Creative Newtech Limited (NSE:CREATIVE) Q4 FY23 Earnings Concall dated May. 29, 2023
Corporate participants:
Ketan Patel — Chairman & Managing Director
Abhijit Kanvinde — Chief Financial Officer
Analysts:
Sudhir Bera — Brighttime Pvt Ltd. — Analyst
Sarang Anajwala — — Analyst
Nikhil Arora — — Analyst
Neha Jain — — Analyst
Harsh Sharma — — Analyst
Jacob James — — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4 FY23 Earnings Conference Call of Creative Newtech Limited. This conference call may contain forward-looking statements about the Company which are based on the beliefs, opinions and expectations of the Company as on-date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties, which are difficult to predict.
[Operator Instructions] I now hand the conference over to Mr. Ketan Patel, Chairman and Managing Director, Creative Newtech Limited. Thank you, and over to you sir.
Ketan Patel — Chairman & Managing Director
Good afternoon, everyone. Welcome to Creative Newtech Limited earning conference call for the fourth quarter and full-year ended March 31st, 2023. I would like to start by thanking you all for taking the time to join us today. On the call with me are, Mr. Abhijit Kanvinde, our CFO, and Mr. Vijay Advani, Whole-time Director at Creative Newtech Limited.
Before we get into the business and financial performance, I would like to share some key recent developments and brief insights regarding the company. The past financial years headwinds in the form of macroeconomic volatility and geo-political tension, which impacted the overall market and consumer sentiment. However, resilience has always been a part of our DNA as Creative and that reflects in our performance during the year. The shift towards digital technology continues to demand for various products as more-and-more industries are up digital and online. We strive to maintain a light and agile business model with a selective strategy to build our brand portfolio, such that our offerings remains ahead of the ongoing market and consumer trend. This reflects in our brand, which has niche products, which are relevant and scalable.
Over the recent months, we added premium brand offering related product and the US based gaming brands. Both of these are among the leading names in their respective fields. Some of the other is the addition include Samsung flash memory, Lexar, and CG tech, CG. On the licensing front, we have now Honeywell licenses in 38 countries covering the APAC and the GCC region. With our growing suite of Honeywell products such geophysical expansions to bring in the scale that we had been expecting in this line-of-business. This in-turn will help us bring brand licensing into a sizable part of our revenue and will also boost our profit margin.
Given that we are upon multiple channels, it gives us substantial leverage to reach a broad market win. The synergy from Honeywell business will continue to grow this fiscal year. This also garners the attention of other global brands, looking at brand licensing as a beneficial approach.
Speaking of headroom for growth, the budget proposal and digitization and technology revamp could possibly result in a multi-billion dollar opportunity for India’s IT sector. With the budget allocation of INR4,600 crores in PLI scheme, we expect in the coming years to get our goods manufactured in India, which will help us reduce our inventory level and overall working capital due to reduction of number of days in logistics.
Consolidated performance highlights for the quarter ended March 31st, 2023. Total income for the quarter was INR402.98 crores in quarter four FY 23. A year-on year increase of 50.16% improvement in EV segment was supported by strong demand for brands such as Samsung, Cooler Master, Honeywell and Sony. EBITDA is at INR11.49 crores in quarter four FY 23, year-on year increase of 23.92%. EBITDA margin stood at 2.85%, PAT stood at INR6.45 crores in quarter four FY 23 compared to INR5.18 crores in quarter four FY22 margins, PAT margins stood at 1.6%. As you might be aware, last year was, we reiterate our segmental structure on the distribution front, to better align with our business design and started.
Our business are now categorized in the following four segments. FMSG, fast linked social media gadget, this comprised of new and niche products that appeal to the younger demographic, and turnover. The brands are driven by social media penetration and wider DevOps. This is one of the faster-growing and higher margin segment. FMCT, fast moving consumer technology. This segment includes established consumer products that cater to personal and organizational demand, such as Samsung, iBall and ViewSonic. EB, Enterprise business this compromise products supply to enterprise and high volume. Some brands in that category include MSI, AOC etc. SMEG Fast Moving Electronic Goods this segment — segment covers our alliance with Reliance, through which we offer home appliances, both like from brands BPL and Kelvin, these segment that are the brands portfolio with better linearity on high-margin and high-volume products we periodically expand and refresh our portfolio with new niche brands and products relevant to our clients.
Coming to Ckart, our online digital B2B e-commerce platform, it is facilitating the growth of our business by catering to existing and new customers with nominal additional costs. The platform or credit spread expand our partner base and volumes of that, Ckart will continue to be our one-stop solution for our customers and improving the working capital cycle and profitability.
Now I hand it over to Mr. Abhijit Kanvinde who will take you through the financial highlights in quarter four and FY 23.
Abhijit Kanvinde — Chief Financial Officer
Thank you, sir, and good afternoon to you all. I’ll show the highlights for our consolidated financial performance, after which we will open the floor for questions. Our financials are as per guidelines. Looking at consolidated Q4 results, the company profit are total income of INR402.98 crores, growing at 50.16% year-on year. This was driven by strong demand for the brands like Samsung, Cooler Master, Honeywell, ViewSonic supported by EV sector. Quarterly EBITDA stood at INR11.49 crores as against INR9.28 crores in the previous corresponding period, an increase 23.92% year-on year. The dynamics during the period impacted the margins.
For the quarter, these will be INR6.45 crores as compared to INR5.18 crores for Q4 FY22 and year-on year growth, 24.55%. Speaking of full year results now. For the financial year ended on 31st of March 2023, we reported a total income of INR1,402.25 crores, driven by growth in Enterprise Business segment coupled with higher demand for brands like Samsung, Cooler Master, Honeywell and ViewSonic. EBITDA stood at INR45.12 crores as against with the INR32.62 crores in the previous previous corresponding year, an increase of 38.31% year-on year.
EBITDA margin stood at 3.22%, changing mix offset the benefit of improved of the operational efficiencies, which has impacted the margin. PAT for the year is at INR27.25 crores as compared to INR19.25 crores in the corresponding previous year — period, growth of 41.56%. This is all from our side, we can now open the floor for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Sudhir Bera from Brighttime Private Limited. Please go-ahead.
Sudhir Bera — Brighttime Pvt Ltd. — Analyst
Sir, congratulations for good set of numbers. Sir I just wanted to know the detail of Honeywell business, what kind of number you have in this FY 23. And what is the visibility of that particular Honeywell consumer products segment which I think will grow exponentially from here so can you talk some light on that business and the prospects for next two to three years.
Ketan Patel — Chairman & Managing Director
Sure, Sudhir. So last year, Honeywell business was close to INR108 crores. In that, we did INR79 crores of business in India and INR29 crores of this abroad. So out-of-the total business of INR1376 crores in consol, Honeywell business stood at 8% of our business. In the coming year, we have planned to do the Honeywell business of close to INR180 crores for this year. And we also think that our top-line will grow overall by 10% to 15%, so which will get the Honeywell business close to 14%, 15% of our overall business. Honeywell, as you know now is available for 38 countries and we have already started our operation for Middle-East. We have Middle-East Director also in-place now and we have signed-up with four distributors in Middle-East. We are also participating in the GITEX Africa Exhibition which is happening at Morocco. So that will also open our entry into the African countries. And for South-East Asia, we have South East Asia Director in place. So I think, Honeywell business from here, will definitely grow exponentially.
A couple of things to do that business is that because a lot of business has moved online and especially countries like South-East Asia and Middle-East, they don’t have the general trade or mom-and-pop store rollout, their business is online and modern retail or power retailers, as it is called, so for online business you require a lot of reviews, so that you don’t have to pay a lot of money to Amazon to acquiring customers and for the power retail business, you require to pay some upfront listing fees which is in tune of AED450,000 to AED500,000. Okay and they only list product once a year, so that process also started during this March month. So our business is slightly slower there, for the first quarter also, it may be a bit slow abroad, but it will start picking-up from the end of second-quarter and the 3rd and the 4th-quarter would be very good on this business.
Sudhir Bera — Brighttime Pvt Ltd. — Analyst
Great. Thanks for the opportunity and all the best sir.
Ketan Patel — Chairman & Managing Director
Thank you so much.
Operator
Thank you. The next question is from the line of Sarang Anajwala,, an Individual Investor. Please go-ahead.
Sarang Anajwala — — Analyst
Hello. Thanks. One, couple of questions actually —
Ketan Patel — Chairman & Managing Director
Sorry your voice is not audible, can you get closer to the mic please.
Sarang Anajwala — — Analyst
Is it better?
Abhijit Kanvinde — Chief Financial Officer
Yeah, bit better, if you could be a bit louder, it would be very clear.
Sarang Anajwala — — Analyst
Okay. Let me know, this is better. Yes, so my question is around the split. So even this quarter I am seeing that EB has maximum share. And then typically FMSG is the area where we have higher margins. I’m just trying to understand the strength like in terms of FMSG if you see this year more or less, it’s kind of flat, so do you see any challenge on that front. How is the traction on that on the FMSG side?
Ketan Patel — Chairman & Managing Director
So, Mr. Sarang your voice was a bit cracking, but what I could unless tell is and you can tell me your furthermore, you said that in the split. EBIT is a lower percentage margin. This. That is higher and the. Higher percentage margins, net that said is lot lower. That’s what. If your question and how will be kind of. Grow that business, that’s what you are saying.
Sarang Anajwala — — Analyst
That’s correct, that’s correct.
Ketan Patel — Chairman & Managing Director
Yeah, yeah, okay, so. Yeah, observation is completely right. And in the EB space because we don’t use working capital in that space. So we get the money advance, and then. We also pay in advance. And that’s why whenever we have, it’s more of an opportunity business and whenever we have that fully cash-flow we do that, we are very cognizant of that fact. That it also affects our overall to margin ratio. Yeah, because it gives you a higher top-line with lower bottom-line, so from this year and what we are willing to rationalize that business and not take it as it comes. While the FMSG business, because we had the Go-Pro for and we have not been doing that business for a couple of years because of COVID and then the travel them on frictions were there. So that product and also the chipset shortage affected overall and complete venture loss in that category. Now we have two products, which we launched. Last quarter, one is could it’s a $1.6 billion US brand completely driven by social media. Millennials are the users of that product, we just launched that product in India last month, and it has shown very good, which was launched only online on Amazon and now we will start offering to that channel but that product very positive, and also we launched Razor.
Razor is the number-one gaming brand, it’s called again in the FMS, sector, that’s also come. And the last months, we launched it will. In the last few months. The sale for that brand is also there, so FMSG is the share overall, we’ll start, you will start seeing that the sale that will be much higher in the coming quarters. Since you asked this question also I would like to add one more thing that in the future and the direction from the Board for this year also is that less is more, they want us to keep consolidating on the brand distribution business, and they want us to kind of in the next three years time, two to three licensing brands and three to four brands in the FMSG segment. As you understand that we do this Distribution business, three main reasons, one is the foot in the door, so we can offer other products to the retailers there. Second is to get higher visibility and third is to amortize our cost. We clearly understand that at INR50 crores business month we can amortize over cost and then all incremental cash flows, we want to use for FMSG and brand licensing.
Abhijit Kanvinde — Chief Financial Officer
Also, this is Abhijit. Our working capital cycle inventory and. If you are trying. If we calculate last year, consolidated basis for the financial in that to. It was 61 days this to certain 4-year, clearly, that was the growth there pilot businesses given that. aActually on moving, pickup in situation where the money comes in advance we pay later. So this is an improvement in working capital, which I would like to highlight.
Sarang Anajwala — — Analyst
Right, right. Thanks for the detailed explanation. One question around categorizations, so Honeywell, India business do we kind of consider it under FMSG or how is Honeywell, abroad it’s part of consolidated numbers, it’s part of secured commitments, but how about India, does it is it part of our pharmacies.
Ketan Patel — Chairman & Managing Director
So in India, the fair to purifiers activity, some the that there and. Fast Moving Electronic essential of Honeywell would go on the computer technology. But since be dominantly the category falls under the FMSG space we categorized in FMSG.
Sarang Anajwala — — Analyst
Okay, got it, got it. Yeah, answer to last question. I think you already mentioned, but I missed them multiple, what was the Honeywell business this year. I think in year.
Ketan Patel — Chairman & Managing Director
So the total business this year INR108 crores, INR79 crores of that business happens in India and INR29 crores of that business happened abroad.
Sarang Anajwala — — Analyst
Okay, got it, got it. Sounds good. Thank you. Thank you very much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Nikhil Arora, an Individual Investor. Please go-ahead.
Nikhil Arora — — Analyst
Sir are we planning for any fundraising in the near-future like for expansion in terms of business.
Ketan Patel — Chairman & Managing Director
So what we understand and I am very new to the market, but they said that quality of the investor is an important thing when it comes from research point-of-view and so if we get the right kind of fund or investment company which is into technology space, which can give us some advise and also the right connections into that space we will look at raising funds to the tune 40 to 50 crores. Also, this money will be utilized in expanding valuable businesses because what happens is that we have to conquer so many countries right now in this financial year because any additional money or the other we have internal exactly we plan to expand in we’ve already established in the we want to do, Thailand, Malaysia, and Indonesia. We wanted to little bit Sri Lanka and we have to expand in GCC, although that is, that is INR180 crores. In terms of money, okay, that is money obviously, we do used in working capital, they have to buy most inventory. And it doesn’t mean we can become look for us, fast forward, the expansion of countries and possibly in the next financial year and fourth quarter, we will plan to go to Africa. That is what hasn’t been in our mind. So in case we get money, in case we are able to then we will try and pass over the Honeywell growth in. We don’t that possibly will go and over-time, it will definitely deliver. We share that by ’25, ’26 rather FY 26 we will at least be INR500 crores in Honeywell or any other brand and but the truth is, our plan will be in the range of 2100 crores to 2200 crores. So that will happen.
Nikhil Arora — — Analyst
So, thank you. and exhibition has about the governance and expansion. Yeah, absolutely. Yeah, also. I want to know like what was the driving growth. This segment is there, and especially the FMSG segment, the revenues are declining, particularly that giving the under.
Ketan Patel — Chairman & Managing Director
Nikhil your voice a bit cracking, you asked something about the segment that we couldn’t…
Nikhil Arora — — Analyst
Growth behind the EB segment and also the FMSG segment, the revenues are quite declining, so any particular reason behind that.
Ketan Patel — Chairman & Managing Director
Couple of things on that side, the first is on the EB segment. Since it’s a batch to business and my understanding this last year. Well that until you are putting more money absolute money through the bank rather than confronted. It’s a good thing, but I think now the margin ratios are also very-very important. We would if there is an opportunity also larger side on the EB business, we will slightly curtailed that the business coming to that FMEG business. Our point is Honeywell, we have that structured cabling business, the structured cabling business has CCTV fiber cables which are used by Honeywell themselves and also by a lot of other channel. We started we we could line and getting electrical channel that space. As we are trying to get into that, we find that that channel is slightly difficult channel more traditional no outlook channel and that’s why we are not growing that business. Currently, we are having the distribution of BPL Reliance in and we Polycab we are just trying to piggybank on these two brands to build our business. So if that we have factored in trying to do that experiment in Southern India. If we get success there, then we will build that business further, slowly winning that business home. I think the Honeywell business will win.
Nikhil Arora — — Analyst
Last question. I just wanted to give you formulaic share any profit margins during the quarter.
Abhijit Kanvinde — Chief Financial Officer
So Honeywell share, are you saying consol?
Nikhil Arora — — Analyst
Yeah consol.
Abhijit Kanvinde — Chief Financial Officer
Okay, this one would like to see. Last year, for all Honeywell business and consol businesses they added INR3.4 crores to the bottomline. So our bottomline standalone was INR20.5 crores and consol bottomline is INR25.25 crores, about INR6.4 crores in addition in bottom-line.
Ketan Patel — Chairman & Managing Director
Nikhil, one thing to also add, that since we are in the growing stage currently there are lot of expanded. For example, the Morocco exhibition what we are taking it will cost us almost to the tune of 30, 35 lakhs for routine now all cost of building. And also we’re paying for the rental for the booth that’s so. In-spite of the expansion, in-spite of spending money on day, in spite of spending money on getting all the regulatory compliance the electronic products everywhere. For example, we just to Singapore, it requires Singapore SG mark, for that you require a certification which cost $10,000, so including all the certification also, we have been able to post a good profit in that Honeywell business and this is all expensed out actually and not take them as a part of capital expenditures, so about, because we have also four categories ready, all the certifications ready and we have to still participate in GITEX Middle East that is Dubai, which will happen in September-October, the press top on participations we have done. So the Honeywell could grow from this year.
Nikhil Arora — — Analyst
That’s all from my side. Thanks for the opportunity.
Operator
[Operator Instructions] The next question is from the line of Neha Jain, an Individual Investor. Please go ahead.
Neha Jain — — Analyst
Good afternoon, sir and congratulations on good set of numbers. I had couple of questions. Sir, just wanted to understand what is the profit margin of for like this entire year for FMEG, FMCT, FMSG etc. So what other individuals, profit margins for these segments.
Abhijit Kanvinde — Chief Financial Officer
If you look at segment results. I am giving profit margins for the consol. I’d say that some of the consol segmental results, the EB segment results profit margin of 2.7%. FMSG was 20.71%. FMET has been as a percentage, but the amount of profit is hardly anything and FMCG the profit margin is 5.39%, overall, it is 5.83%.
Neha Jain — — Analyst
So do we have any plans as to how we are going to increase the profit margins. We see this level to be maintained for the next couple of years.
Abhijit Kanvinde — Chief Financial Officer
Definitely, we have plans to increase the profit margins. We appreciate that as we grow Honeywell business in as the profit margins in consol revenue will grow because Honeywell business has a gross margin of 46% and 55% in India, it is actually. 45% and abroad will be more than 50% so adding that in consol revenue the Honeywell share growth the profitability is going to do zoom up. We have given an internal guideline that FY26 if you want to see the profitability, then the consol basis, will be which right now is rolling in the range of two will be as a percentage will be in the range of 4.5 to 5%, okay. But that going to be steadily growth growing, because the Honeywell business growing and we would like to also add one more than or licensing business, which will deliver that kind of gross margin.
Ketan Patel — Chairman & Managing Director
Neha just adding to what Abhijit said. So the old guidance, is that the next three increase the Honeywell business to almost 30% of your top-line. Consolidated on the brand distribution business, reduce the brand and on the FMSG which is also higher-margin business and it’s also a business which is best to get for the Indian demographic currently. Overall, four or five exclusive niche brands which is high-margin and high-volume. So that’s the whole plan, so in the next two to three-years besides that we have a plan for every quarter and every year. So the margin from 2% will go to between 4.5 to 5%.
Neha Jain — — Analyst
Got it. Sir, in terms of our working capital cycle, which seems to have been improved recently, so is this includes many are sustainable or what is the level that we’d be maintaining now that we are also growing.
Abhijit Kanvinde — Chief Financial Officer
Of course, working capital it inventory, okay. On a consol basis it is around 31-32 days, 34 and what we, is that — we are allowed to increase the Honeywell business and Honeywell business needs higher working capital and the contribution of enterprise business, we do it on business, we do see that you know because it will settle at the 37-38 days of working capital going-forward, that’s going to be our dead line.
Neha Jain — — Analyst
Okay, sir, like you mentioned before that we are also planning to bring on board a few new niche products. This part of the expansion. But apart from that, how do we like retain existing brands, so that they don’t appropriate distributors. So what is the strategy for that.
Ketan Patel — Chairman & Managing Director
A couple of things, Neha. It’s a very good question you asked strategically. See when you take-off brand that point of time, the company has certain goals and the brands have certain goals. In four to five years time, sometimes, it may happen that either the company or the brand, both retailers in terms of their goal, that’s the time you have to part with brand. That’s what it happens. We take our brand with kind of our view that the brand should be with us for eight to 10 years, right. And ideally we take-up a brand where we do the whole big, so nine years, we do so right from importing to distributing to doing the marketing to doing the inside part of that to. With that, do you think. And the EPR also for that brand, everything we do. So it’s a very-very integrated and very good [indecipherable] we do with the brand on every aspect. So in case if the brand had certain issues if I meant be other products kind of if not require into the market because of the change of technology that’s went on we have to pass with the brand. That’s the case.
Second, consider products like the Monitor right that also we distribute for Samsung over a period of time, everybody has move to a laptop during the COVID everybody wanted a second computer at-home. So the monitor sales and the price both zoomed up, but now the monitor prices have stabilized and people are not buying another monitor for their own because they have already bought the same. In this case that sale may go down, but we factor every, so we have our annual operating plan and we have call quarterly operating plan. And based on that out of that the most important brand there that falls into my, where is the brand is very important, it is giving high-margin, high-volume than. I have to closely work with the brand to grow that. So that’s the case, but sometimes it is sheer about luck that whatever you may drive. But you may have shortfall of brands expectation and the brand more from you that could happen.
Abhijit Kanvinde — Chief Financial Officer
And just want to add something to what Ketan said strategically, we are a national distribution house and therefore while some brands must either those always have the fact. gross margin topline monthly for some brands, if have not please given justifiable numbers again, our have with license. We currently have how every, every brand, all our monthly and quarterly basis. So are justifying the investment in the brand is not justifying the return, then our Board has given us a mandate that we should drop-off brand gradually. We are thinking about that will have at least four, five brand, which are not making any add in this financial year.
Neha Jain — — Analyst
Okay, thank you so much. And good luck.
Operator
The next question is from the line of Harsh Sharma and individual investor. Please go-ahead.
Harsh Sharma — — Analyst
Good evening, sir. What I wanted to ask you is, why did the material expense as a percentage of our sales increased YonY which caused gross margin to drop.
Ketan Patel — Chairman & Managing Director
Why did the —
Harsh Sharma — — Analyst
Why did raw material expense as a percentage of sales increased YonY causing our gross profit…
Ketan Patel — Chairman & Managing Director
Yes. But it the last clearly whole country, right. There were put in one strategy in the material for the past two quarters and also the fleet assets really gone up. The very-high due to the kind of thing, so. I think that’s why the cost of the raw material looks higher when you compare year-on year. Because the freight cost and also the strategy is. So that’s been higher and a lot of time, we think that instead of increasing that by with the brand things actually instead of increasing the prices. To keep the mass markets, constant, so that people don’t move towards other brand that is the primary reason.
Harsh Sharma — — Analyst
And one more question, please. If we see operating expenses have reduced YonY. Could you like shed some light?
Abhijit Kanvinde — Chief Financial Officer
Yeah, yeah. This is the other expenses have reduced year-on year standalone basis, as a standalone basis concludes last year 33.6 crores, which has come down to 13.67 crores. The merger is a channel excellent has been installation commissioning. We feel as if any on commission spread that’s although the of severance expense to 5.05 crores to 2.47 crores. Okay, on this in expenses, which are the promotions and periods, our exposure will be spent on behalf of the brand. So technically. There has been lot of spending in this financial year on behalf of the brands.
Harsh Sharma — — Analyst
Understood, sir. And, sir, one last question. Sir, what will be the breakdown of domestic versus overseas revenue.
Abhijit Kanvinde — Chief Financial Officer
So on consol basis, 1476 of consol revenue. Approximately 875 crores will be foreign revenue and domestic will be around by 500 crores.
Harsh Sharma — — Analyst
Thank you sir.
Operator
[Operator Instructions] The next question is from the line of Jacob James, an individual investor, please go-ahead.
Jacob James — — Analyst
Thanks. I wanted to know what are the measures are we taking in order to improve our cash-flow position.
Abhijit Kanvinde — Chief Financial Officer
Pertinent question. At this time there has been cash-flow operations to meet and direction of 18, not taking and-or growth, okay. Clearly, if you see the balance sheet and if you because that balance sheets or are they want to again there. There been all in three in other you know, I’ll do the tune of 40 crores. If you see the composition of this 40 crores increased in our GST. Okay duties and taxes receivable demand as this 30 previously. Also on those become 74 crores. There has been there are two-three components of this. This year we will even we seeing around 7 crores, 5.5 crores receivable, so part of duties, taxes receivable. The GST we planned on exports, post 20 has already come in the month of April and definitely we are hoping that there is around 24.5 crores duty drawback which is pending government this year. We think it will come back, so most of the money which is investor duties and taxes have been expressed to you that. We we will include in this financial year and I am sure that our cash-flow from operations will be good positive result.
Our debtors are in-line problem by Canadian rather our inventory and as sell them, okay, what has. When has done wrong there has been an investment in the duties and taxes receivable, which will come in this financial year and we will have a positive cash-flow this time for sure.
Jacob James — — Analyst
Okay, looking because if I talk about working capital, we. mentioned that some numbers on the working capital. So if you could please it what is Honeywell, working capital as compared to service of the brand on an average.
Abhijit Kanvinde — Chief Financial Officer
With the working capital, it is in the range of 40 to 40, okay. However, Honeywell is 60 almost 60 yeah, sure of this solution will also improve okay reasons is Honeywell in first one or two. Or three times this, they do not give us credit. No, we have to send money in advance. However, analysis, okay after two years live with them now, they have started giving us credit. So the 60 days will also improve 70-30, okay. And we are 40 this okay. So this is we resumed that all about including enterprise, is that will be at today, we will be at 37 or 38, okay, going-forward.
Jacob James — — Analyst
I have one more question. If I — so if we talk about our product newness has impacted our profit margin. So could you if you could. Highlight on the change in-product mix due to which our profit had been impacted. If you could highlight them.
Ketan Patel — Chairman & Managing Director
So in the last year compared to last to last year. Roofing was in and. The gaming product, because they are fast to moving in. The gaming products which have. Mainly Cooler Master BNY fall, they were doing extremely well because we’re not are levels. The graphic that. We’re also in extreme demand last year, we saw a drop into that segment completely the gaming segment. Mainly because the same product goes into crypto mining the same product goes into high-frequency trade on the stock market and the same product goes into animation and other products so considerable drop on that. Second, we also considerable drop on the SME sector and. I think that is because that interest rates went way up and that consumers who give India consumer will then our Consumer Group also in that segment is I years or less, which is 75% almost and this because the three percentage of 50% high on the along with. I think that that a bit. I think so, but I’m not sure about that in that segment, the buying. So actually post Diwali be resolved forward that is what…
Jacob James — — Analyst
Thank you for the insights. That is all from me and I wish you the very best.
Operator
Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Ketan Patel for closing comments.
Ketan Patel — Chairman & Managing Director
I once again thank you all for joining us on the con call today and look-forward to interacting with you again. Thank you so much.
Abhijit Kanvinde — Chief Financial Officer
Thank you.
Operator
[Operator Closing Remarks]