Symphony Ltd (NSE:SYMPHONY) Q3 FY23 Earnings Concall dated Feb. 08, 2023.
Corporate Participants:
Achal Bakeri — Founder, Chairman and Managing Director
Nrupesh Shah — Executive Director, Corporate Affairs
Amit Kumar — Executive Director and Group Chief Executive Officer
Analysts:
Aakash Fadia — YES Securities — Analyst
Manoj Gori — Equirus Securities Private Limited — Analyst
Renu Baid — IIFL Securities — Analyst
Onkar Ghugardare — Shree Investment — Analyst
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Rakesh Wadhwani — Monarch AIF — Analyst
Aditya Bhartia — Investec — Analyst
Rahul Gajare — Haitong International Securities Group — Analyst
Zeeshan Akhtar — Happy Gains — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Symphony Limited Q3 FY ’23 Earnings Conference Call hosted by YES Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Aakash Fadia from YES Securities. Thank you and over to you sir.
Aakash Fadia — YES Securities — Analyst
Yeah. Thank you, Inba. So on behalf of YES Securities, we welcome you to Q3 and nine month FY ’23 results conference call of Symphony Limited. We have with us senior management represented by Mr. Achal Bakeri, Chairman and Managing Director; Mr. Nrupesh Shah, Executive Director, Corporate Affairs; and Mr. Amit Kumar, Executive Director and Group CEO.
Now, I hand over the call to the management for their initial comments, post which we will open the floor for question-and-answer session. Thank you and over to you sir.
Achal Bakeri — Founder, Chairman and Managing Director
Okay. Thank you, Aakash. Good afternoon, everyone, and welcome to this conference call. Thank you very much for being here this afternoon. The customary safe harbor rules apply. This is Achal Bakeri by the way, and my colleague, Nrupesh Shah will be making the presentation, after which we will be taking the questions. Thank you very much. Nrupesh [Foreign Speech] over to you.
Nrupesh Shah — Executive Director, Corporate Affairs
Hello. Good evening, and welcome to Q3 nine months Symphony call presentation. So customary safe harbor statement is applicable. So as you know, we are in the place of 27 degree world and so far cumulatively, Symphony has sold 25 million air coolers worldwide, at least 4 times higher than the closest competitor. So happy to announce launching of high-tech BLDC air cooler. BLDC fans are available, but in the air cooler, Symphony has achieved the breakthrough in terms of the technology, leading to power saving up to 50%, whereby on an average, power saving amounting about INR2,000 per annum. This has a feature of up to eight hours night sleep mode and there are seven speed options, as such because of BLDC technology, one can set the speed at any level, but as of now, it is seven-level speed option and we have fully functional remote control.
To start with, we have three models, Diet 3D, two models and Winter and obviously, in line with the technology, this will be premiumly priced with a decent profitability. So coming to performance highlights. During first nine months, that is April to December, it has been the highest ever standalone as well as consolidated sale vis-a-vis historical high. Gross profit margin percentage as well as EBITDA margin percentage have improved on Y-o-Y basis. Now, standalone EBITDA margin percentage excluding other income stands at 19.9%, up by 270 bps Y-o-Y, while consolidated, it is 13.1%, up by 110 bps. This has been achieved on account of better model mix, decent price increase and softness of input costs. However, in many, many models, we have substantially upgraded in order to have competitive edge and better salability. And as far as our overseas subsidiaries are concerned, particularly Climate Technology, the performance has been subdued on account of demand headwinds in U.S. and Australia and in a short time, it’s likely to continue that way.
As far as Q3 December ’23 quarter performance is concerned, on a standalone basis, it has been the highest ever sales vis-a-vis the historical high. There has been robust off-season sales and trade sentiments across the channels, across the geography, across the models and range quite positive and beyond. Again, gross margin as well as consolidated gross margin percentage coupled with standalone EBITDA margin and consolidated EBITDA margin percentage are higher. Now standalone EBITDA margin excluding other income stands at 25%, jump of 300 bps Y-o-Y for the quarter, while consol is 15.8% on account of the reasons I explained earlier.
Coming to reward to the shareholder. Symphony does follow consistent reward policy and we have a stated payout. So just to summarize, in last 10 years, until 31 March ’22, 51% of the PAT has been paid out. In last five years, it amounts to 53% and in last three years, that is until March ’22, it amounts to 71%, inclusive of special one-time dividend of INR90 in February ’20.
And now, in today’s Board Meeting, the Board has approved and announced share buyback up to INR200 crores at a share price of INR2,000 per share. If it is fully bought back, it will amount to reduction in paid-up share capital of 1.43%. So this will lead to total payout of INR250 crore, including about INR50 crore buyback tax and incidental expenses. Currently, our net worth stands at about INR800 crore and this buyback and payout will reduce the net worth in excess of 30%, which will lead to approx. return on net worth and return on capital employed percentage in the first year by around 4%. And obviously, just like any buyback, this is EPS speculative.
Further, we have changed the shareholder reward policy. As many of you may be aware, until now, it was payout up to 50% of the PAT. Now, Board has decided in today’s Board Meeting, we extent — increase to payout ratio of 60%. This has been decided considering our asset-light, capital-light business model and we believe that we may not require any major treasury on hand. And of course, this includes dividend, special dividend, and buyback.
So, coming to nine months standalone financial represented by Sankey chart. So revenue from operations on standalone is up by 65% in nine months, EBITDA stands at INR129 crore, up by 92% versus top line increase of 65%, and profit after tax stands at INR122 crore, that is 19% PAT margin, up by 79%. So these are some of the detailed charts. So on nine month basis, standalone turnover up from INR390 crore to INR646 crore, and profit after tax up from INR68 crore to INR122 crore, about 19% of the revenue from operations.
Coming to December quarter Q3 financials. Top line is up by 52%, up from INR146 crore to INR223 crore, EBITDA is up by 73%, and now EBITDA excluding other income stands at 25% versus 22% last year, while including treasury income, EBITDA margin percentage on standalone stands at about 29%, and profit after tax up from INR29 crore to INR52 crore. And this is the waterfall chart of movement of EBDITA for December quarter. So as it can be seen, gross margin has improved by 1.4% on account of higher sales. Percentage of employee cost has come down by 2.6%, however, in advertisement, freight and other expenses, there is a marginal increase ranging from 0.2% to 0.50%.
Coming to capital efficacy items. Capital employed during December quarter back to pre-COVID highly efficient, so in our core business, it is negative INR31 crore on account of robust off-season collection. And hence PBIT percentage on capital employed theoretically translates to infinite having total treasury of INR637 crore as on 31 March, ’22, and on trailing 12 months, the return on net worth stands at 20%.
Coming to consolidated financials about Sankey chart. Y-o-Y, the top line stands at INR880 crores, up by 34% lower than standalone due to headwinds in U.S. and Australia as explained earlier. EBITDA is up by 46%, that is INR115 crores, while PAT is up by 76%, stands at INR100 crores on a consol basis. And some of the key profitability and revenue charts. So top-line on a consol basis for the nine months, up from INR655 crores to INR880 crores, while profit after tax up from INR57 crores to INR100 crore, up by 76%. And gross margin has increased on a consol basis despite headwinds in subsidiaries from 44.4% to 44.7%.
So about quarterly financials. For December quarter, consol top line is up from INR205 crore to INR277 crores, that is 35% up, while profit after tax is up from INR21 crore to INR39 crore, about 14% of the top line and growth percentage is about 84%.
And this is the waterfall chart of movement of consol EBITDA margin percentage in Q3. So on a consol basis, gross margin percentage has reduced by 0.6%, however, on account of economy of scale, employee cost have come down percentage-wise 3.4%, while there is marginal increase in three other expenses and it stands at about 15.8%. And coming to consolidated capital efficacy. The average capital employed based on the monthly opening and closing for nine months, consol capital employed stands at INR235 crore, which translates into PBIT percentage for nine months not annualized 17%, while return on net worth on trailing 12 months is 20%.
Coming to the outlook. As far as domestic market is concerned, there is a decent visibility of consumer sales, again across the product, across the channel, across the geography we see overall buoyancy. Symphony will keep on launching as just shared with you, BLDCs and many other value-added products, still there will be graded price increase and there may be further advantage on account of softening of input cost with an objective of reaching to EBITDA margin percentage of historical high.
The current global economic situation has already led to demand headwinds, especially in United States and Australia and we are likely to see the impact of that in the short term but we believe that some of our large customer who have curtailed the order, maybe during the season, they may run out of stock. And on account of our globalized operations, mainly because of multiple R&D and D&D facilities, outsource manufacturing facilities, supply-chain, and very agile, logistics arrangement, we are optimizing in various respect.
Thank you. So with this, open the floor for question-answer.
Questions and Answers:
Operator
Thank you very much, sir. [Operator Instructions] We take the first question from the line of Manoj Gori from Equirus. Please go ahead.
Manoj Gori — Equirus Securities Private Limited — Analyst
Yes. Many thanks for the opportunity. Sir, just for understanding, would like to understand like you highlighted various initiatives to improve the gross margins, but when I look at sequentially gross margins have been impacted, especially you have consolidated these numbers as well. So is it largely because of extra discounts or scheme that we have rolled out for U.S. or Australia markets?
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. So as far as Q3 standalone EBITDA margin is concerned, it has improved from about 22% to 25% as far as Q3 is concerned.
Manoj Gori — Equirus Securities Private Limited — Analyst
Sir, I am may referring to gross margins over here.
Nrupesh Shah — Executive Director, Corporate Affairs
And coming to gross margin percentage even on standalone basis for nine months, it is up from 46.4% to 47.5%. This is about the standalone. Now coming to consolidated, the gross margin is up from 44.4% to 44.7%. So only nominally higher, while EBITDA margin is also up from 12% to 13.1%. On a consol basis, the impact is not as high as standalone basis on account of headwinds in global demand due to economic situation.
Manoj Gori — Equirus Securities Private Limited — Analyst
Got it.
Achal Bakeri — Founder, Chairman and Managing Director
Also we have also been witnessing increase in costs, especially in Australia and which we have not been able to pass on to our customers. So I think the bigger problem in Australia has been that but that is the situation, which is being in the process of being corrected.
Manoj Gori — Equirus Securities Private Limited — Analyst
Sir, can you highlight like what are those cost items, because if you look at RM pressures are definitely behind us plus logistic cost if we look at, that has definitely — has come down at global level. So can you highlight like what are the cause that are actually impacting the margins over here for this Australia business?
Nrupesh Shah — Executive Director, Corporate Affairs
So it’s a variety of components, whether it is metal or plastics or even freight domestically within Australia. So I think those are the ones which have — we have not been able to pass on. And on top of that the market over there is — we’ve also been — not been able to — sort of in some cases been able to sort of match our competitors who have been giving extra discounts. So it’s a combination of factors within Australia.
Manoj Gori — Equirus Securities Private Limited — Analyst
Right. And sir, if we look at — so probably when we are seeing some demand headwinds as Nrupeshji already highlighted like the — some of the larger clients might see shortage of stock and there might be some buying again. But when we — when do we expect normalization in the overall operations at least from a U.S. or from Australia point of view, because if we look at your Q4 was extremely heavy last year for your export business even in your standalone entity?
Nrupesh Shah — Executive Director, Corporate Affairs
So even this year, it will be significant sales in Q4 in the U.S., however, the overall business in the U.S. is going to be much lower than last year, because our major customers over there and primarily the largest of them all is The Home Depot — and has cut-down their order in anticipation of a recession in the U.S. Now which means — and I think from what we have gathered, this is something, which they have done across the board for all products that they sell. They are trying to sort of destock and reduce their inventories in anticipation of a recession but our sense is that, come summer, they will run out of inventory and very honestly, there will be no way of filling up — of fulfilling that excess demand, which they won’t be able to fulfill because the entire cycle time is in excess of three month for us to ship — produce here and ship coolers to the U.S. But that demand would be locked, so we don’t expect us to recoup — to be able to recoup that demand even if the summer is great and the recession is not so severe. So that is a certainty as far as this year is concerned.
Manoj Gori — Equirus Securities Private Limited — Analyst
Right, right. Understood. And sir lastly, if I may squeeze in one more question on domestic business. So obviously, when we look at the Q2 and Q3 performance, domestic business has been back on track and obviously, margins have also improved over year. So with Q4 obviously, when we look at the base is favorable and in Q1 also though 1Q FY ’23 growth number seems very high, but channel was still carrying some older inventories.
Nrupesh Shah — Executive Director, Corporate Affairs
Correct.
Manoj Gori — Equirus Securities Private Limited — Analyst
So should we expect like there is a strong visibility and channel sentiment, as Nrupeshji highlighted, is very positive? Should we expect strong performance during Q4 and Q3 — sorry Q4 and Q1 of next year?
Nrupesh Shah — Executive Director, Corporate Affairs
That is something that we certainly expect. We certainly expect that internally. Much better performance in the current quarter and in the next quarter. We certainly, internally, do expect that.
Manoj Gori — Equirus Securities Private Limited — Analyst
Right sir, right sir. Sir, that’s all from my end. Thanks and wish you all the best sir.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you very much, Manoj.
Operator
Thank you. Our next question is from the line of Renu Baid from IIFL Securities. Please go ahead.
Renu Baid — IIFL Securities — Analyst
Yes. Hi. Good evening team, and congratulations for the strong performance. I have three, four questions. First, coming back to gross margins, now here I am comparing the standalone gross margins in 3Q with the standalone gross margins in 2Q, and there has been a sequential drop of 120 basis points despite softness in commodity prices. So we’re just trying to understand that typically, sequentially, we see improvement in the gross margins as we start nearing the season in terms of pricing. So what has led to weakness in this India EBIT margin as well as gross margin at the standalone level?
Nrupesh Shah — Executive Director, Corporate Affairs
Okay. Renu, let me answer that. See, you should not read much into sequential, because it is a function of the sales mix and product mix, that’s number one. Number two, you would have also seen that in December quarter, there is also major export sales, including sales to subsidiaries, where margin is divided and hence, the real reflection is nine months as a whole and Q3 versus previous year Q3.
Renu Baid — IIFL Securities — Analyst
Got it. Also when I compare the India, as in standalone India revenues like-to-like comparison, yes, that has improved relatively by 100 basis point, 200 basis point there. So get your point. Okay. Second question is, last time when we spoke, you have mentioned that there was significant cost-out actions undertaken in Australia to reduce — in CTL to reduce the fixed cost of that subsidiary. So where are we in terms of turning around the performance of this business and also in the backdrop that it is very certain that U.S. sales, which last year were fairly strong, this season will be declining. So how are we gearing on the cost side for this unfortunate fall in revenue?
Nrupesh Shah — Executive Director, Corporate Affairs
So the entire sort of what we call business process transformation that we are working on in Australia, which we had embarked upon soon after we acquired the company is actually behind schedule basically essentially because of COVID. During COVID, nothing could happen and that is something, which we will only probably witness in the next couple of — in next two years. So that is a process — it’s a process which is on, but what should have been done by now is actually a full two years behind schedule. So that’s all on the cost of doing business front, on the CODB front. On the COGF front, again, there is — there are a — a lot of measures have been undertaken but unfortunately, those have been negated by the sharp increase in commodity cost. Commodity costs, although, are lower now than they were at the peak, but they are still significantly higher than they were pre-COVID levels — at pre-COVID levels. So for the year as a whole both Australia and the U.S. together, the entire Climate Technologies company is not going to be a very happy — not going to see a very healthy numbers.
Renu Baid — IIFL Securities — Analyst
Sure. And Nrupesh sir, can we also have some updates on the nine month odd 3Q performance of the subsidiaries? IMPCO, GSK China and CPN, at least the headline operating numbers?
Achal Bakeri — Founder, Chairman and Managing Director
Sure. Nrupesh [Foreign Speech] will go ahead.
Nrupesh Shah — Executive Director, Corporate Affairs
So Climate Technology topline is INR173 crore. I’m saying in INR, and at a PAT level, it is negative INR17 crore. As far as IMPCO Mexico is concerned, it is INR80 crore and PAT is INR1 crore, and in case of GSK China, top line is INR27 crores and loss of INR2 crores. This is what summary of nine months’ subsidiary performance.
Renu Baid — IIFL Securities — Analyst
Got it. And…
Nrupesh Shah — Executive Director, Corporate Affairs
So keep this figures handy for you.
Renu Baid — IIFL Securities — Analyst
Thank you so much sir for sharing them, it helps to understand how the individual businesses have done. Now coming back to the base India business as in you have highlighted that the summer advances have been fairly robust which has helped working capital improve sharply. So, can we expect as in if you go back 2019 or — yeah, 2019 — December ’19 quarter, pre-pandemic, we had a similar INR200 crores kind of standalone sales and it’s almost about 10% growth. So given that in business everything is back to normal and summers is good, can we expect again a robust growth coming back? And this time around or do you see a bit of focus on the economy segment also which we had sharpened in the last two years but more SKUs should help widen our market share as well as growth in the domestic business?
Achal Bakeri — Founder, Chairman and Managing Director
Yes. Renu. On the — both on the top line and the bottom line in the current quarter and in the next quarter, we expect a significant improvement in performance. And also at the module strategy that you spoke about is also something which is very much happening and so yes, all of those sort of levers are being used.
Renu Baid — IIFL Securities — Analyst
Sure. And last if I can ask, any updates on the industrial air-cooling business, how is that progressing? And given that capex activities also in general improving at the factory level, how has this business performed for the 3Q and YTD?
Achal Bakeri — Founder, Chairman and Managing Director
So truly the growth has been a very, very high in sort of I would say, very high double-digit growth. However, the base being what it was, a relatively low-base in absolute numbers, it is still not something, which may be worth talking about but it is certainly growing very well and growing in that — I mean, that business is moving in the right direction.
Nrupesh Shah — Executive Director, Corporate Affairs
And in terms of the product acceptance and as you know, the business model wise ready terms-wise, iIt is at par with the residential air cooler while it comes to the profitability, it is even better than residential.
Renu Baid — IIFL Securities — Analyst
Got it, got it. Thanks much, sir, and all the best. Thank you.
Achal Bakeri — Founder, Chairman and Managing Director
Thank you.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you.
Operator
Thank you. Our next question is from the line of Onkar Gangorde, sorry, Ghugardare from Shree’s Investments. Please go ahead. Onkar, your line is unmuted. Please go ahead with your question.
Onkar Ghugardare — Shree Investment — Analyst
Hello. Yeah. My question was regarding actually the subsidiary performance. If you look at the nine months figure, the revenue is contributing around 35% to the top line but profit is here for everyone to see. I mean every quarter, there comes some headwind, so what do you think about the performance of the subsidiary and its overall impact on the profitability in the long run?
Achal Bakeri — Founder, Chairman and Managing Director
So, since you specifically said in the long run, we will say that we are very confident about profitability in the long run. If you go to again break down the subsidiaries into three key components which is Australia and the U.S., or actually four, Australia, U.S., Mexico, and China. So as far as Mexico is concerned, it has remained profitable. We’ve had to take some haircuts with some sort of write-offs that we had to do with some customers that have gone bankrupt because of COVID has — which has affected the profitability, but despite that, it still remains profitable. China is — as we have been able to bring down the losses significantly, we are not even being able to go to China for — since 3.5 years, three and three years and four months. So that is something which remains a question mark.
As far as the U.S. is concerned, yes, there was this sort of expectation of a recession which has led to our major customers cutting down on their orders which we believe is completely unfounded and — but nonetheless, that is something which we — is being witnessed across the board, across all retailers, across all product in the U.S. So that’s something which we expect to correct — the situation that we expect will be corrected by next year.
As far as Australia is concerned, I spoke about it little earlier, we are in the process of sort of changing the business model and that should — the entire benefits of that should be visible in about two years’ time. Along with that, we have added new products are in the — and are in the process of adding new products over there which have much better margins and are working hard on improving the margins on the existing products, and all of those should surely see effect in ’23, ’24. So while I understand where you are coming from but believe me, we are equally impatient if not more, and we are again extremely concerned about it and working our best, trying our best to sort of turn things around.
Nrupesh Shah — Executive Director, Corporate Affairs
And just to add to that. In ’21, ’22, mainly on account of U.S. performance and IMPCO performance, ’21, ’22 year as a whole, rest of the world that its subsidiaries and exports put together contributed 50% of the top line, while rest of the world in terms of the PBIT contributed 40%. But on account of reasons just mentioned, current year again, it’s not doing well, but otherwise, last year it was a significant turn around.
Onkar Ghugardare — Shree Investment — Analyst
Sir, but that’s been one year sir, right? If you look at the history, say last three, four years, the performance — the overall performance has been dragged by the subsidiaries.
Nrupesh Shah — Executive Director, Corporate Affairs
That’s right.
Achal Bakeri — Founder, Chairman and Managing Director
That is true. That is true. We also see the subsidiary, there is an opportunity going forward, also, which is why we are hanging in there and making sure that the dragging down will be a thing of the past as we move ahead.
Onkar Ghugardare — Shree Investment — Analyst
And I specifically asked this question, what would be the impact for the long run. Here you categorized long run as say how many years, two years, three years, five years.
Nrupesh Shah — Executive Director, Corporate Affairs
Two, three years, two, three years. In the long run, as the saying goes, we all be dead, so what matters is the next two, three years.
Onkar Ghugardare — Shree Investment — Analyst
Okay. So you expect — I don’t want to like — what kind of performance, I mean, what percentage do you expect at least to add to the bottom line because of subsidiaries? A ballpark figure, I’m asking.
Nrupesh Shah — Executive Director, Corporate Affairs
I wouldn’t venture into that because I really don’t know myself. I don’t know what to expect. We don’t know what — how it is going to be, so I really wouldn’t venture into hazarding a guess.
Onkar Ghugardare — Shree Investment — Analyst
Yeah. But as of now if it is contributing around 30% to the top line, I mean, there has to be a decent contribution to the bottom line as well, right, otherwise, there is no use of doing those things, right?
Nrupesh Shah — Executive Director, Corporate Affairs
We are on the same page.
Achal Bakeri — Founder, Chairman and Managing Director
Yes. Absolutely, absolutely.
Nrupesh Shah — Executive Director, Corporate Affairs
We are very much as an organization philosophically focused on the bottom line, we just don’t chase top line for the sake of top line. We chase top line provided it generates the bottom line that we seek, otherwise, we are not here to cool the world.
Onkar Ghugardare — Shree Investment — Analyst
Okay. All right. Similar, a follow-up to that is you had taken a loan for this Climate Technology acquisition. Do you think it would have been better not to take the loan and go ahead with the — you should have gone ahead with the cash you had at that time to acquire them.
Nrupesh Shah — Executive Director, Corporate Affairs
We can still do that. See, there is nothing like — we can still do that. We can still pay-off the loan, we still have the money in our books, but we have done that for a reason. And we also have to remember, actually there is a part of the dragging down of Climate Technologies is because of the interest and fees on the acquisition loan which in reality should — shouldn’t be considered in this performance. But we have taken it for a reason and that reason as of now still remains valid. If we want, we can pay off that loan, it takes us very little to pay off that loan.
Onkar Ghugardare — Shree Investment — Analyst
Okay. As of now, how much loan you have to pay to entirely clear of that?
Achal Bakeri — Founder, Chairman and Managing Director
Around $20 million.
Nrupesh Shah — Executive Director, Corporate Affairs
Acquisition loan outstanding is $20 million against original avail is $25 million.
Achal Bakeri — Founder, Chairman and Managing Director
$20 million Australian dollar.
Nrupesh Shah — Executive Director, Corporate Affairs
Australian Dollar, which is about INR100 crores.
Onkar Ghugardare — Shree Investment — Analyst
That is still to be paid, right?
Nrupesh Shah — Executive Director, Corporate Affairs
Yes, yes, yes, yeah.
Onkar Ghugardare — Shree Investment — Analyst
Okay. And what’s your plan on that front? Like, when do you plan to —
Nrupesh Shah — Executive Director, Corporate Affairs
It’s a half-yearly repayment that decided with the bank and that is being done.
Onkar Ghugardare — Shree Investment — Analyst
Okay. But like in how many years you plan to pay-off that entire?
Nrupesh Shah — Executive Director, Corporate Affairs
Balance period is about four years.
Onkar Ghugardare — Shree Investment — Analyst
Four years from?
Nrupesh Shah — Executive Director, Corporate Affairs
From now. That is from now.
Onkar Ghugardare — Shree Investment — Analyst
Okay. Four years from now.
Nrupesh Shah — Executive Director, Corporate Affairs
But irrespective of that at any point of time from our treasury, we can always prepay, but there is a lot of sense and logic in having that loan, because otherwise Australian dollar fluctuates and if we would have granted that loan from India, there would have been huge forex fluctuation, that’s number-one. Number two, even in today’s time, that is as of today, including hedging cost, the interest is just 3.85%, while, today’s LIBOR is 4.5%. So just consider that the cost is lower than LIBOR, otherwise there is a spread of 2% to 3%, that’s number two.
And number three, the same amount we are deploying in the treasury in India, and today, pre-tax, it is generating 7%. So by the way, end-to-end it generates Alpha in excess of 3%. And still there is an option as and when required, we can prepay that, but it doesn’t make sense to us. And also partly, in case of acquisition, it also needs some discipline at a level of local organization in terms of the performance and cash flow. So to an extent, it serves that purpose too.
Onkar Ghugardare — Shree Investment — Analyst
Okay. Thanks for the detailed answer. I just have a suggestion or just thinking like, instead of focusing 2%, 3% Alpha over here and there, I guess, management focus should be on to — should be there on to doing a business, which is more profitable than generating 2%, 3% Alpha, right? I mean, focus should be there on that. I’m not saying it’s not there, I’m just stating my views here.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you very much for your advice.
Onkar Ghugardare — Shree Investment — Analyst
Yeah. Thanks. The next question is on the 60% payout which you mentioned, earlier it was up to 50%, right?
Achal Bakeri — Founder, Chairman and Managing Director
Yeah.
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. That’s right.
Onkar Ghugardare — Shree Investment — Analyst
And now it is 60%, not up to 60%.
Nrupesh Shah — Executive Director, Corporate Affairs
It is up to 60%, everything is up to.
Onkar Ghugardare — Shree Investment — Analyst
Okay. Because in the policy, I mean, the dividend policy, you have stated at least 60%.
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. It is, at least 60%. You are right. Earlier, it was up to 50%, now it is, at least 60%, of course, subject to contingency, etc., etc.
Onkar Ghugardare — Shree Investment — Analyst
Okay.
Nrupesh Shah — Executive Director, Corporate Affairs
Because, we believe that in our business model being asset-light, capital-light, and as you would have seen that on a standalone basis, there is a negligible capital employed whether for the quarter or for nine months, and similarly, on a consol basis, it’s just about INR235 crores. So we need not to keep much cash whereby to track down the ROCE or RONW.
Onkar Ghugardare — Shree Investment — Analyst
Okay. Just one question on the buyback front. If you say that management is or the promoters are also participating in the buyback offer, don’t you think that would have — if the promoter wouldn’t have gone ahead with the buybacks, I mean, participate in the buyback that would have been more beneficial to the retail shareholders?
Nrupesh Shah — Executive Director, Corporate Affairs
So that decision you should leave it to the promoter and concerned shareholders.
Onkar Ghugardare — Shree Investment — Analyst
Yes. So that’s what I’m asking, right?
Nrupesh Shah — Executive Director, Corporate Affairs
So here also by the way now to answer your question, minority shareholders, as per the definition, shareholding is just 1.86% as of now, while their reservation is 15%, so against 1.86%, they are going to get 15%. And can you please tell me why promoters should be penalized, and despite a minority shareholders getting about eight times to their share, why they should be rewarded even higher, and that too after offering the buyback price of INR2000 against the current price of INR955?
Onkar Ghugardare — Shree Investment — Analyst
Correct. That is one point. But one thing also is there that for last six to seven years, there has been no return for the shareholders as well apart from the dividends which you have picked, right?
Nrupesh Shah — Executive Director, Corporate Affairs
If you don’t like you need not to remain invested, there are more than 5,000 companies in the country. We are not asking anybody to marry with the company, isn’t it? That is number one. And number two, there are many — see, you should have a patience to listen the answer fully. Please allow me to respond. So what you are comparing these five years to six years, there are the shareholders for 15 years, 10 years, eight years, and last two years also. So your perception maybe this and there are shareholders you’re — who are giving us many complimentary emails, so it depends upon that.
Onkar Ghugardare — Shree Investment — Analyst
Sir, myself, I’ve been a shareholder for 15 years. So just to clarify that.
Nrupesh Shah — Executive Director, Corporate Affairs
Fine, so still if you are being —
Achal Bakeri — Founder, Chairman and Managing Director
Yes. So you have been handsomely rewarded on your investments.
Onkar Ghugardare — Shree Investment — Analyst
Yeah.
Achal Bakeri — Founder, Chairman and Managing Director
Then you have no reason to complaint.
Onkar Ghugardare — Shree Investment — Analyst
Yeah, yeah. I’m just asking for your opinion sir, there is no complaint and anything I’m talking about. I’m just asking for the promoters to [Speech Overlap] —
Nrupesh Shah — Executive Director, Corporate Affairs
If somebody is in a capital market, one should be ready for the up and down, only on the excel sheet, business just grows up and chart shows up, isn’t it? As guys, you yourself being in a capital market for so long.
Onkar Ghugardare — Shree Investment — Analyst
Yeah. Like the way I gave you the advice, so thanks for this advice as well. Thank you.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you. Thanks.
Operator
Thank you. We’ll take our next question from the line of Nikhil Gada from Abakkus Asset Manager. Please go-ahead.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Yeah. Hi, sir. Thanks for the opportunity and congrats on a very strong set of numbers, especially on the standalone business. Sir, my first question is regarding the standalone business itself. And while our main season will start in the upcoming couple of quarters, we have seen certain amount of slowdown, if I can say so, in the other sort of consumer verticals. So what is your view in terms of how we can sort of get hit by it, if by any chance or you do think that this maybe one of the best summers we have?
Nrupesh Shah — Executive Director, Corporate Affairs
So our category, fortunately or unfortunately is decoupled from the economy. What really matters is — the only thing that really matters is the temperature in the summer. If the temperatures are high enough and consistently high enough then regardless of how badly the economy is doing, we will sell and the converse is also true. So far — and again, last year was very good summer, so the channel is — has completely exhausted its inventory, so which is why the channel has been restocking since the end of the summer. And the channel is fairly upbeat about the prospects of the summer to come. And I don’t want to get ahead of myself, but we are already witnessing high temperature across the country, although it’s just a sort of the first week of February, you’re seeing 35 degrees in Bangalore and 34 in Pune, and right here in Ahmedabad is 33 degrees. So we are seeing sort of — and there in fact even has begun some tertiary movement in coolers in the market. So if all goes well, if this continues, if there are no surprises then we should see a very good summer.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Got it, sir. Sir, you mentioned…
Nrupesh Shah — Executive Director, Corporate Affairs
Please remember, I said if.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Yeah.
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. There is a capital if.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Yeah, yeah. We understand that. Sir, just on the price hike that you’ve mentioned. Can you quantify what kind of price hike we had taken in the quarter? And are there any further price hikes that you need to take or if — because since the commodity price and now correcting, you are more or less okay with the current pricing that we have?
Nrupesh Shah — Executive Director, Corporate Affairs
No. We have been increasing the prices every month, install measures from last year, from about six, eight — seven, eight months ago, and that is continuing even as we speak. So regardless of the commodity prices or — because please remember that the commodity prices are still higher than what they were pre-COVID, it may have come down from the peak, but they are still — the overall — the bill of materials cost are still higher than what they were pre-COVID. So this is something which is going to go on. Our EBITDA margins, which are at, whatever, 19.9% were much higher few years ago. So our eventual goal is to be at those historical sort of EBITDA — gross and EBITDA margins. So we are working towards that. So our price rise is something which is going to go on.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Got it, sir. And just two more questions. So just one on the margin front, specifically to once again to the standalone domestic business, if I can say so. We have done — in the past, we have done margins upwards of 28%, 29% on EBITDA level. And now that a lot of business in the domestic also happens, because we supply through exports what kind of a realistic EBITDA margin would you internally target from that perspective, is it 25% that we are already hitting the best margins we can do or you feel…
Nrupesh Shah — Executive Director, Corporate Affairs
No, no, no. No way, no way, no way. We are looking at our historical high of 32%.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Including the export that we do the…
Nrupesh Shah — Executive Director, Corporate Affairs
No, no, no. I’m saying, as a standalone, on a standalone basis. Now without — with exports or without exports is a matter of detail but one on — I mean, comparatively, it can be — from a standalone India business, let’s say, we’re looking at 32%.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Yeah.
Nrupesh Shah — Executive Director, Corporate Affairs
So on domestic sales, it will be 32%.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Domestic sales?
Nrupesh Shah — Executive Director, Corporate Affairs
Yes.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Understood. I understood. Got it. And that as of now would be 80% of the overall standalone numbers, right?
Nrupesh Shah — Executive Director, Corporate Affairs
About — like, about that. Yeah.
Achal Bakeri — Founder, Chairman and Managing Director
Okay. Yes.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
I understood, sir. And lastly, sir, regarding the Australia business that you mentioned, that we had planned to turn it around and create a sort of a more enhanced sort of business model or differentiated business model. Sir, can you for just a benefit sort of highlight what you’re trying to do over there because I might have missed that in the past?
Aakash Fadia — YES Securities — Analyst
So we haven’t even elaborated on that in this call today, but what we’re trying to do is there too, we have a — sort of have a vertically-integrated manufacturing facility, which we are sort of converting into an asset-light third-party manufacturing kind of a facility. We are locked into a lease which goes on until June ’25, so that is one other major cost which we are trying to sort of exit from and changing the business model from in-house captive manufacturing to a third-party manufacturing.
So all of those are works in progress. It isn’t as if nothing has happened. I mean, we’re sort of halfway there but there are — there’s still some work that remains to be done, which as per our original plan would have been sort of behind us by now, but in those two years of COVID, really nothing happened. And — but — so that’s one thing on the CODB front. And on the COGF front, already — we had — like I said a little while before, we had done a lot but that is also all been sort of washed out by the increase in costs. So that is broadly what we are attempting to do with the company in Australia.
And on top of that, yes, on top of that, we are also adding products which are — which have much higher gross margins than the current product that are being sold.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Got it, sir. Sir, Australia is how much of the total CT business, Australia region?
Achal Bakeri — Founder, Chairman and Managing Director
So Australia, till — see — all right so, till heads the company. Almost everything came from Australia. They had barely maybe about $5 million, $6 million worth of business in the U.S. How much was it? About INR20 crores of business in the U.S. till we acquired it in rupee terms. And last year was a INR140 crores. So from INR20 crores to INR140 crores, that is what the sort of swing that happened primarily because we acquired the company, we added products, and all of that. So till that happened, it was INR20 crores was U.S. and Australia domestic was maybe about INR250 crores or so. Now, last year, what was the total?
Nrupesh Shah — Executive Director, Corporate Affairs
About INR370 crores out of which…
Achal Bakeri — Founder, Chairman and Managing Director
INR140 crores.
Nrupesh Shah — Executive Director, Corporate Affairs
INR130 crores — INR140 crores was U.S. and INR230 crores was Australia. So you can see what — now again this year, there is going to be a decline in both the U.S. and in Australia, but at least that is what we did — we were able to do last year.
Achal Bakeri — Founder, Chairman and Managing Director
And importantly, U.S. business at EBITDA percentage and at percentage is even more profitable than domestic business in India.
Nrupesh Shah — Executive Director, Corporate Affairs
Basically…
Achal Bakeri — Founder, Chairman and Managing Director
After considering everything, that includes margin, which is retained in Symphony India, and margin which is retained by Climate Technology. But the point is U.S. business is generating that kind of profitability. And number two, apart from one large customer, we have also forayed into B2C as well as e-commerce on Amazon. Of course, it’s a beginning, so initially, there we are small sale and there is a good potential.
Nikhil Gada — Abakkus Asset Manager LLP — Analyst
Got it, sir. Thank you so much for answering my questions and all the best for the future. Thank you.
Achal Bakeri — Founder, Chairman and Managing Director
Thank you very much. Thank you.
Operator
Thank you. Our next question is from the line of Rahul Gajare from Haitong Securities. Please go ahead. Looks like Rahul’s line has just dropped from the queue. In the meanwhile, we’ll take our next question that’s from the line of Rakesh Wadhwani from Monarch AIF. Please go ahead.
Rakesh Wadhwani — Monarch AIF — Analyst
Hi, sir. Hi. Thank you for the opportunity. Sir, I had one question. So mainly in the Results section, we — you — the company has provided the revenue bifurcation based on the geography, India and rest of the world. So in rest of the world, the revenue for Q3 is INR79 crore versus INR84 crore, so is it because the decline is because we haven’t shipped some products from the India that’s why the India revenue is higher, is my understanding correct?
Nrupesh Shah — Executive Director, Corporate Affairs
Yes. Part of the production for IMPCO Mexico, which earlier used to take place in India, that has shifted to Mexico.
Achal Bakeri — Founder, Chairman and Managing Director
So because of the high shipping cost, we sort of relocated from manufacturing from India to Mexico. So instead of shipping from India, it is being now produced within Mexico, both for the Mexican market and as well as we are using that to supply to the U.S. market.
Rakesh Wadhwani — Monarch AIF — Analyst
Okay. But because the sales have come down, so I thought maybe the exports would have been done from the domestic market, Indian markets, is my understanding. So just wanted to clarify further. So in FY — also INR3 crore Indian market share versus INR121 crore, and for rest of the world, INR79 crore versus INR84 crore, so is my understanding correct because we have shipped more products from India for these markets, that why the revenue from rest of the world has come down?
Achal Bakeri — Founder, Chairman and Managing Director
Can you — we have not fully understood your question.
Nrupesh Shah — Executive Director, Corporate Affairs
Can you repeat your question?
Rakesh Wadhwani — Monarch AIF — Analyst
So, sir, in the financial numbers, in the consolidated numbers, there you have given, company has given the revenue bifurcation based on the geography. So India revenue INR198 crores. So that — is it– just a second, I’ll tell you the page number also for your…
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah, yeah.
Achal Bakeri — Founder, Chairman and Managing Director
It is there, INR198 crores.
Rakesh Wadhwani — Monarch AIF — Analyst
Okay. So this is because — the higher revenue is it because we have shipped the products to the export market from India.
Achal Bakeri — Founder, Chairman and Managing Director
No. So India INR190 crores is — comprises only domestic sales from India, right?
Rakesh Wadhwani — Monarch AIF — Analyst
Okay.
Achal Bakeri — Founder, Chairman and Managing Director
And whatever INR79 crores, rest of the world is comprising of the subsidiary sales and India’s exports also.
Nrupesh Shah — Executive Director, Corporate Affairs
But I believe your question is, last year it was INR84 crores, current year, it is INR79 crores, and even in September, it was INR84 crores, so why there is a decline…
Achal Bakeri — Founder, Chairman and Managing Director
So declines in subsidiaries here.
Nrupesh Shah — Executive Director, Corporate Affairs
Correct. So decline is as we have explained, some of the exports from India to IMPCO Mexico now that happened domestically in IMPCO Mexico on account of logistics costs, mainly on account of that. Otherwise, nine months as a whole, rest of the world is INR304 crores versus last year of INR313 crores.
Aakash Fadia — YES Securities — Analyst
And there is some decline in Climate Technologies’ quarterly revenues. So that’s why the rest of the world is lower. You can see the consolidated quarterly results. INR84 crores versus INR79 crores is due to the subsidiaries decline in revenue in the quarter mainly Climate Technologies.
Rakesh Wadhwani — Monarch AIF — Analyst
Okay, sir. Thank you for clarifying, and, sir, one more point regarding the advertising expenses, they have gone to — increased to 6% of the total revenue for the nine months, and in the past, they have remained in the range of 4% for the consol and for the — 5% for the standalone. So any guidance on that part in the coming quarters or years?
Achal Bakeri — Founder, Chairman and Managing Director
So, Rakesh, as we have explained earlier also, this summer season that passed, in the nine-month data you would see, if we include the summer season for last year, calendar year ’22, there was substantial starting inventory in the channel which has to be pushed, I mean just to create enough pull for that. So increasing A&P was to support the channel inventory liquidation in the market last year and we intend to get back to our traditional 4.5% to 5% A&P expenses as we move forward.
And secondly, there is also a good amount of cost incurred on B2C as it normally happens, it is inclusive of that. And secondly, in current year, especially in September and partly in December quarter, there has been one-time sales functions in marketing on account of some of the market research also, market research expenses, but we have fully treated them as revenue expenses.
Rakesh Wadhwani — Monarch AIF — Analyst
Okay, sir. Sir, that is it from my side. Thank you.
Operator
Thank you. Our next question is from the line of Aditya Bhartia from Investec. Please go ahead.
Aditya Bhartia — Investec — Analyst
Hi. Good evening, sir. Sir, just wanted to understand on the Australia business. After the acquisition, we also had plans that we’ll start shipping some products from India and Chinese facilities. Sir, so I understand that those plans had gotten disrupted during COVID, but as of now, we want to have completely local sourcing mechanism or are we still open to the idea of exporting a fair bit from India and China?
Nrupesh Shah — Executive Director, Corporate Affairs
No. Aditya, we had in fact last year supplied everything from India but then the freight rates went up so high that all — that the cost of freight was much higher than the selling — in the manufacturing cost. So we in fact relocated the manufacturing to Australia this year and as I said to — replied to an earlier question, in the case of Mexico also, we sort of began manufacturing some products in Mexico only to save on the freight cost. But now, going forward, if the freight rate come down to pre-COVID level, it will still make sense to produce in India and ship directly from India. And our business model and our manufacturing process is fairly agile and fairly flexible. So for us to locate or relocate, it requires effort, but it is not something which requires tremendous cost, because it’s all third parties, so we either — whether we final OEM in India or a third-party manufacturer in India or we find a third-party manufacturer in Australia is all that it takes and then relocating the tooling. So, but to answer your question, we had already begun to manufacture from India and then we had to relocate to Australia.
Aditya Bhartia — Investec — Analyst
Understood. And at the current freight rates, it makes sense to be procuring from Australia only? Freight rates could need to come down meaningfully even from current levels for first two, three quarters?
Nrupesh Shah — Executive Director, Corporate Affairs
Correct. Absolutely. Yes. So that is also one of the things, which I was referring to a little while ago in response to another question that many of the sort of measures that we had put in place were washed out by the increase in freight rates and increase in cost. So that was another thing that I was referring to.
Aditya Bhartia — Investec — Analyst
Sure, sure. That explains sir. And sir, regarding our D2C business foray, if you could just kind of spare two minutes and explain to us how exactly is that progressing? How large that business could be today? What are the costs that we incur in respect of that and what are the plans that we are having?
Nrupesh Shah — Executive Director, Corporate Affairs
D2C?
Aditya Bhartia — Investec — Analyst
Yes.
Nrupesh Shah — Executive Director, Corporate Affairs
Okay. I’ll maybe request Amit Kumar to respond to that. Amit?
Amit Kumar — Executive Director and Group Chief Executive Officer
So, Aditya, D2C business is still a nascent business. We are building this channel both in India and in couple of other territories, including Australia and U.S. It’s — as of now it account for a very small percentage of the business but what we are focused on is building it profitably and working it in a way that the cost for us — the average cost of sales on the channel remains a bit acceptable. So this is work-in-progress and between this year and next year, we will definitely sort of take it to the next levels, where this is integrated into the overall approach that we are building on the omnichannel front, where D2C also fits into our sales through the traditional channel, so that’s the larger approach. And as the volumes become more material, maybe we’ll be able to share the numbers also.
Nrupesh Shah — Executive Director, Corporate Affairs
And probably, as things stand, I mean, I believe in current year or at least in current season from D2C, we expect at least positive EBITDA despite this cost.
Amit Kumar — Executive Director and Group Chief Executive Officer
Absolutely.
Nrupesh Shah — Executive Director, Corporate Affairs
Yes. So there is going to be positive EBITDA in D2C despite it is at nascent state, that’s how it has been strategized.
Aditya Bhartia — Investec — Analyst
Understood, sir.
Amit Kumar — Executive Director and Group Chief Executive Officer
Wasn’t the case last year.
Aditya Bhartia — Investec — Analyst
And just one last bit if I may add. In semi-urban areas, in rural areas and versus unorganized rates, there are some initiatives that you have taken, how exactly are those shaping up? And are you seeing an expedited shift happening from unorganized rates?
Nrupesh Shah — Executive Director, Corporate Affairs
So, Aditya unorganized continues to be a large sub-segment within the coolers market and as we work into the market, we are working on two straights. One is increasing the dealer penetration, so there is a focused Bharat product, which is in that taking us deeper into the hinterland and deeper into the unorganized market sector. So that’s one approach we are taking to a focus product and range going into the smaller retails and hinterland kind of a market. The second approach we’re taking is also leveraging — so leveraging a couple of again specific products aimed at the rural market, which are designed bottom-up for that segment and a few of those we will launch within the current market.
Aditya Bhartia — Investec — Analyst
Understood, sir. That’s helpful. Thank you so much.
Operator
Thank you. Our next question is from the line of Rahul Gajare from Haitong. Please go ahead.
Rahul Gajare — Haitong International Securities Group — Analyst
Thanks for the opportunity. Sir, most of the questions have — I have got some clarity, but I just need some more details on some of the areas. Now, you have talked about price hike that the company has taken over the last several months. Two aspects I want to understand. How much is the total price hike that you’ve taken in the first nine months? And what is the gap or the price that you still need to take in order to be neutral on the increased input cost?
Nrupesh Shah — Executive Director, Corporate Affairs
So Rahul, first of all, this have been — I was — it’s a very moderated price increases. So we have not attempted to take a big bite in any one go, so these are all small increases that will effect every month and this will go on regardless of where the prices are. It is the price — hike is actually not a function of the cost, but is more a function of what we believe we can extract from the market.
Rahul Gajare — Haitong International Securities Group — Analyst
Okay. Right.
Nrupesh Shah — Executive Director, Corporate Affairs
So whether the cost go up or down, I mean cost may go up and price may have to go down in certain situations. You know what I’m saying? So the price and cost actually have no correlation with each other.
Rahul Gajare — Haitong International Securities Group — Analyst
Okay. Sir, the second question I had was on the subsidiary sales. Now, in the second quarter, I recollect, there was some sales deferral in Climate Technologies. What you’ve talked about with The Home Depot deferring inventory stocking up. Now that deferral of sales in Climate Technologies in the second quarter, was it more U.S. centric or was it U.S. and Australia?
Nrupesh Shah — Executive Director, Corporate Affairs
So that Home Depot thing was all U.S. and so that has been deferred, but that has also been significantly reduced. So what we had sold last year in December is to a great extent going this time in the new year post January, but is also significantly reduced from last year. The overall orders are significantly lower than last year.
Rahul Gajare — Haitong International Securities Group — Analyst
Right. Okay. Fair enough. Because that deferral was expected to come in the Q3 sales.
Nrupesh Shah — Executive Director, Corporate Affairs
Correct.
Rahul Gajare — Haitong International Securities Group — Analyst
So obviously that has not happened, right? Okay. Sir, my last question is on the other expenses. In the second quarter, we’ve had several…
Nrupesh Shah — Executive Director, Corporate Affairs
Rahul, wait, wait, wait. It was supposed to come in Q3, is happening in Q4. Our point was that.
Rahul Gajare — Haitong International Securities Group — Analyst
Okay. So either Q3 or Q4 that deferral sales would have come through?
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. Sorry?
Rahul Gajare — Haitong International Securities Group — Analyst
So I’m saying that sales would have either come in third quarter or the fourth quarter, that’s what you are basically saying?
Nrupesh Shah — Executive Director, Corporate Affairs
Correct, correct, correct.
Rahul Gajare — Haitong International Securities Group — Analyst
Right. Which is not happening this time around?
Nrupesh Shah — Executive Director, Corporate Affairs
It is happening, but the overall sales is going to be much lower than last year.
Rahul Gajare — Haitong International Securities Group — Analyst
Okay, okay. Sir, my last question is on the cost. Apparently, there were several one-time cost, certain expenses in the second quarter. Now, in the third quarter also I see the other expenses is elevated both at standalone level and consol level. So are there any such one-time costs, which are sitting in the 3Q number?
Nrupesh Shah — Executive Director, Corporate Affairs
Which number you are referring to Rahul?
Rahul Gajare — Haitong International Securities Group — Analyst
Sir, last time, there were off-season sales promotion.
Nrupesh Shah — Executive Director, Corporate Affairs
No, no. This part — see, this quarter, there is no one-time type of expenses, only the — very few additional cost expenses.
Rahul Gajare — Haitong International Securities Group — Analyst
So these are all routine business expenses?
Nrupesh Shah — Executive Director, Corporate Affairs
Correct, correct, correct.
Rahul Gajare — Haitong International Securities Group — Analyst
Right, right. Okay sir. That’s all I had. Thank you very much and all the very best.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you.
Amit Kumar — Executive Director and Group Chief Executive Officer
Thank you.
Operator
Thank you. Our next question is from the line of Manoj Gori from Equirus. Please go ahead.
Manoj Gori — Equirus Securities Private Limited — Analyst
Thanks, sir. Sir, couple of questions, one, obviously, Amitji have highlighted many things for the domestic market. So, product innovation has been one of our many strengths over the years. So, apart from this, in the long run probably can you highlight like what would be the key focus areas which would help us grow faster than the industry whether it’s unorganized or the total air cooler industry. Can you throw some light over there?
Achal Bakeri — Founder, Chairman and Managing Director
Well, it’s going to be more of same, Manoj.
Manoj Gori — Equirus Securities Private Limited — Analyst
Yeah.
Achal Bakeri — Founder, Chairman and Managing Director
Yeah. So it’s not that we have any sort of magic wand or a magic bullet, it’s going to be just more of the same, Manoj.
Manoj Gori — Equirus Securities Private Limited — Analyst
Right. Right.
Achal Bakeri — Founder, Chairman and Managing Director
From constant innovation, constantly [Foreign Speech] and these new markets or existing markets whether it’s India, Australia, U.S., Brazil, Mexico, China, so the same markets, new customers in the case of U.S. and Australia, even adding new products, even in Mexico we are adding new product. Looking at adding new customer in India, it will be again, continuous innovation as far as products are concerned and grow the industrial cooler business, grow exports from India. So it is just more of the same, that’s more of the same. And keep up correctly increasing the marketing that were continuously across the channels, correct. So all of those things which we have been historically doing, whatever had to be done or whatever could be done, we have already done, we just have to keep on doing that and keep on doing that more of that and do it better.
Manoj Gori — Equirus Securities Private Limited — Analyst
Understood.
Achal Bakeri — Founder, Chairman and Managing Director
Continuously.
Manoj Gori — Equirus Securities Private Limited — Analyst
Understood. Sir, last question. So, if you look at we recently or probably sometime back, we came out with this bladeless fan also. Are we looking at — are we seriously considering to get into any other categories or probably this was just a similar category or probably to air coolers, and accordingly, we launched it.
Achal Bakeri — Founder, Chairman and Managing Director
Correct. So this was a very good adjacency to coolers and which is why we sort of got into it. From our point of view, it is basically a cooler without water and a tank, otherwise, everything else remained the same. It has the same plastic component, the same motor blower and all of that. So, it was a clearly an adjacency to coolers and in sort of — like it was a natural extension of what we’re currently doing. But other than that, we are not, and I at least in the — we — at the moment, we have no plans of getting into any other product category within India, right. Whereas in — as I said, in Australia, we are getting into — we are into coolers and heaters, the built type, the installed type, but we are introducing the portable cooler, portable heaters, air-conditioners.
And in the U.S. also we have introduced air-conditioners which we are buying from company in China and giving to our customer over there, and we will continue to offer more products which are in the air space. In Mexico, again, these are all clearly opportunistic sort of moves. In Mexico, again bulk of the business comes from cooler. We introduced heaters, portable heaters a few years ago, that business has been growing at a good pace but in the next few months, we are also going to be introducing washing machines in Mexico. Again, for various reasons, it makes sense to do that because there are tariff issues and most of the other players are importing, so we will be sort of manufacturing that variety of washing machines locally, the only player so far. So, there are these opportunities in which we will keep on sort of seeking, but otherwise, see as far as India is concerned, we are not looking at anything other than coolers and fans, as of year-end.
Manoj Gori — Equirus Securities Private Limited — Analyst
Yes. Thanks, sir. That was very clear. Thanks for the — for highlighting those. Thank you, sir.
Achal Bakeri — Founder, Chairman and Managing Director
Thank you, Manoj.
Manoj Gori — Equirus Securities Private Limited — Analyst
Yes.
Operator
Thank you. Our next question is from the line of Renu Baid from IIFL Securities. Please go ahead.
Renu Baid — IIFL Securities — Analyst
Yeah. Hi. Just two quick questions. Sir, one, in IMPCO Mexico, how large is the non-air cooler portfolio for us today? And in your view given the new category expansion that are dwelling in the market more of traded goods, how large could become over the next two years?
Achal Bakeri — Founder, Chairman and Managing Director
So, the bulk of the business is still air coolers, even in the U.S., sorry, even in Mexico. The heaters is a relatively low-value product, although we have got got reasonable numbers in terms of value, it is nothing significant. The washing machine category is the only sort of — relatively sort of higher-value category that we are diversifying into in Mexico. How much it — what kind of traction it gets, how much it generates remains to be seen. So at least for now, you may consider that the bulk of the revenue will come from air coolers.
Nrupesh Shah — Executive Director, Corporate Affairs
So, as of now…
Renu Baid — IIFL Securities — Analyst
But as we…
Nrupesh Shah — Executive Director, Corporate Affairs
Around 90%, even in IMPCO Mexico is from air cooler.
Renu Baid — IIFL Securities — Analyst
Got it. Secondly, as in if this portfolio typically was relatively of soft goods portfolio and had seen a very swift recovery in ’22, sir, can we expect because of the diversification in the other durable categories, IMPCO Mexico should be able to grow between 15% to 20% CAGR?
Achal Bakeri — Founder, Chairman and Managing Director
That is something which we are — I mean again, internally, that is something which we are — that is the kind of the plan that we have but we really don’t make sort of forward-looking statements of that kind so, I’ll refrain from giving a number.
Renu Baid — IIFL Securities — Analyst
Sure. And just a soft check, you had mentioned in your comments that home depot and some of the large clients in U.S. are going for destocking and they have reduced the order pull-through last year. So, just to get a sense as in — so this typically when you say pull-through as in now the order values have been declined? So would it be like a marginal 10%, 20% kind of decline or they are going for — because last year also the season was a bit mixed for them, or this kind of decline is like 40%, 50% kind of drop. So just trying to get a magnitude of withdrawal of — or the shrinkage in Brazil that we’re seeing in the current year from U.S. market.
Achal Bakeri — Founder, Chairman and Managing Director
The decline is of a very high magnitude of the kind of order which you mentioned.
Renu Baid — IIFL Securities — Analyst
Okay. Got it. Got it. Okay. Thank you so much, sir. All the best.
Achal Bakeri — Founder, Chairman and Managing Director
Thank you. Bye.
Renu Baid — IIFL Securities — Analyst
Bye.
Operator
Thank you. Our next question is from the line of Zeeshan Akhtar from Happy Gains. Please go ahead.
Zeeshan Akhtar — Happy Gains — Analyst
Hi, sir. Sir, I wanted to — am I audible, sir?
Nrupesh Shah — Executive Director, Corporate Affairs
You are, yes.
Zeeshan Akhtar — Happy Gains — Analyst
Okay. Sir, I wanted to know about the Standalone entity. In India, what has been our sales distribution as far as Indian geography is concerned like North, South divide or East, West? Do you have any numbers on that?
Achal Bakeri — Founder, Chairman and Managing Director
They are broadly equal, broadly equal.
Zeeshan Akhtar — Happy Gains — Analyst
Equal. Okay. So is there any part in India that you are focusing on to increase your sale or is it — do we get some more profit from a certain region in India, is it that way?
Achal Bakeri — Founder, Chairman and Managing Director
Not actually, Zeeshan. So see the possibility is linked more to the model mix, different models have different profitability, so profitability is linked more to the model mix than the region’s purchase.
Zeeshan Akhtar — Happy Gains — Analyst
Okay. Now my second question is on have you added any channel partners or dealers this quarter? What is the status over there?
Achal Bakeri — Founder, Chairman and Managing Director
It’s a continuous process. We do that every year, we’ve been doing that every year and we continue to do that every year.
Zeeshan Akhtar — Happy Gains — Analyst
Okay, sir. Okay. And one more thing, sir. We have decided to do the buyback at INR2,000 per share. Now just a view, I just want to know a view from you. How do we — how have you decided this INR2,000 per share? Why not like 20%, 30% higher than the share price? Is there any specific reason for this?
Achal Bakeri — Founder, Chairman and Managing Director
We tossed a coin.
Zeeshan Akhtar — Happy Gains — Analyst
We tossed the coin. Okay.
Amit Kumar — Executive Director and Group Chief Executive Officer
So essentially, the Board of Directors and the management believes in the strong growth potential possibility and opportunities down the line. So as in Chile, that was the case and that’s how this price was decided.
Zeeshan Akhtar — Happy Gains — Analyst
Okay, sir. That’s great you are justifying that you are sticking to your asset-light model by giving back this money to the shareholder.
Nrupesh Shah — Executive Director, Corporate Affairs
Yeah. Basically, we think that this price is still at a discount to what we believe would be a fair value going forward.
Zeeshan Akhtar — Happy Gains — Analyst
Okay, sir. That’s all from my side. Thank you.
Amit Kumar — Executive Director and Group Chief Executive Officer
Thank you.
Nrupesh Shah — Executive Director, Corporate Affairs
Thank you for asking that question.
Zeeshan Akhtar — Happy Gains — Analyst
All right, sir.
Achal Bakeri — Founder, Chairman and Managing Director
All right. Good night, everybody.
Operator
Thank you, sir. Would you like to add a few closing comments? That was the last question for today.
Achal Bakeri — Founder, Chairman and Managing Director
No, thank you. Thanks to all participants for sparing your valuable time and thanks to YES Securities for hosting this conference call. Thank you.
Operator
[Operator Closing Remarks]