Eureka Forbes Limited — Q3 FY26

Eureka Forbes Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=SEF-G0fInD8 Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Ureka Forbes Limited's Q3 FY26 earnings conference call. 0:10 10 seconds We have Mr. Pratik Pa, managing director and CEO and Mr. Gorav Kandelwal, CFO, 0:16 16 seconds Ureka Forbes with us. As a reminder, all participant lines will be in the listenonly mode and there will be an 0:24 24 seconds opportunity for you to ask questions after the presentation concludes. 0:29 29 seconds Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:41 41 seconds Before I hand it over to Mr. Pratik Puta, please note the disclaimer. 0:46 46 seconds Certain statements made by the management in today's call may be forward-looking statements. These forward-looking statements reflect 0:53 53 seconds management's best judgment and analysis as of today. The actual results may differ materially from the current 1:01 1 minute, 1 second expectations based on a number of factors affecting the business. I now hand the conference over to Mr. 1:07 1 minute, 7 seconds Pratik Pa. Thank you and over to you sir. 1:13 1 minute, 13 seconds Thank you. Good afternoon everyone and I welcome you all to the Q3 FIP6 earnings call of Europa Forbes Limited. 1:20 1 minute, 20 seconds We witnessed a resilient performance in Q3 in a challenging macro environment. 1:26 1 minute, 26 seconds Revenues grew 8% year-on-year and adjusted EBITA margin expanded by 57 basis points uh yearon year to reach 11.3%. 1:36 1 minute, 36 seconds This quarter witnessed macro challenges on the consumer demand front. A slowdown post the post the festive period led to 1:44 1 minute, 44 seconds elevated trade inventory which weighed on growth. This impact was the most pronounced in the e-commerce channel and on the water purifier category. 1:54 1 minute, 54 seconds Our water purifiers performed ahead of the category leading to market share gain both sequentially and year on year. 2:03 2 minutes, 3 seconds Our emerging categories did well in the quarter and sustained or accelerated their momentum. 2:10 2 minutes, 10 seconds Robotics continued it strong trajectory and delivered very strong growth during the quarter. Our full range portfolio, comprehensive playbook and good 2:18 2 minutes, 18 seconds execution enabled an all round growth across all channels. 2:23 2 minutes, 23 seconds The air purifiers portfolio did very well and delivered a breakout performance in quarter 3. We built a stronger product range this year and 2:31 2 minutes, 31 seconds rolled out strong awareness and point of sale activation programs which helped the business grow 3x all on a low base and we were out of stock during the end of quarter. 2:41 2 minutes, 41 seconds Going ahead, given the worsening air quality across the country and in most metros, we see this demand staying strong and becoming more geographically broad-based beyond the north markets. 2:53 2 minutes, 53 seconds In addition, the water softness category continued to perform well and delivered healthy growth in the quarter. 3:01 3 minutes, 1 second As the quarter's results show, we have clearly transitioned from being a single c category product business to a 3:08 3 minutes, 8 seconds business which now has multiple and meaningful levers of growth. 3:14 3 minutes, 14 seconds Coming to service, our AMC bookings growth trajectory continued strongly making Q3 as the third consecutive 3:22 3 minutes, 22 seconds quarter of double-digit growth. We rolled out a new program aimed at appropriating a larger share of the filters aftermarket which included 3:29 3 minutes, 29 seconds launch of a new simplified assortment of filters, attractive pricing and engagement program for market service technicians and for the distributors. 3:39 3 minutes, 39 seconds On customer experience, I'm pleased to share that our service KPIs have witnessed a sharp improvement during the 3:46 3 minutes, 46 seconds quarter and we are now at a new all-time high. 3:50 3 minutes, 50 seconds On profitability, we delivered a 57 basis point margin expansion despite increasing our ANSP spend by 23% yearonear. 4:02 4 minutes, 2 seconds Stepping back, let me reframe our Q3 performance in a broader context. 4:09 4 minutes, 9 seconds coming as it did after eight quarters of double-digit growth. It is our firm conviction that the growth slowdown in 4:16 4 minutes, 16 seconds the quarter was a one-off aberration which came on account of very temporary channel specific issues. 4:25 4 minutes, 25 seconds With the benefit of hindsight, it is now clear that the Q3 sellout growth was not in line with our earlier 4:33 4 minutes, 33 seconds projections and the post festive slowdown was not anticipated. 4:39 4 minutes, 39 seconds A more accurate view of a performance therefore might be to look at Q2 and Q3 together. 4:47 4 minutes, 47 seconds As we stand today, our inventory levels have begun improving and we expect the growth trajectory to normalize from this 4:54 4 minutes, 54 seconds quarter onwards and increasingly and progressively position us on course to achieve the longerterm ambition that we have set for ourselves. 5:05 5 minutes, 5 seconds It is important to recognize uh that the relevance of our categories and the need for our categories has 5:13 5 minutes, 13 seconds never been felt more or been more salient. Be it water purifiers or air purifiers or convenient cleaning. 5:24 5 minutes, 24 seconds Recent news headlines highlighted the criticality of point of use water purification given the poor quality of 5:31 5 minutes, 31 seconds groundwater in the country and the risk of water contamination in transit. 5:36 5 minutes, 36 seconds We believe that the EWP category will see sustained tailwinds as consumer awareness grows about the hazards of drinking untreated and impure water. 5:49 5 minutes, 49 seconds Similarly, the challenge of poor air quality is now actually visible and experienced directly by people living in most metros and large towns. 6:01 6 minutes, 1 second We have seen growing incidents of respiratory and health issues and this in turn is leading to greater category 6:09 6 minutes, 9 seconds awareness and demand. We expect this to to continue and indeed only increase in the foreseeable future. 6:18 6 minutes, 18 seconds Not only are the categories more relevant, but we also believe and have no doubt that we have the right strategy 6:26 6 minutes, 26 seconds and the right playbook to drive profitable growth in our business. 6:32 6 minutes, 32 seconds Number one, we will continue to grow the water category driving both penetration and premiumization. 6:40 6 minutes, 40 seconds Towards this, our economy portfolio did well last quarter and we also launched a new premium product, the Aquagard Arctic 6:48 6 minutes, 48 seconds Blaze at a price point of Rs 79,999, the highest in the category. 6:56 6 minutes, 56 seconds A newer categories of convenient cleaning, softeners, and air purifiers drove growth for us last quarter. 7:05 7 minutes, 5 seconds We have built a comprehensive strategy in playbook for each of these categories. 7:10 7 minutes, 10 seconds And we will continue to invest in creating consumer awareness, driving differentiated innovations, and bringing 7:17 7 minutes, 17 seconds alive a visible and compelling point of sale experience. Number three, in service, we will make customer 7:26 7 minutes, 26 seconds experience a source of competitive advantage for us. We will grow revenues by increasingly participating in the aftermarket filters business. 7:37 7 minutes, 37 seconds Towards this, we have launched the assortment of filters and spares. We are investing in customer education, building a dedicated go-to market, and 7:46 7 minutes, 46 seconds forging relationships with a larger group of market technicians. 7:51 7 minutes, 51 seconds Number four, our installed base of long-standing and loyal customers provides us a a very valuable market for 8:00 8 minutes both upgradation and cross-selling. and we will mount online to offline D2C 8:06 8 minutes, 6 seconds programs aimed at this base. Finally, we will remain focused on driving profitability even as we continue to invest in driving growth. 8:17 8 minutes, 17 seconds In summary, our overall business remains on a firm footing. 8:24 8 minutes, 24 seconds The breadth of our performance across categories along with a year-on-year margin expansion gives us the confidence 8:32 8 minutes, 32 seconds to achieve and to aim for a longerterm ambition of achieving 2x revenue and 3x IDA by F530. 8:41 8 minutes, 41 seconds Thank you. And now I hand you over to Gorov to give some more flavor on a Q3 performance. Gor, thank you Pratik and good afternoon 8:50 8 minutes, 50 seconds everyone. Starting off with the Q3 headline numbers, our revenues at rupees 645.4 crores grew 8% yearonear. 8:59 8 minutes, 59 seconds Adjusted EIDA margins expanded by 57 basis points to 11.3% in quarter 3. 9:06 9 minutes, 6 seconds Adjusted PBT grew by 11.3% yearonear and pre-exceptional PAT at rupees 39 crores grew by 11.9% yearonear. 9:15 9 minutes, 15 seconds The adjustment referred to above here relates to a one-time pre-tax charge of rupes 40.4 cr arising from the new labor 9:23 9 minutes, 23 seconds codes. The company has done an assessment and will continue to monitor developments as we go ahead. We do not expect this to be a significant 9:31 9 minutes, 31 seconds recurring impact. This one-time impact has been reported as an exceptional expense in our financial statements. 9:39 9 minutes, 39 seconds On the revenue side, our emerging categories delivered a solid performance during the quarter. These categories 9:45 9 minutes, 45 seconds comprising robotics, softeners and air continue to report strong growth. The electric water purifier segment 9:52 9 minutes, 52 seconds experienced a softer quarter. The post festive demand was lower than our expectations thereby leading to elevated trade inventory levels. This was most 10:01 10 minutes, 1 second pronounced in the ecom channel. We see this to be a temporary phase as underlying growth fundamentals remain intact. 10:09 10 minutes, 9 seconds If you see Q2 and Q3 combined, we delivered a robust double-digit revenue growth of 11.7%. 10:16 10 minutes, 16 seconds We see inventory levels normalizing in the offline channel already and expect that to happen in the e-com channel within this quarter. 10:26 10 minutes, 26 seconds Gross margins expanded 331 basis points yearon year to be at 60.8% during quarter 3. This improvement was 10:34 10 minutes, 34 seconds primarily driven by our quarks program and water specific issues like channel mix and lower discounts. Our quarks 10:42 10 minutes, 42 seconds program is now well institutionalized and is helping create the headroom for growth investments. 10:49 10 minutes, 49 seconds In line with our strategy, we continue to increase our ANSP spends to increase category awareness. Our NSP spends grew 10:56 10 minutes, 56 seconds by 23.3% yearonear in quarter 3 and the focus will remain on investing for category expansion. 11:04 11 minutes, 4 seconds I would now like to draw attention to our YTD performance. On a YTD basis, the business remains on a healthy 11:11 11 minutes, 11 seconds double-digit growth trajectory and our structural levers remain intact. Our YTD revenue stood at rupees 226.6 6 crores 11:19 11 minutes, 19 seconds registering a growth of 11.1% yearonear and adjusted AIDA margin stood at 11.9% 11:26 11 minutes, 26 seconds up 67 basis points yearon year adjusted PBT grew by 22% year-onear to rupees 11:33 11 minutes, 33 seconds 404.8 8 crores 9-month patch pre the labor code impact 11:40 11 minutes, 40 seconds stood at rupees 139.1 crores up nearly 24% yearon year 11:46 11 minutes, 46 seconds gross margins have expanded by 90 basis points to be at 58.8% for the 9-month period I would like to highlight here 11:55 11 minutes, 55 seconds that our gross margins have remained resilient and as reference they were at 59.4% 4% in FI23. 12:02 12 minutes, 2 seconds In effect, our gross margins have remained rangebound at these levels and we expect that to continue. Our operating discipline, our guardrails 12:11 12 minutes, 11 seconds around gross margins supported by portfolio breath across price points and the ongoing cost focus continue to give us multiple levers. 12:20 12 minutes, 20 seconds Given the headroom provided by gross margin improvement, we have made conscious investment decisions mostly in the areas of ANSP and service charges. 12:29 12 minutes, 29 seconds While the total expenses have grown by 11.7%, this is primarily due to a 14.5% increase in service charge and a 16.4% increase in ANSP spends. 12:42 12 minutes, 42 seconds In summary, our YTD performance remains strong with healthy double-digit revenue growth and margin expansion supported by 12:49 12 minutes, 49 seconds gross margin expansion as as a result of our quarks program. We remain focused on driving growth and margin expansion on a full year basis in FI26. 13:00 13 minutes The business continues to benefit from strong fundamentals, low category penetration, and even more favorable 13:06 13 minutes, 6 seconds category tins going ahead. Thank you. I now hand it over back to the moderator for the Q&A. 13:15 13 minutes, 15 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 13:22 13 minutes, 22 seconds star and one on their touchtone telephone. 13:26 13 minutes, 26 seconds If you wish to remove yourself from the question queue, you may press star and two. 13:31 13 minutes, 31 seconds Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we also request that you please limit yourselves to one question 13:39 13 minutes, 39 seconds and one followup. If you have any further questions, you you may rejoin the queue. 13:45 13 minutes, 45 seconds We will now wait for a moment while the question queue assembles. Our 13:53 13 minutes, 53 seconds first question comes from the line of Keshav Loti from HDFC Securities. Please go ahead. 14:00 14 minutes I thank you for the opportunity. So firstly I want to understand as Q3 is a one-off so it's a fair assessment Q4 we will be back to our normal double digit 14:08 14 minutes, 8 seconds growth and secondly now you're given a fiveyear road map of growth and margin possibly. Can you give some color on what sort of growth you're looking in FI 14:17 14 minutes, 17 seconds 26 and 27 and what sort of AIDA margin? 14:23 14 minutes, 23 seconds Uh Kesha um u like I said in my opening remarks and as you just remarked um Q3 was clearly a 14:32 14 minutes, 32 seconds one-time aberration on account of very temporary channel specific issues uh leading from the unexpected unanticipated postfestive slowdown. 14:42 14 minutes, 42 seconds uh this impact was mostly uh and the most pronounced actually in the e-commerce channels uh I think that is 14:50 14 minutes, 50 seconds by and large behind us uh in the offline channels and would get behind us in e-commerce by the end of this quarter. 14:59 14 minutes, 59 seconds This quarter therefore will be much more in keeping with the longerterm trajectory of our of our business that we have shown so far. Um we believe that 15:07 15 minutes, 7 seconds with all the plans that we've got in motion our quarter for quarter 4 growth will be ahead of the vit growth that we've delivered which is of 11.1%. 15:18 15 minutes, 18 seconds Um and we believe that going forward u we will move progressively towards the glide path on the glide path towards our 15:27 15 minutes, 27 seconds objective that we outlined which is of 2x revenue and 3xida that'll be a very graded very progressive uh calculation 15:36 15 minutes, 36 seconds of of of our journey but we will move systematically towards that that that journey and that destination. 15:44 15 minutes, 44 seconds Got it that is helpful. Last question from my side on service. You have announced quite you know lot of new initiatives from investor day. Can you 15:52 15 minutes, 52 seconds elaborate more how are the progress happening on that side and when we will possibly see some colors on the revenue because of this initiatives? 16:01 16 minutes, 1 second Uh yes Kesh actually as you as you mentioned both at the investor day and even just now on the call we've we've talked about many initiatives that we rolled out in the service uh network. 16:12 16 minutes, 12 seconds Let me start with the first one uh which is a very focused effort aimed at improving customer experience. Uh we've 16:19 16 minutes, 19 seconds rolled out a set of programs and initiatives comprising both digital interventions and inputs um training 16:28 16 minutes, 28 seconds interventions uh availability improvement for spares um and also revised incentive program 16:36 16 minutes, 36 seconds all of which has helped drive our KPIs significantly higher. Uh we have now the highest ever 24-hour complaint stat 16:44 16 minutes, 44 seconds resolution. Uh we also have a a very high level of complaints met within the within one hour of the complaints being 16:52 16 minutes, 52 seconds being booked or or the time being booked. Uh and that of course is leading particularly to higher NPS. So a bunch of programs that we've done which have 17:00 17 minutes aimed aimed at improving customer experience uh and and that that's playing out and giving us results. Uh 17:08 17 minutes, 8 seconds number two uh as we had talked about in the investor day uh we have rolled out a comprehensive program uh to address the 17:18 17 minutes, 18 seconds non AMC service opportunity. As you're aware our business model for the longest time has been AMCcentric and we were foregoing and not diving into the large 17:26 17 minutes, 26 seconds market uh for filters. uh we've begun we've begun sort of making up we've made a foothold in that in that that segment 17:34 17 minutes, 34 seconds by launching a completely new assortment uh for uh this filters ecosystem we put together a new go to market system we 17:42 17 minutes, 42 seconds rolled out a a market ST engagement program and we also investing in customer education uh highlighting the importance of genuine filters you may 17:50 17 minutes, 50 seconds have seen some of our advertising campaigns in the in the print and digital media um as you can imagine that this behavior change will take time. 17:59 17 minutes, 59 seconds This is a very large market, a well- entrenched behavior and therefore we expect this to start having some impact from quarter two of next year onwards. 18:08 18 minutes, 8 seconds Um the AMC booking growth that that that you that you that we that we've always worked on uh that attempt that that 18:16 18 minutes, 16 seconds journey continues uh we we are driving both a greater share of the multi-year uh AMC mix which allows our customers to 18:24 18 minutes, 24 seconds have longevity on a network and of course increases therefore lifetime value. You're also investing in driving AMC count. Those results you've seen 18:31 18 minutes, 31 seconds already in quarter three and indeed quarter two and that will sustain uh in in quarter four as well. 18:40 18 minutes, 40 seconds Okay. Thank you. Thank you Bishop. 18:45 18 minutes, 45 seconds Thank you. Our next question is from the line of Sedata Vera from Namira. Please go ahead. 18:53 18 minutes, 53 seconds Yeah. Hi sir. Uh thanks for the opportunity. Uh sir first question is uh on the uh gross margins we have you have 19:03 19 minutes, 3 seconds mentioned in water purifier the economy segment has uh grown quite well in the quarter. So uh given the strong 19:10 19 minutes, 10 seconds improvement in rosings have we seen some drag from uh the affordable segment share going up in the portfolio and also 19:19 19 minutes, 19 seconds on the other expense side uh we have seen a strong 20% increase. uh you mentioned that the ad increase has been 19:27 19 minutes, 27 seconds around 23% and AD is about half of the other expense. So uh does that mean that in some of the other elements here also 19:36 19 minutes, 36 seconds we have seen a strong increase in the current quarter? 19:41 19 minutes, 41 seconds Hi Sar this is Gor. So let me start off with the gross margin question. I think the big impact that has played out on gross margin is the COGS program. The 19:50 19 minutes, 50 seconds effect of that is definitely then the economy segment as well. As you can imagine, any cost optimization program 19:58 19 minutes, 58 seconds would actually be looking at the parts of the portfolio which make a lower gross margin egomy segment and hence our efforts were directed more towards it. 20:08 20 minutes, 8 seconds So that is something where the impact has played out in economy segment as well. But having said that our Cox program is is all incompassing looks at 20:17 20 minutes, 17 seconds all cost of goods sold line and not limited to any particular line. I think the the reason why you start seeing an impact more pronounced now is that as 20:25 20 minutes, 25 seconds the year progresses the number of projects that start getting commissioned will increase. You know what you would have in quarter 1 versus quarter 3 you 20:33 20 minutes, 33 seconds know there will be a difference. So that is one impact which plays out. The second which is more specific to this particular quarter is that in this 20:40 20 minutes, 40 seconds quarter given that you know the growth in the e-com channel was on the lower side there is a mixed impact which also played out. So these are the two main 20:48 20 minutes, 48 seconds reasons which are there. uh on the question of other expenses yes uh even the lines other than the ANSP line they 20:57 20 minutes, 57 seconds have shown an increase and that is largely driven by the fact that we have given the headroom that we saw which was coming because of gross margins uh there 21:05 21 minutes, 5 seconds were certain capability projects that we've we've done specifically in the areas of supply chain and IT and that is a cost that has been incurred as far as 21:14 21 minutes, 14 seconds other expenses is concerned but just to just to reiterate it's not that these infrastructural costs that are getting added. These are capability building cost with a with a finite time horizon. 21:26 21 minutes, 26 seconds Got it sir. Thanks a lot. I'll come back in. 21:31 21 minutes, 31 seconds Thank you. Our next question comes from the line of Reo Bid from IFL Capital. Please go ahead. 21:38 21 minutes, 38 seconds Yeah. Hi team. Um firstly can you help us understand while you did mention the channel inventory is coming off and getting normalized. Uh just for 21:47 21 minutes, 47 seconds understanding how elevated was the channel inventory at the end of December quarter if you can quantify versus normalize inventory and um do you think 21:56 21 minutes, 56 seconds this will have a meaningful impact on your foreq 22:06 22 minutes, 6 seconds uh hiu thank you for the questions um as I mentioned in my uh in my earlier remarks and in the opening comments um 22:15 22 minutes, 15 seconds we had uh built up a certain inventory at the end of quarter two in anticipation of a certain momentum and 22:23 22 minutes, 23 seconds offtake in quarter three and a certain sellout growth in Q3 that did not transpire and hence we were uh we were carrying excess inventory through the 22:32 22 minutes, 32 seconds quarter which we are now unwinding u I think by the end of this quarter we would have normalized inventory across all channels uh already in offline 22:40 22 minutes, 40 seconds channels uh it is in the control uh and evidence of the fact that the quarter has begun Uh so I think that's on the inventory 22:48 22 minutes, 48 seconds part. Um on your quarter point question about quarter 4 as I said earlier quarter 3 clearly is a one-off and we 22:56 22 minutes, 56 seconds expect quarter 4 to return to a a trajectory of double digit growth. 23:00 23 minutes Indeed we expect Q4 growth to be ahead of our YTD growth number. 23:04 23 minutes, 4 seconds Sure. But any quantifiable numbers on how elevated the channel inventory was versus normalized trend in terms of 23:13 23 minutes, 13 seconds yeah it would be hard to quantify given the fact that uh you know our our our stock covers are are defined by the 23:21 23 minutes, 21 seconds expected secondary stories. It would be misleading given the site that was festive in Q2 part of Q3 and more festive going forward. But our inventory 23:29 23 minutes, 29 seconds levels have corrected compared to compared to both quarter two and quarter three. 23:34 23 minutes, 34 seconds Got it. And just a bookkeeping for Gorab um can you share with us what has been the YTD growth in um our key segments of 23:42 23 minutes, 42 seconds air purifiers, water purifiers um services and also on at the YTD level what is um adisement and sales promotion as a percentage of revenue. Thank you. 23:54 23 minutes, 54 seconds Understood. So you know we give out we give out the mental growth number only once a year. So you know that is when 24:01 24 minutes, 1 second post the quarter 4 results is when we would be sharing it. But if I were to give some color on you know some of the key key categories service you heard us 24:11 24 minutes, 11 seconds speak of having grown in bookings all through the year uh you know in mid to high team. So that is the number that 24:18 24 minutes, 18 seconds you can keep in mind. uh as far as robotic is concerned that has continued to be in a very strong growth trajectory. It is now already nearly 24:26 24 minutes, 26 seconds twothirds of our vacuum cleaner portfolio. So that is something which which continues and I think air is one category which I think water 3 in 24:33 24 minutes, 33 seconds particular was very good where it grew 3x albeit on a on a lower base. So big picture is you know that uh you know we 24:42 24 minutes, 42 seconds very clearly transitioned away from being a business which was dependent just on service and water purifier to having far many more growth levers but 24:50 24 minutes, 50 seconds we would be sharing these numbers as part of the annual annual numbers. 24:56 24 minutes, 56 seconds Got it. Got it. Thank you and best wishes to you. Thank you. Thank you. 25:03 25 minutes, 3 seconds Our next question comes from the line of Umang Ma from Kodak Securities. Please go ahead. 25:09 25 minutes, 9 seconds Hi uh thanks for the opportunity. Uh Patik we've historically maintained that water purifiers because of low penetration has generally been uh you 25:18 25 minutes, 18 seconds know in a way not impacted by the consumption slowdown. any assessment as to what happened exactly on the 25:24 25 minutes, 24 seconds e-commerce channel quarter and just a link to a question linked to it was have we seen any impact from the two new 25:32 25 minutes, 32 seconds players uh which are kind of u you know showing aggression in this category 25:43 25 minutes, 43 seconds let me answer your second question first um uh I think like I said in my opening remarks 25:52 25 minutes, 52 seconds We have gained market share in the world segment both sequentially and year on year. Uh this market share again has come across channels online and offline. 26:03 26 minutes, 3 seconds Uh so as the strongest brand in this category the impact of the new uh brands that have launched over the last 12 18 26:11 26 minutes, 11 seconds months uh hasn't been felt by us as much as it has been felt by the smaller brands. So the answer to that question is no. I think our share continues to be 26:20 26 minutes, 20 seconds strong and indeed we gain share on the first part of the on your first question. Actually let me let me just reframe the discussion on on water a 26:28 26 minutes, 28 seconds little bit. Um I think the first point is the water purifiers segment grew double digits in the first half of the year. 26:39 26 minutes, 39 seconds Uh in the quarter three that we that we just talked about and that has just gone by. If I take out e-commerce, outside of 26:47 26 minutes, 47 seconds e-commerce, the water purifier segment had a strong sellout growth in double digits. 26:53 26 minutes, 53 seconds Uh in e-commerce, we had a challenge stemming from what I said earlier, which is that there was a clear slowdown 27:01 27 minutes, 1 second uh in uptakes postfested and a very clear slowdown in traffic on a particular platform. 27:10 27 minutes, 10 seconds Uh so while uh of the two big platforms one did well for us including in water the other platform saw a very clear slowdown in traffic and which reflected 27:18 27 minutes, 18 seconds in in the largest category that we have which is a water purifiers. 27:22 27 minutes, 22 seconds Uh that said again zooming out a little bit u the reality is that uh the relevance of this category has 27:31 27 minutes, 31 seconds never been most more more more more acute and more strongly felt and we believe that with growing awareness and 27:39 27 minutes, 39 seconds growing realization about the need for this category this will category will see sustained tailwinds uh and it will keep growing uh in the future. 27:50 27 minutes, 50 seconds Got it. Uh thanks for that. Uh the second question was for Goro. Uh Goro, you mentioned that the gross margin expansion had two elements to it. One 27:58 27 minutes, 58 seconds was the ecom mix going down and the other one was your uh internal initiative. So for the next three quarters till these actions anniversary, 28:07 28 minutes, 7 seconds how much tailwind should be uh in terms of y gross margin expansion? 28:14 28 minutes, 14 seconds I think uh there are two parts to this uh um I think first what our gross margins tell us is that 28:23 28 minutes, 23 seconds you know contrary to what has often been asked that you know if we expand into if we drive penetration as a strategy if we 28:30 28 minutes, 30 seconds grow uh categories beyond water purifier you know if the product business is growing faster than service does it mean 28:38 28 minutes, 38 seconds that gross margins will decline I think uh stepping back and taking a four-year view is telling us that that is not going to be the case. So I think that's 28:47 28 minutes, 47 seconds that's principle number one and given the capabilities we've built we're confident of you know keeping our gross margins within a particular band. Now coming to what do we expect going ahead. 28:58 28 minutes, 58 seconds See from our perspective we will keep pushing the envelope as far as COGS is concerned and from there now whether we 29:06 29 minutes, 6 seconds choose to deploy it for a growth investment whether we choose to deploy it for you know any pricing action which itself would impact gross margin or 29:14 29 minutes, 14 seconds whether we choose to you know let it flow into a bida as we've done in this quarter that's going to be a that's going to be a tactical choice. uh our 29:23 29 minutes, 23 seconds guiding principle in this transformation has been very consistent that we will be optimizing at an eida margin level. I think in this particular quarter we saw 29:31 29 minutes, 31 seconds the window where we felt our gross margins were going to be good and hence we you know stepped up investments wherever we felt it was required but 29:40 29 minutes, 40 seconds stepping back I think what can be what can be assumed is that we will keep our gross margins at a rangebound level. We 29:47 29 minutes, 47 seconds do not expect to keep our gross margins at a level of 61% that you would have seen in this quarter. But you've seen our trajectory over the last four years 29:55 29 minutes, 55 seconds and we intend to keep it rangebound at those levels through multiple levers and keep aiming for an AIDA margin improvement. 30:04 30 minutes, 4 seconds Got it. Very clear. Thank you so much and all the best guys. Thank you. 30:10 30 minutes, 10 seconds Thank you. Our next question is from the line of Anerod Jooshi from ICICI Securities. Please go ahead. 30:17 30 minutes, 17 seconds Yeah. Uh thanks for the opportunity. Uh so we have seen various instances like indoor water contamination or north 30:25 30 minutes, 25 seconds India uh very heavy uh air pollution even in cities like Mumbai, Pune. So there is a uh sharp increase in the TAM 30:34 30 minutes, 34 seconds and generally um a natural increase in TAM also attracts lot of competitive 30:42 30 minutes, 42 seconds um activity also. So uh do you see a market leader like uh Eureka should focus uh uh very aggressively on driving 30:51 30 minutes, 51 seconds growth because there is a natural growth uh available right now in the market. So what will be our strategy considering 30:58 30 minutes, 58 seconds the conditions are extremely favorable for growing uh most of the categories? 31:03 31 minutes, 3 seconds That is uh question number one. And question number two is uh with almost 23% increase in ad spend u is uh Ureka 31:13 31 minutes, 13 seconds having a highest share of voice among uh all the peers in almost most of the products. Yeah. Thanks. 31:22 31 minutes, 22 seconds Uh thank you Anir. Um I think like a lot of people across the country uh as Indian citizens we were 31:32 31 minutes, 32 seconds also heartbroken and uh you know we were concerned uh to see the news coming out of Indor and the other cities. Um I 31:42 31 minutes, 42 seconds think the problem of impure water is one which can be solved only by using point of point of use water water purification 31:50 31 minutes, 50 seconds systems. Um and um as awareness of that grows like you rightly said this 31:57 31 minutes, 57 seconds category will grow in penetration and growation across town classes not just in the large towns 32:04 32 minutes, 4 seconds um that may indeed in turn attract more competition but as India's largest and strongest brand and the brand with the 32:12 32 minutes, 12 seconds largest service network uh with a proven track record of delivering innovations uh with a very very comprehensive 32:21 32 minutes, 21 seconds an omni channel go to market. We have the strongest right to win in this segment. You can be sure that we will 32:29 32 minutes, 29 seconds remain focused on driving two things. Uh first of all a maniacal focus on growing the category 32:39 32 minutes, 39 seconds by addressing all the barriers uh that hold back category penetration. A case in point being our advertising campaign 32:47 32 minutes, 47 seconds that we've done over the last couple of years with our economy segment and more recently with our nanopore filter 32:54 32 minutes, 54 seconds campaign uh to address the category barriers and to create the need. So that's number one. Number two, we will 33:02 33 minutes, 2 seconds invest in driving differentiated innovations across price points given the low penetration levels of the category. Category entrance come in at all price point not just economy level. 33:12 33 minutes, 12 seconds So it's important for us to keep innovating and attracting customers across the price ladder. Again, an example being a Blaze Insta Hot product 33:20 33 minutes, 20 seconds which got almost 70% new customers in in into the SKU. That's number two. Number three, we will invest in creating 33:30 33 minutes, 30 seconds awareness as you've seen us do and and that's your second question as well in creating awareness both in terms of uh 33:37 33 minutes, 37 seconds using advertising and also point of sale visibility. Um I think the one thing is absolutely clear that even as we grow 33:46 33 minutes, 46 seconds this category we will defend our market share indeed we will grow our market share with absolute aggression. We will 33:54 33 minutes, 54 seconds not let our guard down. We will not give any quarter. Um the category growth and the category will grow has to work to us 34:03 34 minutes, 3 seconds more rightfully given our sheer brand strength. Uh so that's number one. Uh going back to your second question uh of 34:13 34 minutes, 13 seconds uh ad ad spense um our our our increase in advertising has been across all categories. I spoke about our investments in in growing awareness on 34:21 34 minutes, 21 seconds the back of the filter campaign. We also invested behind uh robotics and growing the category. You've seen a shard kapoor campaign over the year. More recently in 34:30 34 minutes, 30 seconds the last quarter we've also invested in in creating awareness about air purifiers. And truth be told, this for the first time the last three four years 34:38 34 minutes, 38 seconds that we've actually meaningfully scaled up and participated in an air purifier portfolio. So with all of these investments, you know, we have we have we have seen our PNP spend grow by 23%. 34:49 34 minutes, 49 seconds Uh to your question, yes, we had the highest share of voice um in water purifiers. 34:56 34 minutes, 56 seconds Um we also had the highest share of voice as you can imagine in in cleaning given the lack of you know spends by the 35:03 35 minutes, 3 seconds other players uh as also in air purifiers albeit in in a very small category and a category with low media 35:10 35 minutes, 10 seconds spends. Um finally I want to conclude by saying that as the category grows as we start seeing tailwind as more 35:17 35 minutes, 17 seconds competition comes in is actually very very good for the category. More competition will create more awareness and it will drive category growth further. And like I said earlier as the 35:26 35 minutes, 26 seconds strongest brand we have the the most right to win and to appropriate a larger share of this growing market. 35:35 35 minutes, 35 seconds Yeah sure sir this is very helpful. Just last question, we have also seen a trend that there is a u filter being installed at the uh housing society level itself. 35:48 35 minutes, 48 seconds So uh the lot of consumers may not go for buying a separate water purifier in their homes but at the same time it 35:55 35 minutes, 55 seconds creates a opportunity for a bulk uh water purifier kind of a market like the way there is a room air conditioner 36:03 36 minutes, 3 seconds versus a large project air conditioner HVAC kind of a market also. So will uh 36:09 36 minutes, 9 seconds that be an opportunity for Eureka? Uh it will not be a consumer product asset but like a largely a consumercentric product 36:16 36 minutes, 16 seconds as such. group uh will ura also uh look at that segment as it becomes uh more popular. Yeah, that's it from my side. 36:24 36 minutes, 24 seconds Uh many thanks. 36:27 36 minutes, 27 seconds So just to your question uh I think we u as as folks as an aquagard aquagard 36:35 36 minutes, 35 seconds brand we are in the business of ensuring that our consumers and our customers get pure drinking water and safe drinking water and which keeps them healthy, keeps them safe. 36:45 36 minutes, 45 seconds uh any way customers want that pure water, we'll be there to participate in that to in in that opportunity. Uh even 36:53 36 minutes, 53 seconds as we speak, we have a part of our business which addresses the B2B water purifier segment. Uh and that can be easily repurposed to address 37:02 37 minutes, 2 seconds opportunities of the kind that you've mentioned. We are in the business of pure water and we will provide the pure water and save water to customers whichever form and shape they choose to have it. 37:15 37 minutes, 15 seconds Okay, sure sir. Uh many thanks very helpful. Thank you. 37:22 37 minutes, 22 seconds Thank you. Our next question is from the line of Priyank Gopawat from Hornville Capital. Please go ahead. 37:29 37 minutes, 29 seconds Hi. Am I audible? You are audible sir. You may proceed. Hi. Uh just one question from my side. 37:37 37 minutes, 37 seconds Uh so could you just throw some light on how we should you know look at connecting service charges or looking at it as a leading indicator for service 37:45 37 minutes, 45 seconds bookings growth because for the last quarters what we have seen is the service charges have grown double digits and this is what the commentary has also 37:54 37 minutes, 54 seconds been on the service bookings growth but this quarter the service charges growth is around 9%. Whereas uh you had mentioned that the service bookings had 38:02 38 minutes, 2 seconds grown by double digits. So could you please throw some light on that? 38:07 38 minutes, 7 seconds Uh hi Pri. Uh so I think there are two lead indicators that one can look at uh you know uh and both of them I must call 38:14 38 minutes, 14 seconds out would not be that would not be the perfect lead indicator. So one surrogate is service charge as you mentioned you 38:21 38 minutes, 21 seconds know it has grown roughly 9%. Uh service charge has two components. There is one part which is linked to revenue because 38:28 38 minutes, 28 seconds there is basis revenue that is generated there's a certain percentage that is paid out. Equally there is a part which is not linked to revenue. So for 38:37 38 minutes, 37 seconds whatever installations are being done, whatever visits are being done, whatever mandatory visits are being done, those are independent of revenue. And hence it 38:45 38 minutes, 45 seconds is that part which causes a bit of a disconnect and and a perfect correlation with revenue. Equally uh from our perspective one very important work 38:54 38 minutes, 54 seconds stream that we continuously work on is trying to address leakages that may come up because as you can imagine you know there could always be opportunities for 39:03 39 minutes, 3 seconds for a technician to kind of you know do some kind of leakage etc. So that's one part of you know which a service charge which you can draw a bit of correlation 39:11 39 minutes, 11 seconds but not a not a perfect correlation. The other number to look at is the deferred income liability which comes on the balance sheet. That is something which 39:19 39 minutes, 19 seconds you know also gives an indication of the service service business growth. Uh and that will again help you. Having said 39:27 39 minutes, 27 seconds that given that we are you know equally looking at tapping the filter sale opportunity uh what it will also mean is 39:36 39 minutes, 36 seconds that you know there will be a cohort of customers who may actually opt for a filter. Yeah. And that is something which will be like a normal product 39:43 39 minutes, 43 seconds sale. So that is something which will not even reflect on the balance sheet as well. That would be a that would be a normal product sale based accounting 39:51 39 minutes, 51 seconds that would happen. So it's going to be a blend of these three things. But unfortunately it's a line where a perfect correlation may not be possible. 39:59 39 minutes, 59 seconds But I think importantly from our perspective you know uh the trajectory that we've seen in our business that is something which has sustained and the 40:06 40 minutes, 6 seconds line of sight that we have is that we expect this momentum to continue and with now the entire filter portfolio 40:14 40 minutes, 14 seconds coming across that provides a strong foundation for this business to grow. Perfect. Understood. Thank you so much. 40:21 40 minutes, 21 seconds Just one more question. So could you also uh just brief me as to how you account for cost for this particular 40:29 40 minutes, 29 seconds line of business and how the revenue is recognized? 40:33 40 minutes, 33 seconds Sure. And I'll I'll explain this by an example so that it's you know it's it's more relatable. So let assume for a 40:40 40 minutes, 40 seconds moment that the price of an AMC is let's say 1200 rupees and it is a one-year AMC and let's say the the cost for that is X for acquiring that AMC. 40:51 40 minutes, 51 seconds the entire cost gets recorded as a service charge at the time of sale. So in a quarter you will 40:59 40 minutes, 59 seconds see the entire cost getting recorded up front. However, since the AMC is for a 12 month period, the revenue recognition 41:07 41 minutes, 7 seconds that happens is 1 by 12 every month. So in a quarter there will be 300 rupees recorded as revenue. There will be 900 41:16 41 minutes, 16 seconds rupees which will be recorded as a deferred liability on the balance sheet. 41:20 41 minutes, 20 seconds But the entire cost related to getting a 1200 rupees AMC is sitting within that quarter. 41:28 41 minutes, 28 seconds Understood. And by the entire cost, do you also include the cost that you would be paying out your technicians? 41:36 41 minutes, 36 seconds Yes, it does. The entire cost of acquisition of getting an AMC customer is sitting here. 41:42 41 minutes, 42 seconds Understood. Thank you so much. That is super helpful. Thank you. 41:48 41 minutes, 48 seconds The next question is from the line of Parikhit Kabra from PKday Advisors LLP. Please go ahead. 41:55 41 minutes, 55 seconds Hi, thank you for the opportunity. Uh I just wanted to try and triangulate uh the growth numbers that we are talking 42:03 42 minutes, 3 seconds about. Right. So uh Pratik has said earlier in the call that we in Q4 our growth numbers should definitely be higher than what the YTD numbers were. 42:11 42 minutes, 11 seconds So even if I pull a ballpark number of 12 13% on that you know just for the sake of calculation and compute my annual revenue for this year will be 42:20 42 minutes, 20 seconds around 2700 odd crores which will overall from last year give me a growth of about 12%. 42:26 42 minutes, 26 seconds uh and let's take 13% also FI25 your growth was about 11 and a half% and at that time you were not doing as much ad 42:33 42 minutes, 33 seconds spend and also you had services that was you know holding you back now services also okay it's not fully come in double 42:40 42 minutes, 40 seconds digit but at least you'll be getting mid uh mid singledigit growth at least so all in all wouldn't this imply that our 42:47 42 minutes, 47 seconds product sales and particularly our water purifier product sales growth rate has decreased in FI26 compared to FI25 All right. 42:57 42 minutes, 57 seconds So, Parish, thank you so much for for for the question and for doing the math. 43:02 43 minutes, 2 seconds Um, I think u like I said earlier, water 3 was an apparition was a one-off and we expect water growth, water four growth 43:11 43 minutes, 11 seconds to be ahead of the YTD growth. Uh, and like like you also underlined uh within that um the product growth will also 43:19 43 minutes, 19 seconds obviously be ahead and will grow double digits. uh your specific question on how our growths have trended over the last uh since the last year. I think let let 43:28 43 minutes, 28 seconds me let me uh zoom out and talk about it in two different parts. The growth that we have in our emerging category whether 43:36 43 minutes, 36 seconds it's robotics or softener or indeed now air purifiers that growth has either remained at the same level or in fact 43:43 43 minutes, 43 seconds actually gone up. uh we see those those those green shoots being out next year as well and the momentum sustaining as 43:51 43 minutes, 51 seconds in yesterday if you recall we had talked about robotics being a thousand growth category by FI30 that momentum continues 43:59 43 minutes, 59 seconds uh coming to water purifiers um as I said in response to an earlier question our growth in water purifiers in the 44:06 44 minutes, 6 seconds first half was double digits our growth in quarter three if I take out the impact of e-commerce our sellout growth in water purifiers in quarter 3 was 44:15 44 minutes, 15 seconds double digits. We expect that to to sort of sustain going forward in quarter 4 as well. Um so uh so that's so that that's 44:23 44 minutes, 23 seconds the picture on quarter on water qualifiers for this year. That said compared to last year directionally the 44:30 44 minutes, 30 seconds momentum of the category has indeed slowed down a little bit but remained at the double digit level. uh going forward for reasons that we discussed earlier on 44:38 44 minutes, 38 seconds the call, the very clear heightened sense of need, felt need, the growing instances of water contamination, 44:46 44 minutes, 46 seconds uh the poor quality of groundwater in India and indeed the contamination in transit. We believe that this category 44:54 44 minutes, 54 seconds will see sustained uh tailwind and penetration growth for the next many many years. 45:00 45 minutes So correct, just a follow up on that. I I appreciate the overall uh long-term story about water purify category. I think that makes sense. But what would 45:08 45 minutes, 8 seconds you attribute the lack the slowdown in the growth momentum for such an underped penetrated category? Right? because uh yes there is a one-off quarter but I 45:17 45 minutes, 17 seconds don't want to focus on it because honestly it's a one-off quarter and it's one channel in fact it's one platform if if you know I'm just trying to understand how can the overall directly 45:25 45 minutes, 25 seconds the momentum come down when we are making as much invest asment as investment as we are uh at an overall year level 45:35 45 minutes, 35 seconds and that's a that's a that's a good question and a fair observation and you're right absolutely we should not concatenate the longerterm potential of 45:42 45 minutes, 42 seconds this category uh with performance of in one platform in one quarter and that was exactly the attempt. Uh I think the 45:49 45 minutes, 49 seconds reality also equally however is that uh the performance that we deliver has to be seen in the context of the broader 45:56 45 minutes, 56 seconds macro environment and the consumer sentiment uh and as the largest legacy category that we have this category is 46:04 46 minutes, 4 seconds also subject to the same variables as any other large category. The emerging categories because they are small, because they are nent, because they have 46:13 46 minutes, 13 seconds a very very long runway to grow, uh they see less of those drags and those headwinds. But as a category that was that that was ongoing a very large 46:22 46 minutes, 22 seconds category, the water category did see some headwinds on account of consumer sentiment. As that as that drag goes away and as the like I said the failures 46:30 46 minutes, 30 seconds and the need grows and awareness grows, this category will return to strong momentum that it had last year. 46:37 46 minutes, 37 seconds Got it. All right, great. And just one last question is on the e-commerce uh model that you have with this particular platform. Uh is it that you guys are you 46:46 46 minutes, 46 seconds know you guys are selling over the inventory to them and then they sell it further? Is it not that you're it's not a drop shipment model? 46:54 46 minutes, 54 seconds No, it is a it is a model where we sell the inventory to them and we partner with them on the on the sellout plan. So 47:01 47 minutes, 1 second typically the way it works and that that works with with most of the large chains is that there are joint business plans that are made. They have an assessment 47:09 47 minutes, 9 seconds of what what they are seeing of the market. We have an assessment of what interventions we are planning. So it is basis that assessment that you know 47:17 47 minutes, 17 seconds joint plans are made out and that's how it's it's done. So it is a sale from us to them which is there and obviously then there are there are linked plans on 47:25 47 minutes, 25 seconds sellout etc. And I think that's the part that you know we mentioned earlier in our in our comments that there was a 47:32 47 minutes, 32 seconds certain expectation and a plan on both sides that we would achieve a particular sellout growth and that did not pan out 47:40 47 minutes, 40 seconds as per expectation and that is the overhang that came across. Great. Okay. Thanks. Thank you Pratik. Thank you very much. 47:48 47 minutes, 48 seconds Thank you. 47:50 47 minutes, 50 seconds The next question is from the line of Mr. Achel Lohade from Noama Institutional Equities. Please go ahead. 47:57 47 minutes, 57 seconds [clears throat] 47:57 47 minutes, 57 seconds Yeah. Uh good afternoon team. Uh thank you for the opportunity. Sorry I'm hopping on the same uh line of questioning. Uh I'm just curious to know 48:05 48 minutes, 5 seconds you know uh in 2Q uh we had a fair amount of growth and we did uh highlight that uh you know the ecom had done very 48:13 48 minutes, 13 seconds well. Uh so is it fair to combine 2Q and CQ and look at the growth? uh is that a 48:20 48 minutes, 20 seconds fair way of looking at growth uh for for uh for the e-com business? Uh and uh B 48:27 48 minutes, 27 seconds uh specifically you you called out that it's a probably a problem with one particular platform. Is there what is 48:34 48 minutes, 34 seconds the challenge? Is that uh the challenge in terms of execution in challenge in terms of any differences of opinion uh 48:41 48 minutes, 41 seconds on how to grow this uh together? If you could clarify a little bit on the same. 48:47 48 minutes, 47 seconds Uh yes Ael thank you so much for the questions. Uh on your first question um absolutely our our our plans uh in 48:57 48 minutes, 57 seconds e-commerce uh across both quarter and quarter quarter two and quarter three were built on assumption of a certain level of uh tertiary sellout and certain 49:06 49 minutes, 6 seconds category growth. While that played up to script played on script up to quarter two post festive in Q3 especially we saw 49:13 49 minutes, 13 seconds deceleration uh and that led to therefore pressure on stocks and in turn pressure on our uh 49:19 49 minutes, 19 seconds sellins into the platform. Um so therefore if you were to look at a more accurate depiction of of a performance 49:27 49 minutes, 27 seconds in the last 6 months combining Q2 and Q3 I think would give you a far more accurate picture. U so I would agree with you on that. 49:37 49 minutes, 37 seconds uh on your question about the issue with the platform and was there a difference? 49:41 49 minutes, 41 seconds No. No, absolutely not. Uh there is uh you know both the platforms uh and the platform teams and our teams were completely aligned on the need to grow 49:50 49 minutes, 50 seconds the categories, the need to grow the business, the need for us to grow share from our point of view. Uh however, what the platform saw was a deceleration in 49:58 49 minutes, 58 seconds traffic. Um and that in turn reflected directly on uh lower tertiaries and lower sellouts. It was it was more of a 50:07 50 minutes, 7 seconds platform issue uh than an issue between us and the platform. 50:13 50 minutes, 13 seconds And did you see a shade of that even on the other platform and other ecom uh uh you know uh sections or not really? It was just one platform. 50:24 50 minutes, 24 seconds uh on the contrary agile u our our the other platform e-commerce did exceedingly well for us delivering strong growth across all categories 50:33 50 minutes, 33 seconds including in water um so it was the problem was confined therefore to just that one platform 50:40 50 minutes, 40 seconds and has that problem been identified and course corrected are you seeing that revival in 4Q or you know there is another way of managing for at the 50:48 50 minutes, 48 seconds company level for us I think the problem has certainly been identified it's been discussed with the platform another partner they also are 50:56 50 minutes, 56 seconds aware of the issue. Uh we are working them jointly in driving out driving up tertiary sales uh and ensuring that we have stronger sellouts in the quarter. 51:06 51 minutes, 6 seconds uh and that impact will start being felt progressively through the quarter as we said earlier Ajan by the end of 51:13 51 minutes, 13 seconds this quarter we expect even the e-commerce inventory levels to normalize right uh just last question if I may uh 51:22 51 minutes, 22 seconds um you know probably I missed out in the beginning in terms of the guidance the medium and long-term guidance what you 51:29 51 minutes, 29 seconds had uh called out that stays as is or is there any change to A that longerterm guidance stays 51:38 51 minutes, 38 seconds absolutely unchanged. Uh we have uh notwithstanding the quarter that just gone by with complete conviction. Um and 51:47 51 minutes, 47 seconds uh we believe that uh we are well on track to deliver to the ambition that we've outlined which is of 2x the 51:54 51 minutes, 54 seconds revenue and 3x of the epida. Um our categories have never been more salient. 52:01 52 minutes, 1 second the need has never been felt more acutely. Uh and keeping aside Q3 as a one-off aberration, um we believe that 52:10 52 minutes, 10 seconds we are well on track to realize that ambition. 52:14 52 minutes, 14 seconds Got it. Uh I have more questions but I'll call back in the queue. Thank you so much. Thank you. 52:21 52 minutes, 21 seconds Thank you. Our next question is from the line of Prates from Lucky Investments. Please go ahead. 52:28 52 minutes, 28 seconds My questions are answered. Thank you. 52:32 52 minutes, 32 seconds Thank you. Our next question comes from the line of Deepak Kumar from Kalyani Family Office. Please go ahead. 52:40 52 minutes, 40 seconds Okay, you are audible. You may proceed. 52:46 52 minutes, 46 seconds Yeah. So, uh just I wanted to know I uh see uh okay on growth momentum the management gave it uh you know what's 52:54 52 minutes, 54 seconds the problem and what they are working on. I just wanted to know more about you know uh the see with as our business grows the cash balance is also growing 53:02 53 minutes, 2 seconds in our books. So do we plan to any you know look for any organic growth opportunities or or how do we plan to deploy that uh you know use that excess 53:10 53 minutes, 10 seconds cash balance which we are building on our books. 53:17 53 minutes, 17 seconds Thanks Deepuk. So I think there are there are multiple areas in which the cash can be deployed. So one is you know looking at growth opportunities that 53:25 53 minutes, 25 seconds could be a strong preference uh where we keep investing the cash for now that could be in the form of organic growth investments or inorganic. So just to 53:34 53 minutes, 34 seconds give a sense our our YTD capex this year is running close to 60 cr rupees and you know we've given we've given out a 53:41 53 minutes, 41 seconds guidance that we intend to keep our capex in the range of 60 to 70 crores. 53:45 53 minutes, 45 seconds So I think that's one area where the cash deployment is is happening and will happen in organic is an ongoing process 53:52 53 minutes, 52 seconds as you can imagine. We keep looking at opportunities that may be there. Having said that the the important guardrail is 53:59 53 minutes, 59 seconds to make sure that you know whatever we look at uh has to make business sense. 54:04 54 minutes, 4 seconds There have to be synergies. There have to be complimentarities. It has to be a creative uh value creating etc. So those 54:10 54 minutes, 10 seconds guardrails are are there in place to make sure that we we come to a we come to the right decision but at a big picture our first preference will always 54:20 54 minutes, 20 seconds be to use that cash for growth. Having said that equally you know with the with the cash balance we are also looking at 54:28 54 minutes, 28 seconds areas and that will all be subject to you know a board approval whether there is some way to reward the shareholders. 54:34 54 minutes, 34 seconds So all those all those options are ongoing uh you know uh ongoing items of discussion but our our strong and 54:42 54 minutes, 42 seconds disproportionate focus and bias would be towards investing uh the the cash for growth. If I can 54:50 54 minutes, 50 seconds just add to that Deep um absolutely agree with uh with what Korov just said. 54:56 54 minutes, 56 seconds Um with our increasing cash balance um we are very open to looking at any 55:04 55 minutes, 4 seconds inorganic growth opportunities that might come away as you can imagine they are uh hard to come by uh and not easy. 55:12 55 minutes, 12 seconds But our our our our intent is to use this growing cash uh uh that we have to invest in growing the business and specifically through inorganic possible. 55:24 55 minutes, 24 seconds Sure. Sure. Thank you. That helps. 55:28 55 minutes, 28 seconds Thank you. Our next question comes from the line of Mayor Paria from Wealth Managers India Private Limited. Please go ahead. 55:38 55 minutes, 38 seconds Uh good afternoon and thank you for taking my questions. Um actually I just wanted to understand one thing in the 55:46 55 minutes, 46 seconds past this is slightly qualitative uh question uh understanding here 55:54 55 minutes, 54 seconds you will get to sorry to interrupt mayor but your line is not very clear may I request you to please ask your question again your line 56:01 56 minutes, 1 second is not very clear now is it okay 56:08 56 minutes, 8 seconds it uh seems better sir please go ahead yeah Yeah. So in the past we have alluded to uh some of the uh you know 56:17 56 minutes, 17 seconds [clears throat] 56:17 56 minutes, 17 seconds uh initiatives we have taken to bring down the effective cost of ownership uh over the life cycle for the water 56:26 56 minutes, 26 seconds purifier segment from a customer standpoint. Uh whether it is with respect to two-year filters, whether it is the AMC cost uh you know the 56:35 56 minutes, 35 seconds effectiveness and some of the other uh initiatives. uh I had uh what I wanted to understand is will it be possible for 56:43 56 minutes, 43 seconds you to give us an understanding on the if you index the effective cost of ownership uh let's say what was it four 56:49 56 minutes, 49 seconds years back uh and uh has it come down from let's say 100 to 80 70 90 uh 56:57 56 minutes, 57 seconds something like that just to understand the impact of all the uh initiatives which we have taken um from a customer 57:05 57 minutes, 5 seconds standpoint that is just on the past what initiatives and uh similar question from the future perspectives. Do you believe 57:14 57 minutes, 14 seconds that in your growth strategy going forward to FI30 uh and uh the aggressive uh um market 57:22 57 minutes, 22 seconds share retention as well as the growth outlook and the underpenetration of the how much of it is continuously built on 57:30 57 minutes, 30 seconds the fact that we will have to continuously reduce the effective cost of ownership uh going ahead and by what percentage do we target that if at all? 57:39 57 minutes, 39 seconds Uh is the question very complicated or am I not clear? just trying to No no no May you're very clear it's a very good question and thank you for 57:47 57 minutes, 47 seconds asking it you're absolutely right uh reducing the cost of ownership has been a very clear strategic area of focus for 57:54 57 minutes, 54 seconds us um u our category has very low penetration as you're aware and uh one 58:02 58 minutes, 2 seconds of the barriers that that that that people voiced was the high cost of both entry and the cost of sustainance and the cost of ownership uh so we've taken 58:11 58 minutes, 11 seconds over the last few There's multiple measures to reduce and bring down uh the the barriers and lower the cost of entry and the cost of ownership starting with 58:19 58 minutes, 19 seconds the launch of economy products um atard shore and then more and then followed by the launch of a lower price AMC and more 58:29 58 minutes, 29 seconds recently last year uh the launch of a two years filter water qualifier and that range is now goes across price points with all of these initiatives uh 58:38 58 minutes, 38 seconds the cost of staying in the category the cost of ownership over a 5year period has dropped between 40 to 50% for customers. So it is a 58:47 58 minutes, 47 seconds meaningful drop and we believe that this in turn as awareness of this grows u it will help drive adoption and category penetration. 58:56 58 minutes, 56 seconds Uh your second question about our F530 ambition and will that mean that we keep dropping the cost of ownership and let 59:05 59 minutes, 5 seconds me separate the two. I mean uh our our ambition of growing the water purifier business business business remains uh you know it remains very important and 59:14 59 minutes, 14 seconds one of the top priorities for us. That growth will come on account of two things driving penetration and driving premiumization. 59:22 59 minutes, 22 seconds Uh penetration increase will happen both by reducing the cost of ownership but also even more importantly by by by creating an awareness about the the 59:31 59 minutes, 31 seconds dangers and the hazards of drinking untreated impure water. um by driving uh relevant innovations by driving uh 59:39 59 minutes, 39 seconds distribution and access and of course driving our service network higher. So all of these together will help us drive growth um and drive profitable growth 59:48 59 minutes, 48 seconds and bring us bring us closer to our ambition of FI30. 59:54 59 minutes, 54 seconds So sir you are not uh again because uh 40 50% in the past has been a meaningful 1:00:00 1 hour drop. Will it be fair to say that uh from a overall perspective we have come to the maturity of effective cost of 1:00:08 1 hour, 8 seconds ownership or that is scope or to reduce this meaningfully further in order to improve the pen one is the macro trend we understand the penetration the lower 1:00:17 1 hour, 17 seconds quality of water and everything else but what is internal to us is our strategy to bring down the effective and it may be a little bit marketdriven but do you 1:00:26 1 hour, 26 seconds believe that if you have to still index from today it can it has a scope to meaningfully come down further Yeah. So, we have multiple levers open 1:00:34 1 hour, 34 seconds to us to drive category growth and to drive water purifier growth. Uh driving affordability is one of them. Um uh 1:00:42 1 hour, 42 seconds driving awareness is the other. Driving innovations is the other. Uh as you can imagine there are multiple consumer segments and one size will never fit 1:00:51 1 hour, 51 seconds all. So we have multiple levers available to us to grow the water purify category. uh both by driving new credit 1:00:58 1 hour, 58 seconds card adoption but also equally by driving faster replacement and faster gradation. 1:01:07 1 hour, 1 minute, 7 seconds Thank you ladies and gentlemen. We will take that as our last question for today. I would now like to hand the conference over to the management for closing comments. Over to you gentlemen. 1:01:18 1 hour, 1 minute, 18 seconds Um thank you. Thank you everyone for your time today and for joining the call. We hope you were able to address your questions adequately. Please do reach out to us and investor relations 1:01:27 1 hour, 1 minute, 27 seconds team in case you have any follow-up questions. Thank you and have a good day. Thank you. 1:01:33 1 hour, 1 minute, 33 seconds On behalf of Eureka Forbes, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.