V-Guard Industries Limited (NSE: VGUARD) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Ramachandran V — Director & Chief Operating Officer
Mithun K Chittilappilly — Managing Director
Sudarshan Kasturi — Senior Vice President & Chief Financial Officer
Analysts:
Unidentified Participant
Arshia Khosla — Analyst
Rahul Agarwal — Analyst
Aniruddha Joshi — Analyst
Keyur Pandya — Analyst
Raman Venkata Kerti — Analyst
Sonali Salgaonkar — Analyst
Shivkumar Prajapati — Analyst
Manoj Gori — Analyst
Abhijit Mitra — Analyst
Anshul Jethi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to VGuard Industries Limited Q1FY26 earnings conference call hosted by Nirmal Bank Equities Private Limited. 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. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Arshia Khosla from Nirmal bank in Institutional Equities. Thank you. And over to you ma’ am.
Arshia Khosla — Analyst
Thank you. Palak I Ashra Khosla on behalf of Mimalbang Institutional equities welcome all of you for the first quarter FY26 earning call for Vegard Industries Ltd. From the management today we have Mr. Mithun K.E. chittalakalli, Managing Director Mr. Ramachandran V Director and Chief Operating Officer and Mr. Sudarshan Kasturi, Senior VT and Chief Financial Officer. I would now request the management to give their opening remarks post which we shall open the floor for Q and A. Thank you and over to you sir.
Mithun K Chittilappilly — Managing Director
Thank you Arshia and the team at Nirval bank for hosting today’s call. A very warm welcome to everyone joining us to discuss our company’s operating and financial performance for the first quarter of FY 2526. I trust that all of you have had the opportunity to review the investor presentation. We had shared earlier Top line growth for the first quarter FY26 was subdued due to weak summer season and the high base of last year. Consolidated net revenues from operations for the quarter is,466 crore a marginal decline of 0.7% over the revenue recorded in the corresponding period of the previous financial year.
The electronics segment comprising of stabilizers, inverter systems, UTA systems and solar systems delivered moderate revenue growth at 4.5% YoY in the first quarter Demand for stabilizers was subdued in line with the overall demand trend for cooling products but this was offset by good growth for products in the other products within the segment. The electrical segment which remains our largest revenue contributor that includes wires, pumps, switch gears and modular switches registered a YoY growth of 7.6%. Hence the performance was steady both from a top line and margin perspective. In the consumer durable segment covering fans, water heaters, kitchen appliances and air coolers, we reported a Revenue degrowth of 16.3% YoY growth was impacted by early onset of monsoon which curtailed the summer season and caused a sharp drop in demand for cooling products.
Sunflame reported top line degrowth of minus 5.4% on a YOY basis. In Tuon, there has been some improvement in light of interventions undertaken earlier and the business has done well in general trade but continues to face softness in the CSB channel. We have also initiated actions to merge sunflink operations with Vgaard which will fast track realization of the synergy benefits. Since the merger is with the wholly owned subsidiary, there will not be any share exchange ratio or change in the shareholding patterns of the company. In Q1 FY26 revenues from non south markets grew by 2.1% yesterday, now contributing 52.3% of the total revenues, while south markets degrew by negative 3.3% by 1.
Our strong markets, that is the Southern and eastern regions were relatively more impacted by the weak summer. We reported a gross margin of 36.7% this quarter compared to 36.6% in Q1 last year. On a sequential basis, the gross margin improvement by around 110 basis points from 35.5% in Q4FY25. As we had indicated last quarter, margin recovery is nearly complete and we are back to the pre covered margin levels. EBITDA excluding other income for Q1 stood at 124 crores declining 20.7% on a Y basis. The EBITA margin was 8.4%, a reduction of 210 basis points from 10.5% recorded in Q1 FY25 consolidating profit after tax.
The quarter was 74 crores compared to 99 crore in the same period last year. The decline is due to the operating deleverage on account of flattish revenues. We expect the demand to normalize in the coming quarters and continue to invest in brand building and capacity enhancement. With that I conclude my opening comments. I would like to thank Asha and the team at Nirmalbang for hosting this call. I would like to request the moderator to open the floor for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Aggarwal from TGI Asset. Please go ahead.
Rahul Agarwal
Hi, good afternoon. Rahul From KeyTag Asset Nitin three questions. Firstly, your entry into lighting. Just to understand what are you thinking about it, what are the products? Which segment are we talking about? Second question was on ecb. I understand fans and coolers would have seen a very large impact, but when I look at the company history, first quarter has never saw a big loss. Right. Except if I remove the COVID period 2122. So is it more of a function of, I understand operating dealers, but because of newer plants, is there more OPEX sitting there which is why this is impacted or bad expenses which have been a bit higher? Y oi is that impacted for a specific campaign? And thirdly, some comments on inverter sales and wire that would help.
That’s all from my slide.
Mithun K Chittilappilly
Yeah. So I’ll start with the lighting. So as you know that we are having a portfolio of categories in the electrical space and lighting is the largest sub segment within the electrical space. I mean lighting and wires are the two large categories and we were present in wires and fans which are the two other large segments, but lighting was absent. And we have been getting a lot of feedback from the channel that there is a huge white space when we are not present. And this is creating some gap in the product portfolio. So this is point number one.
Point number two is we are already having a very, very good network of electrical retailers across the country. A good part of the hundred thousand retailers we have is from the electrical segment and lighting has almost 95% overlap with the wire retailers. So this is the second point that we have the channel. So I think it’s also now we believe that, you know, we are having enough bandwidth to start, you know, creating a new category and this is the top. They ended. Ram, you want to add anything about this lighting?
Ramachandran V
No, I think as you, as you already said, I think, you know, it’s mainly being under a bit of pressure from our state partners to expand our portfolio and to improve lighting because this complete the bouquet of offerings on the electrical side. And that has been the primary driver for that. It is to complete our basket of offerings. And there is a lot of synergy both on channel side and even on the GTM side. So the effort required for us to get into lighting is very, very minimal. And therefore we decided to go.
Mithun K Chittilappilly
Yeah, on the ECD side the ECD has got fans and air coolers within fans. There is a segment called tpw. TPW business has significantly been lower and so has been air cooler. So I think both these have pulled. Out. Good percentage as far as loss is concerned. We don’t think it’s a huge issue. It is a transient issue. And yes there would be some advertisement expenditure that was booked in both sands and air cooler. So it is very much possible. That is also one of the reasons that we are hitting a loss. But I think this time we had extremely cool summer. So last year we had a very, very unnaturally hot summer which propelled the demand for a lot of categories especially cooling products. This year we had the reverse where we hardly had any kind of summer especially in southern part of the country and eastern part.
So these two being our core markets, we faced that headwind. Wires has done well. Wyers has done well because there is a favorable raw material price situation where in which there was some step by step increases of copper prices over the quarter which meant that demand suggestion was good. We were also having inventory to supply. So wire in fact has you know done well. Switches, switchgear also has done well. They have also grown well. You know that’s not because of any price increase. I think we have made some corrections in the team and channel and all that and that’s beginning to deliver fruits.
So that’s as far as the question Krishna is concerned. Thank you.
Rahul Agarwal
Just a follow up on lighting. What kind of products are we talking about and is it they’re also going to get into manufacturing of this?
Mithun K Chittilappilly
Initially we are not looking at manufacturing. I think with regard most of our categories we have entered and seeded by you know the outsourcing model. Initially we will not be a manufacturer but I think once we get to a certain scale definitely we will look at manufacturing and bringing in efficiency. We are looking at the consumer part of the lighting and the residential part of the lighting. So this is the initial focus. Anything that is going into consumer and residential lighting is what we would look at.
Rahul Agarwal
Got it. And a follow up on ECD then maybe I’ll get back in the queue. Was the primary sale for fourth quarter very high and hence channel inventory was high in hints. Our performance on fan schoolers was bit subdued versus peers because when a benchmark at the listed company it looks like our degree is much higher. Any thoughts on this?
Mithun K Chittilappilly
So I think it’s more than pre sailing. It’s more of a geographical issue. So South India has a much higher share of TPW sales in summer than other parts of the country and we got is one of the largest seller of TPW fans in South India. So for us more it’s got to do more with rather than selling it in March. Most of the degrowth has Become come from the TPW segment. In fact, the ceiling fan sales have not degrowth much. The second is air cooler. Air cooler also there is beyond a point we are not able to sell the product because we sell on advance.
So we sell with the similar kind of terms at the market leader which is an advanced payment. So even in air coolers there is no question of channel being stuffed too much because the trade partners have to pay advice. So I hope it’s clear.
Rahul Agarwal
Perfect. Yeah, this really helps. Thank you so much for answering and all the best for the rest of the year.
operator
Thank you, sir. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah, thanks for the opportunity. Two questions. So now we are merging the acquired entity with ourselves. So what are the energy benefits by merging the kitchen appliances business? I guess most of the operational synergy benefits are already there. But still there will be some benefits in terms of reduction in the number of invoices or double billing to the trade, etc. So what are the total synergy benefits that we can look at? That is question number one and question number two, in case of lighting. Now obviously this segment we have seen the technology changes are so rampant that even most of the larger players are also finding it difficult to in a way generate value.
So what will be VGuard’s right to win in this segment means obviously we have the brand as well as the distribution network also. But what will be the focus area means whether it will be B2C more, B2B more. And even the distribution network for minute players is also separate from the ECD or rest of the distribution networks. So. So how, how are we thinking on these lines? Yeah, these are the questions. Thank you.
Mithun K Chittilappilly
Okay. Ram, you want to take this?
Ramachandran V
Yeah. I think, you know, fundamentally, you know, it’s, you know, we’re going to be leveraging the brand and the channel. Yeah. And our channel relationship. I think that’s going to be our fundamental focus. I think initially our strong focus is going to be in our core markets, which is south primarily to start with, which is where we will focus early. We are pretty confident that we can get some good and quick early wins in that area. Yes, I think there are challenges. There are different challenges with different categories. Yeah, I think the challenges with lighting are different in nature from other categories.
But I think as an organization over a period of time we have significantly matured and both our sourcing capability and development capability and we have very strong electronic capability in the company also. And so we are pretty confident that we can navigate this. Of course there will be a learning period as with any business and you know, and there will be a learning curve that we will observe in our case also. So I think that is on lighting and you know, the question on sunflame. So I think you know more than synergy benefits. Right. It is a question of bringing BGAQ capabilities into sunflame for driving growth in sunflame.
Initially, sunflame is a small entity which was managed by the promoter. It was thinly staffed, it was run in a very, very agile manner and we had challenges to quickly move in our capabilities before understanding the business. I think that we’ve taken 18, 24 months to understand the business and we are now moving fast. Quick integration. To give you an idea, I mean synergy benefits, financial benefits apart, I mean that’s not the focus of why we are doing this. I think I’ll give you some sense of, you know, for example, we have, you know, in about 60, I think in about 70 days, right.
We have integrated the customer service nationally and you know, the what I would say call resolution rates, 24 hour call resolution rates have gone up to almost 60% and this will progressively, you know, get better. So that’s one example. And you know, so we just want to bring the functional strength of Vgaard into sunclaim which we believe will significantly empower sunclaim growth. That of course includes also our channel partners. Right. And our business system. Right. We have a very strong nationwide sales infrastructure and a very aggressive sales infrastructure which is extremely capable to scale up businesses in shorter period of time.
So I think, you know, thus far, you know, we had been keeping away from this is what will happen to sunflame. Our capabilities will flow in faster. Primarily our focus is going to be on RND and NPD and the go to market. So we believe we should be able to significantly strengthen sunflame going forward.
Aniruddha Joshi
Okay, sure. So this is very helpful. Thanks. Thanks for the explanation. Just one last thing. Will sunflame be rebranded under VGAD umbrella means like sunflame by VGAD or.
Ramachandran V
I think we, I think we, I think as we had said the last time in, you know, the previous call. Right. So we have a sunflame, we have a project for the long term strategy for sun claim. Yeah, I think once we conclude that, I mean we maybe we’ll have a point of view in maybe a couple of months on that. Right. So we’ll come back. I think we haven’t made a determination in terms of how we will treat you, but of course, you know, I mean, you know the moment there is integration of sunflame and Visas, name will be carried by every Sunglim pack as the manufacturer.
But that apart how to position sun claim, you know, whether as a, you know, as a sub brand or you know, as an independent brand, I think there is work happening in that area. We are doing some work with consumers and we are also internally doing some work to understand what is the best way to go forward. We have one proposal and point of view. We are not from the top yet.
Aniruddha Joshi
Sure sir, this one Bookkeeping question. Lighting, are you looking at any revenue targets, let’s say over next two years or three years?
Mithun K Chittilappilly
No, we wouldn’t like to give out any projections as of now. We will update in the next call.
Aniruddha Joshi
Okay.
Mithun K Chittilappilly
I don’t think we’ll be. Giving out projections anyway but our first in a 6 to 6 months to 12 months will be setting up capability and systems and then only we will look at, you know, launching. Yeah.
Aniruddha Joshi
Okay, sure sir, this is helpful. Many thanks.
operator
Thank you sir. The next question is from the line of Kiyur Pandya from ICICI Prudential Life Insurance. Please go ahead.
Keyur Pandya
First on the lighting side, so you talked about the synergies of cross selling, GTM distribution, etc. In general we have seen that because of the price deflation, I mean very few brands have been able to grow their lighting sales in terms of value and also a lot of competition from smaller brands, value conscious brands. So any specific reason, I mean from that perspective, why you would want to enter the segment where growth is not there either because of the, I mean technology change or price cuts, but the value growth has not been there. That is first point.
Second question on the overall margin side, I can see employee costs have grown at a faster pace and you earlier explained that as you grow in house manufacturing, I mean some of the overheads move in house. So if I look at slightly longer term data, your EBIT margins, EBIT margins are more or less similar. So your gross margin has gone up but depreciation, employee cost and overheads have also gone up and EBIT margin are more or less in the range of 7.5%. So just to understand, are we yet to see any benefits of in house manufacturing or why they are not yet visible since at EBIT level margins are more or less similar levels.
These two are the questions and then we’ll get back in the queue.
Mithun K Chittilappilly
Yeah. So regarding the second part which is EBIT margins, I’ve said this in an earlier call, so if you look at 2019, our larger two competitors, they used to have EBITDA of about 14%. Today both of them are at 10%, whereas we are still having the similar ebitda of about 9 to 10%. So you can see that the competition intensity, competitive intensity in the sector has gone up and margins have come down for most companies, whereas we have maintained margins if you look at last six years. So I hope that answers your second point. The first point is on lighting.
Ram, you want to take this?
Ramachandran V
Yeah, I think, yes. I think, you know, you’re right. I think lighting as a sector has not seen value growth and fundamentally because of price erosion. And that part is true. But I think that, you know, every business has a different dynamic and a different challenge. Yeah. So I think. And that needs to be managed independently and separately and appropriately. Fundamentally. Yes, not having lighting and having lighting has its own advantages and disadvantages for us, you know, as part of playing the portfolio. But I think it’s important, you know, because see, we have partners. Okay, we have partners and you know, our partners have businesses.
Right. And we have gap in our portfolio. And we believe that incrementally for us, at least for seven, eight years, I think this is not going to be a challenge. And although it can be a challenge for an incumbent player who has been in the industry for many years. Right. The other part of it is also that, yeah, I mean, even though there is not value growth, but I think that, you know, the businesses are profitable and, you know, they are able to do that by managing different cost elements differently. So I think at least for the next seven, eight years, you know, I don’t see this question being a challenge for us.
While it may be challenge for the industry, but I think what it will do, it will strengthen our, you know, partner capability and it will help us to, you know, what I would say, expand our network faster. And it will also help existing categories to travel more deeper and wider. I think in the past, you know, we had multiple challenges, but, you know, we believe many of our challenges for some of the categories that we had incubated in the past are slowly and progressively getting out of the way and we now have room to nurture and support one more category.
Keyur Pandya
Understood, sir. So just one small question on the electronic side. So relatively weaker quarter and despite that, you have maintained margins upwards of 19%. So barring for seasonality versus Q1, Q2, Q3, which are really relatively smaller, should you assume that, I mean, annualized margin of higher than 18, 19% are sustainable margin. You earlier talked about Some strategic initiatives as well. So in that backdrop, what are the sustainable margins in electronics?
Sudarshan Kasturi
Yeah, okay. On electronics, yes. I mean, the stabilizers did see a decline in line with, but then that was made up by a strong performance in other products. The inverter battery business did well, solar did well. So that sort of made up. Margins wise, it’s been good, but I don’t think we should take 18, 19%. As a steady state margin. So there are some quarters where we get better margins than usual. Something like 17 should be okay.
Keyur Pandya
Annual basis.
Sudarshan Kasturi
Yeah, so that’s, that’s how it is. 19 is a bit, it’s a good number for, for that category that may not remain at that level all the time.
Keyur Pandya
Okay, noted, sir. Thanks a lot and all the best. Thank you.
operator
Thank you, sir. The next question is from the line of Raman from Sequent Investments. Please go ahead.
Raman Venkata Kerti
Hello, sir, Am I audible?
operator
Yes, sir.
Mithun K Chittilappilly
Yes, yes.
Raman Venkata Kerti
I just wanted to understand that Q1 has been, there has been a Q1 which you already suggested in your previous call, the original guidance of 14 to 15% revenue growth. Is it still doable? And with respect to the margin, can we expect margin to improve going forward?
Mithun K Chittilappilly
So I think how we look at it is when we have a good year, we, like last year we grew by about 70%. So in a challenging year, the growth could come down to 12 to 13%. So I think about 11 to 12%. 11 to 13% is what we’ll be aiming for this current financial year because as you know, first quarter has been extremely challenging. So what happens with us is almost 60% of our products, 55 to 60% of our products are dependent on summer. So when you start with a very, very, you know, adverse weather, it is very difficult for these categories to then perform, you know, till Q4.
So Q4 will determine now, you know, how the growth will shape out. But typically we have seen that good years, you know, if we have a good year, we’ll grow at 17% and a challenging year at, you know, 11 to 12%. So that’s, that’s what this year looks like.
Raman Venkata Kerti
Answer on the margins part.
Mithun K Chittilappilly
Margins, I think we should be between 8 and a half to 9 and a half percent in this financial year. Let’s see how it goes.
Raman Venkata Kerti
My next question is with respect to the lighting segment you did like earlier, followers also suggested that there has been value de growth. So I just wanted to understand how much value creation do you think this segment will do in terms of your entire business?
Mithun K Chittilappilly
So I think when we did some research on the industry. We found that, you know, players like Signify, which is the largest player, you know, with the brand Phillips, Havel Crompton and Surya Roshni, all these four players are making healthy EBIT margins in the business. Now the question is on the value growth. We found that there are subsegments which are growing. For example down lighters and you know, premium architectural lighting, you know, for residential is growing whereas the growth in lamps etc may be, you know, slightly plateaued. So there are, there are some segments which are growing.
It’s not that like the entire industry is. And the third thing is we are present in categories like solar, rooftop, where there is value growth of 20, 25% every year for the last three years. So it’s not something that cannot be managed. It is something like Ram said, every category has its own challenges. We don’t foresee any growth challenges in the first seven, eight years. But once we become large, yes, we’ll have to see. But I don’t think that this category will remain like this forever. I think there are some, there are some tailwinds especially on people migrating from, you know, tubes and lamps to, you know, more expensive, you know, luminaries as the houses become more premium and as people start to spend more on interiors.
This is something that is ongoing. So I think within this particular, you know, lighting has a very large, you know, large category. I think it’s close to 1 lakh crores or something like that if you look at the entire lighting in the country, including institutional and all that. So this is, there are subsegments within the entire lighting gamut that is growing. So yes, there are the lamps, the, the prices of lamps, the LED lamps are coming down primarily due to efficiency in design of the PCB boards and all that. But I think, I don’t think it will keep going on every year.
I think, I think a lot of the value decline is. We probably close to the bottom as far as that is concerned. But we are more interested to sell a bouquet of products, not just lamps, make sure that we make money.
Raman Venkata Kerti
And my final question is with respect to the factories, Indian factories for in house manufacturing coming. So what is the current. Percentage of in house manufacturing and when will the new factories be coming to online?
Mithun K Chittilappilly
So currently we are at 65%. We have one factory which is, you know, one more plant for fans which is undergoing development. We expect that to be operational in 18 months time. That will make table pedestal wall fans and some, some, you know, and, and ceiling fans as well. It’ll have all the both TBW as well as ceiling fan. And yes, we are also setting up one more that is more of an expansion of the existing battery unit that I think will take about 24 months.
Raman Venkata Kerti
Okay, thank you sir.
operator
Thank you sir. The next question is from the line of Sonali from Jeffrey, India. Please go ahead.
Sonali Salgaonkar
So thank you for the opportunity. Sir. I again have a question on fans. So correct me if I’m wrong but is fans as seasonal a product or it is all around all the year round product. So I was just trying to understand it better. Why would an unseasonal rains or a disrupted summer lead to such a big decline in the sales and also a negative ebit.
Mithun K Chittilappilly
Okay, so I think in fans we have, you know, three categories. Ceiling fans, TPW and exhaust. The ceiling fan business is pretty much, you know, throughout the year kind of sales. But there are, there will be maybe like a 10, 20% variation between in season and off season. But the TPW business which is the especially the pedestal fans, it is an extremely pedestal fan is the largest part of the dpw. It is an extremely seasonal business because what happens especially in South India where especially markets like Andhra, Telangana, Tamil Nadu, even Kerala, it gets so hot that the ceiling fan is not able to really cool because it’s really, really hot.
So people put a second fan in the bedroom which can force air from the side through the windows which is cooler than the roof which is already hot. So a lot of the pedestal fans at least in South India and East India goes for this reason and they are extremely seasonal. So I hope this is clear. So if you look at the pan India sales, 70% is sailing and 30% is TPW. Whereas if you look at South India for us this drops down to almost 60, 40. So in South India the share of TPW sales is high and Vega traditionally has been more stronger in tpw.
Of course recently we are also getting good traction in ceiling. So please understand that you will find that players with South SKU will have this kind of a challenge. And secondly there is one more category which is air coolers. So air cooler is also now large. It’s about 140, 150 or 140 air coolers. So a large decline in air coolers also brings down the, you know, consumer durable sales in first quarter. And air cooler is also a high gross margin category for us.
Ramachandran V
Just one more point I want to add, right see this year, you know, last year the, you know, the summer was exceptionally strong and this year rains have been exceptionally heavy and I was just looking at some long period average data. You know the initial months that I saw long period average is nationally, you know, almost in double digit more. Yeah. And in fact in the southern states it’s more than 30% up. Yeah. And you know we are a company, besides what Nitin talked about. We are a company which is over indexed in terms of sales in south and east which have received very, very early days.
So the pressure is further getting amplified in our numbers. But as Nitin has already said, ceiling plan sales are flat for us and the drop is in this particular category because southern market has been very, very heavy raised.
Sonali Salgaonkar
Understood. So would you ascribe that majority of or rather the main reason for the drop in your EBIT margin is because of loss of operating leverage or the general volumes or is there any further reason to that?
Mithun K Chittilappilly
I think it’s majorly operating leverage. There would be some A and P expenditure on fan and air cooler that would have happened. But I think it’s mostly operating levels.
Sonali Salgaonkar
So your ANP spends as per your presentation are almost flattish. So Your overall is 3%.
Mithun K Chittilappilly
It may not be spent on the same categories. Right. So there could be changes within the categories.
Sonali Salgaonkar
Understood. Got it. And just one last question from my side about the merger of Sunset. So you did mention, you know, certain points on that. But exactly what is the difference post merger versus being a hundred percent subsidiary wherein we are expecting a faster pace of synergies right now.
Mithun K Chittilappilly
Ram, you want to take this? Yeah, yeah.
Ramachandran V
Sonali, I explained this earlier. Right. So let me, let me again explain to you the same, clarify the same observation. See for example earlier frontline and VGuard used to operate as separate entities. Yeah. The operational bandwidth inside the sun claim was very, very narrow. So it was very difficult for us to replicate our understanding and know how, how to run some processes systems more efficiently than the way that it is running in Frontline. Yeah, so that was the reason, you know, initially, you know we wanted to put keep these two separate so that you know, we are able to preserve the agility.
You know we are a much larger company, work through multiple functions. Right. And it would have been very difficult to integrate conclave at that stage. But you know, after about 18 to 24 months, you know, the knowledge is in place and you know we got internal stakeholders have understanding and exposure to conclave and we have as part of our integration project, you know, defined, you know, governance framework. We are able to move fast. Now what difference will it make? I think as I explained to you, giving the example of service earlier yeah. In, in about nine, you know, it’s about 70 days now since this has, you know, the systems are coming together.
They have come together progressively and now we have completed the service integration. We expect in three months. Right. To reach similar level of customer service tax, a turnaround time. Same is the thing with the quality. Right. The kind of systems that we have in managing quality and the kind of process we have for qualifying vendors. Right. And all of this is very different. Right. And so this default, this all activities and capabilities will flow. Yeah. We have, you know, maybe 1500 odd. We have 1 lakh plus customers. Many of them are in kitchen. Yeah. Now it’s a lot more easier for us, Right.
To land sunflame offering into many of our customers and channels if it is managed through the same sales system. Right. So these are the kind of advantages that we will get. Right. So I think it’s fundamentally going to make sun claim stronger in its ability to realize outcomes, positive outcomes. Right. Be it on service, based on quality, based on NPD or be it on sales. Yeah.
Sonali Salgaonkar
Understood. Thank you sir.
operator
Thank you ma’a m. The next question is from the line of Shivkumar Prajapati from Ambit Investment Advisors. Please go ahead.
Shivkumar Prajapati
Yes, sir. Hi, thanks for. My first question is regarding the competition intensity versus the rising private labor. Private label players say Amazon Basics and what differentiates vguards products in price sensitive markets.
Mithun K Chittilappilly
So I think the hyper competition today is among various brands. I don’t think private label is such a big, you know, such a big worry, at least in India. What we’ve seen is even in globally, private label usually works in categories which are, you know, can’t be differentiated like. You know, chips or you know, flour. Or you know, food products and stuff like that or something like a, you know, generic item like you know, maybe lamp and those kind of things, bulbs or something like that. But as soon as there is design involved, as soon as there is features involved, private labels usually don’t have a chance because they are not coming. They are not having that kind of sophisticated capability to make products. So for example, if you ask me, Vcard has about 4,000 SKUs today. I don’t know any retailer who has the wherewithal to even manage an additional 500 SKUs.
So that is the kind of variety that brands offer vis a vis a private label. So we have seen that the larger chains, they have time and time and again try to do this, but it has not really made any much dent as you would have seen. There was a time when Big Bazaar bought Out a lot of private labels. Reliance keep trying to do it. So it happens. But I don’t think in our kind of categories it has really made much of a dent as yet. So the hyper competition is between existing players getting into adjacent categories.
It is also certain new brands that are coming up disrupting the existing categories. Maybe using new lines of sales like D2C or E commerce and stuff like that. I wouldn’t say private level, but definitely competitive intensity is up. It’s primarily also because many companies are not growing and they are thinking that the grass is green around the other side and entering new categories. So that’s, that’s the thing. I think we have also seen a lot of exits. So last one or two years we’ve seen many companies defocusing or you know, removing themselves from the marketplace.
So I think it’s a natural process of, you know, cleansing. I think whenever we have something like a slowdown and stuff like that or you know, Covid also was a big shock. Whenever we have these kind of shocks, you know, people tend to exit and you know, go back to their core because they have to protect their core, you know, business.
Shivkumar Prajapati
Understood, sir. And sir, would you please be able to help me with two data points? Number one is now like more than 50% of our revenue is from non south market. So how many states will be, you know, contributing around 500 crores plus of top line for the full year and going forward, what do you see? Like which region or state would be able to, you know.
Mithun K Chittilappilly
So I think we don’t like to give out these numbers, but we have to understand that we also are in a country where you have something like a Maharashtra which is like almost, you know, 10, 15% of India’s GDP. And then you also have, you know, small states. So we have big states and small states and we have states which are geographically large as well. Like UP is a very large state. It’s a large contributor to the gdp, but it is also very large. So we require more than, you know, multiple branches. In fact we have three branches in UP saloon, whereas in a state like Kerala we are able to manage with them.
So I don’t think it’s right. I think we are slowly getting indexed to the, you know, how the national market is indexed. I think earlier we had a very, very high south skew and now, you know, it Is dropped below 50%. I think, I think we have, I think east has done well for us and the other markets are also responding. So I think within, within, within, within, you know, with the passage of time we will hit that, you know 65% of sales from the nonsod markets. You know we are quite confident of that trajectory.
Shivkumar Prajapati
Got it sir. And sir, is there any way or you know metric that you guys track for you know productivity of active dealer in south versus non south region. Something like average revenue per dealer.
Mithun K Chittilappilly
See again it’s not very easy. Just like see we are not dealing with a homogeneous crowd. For example we will have a wire dealer who will be doing 1 crore a month whereas you know we will be very hard to find a guy who’s selling switches for about 1 crore. So it’s not very, very, I mean it’s not very easy to do that. Ram any you know, you want to talk a bit about our sales?
Ramachandran V
Yeah, yeah I think is correct. Right. I think it’s very difficult to have a thumb rule. There are two issues with that and at least as far as regard is concerned our GCM is category based rather than company based. So so we might have like you know many times you know partners who are doing switch gear for example. Right. And they may not, they may or may not be doing other product categories of Vida. So some of those kind of challenges. So I think that you know that may not be the right metric to look at as far as also again you know as Mithun talked about there are large states and you know there are pocket states. Yeah. You know there are states by town class. I mean there are cities by town class and also you know our entry into different states, you know or even in different geographies is at different stages. So even as we speak, you know there are new markets, you know we are entering. Right. Because we still have a lot of room to cover in non south. Yeah. So I think it’s a bit hard to you know so we don’t try to measure on that attribute. So we don’t have a perspective like that for this reason.
Mithun K Chittilappilly
I think how we like to do is that more than in average revenue per dealer we look at maybe average revenue per sales executive and those kind of metrics that makes more sense and in that sense we find that eastern market sense are quite close to the maturity as similar to our south market and the other two zones are slightly behind in that sense. Other than that it’s very difficult, I mean it’s going to be very very difficult to have a single view, you know to see whether. So what we look at is counter share. For example if a retailer is selling 100 units and you know it’s split between three or four brands there we look at, you know, is our ability to gain more share.
This is one part. Second is on influencers. So for example electrician, plumbers, you know, other kind of influences. We also try to see how many of them we are able to cover in each zone. And again it’s very difficult because we don’t have the market data. We are not sure that if someone asks you, you know, how many electricians and plumbers are there in India, you will get five different answers. So, so this is the kind of issue we are having. But if you look at the maturity wise we would say that eastern markets, we are almost there in terms of the maturity in terms of the average throughput per employee and those kind of metrics.
The other two markets are slightly behind.
Shivkumar Prajapati
That’s helpful sir. Thank you so much and best of luck.
operator
Thank you sir. The next question is from the line of Divya Asiwali from Equidious Securities. Please go ahead.
Manoj Gori
Hello. Yeah Manoj Gori here from EQR has a buddy question. See if we look at the electronic segment where we have reported 5% growth. So my question here is, if you look at your comment, you also sounded like south and east were very much attracted because of the season this year and we have a lot of exposure to stabilizers linked to east. Plus this year the power shortages or power cuts were relatively low. In fact that would have impacted us ups and batteries. Can you throw some light towards the quality of this side version growth given the current environment?
Mithun K Chittilappilly
No, I think you know, stabilizer is, you know sale is directly linked to weather and the other one is linked to the occurrence of power cut. So they may not. Yes, you’re right. Ideally should go hand in hand. But I can tell you that we have had severe power outages in the southern part of the country because of very, very strong winds and rains and stuff like that. So it may not be right to correlate but we are seeing a healthy demand for inverters and batteries and we are also seeing very good demand for solar rooftops.
So that is kind of offset. And we also have to understand that air conditioner stabilizer is about 50% of the total sale of stabilizer or 50 or 50. So yeah, so. So, so the decline of, you know, whatever happens in that stabilizer to overall stabilizer may not, it’ll be half of that. So that is also one reason it’s not like 100. What we sell is fair conditioning.
Manoj Gori
Yes.
Ramachandran V
One more point. Actually what has happened is, you know we have gone deeper into the value chain and invert the battery. Right. So consequently our competitiveness in that category has improved. Right. So that is also aiding the business on top of what Mitam has talked about.
Manoj Gori
Right sir. That’s all from my answer. Thanks and wish you all the best.
operator
Thank you sir. The next question is from the line of Abhijit Mitra from Anxious Alpha Investment Management. Please go ahead.
Abhijit Mitra
Thanks for taking my question. I hope I’m audible.
Mithun K Chittilappilly
Yes.
Abhijit Mitra
Yeah. So regarding this sudden state of announcements coming on, capacity cuts on your cells modules, I mean what do you think can be the supply chain impact for inverters and batteries and how do you think this will sort of impact the organized sector in this space? Any thoughts on this, sir?
Mithun K Chittilappilly
You’re talking about the solar PV models, right?
Abhijit Mitra
Yes, yes. Not only, I mean all sorts of sales even you know, for lithium carbonate which goes into batteries. They are talking about, you know, so.
Mithun K Chittilappilly
So I think, I think definitely, you. Know. Supply and demand issues. We will wait and see. So for example, if suddenly US is going to ban or slap anti dumping duty for Indian PV manufacturers or cell manufacturers, definitely that would mean the lower prices in India because so far we were not able to because India has huge anti import duty against China. So the Indian players were protected and they were enjoying, you know, better prices and stuff like that. So we’ll wait and see. Regardless of that there has been a decrease in prices year on year. So. So because there is obviously a glut, you know, of supply and also the technology is getting better in terms of lithium.
I think I’ll ask Ram, you want to comment on this?
Ramachandran V
Yeah, I think, you know, yes, you know, what you’re saying is correct. There is a lot of uncertainty around, you know, this entire space. Naturally, you know, I mean right now we know lithium is the primary, what I would say alternate energy chemistry. We have investment in a company called Gigadyne which does not have lithium in it. But, but they are still not at commercial stage. So. So I think, yes, I think, you know, it is going to be a big challenge, you know, for expanding energy storage. But we’ll see. I think, you know, this is more, I mean, you know, this is again, you know, there has been a lot of uncertainty around some of these things.
Right. And I think what part of, you know, what is happening is basically about negotiating better outcomes for each other and what part is about protecting and guarding? I think we’ll have to wait and see. Yeah, I would say right now we would be speculating, you know, an outcome ahead of something. You Know that is you know, firmly announced. Right. So. But yes, I mean that naturally will be challenged I think on the battery part. Definitely. I know it will be a significant, it will be a significant challenge.
Abhijit Mitra
And for inverters and batteries, I mean what percentage of your, I mean would be imports from China as of now? I mean are there any direct imports from China which you would be doing now?
Mithun K Chittilappilly
Only the solar inverter is imported. So solar business is about 20% of the overall inverter business. Only that is imported. The rest of the products are all made in India. Only the small, that is up to 10kV inverters are imported. The rest of the products in the large solar inverters and the regular, you know, inverters are all made in India.
Abhijit Mitra
Okay, so you are importing the entire, entire box. You’re not importing say a PCB or an NPPT separately or sort of importing the entire.
Mithun K Chittilappilly
Yeah, so. So no one is. There is no technologies in India that is available for small inverters. That is up to 5kV. Almost 99 is imported.
Abhijit Mitra
Understood. String inverters are all imported essentially.
Mithun K Chittilappilly
Yeah, yeah. Anyway, see anyway electronics, everything is anyway imported. So whether it’s China, my Taiwan or you know, Singapore or you know, South Korea, electronics are anyway important.
Abhijit Mitra
Great, thanks. Thanks for this slide. Thanks. We should. All the best. That’s all from my side.
operator
Thank you sir. The next question is from the line of Anshul JT from LKB Securities Ltd. Please go ahead.
Anshul Jethi
Hi sir. Am I audible?
operator
Yes sir.
Anshul Jethi
Yeah. So thank you for the opportunity. So most of my questions have been answered. Just one last bookkeeping question. Just going through your segmental reporting in electronic segment there has been a decrease in the assets part. So as there significant reclassification in the assets or any major asset being divested.
Mithun K Chittilappilly
One minute.
Anshul Jethi
Yeah, sure sir.
Mithun K Chittilappilly
So I think…
Ramachandran V
It’s just normal business variation.
Mithun K Chittilappilly
It’s working…
Anshul Jethi
Okay. No major divestment, right?
Mithun K Chittilappilly
No.
Anshul Jethi
Okay, thank you sir. That’s it.
operator
Thank you sir. As there are no further questions from the participants I now hand the conference over to the management for closing comments.
Mithun K Chittilappilly
Yeah, so I think we can close today’s call. Thank you all for taking time to join our earnings call. I would like to thank Ashiya and the team at Nirmal bank for hosting this call. We look forward to interacting with all of you in the next quarter. Thank you.
operator
Thank you sir. On behalf of Nirmal Bank Institutional Equities Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.