Symphony Limited — Call Transcript 2023

Aug 1, 2023

August 01, 2023

==> picture [573 x 25] intentionally omitted <==

To, National Stock Exchange of India Limited Symbol – Symphony

To, BSE Limited Security Code – 517385

Sub.: Transcript of the earnings conference call of Q1FY24

Dear Sir/ Madam,

We are submitting herewith the transcript of the earnings conference call for the first quarter ended June 30, 2023, conducted on July 27, 2023.

The above information is also available on the website of company at https://symphonylimited.com/investor/results/

This is in due compliance of applicable regulations of the SEBI (Listing obligations and Disclosure Requirements) Regulations, 2015.

Thanking You,

Yours Truly,

For, Symphony Limited

MAYUR Digitally signed by MAYUR CHIMANBHAI CHIMANBHAI BARVADIYA Date: 2023.08.01 18:38:09 BARVADIYA +05'30'

Mayur Barvadiya Company Secretary and Head - Legal

Encl.: as above.

Regd. Off.: Symphony Limited, “Symphony House”, FP-12, TP-50, Off S.G. Highway, Bodakdev, Ahmedabad -380 059, India T: +91-79-66211111, F: +91-79-66211139-40 l Email – companysecretary@symphonylimited.com I www.symphonylimited.com CIN - L32201GJ1988PLC010331

==> picture [163 x 57] intentionally omitted <==

“Symphony Limited's Q1-FY24 Earnings Conference Call”

July 27, 2023

==> picture [162 x 57] intentionally omitted <==

==> picture [150 x 24] intentionally omitted <==

==> picture [109 x 52] intentionally omitted <==

– MANAGEMENT: MR. NRUPESH SHAH EXECUTIVE DIRECTOR, CORPORATE AFFAIRS, SYMPHONY LIMITED – MR. AMIT KUMAR EXECUTIVE DIRECTOR & GROUP CHIEF EXECUTIVE OFFICER, SYMPHONY LIMITED – MR. GIRISH THAKKAR CHIFE FINANCIAL OFFICER – MODERATOR: MR. MANOJ GORI EQUIRUS SECURITIES

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

Moderator

Ladies and gentlemen, good day and welcome to Q1 FY24 Earnings Conference Call of Symphony Limited hosted by Equirus Securities.

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 the conference call, please signal an operator by pressing *, then “0” on your touch tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Manoj Gori from Equirus Securities. Thank you, and over to you.

Manoj Gori :

Thanks. On behalf of Equirus Securities, we welcome you all to the Q1 FY24 Results Conference Call of Symphony Limited.

We have with us our senior management represented by Mr. Nrupesh Shah – Executive Director, Mr. Amit Kumar – Executive Director & Group CEO, and Mr. Girish Thakkar – CFO.

Now I hand over the call to the management for the initial comment and then we will open the floor for question and answer. Thanks, and over to you, sir.

Nrupesh Shah :

Thank you, Manoj, and thank you Equirus. Good evening to all. Welcome to Q1 June Quarter Conference Call of Symphony Limited. So, we are having a brief presentation, to start with, Customary Safe Harbor statement is applicable.

On a standalone basis, i.e. Symphony India Limited, YoY there has been a degrowth in domestic sales by 14% i.e. on standalone, Symphony domestic business is down from ₹ 188 crore to ₹ 160 crore. However, despite this, the noteworthy feature is, as everybody knows, this was a disturbed summer. But still this has been second best June quarter in terms of the domestic sales surpassing any of the June quarter sales pre-COVID. In that respect, it has been 9% vis-à-vis best of the best June quarter sales pre-COVID. This has been achieved on account of various initiatives of Symphony and this has also resulted into, as per the data available right up to 30th June 2023 which are also in public domain, we have also improved our market share.

As far as international business is concerned, there has been a decent performance for the June quarter. The top line is almost in line with last year. However, EBITDA margin percentage is superior and so is PAT. Particularly, IMPCO Mexico has registered highest ever quarterly revenue, up by almost 37% - 38% and EBITDA also. This is on account of consistent good summer in Mexico. As far as GSK China, of course, it's not significant, but nevertheless it has turned around registering a small PAT. As far as Climate Technologies Australia is concerned, its performance remains subdued on account of local macro headwinds. However, down the line, I will cover our turnaround strategy.

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

On a consol basis, gross margin percentage stands at 49.7%, which is up by 400 bps on YoY basis, while standalone gross margin for the same quarter is higher by 60 bps, which is on account of combination of factors including price hike, value engineering and softening of input costs. On a consol Basis, EBITDA margin percentage stands at 9.3%. However, on a standalone basis, it stands at 4.2%. However, let me share with you, this needs not be extrapolated for the year, because in the first quarter i.e. in the June quarter, there are some disproportionately high costs including advertisement, sales promotion and few of the overheads. So, neither IMPCO Mexico performance, which is decently good, nor similarly Symphony India, no way this quarterly performance is an extrapolation of the entire year. In fact, despite this summer, because of our entry into ancillary products with sales around the year, plus variety of the strategies, proof of the pudding is collection whatever we have received so far in the current month, which is almost in line with last year.

So, our internal strategy and action plan is, irrespective of the summer of ’23, we expect decent performance for the year, including on a standalone basis. We expect top line growth as well as profitability growth including improved EBITDA margin percentage. As far as LSV is concerned, it continues delivering robust performance and day by day, we are certainly attaining traction. During the quarter as all of you know, we have completed our buyback all in all amounting to ₹ 249 crore. For the June quarter, the first interim dividend i.e. 50% of the face value, all in all about ₹ 7 crore has been announced.

So, this is the Sankey chart of our consolidated performance. On a consol. basis, revenue stands at ₹ 302 crore i.e. YoY down by 8%. Cost of goods sold in terms of the percentage is 15% lower vis-à-vis sales degrowth of 8%. That has translated into gross margin percentage, as talked earlier, stands at 49.7% i.e. 400 bps higher. From gross margin percentage of 49.7%, EBITDA margin is 9.3%, marginally lower than last year on account of operating expenses of ₹ 122 crore because some of those expenses are fixed in nature. On the right-hand side, there is a detailed breakup of various expenses and it finally resulted into PAT of ₹ 24 crore i.e. 7.9 % of revenue. This is the waterfall chart, EBITDA movement from 10.4% to 9.3%.

So, on a consol basis, the capital employed for trailing 12 months, which includes our subsidiaries and Symphony India stands at ₹ 300 crore, i.e. lower by 15% and ROCE in the core business stands at 36% and RoNW, i.e. Return on Net Worth stands at 15% on trailing 12 months. And of course, RoNW should improve down the line on account of the recently concluded buyback, which will reduce the denomination of net worth.

And this is the Sankey chart of standalone performance as just covered, the details of that.

And this is the waterfall chart of standalone EBITDA margin percentage.

And on a standalone basis, considering trailing 12 months, the capital employed in the core business stands at ₹ 48 crore, reduced by 43%. ROCE percentage on a core business stands at

Symphony Limited July 27, 2023

==> picture [162 x 57] intentionally omitted <==

336% and RoNW is 20%. While treasury stands at ₹ 342 crore as on 30[th] June 2023, down by almost ~ ₹ 198 crore vis-à-vis 30[th] June 2022.

Coming to outlook:

Symphony remains and has cemented its position as the “Numero Uno” in the air cooler industry. As said, we have increased our market share even though overall industry has degrown and thereby our degrowth during the quarter is less than the industry degrowth. However, in terms of the product category, in terms of the future outlook, whether it is Symphony India or globally, we very much remain quite confident. That is due to variety of reasons including continuous launch of innovative value-added products far far ahead of competition, calibrated price hikes and value engineering, continuous thrust on semi-urban and rural markets. We have planned several initiatives to further enhance our semi-urban and rural market presence including availability and dealer distribution network, as well as continuous growth of sales through alternate sales channels, i.e. other than general trade sales.

Last year, we successfully entered into the adjacent product categories which have been received very well including products like Duet and Surround and we are going to launch many more models as well as a larger category. Because of its uniqueness and positioning, it's expected to continuously do well. There are long term structural growth drivers, whether it is in India or domestic market on account of, as everybody knows, intensified heat wave, climate change and that does result into strong tailwinds for air cooler.

Just to share about recent updates in terms of the US consumer sales, despite all headwinds in US, despite the macro position in US, the Home Depot, which is our largest customer over there, majority of the goods what they have bought from us have been already liquidated and sold to the end consumers. In fact, considering the current status, we believe that as it was earlier expected, in many, many models, by the end of the summer, they are likely to be out of stock. Their summer ends in the middle of September.

As far as Climate Technologies Australia is concerned, as shared in earlier conference call, the major business transformation is underway. However, on account of domestic macro factors, this transformation is likely to take some time, even though it is in implementation full-fledged and we believe that part of that result, we should get in the current year and mostly in the next year. Again to repeat, the initiatives what we are doing are (i) substantial reduction in cost of doing the business (CODB), which should result into CODB reduction of almost ~ 40% by next year, (ii) revamping the product category, (iii) converting in-house part of the manufacturing, which was already outsourced earlier, now complete ramping the in-house manufacturing to outsourced business model, and (iv) leveraging retail distribution channel. Considering our product category, we are committed to pursue the growth with a complete focus on ESG.

So, thank you and open the floor for question and answer. I will be happy to answer any question.

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

Moderator : Thank you very much. We will now begin the question-and-answer session. We have our first question from the line of Aditya Bhartiya from Investec. Please go ahead. Aditya Bhartiya : My first question is on market share gain that you spoke about. If you can give us some more details about how sharp the market share gain has been and is it amongst the organized side that you referred to it or is it as a proportion of the overall market? Amit Kumar : So, the market share gain, Aditya, has been on a pan India basis. Specific region wise the overall market share gains varies slightly. However, on a pan India basis, we have seen market share gain especially in the traditional trade and rural segments which saw less degrowth than the online channels this year versus the last year. So, that's the core of the market depth in the market share. Nrupesh Shah And this is vis-a-vis organized market and we consider the organized market, those who sell in multiple states, having a brand and our barometer remains the same what it was in the past and in that respect, as per the data available as of now, our market share gain seems to be in excess of 3%. Amit Kumar Above 4%. Aditya Bhartiya : Sir, if you can share some more details relating to market share as it is standing today versus how it may have been a year back and three years back? Nrupesh Shah : So, if I can take you 10 - 12 years before, so 10 - 12 years before, our market share used to be, I'm talking value wise not volume wise, it used to be 43% - 44 %. For the last couple of years, it inched up and remained around 50%. Current year as on 30[th] June 2023, it seems higher in excess of 3%. Aditya Bhartiya : Understood, Sir. And secondly, you spoke about strong growth in LSV segment. Again, over there, if you can share some details how large this segment have become and how you see this business shaping going forward? Nrupesh Shah : So, I would say still it constitutes vis-à-vis our standalone sales in single digit percentage. Of course, that percentage is now in high single digit percentage. Again, on account of competitive and other reasons, we are not sharing absolute sales performance, but by and large, it has performed in line with our expectation and budget. We have successfully implemented many, many projects across the vertical and industries. I think internally and externally the necessary team, the trade partners, service after sales, even outsourced manufacturing and revamping the range of the model, so combination of all that seems to be working. Aditya Bhartiya : On new product category. So, do you intend to enter into any new product category going forward? Did you mention that that is what the plan?

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

Nrupesh Shah:	So, as shared, we have already entered into Duet and Surround products which are sold around
	the year. They have received a good response with unique features and performance. We will
	further enhance its range and right now, that's what we have to share with you.
Amit Kumar:	Right. So, these are what is called the tower fan category, Aditya. So, that category is something
	that we have already gotten in and we have a set of products within the tower fan category that
	we have launched in the last year and that we continue to drive forward in this year. That's as
	much as we can talk about.
Moderator:	Thank you. We have our next question from the line of Namit Arora from Indgrowth Capital.
	Please go ahead.
Namit Arora:	Yes, Sir. Thank you for the opportunity. Sir, my question is, your company was always
	considered an innovator and a market leader, but the last three to five years have been really
	challenging for a variety of reasons. So, you know, given your perspective, any reflections on
	any learnings from the last few years, anything you would have done differently. And how you
	sort of taking those learnings for sort of the coming three to five years? Thank you.
Nrupesh Shah:	No, you are absolutely right. So, there have been some learnings in terms of how to de-risk vis-
	à-vis a bad summer and I think to an extent we are succeeding, including entering into adjacent
	category, including increasing sales through alternate channels that's also working well.
	Precisely in that direction, even though currently, especially as on March ‘23, our subsidiaries
	haven't done well, but it's exactly the strategy in that respect and we are very much convinced
	and confident that overseas markets are also having huge potential. As it was witnessed in June
	quarter, again, I'm not saying it is a reflection of the full year, but IMPCO Mexico registered ~
	40% growth and highest ever EBITDA margin amount etc. But we have yet to work a lot and
	we are working upon in respect of turnaround of Climate Technologies. As far as the domestic
	market is concerned, I think major major thrust in respect of various strategies and initiatives by
	enhancing our presence substantially, not incrementally, in rural and semi urban market.
Amit Kumar:	That's exactly the point. Namit, the core of the learning is there's risk there in the season in the
	last three years, two of these were affected by COVID. So, multiple risks exist and our strategy
	is focused on channel diversification, product range expansion in adjacent segment and
	geographic expansion that we have followed for quite some time. So, the right mix of these three
	is what we are pursuing and we are confident will help us address these risks suitably and provide
	growth.
Namit Arora:	Sir for your detailed perspective. This is very helpful and all the very best to the entire team.
	Thank you.
Moderator:	Thank you. We have our next question from the line of Hardik Rawat from IIFL Securities.
	Please go ahead.

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

Hardik Rawat:	Actually, I wanted to ask with respect to the Mexico business, could you share some numbers as
	to what sort of margin that you registered and what is the exact revenue, revenue growth?
Nrupesh Shah:	Sure, so Mexico for the quarter's topline was ₹ 77 crore versus ₹ 56 crore of corresponding
	period of previous year. EBITDA is about ₹ 19 crore versus ₹ 10 crore. PAT before exceptional
	item is about ₹ 10 crore versus ₹ 6 crore. And as you asked about IMPCO Mexico, let me share
	figures of other subsidiaries also. So as far as Climate Technologies is concerned, sales is ₹ 51
	crore versus ₹ 60 crore. EBITDA is negative ₹ 2 crore versus negative ₹ 5 crore and PAT is
	negative ₹ 5 crore versus negative ₹ 3 crore which includes interest on acquisition loan as well
	as depreciation. And coming to GSK China, top line is ₹ 12 crores, up from ₹ 9 crore, EBITDA
	at ₹ 1 crore and so is the PAT versus negative PAT of ₹ 1 crore in the corresponding period of
	previous year.
Hardik Rawat:	And apart from that, with respect to with since a month is all almost passed for the second
	quarter, how have you been seeing the sales in the second quarter? Is the pickup because this is
	usually like right after summer. So, what is the revenue looks like in the first month of operations.
Nrupesh Shah:	So, I have shared in initial remarks, despite not a good summer so far, our offseason collection
	is almost in line with last year. That's number one. Number two, starting the current year, of
	course there will be some sales being generated from adjacent category more so from December
	quarter because still we are in the process of enhancing the range and that will be in place in
	next one- or two-months. I think there is a major thrust on sales alternate channels, which mainly
	sell in March and June quarter because they don't buy in off season. So, and coupled with because
	whatever initiative is we have decided to create substantially for a semi-urban market, we believe
	that year as a whole and next summer even that should be helpful.
Hardik Rawat:	Understood. I had a couple of bookkeeping questions. First of all, there's a huge jump, there's a
	sharp increase in the other expense as a percentage of sales. So, it is roughly 9% higher for the
	standalone business. So, in that I've seen that warranty expenses have increased drastically.
	Could you explain what expense these entail, since it has increased by 3.5%?
Nrupesh Shah:	First and foremost, it includes freight and forwarding expense. It includes also warranty
	expenses, then it is also rent. It also includes travelling expenses and there is also Forex loss
	which is on account of loan to GSK China about ₹ 3 crore.
Girish Thakkar:	It's notional, so foreign exchange fluctuation.
Nrupesh Shah:	And legal and professional charges etc. So, all those combined under other expenses, however,
	in the Sankey chart, you would have seen that we have named some of the major expenses,
	freight forwarding, warranties and travel etc.

Symphony Limited July 27, 2023

==> picture [162 x 57] intentionally omitted <==

Hardik Rawat:	No, I just wanted to understand that since there's a 3.4% as a percentage of sales increase. Is
	there any particular reason within any of those heads, for example like warranty or rent that has
	increased substantially with via-via the previous year.?
Girish Thakkar:	So, YoY there is some increase in rent expenses and the forex loss which was not in the June 22.
	So, that is the major difference compared to June 22.
Hardik Rawat:	Alright, so the forex loss, Travelling expenses and rent expenses.
Amit Kumar:	Also, you have to understand is the warranty expenses are more linked to the full year numbers,
	while when we look at it in the form of the quarter, it appears higher, but the full year numbers
	when we compare to that, it falls in line with, what it has been traditional.
Hardik Rawat:	Just one question I was going to the financials and I saw that like you usually the bulk of your
	advertisement expenses usually in the first quarter. Could you give color like what is the
	seasonality on the advertisement spends why it is more in the first quarter and later on in sort of
	the year?
Amit Kumar:	So, the selling season, the consumer selling season for air coolers is typically during March to
	June months. Hence the highest share of advertising and promotions for us through the entire
	year naturally falls in the April, May, June quarter. So, for us, the highest consumer level
	engagement happens in this quarter followed by the March quarter and that's how the skewed is.
Moderator:	Thank you. We have our next question from the line of Tavishi Mehta from ICICI Prudential.
	Please go ahead.
Tavishi Mehta:	I have three questions. The first one is can you throw some light, how is the channel inventory
	placed at 1Q end, and also due to overall weak demand sentiment, do we see any change in
	channel behavior with regards to inventory buildup?
Amit Kumar:	Right. So, interesting question. So, the first question, first. The channel inventory as we see at
	this at the end of the June quarter, in some pockets across the country, particularly in parts of
	UP, Punjab and MP, the channel inventory is slightly higher than what we would have wanted.
	That is mostly on account of us having placed good secondary sales in the market, but due to
	unseasonal rains, some of these markets did not see as much tertiary as we would have ideally
	wanted those markets to deliver. So, some of these packets, the channel inventory is slightly
	higher than our target and expectations. But overall channel inventory at the end of this year
	across the country is lower than the channel inventory that we had at the end of the previous year
	or for that matter, at the end of each of the last three years.
Tavishi Mehta:	Okay. And given that the season has been weak during the current season, have you extended
	any schemes as a part of channel support?

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

Amit Kumar : So, that's not something that we have done because typically July onwards we get into the next year planning and related collection and this season at this point in time in terms of tertiary sales, share is very small share of the full year. So, we have not extended any of these schemes or additional support to the channel at this point. Tavishi Mehta: Okay. And my last question is with regards to the subsidiaries. So, do you see this current margins as a sustainable margin for the subsidiaries? Nrupesh Shah : That's right. On the contrary, at EBITDA level, neither on a standalone level nor on a consolidated level, the quarterly margin we wish to achieve. We have plan in place to achieve much better EBITDA level percentage margin because as explained earlier in the first quarter, some of the expenses are skewed, which ultimately over one year gets rationalized coupled with other points as explained earlier. Tavishi Mehta: Okay, so do we have any target? Nrupesh Shah : Ultimately in terms of the EBITDA margin percentage wise, we wish to be and we are targeting to reach at a pre COVID level percentage. Moderator : Thank you. We have a next question from the line of Rahul Gajare from Haitong Securities. Please go ahead. Rahul Gajare I joined the call late, so I've got a couple of questions. Sorry if there is any repetition. Now with respect to the Q1 performance and I understand season failure, but the standalone performance even during season failure earlier has not been as bad as what we've seen in the first quarter. So, just want to have your comments on the standalone performance first. Nrupesh Shah: No, not very clear about your question. Standalone performance not…. Rahul Gajare Sir, even when we have had similar season failure earlier where because of rains or the season not being hot enough where the sales have been low. We have not seen an EBITDA margin at you this kind of like 2% to 2.5% for a very long time. So, is there a specific reason that this particular quarter, we have had operating for the months which was so weak? Amit Kumar : So, Rahul, what we need to again understand is the nature of this business is such that the AprilMay-June quarter, the Q1 quarter for us is also the culmination of the summer season and some parts of the spend, for example advertising, sales support, schemes and everything they need to be done to support the business done through the entire year. So, as we mentioned earlier, while these are incurred during the quarter and hence for this quarter, they are larger because on the entire year basis we have still done reasonable volumes and we have still done reasonable growth. If you just go a quarter before and a quarter before, we had been doing highest ever quarterly numbers in the last couple of quarters. So, now that material is there with the channel. This quarter is where besides doing our primary sales, we have to spend on multiple schemes,

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

incentives and so on to get the entire channel moving, get to the consumers level in terms of product delivery and all. So, seeing from that perspective, one needs to understand that some of the spend made in this quarter are to ensure that all the primaries and secondaries done in build up to this quarter are taken care of. So, that's why this is coming this way. I agree that the EBITDA percent margin this year, this quarter particularly is lower than expectations and that's something that like Nrupesh Bhai has mentioned earlier that's not a sign of how things would pan out as we go forward.

Rahul Gajare

The second question was with respect to this entire heatwave that we are seeing in various parts of the world, now the Mexico performance this is closer to ₹ 77 crore, whereas last year I think that number was closer to ₹ 110 crore to ₹ 120 crore in that range, so do you see this Mexico performance run rate continuing this way because if that is the case, we're looking at a very strong growth in Mexico business.

Nrupesh Shah :

As I said earlier, neither Mexico performance nor Symphony India performance should be extrapolated for the whole year or new normal. Because Mexico, there has been very consistent decent summer and hence it has registered these sales. It also caught up some of the lost sales of the March quarter. Having said that, normally their season ends in June, however, current year there is extended summer, so somewhat sales is happening in July even currently also. So, in that respect, it is better off, but no way we are suggesting, it is new normal neither Mexico nor Symphony India.

Amit Kumar :

What Nrupesh Bhai is suggesting Rahul is the approach of geographic diversification and hence trying to minimize the risk of adverse event in one geography affecting the overall consol level numbers is something that these trends show that we'll be able to do through the right geographic diversification. So, something that would come closest to us saying this is like the new normal where given a good geographic diversification across the globe, some region or the other will always do good and maybe some of the regions for a given quarter or year will not do as good.

Rahul Gajare Sir, I was actually thinking from the heatwave perspective, have you seen any traction in exports and that is the reason why I was trying to see how Mexico had done?

Nrupesh Shah :

Export which in totality is not that significant but coming to specific geography performance as I had covered in my initial remarks if we were to talk about US, which is one large promising and significant market for us, The Home Depot, just like all other large, organized retailers cut back in terms of demand on account of destocking. But currently because of a strong and good summer, we believe that considering the latest figures available with us in many, many models, they are likely to be stock out in US. Brazil, which is in Southern Hemisphere, however, preseason sale, very initial indication, of course, seems to be quite optimistic and helpful. Even in Europe, we have made some beginning. We have employed some high-level resources. Of course, it's going to take some time to build up, but it's also moving in line with our target and budget and seems promising. Precisely, this is what since long we are talking about de-risking

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

the strategy whereby it's always going to happen, some of the market or geography, whether in the country or globally may do well season wise, some may not do well. But in totality, ultimately we should make it up. As you would have seen in current quarter even though Symphony India didn't do that well, but the rest of the world made-up part of the losses.

Rahul Gajare My last question is on the strategy towards local sourcing, especially in the Climate Technologies area. Is there any change in that aspect given the way trade costs have moved? Any thoughts on that change of strategy about more sourcing from India or the local sourcing continues for climate phenomena? Nrupesh Shah: No, absolutely you are dot on that point. So as far as household air coolers are concerned, now it makes sense to manufacture and sell from India so that's what going to happen. As far as local in-house manufacturing or assembling is concerned, we are reducing substantially and in few quarters down the line, it will be completely outsourced business model which includes residential household from India. For ducted coolers locally, but through outsourced business model and for some other products from China.

Moderator : Thank you. We have our next question from the line of Nirav Vasa from Anand Rathi. Please go ahead.

Nirav Vasa : I have certain queries based on the commentary which we have given you in our FY23 Annual Report which elaborates our global strategy. So, the first thing that I wanted to understand which it pertains to our targeted market across GCC nations where we have also appointed local representatives. So, would it be possible for you to share some updates as to how we intend to get into this market?

Amit Kumar : So, Nirav, we are already into that market and we have been in each of these GCC countries for more than a decade now. Now what we have done and what we have mentioned in the Annual Report is to take the next level approach. So, till now most of the times, we have been focused on addressing these markets through export-oriented team members based out of India. Now, we have changed that approach to also have a senior level resource based out of Middle East itself to cater to the customers in that region and to build relationships and business in that region. So, that's the additional work that we are doing with the anticipation of further good in the business in that market, but we have been in that market.

Nirav Vasa: And we are also looking at expanding our presence, our exports across countries like Egypt, Sri Lanka, Myanmar, Iraq, where a lot of currency and economic imbalances are there. So, do you think those markets can be cracked early or it's a long-term aspiration?

Amit Kumar : So, some of these markets that you mentioned, Nirav, for example, let's say Egypt or Myanmar at this point in time there is a political and economic disruptions in those markets. We have been doing business in these markets otherwise before the disruptions were there. Egypt, for example,

==> picture [162 x 57] intentionally omitted <==

Symphony Limited July 27, 2023

there is a currency limitation that the Government has imposed, and we cannot get dollars out of that country. So, for this year, at this point in time, the business is still awaiting a resolution to this issue. Sri Lanka, there was a political and economic turmoil which has just recently gotten addressed, and we are now talking to potential customers there. So, each of these markets we have exposure, we have active conversations with potential partners and as and when economic conditions they are allowed, we would be in those markets. Iraq is a good example, a couple of years back, it was doing almost nil business because again of the political situation, but over the last two years, we have built business in that market.

Nirav Vasa : So, last question pertains to domestic business. How many SKUs do we intend to launch for the forthcoming summer season? Thank you.

Amit Kumar : That's something that would be difficult for me to share on this call, Nirav. But we do intend to come up with new models, but unfortunately, I will not be able to share that upfront at this point in time.

Moderator : Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for closing comments. Over to you Sir.

Nrupesh Shah : Thank you, Equirus, and thank you Manoj Gori and thank you all the participants for spending your valuable time on late evening. Thank you and looking forward to meeting all of you in next Quarterly Conference Call.

Moderator : Thank you, Sir. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.