My first question was again on VAE and VAM project. While I understand that these benefits would be felt over the course of the entire year, could you give us some indication of what could be the benefit in terms of costing and in terms of Gross Margins? I understand that it will also help formulations and improve the quality of the product, help us differentiate, but what could be the impact on Gross Margins over the course of the year?
Understood, sir.
Just one part again, harping on this cost inflation point. Has the increased costs related to war started hitting us? Or do you think that they'll start impacting us in some time? And have we taken any further price increase in response to that? Or do you think that first quarter margins can dip significantly before we start taking those price increases? And just a related question. In this quarter, we have seen unallocated costs going up very sharply, so what could be the reason for that?
You mentioned that the margin hit that we saw was on account of under -absorption of costs as well as some of the other expenses on marketing side that we discussed. Now given that there is so much inventory in the channel and even companies are also carrying high inventory, it's very likely that factories will continue working at lower utilization level. And to that extent, it seems that under- absorption of cost will remain a trend in the next couple of quarters as well. Is my understanding correct?
And just one last bit. On the project side, sir, you mentioned that the project business has been steady. When we look at margins, margins have been slightly on the kind of lower side versus what we have done in the past. So how should we think about the margins in this segment from a slightly longer-term perspective? I know there are no losses, and we've kind of turned around to that extent. But is 5% kind of an EBIT margin l ooks like a sustainable number or can it be higher?
This is Aditya from Investec. My first question is on market share, wherein earlier we used to have 23%, 24% kind of market share, which then in a couple of years had fallen to 19 -odd percent, and it appears to have settled around that level. Now just wanted to understand how do you see this scenario? Is the aspiration to go back to the kind of market shares that we used to have? Or do you think the industry competitive dynamics are such that we look to kind of protect the market shares at the current level?
So my first question is on the PLI scheme coming to an end on the mobile phone side. How are the conversations with customers? Is it only the element that we were retaining, which we'll start losing out in terms of profitability? Or can there be any other hi t in terms of PLI scheme going away as well?
Sure. So what we had earlier kind of discussed that 50 to 70 basis points of margin impact may be there. Add to that, maybe optically how the margins may look low er on account of higher realizations, but that should be the complete impact, nothing more?
Sir, my first question is on amount that is due for PLI schemes. Could you just quantify roughly what amount may be due from government authorities in respect of PLI? And what would be our por tion of it? And in the last few quarters, have we seen this amount increasing or delays happening in terms of payments?
Sure, sure. And there has not been any unusual delays. Typically, that 1 year kind of a delay that we used to have, it's a similar kind of a run rate that we are seeing.
My first question is on the Longcheer JV. Earlier, we were having just a contract with Longcheer, now we are going the JV route. Just wanted to understand the rationale for that and how volumes are likely to be shaping up versus what our initial expectations were? That is the first question. And a related question is on some of the JVs and arrangements that we are now having with Chinese companies, whether it’s Longcheer or Vivo or Q Tech or HKC, if you could just kind of give us some indication about what the status of government approvals is? Are we seeing any challenges around that?
Understood, sir. Understood. And just one last thing on lighting exports. If I heard you correctly, you spoke about some export order from one of the US retail companies. If you could just throw some light on that and how we are looking at the lighting business after the JV with Signify?
Hi. Good evening, sir So my first question is on the mobile phone side. I just wanted to understand how we thinking about the ramp up in volumes from here on. And like this particular quarter was more like a flattish quarter on a sequential basis, of course , so from here on, how should one think about volume ramping up? And my second question is on the consumer electronics business, wherein the TV revenues appear to have fallen quite sharply, and it's been fourth or fifth consecutive quarter that that's happening. Just wanted to understand how much of this is overall market phenomena, and how much of this could be on account of maybe some market share?
Sir, the volume that you mentioned,3.3 million to 3.5 million per month. This is the volume that we did in 4th Quarter for smartphones?
Given that you pointed out of 13% kind of a price increase that was required, around 8% has been taken so far. Does that mean that in Q1, we are likely to have margin pressure and the margins hopefully then recover through the course of the y ear if commodity cost cool off. And if commodity costs stay where they are, then the impact of higher plastic pricing and other crude derivatives has yet to hit us, that starts hitting us from quarter 2 onwards?
Sure, sir. So, we are still aiming for 8% to 8.5% kind of UCP margins in this year?
Hi, good afternoon, sir. My first question is on the inventory levels that you spoke about. Just wanted this clarification, the 60 to 65 days of inventory is the combined inventory that brand and channel is carrying, is that so?
Understood. And within this, according to you, inventory is higher at both the levels, even channel is already carrying much higher inventory and to that extent, there may be some difficulty in selling inventory before December, before the new energy efficiency norms come in. Is that the reason why you are anticipating some bit of pricing pressure?
Sir, while we have seen a decline versus last year, but if I look at versus Q1 two years back, which is Q1 FY24, there is still a growth in the UCP vertical. In that context, margins falling quite sharply versus, let's say, the margins that we recorded in Q1 FY24, looks a bit surprising. The other way in which I am also kind of considering is that overall volumes or overall revenues this quarter was still higher than off-peak season of Q2 or Q3 last year. But margins have come off quite sharply from there. So, is there some element of some other expenses being involved or some gross margin erosion as well?
And versus second and third quarter of last year also, there is a decline in margins. I mean, second and third quarter are, of course, off -peak seasons and therefore volumes tend to be lower. So, should we be kind of comparing those?
Hi, sir. This is Aditya Bhartia from Investec. Sir, my first question is on something that you mentioned in your opening comments that in April we have seen 15% to 20% decline for the industry sales. Just wanted to understand, was it the primary sales that you were speaking about or secondary sales? Because in case, we are speaking about secondary sales, then is it fair to assume that primary sales would have fallen by even a sharper pe rcentage, given that the inventory in the system was fairly high?
Understood, understood. And given, sir, that this year industry has been operating with higher -than-usual inventory for compressors, given all the shortages that we were kind of hearing about, what implication can a weak summer have on the compressor scenario?
Sir, just wanted to clarify on the operating cash flow point. You're saying that we'll still be operating cash flow positive for the entire year. Because when I look at both inventories as well as receivables, those have gone up very sharply versus last year. So, we'll have to kind of recoup a fair bit of loss around in fourth quarter. So, have I understood correctly that operating cash flow positive for the entire year and not just for fourth quarter?
Okay. And sir, the other clarification that I required was on the core business growth that you spoke about of around 40% for 9 months. Given that last year, we had Iskraemeco only in second half. So, INR500 crores was essentially split between third quarter and fourth quarter. And this year, in first half itself, we have done roughly INR500 crores, even if we assume no further revenues came in, in third quarter, even in that case, it's difficult to see how core revenue growth without Iskraemeco could have been more than 20% in 9 months. So where am I getting the calculation wrong?
Sir, just following up on the question on receivables. So I understand that the receivables that we are seeing on the balance sheet are not including this INR300 crores, INR350 crores of deferred receivables because that's residing in other noncurrent assets. In that context, there's been almost like INR550 crores, INR600 crores of increase in receivables, even higher than the revenue increase that we have seen. So just wanted to get your take on that? And how should we think about it going forward? And also just a related question that in the cash flow, we can see that there appears to be a provision for doubtful debts of around INR55-odd crores. So what is that in respect of? And if we adjust for it, then margins look even better. So how should we think about margins as well?
Sure, sir. And provision for doubtful debt that we are having of INR55 crores?
Sir, my first question is on gross margins again. If we look at stand -alone gross margins, those have not moved up dramatically. On INR450 crores of revenues, we have somewhat a similar gross margin of 28%. It is subsidiaries with roughly INR220 crores of revenues, wherein we appear to be making almost INR150 crores of gross profit, which is almost 68% gross margin. So just trying to understand why is it that margin bump up has been so sharp on the subsidiary side? And what is the change in product profile versus, let's say, the preceding quarter, which is kind of contributing to such a sharp jump? That's my first question. And maybe I can go ahead with my second question as well. So these deferred receivables of INR350 crores that you are speaking about are not included in this INR858 crores, right? This INR858 crores is pure receivables, which at the end of March used to be, I think, somewhere around INR570 crores. So there is a significant increase in base receivables also, and that's something that I would like to understand what is really contributing to that?
Sure, sir. And sir, if you could just also tell us the 10% stake that is being given to US Tech India Private Limited and 8.25% to AOS in the OSAT subsidiary. What exactly is the agreement like? Do we have some offtake arrangements with technology partners as well? Who are all our technology partners on the OSAT side? Anything on that would be very helpful.
Sir, just wanted to understand about the TenneT order. How many packages have you already recorded until now? And how should we think about the opportunity going forward?
Sir, about the TenneT order, I think there are 6 packages of that. Just wanted to understand how many packages would we have recorded until now? And is it fair to assume that all 6 packages would be coming to us as a replacement contractor? Or could others be also involved in this? Subramanian Sarma: Sarma here again . We have a framework agreement. And like you said correctly, we have 12 GW, that means 6 packages of 2 GW each. Currently, what we have included in our order inflow and which will then generate revenue is two of those. And then, we are in discussion for the third and fourth with the customers, and we'll have to see when it happens, when they call up, then we will advise you, and we will include that in the order flow. So as and when they get called out, we will include that in our order inflow. But we have a potential for all 6, yes.
Hi. Good evening, P.R.
My first question is on the merger between Subsea7 and Saipem that we are kind of hearing about. I understand that we used to have the LTA contract also with Subsea7. So, just wanted to understand if it can have any implications for us? How should we see that?
So, my first question is on the provisioning that we have done in this year. We can see from the cash flow statement that there appears to be elevated provisioning this year. So, which project does it pertain to? And the related question is on the unbilled WIP part, that given that it has increased a lot this particular year, you mentioned about Jal Jeevan Mission . Are there other projects also that are not getting certified? And within Jal Jeevan Mission , what is your expectation? How exactly does this issue get resolved? I'll come back to the second question.
Sure, sir. So, my second question is on the Middle East market, wherein off late you have started speaking a fair bit and it seems that we are looking at certain select opportunities. Just want to understand how the qualification status over there, which are the areas wherein we are qualified, which are the areas wherein we are focusing on it, how exactly are we tying up with the local contractors and what kind of opportunities are we really looking at? How large can that market be for us?
Hi. Good afternoon, Chirayu. To start with, just clarification. This 11% to 13% margin guidance that you’ve given is at the EBITDA level and not at the EBIT level. Is my understanding correct?
Given that we are having 14% to 15% kind of a margin this year, why are we kind of building in such a sharp decline in margins going forward -- is it just that we are being very conservative and actual margins are likely to be much higher than this guidance?
So two questions from my side. One is that when you think about Lloyd, what's the kind of margin level that you think about from the perspective of next two, three years? And what is the longer-term trajectory that you see margins for them?
Sure, sir. Sir, my second question is on the Switchgear segment. If we look at the three kind of broad pillars of the segment domestic switchgears, industrial switchgears and switches, could you kind of guide us as to what the demand trends are in each of these? And is there an area wherein we are seeing market share gain or significant loss?