Okay. Sir, if you could just spell out the RAC margins like you normally do, how much was it this quarter versus last quarter, last year same quarter?
Yes. RAC margin, it is in about the same range as what we had achieved in the previous quarters. And if you recollect my previous discussions with you also and the guidance which I had given you, it's been hovering around 9%, 10% all along in the UCP category.
Sir, first question on the demand outlook for this year on the RAC side, given that near term we have seen some softness given the seasonal rains, would it be possible to indicate how much are we budgeting in terms of outlook volume growth for the coming year? And second, on the market share as well, I mean, we did maintain market share on a Y -o-Y basis, but every quarter we have seen some moderation. So do you think market share gains will be a priority now given the outlook? So that will be the first question.
Yes. So one is, of course, as you said rightly, January, February period was good. But as the season moved into the summer season, there have been some unseasonal rains and thunderstorms in some part of the country and which has brought down the sentiment -- consumer sentiments. So the initial few days have not been good. Summers are a bit late. But I believe that it is going to be an extended one. So hopefully, we will -- we should be able to make up for whatever we have not been able to encash upon as an opportunity during the initial few days of the summers. We are quite buoyant that hopefully the summer will be longer and we will be able to encash.. But it will all depend on the summers. And it's very difficult to gi ve you any kind of guidance as to what kind of percentage growth we'll be able to. Of course, we've got plans. We are -- we intend to grow, and that's our ambition also, but it will all depend on the summer season. However, as you know, these days, actually, the ACs, air coolers and all these products, whatever verticals we are into, around the year there's been movement happening because somewhere -- and we have got larger basket and they keep complementing if per chance one particular category doesn't show up, then the second category makes up for that. So we are quite confident that we'll continue to produce good results, and we'll continue to give you good returns. On the market share front, I remember that you asked for that also. On the year -on-year basis, you will see that our market share has been hovering around about 19%, and we have been able to maintain our leadership position. Yes, 1 month or so here and there, probably at times for some reasons, the market share as per the syndicated research may go up and down because it is at the -- they are all indicative ones.
Yes. Sir, just on the provisioning in the international projects that you alluded earlier. So if you can share more details on that? I mean, if the team is extremely confident of receiving the money, why are we taking the provision at this stage? And in a way, is the entire provision already done or there might be some extra provision in Q1, Q2 also? And which type of project, which country that we are referring to? And what is the total quantum of that project?
See, these are actually the expected credit loss as per the time lines which we provide. While team has been putting in effort and they are likely to collect money. But since the time is -- as per the time lines we are supposed to provide, we have gone ahead and proactively provided for. And there are a couple of projects, we have provided for. And the geog raphy of course is the GCC countries.
So that expectation of 15%, 20% or 20%, 25% industry growth still remain? Or is there a dent to that, sir?
Yes, double-digit growth is definitely going to be there, but it's difficult to say whether it is going to be 15% or 20%. It depends on the season. But yes, overall, the industry is lesser penetrated. We have got everything positively moving in the direction of our growth. I have been informing you all along all our conversations for last several quarters, per capita income, GDP, penetration levels, hot and humid environment of our country, large consumption base and population base, everything is there positively placed for us. Only thing is summer should support us. But otherwise, overall, by the time the year ends, actually, even if 1 quarter or a few months are lower over the previous quarters, it can -- it is made up in the subsequent quarters generally. And by the end of the year, you see our results for several years, we've been continuously growing, and we are faster growing than the industry growth.
Is this like a 15%, 20% growth category or maybe more?
Very difficult to say on the percentage growth. But yes, we will be -- it will be more than double-digit growth, yes.
Sir, just wanted to get a sense on if you've taken any price hikes and given the muted demand that we are seeing on the late onset of summer, are we seeing any discounting by any of the peer set, etcetera? And secon dly, if you can also talk about the Commercial Refrigeration business, you spoke about margins being lower. What was the margin impact both for 4Q and for FY '25? And also, if you can talk about the revenue growth for Commercial Refrigeration, both for the quarter and for the year?
So your first question is about the price hike. You see, we are evaluating continuously on as to how the demand has been moving. We are also bearing in mind the commodity price movements and also the forex movement. And accordingly, a judgmental call will be taken as and when we feel it appropriate. Immediately, I'm not looking at any price hike to be honest. But as the situation demands, we will take appropriate action, one. On account of discounting, right now, the channel as well as the brands are settled with the inventories. So if the summer season is not setting in appropriately and if the summers are delayed and in case some brands resort to the discounting, I cannot say on that. But looks unlikely because at the end of the day, summers will be there, maybe it would be a bit delayed. And hopefully, it is going to be longer one. So I don't think it is appropriate to talk about discounting at this moment. And as of now, nobody has resorted to that particular discounting element. Commercial Refrigeration, I have already talked about, I think, in detail as to profitability and the growth last year has been a little muted one, both on account of the QCO stock liquidation and on account of demand of certain categories. And therefore, while people in the industry were holding on some inventory, they wanted to liquidate that. So I think all in all, that was not a good year for the Commercial Refrigeration segment. And going forward, if you were talking about revenue for quarter 4 and we have grown by about overall 19%, 20% in the category, Commercial Refrigeration category. And profitability, we have not done well, to be honest, in this Commercial Refrigeration category. But overall, we have done reasonably well.
My first question was on the UCP margins, which are fairly strong at about 10% for the quarter and also about 80 basis points higher Y-o-Y. So just trying to understand what led to the strong margins given the fact that I believe you said you've not really taken any price hikes on the room AC side, plus given RM cost increases, and I'm assuming even com pressor costs would have gone up. So just if you could help us understand what's driving that increase? Are there any one-offs that we should be aware of?
Yes. So let me answer you on this particular one. There are a couple of things which have helped us increase our margins in this category. UCP, as you know, i t consists of air conditioners, commercial refrigeration, commercial air conditioning and air coolers. So in each of these verticals, except for the commercial refrigeration segment, we have done better than the previous quarters and the previous year in terms of our profitability for the several reasons. One, of course, the better product mix has happened. Like in air coolers, there is a better demand for the larger capacity industri al kind of coolers, which is more than 100, 120 liters, etcetera, and which is a slightly better margin fetching products. Similarly, even in the room AC category also, there is a demand for higher energy -efficient products, which is also helping us impro ve our profitability. And even on the commercial air conditioning front also the overall revenue and profitability has gone up in quarter 4, and this has all helped us in improving our margins.
Yes. Okay. And just a second question on the Projects business where we've once again seen a loss this quarter. So I think one of the comments in your press releases of some difficulties in domestic projects. So if you could just help us understand what's driving that loss? Is it like provided for completely and hopefully doesn't come back in the coming quarters?
So Ankur, Yes, there are some provisioning which we have made in the international projects business, and that is on account of our prudence because some payments have got a bit delayed. Although the team is putting an effort to collect those monies also, and we are hopeful that in subsequent quarters, those payments will come up. But we have been able to provide them in advance to avoid any difficulties.
And sir, what was the quantum in this quarter?
About INR40-odd crores approximately.
Sir, just wanted to understand in terms of the market volume for the year FY 2025. And given what we have seen in the month of April, assuming that we see a normalcy from, let's say, second half May onwards, how do you see the market growth, especially when we are hearing that South is seeing a decline of 25%, 30% Y-o-Y. So if you could give some sense on the volume for FY 2025 for the industry and the outlook in terms of the growth, especially taking into account the April month?
So if you're talking about financial year 2025, you've seen our growth. We've grown by about 36%, in volume, and in revenue about 30% we've grown. We've shown our growth as in UCP segment. And if you're talking about industry, industry has been hovering about around 13-14 million, approximately. And I have already informed you and in previous question also I shared about how the future is looking at this. Initial few days have been a bit challenging because summer set in a bit late in most part of the co untry. However, we are reasonably confident now , that in next few days summers may pick up and probably we will gain from the extended summers.
This is Aditya from Investec. My first question is on market share, wherein earlier we used to have 23%, 24% kind of market share, which then in a couple of years had fallen to 19 -odd percent, and it appears to have settled around that level. Now just wanted to understand how do you see this scenario? Is the aspiration to go back to the kind of market shares that we used to have? Or do you think the industry competitive dynamics are such that we look to kind of protect the market shares at the current level?
So while we would aspire to go back to higher market share. However, I think we need to bear in our mind the number of players which are continuously been increasing in the category because as I said, India is poised for a big growth. And every geography is looking at entering into India. If you look at, we have got brands from America, Europe, Korea, China, Japan, from all geographies, people have entered into India. This has become quite clutter, t his particular segment, AC, if you look at. There are more than 60, 65 brands which are fighting for getting this share into the pie. And therefore, it becomes very, very difficult to maintain a very high -level market share. However, what we have been assuring you and our endeavour has been to continue to remain a market leader and with a reasonable gap between number 1 and number 2. That is what we will continue to do that.
Sir, just one question on revenue growth outlook. You obviously talked about RACs. Just wanted to know your opinion about the Commercial AC, Commercial Ref and project business. How do you see the next year panning out in terms of growth?
So this looks very positive, both the segments which you talked about, B2B, Commercial ACs as well as Commercial Refrigeration if we look back 2 -3 years back, there was -- most of the industries that put on hold their capex investments. During the COVID, et cetera, the business has gone down and therefore, people were holding back. But now if we look at, it has started opening up. And if you see our Commercial Air Conditioning growth, we have continued to grow both in terms of revenue and profitability in this segment. So it is definitely a very positive sign. In Commercial Refrigeration also, if you look at barring last few quarters in the previous year, fiscal year '25, where we had some challenges in demand and also due to because the QCO was coming up and also there was commodity costs going up, which industry player could not pass on to the consumer. And therefore, there was a bit of a challenge in this category. However, in terms of revenue growth and all, both these segments are quite positively placed. There is a demand for Cold Chain products and the category is continuously growing. And similarly, a lot of new offices and buildings are coming up, commercial buildings, airports, metros, and this paves a lot of opportunities for us, in cluding our group companies where a lot of new businesses are coming up, Tata Electronics and all, where we have got -- we are beneficiary of large orders booked during the year, which are going to get executed. So hopefully, this is going to be a good year going forward.
Sir, just one question. Just wanted to understand for our Chennai factory, do we have any kind of state incentives that we'll be receiving?
Yes. Actually, there is a state benefit definitely there, which is going to come as we produce. But it is over a longer period, over the next 15 years, I think 15 years, we are going to get the dividends in -- from this factory. However, we are quite upbeat because this factory has been largely set up, not keeping in mind only the benefits what we want to get. Ultimate objective was we wanted to be closer to the market. If we when earlier on, we were selling and sending products from North India to South India. One is the transit time. A nd secondly, the transportation cost was sort of eating into the profitability. However, by reaching out closer, we have cut short on the timings to reach out to the consumer faster. And secondly, we have been able to save some costs, which we are investi ng into building the brand further. So both ways, I think that was the objective of setti ng up this factory. Of course, in the present we are going to get benefited from the state government, and we will make use of that in expanding the brand in the volume and the business.
Sir, my long-term questions, you've pretty much answered. My question is more near term. So there has definitely been strong primary filling in the channel in anticipation of a stock out and supply chain issues. But then especially when I see the secondary sales, the movement has been very slow. And I mean, the only legit data that we get is the GSK numbers and basis that there is a decline in terms of Voltas' market share. So how are you seeing your secondary sales at the point?
So I think Natasha I have answered that there has been challenges in the secondary movement as well as tertiary movements during the last few days, about last 30-40 days because of summer onsetting has been delayed. There have been some rains playing the spoil sport. So that has been a little challenging for us. And yes, we get to see that some dip in the market share has also happened. But generally, w e are not concerned on month -to-month basis. It is -- actually, we look at on the quarterly basis and the annualize basis as to how our market shares are moving. And also for us, this particular quarter, April, May, June is the largest. For our company, we are quite AC-focused orientation. And therefore, you'll get to see that we will cover up all that in this quarter. From now onwards, until the second and third quarter, we will make up for all this.
So we would have broken even or marginal profitability?
Marginal.
I just have one question, which is in the month of April, company reported that there was a custom duty demand of about INR25 crores. Can you talk about what products or component does this custom duty refer to? Because this can have impact not just for Voltas, but other players and industry at large. So just if you can throw some light, maybe Mr. Sridhar can talk about this, which products are these?
So -- okay. Let me answer and if Sridhar needs to add to that, he can also add. The notice -- demand notice was on copper as an element, if you're talking about what particular item was it. And since we have been buying copper as well as the industry from some of the countries where the duty exemptions are there, FTAs have been signed up. We've been buying from there. And probably, in our opinion, it's a legitimate buy because the vendors have declared that these goods get manufactured in the respective countries and they have submitted documents also to that effect. However, it is between them and the government, whic h is settling. And because we have received the notice in the middle of the month, and we are just evaluating that notice, and we are also consulting amongst ourselves, and we'll be responding to that suitably.
So this is copper tubes basically?
Yes.
I just had a question on other income during the quarter. So there was a sharp jump in both other income and other operating revenue income. What was it? And did it help UCP margin? If yes, by how much was the benefit because of this particular?
This is largely the interest and mark-to-market income on our investments in other income. And this year, it has paid us good dividends. And in other operating income we have accrued PLI linked incentive. So therefore, you see a jump in that. That's the only thing.
How much with respect to UCP margin because of this?
No, no. While PLI linked incentive is part of divisional results, we don't take investment income it in the divisional margins. This is unallocated -- we show it as unallocated earnings.