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Symphony Ltd
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Ladies and gentlemen, good day, and welcome to the Symphony Limited Q4 FY '24 Earnings Conference Call, hosted by ICICI Securities.
[Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you, and over to you, sir.
Yes. Thanks, Darwin. On behalf of ICICI Securities, we welcome you all to Q4 FY '24 Results Conference Call of Symphony Limited. We have with us senior management, represented by Mr. Achal Bakeri, Chairman and Managing Director; Mr. Nrupesh Shah, Managing Director, Corporate Affairs; and Mr. Amit Kumar, Group CEO and Executive Director.
And now I hand over the call to the management for initial comments on the quarterly and annual performance. Then we will open the floor for a question-and-answer session. Thanks, and over to you, sir.
Okay. Good afternoon, everybody, and a warm welcome to all of you to our quarterly and annual earnings call. I am sure you're enjoying the summer and -- as much as we are. And also appreciate ICICI Securities hosting this call. My colleague, Nrupesh Shah will make a short presentation, following which we will all respond to any queries that you may have. Thank you very much, and over to Nrupesh Bhai.
Hello, good afternoon. So the customary safe harbor statement is applicable. So coming to performance highlights. March '24 quarter on a stand-alone basis, we have registered highest ever quarterly India domestic sales. This is on account of decent summer, which set in early March. And even in current quarter also, we are cashing in on India's scorching summer. We will talk further about it later on.
There has been decent improvement in EBITDA margin on stand-alone as well as on consol basis for the quarter as well as Y-o-Y on a variety of initiatives, which we have taken during the year. LSV continues registering robust growth, and final dividend has been decided INR 8 on a face value of INR 2 that is 400% and including interim dividend of INR 5, it amounts to annual payout of about INR 90 crores, that is 61 percentage of the profit after tax.
And just to summarize the financials on our consol basis Y-o-Y, there has been a 3 percentage reduction in revenue, which stands at INR 1,156 crores, translating into gross margin percentage of 48%, that is up by 420 bps, while EBITDA is 14.70%, up by 310 bps and PAT of about 13 percentage.
So coming to block of overseas subsidiaries as a whole for financial year '24. Overseas subsidiaries put together has registered a top line of INR 433 crores versus INR 385 crores a year before that is increase of 13 percentage, while for the quarter, it has registered sales growth of 15%. Coming to EBITDA, previous year, that is in FY '23, it was negative by about 11 percentage. Current year, it is positive by 2.6 percentage, registering overall improvement in EBITDA margin by about 1,170 bps. And for this quarter, there is a positive EBITDA of 1.1 percentage, which was negative 23.4% previous year.
As far as IMPCO Mexico is concerned, for the quarter as well as for the year, it has registered highest ever top line as well as profitability. Summer has been a strong tailwind, and it has surpassed our internal budgeted financials also. Similarly, Symphony Brazil, wherein we forayed just a year before, it has been a decent start, and there has been a complete stock out, again, exceeding our own internal budgeted financials.
As far as GSK, China is concerned, it's a steady performance and first time it has registered positive EBITDA of INR 5 crores. And after paying interest to Symphony on its loan amounting to in excess of INR 3 crores, it has registered a marginal PAT. And coming to Climate Technologies, Australia, demand headwind purchase, of course, we are in the phase of transition for complete transformation. However, on account of some of the initiatives, which have been already implemented, starting Q3, we are witnessing despite lower sales, decent improvement in gross profit as well as EBITDA margin percentage.
So coming to consolidated financials for Q4, it stands at INR 332 crores, up by 8%; gross profit margin about INR 161 crores, 48.5 percentage, up by 720 bps; absolute EBITDA, INR 60 crores, up by 158% and translating into 18.2% for the quarter; while PAT is INR 48 crores. And here as a whole as we initially, top line of INR 1,156 crores. And on a consol basis, our total capital employed is INR 302 crores, which translates into ROCE of about 50 percentage and return on net worth of 18 percentage, and absolute EBITDA during the year stands at INR 170 crore, up by 24% despite a reduction of 3 percentage in top line.
So this is the waterfall chart of consol EBITDA margin during FY '24, up from 11.6 percentage to 14.7%, mainly on account of improvement in operational performance of subsidiaries, which has translated into improvement in gross profit margin.
Coming to stand-alone financials. For March '24 quarter, it stands at INR 251 crores. Absolute gross profit margin is INR 121 crores, that is 48.4 percentage, while EBITDA is INR 63 crores, up by 33 percentage, having 25.3 percentage EBITDA margin. And after making onetime exceptional provision of impairment of about INR 7.7 crores for loan granted to GSK on account of accounting policy and standard post that stand-alone PAT stands at INR 46 crores. Otherwise, it would have been about INR 54 crores.
Year as a whole, stand-alone financial, top line is INR 796 crores, down by 10%; PAT of INR 153 crores, which is 19.2 percentage, up by 60 bps; and our core capital employed in the business stands at about INR 44 crores, translating into ROCE of 362 percentage and RoNW of 18%. And as on March '24, our treasury, that is surplus fund, stands at about INR 395 crores. So about EBITDA margin, Y-o-Y almost remains the same, up from 20% to 20.2%.
Turning to subsidiary-wise performance, Climate Technologies Australia, top line INR 185 crores, reduced by 18 percentage; EBITDA, minus INR 23 crores versus negative INR 43 crores a year before; and PAT negative INR 25 crores versus negative INR 43 crores year before. For IMPCO Mexico, top line is INR 178 crores, up by 51%; EBITDA, INR 27 crores, more than double; while PAT is about INR 11 crores. And there also, there is a significant improvement in GP margin and EBITDA margin percentage.
About GSK, China, the top line is up by 36 percentage, INR 44 crores, EBITDA is INR 5 crores. And also happy to inform that almost for last 2 years, GSK China is completely self-sufficient to meet with its financial needs, including working capital as well as its business growth. So for the last 2 years, no more financial assistance or loan in any form is required by GSK. About Symphony Brazil, which is more like a trading subsidiary, so this was actually a first year of operation and registered INR 26 crores of top line and positive EBITDA of INR 3 crores.
Coming to outlook. So starting March, it has been a decent summer. There has been all around phenomenal demand and summer sets in early in Southern India, Eastern India and Maharashtra, and we are witnessing excellent demand across all these regions across the models. And still 2 more months to go. And demand, as further summer sets in, Central India and Northern India is likely to pick up further.
So as you know, Symphony very well maintains its Numero Uno status in air cooler industry. We are very confident about the long-term structural growth and performance in domestic as well as overseas market on account of intensified heatwave and climate change, which is already witnessing and will further witness strong tailwind in air coolers. And now as we are witnessing improved performance in subsidiary companies, we are actually leveraging complementary strengths of our international business, which is our unique moat in many respects.
Coming to Climate Technologies, in 2 parts, one is initiatives, which have been already implemented or in the final phase of completion. There has been a substantial rationalization of [ overhead ], that is cost of doing the business. When we acquired the company in INR, its annual [ overhead ] was INR 77 crores. In FY '23, '24, we reduced to INR 49 crores. And next year, it is likely to be around INR 38 crores.
There has been decent rationalization in gross profit margin percentage, especially in last 2 quarters, so as it can be seen in Q4 of '24 gross profit margin percentage stood at 40 percentage versus negative 7 percentage, while in Q3 of FY '24, it was positive 40 percentage versus 28 percentage in first 2 quarters, as these measures were not implemented, actual effect is of last 2 quarters. This is mainly on account of calibrated price hike and revamped product portfolio and debt sourcing mix.
And further initiatives, which are already in pipeline and we believe that by September '25, further measures, which will be executed, one is completely outsourced business model, which is progressing well. And by September '25, as far as portable air coolers are concerned, they will be outsourced from India and rest of their other products will be outsourced from China. So complete supply chain OEM products, et cetera, have been already set and decided. There is a complete revamping of the product category, for which we believe there is a decent traction, and they are also reasonably and decently profitable. And now we have also a decent distribution channel that should help us to really scale up. Thank you.
So we are open for question and answer.
[Operator Instructions]
Sir, before the question queue is getting formed, just -- Aniruddha here, just 2 questions from my side. So, we had introduced one kitchen fan also, and we have also, at least, partially introduced the personal air cooler also. So any update on these 2 initiatives that we had done. So in terms of scale, are these products pan-India? Or how has been the performance of these 2 products? That is question number one.
Question number two is about air purifier. So now since the larger public is aware about the air quality pollution, all these details. So is there any potential to have air purification benefits in air coolers also? The way fan companies are now offering air purification benefits also. So just your views on that.
And the third question, can you elaborate a bit more on the region-wise growth rates? I mean, let's say, metro Tier 1 cities or rural markets. And in terms of the -- probably the market share that we would be having in these regions, and if there is any gain in the market share?
I'll request Amit Kumar to answer these questions.
So Aniruddha, I'll pick these in the sequence that you talked about. So starting with our fans and the personal fans that you mentioned. These are niche products, and we are following a focused channel strategy for them. We have taken a conscious call of not spreading these across the entire country and in the entire channel that we have. So these are going into niche channels. As of now, we are focusing on a select set of cities in the double digits across the country. Most of these are metros and Tier 1 cities. And for this year, the focuses are building the markets in these cities for these products. As we go forward, we would figure out how we expand the distribution across more [indiscernible].
The second point around the air purifier, I do understand that's a category that has gotten consumer sort of understanding and in some markets that we've accepted. I do wish to highlight some of our models come with -- they already come with i-PURE, which is an air filtration technology that we introduced many years back into a select premium range of products that we have. That continues to be there. And those models we have made available across the country.
So to that extent, subject of our air cooler already offered air purification benefit, and consumers can use these products, if they want both cooling and air purification as a combined benefit from the product. Regarding the regions and market shares, obviously, we are collecting early information, but I think it's too premature at this point in time, this is broadly 1/3 into the season to talk about market shares for now. So allow us to hold on to this. Maybe, end of the June quarter, we'll have a better sense of how we are doing on the market share for this year.
Okay. Sure, sir. Very helpful.
The next question is from the line of Naysar Parikh from Native Capital.
So my first question is if we look at our A&P spend, right, for this quarter, it is almost half, it was stand-alone and maybe even consol. So are we in a bid to save costs? Are we under investing in the channel? And how should we think about it? And how should you think about the A&P spend for the next year?
No. So it's more about year as a whole. As such, due to some strategic reasons, in March '23, it was disproportionate high. And secondly, considering current year, the way in which summer is shaping up, we decided to spend somewhat higher amount in June quarter. So ultimately, it is year as a whole. Of course, YoY also in '23, '24, there is a decline in advertisement and sales promotion expenses. But just to remind you, in '22, '23, there were some of the onetime advertisement and sales promotion expenses, more like sales marketing, market research somewhat related to B2C e-commerce initiatives, et cetera, also. So what is in current year as a whole, it's more like a normalized advertisement and sales promotion expenses.
Okay. Second question is, can you give a mix between how much -- broad channel mix, how much is from home and how much is industrial and also within the home segment, how much is [ GT, MT ] online? Just some rough directional idea.
So as far as centralized and ducted air cooler, overall on a consol basis, which constitutes about 15 to 17 percentage of the top line, we don't have a company-wise data. And profitability wise also, it is almost proportionate. What I mean to say centralized air cooling is also equally profitable.
What was your second question?
Sorry, GT, MT and online mix.
So this is too early because just 1 month of the current summer is over. However, Y-o-Y and in absolute quantity, it is showing phenomenal growth. But all put together in '23, '24, it would have contributed almost 30 percentage or 1/3 of the sale, which consists of large format stores, [ RCS ], e-commerce, D2C institution, et cetera.
Okay. So that 30%, 40% and the remaining would be GT, right? That's how we should think?
That's right.
Okay. Got it. All right.
We have the next question from the line of Balasubramanian from Arihant Capital.
Sir, my first question regarding the CT, Australia. What's your thought process on changes in in-house business to outsourced business model? So what is going to change next over 2 to 3 years? And the second question, we are in the pipeline of launches of [indiscernible] heaters side. So what kind of opportunities we have on heaters and portable ACs?
So the Australian subsidiary had always -- was always a heater cum cooler company. So it isn't as if heaters are a new introduction. However, all this while it was focused on gas ducted heaters. The big change is that we are transitioning from gas to electric. So we are slowly reducing our reliance on the gas ducted heating business and introducing with the introduction of electric products, hoping to scale up the electric heating sort of category. So it's just a matter of changing from gas to electric. We were always in heaters.
So amongst the new products, as far as heating is concerned, yes, we have panel heaters, which can be on the wall. We have oil-filled column heaters, which are like portable heaters. We have built in electric fire places. So these are all -- and we have strip heaters, which are mounted on the ceiling for verandas and for outdoor areas. So these are new heating products that we have introduced. Amongst air conditioners, yes, we have introduced portable air conditioners that range too is being sort of fine-tuned and calibrated for the summer to come.
And all of these products are going to be sourced from China. These products have been especially developed for us given by -- as for our specifications by vendors in China and the products, which Climate Technologies used to make still until so far, which is a cooler, roof-mounted air coolers and gas ducted heaters, are also being outsourced to various manufacturers in China. Only portable air coolers, which Symphony specializes in, will go from India. All the other products will be outsourced to China.
As a result of all this, we are, on one hand, significantly contracting our manufacturing capabilities and our [ space ] required in our overheads as is evident in the numbers that we have shown of CODB reduction, but it also leads to a significant reduction in our cost of goods sold and an improvement in our gross margin, which is also evident in the numbers which have been shared with you. So this also allows us to completely focus on sales and distribution and not be not sort of divert any of our bandwidth on manufacturing related matters.
So this is something which we did 15 years ago, when we acquired our company in Mexico, it was also a fully vertically integrated manufacturing facility, and we transformed its entire business model into an asset-light capital-light business model. And so divested all the manufacturing, divested the real estate, outsource everything partly within Mexico or to China or to India. So the focus only remains on sales and also the cost -- we are able to reduce the cost of doing business, reduce the cost of goods sold. And most importantly, it becomes a variable cost business model.
So in other words, that's what we have done in Mexico. Several years ago, we did it in China recently, and now we are in the process of doing in Australia as well. The way we call it in India is we are trying to Symphonize these companies to adopt the business model and a philosophy, which is very much akin to what we have done at Symphony. I hope I've answered your question.
Yes, sir. Sir, how much price hike done in Q4? And what kind of price hike we can expect in coming quarters? And -- because of the demand is very strong because of the summer season. If you could throw more light on the demand side and the price hike side?
There will not be -- I suppose -- I assume you are referring to India.
Yes, sir.
So there will not be a significant price hike in this quarter. There will be some minor price hikes. But a lot of it is already sort of -- a lot of the sort of prices have already been committed. So we will not be able to sort of changed the price significantly. There will be some minor price improvement. So don't expect much on that front.
So is there a 1% or 2% in that range, sir, or even more?
No, you can say in that range. Yes.
The next question is from the line of Mayur Parkeria from Wealth Managers.
It's been a [ pleasure ] coming back to Symphony and trying to see over the years how it has done. So a couple of questions from my side. My regards to Nrupesh Bhai, also. Sir, in such a strong environment of summer season, even globally, there is in most parts of the world and in India, is there a risk that we face a stock-out situation?
Again, good question. To some extent, that is sort of happening in some select models in our case. However, our operations team is working day and night to meet with the demand. But yes, it is an unprecedented situation and not only us, but pretty much the entire market, whether air coolers, air conditioners are facing a similar situation. But like I said, our operations team is trying its best to be able to fulfill the demand. And so yes.
Sir, we have always maintained a flexible manufacturing and rather capacity because it helps us to optimize our efforts on sales distribution as well as capacity change also, which we can monitor. So in situations like this, after if I remember such a strong summer, no early rains and across the -- it has come after a couple of years, after COVID season, before COVID I remember, it was 16, 17 times there were such, and we had broken a lot of financial records for us at time based on that capacity. In today's time, is it not possible to actually take away strong market share from peers, who will [indiscernible] expand and we should [indiscernible] situation even for another increase...
Sorry to interrupt, but your line seems to be breaking up in between, sir.
Is it clear now?
It's slightly better.
Yes, it's a good question. And that is what we are striving our best to do. So like I said, our operations team is leaving no stone unturned to be able to meet the demand. So who knows...
But sir, can we gain market share in these times like this?
We probably already have. Although at this stage, we are not bothered about tracking that, that we will see at the end of the summer at this point. We are just sort of focused on fulfilling orders. But I'm sure that is going to be the outcome at the end of the summer.
Sir, just continuing with similar questions. When we had such strong summers in the past into, I remember that our EBITDA margins were in the region of 28% in the domestic part, I'm saying, the domestic part, 28%, 30% also, it has gone. Do you think in the next FY '25 because our season is actually June quarter to June in that sense. So do we think that FY '25 can be a year where we come back to our -- I know it's a situation. But for one of the years, is it possible that we hit that kind of back to our older margins given the strong tailwind we have.
First of all, I really appreciate your being so much on top of all the numbers -- historical numbers, that's very remarkable. And I may also say that our margin at its best EBITDA margin was 32%. So not only 28%, it was 32%...
Yes, yes, I stand correct. Yes, sir.
Yes, no problem. What I'm seeing is that our endeavor and our aspiration is to be back to that level. It might not happen this year, but in the next 2 years or 3 years or so, that is where we aspire to be back again. Remember, I said aspire, right? So we're certainly doing our best to do that. So don't hold me to that...
Sir, is it because compared to those historical years, means we still remain an outsourced model, our operations have not gone up. So is it just because that over these years, the pricing -- the inflationary on the cost side must have gone up, but our pricing may not have taken as proportionate increase over longer periods of time and hence, our margins will take time to come to those? Or is it something else at play because in a strong summer we can say that...
Nothing else. There is nothing else. What you said at the outset is exactly what the reason is. Costs went up during COVID. And because of sort of tepid summers, our pricing did not sort of keep up with the cost increases, which is why there has been a sort of a shrinkage in our gross and EBITDA margins. But with the trend of this summer, we will certainly be revising our pricing for -- going forward. And it will gradually inch back towards -- or will try to inch back towards our historical margins.
Okay. Sir, normally for our order -- can I just continue with small questions, please?
I'm sorry?
Can I just continue for small questions, 2 more, small, yes.
I think if you can join the queue, there are several other people waiting. So I think it will be...
I'll join, sir. Just 1 last question from my side. I'll join the queue after that, sir, last question. Sir, our normally ordering takes place prior to our December season, right, from a dealer's perspective, it's just that the deliveries happen later on, but the ordering happened much before that. Is it -- are you seeing that the ordering pattern post March has actually undergone a change? Is it that there is a similar -- is it that the estimation of demand was a similar kind, and it's just the execution of the demand? We are seeing a structural change in the way now the ordering is also even in this season, it's still happening.
There is no structural change. This is -- it's only that the demand is coming from regions where modern retail and our regional retail chains are strong and which do not buy in the offseason. It is the GT, which buys in the offseason. So which is why what we are seeing this. Otherwise, there is no structural change.
[Operator Instructions] We have the next question from the line of Manoj Gori from Equirus Securities.
First of all, it's just a good 2 years that you enjoying the summer. It's quite a while that we are actually going through a very smooth summer. So sir, my question would be, if you look at probably north market still is not operating to its potential. So do we see any business loss, probably we could have done significantly better probably in the upcoming quarter, while...
Manoj, before you go any further, your voice is not clear.
Is it better now, sir?
Instead of speaker, if you can use the handset, please.
Yes. Yes. Is it better now?
Yes.
Yes. So sir, I was just regarding to the north market, probably it's not operating at its potential. So do we see any business loss? Probably, we could have done significantly better volumes in the upcoming quarter? Or we are seeing so strong demand from the south market, probably we are just trying to meet the demand requirement over there. So just any thought on the overall demand environment if you can throw some light.
It's a little -- north will fire now. The summer generally sets in the north a little later. So it's not that north is not going to happen. It's certainly just a matter of time. And once north fires, then, that will also just add to what we are already doing.
Right. And sir, so far, the demand-supply situation, probably we are able to meet it, right?
Yes, yes, because again, the kind of products which we sell in the north and the kind of products we sell in the south are somewhat different. So the manufacturing facilities are also different. So there will be no overlap, or very marginal overlap in that. And so there shouldn't really be any problem with that.
Right, sir. Sir, secondly, if you look at the gross margins, we did somewhere around 48% for the full year at stand-alone level. This is despite a key profit sharing that we do with our subsidiary. Can we expect some improvement over there probably this should be a normal case, at least for next couple of years for FY '25 and '26?
I really don't know. I haven't thought that far, or we aren't really looking at that. But we -- like I said to the -- in response to the previous question, we are aspiring to and working towards in the direction of restoring our historical EBITDA margins. So in the process, everything will go up, whether it is gross margin or profit after tax or profit before tax, whatever. So it's a matter of time, but that's the direction in which we would be heading.
Right, sir.
More importantly, the parameter will be EBITDA margin because once we take care of EBITDA margin, whether it be CODB or whether it is deal of materials, everything is accounted for. And secondly, you would have also observed that in Q4 '24, even though top line is up by 5 percentage, our EBITDA margin percentage is up by more than 530 bps. Same is about consol, not only for Q4, but year as a whole.
Right, sir. I was just coming to that because if you look at we did some -- we did took some initiatives to improving on the cost side, especially on the subsidiaries, and probably the positive impact is visible during FY '24. So -- and in fact, you have already given some indication on FY '25 as well. Just want to understand on revenue side for Climate Technologies, probably we've taken a lot of efforts over there, but revenues have declined significantly during the current year. So what is the road map there? Probably where do we see these revenues from INR 180-odd crores moving in the next couple of years? So that would be helpful.
So our first endeavor would be to sort of recoup the lost revenue, what it was last year or the year before. So our first endeavor would be to be back at that level.
Right, sir. Sir, lastly, if you look at the receivable days, that has increased from roughly around 35 days to 53 days. Normally, we keep it very tight. So just wanted to understand any one-offs over there?
So again, it is because of the significant -- so far the business that has come is more from regions where there is a combination of modern retail and regional chain stores, where we do extend credit and online also. So it's more a function of that. But it will certainly be reined in the days -- in a few weeks, couple of weeks.
And mind that, that billing starts from third week or fourth week of February until middle of May. So typically, it will be at its peak as of 31st March.
The next question is from the line of Siddhant from Goodwill.
Yes. Do you see the summer as an inflection point for the commercial cooling? Or is still time -- there's some time? Are you seeing inquiries around that? How's that business going?
Again, it appears as if you are using a speaker. You're not using your handset. Would you mind using your handset because your voice is not clear...
Yes, yes. Can you hear me better?
Yes, it's better.
Yes. So in the industrial cooling segment, are you seeing any rise in inquiries? Is that as an inflection point? Or is -- does that still seem to be far away?
Rise because of the current summer? Is that what you are saying?
Yes, yes.
Yes, of course. Of course, because of the spike in heat, there is a much larger level of inquiries and orders also. So of course, what we are seeing in domestic is also something we are witnessing in industrial coolers.
Okay. Okay. Apart from that, do you -- where is the channel inventory, like you said, it's clearing out. So you expect -- where was it like 6 to 8 months or 12 months ago, last season?
Yes, of course, it was much higher than it is now. It is pretty much gone now.
It's pretty much gone now. So technically, even after the summer in H1 could continue to do well, right?
That's right. That's what we expect.
And on going back to the 25% or 28% margin aspiration, what are the competition levels compared to 2016 versus 2024? Because I would assume the market has gotten a lot more competitive. So would it be a tougher to...
Not really. First of all, again, we correct you. It was not 25%, 28%. It is more like 32%. Competition, there's nothing -- I mean, nothing new about competition. We have been there, done that. We have been around, then the faces change, the names change, the picking order may change, but the number of players has been as long as it has always been. So there is really nothing different about competition. Like I said, we -- just some -- the players have changed. So we have faced competition and all through our history. So really nothing significant has changed. And at the end of the day, if there's more people who copy Symphony's products, that's all.
Yes, we've seen that. Okay. Superb.
Reflected also in our market share. It remains intact.
The next question is from the line of Ayush C from Shravas Capital.
Just wanted to understand, maybe all the country side -- I just want to understand how the demand scenario is in India? And going forward, how are you going to cater to this demand?
Can you speak on the -- can you use your handset, please?
Yes. I just wanted to understand how is the demand scenario playing out in India, leaving all the other countries aside? And how are you going to cater to this demand going forward?
Demand scenario, I think we just spoke on this while we've been talking about that demand has been unprecedented because of the summer, and we are catering to it.
All right. Any new product launches in line?
Not really. We are -- I mean, nothing exceptional for us. We are continuously introducing new products. We've been doing that all -- every year, and we will continue to do that going forward.
The next question is from the line of Lakshminarayanan K G from Tunga Investments.
Two questions. One is our -- on the stand-alone, our advertising has actually come down. I just wanted to understand, what is the -- is there -- whether it will get -- we are booking lower this quarter, the next quarter, it will go up, or how to think about it?
We have already answered that a few minutes so, but we'll answer that again. Nrupesh bhai, please.
Yes. So whatever advertisement and sales promotion expenses we have incurred in '23, '24, that is normal. In '22, '23, in fact, there were some of the onetime advertisement sales promotion expense, like related to D2C, e-commerce, some of the market research and market survey, some of the overseas studies, et cetera, et cetera. So whatever we have incurred in '23, '24, it is normalized. And that's what we had conveyed even in '22, '23.
And secondly, our overall -- or most of the market spend happens in March quarter and June quarter. And depending upon how season unfolds and depending upon the requirement that is spread between these 2 quarters.
Got it. And what is the freight and forwarding charges in the stand-alone for the full year?
I think then we can answer you separately. We don't have the figure readily available.
The next question is from the line of Rahul Gajare from Haitong Securities.
Sir, I just have one question, given most of my questions are answered. Now it's a small thing, but the loan that we have given to the Chinese entity and the impairment that we've done in this particular year, could you tell me how much of the loan is still outstanding? Is this close to INR 60 crores after this impairment is that is outstanding?
So overall loan, including outstanding interest was about INR 61 crores out of [ 7.80 ]. Impairment has been provided for. It doesn't mean it has been written off. It is provided for. So remaining is about INR 53 cr.
Okay. And how much time do you think you can actually recover this loan in? Because I'm just trying to think, will there be more impairments and possible write-offs sometime in future, given the performance of the Chinese entity that we have seen for the past couple of years?
So let me take you through Chinese acquisition when we acquired the company, it was a bankrupt company. And on a top line of INR 50 crores, it was incurring the losses of INR 16 crores. So we acquired a company just for about INR 15 million. And at that time, the guidance given was 3 to 5 years' time, we will break it even. And that's what we actually achieved in 3 years because the acquisition objective was, apart from various complementary strengths, really, the sourcing strength, design and development, R&D, access to Chinese market, et cetera.
However, post that, that is in 2018, '19, post achieving the breakeven on account of COVID and due to a variety of other reasons, it completely disrupted. However, for the last 2 years, again, it is back on track and the EBITDA, of course, it is small vis-a-vis total, but this is the highest ever EBITDA what we have registered in current year. And we expect this to grow further and we don't expect in nutshell any write-off or impairment. We expect the cash flow and profitability to improve and hence, the loan to return hopefully. Even impairment also, we should be in the position to reverse.
Okay. Fair enough. So that's the only thing that I had. Best wishes for the very strong season that we are looking at in FY '25.
The next question is from the line of Aditya Bhartia from Investec.
Sir, my first question is on inventory situation in the U.S. because we had spoken about the destocking carried out in the last few quarters for the year or so. So are we starting to see demand improving, which can increase Climate Tech profitability and performance going forward?
No, couldn't understand your question. And if you can use the handset please, Aditya. Aditya, can you please repeat the question by using the handset?
So my question is on the demand situation in the U.S. We are seeing massive destocking taking place over there because of muted demand conditions. Are we starting to see an improvement in performance in the U.S., which in turn can aid performance of Climate Tech as well?
Not at the moment. At the moment, whatever I said earlier, in case you heard it with regards to Climate Technology is all limited to Australia. The U.S. is something that we are not considering. Whatever happens in the U.S. will be an upside?
Understood. Understood. So at this stage, we are not seeing any green shoots if in case they play out, then that can provide a bit of an upside.
Correct. Correct.
Understood, sir. And on the domestic business, while I really appreciate the candid comments and the insights that you shared on margins. But I'm just wondering, if we are having a fairly strong demand scenario, then would the focus be more on market share or on margins? Is there a scope of improving market share a little more by maybe just keeping the margins where they are as opposed to looking for an expansion?
The -- it will essentially be on the bottom line. So it is sort of a good combination of market share and margins. So we are not going to foresake volumes, but we'll try -- we'll maximize volumes and maximize margins.
Understood, sir. Understood. And one last bit. On the northern part of the country, sorry, I could not completely understand how exactly demand trends have been because has the properly set in and have you started seeing very strong growth in north as well? Or so far, it has been in other parts of the market...
Not yet. North India is yet to fire, and we expect it to happen anytime soon now.
Understood. But given that north is the bulk of room -- air coolers market, what does it mean for the overall air cooler industry or our sales, let's say, in the month of April? If you could just kind of give some indications around that.
Well, north is going to sort of it -- summer is going to set in. In all these years, it never has been that the summer has not set in. It's just a matter of time. So in fact, we are sort of in one sense, glad that it did not happen so far because otherwise, we would have been burning the candle at both ends. We would have been -- not been able to meet the demand for both the south and the north had it happened simultaneously. So in a way, it's good that the summer is staggered. So we are able to cater to the demand and not really have to foresake any demand -- any sales.
Sure, sir. And north would be what proportion of our business?
I mean, again, those are numbers that we sort of don't disclose. But of course, it's the largest market in the country.
Right, right, right. That's really helpful, sir.
[Operator Instructions] We have the next question from the line of Shraddha Kapadia from Share India.
Hello? Am I audible.
No, it doesn't seem. No, you are not audible. Please use your handset.
Is this better? Yes, yes. Okay. Congratulations on a good set of numbers. Actually, I just had one question. Like considering this year, its election, so are we expecting any increase in the revenues due to election? Or have you witnessed similar trend?
Election, to the best of my memory, has never had any major impact on our sales. So the summer, the severity of the summer is the only criteria that impacts sales.
No. So actually, if we have the rallies and the meeting everything and the public gathering, so there, we normally see the air coolers and everything. So that was the main point.
Not so sure. So they do use our coolers. You will find our air coolers on the stage also, behind every political leader that is giving a speech. The coolers that you see would most likely be a Symphony. But sure that happens. But that does not lead to a huge surge in sales.
Okay. Okay. And just one more question. So in terms of adjacencies, is there any specific product, which we have seen performing very good or some product, which you would like to highlight?
No. So the only adjacency that we have got into our tower fans, which are also doing very well. But within air coolers, it is the segment of kitchen cooling fans that we elaborated at the beginning of the session that are also doing well, which have been introduced recently and are doing already quite well. So all in all, you've seen the numbers.
The next question is from the line of Shahzad from Evolve Media.
Actually, I don't have any questions. The question has already been answered regarding the [ A&P ] spend. So thank you very much for giving me time. My query has already been solved.
The next question is from the line of Mayur Parkeria from Wealth Managers.
Two questions from my side. Again, first I wanted to actually give a token of appreciation for the management on the Australian subsidiary has been a very long journey for us from FY '19 onwards and the kind of pain we went through over these years. So if I remember correctly again in INR 250 crores, INR 260 crores of the top line when we had acquired that subsidiary, over these 5 years, what would have been the accumulated loss, rather cash loss, which would have happened over these years in Australian subsidiary?
Yes. Give us a minute.
I mean if you have another question, until that figure is compiled.
Yes. So now that -- sir, you were mentioning like Symphonize all the international subsidiaries that happened in terms of asset-light model, in terms of cost structure rationalization. So can we now safely say that the international subsidiaries will no longer be a drag on the domestic numbers, not only drag, but also kind of support and any kind of pressure on the balance sheet, the P&L. And from here on, the focus is to grow next 2, 3 years? And if that is what -- if the interpretation is correct, can you help us with -- because it's been a very long journey. Can you help us with some targets or something, which we can look forward to from the international subsidiaries? That's it.
So 2 things. First of all, it would be -- we would not like to give a sort of what is called forward-looking statement. However, we must also point out that the journey got long, became longer because of COVID. Had COVID not happened, then the journey would have been over long ago. Because of COVID, we did not even -- we weren't able to go there for 3 years or 2 years. We could not even visit -- they could not go to China. Chinese couldn't go there. Everything sort of came to a standstill. So were it not for that, things would have been much very different.
But we would like to -- we would at a very minimal like to restore top line that existed. With the -- given the new -- the latest cost margins and cost of doing business, without that changing, with the same percentage is growing the top line, that is going to be what we would endeavor to do the least.
And to answer your -- we have an accumulated loss of INR 86 crores in the Australian subsidiary.
And in continuing the financial [indiscernible] related question, just to remind you, when we buy [indiscernible] Mexico, initially for 5, 6 years, we had to continuously pump in the financial assistance by way of loans, which not only recovered interest, but it is completely self-sufficient and debt-free. Similarly, GSK China despite being China, almost for the last 2 years, no more financial assistance is required. Hopefully, we are striving to achieve the sale for Climate Technology.
Sir, what has been our export in FY '24 from India?
Again, that's the number we will pull up and separately, you can talk...
Otherwise, [indiscernible] reporting what we are already disclosing it is there, but we don't have handy.
The next question is from the line of Premalal Kotha from IBM India. The current participant seems to have left the line on hold. We will proceed to closing comments, sir.
I would now hand the conference over to the management for any closing comments.
Yes. Thank you all the participants for your valuable insight as well as questions and sparing the time. Also thanks to Aniruddha and ICICI Securities for hosting this conference call. Looking forward to see and meet all of you in June quarter conference call.
Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.