Bajaj Electricals Limited (BAJAJELEC) Q1 FY23 Earnings Concall Transcript

Bajaj Electricals Limited (NSE:BAJAJELEC) Q1 FY23 Earnings Concall dated Aug. 12, 2022

Corporate Participants:

E. C. Prasad — Chief Financial Officer

Anuj Poddar — Managing Director and Chief Executive Officer

Analysts:

Deepak Agarwal — PhillipCapital India Private Limited — Analyst

Chirag Lodaya — ValueQuest — Analyst

Nikhil Kale — Axis Capital Limited — Analyst

Unidentified Participant — — Analyst

Hitesh Taunk — ICICI Direct — Analyst

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Charanjit Singh — DSP Mutual Fund — Analyst

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Chirag Muchhala — Centrum Broking — Analyst

Aakash Fadia — YES Securities — Analyst

Achal Lohade — JM Financials — Analyst

Amit Mahawar — Edelweiss Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Bajaj Electrical Q1 FY23 Earnings Conference Call hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Deepak Agarwal from PhillipCapital India Private Limited. Thank you, and over to you, sir.

Deepak Agarwal — PhillipCapital India Private Limited — Analyst

Thanks. Good evening. On behalf of PhillipCapital India Private Limited, I welcome you all to Bajaj Electrical Limited Q1 FY23 earning call. Today we have with us management represented by Mr. Anuj Poddar, MD and CEO; Mr. E. C.

Prasad, Chief Financial Officer. Without taking much of time, I would like to hand over the floor to the management for their opening remarks post which we open the floor for Q&A. Thank you so much and over to you sir. Thank you.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Deepak. Good evening, everyone. Thank you all for joining us on a late Friday evening on the eve of a long weekend. So I know you all looking forward to the weekend. But thank you for being with us today for this call. I’ll just make a few short opening comments. I’m sure you’ve got a chance to go through our results as well as the investor deck that we released. I’m please to report that we’ve had a healthy and good quarter and it’s a strong bounce back from the last 2 Q1s that we’ve had. Just key headlines from my side. Our consumer business has continued to demonstrate good traction with good growth of about 58% Y-on-Y basis. Our EBIT has bounce back in the consumer business and make a soft quarter that we had last year in Q1. We’re maintaining our growth rate in the focus on EBIT. The consumer business importantly for the EPC segment this marks the second quarter in running that we’ve demonstrated profitable breakeven results. We hope to continue and maintain the trend going forward.

From a balance sheet and cash flow perspective, which we’ve always been very focused on and this is now we’ve continued our track record of demonstrating strong cash conversion and positive cash flow with cash from operations amounting to about INR166 crores, while we’ll talk on the operational aspects of all the business segments product categories, which we continue to do well. I do want to call out our Illumination business which continues to gain market share as demonstrated growth on the topline and continues to see inch up on the margins and profits that it earns. And lastly speaking, I just want to point out that this is a quarter in under which we’ve undergone transition of our operating ERP system. We’ve transitioned to the latest version of SAP 4 HANA to that extent that transition happen sometime in May, and as part of any such large transition there is some disruptions in dealing issues. So, we faced some of that in this process of transition in the month of May and these results are despite the commissions and certain amount of sales losses that we had in the month of May as part of this transition.

So with that, I’ll hand it back to Deepak and happy to take on questions. Thank you.

Questions and Answers:

Operator

Thank you. [Operator Instructions] The first question comes from the line of Chirag Lodaya from ValueQuest. Please go ahead.

Chirag Lodaya — ValueQuest — Analyst

Yeah. Thanks for the opportunity and congratulations on good set of numbers. Sir my first question was on the gross margin. Q-o-Q if I see your gross margins are about almost around 350 basis point, however QoQ consumer margins are flat. So just wanted to understand where is this discrepancy is coming?

Anuj Poddar — Managing Director and Chief Executive Officer

Chirag the gross margin, you may be seeing is on a consolidated basis, and therefore it’s a blend of the consumer business, Illumination business and consumer business so is a little misleading. But at, if you look at the segmental results where we report our EBIT margins, etc, kind of flat on a QoQ basis, but also if you look at from a 3-year perspective, it’s similar to — it’s quite a significant improvement over last Q1, but I would look at last Q1, as average. If you go back 3 years, we maintain that margin and that’s despite that this year yet factors in significant commodity inflation in headwinds in this Q1 results. If you compare that also, I think the fact that we maintain those margin on a 3-year basis as demonstrated of the fact that at an underlying level we actually delivered improvement in margins in real basis.

Chirag Lodaya — ValueQuest — Analyst

Okay. And in terms of margin trajectory ahead, how we should look at it on a QoQ basis. This is significant improvement or you still think there is some pressure in initial quarters before the know you start improving on overall margins?

Anuj Poddar — Managing Director and Chief Executive Officer

Yeah. The commodity inflation cycle started in about October, November 2020 that has gone on till about May 2022 which is this year. We started to see a little reversal in the commodity inflation in cost since June of this year and continuing into July. So to that extent we expect margins to start improving from Q2, but the full benefit of this commodity cost reduction and margin improvement will be seen in Q3, but here on I think we’ve at the bottom of the margin, we expect to deliver higher margins going forward.

Chirag Lodaya — ValueQuest — Analyst

Right. And just lastly if you can also share 3 year CAGR growth for appliance, lighting and more features that would be helpful. You have shared on front in the presentation. Just share.

Anuj Poddar — Managing Director and Chief Executive Officer

We could had that 3-year that we carve out on a subcategory level 3 year CAGR, but on a overall basis, I think it’s about 7.4% on the 3-year CAGR basis for the consumer business.

Chirag Lodaya — ValueQuest — Analyst

Okay. Thank you and all the best.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Chirag.

Operator

Thank you. Next question comes from the line of Nikhil Kale from Axis Capital. Please go ahead.

Nikhil Kale — Axis Capital Limited — Analyst

Yeah, thanks for taking my question. First part is, what was the impact of this system upgradation you talked about, there were some impact on sales. Would you be able to quantify?

Anuj Poddar — Managing Director and Chief Executive Officer

Hard to quantify. Specifically, we had about 10 days of disruption because of system. Therefore, at the end of 10 days, lots of sales. I would say some of that we were able to recoup or makeup in the ensuing days but approximately, I would — if I were to hazard a guess, I would say anywhere between INR30 crores to INR50 crores maybe a loss of sales that we’ve seen in this quarter because of this. And I want to add to that. This is Phase 1 of SAP, some further implementation of systems that is going on now. It will go on for another 3, 4 months but impact due to that now will be minimal. But just to tell you that full implementation will happen by the way — quarter. But we’ve seen the bulk of the impact happened in Q1, we don’t expect any significant impact going forward.

Nikhil Kale — Axis Capital Limited — Analyst

Got it. And sir, just looking at the CIP performance [Indecipherable]

Anuj Poddar — Managing Director and Chief Executive Officer

Nikhil I’m sorry your voice is breaking up now.

Operator

Mr. Nikhil, please go ahead with your question.

Nikhil Kale — Axis Capital Limited — Analyst

Yeah, I was saying you mentioned that the CP performance 3 year CAGR at 7.4%, looking at the kind of that would kind of imply that the volume growth would be maybe low, low-single digit right. So yeah, I just wanted to get some idea on how are you looking at demand. I mean we gather from other companies that demand has kind of slowed down in the last quarter, but what is the sense that you’re getting especially for some of the key markets for you, which might be different from some of the peers?

Anuj Poddar — Managing Director and Chief Executive Officer

So first, let me tell you about the weakness and then let me tell you the good news. Since about 20th May or last week of May there has been as visible slowdown in demand in the industry. I think that across the Board, and therefore that factored into our Q1 results also. June has been weaker demand, April-May was largely better off. We’ve seen some of that weakness continue into July. But August-September, we expect to see a strong bounce back. One is actually so far in August, we are seeing some signs of bounce back, but I also see that getting accelerated because we have an early festive season this year Diwali is on I think 24th October are the festive dates also come in earlier and to that extent I think the primary sales, will see a pickup in August, September and therefore we are confident that Q2 will see a healthy bounce back on an overall basis.

The one part the jury is out surely in terms of in the economy in the later part of the year what will the demand trends, etc, be that the inflation continued at the trajectory that it was at 2, 3 months ago, I would have had a slightly softer view. Seeing some of this, at least on our side cost pressures and inflation come down. I do think I would be slightly more optimistic now than I was 2, 3 months ago and we may escape a demand slowdown in the latter half of the year, which means, net-net I mean optimistic that Q2 we will see a bounce back in these two months, but Q3 may end up being a decent quarter and not a bad demand affected quarter.

Nikhil Kale — Axis Capital Limited — Analyst

Okay. Okay, thank you. And on the margin side. So I think we’ve done a decent job in maintaining our margins in the consumer products business. But now with some of these tailwinds kind of coming in on the commodity side also with the expectation of improving demand what is the outlook on the margins going forward?

Anuj Poddar — Managing Director and Chief Executive Officer

So our long-term outlook and margins is good if you minus this 2 years of COVID we have given a strategic guidance that we will — we are very conscious that as a company, we want to expand and widen our EBIT margins on consumer. We had given a guidance about 1 percentage point per annum. COVID or this commodity has impacted us, but we expect to get back to that in an absolute basis. So I think we would exit this year at a good healthy run rate and get back to the original trajectory by next year. While I don’t want to give you a specific number guidance, we are clearly targeting a double-digit margin in the very near future.

Nikhil Kale — Axis Capital Limited — Analyst

Okay. Got it. Thank you.

Operator

Thank you. [Operator Instructions] Next question comes from the line of [Indecipherable] from JM Financials. Please go ahead.

Unidentified Participant — — Analyst

Hi, thank you for the opportunity. Two questions from my end. One is if you can just talk a bit on the rural side of the business. Because you know that was one area, which was after some pressure. And Bajaj has some bigger presence in these markets compared to peers? And secondly, an update on the demerger of the EPC business. What would be the status of that and we still maintain the target date? Yeah, those two from my side.

Anuj Poddar — Managing Director and Chief Executive Officer

Your voice was not very clear. First was rural side and second demerger. Is that correct? I’ll go head and answer, I think that’s what I heard. So rural side of the business if you recall our commentary from Q3 rural demand has been weaker than urban because our contribution of weightage of rural has been higher. So, therefore, on a consol basis, we’ve had a little slightly elevated impact of the rural slowdown. My guess is with a good monsoon, good MSP announcements by the government, etc we expect by end of Q2, stroke in Q3, we have to see a bounce back in the rural demand and we should be beneficiaries of that. It’s a little early to say but that’s our outlook right now the rural demand side.

On the demerger the teams have been filed with the stock exchanges. We’ve had two around the titration on terms of queries with the stock exchange, when I say stock issue that includes semi-related queries that will get routed through via exchanges. We would expect unless there any further queries but we will have full approval from the exchanges within this month post which we will be filing for NCLT approval. It is very hard to put a very specific timeline to NCLT. I do understand that there is some vacancies in the NCLT because of which you that process may be longer than originally anticipated. Our original target for that was towards to — our internal target for that was to actually get the approvals by the windy quarter this year but latest by fiscal end I think currently it looks like fiscal end which is a GSM quarter more likely where we should have all approvals.

But we will keep updating you as and when we have more visibility on this.

Unidentified Participant — — Analyst

Thank you so much.

Operator

Thank you. [Operator Instructions] The next question comes from the line of Hitesh Taunk from ICICI Direct. Please go ahead.

Hitesh Taunk — ICICI Direct — Analyst

Thanks for the opportunity sir, and congratulations on a good set of numbers. Sir my first question is on the pricing front. Sir, how much price hikes have you taken during this quarter?

Anuj Poddar — Managing Director and Chief Executive Officer

Hitesh we had taking approximately a 5% hike an average across various categories in the month of April. We had planned further hike in May, June, which we did not take given that the visibility of commodity prices starting to cool off. And we do not anticipate now any further price hike at least visibly as of now.

Hitesh Taunk — ICICI Direct — Analyst

Okay. Okay, Sir the second question is on — our advertisement expenditure fund. This quarter, we have seen kind of increase in the advertisement expenditure for about 3%-3.7% on the sales. So, is this a kind of expenditure we are going to maintain, or will it be a slow down going forward?

Anuj Poddar — Managing Director and Chief Executive Officer

So our general guidance has been that expense and expense will be between 4% to 4.5% on an annualized basis. It has been slightly lower in the last one or 2 years as the COVID our margin pressure goes away. We actually expect to normalize at 4% to 4.5% on an annualized basis. On a quarterly basis there will be some swings based on seasonality of campaign but annual basis that’s the number we expect.

Hitesh Taunk — ICICI Direct — Analyst

Okay. And sir, my next question is on the Morphy Richards front, we have seen a kind of the decline on that segment. So is there any specific reason you want to contribute or is it a kind of a normal phenomenon, this quarter?

Anuj Poddar — Managing Director and Chief Executive Officer

So I don’t think the quarter phenomenon. So two answers to that. Number one in this last 12 months or 15 months of significant price increase that there has been, you know the conflict between online and offline channels has been very acute because pricing strategies by both channel is very different. And I’m not just talking about us, but the players in the market. To that extent Morphy has borne a much greater brunt of this channel conflict, given its unique positioning and scale in each segmentation. Going forward with this pricing hike kind of stabilizing etc, we think the price conflict that has been there between the channels will normalize and therefore to that extent the brunt that more fuels bearing will ease out, but the larger strategic view on that is so far as you know we’ve had short term relations in deals with Morphy are we signed a 15-year relationship. On the back of that we are now putting together a completely revamped strategic roadmap for growing Morphy business, including a complete re-look at its product portfolio and go to market and brand strategy.

That will play out over the next 18 to 24 months and we have a very clear visibility on how we’ll drive that growth. But some of that is something we’ll start seeing from next year onwards in terms of the results of that climate we rolling out.

Hitesh Taunk — ICICI Direct — Analyst

Okay. And sir, my next question is on the market share front. I mean we have gained a substantial market share over the last 2 years in our different product categories. Was it continue currently in this quarter also and if you can share some market share for the leading products that will be great.

Anuj Poddar — Managing Director and Chief Executive Officer

Yeah. So while we don’t publish market shares in numbers, we have gained market share, particularly in Fan where you see our growth has consistently been higher than industry, the last I think four to five quarters. Lighting we are starting to see greater trajectory versus before. So I’m sorry, I’m saying is that — I’m audible right. Lighting, consumer lighting. We’ve been gaining share, we gained share in this quarter. We expect that to continue. Appliances, where we had a dominant share. We are looking to defend that and we have other segmented approach where in certain segments in appliances we expect to gain share.

Hitesh Taunk — ICICI Direct — Analyst

Okay. Okay, that’s all from my side sir. If I have more question, I will come in the queue. Thank you.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Hitesh.

Operator

Thank you. Next question comes from the line of Akhilesh Bhandari from ICICI Prudential AMC. Please go ahead.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Yeah, good evening, sir and thank you for taking my question. So you mentioned that demand is improving and also that and now that the commodity prices also softened a bit. Can you just give a qualitative comments regarding how much given the higher relatively higher competitive intensity in almost all the categories how much of the price commodity price decline benefit perhaps would have to be passed on to the consumer or would be passed onto the consumer by the industry and how much can be kept?

Anuj Poddar — Managing Director and Chief Executive Officer

To be honest, Akhilesh some of that is more tactical different players have a very different approach to how they balance between margin protection versus price. So what I know a couple of our competitors have done that in June, throughout July. But I would not react to every tactical move because we have our trajectory and what we are planning to do. I don’t see any fundamental shift happening on that. Those are more short-term tactical things on a particular month. Directionally, structurally, I think we will see margin increase for all including Bajaj Electricals and at an overall level we are confident that we will see margin increase while yet, continue to drive market share growth. So that on a — not just long-term, but even on an annualized basis we will deliver on both of these assets.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Sir, looking at whatever price increase and what you have taken over the last one year and also comparing that to the — what has been the commodity price increase till the end of the first quarter, what was the gap between the price increase versus your blended cost increase? Just some broad number you can give?

Anuj Poddar — Managing Director and Chief Executive Officer

Yeah. So at a very broad level, I think you know for the last 4 to 5 quarters we been running at a lag of 2 to 3 percentage points because of this calibration between when we are taking a price increase to the cost increase that we’ve been facing. That would have been the case in Q1, also had the commodity cost not started softening up. So I think from the second half of this quarter where we’ve seen that and therefore that is started to reverse out. I think by August 15 onwards, that should have neutralized. So without taking a price hike, I think August 15 to about September end we should be back to having fully covered for or negated the impact of the cost side pressures that we had.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Understood. And sir last question from my side. So a couple of players who had hosted the call they declared the results earlier had called out some amount of channel destocking because of the expectation of price cuts by the brands. According to you has that effect now ended or some of that is still continuing?

Anuj Poddar — Managing Director and Chief Executive Officer

Akhilesh to be on because our model is different. We do not have channels carrying significant stocks because of our TOC model etc. So in general in our channels stocking except for certain product categories where they may have had a scheme for which they’ve done that. We do not have that problems. I frankly don’t have any data to share with you. We do not have that either on the high-stocking or on the need to clear that out on a upward or downward level either which way. So our primary and secondary sales are typically more closer to each other most of the time.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Got it. Thank you again. Back on the queue.

Operator

Thank you. [Operator Instructions] Next question comes from the line of Charanjit Singh from DSP. Please go ahead.

Charanjit Singh — DSP Mutual Fund — Analyst

Hello?

Anuj Poddar — Managing Director and Chief Executive Officer

Yes, Charanjit. Good evening.

Charanjit Singh — DSP Mutual Fund — Analyst

Yeah. Sir on the appliances side, if you can give more color on the mixer, water heaters while it was not a very seasonal quarter for water heaters, so how these categories are performing for us and how is the outlook because kitchen is one of the segment where we are seeing increasing focus from lot of other players also. So how we are trying to position in terms of [Indecipherable] versus premium within these categories? That’s my first question on the kitchen appliances side.

Anuj Poddar — Managing Director and Chief Executive Officer

Charanjit on an overall we’ve given appliances growth is a healthy growth that we’ve had. Our focus in appliances, while fans we have significant premiumization that we’re achieving, appliances are not that far out, but there is sub-segments I mentioned initially where we think there are certain whitespaces or weaknesses such as sub segmental level, let’s say, mixer, grinder of 750 watts and above etc that we have pockets that we need strengthen. Premier water heater certain types of water heaters etc where we’re looking at so on and so forth for different appliances. The other approach to that earnings geographical level while overall we have strong there are geographical pockets where we need to strengthen market share in the third piece is really between urban and rural. So for us the appliance spending is coming from these tactical things either at a sub-segment level and because we know we have some of those gaps, which we actively working on therefore we are confident that in all while we may have more competitive intensity and new players coming to appliances. We do have growth avenues as we fix each of these things and we will gain market share on an overall basis.

Charanjit Singh — DSP Mutual Fund — Analyst

Sir, as category kitchen appliances, what will be the market growth, which you would be expecting? And from our growth perspective can we be higher or in line with the market?

Anuj Poddar — Managing Director and Chief Executive Officer

So if you look at, an overall industry level, which is not the top 3 or 4 players. We have been and we will continue to have higher growth. So which means that gaining market share where we yet be the long tail unorganized players like are losing share. We will continue losing share. But our game is not just against them. So even amongst the 3 or 4 players earlier point that I mentioned, we know that we are under more intensity of competition in these appliances category. But we do have a clear vision roadmap. We will see a lot more launches in the next few quarters, which will demonstrate our plans for this segment — these categories.

Charanjit Singh — DSP Mutual Fund — Analyst

Okay. Sir, on the lighting side in terms of the B2B market how is that shaping up? And when do we start seeing these new launches in of patterns panels and downlighters starting to contribute to the lighting revenue? And how large is the potential for these new products that we’ve launched in the Lighting segment?

Anuj Poddar — Managing Director and Chief Executive Officer

You said B2C right?

Charanjit Singh — DSP Mutual Fund — Analyst

B2B, how that is going to scale up because that is where we are hearing from the other players?

Anuj Poddar — Managing Director and Chief Executive Officer

Consist of panels and downlighters, so that will consumer side. So let me first talk B2B of the professional lighting, that’s the part that we’ve done very well last 2 years, we’ve turned that business around, even if you look at last year, which is full year FY22 the market that de-grew, we actually had growth and seen the significant increase in market share. We are almost close to, number one in the professional lighting B2B lighting. This quarter two, we had a growth small growth, but growth in the market that is de-growth in this Q1. Our bottom line of profitability in that turnaround we had a breakeven last year and in this quarter we had a certain slide further expansion of margins, we will continue maintaining both these trajectory that is not driving — we will continue to drive growth on the topline in B2B though that may be single-digit because overall market industry is weak and will demonstrate growth and expanding margin, the bottom line that’s in the back of many launches that’s more sector or vertical focus, stadiums, metros, indoor street light etc, it’s a very segment sector driven product strategy that we have here — growth.

On the B2C side which is a consumer side, that’s been the big delta for us because that’s where we had been lagging significantly. We do not have the right product range with us, we were not LED focused. Our share of LEDs now between 85% to 90% that’s a continuous improvement that we’ve had within that from conventional lamps our share of downlighters, battens, — panels etc increasing. You will see lot more launches on that, on the B2C side over the coming quarters. And lastly, structurally we have from 1st July carved out and created a unified lighting segment due to the consolidation of the B2C and the professional lighting and on the B2C which is consumer side, we have now creating a separate go-to-market or sales team, which is not what we had earlier. That will be fully in place by end of September. So you will see the benefit of our revamped go to market also on the consumer lighting side.

Charanjit Singh — DSP Mutual Fund — Analyst

Thanks for that answer. Just last question from my side. In terms of mix of in-house manufacturing and also in appliances lighting and fans. Can you share that number?

Anuj Poddar — Managing Director and Chief Executive Officer

So you now it is in the 15% to 20% range. Our guidance has been that will continue to grow marginally 3 years out that should be closer 25% to 50%. But what’s changed and is continue change even within this right now is the mix of what we are making it out versus what waiting outside. So for example mixer grinders that we never used to do in-house now we are assembling those in-house. The capacity range of water heaters that we’re doing in-house has gone up and fans, which is in-house we have moved up. We’ve set up a new paint workshop etc for making this lower-end sub economy ceiling fans, you will see us start to move that upwards to making more premium fans in-house. And last year on Lighting, which is I think more commoditized. That is why we are reducing our mix of in-house manufacturing.

So overall company level, it will increase but the mix in that across these product categories is changing significantly that’s driven more by a strategic agenda in terms of what we want to focus on internally.

Operator

Thank you. Next question comes from the line of Charanjit Singh. Please go ahead.

Anuj Poddar — Managing Director and Chief Executive Officer

I think we finished with Charanjit. You may want to move to the next participant.

Operator

Next question comes from the line of Rakesh Roy from Indsec Securities and Finance Limited. Please go ahead.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Yeah, hi, sir. Sir my first question is regarding — sir, can you highlight your — sort of for next one year, sir any new launches or new product adjacent in your CP business?

Anuj Poddar — Managing Director and Chief Executive Officer

Sorry, I didn’t get it. Do we have new launches is the question of what are the new launches?

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

New launches then product addition in CP business?

Anuj Poddar — Managing Director and Chief Executive Officer

We’ll keep continuing to have that, like you’ve seen in the current investor deck also we highlighted some of these launches. We will have that across categories. My guess is what you will see in the next, Q3 and Q4 will be more than what you’ve seen in Q1 or Q2 that you will see. In terms of specific launches of course for competitive reasons we’ll rather share that as and when we make those launches here.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Sir, are any plans to add any new product in your CP business in which the next one or 2 years to increase your basket, sir?

Anuj Poddar — Managing Director and Chief Executive Officer

So in terms of remain as a sub-category a category by itself. Yes we evaluating various thing but as and when we are ready to have firm that up announcement that we will do that.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Yes. Sir for an example, you’re try to switch or wire business like —

Anuj Poddar — Managing Director and Chief Executive Officer

So that I can confirm to you, we are not going to do switches. We are not looking at doing wires and cables and we are not looking at large white goods refrigerators air conditioners or for that matter, water purifiers. That these are clearly something not on the table for us.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

All right. Sir, can you share here sir, volume growth in CP business? How much the volume is there?

Anuj Poddar — Managing Director and Chief Executive Officer

Volume growth in Q1, you mean?

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Yes, sir.

Anuj Poddar — Managing Director and Chief Executive Officer

So, Q1 has been significant volume growth. If you look at the fact that we’ve had about a 5% price increase in order 57%, 58% no revenue increase. So, rest is all contributed by volume growth.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay. Thank you from my side.

Operator

Next question comes from the line of [Indecipherable] Capital. Please go ahead.

Unidentified Participant — — Analyst

Good evening, sir.

Anuj Poddar — Managing Director and Chief Executive Officer

Good evening, Harshit.

Unidentified Participant — — Analyst

Yeah. Sir are we planning for any inorganic growth in future sir, in near future or something say after 2 or 3 quarters or something like that?

Anuj Poddar — Managing Director and Chief Executive Officer

Harshit that’s very speculative, of course you know this is opportunistic as and when we get an opportunity that may come in, we will — let me just say that every opportunity that comes we do look at it now, which is a difference or a change from two years ago and we are not even looking at those. We do actively evaluate every opportunity that comes, but finally know it has to meet our strategic and financial parameters and as and when that happens, then we’ll be happy to share that. We are very open to inorganic also whether or not something will happen time will tell.

Unidentified Participant — — Analyst

Okay. Like our interest will be without –, right. not ACs or Washing Machines or like that?

Anuj Poddar — Managing Director and Chief Executive Officer

We will not look at white [Indecipherable] ACs even in a in organic way.

Unidentified Participant — — Analyst

Yeah, I think, be our plan will be only for kitchen and etc. Correct?

Anuj Poddar — Managing Director and Chief Executive Officer

It will be hard to say what we may do it may be close adjacencies etc. But I can’t rule out AC, refrigerator etc.

Unidentified Participant — — Analyst

Thank you, sir. All other questions of my were answered. And sir, and congratulation for good set of numbers.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Harshit.

Unidentified Participant — — Analyst

Yeah, yeah. Thank you.

Operator

Thank you. [Operator Instructions] The next question comes from the line of Akhilesh Bhandari from ICICI Prudential AMC. Please go ahead.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Yeah, thank you for taking my question again. Sir can you give an update on Nirlep, how is it scaling up you will look into improve the distribution and the product launches in that area. So how are things shaping up there?

Anuj Poddar — Managing Director and Chief Executive Officer

To be honest Nirlep is yet right now relatively weaker than many of our other product categories. I think it has a long way to go. Some of the scaling up of distribution etc while we’ve done that benefits of that are yet to play out. I think we are going to be another 3, 4 quarters before we see real improvements in the Nirlep. So right now that is a soft performance for us.

One other announcement related to Nirlep which our Board has approved today is an enabling provision to review or evaluate ways and means of consolidating Nirlep into Bajaj Electricals. That’s in line with our overall intent to simplify our corporate structure and have minimal entities as required. So that we can do that. So that’s in principle approval. We will now work on specific modalities options to drive the consolidation and then come up with a scheme at the right time.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

And given that you’re implementing a lot of things and looking to gain market share across segments. So how does that — can you just call out how — what is the order of priority for all the things because you have to — you’re looking to do things in charge in Nirlep, gaining market share in fans lighting. So how, what is the order of priority if you can call that out?

Anuj Poddar — Managing Director and Chief Executive Officer

Good question., Akhilesh. We have a lot on our table, fan and lighting our normal appliances Nirlep, Morphy etc, that you said besides all the other organization thing. So we have to keep balancing these things. As a principle we are aggressive, which means internally also aggressive in pushing a lot of these things, but we are conscious that we don’t push to a break point. If I just put it in a more sales, the larger things that we have to solve for or which has greater delta is priorities of course fans lighting, sector is not much larger for us today and therefore we are seeing more movement from us right now on that piece. As we start to see some of that to it, I mean it’s already starting to fructify but as that starts coming to an auto pilot mode. Therefore, for example, Morphy, I told you know another 18, 24 months out and then you start seeing more movement on that and so also for Nirlep.

So we have frequent some of these studies out and you’re seeing that in terms of what we are reporting also.

Akhilesh Bhandari — ICICI Prudential AMC — Analyst

Got it. Thank you.

Operator

Thank you. Next question comes from the line of Chirag Muchhala from Centrum Broking. Please go ahead.

Chirag Muchhala — Centrum Broking — Analyst

Thanks for the opportunity. Two questions. So first is on the — I mean just as a continuation of the previous question. So for the 2 other subsidiaries and associates with the Starlight lighting in England, I mean any about plans to keep them separate subsidiary or integrate them also Bajaj and specifically for Q1 and near-term you know how do you see that impacting our overall financials in terms of the I mean subsidiaries kind of making losses or needing further capital infusion on Bajaj standalone entity?

Anuj Poddar — Managing Director and Chief Executive Officer

Chirag I just ask, our CFO E.C. To update on the status on the Starlight and then maybe I’ll try and answer your question.

E. C. Prasad — Chief Financial Officer

The status is for Starlight merger is that it’s in the final phase of the NCLT approval and we expect approval from the NCLT to be received by the end of Q2 or latest by the beginning of Q3. That’s the update on as far as the merger of Starlight concerned.

Anuj Poddar — Managing Director and Chief Executive Officer

In terms of impact of benefits of that mathematically it’s the same thing because in all the results of that fold into consolidated results of Bajaj Electricals that said in reality on the ground having two separate entities does create more work for us ends up requiring more resources in terms of people and there is a constant funding exercise required, Starlight as you know, the legacy of that funding losses or funding gap. To the fact that once it’s merged, I think some of these returns or things that drain energy or time of funding optimization, I think to that extent you will see an improvement in making things far more seamless and smoother for us. And therefore, I wouldn’t say that’s a significant huge profit bump up for that, but at least some smaller to a smaller extent that the efficiencies should improve with this in consolidation.

And the same will hold true for Nirlep as and when we execute that which I’ve given a guidance on the earlier question.

Chirag Muchhala — Centrum Broking — Analyst

Sure. And on Nirlep sir?

Anuj Poddar — Managing Director and Chief Executive Officer

Nirlep?

Chirag Muchhala — Centrum Broking — Analyst

No, no Hind Lamp?

Anuj Poddar — Managing Director and Chief Executive Officer

That is all done, there is nothing now, so with in Hind Lamp the operations that were they were demerged from Hind Lamp and holding of Bajaj Electricals I think 2021 –, sorry, 2020. So there’s nothing further to be done really on Hind Lamp now.

Chirag Muchhala — Centrum Broking — Analyst

Sure sir and I mean Just for the sake of accuracy the four sub categories that we have fans, appliance lighting and Morphy Richards is it possible to give the revenue in absolute terms, I know in PPT you have given percentage growth but since Q1 last year was a very I mean abnormal base if it’s possible, can you please give the revenue in value terms?

Anuj Poddar — Managing Director and Chief Executive Officer

Chirag, to be honest we did give that out in our annual debt at the end of Q4, but then a call it quarterly basis we’ll not be able to do that for competitive reasons because none of our competition does that.

Chirag Muchhala — Centrum Broking — Analyst

And sir, last question on, especially on fans and water heaters. So while you mentioned earlier that a couple of your peers have taken price cuts recently in June, July as commodity prices started softening, but we have not taken any price cuts in this category in June, July month. Is that assumption correct, sir?

Anuj Poddar — Managing Director and Chief Executive Officer

That’s correct. So we’ve not take any price cut and when I refer to competition that is particularly for fans, that I understand two players have done that.

Chirag Muchhala — Centrum Broking — Analyst

Okay. And we do not see any need for price cuts considering that no fan, unfortunately, as you mentioned that the post 20th May there was softness. So part of the summer season was a loss in terms of secondary sales and channel inventory. So I mean there is no I mean likely would have us taking any price cuts in fans. Is that assumption correct?

Anuj Poddar — Managing Director and Chief Executive Officer

Yeah, so as on today. I don’t expect, time will tell in future, something else changes. The other aspect in fans remember that the compulsory star rating is kicking in. It’s this July to December the transition period and from August, Jan, it will be 100% implemented to that extent in a normal case one would have seen a price increase, cost increase to comply with the star rating and energy efficiency, but given that the commodity pressures up maybe one will be able to drive that conversion and offer energy efficient fans without a price increase. But, therefore to that extent in an overall basis a price reduction made us neutralize versus this transition to energy efficient fans.

Chirag Muchhala — Centrum Broking — Analyst

Okay, sir. Okay, thanks a lot, sir.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. Next question comes from the line of Aakash Fadia from YES Securities. Please go ahead.

Aakash Fadia — YES Securities — Analyst

Hello? Thank you for the opportunity. Sir, where are we in our logistics cost saving initiatives currently? So as full benefit being realized or we are still under cost?

Anuj Poddar — Managing Director and Chief Executive Officer

No, Aakash may short candid answers. We’ve not yet realized the full benefits of that.

Aakash Fadia — YES Securities — Analyst

How long it will take to — realize the complete benefits of this initiative?

Anuj Poddar — Managing Director and Chief Executive Officer

I’ll again be candid we should have had it by now, we’ve not had it, but we are on the job there.

Aakash Fadia — YES Securities — Analyst

Okay. Thanks a lot and best of luck for future.

Operator

[Operator Instructions] The next question comes from the line of Achal Lohade from JM Financials. Please go ahead.

Achal Lohade — JM Financials — Analyst

Yeah, good evening. Thank you for taking my question. You know while you did talk about the volume growth implied volume growth on a YoY. Is it possible to have some color in terms of how is the volume growth triggered given last 2 years were impacted because of COVID 3 year for fans, lighting, water heaters small appliances?

Anuj Poddar — Managing Director and Chief Executive Officer

Achal we’ll have to look at that at the 3-year category level, maybe we’ll come back to you on that business. Yeah. Again my short answer is, if you look at FY22 in most cases a volume de-growth. So the growth in revenues is driven by price increase. I expect that to start reversing out. This year, you will not have that much of a price increase. So any growth that we have now will been driven more by volume, but on a 3-year category-wise, we will have to look at that and come back to you.

Achal Lohade — JM Financials — Analyst

Understood. The second question I had, specifically with respect to the lighting business. Now, like you mentioned you have gained significant market share in the professional lighting. Can you help us understand what’s the market size for consumer and professional lighting and B, what are the key changes which you have done to see this market share improvement in both consumer and professional side?

Anuj Poddar — Managing Director and Chief Executive Officer

It’s a very broad numbers in the professional lighting, industry side should be about INR4,500 crores and on the consumer lighting, about INR10,500 crores. Okay. That’s a very fragmented market, particularly in consumer lighting is a lot of players, etc. Sorry, the second part of the question is, what have we done to drive market share?

Achal Lohade — JM Financials — Analyst

You mentioned you mentioned professional lighting has seen a decline in terms of the industry growth, and I don’t think you commented specifically on the consumer lighting how that industry growth has been. Has that also seen a decline, or it’s kind of stagnated?

Anuj Poddar — Managing Director and Chief Executive Officer

Consumer lighting is not seen so much a decline on an overall basis, but there, I think, we are seeing it’s a very, very fragmented long tail industry. There we are seeing a much sharper shift from the fragmented long tail unorganized or smaller players to the larger players. I think that trajectory will continue next 2, 3 years, because it was a long tail because it operating at the very bottom end of the market a very commoditized cost driven and if you look at from a 3, 5-year length LED prices have been continuously coming down and therefore, it has become a very price-driven market. LED prices, the rate of reduction or price erosion is really bottomed out. So it’s no longer a price driven market and therefore, it’s moving to a proposition of productivity market even in the consumer side. And as that happens, that helps actually the tailwind for the larger better quality players with better R&D and therefore we see a market share increase happening for us and/or other leading players, we will deliver on that growth and increase in market share in the back of better products.

Whereas at Bajaj in particular, I do think we have been — we are behind the curve on consumer lighting, not just on the shift to LED but introducing value added products that in downlighters, etc, but that’s the catch-up that we are now playing and we will play that aggressively over the next couple of years and therefore we are confident that we will gain in the consumer lighting —

Achal Lohade — JM Financials — Analyst

Understood. And just last question if I may, — talk a little bit about how you’re strengthen the shifting from just — understanding. We talked to [Indecipherable]?

Anuj Poddar — Managing Director and Chief Executive Officer

Achal I couldn’t hear. How have we strengthened what?

Achal Lohade — JM Financials — Analyst

Leadership team in terms of the various product segments?

Anuj Poddar — Managing Director and Chief Executive Officer

So you know, we made some public announcements. The most recent key announcement is we restructured so the lighting business which was split with consumer lighting being part of overall consumer business in professional EPC, we brought it together as you one unified lighting business segment is headed by Rajesh Naik he had joined us in December 2019. He was heading the professional lighting. He’s been instrumental in turning that round and growing and now will drive the overall lighting business. Under him, like I mentioned earlier, we are setting up so we have now got a dedicated lighting sourcing supply chain team for this. We’ve got a dedicated lighting quality, lighting marketing. We are beefing up all of those functions under that and most importantly a go-to-market separate sales team for consumer lighting, which is not what we had earlier.

On the leadership side, on the other hand in the Consumer business, which is rest of the consumer that is fans, appliances, Morphy Richards, Nirlep etc we’ve got a new Chief Operating Officer. Ravindra Singh Negi, he has joined us. He was the Head of the consumer products business and will be joined us in July. And therefore, there again we have an integrated strong leadership in place for that. Under each of these of course we have the second line of leadership that we have strengthened and our continuous changes. At the corporate side similarly, we have strengthened the team and we continue to do.

What is not visible is more the middle and junior management or junior levels also. There’s a lot of churn that is happening in terms of strengthening the talent pool that we have. So overall as an organization, we are a very different organization in that investment in talent is something we’re very committed to, because I think that will be due to professionalizing and performance going forward.

The most recent one, if I may talk about it myself is an announcement that we made today of also splitting the Chairman and MD role. So Mr. Shekhar Bajaj will now continue as Chairman and he is relinquished the MD role and pass that on to me.

Achal Lohade — JM Financials — Analyst

Great, that’s very helpful and congratulations on your promotion, sir. Just, is there any anything left to be done which is still kind of significant or meaningful which is yet to be done?

Anuj Poddar — Managing Director and Chief Executive Officer

Absolutely. There is a lot lots and lots left to be done so well you know if you also see one of the other desk put out this only horizon one in our strategy to deliver Horizon 2, which is really about growth and operational excellence. We have our hands very, very full. So we have a very clear roadmap. We have many initiatives to do and we are very committed to deliver on those.

Achal Lohade — JM Financials — Analyst

Got it. Thank you and wish you all the best. Thank you.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you very much.

Operator

Thank you. Next question comes from the line of Amit Mahawar from Edelweiss. Please go ahead.

Amit Mahawar — Edelweiss Securities — Analyst

Yeah, hi. Anuj congratulation on your new role that you’ve got. I just have one question that in basically as you consolidate the entire business structure, what is the specific allocation to each businesses. So you know, we talk about Nirlep or you talk about Starlight. I just want to understand maybe in the next one to two year how much is going to be the investment in each business specifically? Yeah, that’s the question. Thank you.

Anuj Poddar — Managing Director and Chief Executive Officer

Amit hard to quantify that, because that’s not, so we were looking at it, each business, whatever it requires we will make that happen. Our view is these are not really financial investments, they all look at consumer business or lighting business and how the rest of EPC financially they all profitable. So they will have internal accruals to do that. So, except the one piece, I’ll put out is some CapEx for manufacturing, which had been guiding at 15%, going up 25%, 30%. We have that in the back of our minds, but maybe that’s 2024 thing we’ll come back at that point and look at that. But again, that will not be some INR300 crores, INR500 crores, it be maybe a smaller number than that. In terms of, to me the investment is not so much of money, but people and therefore this focus on strengthening management leadership talent across the board was like — to a questions earlier, we have a lot to do.

We have a lot to do, we cannot to all of it sequentially, if we are hungry and aspiration we have to do a lot of that in parallel and therefore the allocation of energy or resources in terms of people talent so that we have all of this happening in parallel that is what we’re focused on as an organization. So to that extent our commitment to invest in talent or R&D. So all of these things move in parallel. So, 2, 3 years out, we should start seeing a payoff on multiple fronts rather than have it all sequential. I don’t know, if I was able to clarify your answer question, but that’s the way we think.

Amit Mahawar — Edelweiss Securities — Analyst

Yeah. Yeah, fair. And maybe second question Anuj is generally, we’ve seen a lot of leadership reject in Bajaj and I think in last 1, 1.5, 2 years you’ve actually had a very strong and robust process in the organization. So I just want to understand how will your appraisal policies be the ESOP structuring? Is it in line with the best? How will you attract more talent and wide range of talent that you’ve set processes and systems on place? Thank you.

Anuj Poddar — Managing Director and Chief Executive Officer

First, the policy a principal statement our vision is to be the best in class organization in our industry. And when I say that for our industry is beyond the benchmarks of our industry. We are looking at other companies and other sectors that have a more superior approach to all of these things institutionalizing how they run the organizational or culture the talent pool the performance appraisal management system etc and to that extent there is a lot of work that’s going on internally with [Indecipherable] and with others. We revamped our PMS our variable components are much higher than they historically used to be. Our approach to driving performance at an operational level is reaching. Our ESOP will probably undergo a review next year, we’re waiting for the demerger to be completed and then for both companies separately we’ll also review the ESOP scheme, but you know this is a continuous dynamic process. So we are clear what is required and we keep making those changes. The larger vision to that is to be far more institutionalized. So it is not meant to be driven by one or 2 people, but can we create an organization that is in specialized can that can therefore chase multiple initiatives or goals and work at a far more greater speed. Again things like the SAP transition that I spoke about, these are long overdue and unless we have this robust systems processes to my mind the building blocks on which we will then mount aggressive growth going forward. If I can point back to that investor deck that we put out in early July and that Horizon 1, Horizon 2 is really about that. So really putting in place all those building blocks. They have another 6, 9, 12 months to put that in place. So that next 3 years we really going to look at building off these building blocks to have faster growth.

Amit Mahawar — Edelweiss Securities — Analyst

Thanks, Anuj and best of luck.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Amit.

Operator

Thank you. Next question comes from the line of Chirag Lodaya from ValueQuest. Please go ahead.

Chirag Lodaya — ValueQuest — Analyst

Yeah. Sir, can you share the update on NPD as a percentage of sales and premiumization share how it has no moved for us?

Anuj Poddar — Managing Director and Chief Executive Officer

We don’t normally publish that. We made an exception in that July Investor Day to share the contribution of new product launches. To give you a sense that we made significant improvement even this quarter our contribution from new product launches higher than the previous quarter on YoY basis etc. So that’s the key metrics that our R&D is driven by. Look at this number of launches that we’re doing, therefore that we pointing to giving an indication that our share on new product launches going up. I again, I’m sorry, I’m not giving absolute numbers, but again, if you look at, let’s say, signs of the category and used to be sub economy. If you look at the 3 examples that we’ve given this today’s quarter deck one is an ABS and we never had a play in the ABS segment. Second is the decorative premium plan. Again, that was a large, white space for us. And the third is the four star energy efficient, but in the water technology. All of these were or segments that we are not operating in.

As we start entering these sub-segments of product categories, our share in contribution coming from these new product launches are increasing. We have a clear target in the next 2, 3 years, you will see that on par with the best of the players in the industry.

Chirag Lodaya — ValueQuest — Analyst

All right. Got it. And so with respect to assume that in coming quarters we see positive volume growth in the last few quarters because of this stock price increase, etc. I think they’re under pressure but is it fair to assume that the remainder can be positive on the growth overall?

Anuj Poddar — Managing Director and Chief Executive Officer

That’s correct. So you know, Q2 like I said, will be a blend of some of the legacy inventory higher cost inventory, but we’ll start seeing an improvement in Q2. But I think the more benefit of that should come through in Q3 you will should see or we should see margin improvement with this commodity costs having cooled off.

Chirag Lodaya — ValueQuest — Analyst

Got it Thank you, Anuj.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you, Chirag.

Operator

Thank you. Next question comes from the line of Rakesh Roy from Indsec Securities and Finance Limited. Please go ahead.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Yeah, hi, sir. I have one more. Sir, can you highlight fan business how much the fan segment is contributing or mix segment or premium segment in fan business?

Anuj Poddar — Managing Director and Chief Executive Officer

Sorry Rakesh I couldn’t hear you clearly.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Hello?

Anuj Poddar — Managing Director and Chief Executive Officer

Premium in fans will be about 20%.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay, and the economy and mid sir?

Anuj Poddar — Managing Director and Chief Executive Officer

Economy and mid would be another 20 and rest of them with a lower segment there.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay. So this is for Q1 and Q4 FY22 the ratio same?

Anuj Poddar — Managing Director and Chief Executive Officer

No it is slightly lower, which means premium I think was about 14% to 15%. And I don’t remember off hand, the economy and the mid-segment.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay, sir. Sir same question, sir. For any target to increase the premium from next one year, how much do you target sir?

Anuj Poddar — Managing Director and Chief Executive Officer

I don’t have a numerical target for that. But the fact is like I gave a 3 examples. We’ve typically been weak because we didn’t have products at all in the premium fan segment, if your question is particular fan, as we are starting to introduce this in more brands and models that are their in the sheet both have got good traction and feedback from the market, but we also conscious that one or 2 models will not do it. So as we expand that range we expect to see an expansion in the share contribution of in those sub-segments.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Sir, do we see more new launches in premiums fan in near future?

Anuj Poddar — Managing Director and Chief Executive Officer

Yes, absolutely. When again we are bracing up for next year’s next season. So we’ll see that gradually happen right from now till next summer season.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay, sir. Overall, we are number 3 and number 4 player in fan category?

Anuj Poddar — Managing Director and Chief Executive Officer

And we are number 4, number 5. So between 4 and 5 both are similar.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Okay, sir. Sir, —

Anuj Poddar — Managing Director and Chief Executive Officer

Number 7 player.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

With the fan in premiums or economy, sir? Can you just highlight on this sir?

Anuj Poddar — Managing Director and Chief Executive Officer

Sorry, your question any highlight on premium and economy?

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

In premium how much market share we have currently, sir?

Anuj Poddar — Managing Director and Chief Executive Officer

That’s what I said, Q1 has been about 20 — market share you mean?

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Just market share.

Anuj Poddar — Managing Director and Chief Executive Officer

No, we don’t publish that but we will be very small. So while we are number 4 number 5 overall rank in premium will be worse than that. So that’s the catch-up that we are looking to play at.

Rakesh Roy — Indsec Securities and Finance Limited — Analyst

Right. Thank you, sir. Thank you from my side, sir.

Operator

Thank you. As there are no further questions, we have reached the end of question and answer session. I would now like to hand conference over to the management for closing comments.

Anuj Poddar — Managing Director and Chief Executive Officer

Thank you very much once again for joining us today and I know it’s a Friday evening long weekend coming up. Once again, I would like to reiterate that we are happy with our Q1 results and I would like to acknowledge our team that is delivering this. We remain confident about what the future holds for us and we are committed to add value to all of you. Thank you very much.

Operator

[Operator Closing Remarks]