You mentioned in your press release that March has been the strongest month for you. We understand that there was a lot of inventory pushing in March brought up by the industry itself. April, at least till mid-April, it wasn't the best of season in terms of rains. And now you mentioned that secondaries have picked up very well. But against that, what at least we are seeing is that primaries are still soft. And in terms of the price hike also, what I've understood is the newer price-hiked inventory is probably still not passed on to the trades. So, on that backdrop, how do you see margins in this quarter, given this is the most important quarter? And any cost escalation from here, do you think that may dent the demand itself for this season? Thank you, sir.
Questions across 24 calls
Natasha Jain
Phillip Capital
Voltas Limited
So my first question is on the RAC side. Can you tell us how July month was for Voltas? What is the current inventory looking like for you at a brand level as well as the channel level? And did you see any pricing pressure or are you continuing to see that? That's my first question?
Sir, both. At Voltas' level and at the channel level?
Sir, my long-term questions, you've pretty much answered. My question is more near term. So there has definitely been strong primary filling in the channel in anticipation of a stock out and supply chain issues. But then especially when I see the secondary sales, the movement has been very slow. And I mean, the only legit data that we get is the GSK numbers and basis that there is a decline in terms of Voltas' market share. So how are you seeing your secondary sales at the point?
Yes. I would request the management to give closing comments, if any.
R R Kabel Limited
Thank you for the opportunity and congratulations, sir, on a good set of numbers, especially given the macro volatility. My first question is on wires and cables only. What we got to know from the ground was that, you know, there is continued stress in Morbi because of which, you know, ceramics is having a problem, and then wires is ancillary to that? When we spoke to few channel partners, they told us that there's destocking, down trading, metal volatility problems and all of that. Despite that, you've clocked in a volume growth of 10%. I think wires had seen more pressure than cables. Just want to know what is it that you're doing different. Are you indexing yourself to newer markets where growth is coming out for you? Could you throw some detailed color on that? And I apologize for iterating this question.
All right. Just a follow-up on that as well. You said definitely cables is doing better for you. First off, could you just give a little detail color as to how cables business is scaling up for you, both on exports and domestic? Because we have a low base in terms of the trailing quarters for cables, can we expect you to beat industry growth for cables, and can that drive strong growth for you in the coming quarters compared to incumbents?
Congratulations team on a good set of numbers. Sir, my first question would be broadly on the Wires & Cables demand on the ground. So if you could, in a little detailed color, tell us how the demand is on the ground right now? How is the inventory position? And because of copper rising so sharply, is the channel seeing issues in terms of working capital? So that's the first one?
Got it, sir. Sir, ideally, how much time would it take for such a sharp price to be passed on to the channel and then to the consumer eventually? Or can there be any slowdown in projects, especially in housing projects going forward in the near term?
Whirlpool of India Limited
Thank you for the opportunity. So, my question is on competitive dynamics. Two points here. First, we have seen that Voltas Beko, Godrej, Haier, and now even LG Essential, coming in very aggressively in all categories that Whirlpool is present. Additionally, your largest revenue salience which is refrigerator, first off, it is a high penetrated product compared to other appliances, and secondly, for some reason, replacement cycle is just getting longer without any trigger for a customer to change as in, there is no frequent e-rating like what comes in probably in AC. So, again, if not a very quick demand generator category anymore, given these two points, how do you read the competitive dynamics for industry and Whirlpool in particular?
This is much helpful. The second question is on AC. I understand it is a very small category for you at this point. But if I observe the market share data, you have grown versus probably the incumbents who have lost market share. Now, given that there is so much of cost hikes coming in and GST benefits almost gone, in such a scenario, if I were to just pick up brands in the middle segment of the pyramid, so do you think that Whirlpool as a brand could be a bigger beneficiary given you would be more favorably placed in terms of pricing versus the rest of the brands in that category? And in terms of outliers, would AC become an outlier for you in the near-term given that now that will be a seasonal quarter for AC?
Amber Enterprises India Limited
Sir, one clarification. You said the RAC industry will be flat and Amber will grow by 13% to 15%. Is that right?
Got it. And sir, since we've already done 15% in first half, we expect to maintain that run rate. That's good. So just a little color here. Can you tell us how is the order book looking like in terms of the new BEE rated inventory? Is that a good order book?
Blue Star Limited
Thank you for the opportunity. And good morning, gentlemen. First of all, congrats on a resilient set of numbers. My first question is on Segment-I. So Commercial AC, which is a higher margin business, witnessed loss of sales as per your opening commentary. Overall also execution has been slow on account of range, your top line growth was moderated to 16.5% versus 30% run rate before. Now, this segment saw margin expansion and it's also above our broader guidance of 7% to 7.5% range. So can you explain how margin expansion happened? And sequentially also it's been a sharp improvement, so were there any favorable terms with our vendors here? That's my first question.
Understood, sir. My second question is on Segment-II. So our top line has de-grown by 10%, and both Commercial Refrigeration and Room AC has declined. Again, your UCP margin has shown resilience and what is surprising is Q-on-Q it has actually improved. And in conjunction, if I check your creditors, you have also made very steep payment to your creditors. So my question here is, did we avail some good cash discount from our creditors which actually protected our UCP margins?
My first question is on the channel expansion that you have mentioned. Because we have got market share gains primarily because of that, I just want to understand if you could call out what is your footprint in South versus non -South. And what is the scope to expand here further? How much are we non-indexed in the rest of India? And therefore, what can be the growth opportunity just by channel expansion? That is my first question. My second question is, if you could throw some light in terms of how different geographies are doing? How is South doing? Is it any better than it was before? Because South disappointed the most and Blue Star is indexed to South versus probably no rth, how is it doing? You are lower indexed there. Therefore, on that account. And lastly, in terms of exports, while I understand U.S. the tariff uncertainties, but in non-U.S. markets, what is the scope there? And are these high-margin businesses? If yes, what kind of scale-up can we expect and by which year? That's it, sir.
Thank you for the opportunity. Sir, first of all, the detailed commentary was helpful. My first question is on RAC. Now that you have mentioned and all your peers have also given out numbers, the top -line growth was strong, could be because of channel filling and the start of this quarter has been slightly tepid, and May has any which way s, seen continuous rains in North of India. Given that all of our major players have backward integrated, are now sitting with massive capacities, and the season has kind of at least started with slight disappointment, and you said that the BEE rating is due just probably seven, eight months down the line , does that mean that for the remaining part of the year there will be pressure, both in terms of volume, because inventory will be high in the channel and then, therefore, there could not be any pricing advantage?
Thank you, sir. That was helpful. Just one last question. In terms of Commercial AC, I understand that VRF technology is the fastest growing, and you have indigenously developed your own technology. Now what I have understood from the industry is, this technology needs to continuously go through R&D in order to be with the updated technology. So, here, because we have already made this technology probably a year before, are we going to see huge R&D spends on this? And therefore, can margins be impacted? Thank you.
Thank you for the opportunity and congratulations, sir, on a great set of numbers. I have two questions, both on the UCP side. The first question is, 3rd Quarter is usually an unseasonal quarter, but we have seen good growth on RAC mainly on account of prolonged summers. Now, having said that, do you think the channel is a little cautious in terms of stocking to Q4 because there could be a chance of a prolonged winter? And any which ways you are sitting on very high bases, so how does that look to you?
Thank you so much, sir, for that detailed answer, that helps. And my last question is on the EBIT margin side. Now if I look at both your Segment-I and Segment-II margins, you are already at peak as per your own guidance, specifically outperformance in your Segment-I. So, from here on how does the margin growth trajectory look like, given the fact that Commercial Refrigeration is yet to pick up? So, what kind of expansion can we expect? Thank you. And all the best, sir.
Polycab India Limited
My first question is on wires and cables. If I see your top -line growth, this has historically, growth has been much larger than 19%, with margins lower than 15%. So , this time, it's at a lower top-line growth, a higher margin. I want to understand, does exports have anything to do with this given that there was a period of 20 days when a lot of players front -loaded U S exports. So , has that also come into our margins? And having said that, what about exports from quarter 3 onwards to US given it's a high-margin business? First question, sir.
Understood. This is helpful. And in terms of export, can you break the sales geography-wise?
Thank you for the opportunity and congratulations on strong set of numbers. My first question is on the export side. So, firstly, can you tell me the contribution from the US in our total exports for FY25 and ‘24?
This you are saying share of total exports, right?
Havells India Limited
Sir, my first question is a follow -up on the last participant's question. While inventory definitely we might see clearing at the brand level, how do you see secondary moving, first that? And secondly, when we talk to our channel partners, they tell us that they have huge inventory with them, and the entire cash flow is blocked in that inventory. So third quarter, do you expect channel partners to fill up very aggressively given they already have stocks and they do not have that kind of cash flow with them?
Understood. And sir, my second question is on ECD. Now your degrowth is at 1.7% Y -o-Y. When we went on the ground, we understood that fans' degrowth is in high single digit, around 8% to 9%. So if you could correct me if my data is correct or wrong? And secondly, if that is the case, what product categories supported in terms of reducing the degrowth? If you could just give some qualitative color on how the large appliances, small appliances did versus fans?
Thank you for the opportunity. Sir, my first question is on Lloyd again. So , Lloyd is predominantly a South and East indexed brand, and summers was worse over there versus North and West. Now, when I went on my distributor check, what I understood is the distributors have moved products from South to North in order to liquidate their own inventories. Now , you mentioned to the last participant that your inventory is also high, can you tell us how high is it? Could that lead to some price discounting we could see in the following quarters?
Your inventory, at Lloyd's, at Havells' end, not the channel's end.
My question is on the cables side. Now there is a decline in your contribution margin, both on a Y-o-Y and Q -o-Q. Given that fourth quarter, the copper prices rose and, usually, the price is passed on within a gap of 15 to 20 days, and we are a wire-heavy company, why this decline in contribution margin?
Sir, your presentation states that there was a moderate ECD growth on account of a mild start to summer season. However, your ACs have done phenomenally well if I see the top line. So does this mean that there is a combination of low structural demand for fans plus very high competition? Or does this mean that there could be a case of high inventory stocking for Lloyd in the channel, not necessarily translating to consumer demand?
KEI Industries Limited
My first question is on the cable side. Can you break the number, 22.5% in volume and pricing, please?
And sir, have we been able to pass this pricing benefit or will it show in the third quarter?
Thank you for the opportunity and congratulations o n a good set of numbers. My first question is, sir, you had mentioned today in the TV intervie w that you are aiming to close this year with 11% EBITDA margin. Now if I just see the highest gro wth category for you in the past couple of years has been wires -- housing wires, which is a high-margin business. Assuming that going forward, the salience will be higher for cables, as cables have more tailwinds, the margin should adjust on the downside. So from current 10%, can you just walk us in a little bit of detail how will you achieve this 11%, given that cables will increase more than wires? So first question is that.
Understood, sir. So what I understand is 11% will b e a mix of even your treasury, the hedging part of your numbers. And sir, you also mentioned logistics...
Thankyou for the opportunity Sir My first question is, how does the pricing work , is it per kg basis or percentage of raw material price?
Understood. And so my second question is more industry based. So now that most of the , the major players of wires and cables, the results have been out, we have seen that there has been strong top line growth, which is warranted because 4th Quarter is a seasonal quarter. But then margin expansion has not happened. So, is it fair to deduce t hat most of the benefits that the industry is going to get is out of scale and there may not be pricing advantage?
PG Electroplast Limited
First of all, congratulations on a fantastic set of numbers. Sir, my first question is on the challenges that you mentioned on the supply side. We understand that there is a shortage for compressors. So just wanting to understand how are you placed for the season till June?
Sir, you just mentioned to the previous participant that you are in advanced -level discussion for compressors. When I see the latest PLI outroll, your company has got PLI, but for non - compressors. So are we in discussion outside of the PLI for compressor setups?