Elgi Equipments Limited (ELGIEQUIP) Q3 FY23 Earnings Concall Transcript

Elgi Equipments Limited (NSE:ELGIEQUIP) Q3 FY23 Earnings Concall dated Feb. 06, 2023.

Corporate Participants:

Jairam Varadaraj — Managing Director

Analysts:

Kamlesh Kotak — Asian Markets Securities Limited — Analyst

Ravi Swaminathan — Spark Capital — Analyst

Vinod Shastri — Instanomic Ventures — Analyst

R. Govindraj — Individual Investor — Analyst

Harshit Patel — Equirus Securities — Analyst

Amit Anwani — Prabhudas Lilladher — Analyst

Manish Goyal — Individual Investor — Analyst

Priyesh Babariya — Axis Capital — Analyst

Navin Vijay — NS Capital. — Analyst

Bhavin Vithlani — SBI Mutual Fund — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Q3 FY2023 Earnings Conference Call of ELGi Equipments Limited hosted by Asian Market Securities 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 that are difficult to predict. Actual results may differ from such expectations, projections, etc. whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Kamlesh Kotak from Asian Markets Securities Limited. Thank you and over to you.

Kamlesh Kotak — Asian Markets Securities Limited — Analyst

Thanks, Yashashree. Good evening, everyone. On behalf of Asian Markets, we welcome you all to the 3Q FY ’23 earnings conference call of ELGi Equipments Limited. We have pleasure in welcoming Mr. Jairam Varadaraj, Managing Director, representing the company.

I request Mr. Jairam to take us through an overview of the quarterly results and nine month results and then we shall begin the Q&A session. Over to you, sir. Thank you.

Jairam Varadaraj — Managing Director

Thank you, Kamlesh. Good evening, ladies and gentlemen. Thank you for taking the time out to be with us this evening. Like we normally do, I will take you through a reconciliation of EBITDA performance compared to the Q3 of last year.

So we grew sales by about 18% and we improved on our contribution level — contribution by about 3%. So effectively, we should have had an EBITDA of close to INR1,500 million and we posted an EBITDA of INR1,120 million. So there is a gap of about close to like 30 odd — INR3,000 million, INR30 crores. So the main thing is we have to look at comparing to last year, one, the fixed costs were very, very low because we were still coming out of COVID and business was still conducted by and large virtually. There is very little travel by employees, very little travel — all other costs were low. That has changed progressively this year. Besides increased travel, the cost of travel has also gone up. So as a consequence, that as taken up quite a bit of a cost competitive [Phonetic]. That is actually when you take go back to the pre-COVID levels, we’re not in such a bad shape.

Of course, employee costs have also gone up by virtue — primarily of increments because that was also subdued during the COVID period and we had done some marginal headcount in different locations in the world. So there is nothing to be alarmed about. So overall I think the profitability has been very good in this quarter at all levels of profit, whether it is at operating profit level or at a contribution level we have done yet.

Moving on to the sales number. The 18% growth is roughly 3% in volume, about 10% in price and about 5% in exchange rate. That’s nearly the contributing factor of our 18%. India, so I — like I normally do, I’ll start with Australia and work my way West.

Australia did better than the previous year, but there were some challenges with specific product — specific business verticals, which are temporary and we are hoping that in the last quarter, we will do even better. Southeast Asia continues to be a challenge, though they have done better than last year, they were really not anywhere near what we target the performance in that region. But we continue to pay attention to how we can improve our share there.

Coming to India, we had reasonably good run, but I think there are opportunities in India that we need to explore a little bit more deeply. There were some verticals that we’re absolutely dead, like our water well business, our new product which we launched about three years ago as taken on very good traction in the market in terms of acceptability, not just acceptability, but as a product preference over competitors. But the market has been literally dead. So that’s something that we did not anticipate that it will be this bad and it is still early days to say when — if and when this market is going to come back. On the profitability side, we have a railway business, which is contractual business, we get orders, we participate in tenders and the orders are generally for execution over a year. And we were stuck with legacy prices and current cost. So as a consequence, there was a compromise on margin. Nothing significant, but I’m just giving it as a overall assessment of the business.

Europe continues to grow for us. We are aligned and in-line with overall strategic plan that we made for Europe. So that’s been a positive experience on the topline. We are waiting for the coming year when we expect to see a significant shift in the volume, which will start changing the bottom line profile of Europe.

North America was again a very strong performer for us. We continue to grow in that market. It’s a little — both Europe and North America are little bit of a conundrum for us. The published information or the press keeps talking about doom and gloom in Europe. They talk about the war, they talk about the energy crisis, but we continue to grow there and I think I believe that from whatever we have been able to clean out of our competitors’ numbers, they have also grown.

The same thing with North-America with the stated inflation and the threat of unemployment. In-spite of all that we are growing and I believe our competitors are growing as well. So this is really the synopsis on — and ATS [Phonetic] of course it continues to do well. This year, our automotive equipment business.

So going on to the revenue mix. We continue to maintain 45% India and 55% Rest of the world. That ratio continues to remain.

The fourth quarter, we expect it to be as strong as the third quarter. We normally have very strong fourth quarter like most companies in India. We’re not sure, considering the way that is all these uncertainties and changes that are there, whether we will have that kind of hockey stick in the fourth quarter, but we still believe it will be as good as the third quarter. As far as profitability is concerned, we expect that we will continue to maintain it. We don’t see continuing improvement in the same trajectory, but we will be able to maintain the current levels of profit. As far as capex is concerned, we had projected that total spend will be about INR50 crores and we are still well within that. I don’t think we will exceed that number for this year. Having said that, we are looking at building longer-term bigger capex for moving our current facilities from the Sydney campus to our new campus where new facilities exit. We haven’t finalized the number. We hope that by the end of this financial year we would have finalized that number and probably during the next call, we will give great more details about what that would look like.

So as far as the current cash position is concerned, with the sale of our property in South Boulevard in Charlotte, we have no debt in the books effectively. The net-debt position is actually positive. So that’s the situation as far as we’re concerned on the cash.

So this is kind of summary for Q3 and we are happy to answer specific questions. Thank you very much.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Ravi Swaminathan from Spark Capital, please go ahead.

Ravi Swaminathan — Spark Capital — Analyst

Hi, sir congrats on a very good set of numbers. First question is with respect to the general demand scenario, which is there in the domestic market. Are you seeing it moderating across industries? So basically it will be industries, infra, your views on how budget can kind of trigger infrastructure related spend and how it can benefit Elgi. So if you can talk about the India market, it will be really great.

Jairam Varadaraj — Managing Director

Yeah, well except for a few verticals not even a few specific vertical like spinning industry and textiles, which has really been challenged for the last year. We don’t see any problems in any of — any specific verticals or any slowing down. Inquiry levels continue to be healthy. In the earlier quarter, I had kind of expected that there will be — we kind of sensed maybe there is a bit of delaying of finalization and all that, we are not seeing anything of that nature at the moment. So the domestic market is running along quite nicely. As far as the budget is concerned, one thing that is a big highlight for us is the huge investment in railways. We had a strong player in that segment and we are waiting to see how the — how this budget is going to get translated into production of locomotives, which is really what our business is, which is what our business is linked to. So even though there will be some expenditure towards expanding the rail network, I think quite a bit of it is going to go towards rolling stock enhancement. So that would help our business.

The general investment in infrastructure that the budget has talked about. We need to know the specifics, we don’t know the specifics yet, but we are in the capital goods business. So any infrastructure build, which requires capacity we will be there. So we’re are quite optimistic that it will only contribute positively to our business.

Ravi Swaminathan — Spark Capital — Analyst

Sir, what would have been the volume growth during this quarter in the India market, any sense on that?

Jairam Varadaraj — Managing Director

I don’t want to go too granular on that, Ravi. I gave you an approximate — aggregate level, we had told you the volume growth is about 3%.

Ravi Swaminathan — Spark Capital — Analyst

Got it sir. Thanks a lot.

Operator

Thank you. We have a question from the line of Vinod Shastri from Instanomic Ventures. Please go ahead.

Vinod Shastri — Instanomic Ventures — Analyst

Good evening sir. And congratulations on the good set of numbers. Sir, I had two questions, sir. As per — the earlier con calls, we discussed that Europe will come into the breakeven or we will be profitable by FY ’23 and that was a very deliberate plan. Considering the opening up of the European economy, is there any chances that we will turnaround before that? Is there any chance that we will be profitable over there?

Jairam Varadaraj — Managing Director

No, I don’t think — like I just explained to you in the preamble, we are on-track to our original plan. Our original plan, as you can as you might remember got pushed back by a year due to — pushed forward by a year due to COVID and we are going along as per that revised plan.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir. Then the one more thing would be, is there any chance that just during the results, is there any chance to provide a PPT, which will be helpful for the investors actually.

Jairam Varadaraj — Managing Director

Sorry, say that again. I don’t know what you meant by that.

Vinod Shastri — Instanomic Ventures — Analyst

Just during the results, if there is a PPT which is released from the company that it would be helpful for somebody to go through what just — has just happened during the quarter.

Jairam Varadaraj — Managing Director

Are you referring to a PowerPoint presentation which summarizes [Speech Overlap]

Vinod Shastri — Instanomic Ventures — Analyst

Yes, sir.

Jairam Varadaraj — Managing Director

Sure, we’ll do that.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir. Then one more question will be on the standalone basis, the margins were 19% versus 17.97% close to 18% and on a consolidated basis, say it is 14.83% versus 15.25% quarter-on-quarter. Now, on the standalone side, these margins are at sustainable level, this 19%?

Jairam Varadaraj — Managing Director

Vinod you are talking about the EBITDA margin. What margin are you talking about?

Vinod Shastri — Instanomic Ventures — Analyst

EBITDA margins, sir.

Jairam Varadaraj — Managing Director

Okay. Yeah, these are sustainable like I said, the fourth quarter we expect performance to be pretty similar to the third quarter at the very least, right. Normally, the fourth quarter there is a hockey stick, but I think considering the various financial barring economic conditions, we think it will be very similar to the third quarter. So, which means both the top line and bottom line, we’ll be able to sustain.

Vinod Shastri — Instanomic Ventures — Analyst

Thank you, sir. Thanks for the opportunity, sir and good luck, sir.

Jairam Varadaraj — Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] We have our next question from the line of R. Govindraj, an Individual Investor. Please go ahead.

R. Govindraj — Individual Investor — Analyst

Good evening, sir and congrats for a good set of numbers. Sir, in the — [Indecipherable] it was mentioned that we have some joint operations with L.G. Balakrishnan & Bros. Can you so — throw some light on those, which are the operations we have jointly [Phonetic].

Jairam Varadaraj — Managing Director

I don’t know which one you’re referring to. We don’t have any joint operations with L.G.

R. Govindraj — Individual Investor — Analyst

[Indecipherable]

Jairam Varadaraj — Managing Director

The company is a partner in a partnership firm that is called L.G. Balakrishnan & Bros firm. It’s got nothing to do with L.G. Balakrishnan & Bros Limited.

R. Govindraj — Individual Investor — Analyst

Okay, sir. Okay. And regarding this, in the Annual Report FY ’22, it is stated that we will send all the non-core assets and monetize from them. So sir, how much has been done and how much left over sir?

Jairam Varadaraj — Managing Director

Well, we have been giving updates on that. We have sold our Ahmedabad office, we have sold our Bombay office, we have sold our apartments in Bombay, we have sold daily office earlier two years ago, we sold our Chennai office. So progressively we are getting rid of all our non-core businesses, sorry, non-core assets.

R. Govindraj — Individual Investor — Analyst

And any ballpark amount, sir.

Jairam Varadaraj — Managing Director

Sorry?

R. Govindraj — Individual Investor — Analyst

Any ballpark amount? How much it will be?

Jairam Varadaraj — Managing Director

I don’t have the number in front of me.

R. Govindraj — Individual Investor — Analyst

And last question sir, in the recently concluded auto expo, we have showcased some of our products for the automobile sector, there is [Indecipherable] equipments. Whether we are already in that business or is it a new venture sir.

Jairam Varadaraj — Managing Director

We’ve been in this business for more than 20 years, 25 years.

R. Govindraj — Individual Investor — Analyst

Okay sir. Maybe this new business will replace the older one or is it just launched now? These are new products that we display in exhibition as part of our continuous improvement of our product range. Okay, sir. Thank you sir.

Operator

Thank you. [Operator Instructions] We have a next question from the line of Harshit Patel from Equirus Securities. Please go ahead.

Harshit Patel — Equirus Securities — Analyst

Thank you very much for the opportunity. Sir, my first question is on the pricing in the Indian market. I remember in the last call you had mentioned that you might have to roll back prices in some specific categories of products based on how the market behaves. Sir, could you elaborate on how was the scenario in this particular quarter? Have you done any cutbacks on the pricing? And — I mean what do you see will happen in the next few quarters down the line?

Jairam Varadaraj — Managing Director

So we have never — we’ve not rolled back any pricing, we’ve held on to our pricing, we have realized that in the price discovery process, we have established a reasonably good relationship between the price and brand. So, I think we are okay.

Harshit Patel — Equirus Securities — Analyst

You don’t foresee a scenario where you might have to cutback on the pricing, especially the Indian market going –.

Jairam Varadaraj — Managing Director

Not at an overall level. Pricing is a very dynamic thing that will continue to happen, but at an overall level we don’t see that happening.

Harshit Patel — Equirus Securities — Analyst

So ideally, now that should flow into our gross margins, right, because I think we have now by far absorbed almost all the raw material price inflation, right. So I think that should enhance our gross margins significantly going ahead.

Jairam Varadaraj — Managing Director

So that’s what you’re seeing in Q3 results. We can’t expect more than this.

Harshit Patel — Equirus Securities — Analyst

Okay, sure. And sir my second question, would be on the European front. As you have mentioned, we should be able to break even in FY ’25. So what was our loss for the first nine month of FY ’23?

Jairam Varadaraj — Managing Director

I don’t want to get into the detail of specific regions performance. Because it’s not — that’s not good for the competitive situation. We have made an overall plan of a loss of INR200 crores over a five year period, that got pushed to about six years and we are well on track to that.

Harshit Patel — Equirus Securities — Analyst

Understood. And just last to check on the motors facility expansion, so are we on-track to produce bulk of the motor requirements for our FY ’24 production?

Jairam Varadaraj — Managing Director

Yeah, absolutely. yeah.

Harshit Patel — Equirus Securities — Analyst

Okay, perfect. That was all from my side. Thank you very much.

Jairam Varadaraj — Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] We have a question from the line of Amit Anwani from Prabhudas Lilladher. Please go-ahead.

Jairam Varadaraj — Managing Director

Ma’am, ma’am, your voice is very, very feeble. Can you — I don’t know what the problem is? I don’t know whether it’s on my side or your side.

Operator

I’m sorry. is it okay now?

Jairam Varadaraj — Managing Director

Far better.

Operator

We have a question from Mr. Amit Anwani from Prabhudas Lilladher. Please go ahead.

Amit Anwani — Prabhudas Lilladher — Analyst

Hi, sir thanks for the opportunity. I Just wanted to understand the aftermarket business contribution for this quarter and how is our outlook with respect to the market’s contribution in, let’s say next year or couple of years.

Jairam Varadaraj — Managing Director

So our aftermarket contribution as two dimensions. One is aftermarket in India, which is our core, I wouldn’t say core business, but it’s — it’s our largest market in terms of our tenure or presence. So we have an large installed-base in India and therefore there is a very attractive aftermarket revenue stream coming from that. That has consistently grown for us. And probably, today we are at around 25%, 26% of our revenue coming from aftermarket. Is there room for further growth? Absolutely, there is. But this is a very, very metered and very deliberate movement from where we are to where we would be. As far as the rest of the markets are concerned, the first strategy in this business is to create an installed base, which is where we are right now. So it’s a little premature to be measuring aftermarket in markets outside India. Having said that, it doesn’t mean we completely noted, we keep a careful eye on it. We make sure that installed base, share of our installed base is maintained. So that when the number — installed-base starts becoming bigger, we are able to extract the value — the true value of that potential.

Amit Anwani — Prabhudas Lilladher — Analyst

Sure. Next question is on the geographical performance, I might have missed. So I remember I think from past H1 we were facing headwinds in Southeast Asia, Sri Lanka, Middle-East. So your outlook on that.

Jairam Varadaraj — Managing Director

Southeast Asia is still like I said in my preamble, it’s still a challenge it’s — It’s an extremely price sensitive market. But we have grown compared to last year. The potential is there. We’re still trying to figure out what would be the most appropriate strategy for that region. But it’s a very small percentage of our total revenue.

Amit Anwani — Prabhudas Lilladher — Analyst

All right. Last question on the manpower cost. So, is it better to assume this INR141 — INR144 crore quarterly run-rate will continue till we breakeven in Europe or this is likely to increase, decrease?

Jairam Varadaraj — Managing Director

Are you talking about the current employee cost, which is about INR144 crores?

Amit Anwani — Prabhudas Lilladher — Analyst

Yes, you are right sir.

Jairam Varadaraj — Managing Director

That that will continue to be at this level and come April, there could be a revision, which is normal. So that’s what we expect.

Amit Anwani — Prabhudas Lilladher — Analyst

Thank you, sir.

Operator

Thank you. [Operator Instructions] We have a question from the line of Vinod Shastri from iInstanomic Ventures. Please go ahead.

Vinod Shastri — Instanomic Ventures — Analyst

Yes sir, just two follow-up questions, sir. I just wanted to know what is the R&D investments that we have made so far and what is the progress on that would be the first question sir.

Jairam Varadaraj — Managing Director

R&D investment In value terms would be about 3% to 4% of our revenue in the Indian rupee terms. But if you normalize it for global costs, it’s probably 7% to 8% of our revenue.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir. Is there any new product line that we are planning — any new products that we are planning any lineup into that?

Jairam Varadaraj — Managing Director

So that’s a continuous investment into upgrading our existing products, building adjacencies that it’s too many to talk about.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir. Just regarding this Siemens order for this INR26,000 crores onto railways. What is the kind of market share that we can expect just on very hypothetical situation. What is that we can expect out of this order — this Siemens order from railways sir?

Jairam Varadaraj — Managing Director

It’s very premature to even answer that question. The Siemens first have to make a decision on who they want to work with. There are so many considerations because it’s a — this is a very complicated and large order with extensive service conditions that go to very long periods of time. So nothing can be stated with certainly at this point in time.

Vinod Shastri — Instanomic Ventures — Analyst

Just some numbers on any kind of market-share that we will be having –?

Jairam Varadaraj — Managing Director

Very difficult to say that.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir. The same applies to whatever is on the budget allocation towards railway for rolling stock for this [Indecipherable] costs?

Jairam Varadaraj — Managing Director

It is just a very positive environment, that’s all. I mean we can’t convert it into specific business numbers yet.

Vinod Shastri — Instanomic Ventures — Analyst

Okay. But on the whole, you expect the railway division to do good comparatively to the last year during the FY ’23 and ’24, right sir?

Jairam Varadaraj — Managing Director

I hope so, yes.

Vinod Shastri — Instanomic Ventures — Analyst

Thank you sir. Then the final question would be on the textile sector, even on the last con call, we are facing some difficulties and there are some lower order inquiries towards the textile segments. Can we find any resilience towards that? Is there — on the inquiry side, is there anything going on the positive side or we are still maintaining into what were some one quarter or two quarters back.

Jairam Varadaraj — Managing Director

Yeah, we are still at the same situation, I don’t think textiles as shown any significant improvement yet.

Vinod Shastri — Instanomic Ventures — Analyst

Okay, sir, can — when are you at least expecting something to happen towards that segment, sir?

Jairam Varadaraj — Managing Director

I wish I had that crystal ball to make that statement. Every time we speak to people, our customers in the industry they used to say next quarter now they have said so often now they when we go and ask them, they say we don’t know. So it is a uncertain period that we’re going through.

Vinod Shastri — Instanomic Ventures — Analyst

Okay sir, thank you sir.

Operator

Our next question from the line of Manish Goyal, an Individual Investor. Please go ahead.

Manish Goyal — Individual Investor — Analyst

Yeah, thank you so much.

Jairam Varadaraj — Managing Director

Hi Manish, how are you?

Manish Goyal — Individual Investor — Analyst

. Good, good, sir. Hope you’re doing well. You continue to surprise us positively.

Jairam Varadaraj — Managing Director

That’s a good thing, isn’t it?

Manish Goyal — Individual Investor — Analyst

Yeah. Sir, just a couple of questions. One on the international business, which probably if just shoot the numbers based on your revenue share. We have seen roughly 30% growth. So is it largely contributed — you did allude to various geographies, but looks like that it’s largely coming from Europe and North America, So, so — and you mentioned that there are lot of economic challenges and still things look good. So just wanted to get your perspective, what’s driving it? Any [Indecipherable] also you mentioned that in the coming year, you expecting a significant volume growth in Europe. So maybe if you can elaborate on that as well. Thank you.

Jairam Varadaraj — Managing Director

So our growth outside of India, it’s not just been in Europe and the US. All our geographies have grown quite well. That’s point number-one. But within that, Europe and America, have had a disproportionately higher growth, that’s for sure. As far as why they are growing? It is — I can only give you a speculative answer, because that is a conundrum in terms of what is published in the press, bye. Experts in economics and then there is the ground reality, right. The expertise and economic stocks about energy crisis in Europe, the Ukraine wall, inflation in America and the possible unemployment — increase in unemployment in America. So this is really what they’re saying, but the ground reality is everyone is growing that. Everyone is investing business is doing well. Now this has been going on for not just one quarter, but it’s been going on for almost a year, right. So, sometimes you wonder whether the these are the people of the world are behaving, independent of what economists say they will, right. So there is a — so even this is what happened even during COVID. I mean there were all these doomsday scenarios that put out by various economists and was whoever. But the world reacted very differently and people — or citizens of the world reacted very differently. So, I don’t know whether that’s the manifestation here. That’s at a some philosophical level, but at the same time, there are things that are happening for instance, the — I think all the countries are looking at a lower dependence on China and part of that strategy is one is China Plus One strategy going into other countries. And the other one is also in sourcing production. So if you look at in the US, there is investment being made in manufacturing products that they were earlier sourcing from China. So some of some of the growth in some of that for our products probably coming from that. So it’s very difficult to say what exactly is going on.

Manish Goyal — Individual Investor — Analyst

Sure. And on my other question, you did mention that the coming year, we would probably want to see strong volume growth in need of –?

Jairam Varadaraj — Managing Director

So it’s — it’s not anything exceptional. We are looking at the trajectory of growth, which we have — if you look at the trajectory of our growth, the past few years that it’s the same trajectory that we are maintaining into the future. So there is — it’s not like there is something like an inflection that we’re looking at which could set us up to fail and get disappointed, but it’s we have a clear four-year, four to five year track record of consistent growth. And what we are expecting into the next year is following that same trajectory, The foundation, it’s not just the that number — that graph, but the underlying things of the number of distributors we have build. Number of markets we have built, number of customer installations that we have created, references that we have done, success stories, they’re all very robust. So those are the ones that are going to drive it.

Manish Goyal — Individual Investor — Analyst

Sure. And on last call we had mentioned about the inventory levels going up, basically to extend the supply-chain challenges, so how is the situation on that front? Number one, number two, if you can share your — you did mention your net cash. So you mentioned that after sale of property in US, right? Maybe you can share the numbers?

Jairam Varadaraj — Managing Director

So the numbers are as of today, Manish, because it’s not Q3 numbers. Q3 numbers were that our net debt position in — was about INR120 crores was what our net debt was. And today, that position is now zero or maybe marginally positive. So that’s really the situation. We sold the property as we have communicated into the thing for about $17 million. And so the realization for the company is probably around $16.5 million or $17 million, taxes and brokerage and all that. So that effectively brought the net debt position down to zero. And then in the meantime, we have generated some more cash. And as far as the inventory is concerned, yes, the inventory is still a problem. We need to work on it. We have done some work on it, but nowhere near where it should be, and we are working on multiple initiatives to bring it down. So I’m hoping that in a few months, we should be able to extract cash out of the inventory.

Manish Goyal — Individual Investor — Analyst

Sure. Thank you so much.

Jairam Varadaraj — Managing Director

Thank you.

Operator

Thank you. [Operator Instructions] We have a question from the line of Priyesh Babariya from Axis Capital. Please go ahead.

Priyesh Babariya — Axis Capital — Analyst

Hi sir, thank you so much for the opportunity. I’ll just have one question regarding competition scenario in domestic market as well as in international market that you cater to.

Jairam Varadaraj — Managing Director

So any specific question?

Priyesh Babariya — Axis Capital — Analyst

So how was the competition scenario was there in the past, how it has been shifted and what is the current scenario?

Jairam Varadaraj — Managing Director

I think by and large, it’s the same competitors who are there. They’re very strong, highly respected competitors, keep us on our toes. We learn from them. And yes, so we have our own strength and we have our own value proposition that we bring to the customer. Therefore, yes, it’s nothing significantly changed. Of course, there are — in India, there are some — in the last few years, there are a lot of Chinese manufacturers who make very low cost, low performance, low quality machines. But that is as — I’m not asking for any protection, but I’m just saying it is — those prices are just not realistic. But that’s the reality. And we are building on some specific strategies that will help us account to that. But that’s part of life. I mean you just take it and try and figure it out.

Priyesh Babariya — Axis Capital — Analyst

Sure. Thank you so much sir.

Operator

Thank you. [Operator Instructions] We have a question from the line of Navin Vijay from NS Capital. Please go ahead.

Navin Vijay — NS Capital. — Analyst

Good evening, sir. Just wanted to have the contribution from our side to the new Vande Bharat Express, sir?

Jairam Varadaraj — Managing Director

Sorry. Vande Bharat?

Navin Vijay — NS Capital. — Analyst

Yeah, Vande Bharat Express.

Jairam Varadaraj — Managing Director

Well, we — our compressors are running on the train. So right now, the value of the business is very, very small, not even worth talking about because it just started production of these trains.

Navin Vijay — NS Capital. — Analyst

Okay sir. Thank you sir, that was the only question from my side.

Operator

Thank you. We have our next question from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.

Bhavin Vithlani — SBI Mutual Fund — Analyst

Good evening Jay. Congratulations for great numbers.

Jairam Varadaraj — Managing Director

Thank you. Bhavin. I was wondering where you are hiding all this time.

Bhavin Vithlani — SBI Mutual Fund — Analyst

So apparently I joined in a bit late. See, what has been the growth — for the compressor business, what’s growth in India? And if you could maybe give some color on how the been the movement on the market share? And the reason this question is we understand that some of your European peers have seen significant increase in the wait period due to inventory issues or supply chain issues. So have we benefited some bit on that?

Jairam Varadaraj — Managing Director

I don’t want to talk about specific percentage of growth in India, Bhavin. That would not be in our interest to talk — reveal that in the call, which is public. But what I can say is if you look at the performance of our competitors globally, they’ve grown, I mean, and they’ve grown pretty significantly. So yes, they have had supply chain challenges, probably a little bit more than us by virtue of the fact that they have — their scale is much larger. But I think they’ve been able to get their customers to wait and buy from them. So it’s not like there has been an exodus of their customers towards — running into our arms. No. That has not happened. Maybe marginally, in certain peripheral cases, we have gained share by virtue of being able to deliver quickly. But I wouldn’t say that there’s a big shift towards us because of availability from Elgi, no.

Bhavin Vithlani — SBI Mutual Fund — Analyst

A couple of follow-ups here. How has been the growth or progress on the oil-free part of the business and also the water wells, given that we have taken corrective actions water well side?

Jairam Varadaraj — Managing Director

Yeah, so oil free continues to grow well for us, both in India as well as outside the country. Obviously, the value of our revenue in oil free is far higher in India than in the international markets. But good traction to get some marquee brands as customers in Europe and in the US. So it’s overall a very positive thing, but it’s a long haul. We realize that it’s a technically sensitive product. Customers have a lot of apprehension. And there are well-established brands who are preferred brands for that category of compressors. So we have to chip away at it, and that’s what we are doing, and we’re getting some good results, entries into good customers. So that’s on the oil free side. As far as water well is concerned, I was explaining, I was providing a narrative before you joined, the market is dead, our product has gained the preferred product position from not being considered today the market and customers think our product is very good and probably the preferred product. So once the market turns, I think we’ll be in a good position.

Bhavin Vithlani — SBI Mutual Fund — Analyst

And just last question is about a year ago the you kind of moved away from pricing at a discount to premium pricing as far as — in cases we hear about a premium. Are we — is that sustaining? And are we seeing now that the customer acceptances [Speech Overlap] our prices.

Jairam Varadaraj — Managing Director

Sorry, Bhavin, I didn’t get your question. What was your question?

Bhavin Vithlani — SBI Mutual Fund — Analyst

So a few years ago, we — our product used to be at a discount to some of the international multinational peers. And now we see that it is either at par or in some cases, at a premium that is — are we able to sustain this? And are we seeing the amount of acceptances from a customer side about the pricing strategy that we have now adopted?

Jairam Varadaraj — Managing Director

I don’t think we are at a premium or anywhere close to being the same as our large multinational competitors. So I think that would be a bit of a wishful thinking. And if somebody is saying it’s probably our sales guys and distributors who lost some orders, who are saying that they are — that our prices are — that’s not true. By and large, if you look at the average point, we are still at a lower thing, which is fine. I mean that is the Toyotas of the world and the Hyundai’s of the world, they took a long time to build their price points to market levels, which is par for the course. That’s the nature of the game, which is fine. So that’s the journey we are at right now.

Bhavin Vithlani — SBI Mutual Fund — Analyst

Sure. Sir, the last question from my side. Your view on the underlying demand outlook and pardon me if you’ve already given, especially in India, are you seeing the momentum of the demand, the same accelerating or decelerating?

Jairam Varadaraj — Managing Director

You know in the last quarter’s call, I was saying that there were things that seem to be slowing down in terms of customers taking longer to finalize. It doesn’t seem to lead at enquiry levels, I’m not saying they’re going through the roof, but they’ve not come down. They’re continuing down the same pace. So as far as India is concerned, I think it’s continuing, right? It’s nothing there that is negative. As far as Europe and America, we’re still continuing down that same path. Our presence there in those markets is so small. So even if there is a dip in the market, there is enough of an opportunity for us to grow.

Bhavin Vithlani — SBI Mutual Fund — Analyst

Thanks so much for taking the questions. Best wishes.

Jairam Varadaraj — Managing Director

Sure. Thank you.

Operator

Thank you. [Operator Instructions] We have a question from the line of Manish Goyal, an Individual Investor. Please go ahead.

Manish Goyal — Individual Investor — Analyst

Yes, sir, just on other income, which has seen a significant increase in a stand-alone and console. So if you can just provide data plans as to onetime income. And what was the gain from the sale of property and where is it captured? What is the amount? That was number two. And number three, at standalone, how much of the dividend income from the subsidiaries? Thanks.

Jairam Varadaraj — Managing Director

So you seem to be picking up stuff that I don’t prepare for, Manish. So anyway, I’ll try and answer what all I have in front of me. The property sale did not happen in Q3, so you won’t see it in the Q3 numbers. You will see it in our Q4 numbers. But since the sale has already happened, it’s $17 million is the sale gross value. The realized value is about $16 million something after brokerage and whatever else. So that’s on the property in the US. The rest of it is all small stuff that we have sold in India. Ahmedabad we sold — so I don’t have the breakup of the value but these are all — bulk of our other income is in that form of what we disposed of.

Manish Goyal — Individual Investor — Analyst

Sure. And you won’t have other dividend income number as well as the standard?

Jairam Varadaraj — Managing Director

I don’t know — we don’t — haven’t got it. Have we got dividend? Just give me a minute. So we’ve got about INR16 million which is — INR16 crores as dividend. Yes. From subsidiaries. Not for the quarter, this is for the whole year.

Manish Goyal — Individual Investor — Analyst

Okay. I know I was just — always you are getting from ATS dividend –.

Jairam Varadaraj — Managing Director

Yeah, yeah. So it is ATS as well as Addison Precision, which is just holding land and from the sale of the land.

Manish Goyal — Individual Investor — Analyst

Okay. Thank you. I’ll take it offline. Thank you so much.

Jairam Varadaraj — Managing Director

Thank you.

Navin Vijay — NS Capital. — Analyst

Thank you. We have our next question from the line of Navin Vijay from NS Capital. Please go ahead. Sir, you have mentioned that you are seeing below par demand level from the textile sector domestically. Just wanted to ask which sector has surprised you on the positive side, I mean, about our enquiry or order level, some color on that?

Jairam Varadaraj — Managing Director

So we are not dependent on any one industrial sector, and that’s the good part of this business because every factory needs compressed air and therefore, we supply to all. So there is no one industry vertical that has done disproportionate growth in the year or the quarter.

Navin Vijay — NS Capital. — Analyst

Thank you sir.

Operator

Thank you. [Operator Instructions] As there are no more questions, I now hand the conference over to management for closing comments. Over to you, sir.

Jairam Varadaraj — Managing Director

Thank you. Thank you all. Thank you, Kamlesh, for hosting this. So it was a pleasure to listen to your questions and try to answer them to the best of our ability. So I really appreciate it. Thank you.

Operator

[Operator Closing Remarks]