Blue Star Ltd — Q4 FY26

Blue Star Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=O3Iv8BuG81U Published: 5 days ago

0:00 Ladies and gentlemen, good afternoon and welcome to the Blueest Star Limited Q4 and FY26 earnings conference call. We 0:08 8 seconds have with us today from the management Mr. B Thiagar Raj Rajan, managing director, Blueest Star Limited and Mr. 0:15 15 seconds Nikl Sony, group chief financial officer, Blueest Star Limited. As a reminder, all participant lines will be in the listenonly mode and there will be 0:23 23 seconds an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:30 30 seconds operator by pressing star then zero on your touchstone phone, please note that this conference is being recorded. I now hand the conference over to Mr. Btajin. 0:41 41 seconds Thank you and over to you sir. 0:43 43 seconds Thank you. Uh good good afternoon ladies and gentlemen. It's a pleasure interacting with you uh once again uh in 0:52 52 seconds connection with the uh financial results for Q4 FI26 and FI26. 1:00 1 minute Uh you all have uh seen the results uh approved by the board yesterday and uh 1:07 1 minute, 7 seconds we are here to explain the results in detail. Uh as you would have seen uh we have more or less delivered in line with 1:16 1 minute, 16 seconds expectations. Uh though some of you feel that we exceeded the expectations. 1:22 1 minute, 22 seconds Uh you know FI26 uh was a very challenging year with many headwinds one after the other. Uh it started off with 1:31 1 minute, 31 seconds a weak summer season. Then we had interruptions due to uh GST reduction 1:38 1 minute, 38 seconds announcement on 15th of August till September 22nd the secondary sale and therefore primary sale was impacted. 1:48 1 minute, 48 seconds Post that we had the energy label change and connected with that you can see the 1:55 1 minute, 55 seconds trade stocking prior to that and the trade trying to liquidate that stock. In 2:01 2 minutes, 1 second between there were trade war related uh hiccups all throughout the year. It 2:09 2 minutes, 9 seconds still continues which impacts us in terms of the supply chain itself on numerous raw materials 2:16 2 minutes, 16 seconds that we get. One is about the availability. The second is about the prices. 2:23 2 minutes, 23 seconds As we were beginning to build up towards the summer season, you are aware of the war and the war rel related impact. It's 2:32 2 minutes, 32 seconds not much to do with the LPG availability of LPG pricing alone. That's a minor one. How the supply chains overall will 2:41 2 minutes, 41 seconds be impacted and the overall market sentiments that will play a role in the 2:48 2 minutes, 48 seconds coming days. We had been waiting for the summer season to take off in a big way 2:55 2 minutes, 55 seconds which indeed happened on April 13th. As we speak, we are in a great summer 3:03 3 minutes, 3 seconds season. One praise that this summer lost for another eight weeks for managing the 3:10 3 minutes, 10 seconds huge inventory in the trade and the inventory buildup that we may have which we will deal with as a part of the 3:18 3 minutes, 18 seconds questions and answers. Before that I will pass it on to Mr. Nicholson Sony for the opening remarks. 3:27 3 minutes, 27 seconds Over to you. 3:28 3 minutes, 28 seconds Thank you Mr. Tagarajan. Uh good good afternoon ladies and gentlemen. Uh this is Nikl Sony and let me take you through the financial highlights for the quarter and year ended 31st March 2026. 3:41 3 minutes, 41 seconds Uh FY26 has been a challenging year with multiple headwinds affecting revenue and profitability across businesses. 3:49 3 minutes, 49 seconds However, demand for room air conditioners picked up towards the end of the year helping the company to post highest ever quarterly revenue in Q4 FY26. 3:59 3 minutes, 59 seconds Coming to quarter ended March 31, 2026, the financial year are as follows. On a consolidated basis, uh revenue from 4:06 4 minutes, 6 seconds operations for Q4 FY26 grew 1.3% to rupees 4,72 crores as compared to rupees 4,19 crores in Q4 FY25. 4:19 4 minutes, 19 seconds Aida excluding other income for Q4 FI26 improved to rupees 326.3 4:25 4 minutes, 25 seconds crores aida margin of 8% as compared to 279.4 crores and aida margin of 7% of 4:33 4 minutes, 33 seconds the revenue in Q4 of last year. PBT before exceptional items was higher at rupees 282.6 crores in Q4 FI26 as 4:43 4 minutes, 43 seconds compared to rupees 248.8 crores in Q4 FI25. 4:49 4 minutes, 49 seconds Pursuant to the notification of the labor codes as required by ICI guidance note, the company has recognized the incremental impact of graduity and leave 4:57 4 minutes, 57 seconds and catchment amounting to rupees 56.4 crores for the period ended 31st December 2025 on an estimated basis and this was shown as an exceptional item. 5:08 5 minutes, 8 seconds In the current quarter, the liability was reassessed and finalized at rupes 38.83 83 crores and accordingly the provision of rups 17.5 crores has been 5:16 5 minutes, 16 seconds reversed in Q4 of FI26. Tax expense for Q4 FI26 was rupes 72.9 crores as 5:24 5 minutes, 24 seconds compared to rupes 54.8 crores in Q4 of FI25. 5:29 5 minutes, 29 seconds Late profit was at rupees 227.2 crores in Q4 FI26 as compared to rupees 194 crores in Q4 of FI25. 5:38 5 minutes, 38 seconds For the year ended March 31, 2026, the financial highlights are on a consolidated basis are summarized below. 5:47 5 minutes, 47 seconds Revenue from operations for FI26 grew 3.6% to rupees 12,42 5:53 5 minutes, 53 seconds crores as compared to rups 11,967.6 crores in FI25. 6:01 6 minutes, 1 second IITa excluding other income for FI26 improved to rupees 930.4 4 crores, an 6:07 6 minutes, 7 seconds iida margin of 7.5% of revenue as compared to rupees 875.9 crores and a 6:14 6 minutes, 14 seconds bida margin of 7.3% of revenue in FY25 recording the growth of 6.2% 6:21 6 minutes, 21 seconds mainly owing to overall focus on cost management. PBT before exceptional items debrew 3.9% to rupees 741.9 crores in 6:31 6 minutes, 31 seconds FI26 as compared to rupees 772.4 4 crores in FI35. 6:37 6 minutes, 37 seconds Pursuant to the notification of the labor codes as required by ICI guidance note, the company had recognized the incremental graduity and encachment 6:45 6 minutes, 45 seconds amounting to rupees 38.8 crores. This non-recurring item is shown as an exceptional item in consolidated statement of profit and loss for the 6:53 6 minutes, 53 seconds year ended March 31, 2026. Tax expense for FI26 was rupees 175.8 crores as 7:01 7 minutes, 1 second compared to rupees 193.6 6 crores in FI25. The effective tax rate was 25% for FI26 as compared to 24.7% for FI25. 7:13 7 minutes, 13 seconds Net profit for FI26 grew to rupes 527.3 crores 4.3% of 7:19 7 minutes, 19 seconds revenue as compared to rupees 591.3 crores which was 4.9% of revenue in FI25. 7:26 7 minutes, 26 seconds The board of directors of the company have recommended a dividend of rupees 8.5 per share. Last year the dividend 7:34 7 minutes, 34 seconds was rupes 9 per share. Carried to forward order book of March 31 2026 grew by 10.5% to rupees 6923 crores as 7:43 7 minutes, 43 seconds compared to rups 6,263 crores as of March 31 2025. The capital employed as of March 31 2026 increased 7:52 7 minutes, 52 seconds to rups 3,258 crores as compared to rups 2427 crores as of March 31 2025. Net cash 8:01 8 minutes, 1 second position was at rupes 175.5 crores as of March 3126 as compared to net cash position of rupes 640.3 crores as of 8:10 8 minutes, 10 seconds March 31 2025 coming to business highlights for uh electromechanical projects and commercial air conditioning that is 8:19 8 minutes, 19 seconds segment one the segment one revenue grew 1.1% to rups 1989.9 8:26 8 minutes, 26 seconds crores in Q4 FI26 as compared to Rs 1,900 168.2 crores in Q4 FI25 8:35 8 minutes, 35 seconds segment result was rupees 128.5 crores which was 6.5% of revenue in Q4 of FI26 8:43 8 minutes, 43 seconds as compared to rupees 149.9 crores which was 7.6% of revenue in Q4 of FI25. 8:50 8 minutes, 50 seconds Segment revenue for the year grew 12.8% to rupes 6762.8 8 crores as compared to rups 5,998 9:00 9 minutes crores in FI25. Segment result was rupes 51.9 crores which was 7.4% of revenue in 9:08 9 minutes, 8 seconds FI26 as compared to rups 490.9 crores which was 8.2% of revenue in FI25. 9:16 9 minutes, 16 seconds Order inflow for the current quarter was higher by rupees 35.7% compared to corresponding quarter of FI25 9:24 9 minutes, 24 seconds which was rupees 1954.39 crores in current quarter versus 1439.9 crores in quarter 4 of last year. Coming 9:33 9 minutes, 33 seconds to electromechanical projects business Q4 FY26 saw strong equity momentum for 9:40 9 minutes, 40 seconds buildings inquiry moments for buildings data centers and factories with bookings growing 35%. Order inflow for the year 9:48 9 minutes, 48 seconds was lower by 10% compared to rupees compared to five FY25 as the order inflow was sluggish in previous 9:55 9 minutes, 55 seconds quarters. The carried forward order book of electromechanical project business was at rupees 4,664.5 10:04 10 minutes, 4 seconds crores as of March 31 2026 as compared to rups 4755.2 crores as of March 31 2025. 10:14 10 minutes, 14 seconds Coming to commercial air conditioning systems, the commercial air conditioning business gained momentum during the quarter supported by healthy demand from 10:22 10 minutes, 22 seconds the government, industrial and retail segments. While the bookings from office, education and IT sectors remain subdued, the revenue growth inducted 10:31 10 minutes, 31 seconds systems and chillers during this quarter has been good and VRF is showing steady progress. We remain confident in the medium-term prospects of the business 10:40 10 minutes, 40 seconds with steady growth expected across key product categories. 10:44 10 minutes, 44 seconds International business which also falls short of this segment. The geopolitical uncertainty including tariff related uncertainties persist. The future 10:52 10 minutes, 52 seconds prospect of the US business is highly dependent on the outcome of the India US trade deal. However, despite this headwind, our foray into US is 11:00 11 minutes progressing well. Our supplies to Europe has also commenced and we remain optimistic on the prospects for this business. On account of the change in 11:08 11 minutes, 8 seconds the projects mix business entire the business mix within the segment one, the margins were lower at 6.5% of the 11:16 11 minutes, 16 seconds revenue in Q4 of FI26 as against 11.6% 6% in Q4 of FI25 and 11:22 11 minutes, 22 seconds the margin for FYI 26 year old was 7.4% as against 8.2% in FI25. 11:29 11 minutes, 29 seconds Coming to segment two that is unitary products the revenue grew 1.3% to rupes 1,985 11:37 11 minutes, 37 seconds crores in Q4 of FI26 as compared to 1,960.2 crores in Q4 of FI25. 11:45 11 minutes, 45 seconds segment result was rupees 206.9 crores that is 10.4% of revenue in Q4 of 11:53 11 minutes, 53 seconds FI26 as compared to rups 164.5 crores which was 8.4% of revenue in Q4 of FI25. 12:02 12 minutes, 2 seconds Revenue for the year uh degree by 5.1% to rupees 5332.4 12:09 12 minutes, 9 seconds 4 crores in FI26 as compared to rups 5,621.1 crores in FI25. 12:17 12 minutes, 17 seconds Consequently, segment results declined to rupees 434.8 crores which was 8.2% of revenue in FI26 as compared to rupees 12:26 12 minutes, 26 seconds 471.3 crores which was 8.4% of revenue in FI25. 12:33 12 minutes, 33 seconds Within segment two, the room air conditioner business witnessed reasonable growth with primary demand picking up in March and and channels 12:41 12 minutes, 41 seconds across all regions stocking up for the summer. The dealer network expansion continues to progress as planned. 12:47 12 minutes, 47 seconds Despite the multiple challenges, we gained market share marginally during the current quarter. Quite a few cost rationalization measures taken in Q1 12:56 12 minutes, 56 seconds FI26 owing to poor summer season continued till the end of the financial year and it resulted in improved margins for the quarter. Commercial 13:05 13 minutes, 5 seconds refrigeration business uh due to muted demand from frozen food and QSR segment throughout the year the market for deep freezers and cold rooms remain stagnant. 13:15 13 minutes, 15 seconds However, storage water coolers witness doubledigit growth driven by strong demand from government and corporate sectors. Due to delayed onset of summer 13:24 13 minutes, 24 seconds season, advertising and field marketing campaigns had not commenced in March 2026. This combined with prudent pricing 13:32 13 minutes, 32 seconds and other cost optimization measures undertaken since April 2025 resulted in improvement of segment margins to 10.4% 13:39 13 minutes, 39 seconds in Q4 FI26 as compared to 8.4% in Q4 FI25. 13:45 13 minutes, 45 seconds Coming to segment three, the revenue grew 7.3% to rupees 97.18 crores in Q4 13:51 13 minutes, 51 seconds FI26. Uh as compared to rupees 90.56 crores in Q4 FI25 segment result was 13:58 13 minutes, 58 seconds rupees 14.3 crores that are 14.7% of revenue in Q4 of FI26 as compared to 14:05 14 minutes, 5 seconds rupees 8.8 crores which are 9.7% of revenue in Q4 of FI25. 14:11 14 minutes, 11 seconds Segment revenue for the year degree by 12% to rupees 36.8 crores as compared to rupees 348.6 14:18 14 minutes, 18 seconds crores in FI25. Segment result was 34.9 crores which was 11.4% of revenue in 14:25 14 minutes, 25 seconds FI26 as compared to rupees 29.7 crores which was 8.5% of revenue in FI25. 14:32 14 minutes, 32 seconds Uncertainties around the regulatory policy framework pertaining to MET tech solutions business are yet to be resolved and consequently the business 14:40 14 minutes, 40 seconds has slowed down. However, the industrial solutions business continued to grow driven by strong demand in automotive and steel industries and the data 14:48 14 minutes, 48 seconds security solutions business maintain steady performance. Coming to business outlook for from the second week of April 206, summer had set in and 14:57 14 minutes, 57 seconds secondary sales of room air conditioners have picked up momentum driven by encouraging demand from manufacturing and data center sectors, electromechanical projects and 15:05 15 minutes, 5 seconds commercial air conditioning business segment is expected to maintain growth momentum with rising input costs and volatile exchange rates. There will be challenges in managing the margins. 15:15 15 minutes, 15 seconds Further, the ongoing middle crisis can lead to the supply chain disruptions and also dampen growth. We remain cautiously optimistic about the prospects for FY27. 15:26 15 minutes, 26 seconds With that, uh I would now like to pass it back to the moderator who will open the floor for questions. We'll try to answer as 15:34 15 minutes, 34 seconds many questions as we can and to the extent we are unable to, we'll get back to you via email. Thank you. 15:41 15 minutes, 41 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchdown telephone. 15:50 15 minutes, 50 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies 15:59 15 minutes, 59 seconds and gentlemen, we will wait for a moment while the question Q assembles. 16:04 16 minutes, 4 seconds We'll take our first question from the line of Natasha Jen from Philip Capital, India. Please go ahead. 16:11 16 minutes, 11 seconds Thank you. Good afternoon everyone. I have three questions. First in terms of UCP RAC being a hyperco competitive 16:18 16 minutes, 18 seconds market requires constant ad and promotional spend. So could you throw some color in terms of your strategy 16:25 16 minutes, 25 seconds that are you now protecting margins or will we see elevated ad spend later in the year and if you're protecting margins will that impact our volumes? 16:34 16 minutes, 34 seconds Second question um in terms of April what we observed was first 15 days was pretty much flat because of rains. 16:41 16 minutes, 41 seconds second 15 days only secondaries have picked up it seems primary either the channel is pretty much stopped in south or people do not want to stop because of 16:49 16 minutes, 49 seconds the erratic weather condition so with that background uh could you tell us how are you reading near-term given that season will probably end towards the end 16:57 16 minutes, 57 seconds of June and lastly given cost has increased so much are you seeing a very sharp downtrading happening because what 17:05 17 minutes, 5 seconds we seeing is lower tier brands are gaining market share at the cost of all higher ones So any color on that will help. Thank you. 17:18 17 minutes, 18 seconds Uh thank you. Uh the first question is connected with the advertising and marketing. 17:25 17 minutes, 25 seconds So if you know in March 2024 we were anticipating a great summer season. 17:32 17 minutes, 32 seconds given the IMD weather forecast said so and the dealers were talking anticipating uh the compressor shortage 17:41 17 minutes, 41 seconds in a big way. So in Q4 of FI25 there was huge advertising that took 17:49 17 minutes, 49 seconds place and subsequently it is very difficult to correct say for example our IPL and all you would have made a huge 17:57 17 minutes, 57 seconds commitment you would have bought a media but when the summer failed we suffered few things could be corrected that's 18:04 18 minutes, 4 seconds about all but significant amount of marketing spend were there in nickel remarks what he meant was actually in Q4 18:14 18 minutes, 14 seconds of last year that is FI I'm not talking about FI26 FI25 there was huge 18:21 18 minutes, 21 seconds advertising spend in Q4 of FI26 we were clear about it because summer 18:28 18 minutes, 28 seconds had not set in summer set in actually on April 13th only so therefore in Q4 in 18:35 18 minutes, 35 seconds preparation specifically ending end of February March the spends hair very low. 18:43 18 minutes, 43 seconds This includes also many inshop promotions like inshop demonstrators so on and so forth which we are stepping up 18:51 18 minutes, 51 seconds post the onset of summer season. See alert advertising happens in in some 18:58 18 minutes, 58 seconds measure for overall brand visibility and the real advertising for room air 19:06 19 minutes, 6 seconds conditioners including tactical is indeed a function of how the demand in the marketplace is again during the 19:15 19 minutes, 15 seconds festival season last year we had to the the there was a GS announcement and it was not picking up so or subsequent period period we had to uh call it off. 19:27 19 minutes, 27 seconds Uh that's how it works. But there is no uh no intent to stop our investments 19:36 19 minutes, 36 seconds which is in the order of around 1 and a half% to 2% of our products business uh revenue. Uh that's what is the 19:45 19 minutes, 45 seconds advertising uh brand building marketing expenses. Uh that will continue depending on the demand. If there is a 19:53 19 minutes, 53 seconds extreme situation like that we will do and it will not affect because if the summer itself has not set in and you go 20:01 20 minutes, 1 second and keep advertising sale is not going to happen but because you are not advertised despite that it is not that 20:07 20 minutes, 7 seconds your brand image is eroded. So that that we are very conscious of that. The 20:14 20 minutes, 14 seconds second question is connected with uh the weather. 20:20 20 minutes, 20 seconds the I told you se April 13th the summer season had settled and uh you have to uh 20:30 20 minutes, 30 seconds it it is uh it it has taken off well from April 13th and obviously you have 20:37 20 minutes, 37 seconds to wait for the dealer field inventory to get liquidated. They had bought 20:44 20 minutes, 44 seconds inventory in December because there was a energy level change post that they know the prices will keep going up and 20:52 20 minutes, 52 seconds they stocked up and indeed in February and March they would have bought it because they know the price increase 20:59 20 minutes, 59 seconds have been announced and the new material that will go into the market will be at 21:06 21 minutes, 6 seconds higher prices. So whether the secondary tertiary movement or whether it is 21:14 21 minutes, 14 seconds primary pickup it is now clearly the function of how severe the summer will 21:20 21 minutes, 20 seconds be and how long it will last. Uh the the the question here is another 6 weeks 21:28 21 minutes, 28 seconds whether summer will be active and as we speak the primary movement has commenced 21:35 21 minutes, 35 seconds already in many markets and we have to wait and see. So uh in one single 21:42 21 minutes, 42 seconds sentence we are happy that the summer season has set in. We are not 21:47 21 minutes, 47 seconds celebrating like it was 2024 summer. We have we have still two three weeks to go to assess how it is going to pan out. 21:58 21 minutes, 58 seconds And your third question is part and uh parcel of that the uh the the the 22:07 22 minutes, 7 seconds function of the uh car increased cost to be passed on is again dependent on the demand in the market. 22:19 22 minutes, 19 seconds Thank you. Thank you sir. All the best. 22:24 22 minutes, 24 seconds Thank you. Next question is from the line of Ravi Swaminatan from Aendas Park. Please go ahead. 22:32 22 minutes, 32 seconds Hi sir. Uh thank you for taking my question. Uh my first question is uh sorry to interrupt Ravi. Can you use your handset more please? Your audio is not clear. 22:41 22 minutes, 41 seconds Is it better now? 22:43 22 minutes, 43 seconds Uh are you on a Bluetooth device? Please use the handset. Yeah. Is it better now? Yes, please go ahead. 22:50 22 minutes, 50 seconds Yeah. Uh my first question is with respect to the price increase in air conditioners. How much amount of price increase you would have taken since 22:58 22 minutes, 58 seconds January 1st including the B nom change and how much more needs to be taken to compensate for the dometry price increase that has been that has happened. 23:09 23 minutes, 9 seconds We have stated this in many media interviews of mine it will be there roughly around it varies from SKUs to 23:18 23 minutes, 18 seconds SKU. it is around 5% is the price increase on account of energy level 23:24 23 minutes, 24 seconds change alone average subsequent to that till uh the April beginning it will be 23:31 23 minutes, 31 seconds around 8% for the raw material price increase and the uh exchange rate all 23:39 23 minutes, 39 seconds put together so there would have it should have been around 13% price increase that is warranted 23:46 23 minutes, 46 seconds we would have taken till Now the the you know very well again I'm repeating the inventory was enough. The primary sale 23:54 23 minutes, 54 seconds is beginning to pick up. So far whatever primary had happened we would have realized up to 8% out of 13 price 24:04 24 minutes, 4 seconds increase. Five more percentage of increase will happen as the April May sorry May June buildings are happening. 24:15 24 minutes, 15 seconds That is the reality. How you know it may vary from model to model on the average you can assume it to be so 24:25 24 minutes, 25 seconds and uh uh is it completely enough to uh cover the cost inflation which is there and protect the level margins for the 24:33 24 minutes, 33 seconds cooling product segment I 13% will will cover uh the desired 24:43 24 minutes, 43 seconds margin levels Okay, got it sir. And uh you had highlighted that there might be 24:51 24 minutes, 51 seconds and and here again and here again it does not take into account going forward what cost increases will be there like 25:00 25 minutes what has happened now post war is the plastic petroleum based uh input uh 25:09 25 minutes, 9 seconds cost like for example serene polyine all those costs will go up. 25:18 25 minutes, 18 seconds Got it. Uh and with respect to the project business also in terms of uh raw material prices going up there some of 25:26 25 minutes, 26 seconds the costs might be some of the projects might be fixed price contract. Uh how to think about uh any margin impact that 25:33 25 minutes, 33 seconds can happen in the next 12 months because of the uh raw material price increase and currency depreciation that has happened. 25:40 25 minutes, 40 seconds I don't think we have uh any fixed price for rarely we will be it's all covers for the price variation. Having said 25:49 25 minutes, 49 seconds that if you have delayed or the delay is attributable to us during the delayed period price variation will not be 25:57 25 minutes, 57 seconds applicable. I do not think we have any kind of an impact at the moment 26:04 26 minutes, 4 seconds uh in terms of uh input material cost has gone up. See how it works is that 26:12 26 minutes, 12 seconds you always assume that price variation will provide for something and there is some contingency that is available and so that is not the major concern. 26:24 26 minutes, 24 seconds Got it sir. Yeah. Thanks a lot. Thank you. 26:28 26 minutes, 28 seconds We'll take our next question from the line of Rahul Agarwal from Ikitai Asset. Please go ahead. 26:35 26 minutes, 35 seconds Hi sir, very good afternoon. Thank you for the opportunity. Sir, three questions. Firstly, on the international business, if you could just provide some 26:42 26 minutes, 42 seconds color on what's the one-year outlook and a three-year outlook in terms of new customer approvals and the growth you see the revenue potential there. Second 26:51 26 minutes, 51 seconds question was qualitatively if you could talk about the growth outlook for fiscal 27 on commercial AC commercial ref and 27:00 27 minutes projects. And third was on the balance sheet. Uh just wanted to know what's changed for the payable number. Uh I'm 27:07 27 minutes, 7 seconds I'm assuming that there is you know bit more inventory stocking and hence the creditors uh you know actually look like 27:14 27 minutes, 14 seconds maybe you paid in advance and hence they drop down considerably. First you could explain that in terms of the what's the change there. That's all for myself. 27:22 27 minutes, 22 seconds Thank you. 27:25 27 minutes, 25 seconds Uh so the uh international it is a wrong time to be talking about uh long-term uh 27:33 27 minutes, 33 seconds you know honestly uh many trade deals are they are taking off. They are in the verge of signing and huge uncertainties 27:41 27 minutes, 41 seconds provide. All that I can say is that we have uh approval for quite a few of 27:48 27 minutes, 48 seconds products with quite a few of customers and these are connected with air to water or air to air heat pumps. As far 27:57 27 minutes, 57 seconds as United States is concerned the uh you may have uh read already the US market 28:04 28 minutes, 4 seconds is stagnant or it is degrowing for our customers. Correct. The HVAC market 28:10 28 minutes, 10 seconds there is uh was doing not that great last year. Now 28:17 28 minutes, 17 seconds with uh with many other economic factors there that is likely to slow down. That is the information we have got. Having 28:26 28 minutes, 26 seconds said that we are new entrant even if I sell 100 unit it is uh it is a growth for us. It is an additional market. So 28:33 28 minutes, 33 seconds the trial uh marketing uh or u the validations and all that continue to go 28:42 28 minutes, 42 seconds on today that is not a very very significant part of the business but we 28:48 28 minutes, 48 seconds we we we have approvals acceptance and even customer preferences for quite a 28:56 28 minutes, 56 seconds few products for quite a few OEMs in these markets. Uh that's where it is. 29:03 29 minutes, 3 seconds Europe uh it it it has been slow. It continues to be slow. But now with the 29:10 29 minutes, 10 seconds new energy security, the countries are beginning to insist that the people should begin to use heat pumps rather 29:17 29 minutes, 17 seconds than the boilers. That's where we are now. We we had mentioned repeatedly that 29:23 29 minutes, 23 seconds it is a very important and critical portfolio for blue star. It may not 29:31 29 minutes, 31 seconds contribute significantly to the revenue but in about three years depending on how the global economy is going to pan 29:39 29 minutes, 39 seconds out. We should be beginning to grow that business significantly. In all this blue star is not entering with its own brand. 29:49 29 minutes, 49 seconds Blue star is not acquiring any uh brand from those markets. Bluear is not 29:57 29 minutes, 57 seconds setting up any joint ventures there. It is blue star making products for others 30:04 30 minutes, 4 seconds as a CDM manufacturer. That is our strategy. 30:09 30 minutes, 9 seconds And the second part commercial refrigeration business again to a very large extent like quite a bit of cooling 30:18 30 minutes, 18 seconds uh for frozen food. It is impacted by it is dominated by the ice cream segment and uh the the last FI26 was a bad year. 30:29 30 minutes, 29 seconds FI27 we have to wait and watch the the it all depends on how the ice cream retail 30:37 30 minutes, 37 seconds network is expanding and that significantly impacts this business pharma or other uh sectors are are are 30:47 30 minutes, 47 seconds very very minimum. We are not into fresh produce related like pack houses or uh 30:54 30 minutes, 54 seconds vegetable fruit processing. We are not into that. Those are large EPC contracts. In the model cold room 31:02 31 minutes, 2 seconds business it or the modular uh refrigeration products. It is it is 31:09 31 minutes, 9 seconds somewhat muted market and in any case uh for you all the we are talking about uh 31:18 31 minutes, 18 seconds 35,000 cr plus room air conditioner market versus 5,000 crores of commercial 31:25 31 minutes, 25 seconds refrigeration market which is addressed by blue star. So this is one particular segment uh which has a huge growth 31:35 31 minutes, 35 seconds potential but it is yet to grow. Uh what is your third question is about 31:42 31 minutes, 42 seconds comment on comment on the commercial AC and the project segment outlook for growth outlook on revenue for fiscal 27 31:50 31 minutes, 50 seconds in commercial air conditioning. uh again last year it was it was impacted by uh 31:57 31 minutes, 57 seconds the multiple factors including GST in some way uh the outlook continues to be 32:04 32 minutes, 4 seconds around 8 to 10% kind of growth and the growth uh is today driven predominantly 32:11 32 minutes, 11 seconds by manufacturing sector and uh the in case of projects it is driven by 32:18 32 minutes, 18 seconds manufacturing as well as the data center both In in both these segments we are market leaders we continue to do well. 32:27 32 minutes, 27 seconds To give you a rough idea that the data center MEP part of it where we are leaders we would estimate the market 32:35 32 minutes, 35 seconds size to be somewhere around 3,500 crores and we we we do a business of 32:43 32 minutes, 43 seconds around 1,000 crores there. This is likely to more than double within 3 years going by the inquiries in hand. 32:52 32 minutes, 52 seconds and going by the order finalization speed that is there. So therefore that MEP part of that that that,000 cr has 33:02 33 minutes, 2 seconds the potential to go to 3,000 cr within 3 years. Roughly 15% of blue star's 33:09 33 minutes, 9 seconds revenue may be coming from data center MEP business alone. So that is the outlook there. the the sunrise sector is 33:18 33 minutes, 18 seconds there in manufacturing it is connected with semiconductor EV battery solar cells these are the segments which 33:26 33 minutes, 26 seconds require air conditioning and expert cooling solutions and uh we continue to do well there and quite a bit of orders 33:34 33 minutes, 34 seconds are under execution quite a bit of orders are on the anvil and here again this will be next 3 to five years that 33:43 33 minutes, 43 seconds is going to be growing tremendously so both commercial air conditioning and electromechanical projects. Uh while 33:52 33 minutes, 52 seconds buildings or uh infra projects like airports, metro the these are the these 33:59 33 minutes, 59 seconds will continue to happen. Uh very attractive part of that segment is attractive in the sense it is financing 34:08 34 minutes, 8 seconds there is no worry cash flow there is no worry. These are very uh fast track projects. 9 to 10 months you have to 34:16 34 minutes, 16 seconds complete and these kind of projects are very attractive to us. This is where we will bet on. Blue star is not in not 34:26 34 minutes, 26 seconds having the complete range of data center cooling equipment. We are leaders in MEP part of it. We have a few chillers but 34:35 34 minutes, 35 seconds if you are to talk about uh the CDUs which are cooling distribution units pulling at that that particular space we 34:43 34 minutes, 43 seconds are on the lookout for a technology we are discussing with the many partners but nothing material as of now. Thank you. 34:53 34 minutes, 53 seconds So just to clarify you said I request you to join back the queue please as we are participants waiting for their turn. Okay thank you. 35:01 35 minutes, 1 second Thank you. 35:02 35 minutes, 2 seconds Ladies and gentlemen, in order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at a 35:10 35 minutes, 10 seconds time, we'll take our next question from the line of Aneruta Zoshi from ICAC Securities. Please go ahead. 35:18 35 minutes, 18 seconds Yeah. Uh thanks for the opportunity. Uh sir uh if you can share any outlook for 35:25 35 minutes, 25 seconds the air conditioner industry as well as the blue star for uh FI27 considering there was a uh there is a extremely favorable base of FI26. 35:37 35 minutes, 37 seconds Uh secondly uh whether the excess u uh trade schemes like uh free uh 35:44 35 minutes, 44 seconds installation or higher u discounts for the trade. So whether all of them have been discontinued. So uh and at the same 35:54 35 minutes, 54 seconds time commodity prices have increased. So considering all these things uh what will be the outlook for u uh margins as 36:02 36 minutes, 2 seconds well. Question number two and last question um in terms of now bluear has a solid market share in air conditioners 36:11 36 minutes, 11 seconds and uh in a way connect with dealer distributor manufacturing capability. So is there any potential to end? Is there 36:18 36 minutes, 18 seconds any plan to enter other products u in uh in a way either white goods or uh durables like uh uh washing machines, 36:27 36 minutes, 27 seconds refrigerators or or any any other matter for that matter because if AC penetration reaches a very good level in 36:33 36 minutes, 33 seconds FI30. So what will be the key driver? Uh beyond that I guess uh the seeding will have to be done now for the growth to be seen uh maybe after FI FI 2930. Yeah. 36:45 36 minutes, 45 seconds Yeah. These are the questions. 36:46 36 minutes, 46 seconds So your your first question is about industrial air conditioning. 36:51 36 minutes, 51 seconds No no sir. Air conditioner industry itself overall uh RAC industry. 36:59 36 minutes, 59 seconds So the uh first of all room air conditioned industry given the penetration it will be the fastest 37:06 37 minutes, 6 seconds growing market in the world and I still maintain by uh 2030 it it should more than uh double the 37:15 37 minutes, 15 seconds cagr at 18 to 20% should happen uh there may be a year with uh lower growth there 37:24 37 minutes, 24 seconds may be year with very high growth and uh one more summer season may get washed out in the coming years. all that apart 37:33 37 minutes, 33 seconds uh the outreach is very very encouraging and uh this is for the growth of the 37:39 37 minutes, 39 seconds industry and uh what is today around uh perhaps fi 26 and let us say it is going 37:47 37 minutes, 47 seconds to be 17.5 million units uh I I will not be surprised uh many things happen and 37:55 37 minutes, 55 seconds it ends up with 40 to 50 million units by FI30 it it has potential it can 38:02 38 minutes, 2 seconds happen. Uh but what I'm not very sure is whether it is an industry which given the number of players the competition 38:11 38 minutes, 11 seconds the increasing competition and uh increasing investment in manufacturing 38:18 38 minutes, 18 seconds capacities whether it will provide uh that 8 to 9% of operating margin. So the 38:28 38 minutes, 28 seconds question will be the margin will be under extreme pressure. Uh it is again a function of uh how uh rapidly the demand 38:37 38 minutes, 37 seconds builds up and what is going to happen to the commodity prices specifically copper 38:44 38 minutes, 44 seconds and uh other electronic components. Uh this is what is the the thing that the 38:51 38 minutes, 51 seconds industry players will have to look out for. uh it it just because the market is growing uh it is not necessary that the 39:00 39 minutes margin will expand. It will continue to be under pressure. That is the outlook for the industry. Commercial air 39:08 39 minutes, 8 seconds conditioning industry is steady. It's a function of um many infrastructure getting built there. The penetration level is higher. It is urban centric. 39:20 39 minutes, 20 seconds But you see more and more tire three, four, five towns having air conditioned restaurant or air conditioned marriage walls or air conditioned hotels, 39:28 39 minutes, 28 seconds hospitals so on and so forth. It will coincide with the construction cycle and 39:35 39 minutes, 35 seconds the infrastructure development and uh we are market leaders there. the the the 39:43 39 minutes, 43 seconds competitive intensity is not that high like room air conditioner but you do 39:49 39 minutes, 49 seconds have uh the techn technology related changes the the product innovation cycle 39:56 39 minutes, 56 seconds or the time it takes to develop those products like uh VRF and today it is 40:03 40 minutes, 3 seconds advancing very rapidly because energy efficiency requirements, reliability requirements, automation requirements are very high in that particular part. 40:14 40 minutes, 14 seconds Unlike uh United States uh in India the residential air conditioning market size is very big uh I mean it is more than 40:24 40 minutes, 24 seconds 35,000 crores and still you are dealing with something like 5,500 crores market in commercial air conditioning that's 40:33 40 minutes, 33 seconds very EPC part of the market will is huge it will continue to grow uh but there 40:41 40 minutes, 41 seconds then the question is there you are able to protect your margin. There you are able to protect your cash flows. That is 40:49 40 minutes, 49 seconds what we are focused on. We are not chasing the market share. We have repeatedly stated this. And where the 40:56 40 minutes, 56 seconds expertise is paid for or you are getting sufficient returns for the expertise 41:03 41 minutes, 3 seconds that you have built in that particular domain. Today it is manufacturing and data centers and some other point of 41:11 41 minutes, 11 seconds time it may be something else. uh but it will continue to grow because these two sectors India is reinventing itself and it is attracting lot of investment. 41:24 41 minutes, 24 seconds The margins outlook given the commodity prices it it is a wrong time to predict 41:31 41 minutes, 31 seconds anything because when when you're in adverse situation you swing to the other extreme. Uh but it it it is bad uh you 41:41 41 minutes, 41 seconds don't have any visibility at all. uh whether it is exchange rate or whether it is uh the commodities and as we speak 41:51 41 minutes, 51 seconds they say that there will be huge shortage of electronics because of helium related issues. Uh so it it is it 42:00 42 minutes is unfortunate that we are in that situation that you have to deal with quarter to quarter and the the right now 42:09 42 minutes, 9 seconds we are focused on how to ensure that our prices or our price realization 42:17 42 minutes, 17 seconds is in line with the cost increase that has already taken place. And uh once uh this quarter ends there will be 42:25 42 minutes, 25 seconds additional input costs increase if the war is not ending. That's where we are. 42:33 42 minutes, 33 seconds Okay. Sure sir. This is very helpful in the last session uh on on you to join back the queue please. 42:39 42 minutes, 39 seconds No no no I had I had already asked the question the uh entry possible other products like uh refrigerator washing 42:46 42 minutes, 46 seconds machine. We will we we have as on date foreseeable future we don't have any such plans at all. We will be focused on air conditioning and refrigeration. 42:57 42 minutes, 57 seconds There will be geographical expansion which we have begun and India itself is a very uh high growth market. We have no 43:06 43 minutes, 6 seconds plans whatsoever to get into white goods. Okay. Sure sir. Sure sir. Very helpful. 43:13 43 minutes, 13 seconds Thanks. 43:15 43 minutes, 15 seconds Thank you. We'll take our next question from the line of Sonali Sarakur from Jeff India. Please go ahead. So, thank 43:23 43 minutes, 23 seconds you for the opportunity. So, I have the following questions. Firstly, what is the inventory level in RAC's right now 43:31 43 minutes, 31 seconds versus the start of uh this year say January 26. Secondly, the quantum of price hikes is definitely required to 43:39 43 minutes, 39 seconds cover up the margins. In your view, do you think it will lead to a demand destruction industry-wide not only 43:47 43 minutes, 47 seconds limited to blue star? Thirdly, your capex and FI27 outlook in terms of revenue or margins please. Thank you. 43:58 43 minutes, 58 seconds The last part will deal with uh the uh the inventory level 44:06 44 minutes, 6 seconds uh will be reasonable um as of now. The the question is that the dealers have to 44:12 44 minutes, 12 seconds begin stocking. So already March huge billing took place. April 13th onwards 44:20 44 minutes, 20 seconds it is selling in the secondary tertiary very well and my estimate as on date if 44:28 44 minutes, 28 seconds you if you ask me it would have come to a reasonable level which means around 45 to 60 days of inventory should be there. 44:37 44 minutes, 37 seconds But if the summary is active this this 45 to 60 days of inventory should get exhausted even within 20 days of time. 44:47 44 minutes, 47 seconds That is how it should happen. So I do not think today the inventory 44:53 44 minutes, 53 seconds of the manufactur is an issue at all because it is locally 45:00 45 minutes manufactured. You can regulate it in particular manner. The challenge is that to monitor how much is moving out and 45:08 45 minutes, 8 seconds how much will be the primary billing and how I will moderate the production that that's where it is as of now it that is 45:17 45 minutes, 17 seconds not the concern the concern is connected with how the pricing will be passed on 45:23 45 minutes, 23 seconds to the consumers and uh I I cannot talk about other brands in our case it is very important for us to pass on the 45:32 45 minutes, 32 seconds increase it is not that we operate with huge margins. It is very important that the margins are uh in the in the order 45:40 45 minutes, 40 seconds of I again I'm for the benefit of everyone I'm saying the segment one uh we we want to continue to maintain that 45:49 45 minutes, 49 seconds 7 to 7 and a half% outlook segment two we want to maintain 8 to 8.5 okay that's 45:56 45 minutes, 56 seconds where it is now uh at the same time we we have to march towards our market go 46:04 46 minutes, 4 seconds market share goal of 50 which is currently at around 14.25. 46:10 46 minutes, 10 seconds So this is a function of uh how long the summer will be active how much price 46:18 46 minutes, 18 seconds realization can be improved. So this is a very critical period to judge that. 46:24 46 minutes, 24 seconds Now the consumer demand will drop. It is again if the summer is active uh it's 46:31 46 minutes, 31 seconds not going to be as I have told you that let us say last year to this year 13% price increase but there is a 10% GST 46:41 46 minutes, 41 seconds benefit actually the consumer is going to pay around 3%. 46:46 46 minutes, 46 seconds and uh that's where uh we are. So I I do I am not very sure uh there will be the 46:54 46 minutes, 54 seconds uptake will be reduced because of this price increase. I am not seeing that if 46:59 46 minutes, 59 seconds the summer is going to be hard. Um and the issue will be due to the war let us 47:09 47 minutes, 9 seconds say tomorrow the petroleum prices are increased or diesel prices are increased and the inflation uh peaks during this 47:17 47 minutes, 17 seconds period consumer sentiments may force the consumers not to spend that can happen. 47:25 47 minutes, 25 seconds uh I I I I am not able to comment on that but I know for sure that the consumer sentiments will dramatically 47:32 47 minutes, 32 seconds change uh if uh say for example petrol prices are going up or diesel prices are 47:39 47 minutes, 39 seconds going up. Uh but this 3% net of GST increase may not pull down. uh probably 47:48 47 minutes, 48 seconds a fivestar buyer will end up buying a three star or or somebody in a high-end fivestar may end up buying a normal 47:55 47 minutes, 55 seconds fivestar and uh one may end up buying a brand which has priced it cheaper that 48:02 48 minutes, 2 seconds all that can happen. I don't think they will postpone the purchase for for this particular aspect. Thank you. 48:10 48 minutes, 10 seconds Uh sorry Nicl about the balance sheet and traffic. Yeah sure. So can you hear me? 48:16 48 minutes, 16 seconds Yes sir. Yeah. Yeah. So with regards to capex, see the annual capex can be anywhere in the region of around 250 to 48:24 48 minutes, 24 seconds 350 crores. So that's the normal spend that we have. And when I say this capex, it includes all type of capex that is 48:32 48 minutes, 32 seconds the normal routine capex, maintenance capex, uh your uh investments in R&D, product development as well as whatever 48:40 48 minutes, 40 seconds IT investments that will digital investments that we will be doing. So all of that is will be in that region. 48:46 48 minutes, 46 seconds As regards uh what what growth we can expect for the next year F27 I think it is too early to comment uh you already 48:54 48 minutes, 54 seconds heard Mr. Rajin that summer is just set in and we would like to wait and watch because it entirely depends on how the 49:00 49 minutes summer actually plays out to predict for the year and the margin outlook the margin outlook what we have said 49:08 49 minutes, 8 seconds already again that you know given the cost pressures that we are having in terms of commodity pressures that are 49:15 49 minutes, 15 seconds there and the limited kind of uh way in which we price increases can take place there is going to be margin pressure 49:23 49 minutes, 23 seconds this year the headwinds are going to be Yeah, got it sir. Very helpful. Thank you and all the best to the team. 49:31 49 minutes, 31 seconds Thank you. Next question is from the line of Adita Bhartya from Invest. Please go ahead. 49:40 49 minutes, 40 seconds Hi. Hi. Good afternoon sir. Um so given that you pointed out of 13% kind of a pricing fees that was required uh around 49:48 49 minutes, 48 seconds 8% has been taken taken so far. Does that mean that in Q1 we are likely to have margin pressure u and and the 49:58 49 minutes, 58 seconds margins hopefully then recover through the course of the year if commodity costs cool off uh and if commodity costs stay where they are uh then the impact 50:07 50 minutes, 7 seconds of higher plastic pricing and uh uh um other crude derivatives is yet to hit us that starts hitting us from quarter two onwards. 50:18 50 minutes, 18 seconds Again it is uh I have stated very clearly the additional price increase 50:24 50 minutes, 24 seconds will has come into effect in May itself we have to pass it on it is a function 50:31 50 minutes, 31 seconds of the secondary demand then the dealers will have to buy that's where we are and 50:38 50 minutes, 38 seconds we are also stating that there will be margin pressure uh throughout the year and uh un and until something 50:46 50 minutes, 46 seconds dramatically changes is in Q2 or Q3 we do not know and uh we are still 50:53 50 minutes, 53 seconds maintaining that uh 8 to 8.5 is the outlook for the market. 51:02 51 minutes, 2 seconds Sure sir. So we are still aiming for 8 to 8 and a half% kind of UCP margins uh uh in this year in which case uh uh uh 51:11 51 minutes, 11 seconds as as she as she's saying today. 51:16 51 minutes, 16 seconds Understood. Understood. So they are cost pressures but we feel fairly confident that we should be able to pass pass those on. Is that understanding correct? 51:24 51 minutes, 24 seconds That's right. In a good summary year it should be 8.5 to 9. for your information we are saying 8 to 8.5 should be the 51:32 51 minutes, 32 seconds thing in my very open remarks uh or to the first question I have stated the market will continue to grow the margins 51:41 51 minutes, 41 seconds will be continuing to be under pressure 32030 and I am not seeing that this 8 to8.5 51:50 51 minutes, 50 seconds continuing as the market expands further and further slos 51:58 51 minutes, 58 seconds and but as far as this financial year is concerned as we see today we believe 8 to 8.5 is possible. 52:10 52 minutes, 10 seconds Understood. Understood. Um and and uh it all the costs that have gone up uh uh 52:16 52 minutes, 16 seconds since the war broke out those costs are yet to get reflected in this 13% kind of price and fees that we spoke about. I would take is that is that what you would? 52:27 52 minutes, 27 seconds Yeah. 52:27 52 minutes, 27 seconds Understood. So plastic pricing for the go. 52:31 52 minutes, 31 seconds Sure. Sure. That's clear sir. Thank you so much. 52:36 52 minutes, 36 seconds Thank you. We'll take our next question from the line of Pulkit Partney from Goldman Sachs. Please go ahead. 52:43 52 minutes, 43 seconds Uh sir, thank you for taking my question. Just one question. You spoke about 3500 cr cooling opportunity right 52:51 52 minutes, 51 seconds now for data centers out of which you can do 1,000 cr as a MEP contractor. Can you highlight of those 1,000 cr how much equipment can we source internally? 53:04 53 minutes, 4 seconds So these are NEP contract the equipment if you are talking about cooling equipment it will not be uh there there 53:12 53 minutes, 12 seconds is it will be negligible negligible market is completely separate sure so basically as a contractor we can 53:20 53 minutes, 20 seconds do about thousand I mean we are doing thousand cr which is a third of there will be material those material will be something like a bus deck or 53:28 53 minutes, 28 seconds sheet metal insulation uh such things it is not connected with cooling Okay, very clear sir. Thank you so much. 53:38 53 minutes, 38 seconds Thank you. 53:39 53 minutes, 39 seconds Thank you. Next question is from the line of Reu B from IIFL Capital. Please go ahead. 53:46 53 minutes, 46 seconds Yeah. Hi. Uh thank you for the opportunity. So two questions from my side. Uh first um on the RAC bill for the unit cooling. Um can you help us 53:53 53 minutes, 53 seconds with the volume numbers for fiscal uh 26 and at what utilization levels are you sitting at the factory? Um and second is 54:01 54 minutes, 1 second on the ME portion of the business um where you've highlighted data centers and manufacturing as key groups uh markets. These are also sectors where 54:09 54 minutes, 9 seconds typically um customers or one would presume the pricing environment is relatively favorable. So just trying to understand in these segments especially 54:17 54 minutes, 17 seconds under kind of market are likely to develop in the next two to three years. 54:21 54 minutes, 21 seconds uh any reason why we are um still um expecting margins to be at 7 seven and a half% levels only and not um expecting 54:30 54 minutes, 30 seconds uh the project margins to improve as the quality of projects that we executing on the core HVAC um side or the MP side are 54:37 54 minutes, 37 seconds also improving the last part I'll answer it it is not our portfolio is only manufacturing and 54:46 54 minutes, 46 seconds data centers we do have buildings we do have infra project. So it's a blended 54:52 54 minutes, 52 seconds margin we are talking about. uh your uh other question is that I my my estimate 54:59 54 minutes, 59 seconds is that the the market would have been anyway we don't know the final numbers of the market it should be somewhere 55:07 55 minutes, 7 seconds around uh 15.5 million or something like that and we have always said that the in 55:14 55 minutes, 14 seconds the in the volume terms we will be somewhere around some 11% of the market 55:21 55 minutes, 21 seconds we will be uh now the uh the uh as far as the segment two margins are concerned 55:29 55 minutes, 29 seconds I I'm saying that you we have we are at a juncture where we have to necessarily pass or increase 55:38 55 minutes, 38 seconds if it is not passed on now it will be even more difficult later because uh the this is a time the increase will look 55:47 55 minutes, 47 seconds like only 3% over last year. uh the more you delay it will look like that we are increasing over correct there is a 55:56 55 minutes, 56 seconds justifiable reason uh for I suppose I've answered all your question 56:03 56 minutes, 3 seconds sure then my perspective was that it data center is growing at almost 40 50% cagger for you and it share in the project business would increase from 56:11 56 minutes, 11 seconds current 15% levels to close to 20 25% uh three years out so should that not have a positive tail effect on the segment 56:20 56 minutes, 20 seconds profitability when we look at the blended number for the company within the within the segment it is at 33%. 56:29 56 minutes, 29 seconds uh within the segment okay data center I mentioned if blue star's revenue will be 56:36 56 minutes, 36 seconds 20,000 cr it'll be 3,000 cr in that context 15% of the company's revenue could be so don't do not do not mix up 56:44 56 minutes, 44 seconds with that statement with this within the project's business it is there there is 56:51 56 minutes, 51 seconds there is a there are data center there are factories there are buildings there are infra 56:58 56 minutes, 58 seconds Now in that particular business we have been operating between 7 to 7.5%. 57:05 57 minutes, 5 seconds I will not at this juncture say that is going to become some 8 to 8.5 or 8.59. 57:12 57 minutes, 12 seconds It is indeed it is true that the data center market will grow and that part of the business will be significant within 57:20 57 minutes, 20 seconds that segment and I am we are not making a statement I am not going to be in buildings or I'm not going to be in 57:28 57 minutes, 28 seconds other vehicles. So as of now that is all the guidance that we are giving. 57:34 57 minutes, 34 seconds Got it. Got it. and the average utilization level for our um RH facilities. 57:41 57 minutes, 41 seconds You know I want to remind that CCT Himasel is built in such a manner that it is at operating at full capacity. 57:54 57 minutes, 54 seconds Okay. the whatever little we can improve we keep improving but otherwise it is operating at 100% capacity which is 58:03 58 minutes, 3 seconds somewhere around 6.5 uh lakh units the balance out of our 58:11 58 minutes, 11 seconds something like 1.6 million comes from CCT factory not exactly 1.6 Six it will 58:18 58 minutes, 18 seconds be uh it will be something like um uh it is not one lakh it will be somewhere 58:24 58 minutes, 24 seconds around 9 lakh unit because we also buy window air conditioner and few SKUs from outside 58:32 58 minutes, 32 seconds DCT is built the module of three lakh so three lakh became six lakhs six lakhs 58:38 58 minutes, 38 seconds became 9 lakhs this 9 can become 12 and therefore this capacity is added in line 58:46 58 minutes, 46 seconds with the market requirement. Today if we are saying this year the the growth will 58:53 58 minutes, 53 seconds be good it will be operating close to 100% capacity then we will be deciding by October to 59:02 59 minutes, 2 seconds expand the one more line and the the factory is built in such a manner the building is available it is assembly 59:09 59 minutes, 9 seconds line that we need to invest what we to invest last year we said that we will 59:16 59 minutes, 16 seconds postpone and look at it in October. So in October we will go ahead and take that call. So you can therefore the 59:25 59 minutes, 25 seconds answer is it is operating close to 100% capacity in room air conditioners or commercial refrigeration. Perfect. 59:34 59 minutes, 34 seconds Thank you and best wishes to you. Thank you. Thank you. 59:37 59 minutes, 37 seconds Thank you. Next question is from the line of Achelare from Noama Institutional Equities. Please go ahead. 59:45 59 minutes, 45 seconds Yeah. Uh good afternoon sir. Thank you for the opportunity. I just wanted a clarification with respect to the u uh 59:52 59 minutes, 52 seconds industry size. Did you mention from a fiscal year FI26 perspective the uh 14 and a.5 million pieces for the industry sir? 1:00:03 1 hour, 3 seconds No I didn't FI 26 will be somewhere around 15 million only and uh I think it 1:00:12 1 hour, 12 seconds should be 17.5 for FI 27. I also mentioned FI26 final figure. I do not 1:00:19 1 hour, 19 seconds know what it is. It should be in my view it should be close to 14.75 or 14.5 to 14.75 because it would have 1:00:28 1 hour, 28 seconds degrone only by around 5% in volume over the previous year 1:00:34 1 hour, 34 seconds and our market share is 11.25% like what you said in value in volume terms and value terms 14.25. Have I understood right sir? 1:00:43 1 hour, 43 seconds That is right. 1:00:45 1 hour, 45 seconds Got it. The second question I had uh was with respect to uh you know um given where we are currently uh you know uh 1:00:53 1 hour, 53 seconds what is it? You said the the season actually started only on 13th of April uh properly what is it typically when it 1:01:01 1 hour, 1 minute, 1 second starts according to you I mean what kind of delay we have had uh seen and do you think uh the way the uh weather is 1:01:10 1 hour, 1 minute, 10 seconds progressing we could have really an extended summer season particularly for south It has happened in the past like that. 1:01:20 1 hour, 1 minute, 20 seconds The the question is whether patterns have completely changed and uh so it is just impossible. You have to keep your 1:01:29 1 hour, 1 minute, 29 seconds fingers crossed and the one good news is that the forecast one week prior to that is becoming much more accurate and uh 1:01:38 1 hour, 1 minute, 38 seconds the the delayed monsoon means it may be in so January first week it is setting in by January sorry instead of June first week it is setting in by June 15. 1:01:50 1 hour, 1 minute, 50 seconds It's not that it is going to get delayed to July or something like that. And again I'm stating if it is going to be a 1:01:57 1 hour, 1 minute, 57 seconds disastrous monsoon, it will have other consequences actually. 1:02:03 1 hour, 2 minutes, 3 seconds So it is again not worth it to praying for that as well. All that one should look forward to is rest of May and uh 1:02:11 1 hour, 2 minutes, 11 seconds first half of June if the summer is active and uh perhaps in few pockets of north till June end that is good enough. 1:02:23 1 hour, 2 minutes, 23 seconds Understood. Understood. And just a clarification on the 4Q UCP margins. Um it's fair to say that there is an 1:02:30 1 hour, 2 minutes, 30 seconds element of the provision reversals uh and the lower cost which has improved the margin 1:02:38 1 hour, 2 minutes, 38 seconds provision reversal I'm not able to follow labor code provision uh the final assessment and the reversal of that 178 crores. 1:02:45 1 hour, 2 minutes, 45 seconds So that is in the exceptional item provision was made in the exceptional item provision is taken back in 1:02:53 1 hour, 2 minutes, 53 seconds exceptional item. So there is no provisions out there. 1:02:57 1 hour, 2 minutes, 57 seconds Understood. Uh thanks for the clarification sir. Thank you so much. 1:03:00 1 hour, 3 minutes And that is and that does not go into business also. 1:03:03 1 hour, 3 minutes, 3 seconds Got it. Got it sir. Noted. Thank you so much. Thank you. 1:03:09 1 hour, 3 minutes, 9 seconds We'll take a next question from the line of Karan Gupta from Akmill. Please go ahead Karan. 1:03:18 1 hour, 3 minutes, 18 seconds Yeah man. Hello. Am I audible? Yes please go ahead. 1:03:22 1 hour, 3 minutes, 22 seconds Yeah. uh most of the questions on MEP side uh has been answered but just want 1:03:28 1 hour, 3 minutes, 28 seconds some clarification on that uh in overall uh data center project uh as you said we 1:03:37 1 hour, 3 minutes, 37 seconds are providing chillers uh and uh for the CDU side we are doing some partnership 1:03:44 1 hour, 3 minutes, 44 seconds uh so uh how much is the in-house uh products and how much it is the outsourcing 1:03:53 1 hour, 3 minutes, 53 seconds in the MEP side. So, chiller as you said we are on the market leader 1:04:00 1 hour, 4 minutes in MEP of data centers. We do not have any cooling equipment at all. It is all electrical or mechanical equipment. 1:04:10 1 hour, 4 minutes, 10 seconds Okay. Cooling equipment is bought always separately by a data center provider. 1:04:17 1 hour, 4 minutes, 17 seconds Okay. In that cooling equipment business, we we do not have the complete 1:04:23 1 hour, 4 minutes, 23 seconds range. We have few chillers. We we do not have CDUs. We do not have fan wall units. For example, these we are in the 1:04:32 1 hour, 4 minutes, 32 seconds process of developing or making partnerships in the MEP part of it. It it is broadly 1:04:41 1 hour, 4 minutes, 41 seconds uh the electrical mechanical access way again main electrical equipment will be bought by them separately. 1:04:51 1 hour, 4 minutes, 51 seconds Okay. Okay. And what about the Okay. And what about the order book size 1:04:58 1 hour, 4 minutes, 58 seconds in that segment entity side for the data center? 1:05:02 1 hour, 5 minutes, 2 seconds I I I I told you that we estimate market to be anywhere between 3,000 to 4,000 1:05:10 1 hour, 5 minutes, 10 seconds and our order book will be somewhere around 1,500 crores 1500. 1:05:22 1 hour, 5 minutes, 22 seconds Yeah. I I'm I'm saying at at some at at any given point of time, you're not going to order a book, right? 1:05:31 1 hour, 5 minutes, 31 seconds Yes. Yes. 1:05:35 1 hour, 5 minutes, 35 seconds Broadly translate into annual revenue of around thousand but the but the inquiry inflow is very huge uh very big numbers. 1:05:49 1 hour, 5 minutes, 49 seconds Okay. Sure. Thank you. Thank you. 1:05:54 1 hour, 5 minutes, 54 seconds Next question is from the line of COR from ICIC life insurance. Please go ahead. 1:06:00 1 hour, 6 minutes Uh thank you. Uh the one question that uh because of this talking that you 1:06:07 1 hour, 6 minutes, 7 seconds mentioned in quarter 4 uh should we expect lag for at least in quarter 1 uh 1:06:14 1 hour, 6 minutes, 14 seconds between the primary sales and secondary sales looking at the inventory situation? 1:06:20 1 hour, 6 minutes, 20 seconds I don't think so. April that statement may be true but 1:06:26 1 hour, 6 minutes, 26 seconds the prime minister is uh kay can you please mute your line? 1:06:34 1 hour, 6 minutes, 34 seconds Sure. 1:06:38 1 hour, 6 minutes, 38 seconds Your statement may be true for April there were you know generally April first week itself it should start it 1:06:46 1 hour, 6 minutes, 46 seconds didn't and it began only in May first week and sources sir thanks a lot all the 1:06:54 1 hour, 6 minutes, 54 seconds best thank you next question is from the line of Manish Raj from Canada HSBC please go 1:07:02 1 hour, 7 minutes, 2 seconds ahead uh thank you uh thank you for the opportunity uh just one questions. Uh if the summer progresses as the way it is 1:07:10 1 hour, 7 minutes, 10 seconds progressing right now, what is the kind of primary sales that we can expect on the last year's page base? If you could give us a growth number. 1:07:20 1 hour, 7 minutes, 20 seconds So I have always stated that uh the uh given there is price increase of I'm saying average you take at least 10% 1:07:29 1 hour, 7 minutes, 29 seconds over last year the a good performance would mean anywhere between 25 to 30% over last 1:07:38 1 hour, 7 minutes, 38 seconds year and uh will that result will that result yes 1:07:46 1 hour, 7 minutes, 46 seconds so I'm I'm saying that over last year Q1 for the industry if it is a 25% growth 1:07:56 1 hour, 7 minutes, 56 seconds that means it is a very good summer that's what one will have to imagine and imagine last year summer was not a great summer 1:08:05 1 hour, 8 minutes, 5 seconds and 25% because in that 15% is the real growth and 10% is arising out of the 1:08:13 1 hour, 8 minutes, 13 seconds price that's all it is and it looks like there is a probability that it will happen again it's a function of summer. 1:08:25 1 hour, 8 minutes, 25 seconds So just uh adding to that part if uh it pans out as the way the expectation is then uh at the end of Q1 uh are we going 1:08:34 1 hour, 8 minutes, 34 seconds to be sitting on a uh lower inventory versus what we were sitting last year. Is that a thought process right? 1:08:42 1 hour, 8 minutes, 42 seconds Yes. Yes. Inventory adjustment even last year was not that difficult. The problem 1:08:49 1 hour, 8 minutes, 49 seconds last year was that it was compounded by one factor after the other factor. So you are starting with an assumption 1:08:56 1 hour, 8 minutes, 56 seconds there will be shortage of raw material and therefore you have to produce. Then the weather forecast says that weather is going to become hotter by April 15. 1:09:06 1 hour, 9 minutes, 6 seconds April 15th it says May will become hotter and it continued like that. Then the next part of it next part of it is 1:09:14 1 hour, 9 minutes, 14 seconds the festival season was completely dampened. Then you got into energy level change. What will happen to all inventory new inventory? So that those 1:09:22 1 hour, 9 minutes, 22 seconds are all the issues there. But I am saying inventory management of the industry and blue star will be far 1:09:30 1 hour, 9 minutes, 30 seconds better this year because if the moment summer has not set in people have moderated the production and they know 1:09:38 1 hour, 9 minutes, 38 seconds very well that we have to wait for a lag in the primary sale. it already happened and now they will be moderating what is 1:09:47 1 hour, 9 minutes, 47 seconds the production and what is the sale that is happening and I don't think that will be the concern at all. I'm again 1:09:53 1 hour, 9 minutes, 53 seconds repeating the issue will be how to pass on the price increase fully now and how to pass on the price increase post the 1:10:02 1 hour, 10 minutes, 2 seconds season there will be war related increase in cost so this year will be about margins rather than inventory. 1:10:12 1 hour, 10 minutes, 12 seconds Thank you sir. 1:10:15 1 hour, 10 minutes, 15 seconds Thank you ladies and gentlemen. We'll take that as the last question for today. I now hand the conference over to Mr. Nikil Sony for closing comments. Over to you sir. 1:10:26 1 hour, 10 minutes, 26 seconds Thank you. Thank you very much ladies and gentlemen. With this we conclude this quarter learning call. Do feel free to revert to us in case of your 1:10:35 1 hour, 10 minutes, 35 seconds questions are not fully answered and we'll be happy to provide you additional details by email or in person. Thanks. 1:10:43 1 hour, 10 minutes, 43 seconds Thank you members of the management team. On behalf of Blue Star Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.