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Gati Ltd
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Ladies and gentlemen, good day, and welcome to the Q1 FY '24 earnings conference call of Gati Limited, hosted by Prabhudas Lilladher. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements do not guarantee the future performance of the company and it may involve risks and uncertainties that are difficult to predict.[Operator Instructions] Please note that this conference is being recorded.I would now like to hand the conference over to Mr. Praveen Sahay from Prabhudas Lilladher. Thank you, sir.
Thank you, Carol. Good afternoon, everyone. On behalf of Prabhudas Lilladher, I welcome you all to Gati Limited Q1 FY '24 earnings conference call. Today, we have with us senior management team of Gati, represented by Pirojshaw Sarkari, Managing Director and CEO; and Mr. Anish Mathew, Chief Financial Officer. I'll hand over the floor to the management for their opening remarks, post which we open the floor for Q&A. Thank you, and over to you, sir.
Thank you, Praveen. Good afternoon and a very warm welcome to everyone on our quarter 1 FY '24 earnings conference call. We have uploaded our results and earnings presentation on the stock exchanges and company's website. And I hope everyone had an opportunity to go through the same. As mentioned, along with me, I have Mr. Anish Mathew, the Chief Financial Officer of Gati and our Investor Relations team. I will now share an overview of the economy, industry and business, after which we'll hand over the call to Anish to discuss the financial performance of the company for the quarter ended June 2023. The global economy, world economy is in a state of stagnation. As per the International Monetary Fund, global economic growth is projected to decline from 3.5% in 2022 to 3% in 2023-'24. This projected growth is below the average growth registered during the past 2 decades before the pandemic. The sluggish growth in global economy is projected on account of multiple factors like high inflation, Russia-Ukraine conflict and sluggish demand recovery post COVID-19. Policymakers around the globe are facing a tough task of fighting inflation, maintaining financial stability and supporting economic growth.On the positive front, inflationary pressures are expected to ease out in the second half of 2023, and the global economy is expected to gain some momentum in 2024. The growth momentum is expected to come on the back of robust household spending in the United States and European Union and along with recovery in China following the reopening of its market.The Indian economy and logistics sector, amidst an uncertain global economic outlook, Asia Pacific is poised to show some green shoots amongst the major regions. The growth in this region is expected to be driven by India and China. The IMF has projected the Indian economy to grow at 6.1% in 2023. The growth outlook for India is based on decline in inflation and trust in investments by the government, which will lead to job creation income and increased demand.The e-way bill volumes for June 2023 stood at 8.61 crores as compared to 7.45 crore in June 2022, showcasing a growth of 15.6%. This signifies resilient domestic trade and transportation activity. Additionally, GST collection in June 2023 stood at INR 1.6 lakh crore, up 11.7% year-on-year. Increased GST collection is indicative of momentum in the underlying economy. As India aspires to be amongst the top 3 global economies, the Indian logistics sector is poised to gain from it. With right government policies, trust on manufacturing and infrastructure CapEx, the logistics sector is bound to grow.A point worth noting is that India's road network has expanded to above 6 million kilometers. The growth of small and medium enterprises and increasing need for timely delivery of goods augurs well for the express delivery business in the country. Key trends that will shape up the logistics industry going forward will be digitalization, data-driven decision-making, rise of cross-border e-commerce, growth of direct to customers especially in tier 2, tier 3 and tier 4 cities and the corresponding need for warehousing.On the company front I would like to start by sharing a few key updates on the company post Allcargo acquisition of KWE stake, the subsidiary holding Express business is now renamed as Gati Express and Supply Chain Private Limited from earlier Gati-KWE. We have appointed Mr. Rajesh Gowrinath as Vice President Sales to accelerate profitable growth, Rajesh comes with 20-plus years of experience in logistics companies such as DHL and Blue Dart.We have also signed an LOI with one of the largest domestic IT companies to build best in class Gati enterprise management system renaming it to GEMS 2.0. This will be built on a micro services platform.Our Express business continues to deliver a resilient performance driven by positive momentum in volume. Quarter 1 FY '24 volumes were up 5% year-on-year despite a strong base quarter. The base quarter, quarter 1 FY '23 benefited from exceptional volumes driven by industry consolidation that favored a few players. We expect the positive sales momentum to continue in the coming months and to augment our infrastructure buildup efforts. Gati will now be launching the Bangalore hub in the week of 15th of August.For the first quarter of financial year 2024, the Express business has recorded a revenue of INR 367 crores. The gross margin stood at 27% and EBITDA margin stood at 5%. In our presentation this time, we have shared the service parameters. I will take a few minutes to walk you through these. We have shared 3 service parameters.The first one being DIFOT, which stands for delivery in full and on time. This parameter is an indicator of the successful point-to-point delivery right from pickup to line haul to end the delivery to the customer's customer. Two, PIFOT, which is pick up in full and on time. This parameter measures the efficiency with which parcels are picked up for further transportation. And finally, the delivery efficiency, which is DE; delivery efficiency measures last-mile delivery service. One point to note in delivery efficiency is that, in some cases, it has customer dependency, which means that the delivery to a particular customer happened as per the availabiity and the choice of the customer.So these are the 3 new parameters that we have introduced. I would now like to share updates on initiatives undertaken under each of our pillars of growth; sales acceleration being the first one. Our sales acceleration initiatives are showing positive results, which is evident from the increase in our volumes. At Gati, our primary focus remains on customer centricity and delivering top-quality service. This approach has resulted in an increase in the wallet share from our existing customers and has also helped us find new clients.We also see promising growth prospects by capitalizing on the synergy between the contract logistics arm of Allcargo and cross-selling across our EQ customer base. This strategic approach is expected to unlock new avenues for business expansion.Infrastructure development, at Gati building the right infrastructure is of utmost importance. As mentioned earlier, we will be inaugurating our Bangalore super hub in the week of the 15th of August. This is another important milestone after the launch of Bhiwandi and Farukhnagar hub. These well-established hubs are equipped with cross-docking facilities and advanced material handling equipment, ensuring smooth and seamless operations. These initiatives have resulted in efficient loading and unloading, a reduction in turnaround time of the truck and created capacity to handle increased volumes.On the operations front, we have been making continuous efforts to enhance our operations. The focus is on increasing visibility for customers and optimizing productivity. As part of this endeavor, we have mandated GPS tracking in all our line haul and feeder vehicles, enabling us to monitor their movement in real time. Additionally, to ensure cost optimization and faster turnaround, we have embarked on route optimization equipment. Today, we can proudly say that all our service parameters are amongst the best in the industry. I would also like to highlight that we have started a nationwide training program for our Gati associates to create their image as brand ambassadors of the company. Gati associates help us in our first-mile pick up and last mile delivery.On the technology front, after a successful and smooth deployment of e-docket in the retail business, we initiated the pilot for MSME vertical. E-dockets enable enhanced visibility, transparency and improved compliance.And finally, on the ESG front, we also remain committed to our ESG journey and aim to convert our entire delivery fleet to alternate fuel vehicles by 2025.With this, I would like to hand over the call to Mr. Anish Mathew our CFO for financial highlights for quarter ending June 2023. Over to you, Anish.
Thank you, Phil. Good afternoon, everyone, and a very warm welcome to our Q1 FY 2024 earnings call. I'll take you through the highlights of financial results for the quarter. I would like to start with the highlights of our export business. Based on your request and in line with the best practices, we have started disclosing our monthly volumes and also the service parameters. Volume performance during the quarter was encouraging and expected to build the momentum. The company saw pick up in orders from large customers of preparations for the upcoming festive season gathered pace. Total tonnage handled for Q1 FY '24 stood at 2,92,390 metric tons as compared to 2,78,748 metric tons for Q1 FY '23, reporting a year-on-year growth of 5%. Our revenue from Express business stood at INR 367 crores in Q1 FY '24 as compared to INR 365 crores in Q1 FY '23. Corresponding gross margin for Q1 FY '24 stood at 27.3% as compared to 27.9% for Q1 FY '23. Export business EBITDA for the quarter stood at INR 18 crores as compared to INR 19 crores during Q1 FY '23. I would like to highlight here that depreciation on ROU assets for Q1 FY '24 was INR 12 crores and interest expense on lease obligation was INR 4.4 crores.Our client mix for the quarter for KEA, MSME and retail stood at 63% is 19% and 18%, respectively. On a consolidated basis, Gati reported revenue of INR 426 crores in Q1 FY '24 as against INR 431 crores in Q1 FY '23. Reported EBITDA, excluding other income, stood at INR 17 crores for the quarter ended June '23, as against INR 19 crores for the same quarter previous year.We remain confident on the growth prospects of Gati and are dedicated to improving efficiency across the value chain. As mentioned earlier, we have been consistently providing other key comparative financial performance indicators in our investor presentation. One can refer that for more details.With this, I would like to open the floor for question and answers.
[Operator Instructions] The first question is from the line of Amit Dixit from ICICI Securities.
I have a couple of questions. The first one is on your net realization in this quarter. If I look at the net realization it is down -- slightly down Q-o-Q, I mean we were of the impression that the letters for price hike have all gone to the customers. So just wanted to understand the acceptance of this price hike and if there is a one-off in the net realization that we are missing out?
So the letters for rate hike had gone out in the last quarter of last year itself. Like I had said in my last call also, while on the retail business, we have seen increase. But on the key accounts, generally, they would only negotiate a rate hike when the contract comes up for renewal. Having said that, the net realization also is a combination of various other factors, #1 being the lane mix. So it also depends on if your lane mix shifts, which means if you're doing larger or longer lanes, your net realization is higher than if you're doing shorter lanes. It also depends similarly on the product mix. So in Gati, we also have products which are national products, zonal products and local products. So it is a combination of all these that kind of brings our net realization. Having said that, we found that if we have to grow the larger customers, yes, we have seen a net realization fall in this quarter. We are cognizant of that, but a combination of these lane realizations would get our gross margin also equally supported because our costs would also reduce if the lanes that are given to us are short term.
The second question is essentially on the EBITDA margin front. So I mean, in Q3 FY '23, you guided that by end of Q2 FY '24, we should be reaching 9% EBITDA margin. Considering the performance in Q1 FY '24, it looks unlikely, at least to me that we would get to a number even closer to that by end of Q2 FY '24. And since your -- most of the super hubs are now operational in Bangalore, super hub will get operational in August 15. So what kind of levers we have to ensure that EBITDA margin grows from here? And what would be the trajectory that we can look at?
So we still maintain that in 3 years, we will be a INR 3,000 crore organization with an EBITDA margin, anywhere between 10% to 12%. We don't move away from that. We will be showing improvement quarter-over-quarter to reach that figure. Every new hub that we bring in, of course, brings in a lot more efficiency into our operations and therefore, optimization of cost benefits do come in. So we will see, as we move forward, our cost optimization kick in. But to get to the margin figure, the one big factor for our margin would be the leveraging of our fixed cost by volume growth. And as we grow the volume, we will be able to leverage that and come to the figure of 10% to 12%, which we have maintained by 3 years when we get INR 3,000 crores.
Just a follow-up on this. Actually, our super hubs, if I look at it, only 3 are remaining Indore, Hyderabad and Kochi. And the west, Farukhnagar, Nagpur, Mumbai, Guwahati, everything is operational now. So I just wanted to understand that next [indiscernible] you are saying that 9%, we will reach in Q2 FY '24, that was the understanding, at least I have. So are we advancing this guidance slightly or are we postponing the guidance slightly, 9% in near term?
Last quarter and this quarter, both the quarters I have maintained that we are not changing our INR 3,000 crore guidance and we're not changing our 10% to 12% EBITDA guidance of reaching INR 3,000 crores by 2026.
The next question is from the line of Rajat Setiya from ithought PMS.
One question about the business mix that we have. So what really is the difference between retail and MSME client? And what is the difference in their margin profile?
So the difference between retail and MSME customers, the main difference is that we do not give credit to the retail customer. The MSME customers get credit from us anywhere between 15 to 30 days. From a shipping profile, the MSME customer may be slightly more regular than the retail customer. From a yield profile, the difference between an MSME customer and a retail customer would be anywhere between 20% to 25%.
And in terms of their -- like -- I mean, the kind of business that they gave, how are we differentiating? I mean, between a retail and an MSME, what's the difference in their profile, who are they?
So generally, retail customers are ones who come in clusters. So for example, you have the cashew nut cluster, the sari cluster. These are small enterprises, which work in clusters. And they are identified as the retail customers. The MSME customers are those who are actually manufacturing in a small way to supply to a larger manufacturing unit, their spares or their components. These are more in the industrial parts like the MIDC or GIDC, et cetera. So that is how the differentiation comes.
What will be our annual maintenance CapEx?
Maintenance CapEx what is the meaning of -- well, Anish you want to answer.
So can you explain actually what you mean by maintenance?
I mean any CapEx that we need to do, to maintain our facilities. So we see a number of -- we see a number in our P&L, which says depreciation of so and so. The depreciation is not really a cash number, right? So how much of the depreciation basically we need to replenish back into the business to ensure our smooth operations, whatever assets that we have on lease, how much of that depreciation is going back in terms of maintenance capital expenditure.
So the normal CapEx spend for us would be in the range of around INR 15 crores, okay. So -- and that would include roughly maybe INR 4 crores to INR 5 crores of normal maintenance expenditure for our warehouses and FCCBs and remaining actually would be for our infrastructure, I mean, IT infrastructure. So unless and until we do have a major STC, we don't incur a huge expenditure. As we've been kind of explaining as in the previous calls for any new STCs, we don't do the construction that's kind of going to hand over to the landlord and then we kind of tweak around, minimum expenditures which we incur as we have some CapEx would be in the range of around INR 2.5 crores to max INR 4 crores. But otherwise, minimum CapEx...
And this number that you explained INR 5 crores, INR 6 crores, is it expense through P&L or this sits in the balance sheet?
No, what we are referring to is CapEx spend, so this would be pure CapEx, cash outflow, which will be end of being charged to the P&L by way of depreciation at...
One more question. What exactly is -- how delivery efficiency is different from DIFOT? What does it capture? I think I couldn’t understand that.
So DIFOT is basically a parameter to measure end-to-end service. That means if you are a customer, and I tell you that I can move your shipment, if I pick up from Bombay to Delhi in 3 days, that means from the time I pick up to the time I deliver, your time and transit will be 3 days. That is what is DIFOT. Delivery efficiency means that from the time it reaches my last operating unit in Delhi from there to the customer that is measured as delivery efficiency.
And it largely captures the time it takes versus the promised time from that particular point?
So delivery efficiency is a measure of same-day delivery, which means the day it reaches the last OU of delivery, it should get delivered on that same day as long as it reaches within a certain cutoff that is defined at each of the last OU. For example, in a certain operating unit, the cutoff would be that any shipment which reaches before 12:00 in the afternoon will get delivered the same day. In others, it could be 11:00 and some it could be 3:00 depending on where the last operating unit is. But this is clearly defined in the system, and we measure that so that when a shipment reaches before that time, it should get delivered on that same day.
And how do we adjust the customer dependency that we have that you explained because some of the customers may -- you said, their availability and all. So how do we adjust that into this?
So if you look at my target, which I -- which we have put in the presentation on delivery efficiency, we have mentioned a number of 93% over there. And that is because generally, delivery efficiency should be 100%. But because of this way of doing business of appointment delivery where the customer says, hey, don't deliver today deliver tomorrow or deliver after a couple of days. Even the target has been adjusted according to the historic data that we have in our system. So there are customers in India who would not want delivery on the same day, but would want it after a few days. It all depends on if their inventory is choked in their own offices so that they don't have space to receive it. But this is approximately as industry-wide it is approximately 5% to 7%.
And the other targets that we have mentioned, DIFOT 90%. So this number, basically, how do you look at it? I mean -- is this the first set of targets that we had set for ourselves, and we are obviously hitting it now. Will that increase in future this target? Or do you think this is the industry parameter where if you read then that's good enough? No, they will increase. Nothing -- we don't stop at anything, right? So we have to -- if we have achieved 90%, our next target will go up. But we set our targets annually. So we make sure that one is to reach the target, but second is to maintain consistency because consistency is very important in our business.
And one last one. In terms of average weight that we -- not average at least the rate. What's the maximum weight that we carry in our Express Surface what you said, operations.
So on a per shipment basis, there is no maximum weight. You could give me 3 tonnes, 4 tonnes, 5 tonnes. But on a per-piece basis, in Gati, we don't carry more than 700 kgs. You followed the difference between per shipment and per piece? Per shipments are having more than one piece in it. So -- and I'll tell you in normal parlance, box. So shipment could be 5 boxes, right? So you have 5 boxes that you give me can weigh anything, but your per box cannot weigh more than 700 kgs.
And usually, what is the weight range wherein we get most of our ship -- like products that we need to transfer?
So we will slowly reveal more and more information to you guys. Give us some time.
[Operator Instructions] The next question is from the line of [ Jigar Shah from AK Securities ].
Sir, I have a couple of questions. So the first one is, sir, just wanted to understand how do we plan on improving the margins to reach the targeted 10% to 12%? And will it be a combination of increased volumes and cost cutting measures?
So of course, it has to be a combination of both. But in our case, I believe increase in volumes at this stage is more important than cost cutting measures. For us, increased volume also optimizes our cost because our direct cost, which is trucking cost is a metric called capacity utilization. And as your volume goes up, your capacity utilization of your trucks also increases. And therefore, your cost per kg that you move in a truck reduces. So as Gati stands today for us to reach that 10%, 12% EBITDA margin, we have to increase our volumes. That is the most important.
And sir, my next question is I just wanted to -- an outlook for the coming quarters, provided it being a festive season. So are we seeing a higher demand?
So definitely, as you know, in the express industry, the quarter 2 end and quarter 3 beginning are the best months. And of course, what happens is that customers start creating inventory for sale. So yes, we will see -- we already are seeing a higher demand.
[Operator Instructions] The next question is from the line of Rushabh from RBSA Investment.
Just want to understand, sir, in terms of your Surface Express industry per se, growth rate, is it growing in line with your expectation? Or is it slowed down a bit, say, from 10% to 12% to say low high single digit. Are we seeing any headwinds in the sector, I mean surface express industry per se?
So to answer your first part of your question, I don't see a slowdown below 10% to 12% for sure, the industry growth rate. Are we seeing any headwinds? I think we saw headwinds in the first couple of months of this financial year, but now we are seeing consumption patterns go up and therefore, demand increasing.
And the second thing, you mentioned that we are seeing synergies with Allcargo, we've added new customers. Can you please elaborate what kind of new customers are we adding, if you could? What synergies are we exactly looking for? Pease elaborate on this.
So as you know, as a group today, Allcargo can offer end-to-end services to any customer in India, which means if a customer wants to import its raw materials from anywhere in the world, Allcargo can bring the raw materials either by ocean freight or airfreight. Then we also have container freight stations, where we can stage the containers before they get custom cleared, post which we can warehouse their material for them nearer to the port or inland. This is a company called Allcargo Supply Chain, which is the contract logistics company. And finally, we can distribute through Gati, their last mile deliveries. So this is what we call end-to-end integrated service that we as a group can provide to the customers. Now if there are customers who are doing import of materials with Allcargo, then we can go to those customers and tell them that, hey, guys we can do your warehousing through Allcargo Supply Chain, and we can do your distribution through Gati, and vice versa, our Gati customers, also, we can tell them that, by the way, if you have any imports or exports or if you need any warehousing, we can do that for you. And that is the advantage of the cross-sell that we have now constituted in a group as a process, and it is monitored at the corporate level of the group. The advantage that one sees is that if there is a warehousing customer with Allcargo Supply Chain and if Gati is not distributing from that warehouse then we can go with the customer together. And because of the good relationship that is existing with Allcargo Supply Chain, Gati could start doing distribution from that warehouse. So this is the kind of synergies that we are looking at for all the services that the group can provide.
Sir, I just wanted to understand. So how much of the synergies that we are actually tapping a right now, have you said recently -- I just want to understand what stage of leveraging those synergies are we -- is Gati currently in?
So it is a continuous process. Every month, there are a couple of customers that we get leads and then we, of course, have our conversion of those leads taking place. This is a very structured program that is run in the organization. And yes, we are seeing initial wins from this program for Gati and from Gati also.
Just a last question. Sir, recently, we hired Mr. Rajesh, who's had a very good background. So in terms of adding more people at this level, are we looking to add more people or we are done with adding more people in the second -- in the execution team stage.
So we have also -- so we keep identifying the gaps that are required by Gati and we will fulfill them. We have got Rajesh now. We also very soon will declare a digital marketing gentleman that we have just recruited. It will be out in the press very soon. We believe that a combination of digital marketing and good pedigree sales will really get us our volume also going.
There is a very significant front-loading in employee cost for us currently?
Not necessarily because these, for example, Rajesh has replaced our Chief Commercial Officer, who has left -- who will be leaving the organization soon.
[Operator Instructions] The next question is from the line of Praveen Sahay from Prabhudas Lilladher.
So my question is related to the Surface Express business. And in the last 5 quarters, if I look at on the volume is in the range of around 280,000 to 282,000 or this quarter is almost is 290,000 tonnes. So can you give some color, like after creation of these hubs, super hubs, how much it can go or any parameter like on the utilization side of those things to track on the way forward, how this number to move actually?
So this is a way of asking me what is my revenue going to be in the next quarter, right?
No, not exactly, sir, because just trying to understand that all the improvements we had done, a lot of improvement we have done. So these numbers how to move on because Q-o-Q, if I look at, it's almost flat, like 4 or 5 quarters, it's 1% or 2% up and then. So just trying to understand.
Let me tell you all. Let me tell you all. So it's been some time that we now have acquired Gati from -- by Allcargo, right? We have been, for the last 2 years, doing a lot of work in Gati to make Gati great again, okay. Once the confidence comes into the management, the management starts putting numbers out there. So you must have now noticed that for the last 2 months, we have been putting our volume numbers out, right? You saw that in the month of June, you'll see that in the month of July. You'll see that in the month of August, right? And that will tell you -- give you the answer to your question as to how volumes are moving. Secondly, we have also now put out service parameters. And the fact that management puts out volumes and service parameters should tell you that the management is now confident of what it has done over the past 2 years and therefore, it is putting its neck out and giving you these parameters out in the open. So I would just suggest that follow us every month and you'll get to know the volume increase.
So second, sir, on the client mix, as -- that's the client mix has been given like of some 60% or MSME has a 20%. So is there any margin differential in those different kind of client mix. And this mix, what the presentation has given it is of our revenue? Or is it of volume?
Revenue.
And if you can give the volume as well.
I have said this before also, that the large customers, whatever we get as a yield from them, the yield for the MSME customers is 40% more than that and the yield for the retail customers is another 40%, 50% more than that. So that is how the business works between the large customers, the MSME and the retail. With regard to the volume customer-wise, give us some time, we will start putting out some more details also to you all. We want to be as transparent as possible with all of you, okay?
Last question on the Bangalore hub, which you are starting from this month onwards. So is it a similar line of Farukhnagar, or the Bhiwandi? Is it as big hub for that?
Absolutely similar.
And is it also a consolidation of some hubs there you are doing like of Bhiwandi you have done?
Yes. 2 hubs in Bangalore, which are getting consolidated with a much larger space that we are setting up in Bangalore. Just for all of you all, Bangalore is one of our largest delivery cities in the country.
The next question is from the line of Dhwanil Desai from Turtle Capital.
So my first question is we have been talking about the legacy issue and because of that discounting we have to. So is it likely to be over in this quarter? And had it not been the case, what would have been our gross margin this quarter?
Good question. So I would only put my neck out and say that a lot of those issues have now finally reduced. I'm not saying they are over, okay? But they have reduced dramatically. It's only a matter of, I would say, another quarter or so before I can come back and say now it is BAU. How much impact that has on the margin is not something that I would like to talk about over here.
Okay. There only reason, I mean, I'm perfectly okay if we're not willing to share the details. The question is that because we have operationalized a lot of new hubs and there's some time which has passed and you mentioned about increased productivity, et cetera. And our goal was always 30%, 31% and even [ QDDs ] 32% gross margin. So on that journey, had it not been the case, we are at a comfortable place where you would have thought that we should be given all the efforts have been put.
In a way, yes.
Or you think that there is still some distance to cover.
No. So our operational efficiency continues constantly, but we have reached a very good stage in operation.
And second question, Phil, is on this contract logistics business. We talked about a lot of synergies and we have done that in the past also. And there was also some talk about the restructuring within Allcargo group. So any sense from whether that business is going to be merged or if so, what is the time line for taking that decision? What are the parameters? Some light on that would be valued.
So I thought you analysts were smart people. You all already have been told here I'm the MD of Allcargo Supply Chain -- not the MD of Gati, right.
I think the genesis from where this question started.
[Foreign Language] we wait for some time, we will let you all know there is a restructuring happening. We'll let you all know.I'm sorry, but I have something come up. I have to leave now. I'm very sorry. So if there is the last question, maybe or if you, hey, Anish can continue. So I will log out. Thank you very much, everyone, and I am sorry about this, some urgent has come.
We proceed to the next question from the line of Krupashankar from Avendus Spark.
One question from my side is on the general pricing environment in the industry. I just wanted to assess if it is holding on it -- or are you seeing more aggressive players coming in because you have seen the recent stream of announcements, wherein which pricing is looking very dilutive in nature. I just wanted to catch some thoughts on that.
Yes. I would say the environment is now competitive with all the players kind of very aggressive in the market. So from that perspective, we also kind of make sure, okay, we don't dilute so much, roughly, but at the same time, we drive the volume. I think that's the whole game all about. So our focus is to kind of get the volume at the same time not to dilute too much. But there is a competition -- aggressive competition in this industry.
Well, ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for their closing remarks. Thank you, and over to you, sir.
So thank you, everyone, for attending this call. If you have any more questions, we can either mail our IR team for any kind of response, which is required for any queries.
Thank you very much. On behalf of Prabhudas Lilladher, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.