and AI energy manager. A sharper portfolio across a [indiscernible] articulation and growing demand for intelligent and energy efficient cooling solutions. The company continued to expand and deepen its channel presence across Tier 2 and Tier 3 markets, that RAC penetration remains relatively low. Wider distribution, stronger dealer engagement and increased presence across traditional trade model retail and emerging channels improved product availability and enabled Voltas to capture incremental demand across markets. Another key enabler was the company's manufacturing and supply chain preparedness. Capacity was progressively ramped up ahead of the summer season with the Chennai and Pantnagar facilities operating at high utilization levels. Strong raw material planning, supply readiness, deeper localization and disciplined inventory management ensured product availability during the peak season and enable the company to effectively service the significant increase in demand. Commercial air conditioning delivered a stable performance and continues to represent a significant long-term growth opportunity supported by urbanization, infrastructure development data center expansion and increased adoption of intelligent building solutions. Commercial refrigeration at air coolers recorded a relatively muted performance primarily due to slower market uptake following price increases. The company continues to focus on institutional sales channel development customer diversification and new product introductions to drive improved performance in the coming quarters. Segment A margins improved significantly compared with the previous year despite commodity inflation and currency depreciation. These pressures were partially mitigated to progressive price increases and comprehensive cost optimization program initiated in FY '26. Encompassing strategics sourcing deeper localization, product design improvements and manufacturing product initiatives. Overall, the combination of sustained brand investments, differentiated products, sharper product management, expanding channel reach, enhanced manufacturing capacity and resilient supply chain execution enabled Voltas not only to maintain its leadership, but to materially widen its lead over competition. Voltas has entered into a binding term sheet with Attenburg Innovation Private Limited for a proposed 50-50 joint venture to develop and manufacture high efficiency RAC compressors in India. The proposed venture will strengthen indigenous sourcing, reduce import repetency and enhance long-term supply security. The transaction remains subject to satisfactory due diligence, product validation, definitive agreements and necessary approvals. VoltBek. VoltBek continued its strong growth trajectory in Q1 '27, substantially outdoing the industry and recording its highest ever quarterly sales in value and volume. The business achieved a year-to-date market share of 9.4% in washing machines and 7.4% in refrigerators, further strengthening its position in highly competitive Indian home appliances market. The company maintained its #2 position in the semiautomatic machine category, using highest-ever market share of 15.6%. The performance was supported by sharper product and premiumization strategy with refreshed product lineups across prosper refrigerators and fully automatic washing machines. These introductions strengthened VoltBek presence in higher-value segments improved overall product mix and enhanced its relevance among consumers seeking differentiated features contemporary design and superior performance. Voltbek continued to see its brand and care strategy through an expanding retail footprint, deeper channel penetration, enhanced in-store visibility and stronger consumer engagement across 3 key markets. At the same time, increased focus on localization, strategic sourcing material optimization, product design and manufacturing efficiencies is expected to progressively strengthen cost competitiveness and profitability. With increasing scale, improved market share and a stronger premium portfolio, VoltBek remains a key pillar of Voltas' long-term strategy supporting portfolio diversification, premiumization and the company's evolution into a comprehensive home appliances player offering integrated cooling and home appliance solutions. Segment B, Electro-Mechanical Projects and Services. Segment we continue to play an important stabilizing role in Voltas' diversified portfolio reinforcing the company's position as a leading engineering and project solution enterprise. During Q1 FY '27, the domestic products business maintained strong order momentum securing strategic wins across key growth sectors, including industrial infrastructure, electronics manufacturing, metro and turnkey projects and data centers. The company continued to selectively pursue fast track and value-accretive opportunities, strengthening the quality of the order book and supporting healthy revenue visibility. The business maintained strong execution discipline across projects and geographies with continued focus on timely delivery, project profitability, working capital management and risk controls. Within the international projects business person to the court award received bank guarantees, amounting to [ INR 167 million ] equivalent to INR 430 crores were canceled during the quarter. The quarterly financials has more details. While Voltas effectively mitigated risks arising from geopolitical prices and ensure continuity across key projects and customer engagements new order book remain delayed following the impact of the conflict in the Middle East. Against this backdrop, the business continued to focus on operation stability and tighter project controls, disciplined risk management and selective pursuit of opportunities. As of 30 June 2026, the total carryover order book value per Segment B stood at INR 6,345 crores, providing revenue visibility and underpinning the company's confidence in the long-term prospects of both its domestic and international projects businesses. Engineering Products and Services. Segment C delivered high double-digit top line growth during Q1 FY '27 further strengthening the scale and contribution of Voltas engineering products and services portfolio. The Mining and Construction Equipment division delivered impressive top line growth supported by sustained demand for crushing and screening equipment. Continued execution of operations and maintenance contracts and stable performance from the Mozambique operations. The division also continued to strengthen its higher-margin aftermarket and service annuity business. We put a customer engagement, enhanced life cycle support and expanded service capabilities. The Textile Machinery division delivered double-digit growth despite a challenging operating environment characterized by geopolitical uncertainty and cautious industry sentiment. Encouraging the market has begun to demonstrate early signs of a gradual revival, reflected in improved order booking levels. Continued focus on aftersales spinning accessories and services delivered encouraging results and further strengthened the resilience of the business. Together Segment B and C continue to enhance the resilience and diversification of the Voltas portfolio providing balance to the consumer businesses while contributing to sustained growth and revenue visibility, supported by strong summer season and disciplined execution, the company exited the quarter with a strong liquidity position and well-controlled working capital profile. Continued focus on inventory collections and cash flow discipline strengthened the balance sheet and provided the flexibility to support investments in plants, products, channels and manufacturing capabilities while maintaining financial strength. Volta enters the coming quarters from a position of strength, supporting supported by structural initiatives undertaken across businesses. Refresh product portfolios, sharper product management, sustained brand and marketing investments channel expansion, enhanced manufacturing readiness, localization and cost optimizations have strengthened the company's competitive position. While Q2 is traditionally a leaner period for the cooling industry and geopolitical uncertainties continue to create commodity currency and supply volatility, Voltas revenue remains well positioned to navigate these challenges. In room air conditioners, the focus will remain on consolidating and extending leadership through product innovation, premiumization, sustained brand investments and deeper channel penetration Commercial air conditioning delivered a stable performance and continues to represent a significant long-term opportunity, supported by urbanization, infrastructure development, data center expansion and increased adoption of intelligent building solutions. VoltBek continues to be one of the fastest-growing home appliances businesses in the country with product segmentation, premiumization, innovation and channel expansion expected to drive market gains and progressively improve financials. With the projects business, the company remains focused on selective and value-accretive orders booking, execution excellence and cash flow discipline and project profitability. The Engineering Products and Services business will continue to build on their growth momentum with increasing emphasis on higher-margin aftermarket and service revenues. Across its businesses, profitable growth, market expansion and sustained improvement in profitability remains central to Voltas strategy. The company continues to unlock efficiencies through strategic sourcing, localization, product and design optimization, manufacturing excellence, process improvements and increasing benefits of scale. Thank you. Natasha, over to you.

[Operator Instructions]. The first question is from the line of Indrajit Agarwal from CLSA.

I have 2 questions. First, if you can share some contours of the compressor what kind of CapEx can there be? And when can we see commercial production? And how will the capacity share between the 2 entities.

Yes. Good evening, everyone. My name is Mukundan Menon. Thank you for the question Indrajit. So this JV that we've signed with Amber it's for manufacturing capacity of around 2.8 million compressors for air conditioners to begin with. That's what we have sort of tried to achieve. And this is an effort to secure the supply chain for a category, which is a very important category in the overall compressor. So the heart of the conditioner is the compressor. And we always felt that it is very important to secure this very important part within India because with all the challenges that are happening with respect to the QCO restrictions, the quantum of imports, which allowed the quota system, there's also something called the transition TCO rules we felt it would be good for us to have as a leader in the air conditioner market with a very high volume. We did not want to leave this very important component unhinged. So that was the reason we went for this sort of arrangement in terms of the overall CapEx, we still are -- it's still in the early stages in the final, as we work out the details of the definitive agreement, we'll arrive at that. It's a little early to sort of comment on the total CapEx requirement actually.

Sure. Secondly, while our market share in VoltBek has been gradually inching up, do we have an EBITDA breakeven line of sight yet or it's still too early.

So this -- Indrajit, we were -- in rise this year, this particular year was when we initially were aspiring to get to an EBITDA breakeven Unfortunately, what has happened with respect to the West Asia crisis, took up prices of the commodities quite sharply. And most of the brands, including us struggle to pass the entire thing onto market. So we had -- in a way, I think if we were to assume that we were to reach this year, I think the way it may get sort of pushed over by a few quarters. That's the way we see it.

The next question is from the line of Achalkumar Lohade from Nuvama Institutional Equities.

Sir, my first question is with respect to the volume growth, if you could call out what has been the volume growth for the industry. We have grown by -- you mentioned -- but what has been how the industry? And secondly, how do you see it in terms of the current channel inventory and the way forward for the full year? If you could comment a little bit on the same.

Yes. On the room air conditioner, Achal, the industry seems to on the secondary market share. The secondary sales what is published by GFK Nielsen, they showed a 15% growth in secondary. That's what we have said. My sense is the primary increase would be anywhere between 20% to 22% in volume terms and maybe around 25%, 26% in value terms, maybe the industry growth. I again said, we have done better, which is reflected in our market share growth, which we have seen our market share grow significantly growing from 15.9% for the full financial year last year to 17.3%. So -- the -- our volume growth was around 44% was the volume growth and our value growth on increase is around 50-odd percentage.

Understood. If you could give us some sense in terms of what is the extent of cost inflation and how much price we have taken so far and how much we are expecting now.

So the cost, yes, we -- so this year has seen 2 things happening. One was the there was a table change which happened. And that took up the prices of all the 3 star ices by roughly 5% and the 5 star by 15%, a weighted average of somewhere on 78%. Then there was the commodity price increase, the depreciation of the rupee plus the increase in the ocean and trade charges, some increase in plastic costs all that added up to another sort of 4%, 5%. And so overall, all put together, 10% to 12% was the cost. And we have also passed on very close to that number into the market, maybe a percentage or 2 less, if at all, actually, because we had a reasonable stock of this units a little before -- before all these disturbances started and we also had the -- we were blessed with the fact that we did not have any disruption in our production during the peak summer months, which is March, April, May, despite all the disturbances which were there, we managed to keep our production running. And we have utilized some of the stocks of the products that we had imported a little better price before all this hit us. So -- so more or less, we had passed on maybe a couple of percentages, if at all, we would have held on to it.

So does that mean we don't necessarily have to take any further price increase? Have I understood right, sir?

Yes. So the price increase, generally, we wouldn't -- we normally what we do, thal, is that if at all, there is some moderation if the costs keep moving up further, we'll have to obviously take a price increase. We are watching what's happening on the overall West asia crisis, if things worsen, obviously, the costs get impacted, we will necessarily have to take a price increase. However, if it is nothing significant. What will happen is to shore up the margins, a little bit of reduction in the channel schemes. That is what we will do.

Understood. Just a clarification in terms of the mix for the season, if I were to ask from Jan to June, what would that be in terms of outsourcing the sales in sourcing serve for us.

Yes. So the -- out of the total air conditioners that we sell, roughly 7%, 8% of the sale or I would say in the peak season quarter 1, maybe around little more than -- around 10% of the sale happens to be window air conditioners. Window air conditioners are completely OEM and out of the split ACs, which is the balance, 90%, we have a 70-30 mix, actually, 75, 25 mix kind of thing between self-manufactured and OEM manufactured.

Got it. Just a second question with respect to the complexer joint venture. What I wanted to check, is that the energy-efficient compressor we are talking about. If you could give some sense in terms of, a, how soon can this go on stream and what kind of advantage it can bring to us?

So the compressor that is getting developed the platform that is getting developed is for the Star as well as the 5 star, which is a popular categories, and we begin with the the most voluminous product, the one which is a volume driver for the 1.5 star and 3 star and 5 star. And all of them have energy efficiency levels. sort of meeting the requirements of the energy table. So really energy-efficient machines, which will meet the 3-star requirement as well as the 5-star current year requirements, current table requirement, which goes on until next year, December '27, December '28, there's another stable change. all these products are capable of getting upgraded to a better energy efficiency. The energy efficiency of our compressor is driven by the motor and the motor gets -- the motor gets upgraded when there's an energy table sale. So to answer your question, Achal, these are the best-in-class in terms of energy efficiency today. and it will also can be upgraded to the best-in-class when the table changes.

Right. And in terms of costing, that's my last question, sorry, sir. Would that help in terms of cost savings compared to the regular compressor as of now?

Yes. So the way we have looked at it is currently, as we had mentioned at the beginning itself, even in Mr. Sridhar's message, it was essentially to have a supply chain security being the largest manufacturer of air conditioners with a leadership position, we have to secure the supply chain, and it was done with that intent. The other -- most of the other things like cost, all this will be a work in progress because as the product gets sort of commercialized over the next 1.5 to 2 years, all these numbers will play out actually. A little early to comment on that, Achal, yes.

The next question is from the line of Aditya Bhartia from Investec.

Sir, my first question again is on to -- how long is it likely to take for the plan to become operational? How would technology be sourced? And until then, how are we going to meet the Q3 norms? What are the arrangements that we have done until then?

Yes. So Aditya, so this is the way we have planned this out from assuming the work starts on this immediately. -- it's an 18-month kind of runway that we are looking at before the commercial production starts. So during that period, the plant has to be put -- the products have to be manufactured. The pilot back has to be taken out. The pilot testing of that -- the field testing of the pilot batch has to go on. And then we start the full-fledged commercial production. So 18 months from now is when we're expecting full-fledged commercial production of the compressor. And the second question was -- what was the target here? The second question?

Until then, how are we going to manage the QC norms, what are the arrangements that we have done for that.

Okay. So the -- currently, the Q2 norms is that up to 30%, you can import from sort of of your FY '25 numbers you can import. So that we can continue to import. That is point number one. Point number two, there's 2 big compressor manufacturers, which is highly have built up capacities in India, and we have blocked those capacities for the -- from India and so that we take it from there. And -- our idea is that even after these products come into the thing, our scale will be so much by the time this gets commissioned that we will still have a mix of these compressors from these 2 vendors made in India, along with our own secure supply chain of compresses. So it will be a blend of that. It is not this or that, we will continue to buy from them, and we will also continue to manufacture and secure our supply chain. So it's a double 2-sided thing. We wanted to ensure that we secure our supply chain, both with suppliers as well as have our own technology indigenous technology.

Understood, sir. Sir, my second question is that you mentioned that besides the B norm change, there was roughly a 4-odd percent kind of a price escalation or cost escalation that we saw. Given how sharply some of the commodities moved and rupee depreciated, is it -- is this 4% the hit that we saw with the benefit of lower cost inventory -- or are you saying that with these increased costs, the overall entries in terms of costing is only around 2%. Just want to clarify.

So actually, if you've seen the results that we have published, we seem to have sort of done a little better than some of the key competitors. And I think we did a lot of right things. One is we have planned for the season well. As I mentioned, there was no disruption in the factory. So the volumes came and the absorption of the cost of the factory also was well done. We also have a very active cost takeout project, which is going on. And that has been one of the -- I think it has helped us in at the right time when the things started going wrong, that cost takeout project has started sort of tying into some savings. And I think a mixture of the share scale the lack of discontinuity in the manufacturing, the proper absorption of our cost because of the larger volume and lack of disruption coupled with this cost takeout project, I think a mixture of these 4 things, I think, played out in our favor, I suppose, this year.

The next question is from the line of Siddartha Bera from Nomura.

Sir, first question is on the UCP segment. So I'd like to allude to the fact that while the AC revenues have grown at 50% plus the -- our overall revenues are up 30%. So can you please share like in commercial electrification, and the CIC segment what has been the decline? And how do you see the outlook for the commercial metrics segment going out, given that it has remained under stress for quite some time. So some...

Yes. So Siddhartha, so what you said is right, the kind of buoyancy that we saw in the room a conditioner segment within was probably not seen in the other 2 categories, which is commercial refrigeration, which is decrease of water coolers, water dispensers. -- not all it seen in the commercial air conditioning category, which is tucked VRF and [ Chile. ] So -- and the light commercial like conditional. So -- the -- it was indeed a muted. It was, I think, a reasonable growth in the commercial air conditioning segment, which is the ducted VRF and Chile, but a muted kind of performance in the commercial refrigeration. And what you said is absolutely right. You would have heard from the other major competitors in the commercial refrigeration space -- the industry seems to have de-grown by around 15% or so. And I think we did a little better than that, I suppose compared to that. But going forward, I think things will indeed settle down this was a category where the price increase was significant, like unlike in the room air conditioner category, here, the costs went up a little more significantly like for freezers by 10% of water coolers by around 15% and water dispensers again by 10%. So very steep price increases, cost increases forced all the major brands to increase selling prices to that effect. And probably the channel was not fully ready to absorb that cost, so they place the wait-and-watch thing. But over the last few months, we are seeing them taking to that because there seems to be a normalization and a complete acceptance of the fact that this is a cost pass-through and there's no other way to manage. So we are seeing some improvement in the traction this quarter.

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

Sir, I'm a little new to the company, so pardon me if some of the questions sound very nice. Just trying to get some color on the margin performance first. So EBIT margin in unitary cooling products was around 5.3%. Now -- this is on the back of a good summer season and you alluded to market share gains in the RAC segment. I understand commodity cost inflation would have had a negative impact. But if I look at overall company gross margin, it is flattish. And also as expected a 32% revenue growth to have some kind of operating leverage benefit. So just trying to understand this is the best quarter of the season, and we are doing a 5% kind of an EBIT margin what can we then assume as a steady-state profit expectation for this segment?

Yes. So Mr. Gupta, what you said is absolutely right. So this -- if you look at some of the other -- this has been a rather difficult quarter for the industry as a whole. The summer -- a reasonably good summer compared to the very weak summer last year in that increased the demand, as I mentioned, by around 20-odd percentage, 25% or whatever. However, the commodity price increase, which and the dollar depreciation, which hurt it hurt everybody. So if you look at the results of most of the competitive brands, 5 or 6 of them were top players in this category -- in this category of room air conditioners, saw a significant shrinkage in their EBIT by almost like 3% down, some of them 4% down. So in comparison to that, we seem to have done better we had -- in fact, our Q1 to Q1, there is an increase in our EBIT percentage last year to this year. So we have, I think, weathered this storm much better than the rest of the people. And -- the reason for that is the point that I mentioned a little while earlier, which has to do with the way we manage the factory without a disruption cost absorption. The sheer scale effect. And the fact that we have an active cost on projects. So with these numbers don't reflect that very high buoyancy in the sales volume completely. I agree it is primarily because of the dampening effect of the cost increases, which came which could not get passed down typically into the market Gupta, actually.

Got it, sir, but the problem was in the -- below the RM cost, like more channel financing or more discounts and schemes because the GM line still seems to be reasonably okay if I look at the full quarter for the full company performance.

Actually, yes, it's essentially at the -- yes, probably the material cost actually is the one which affected the big time, yes.

Okay. Got it, sir. Second question is on the tab -- so firstly, why is there -- I mean, I'm sorry, if I sound naive, but why is there import dependence in compressors in this industry? Is it that certain RMs are not available in India? Or is it just cheaper procuring it from outside? And how does -- whatever this constant is get addressed with this JV? And secondly, why a JV and not do it organically?

Yes. So the import content and air conditioner currently see, around 4, 5 years years ago, almost 75% of the BOM of our air conditioner used to be imported. The major component is compressors. There is a copper there is aluminum. There is controller and there is motors. Most of it used to be imported. Currently from the 70% import content for -- I'm here, I'm talking about the industry, not only at. That 70% has now come down to around 30%, 35% because there is a -- there's copper getting manufactured here controllers getting manufactured, you have motors getting manufactured here. almost 40% of the compressor requirements of the industry getting manufactured here. So that has brought down the import dividends to around 35-odd percentage. So that is point number one. The compressor is a thing that we felt that is very important because while the -- there are many companies who have entered into manufacturing PCB controllers who are entered into manufacturing the special type of cubes, which are used for air conditioners, we call it in group tubes. For aluminum, there are many manufacturers who have entered into India. We felt that the compressor is an area, which is there is a short -- there's a gap between what is being made in India versus what is required by the industry. And being the most important component in the way of materials. We felt it is important that we have this manufacturing sort of capability built within the organization or through a joint venture. The second question you mentioned about whether -- why can't we do on our own. In the compression, the most important item between the compressor is the motor. That our tie-up with Ettenburg. Ettenburg is a leader in motor and they compete with the global giants in this category because of the sheer volumes that they have made in the ceiling fan category. So we seem to -- they seem to have cracked the code as far as the most important item on the bill of metrics is concerned, which is the motor. This is a capability that a company like Voltas does not have. And because we have never gone into a component manufacturing so far. So this is the first time that we want to secure this and we are doing it. So -- the answer is that we did not have this capability, and we felt it is better to partner with somebody who is way ahead of the curve and do it along with them.

Super, sir, that's very, very helpful. Just a small follow-up here.

Mr. Sameer, I just take this to rejoin the queue, please, for the follow-up question. [Operator Instructions]. The next question is from the line of Rahul Agarwal from [ Ikigai Assets ].