Refused to commit on whether 15 fans growth.

On volume growth - given you spoke about high-single digit to low double-digit price increases, is it fair to assume volume growth in ECD would have been quite modest if any? What contributed to it given the favourable base?

Like I said earlier, Aditya, that this quarter we were impacted. Now, we run a very lean ship, as you know. Now, sometimes if the prices go up and there are supply disruptions, that can have an adverse effect. But of course, over a period of time, what we found, that if you run a lean shop over a period of time, your ROCEs are much better, and your cash flows are much better. So, we've kept to that principle. I would say that, because of supply disruptions, we did lose some sales, order of magnitude ~ Rs. 200 crores, maybe a little bit more.

Were the supply disruptions largely on the fans portfolio or something else?

Actually, we had some supply disruptions in other areas as well, because if it is only pricing disruptions, then that was a different story. In this case, there was a clear lack of visibility on supply of commodities and of various input materials as well. So, we did have supply disruptions earlier. For instance, lighting was our fastest growing segment. But it would've grown even faster. I'd say there was a disruption in more than one area. Not only in fans. But the good news is that we worked very hard. Certainly, towards the end of the quarter, many of these issues pretty much settled down, and that has enabled us to start the next quarter very well.

On the expenses side - we've seen some cut in A&P and a rise in other expenses. What's the sustainable A&P number going forward?

Yeah. So, Dhruv, as I said earlier, this is a very active year for brand Crompton. So, it's not really something that we've cut back at one quarter. And that's not something that we, as we've said before, A&P investment is something that we want to consistently make. You will see a lot of activity on brand Crompton going forward, which we believe will go a long way in refreshing the way that we are positioned, the TG (Target Group) that we are able to cater to, etc. So, on a generic basis, I'd say the kind of percentage to sales over the year should be similar to the one that we'd had last year.

On the solar rooftop portfolio - last quarter you had close to Rs. 500 crores of order book. What's the current number? How has execution been? How should we think about this over the next one to two years?

Yeah. the Solar rooftop business, in particular, has been in a ramp-up mode last quarter. So basically, getting all our ducks in place in so far as the execution is concerned, is what I'd say. Frankly, as you are aware, out of that Rs. 500 crores, Rs. 450 crores is an order book that we expect to execute over the 6 to 8 months. So, I'd say that this has been a year in which we really ramped up our execution capability. This is like going from zero to 500 in a very short period of time. So, the order book pretty much remains in place. The good news is that in solar rooftops, we also have started garnering orders on the B2C side. the entire idea of the B2G business was that it gives us the scale both in solar rooftops and solar pumps, helps us sharply ramp up execution, and that we will also use to step up our B2C presence. This was the quarter where the revenues from B2C have also started rolling in.

We had a low base of last year. How do you tally this? Is consumption really that weak or specific to category? Are you seeing any green shoots now?

Actually, I think, like I said, the consumption is pretty decent. What happens in our business is that initially, when you take price increases, there's a sticker shock. So, first guy comes into the store, he looks at the product, and he says, guys, I just came two weeks ago, and the price is now 10% higher or 15% higher, He says, guys, I don't want to buy it just now. Maybe it'll come down. So having said that, the nature of our business is that most of these are only partially discretionary, so you really don't have an option. So, I think the pricing has a delaying impact, but not a demand suppression impact. Certainly, what we are seeing is that demand remains robust. And yes, we started the quarter a little bit impacted by the supply disruptions that we were facing. But as our supply disruptions have subsided, and market has become much more predictable, we are seeing robust growth is what I'd say.

Copper prices have been continuously going up - do you think we may need further pricing actions to support margins?

Like I said earlier, we have been quite disciplined in passing on pricing increases, Having said that we have not seen most of our competitors, or a large bulk of our competitors, frankly, follow through in the same manner. As of now, do we see a significant spate of pricing increases being necessary? The answer is no. Partly because we've been first to the market, and the price increases that we did take, have now largely settled into the market. At least to date, I am not seeing a sharp set of price increases that are still necessary for us because of the combination of the two, or actually three - price increases, cost measures, as well as our operating leverage.

The Rs. 200 crore shortfall from supply disruptions - which category faced these challenges? Is it fan, air coolers?

I think we answered this earlier. It's largely fans, and largely in the ECD category is where we had the shortage, Parag. Fundamentally, as you would know, Crompton, as an organisation, has always been working on a sharp net working capital management and we have been an organisation that works on negative working capital. So, as we entered Q4, we never carry a base inventory into it. And as the war opened up, our initial challenge assumptions were around availability shouldn't be a concern, it's only pricing. But as we discovered, the commodities also took time. And we did not have the base inventory to cover it. And that took us time. By around June end, it got stabilised. And July, we are back to normal.

On solar rooftop - it seems this quarter didn't see much execution. Was it something to do with government or any challenges in the quarter?

Yeah. The revenue recognition for solar rooftop, we follow a methodology on installation basis. So, dispatches from our end are ongoing. It's been moving in the right trend, but revenue is recognised when the installation gets completed, which we're expecting to happen in Q2. The government's been paying us on time. In fact, they've been paying us and pushing us to continue to accelerate.

On Butterfly - how is the competition in this segment with white label, Chinese brands and Ninja coming in?

I think kitchen appliances for quite some time has been extremely competitive space. At least for the last five - six years, it's been a very competitive space where we have been having white labels, and international brands have started playing in this market for quite some time. I think how we were looking at it, it's quite visible in the levers that we started activating from last year, starting from the brand refresh to our brand architecture rework. And in line with it, keeping the consumer as the centre, I think that's when we had launched our Idea First Series coming into place, and which has actually started working well for us and contributing significantly to the growth delta for Butterfly. But from a space point of view, it is always good to have multiple brands playing in a space because it opens up lot of opportunity for us as a very serious player in kitchen appliances.

On the Rs. 200 crore lost sales - the channel would still be carrying inventory. So firstly the channel inventory should have sufficed for the supply chain disruptions. And does this episode change our approach towards inventory management, particularly going into the largest season?

Sameer, first and foremost, channel inventory is an outcome of a tertiary sale. What we are discussing here is about a primary sales loss for the company. So, a tertiary sale, whatever channel carries would have been adequate, and that is what we see in category after category on our tertiary growth. So, I don't think these are apple-to-apple numbers that are comparable. Second, in terms of how do we look at the inventory management strategy, these are typically one-off black swan events, for which we cannot change the business model of the company. I think for many years, our business model on being asset light has been very, very productive, and that has been giving results quarter after quarter, and we don't want to revisit that just because of a one-off.

On Butterfly - 18% growth looks great but this quarter had tailwinds in terms of higher demand for induction cooktops. Competitor TTK did 34% growth - was this segment impacted by supply disruptions? You mentioned market share gains but market leader reported faster growth.

Our core category business, which almost, contributes to about 85% of Butterfly's turnover has grown significantly in line with what the competition has grown. So that's the first thing. Second thing is with respect to induction cooktop; our growth is not backed by induction cooktop at this point in time. Because like we have seen in the past quarters also, our auxiliary categories were something that strategically, we decided to accelerate them only from quarter two onwards of business. So, our growth is steady state coming in from key categories in which we are serious about, and our market shares also have been sustainably doing better for last few quarters for us. If we break it down into a few categories where we would want to benchmark it against, maybe our pressure cookers and glass top gas stoves have done much better than what we see from our peers at this point in time.

On the renewable side - what are the margins vs company margin? And does monsoon seasonality impact solar rooftop business?

In the renewable business, we are in two segments. We are in solar pumps, and we are in solar rooftops. The solar rooftop business, of which we started about eight - nine months ago, that's a business where we have gotten order book of about Rs. 500 crores, as you guys are aware. A bulk of this is the order book from Andhra Pradesh. The nature of this contract is we have to implement about 38,000 rooftops in various SC/ST homes in Andhra Pradesh over the next six to eight months at the outset. The payment characteristics of this are that when we demonstrate to the government that we have the product; the government upfront pays us 40%. Then we go out and install the product. Then at that point in time, MNRE pays us. Insofar as the margins, EBITDA line is similar to the company EBITDA margin. The gross margin is lower, but EBITDA line is similar. Does the monsoon impact? The monsoon impacts insofar as execution is concerned. So far as solar pumps is concerned, if it's raining very heavily in an area, obviously you can't go and install a solar pump because the place would be wet.

On the Rs. 200 crore discussion - as you pointed out, this was primary sales impact and tertiary sales has not been impacted, which would imply channel inventory depleted. Is it fair to assume a large part will come back in Q2/Q3?

See, no, not necessarily. There is a mix of these two. The channel inventory, as it depletes, if you made some primary sales, if you are not able to make adequate primary sales, the channel will replenish from other sources. Let's understand that. So, for a bit, there will be a momentary replenishment of inventory. But the market share impact, I don't think is abiding because when Crompton comes back into the market, Crompton being Crompton, obviously it's a strong player. So as our ability to sell improves, we are obviously able to claw back that position.