Elgi Equipments Ltd
NSE:ELGIEQUIP
Earnings Call Analysis
Q3-2024 Analysis
Elgi Equipments Ltd
Elgi Equipments Limited reported a modest increase in sales, with a growth of 6.5% in comparison to the same quarter from the previous year. This growth was driven by strong continuing profitability, especially marked improvement from the previous quarter. However, the company's sales figures fell slightly shy of internal forecasts.
A significant rise in employee costs, amounting to INR 253 million, particularly in North America, was offset by a marginal savings in other expenses. Company management indicates that the rise in employee costs is not a source of concern as it stems from filling essential leadership positions in the US that were previously unoccupied. Furthermore, the company experienced one-time expenses related to consultancy and recruitment that are not expected to recur.
The top-line figures were mainly disappointing due to underperformance in North America, which has been impacted by ERP challenges. Other regions such as Australia and Southeast Asia also experienced downturns, albeit other global regions surpassed the previous year's performance. The management is actively addressing these issues and working to improve these figures.
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Good evening, everyone. On behalf of Asian Markets, we welcome you all to the 3Q FY '24 Earnings Webinar of Elgi Equipments Limited. We have pleasure in inviting Mr. Jairam Varadaraj, Managing Director from the company. I will request Mr. Jairam to take us through the presentation with the 3Q and 9 months highlights, and then we'll follow up with a Q&A session.
Over to you, sir. Thank you.
Thank you very much, Kamlesh, for hosting this conference or the call. Ladies and gentlemen, it's such a pleasure for me to be with you this evening. I will take you through our performance for Q3.
I will start with a disclaimer in terms of compliance with all the regulatory requirements. I'll start first with the EBITDA reconciliation. Our sales grew marginally 6.5% compared to last year's same quarter, Q3 of last year. Our profitability was good. We continue to maintain a strong profitability compared to Q2 of this year.
Our EBITDA should have been INR 1,536 million on increased sales and contribution, but the actual EBITDA is INR 1,294 million. The increase in employee cost was INR 253 million, and savings and other expenses is about INR 11 million. This INR 253 million in employee cost, bulk of it is increase in cost in North America. And that's primarily because last year, quite a few leadership positions in the U.S. were vacant. And that -- those positions got filled this year. So that's the reason along with normal increment.
So there is nothing alarming about this increase in cost. Even Q2 had an increase of close to INR 211 million. So I'm not too concerned about it. In other expenses, in spite of a savings of INR 11 million, actually, the actual cost, we have close to about INR 40 million, which is onetime expenses in certain consultancy projects and recruitment charges that were unique to this quarter. And therefore, the overall cost structures are quite in control.
The disappointment for us was really in the top line, and the primary drop in top line has been in North America. We continue to have some challenges due to our ERP. Most of the businesses have recovered. There are a couple of verticals in our distribution business, especially our service vertical, which is still struggling a little bit. But we are on top of it. We are quite confident in a very short time, we will have that result.
So I'm -- yes, a disappointing top line, but not something that is attributable to our internal capability or the market. If you look at the sales across the world, Australia, has been lower than the previous year. Southeast Asia has been lower and North America has been lower. The rest of the regions have actually performed better than last year, but all of them have not performed as well as we planned to do. I will talk a little bit more about it in the later slides.
Australia's dropped compared to the previous year. There have been challenges in the economy. I'm confident that we are continuing to hold on to our share of the market. Southeast Asia continues to be a challenge for us. We are in a good position, the opportunity in Southeast Asia is very good. We are in the middle of reworking our strategy and our structure for Southeast Asia. So I'm hoping next year would be kind of the starting point for us in Southeast Asia.
North America, as you all know, has been a problem due to our ERP implementation. We have come a long way since the problems that started in the April of this year. But things have come a long way, but we still have some more ways to go before it is 100% normal.
As far as Europe is concerned, we are -- we have not performed to our plan, but we have grown over the previous year. We are working hard towards making the losses that are within the plan in Europe. And we have made plans to breakeven as per our original Europe plan, strategic plan that we made 6 years ago. Next year, we will break even in Europe through a combination of both top line growth as well as reduction in certain costs.
Middle East has done very well for us. In fact, it's done as per plan. In fact, exceeded our plan. India has been -- growth has been good in India. But in different verticals, we really think there is more opportunity in India, and that is something that I will come back and talk about.
ATS has also grown, but not to the extent of our plan. So if I look at revenue growth over the previous year, it's been 6.4% sequentially, we grew only about 2%, which is a bit of a disappointment, but this is not something that is systemic indicator. If anything systemic, we will come out of it. I'll talk a little bit more about Q4.
The sales mix between compressors and automotive remains pretty much the same, and the sales of our compressor business in India compared to the rest of the world is also roughly in the same ballpark. It is because of the drop in revenue in America and an increase in revenue in India that there has been about a 2%, 3% shift in the percentages.
So consolidated, if we look at our performance, we have posted reasonably good numbers at a profitability level. If we had the solid top line as planned, I think we would have had some extremely strong bottom line. But we are quite confident that as things move forward, we'll be in a much better position.
So our net cash position is definitely better. It continues to keep improving. And we expect to close the year even better than the number that is there in -- for December. So from a cash flow point of view, we are still good. But we believe that our inventory and receivables are on the higher side. Inventories went up in response to the challenges we faced with logistics during the COVID period. At that time, there was a huge increase in inventory. We have done significant amount of work in reducing it. But the recent Red Sea problem is again,pushing the need for higher inventory in Europe and the U.S. because of longer lead time. European lead times have gone up by almost 2 weeks, and U.S. lead times have gone up by almost 10 days.
So we are responding to it, while at the same time, reducing inventory. We believe there is an opportunity without taking into account the need for additional inventory due to the Red Sea problem. Without that, we think that there is an opportunity to reduce about INR 100 crores to INR 150 crores of inventory in the various regions.
Similarly, on receivables as well, we think there is a possibility of anywhere between INR 80 crores to INR 100 crores that we can. So we are working on these. So the cash position of the company going forward will be pretty strong.
In terms of Q4, we think that the fourth quarter will be top line better than Q3 and profitability will be roughly in terms of percentages following the Q3 pattern. So we should have a reasonably good Q4 and therefore, close the year -- sorry, closed the year with roughly 7% growth in the top line and profitability commensurate to that.
So in terms of our plan, we had expected that we will grow between 12% to 13% in that range. As opposed to that, we have grown only 7%. If we had not had the problem with North America, growth would have been in the neighborhood of around 10%, 11%. So this is something that we carry forward optimistically into the next year. With America coming back, I think we should have a good year. And Europe losses getting curtailed, I think we should have a good year next year.
So this is a summary of our operations. I will rely on your questions to clarify more. Thank you very much.
Thank you, Mr. Jairam for this presentation. [Operator Instructions] The first question is from the line of Mr. Ravi Swaminathan.
Congrats on a good set of numbers, especially the India business. My first question is how do you see the India market over the next 1, 2 years? Assuming there is a continuity in the government, last 12 months, growth has been slightly tepid, I think both for the industry and for Elgi in the India market. How do you see -- how to think about the industry in terms of growth? Will we grow double digit? Or will we grow probably high single digit? Your thoughts on that, that would be great, sir.
Okay. So good to hear your voice again, Ravi. I think there's a lot of noise about India, both internally and externally. And my belief is that even if a small percentage of the noise gets converted into reality. It will be a significant impetus for our country. So I remain optimistic.
Yes, this year, if you look at the P&L of most companies, that has been a muted top line growth, and that's the case with India as well -- I mean, a case with Elgi as well. But I think we are working on a couple of initiatives, strategic initiatives. We have brought in an outside agency to leverage our go-to-market strategy in the Indian market. We see significant opportunities for us to play on a much wider platform. So those initiatives should start seeing some results towards the third quarter of next year. Plus, our own internal normal business as usual initiatives should give us some good results. So I'm very confident that India will have double-digit growth for us at least for the next couple of years that we are quite confident about.
Got it, sir. And second is more in terms of the profitability also. I think we have kind of -- achieved the kind of level of profitability that you had highlighted in the analyst meet before COVID, 16% kind of EBITDA margin. And India has contributed to that significantly.
But along with higher profitability, it comes with higher competition also. If you see the motor market recent commentary from players like CG Power have been talking about increased aggression from competition. Do you see something similar to that in our industry? Or is it more like a gentlemanly game that is being played?
No, there is aggression. There is -- when commodity prices have softened, we held on to our prices. We tried to do our own cost reduction programs. So we retained all of them. And that's why you're seeing a very healthy profitability on the standard loan books. So that is something that's going to erode.
But I think we should be able to more than make up for it on 2 dimensions. One is the top line growth that I talked about in India, which we are very confident about. And the other is we have institutionalized an ongoing material cost reduction program at least to the extent of 1% to 1.5% on our revenue. So that's going to continue to give some benefit to us in the bottom line.
The next question is from the line of Mr. Harshit.
Sir, my first question is our growth of close to 6% in the first 9 months of FY '24 for the compressors business. Could you broadly bifurcate that between volume and price since you have mentioned that we have held on to prices? So I believe the majority of the growth would have come from volumes only. Would that be the right understanding?
I think majority of its volume growth shipped because the pricing we have already realized it last year. So we have -- we got the benefit of better pricing last year. So since then, we have not really increased our prices.
And this would be the case for both India as well as rest of the world. Because I believe if I remember rightly, there was some lag in the realization of those higher pricing levels when it comes to the overseas market. So would there be still some component that we would have realized in FY '24? Or that process would have got completed by FY '23?
I think we've done most of it. India, to the fullest extent, we've got -- we didn't do any pricing. Most of it is volume. As far as Europe is concerned, Europe and the U.S. is concerned, it is -- there was a lag for maybe a couple of quarters. We had to eat out our inventory, and then we are now back to volume.
Just as a response to the previous participant's question. You mentioned that the margins were healthy at the standalone level because we have been able to hold on to our prices. But you mentioned that it could erode. So do you see a possibility that we might have to rationalize the prices a little bit? Or we will still keep on going with the current pricing structure?
So there is an expectation that annually, there will be some increases in inflation based commodity prices, right? Considering that you know we have increased our prices much more the what the earlier commodity prices are. We will take possibly a competitive call of not increasing our prices if there is an inflation rate commodity. That's what I meant by possible erosion. I'm not saying it will definitely happen, right?
But we are -- like I said, we are also looking at an ongoing material cost reduction program, which is through a structured program of better sourcing, better in value engineering, alternate materials. So that should help us a little bit. So net-net, I don't see a major issue. But on the outside chance that there is an inflation driven commodity price increase and we are not able to pass it on or we don't want to pass it on for competitive reasons, that could be an erosion.
Understood. Sure. Secondly, has there been any change in the market share structure in India in the past 2, 2.5 years? Because we have seen Ingersoll Rand growing at a very fast pace. Apart from that, also, has there been any change in the type of compressors used for various end user industries?
So for example, the oil-free compressors growing at a faster pace. Also, this screw compressors as a category gaining some market share from the piston compressors. Has there been any change, both on the product as well as on the competition front?
So I would say in the last couple of years, the biggest change in the competitive landscape is the influx of low-cost machines from China, yes. It is in the lower end of the machines, lower kilowatt machine. The quantities have been reasonably large. So they have taken a sizable chunk of the market. I would say close to about 25% of the market.
Now we have -- we are in the middle of building a competitive response to that. It is not -- it's a pure price-driven segment, and there are certain specific verticals that are more attracted by the low-cost machines from China. We know those segments. We play in those segments. And we are also looking at building a product, which is a competitive response to it. So in the 2 years, I would say that's been the big change. And we are seized of that, and we will respond to that.
Understood. So that this close to 20% to 25% share that you mentioned for Chinese compressors at the moment, what would have been this number, let's say, those 2, 2.5 years ago?
I would say that maybe 2.5 years ago, it would have been probably about 8% to 10% of the market, yes.
Perfect. Understood, sure. And sir, lastly, if I could ask 1 more question. The way you gave an idea about the sales in the various geographies that we operate. Could you also give some sense on how the profitability has been in these different regions? So what are the regions where we make better margins than the others? If at all there is a drastic change, either on upside or on the downside in the margin profile in these various regions, so if you could highlight this margin structure, so that will be very helpful.
So the only region where we made a lower profit than compared to the previous year is the U.S. North America, and that's primarily because of the top line challenges. So Europe -- I mean, starting from Australia, our profitability was higher than last year in spite of having a lower top line, the marginal drop in the top line. India, as you can see, has been better than the previous year, year-to-date, I mean. The same -- Southeast Asia, I would not even talk about because it's a very small market at the moment.
Middle East has also been more profitable. Europe, the losses have been lower than the previous year. To that extent, it is more profitable. And the same thing and Brazil has been profitable. So the only region is North America, where we have significantly lost our profitability during this year. And that's coming around, and that's why I'm confident with Europe breaking even next year, North America coming back to profitability. India growing double digit, while retaining to a large extent, the current level of profitability. Next year will be -- I'm quite confident will be a strong year for Elgi.
[Operator Instructions] So I'll take a couple of questions from the chat box. Sir, your profit before tax has increased by 8%, which is impressive as compared to the previous quarter. Could you please elaborate on any potential changes in PBT that might be anticipated?
Changes in PBT for the whole year? Or is it -- I don't understand the question.
Sir, there's no clarity on that. It just said changes on the PBT that might be anticipated.
So profit before tax has gone up in the quarter. Now I expect that same trend to continue into the fourth quarter as well, probably at a slightly higher level because the top line we expect in the fourth quarter to be better than the third quarter.
Continuation to that question, sir. And if I may just want to understand how the Indian market is panning out in terms of demand across the key categories like industrial, infra, water, et cetera?
Okay. So the Indian market, the inquiry levels continue to be quite healthy. Conversions and completions are still a little sluggish. But like I said, there has been a lot of initiatives, noise, investments being planned, large investments being planned all that will have a trickle-down impact.
And so even if a small portion of it gets realized, I think there will be a significant impact for us. We're already beginning to see some green shoots on the industrial side. So we remain quite optimistic. Besides that, like I said, we think there is a large opportunity even in a flat market for Elgi to expand its presence, and we have already started that process, and we hope to see some results in the coming year.
The next question, sir. Sir, the employee cost of INR 253 million in North American region impacted the bottom line as per your presentation walk-through. Do you see such expenses in any other geographies in upcoming quarters?
No, I don't see any expense. Like I said, the explanation for the North America increase, huge increase or significant increase in people costs in North America is because in FY '23, many of the leadership positions were vacant and we fill them in the current year.
As a consequence, you see a sudden increase in the people cost in North America. So there's nothing to be concerned about. The biggest thing drive for us in North America is to take the top line back to where it was and grow beyond that in the coming years, which we are quite confident we'll be able to do.
[Operator Instructions] Sir, there is a question from Mr. Abhineet Anand.
So just -- you did mention that next year, there are 2 levers in terms of North America and Europe from a margin perspective. For the 9 months, if you can give some details on these 2 geographies, what has been our contribution at the sales and EBITDA number so that it would be easier to understand next year does it change?
I don't want to get into too much of detail, Abhineet, about geographical splits. All I can say is if you look at Europe, we have grown our Europe business by about 12%, 13% in this year. And North America has actually shrunk compared to last year. That's been a degrowth in North America to the extent of about 6%, 7%. So that's really the situation that we are in.
As far as profitability is concerned, Europe, the losses are lower than last year. And to that extent, it has contributed, I mean, indirectly to a better profitability at a consolidated level. North America has made a loss because of the drop in top line, but that's going to come back.
In Ballpark numbers, sir, I mean, we don't want an exact number, as you rightly said. But Europe and North America would contribute how much to our sales and EBITDA?
Europe and North America together will contribute to -- I don't have the numbers in front of me. I would say about 35% to our top line and 35%, maybe 40%. And both of them don't contribute to the bottom line.
Even at EBITDA level?
No, no.
The next question is from the line of Mr. [ Vipul Kamasa ]. So we'll take Vipul's question later on. I think he is facing some technical difficulty. The next question is from the line of Mr. Harshit Patel.
Sir, you have highlighted that from FY '25 onwards, we will start shifting all the different, different facilities into one consolidated location. The CapEx incurred will be close to INR 500 crores over a period of time. So do you think there could be any kind of production issues? Because of that, there could be a period while we are not able to deliver the kind of machines that we want to, some sort of market share loss that might happen because of all these rechecking, which is going on. Any issues that you could foresee at this point in time?
Absolutely not, Harshit. I mean, a few years ago, we shifted our entire machine shop and our air and technical assembly to our new campus, and we didn't even missed a beat in that whole process. The team had done an outstanding job. And we know what to do, how to plan and make that happen. So we will not allow business to suffer because of the shift.
Okay. And sir, lastly, this order from Siemens that you have received, I think, close to INR 1,900 crores is the value that you have mentioned. So could you give an idea on the execution schedule, the kind of margins that we might be able to make, maybe lower or higher than the current company level average. And the kind of similar opportunities that might arise going ahead once we fulfill this kind of order. Because as I understand, our current market share in the railways and metro market is much lower than we would like it to be.
Our market share in railways is very high. Our market share in metros is very low. So that's the -- I just want to correct that. As far as the business is concerned, it is over a 32, 33-year period. So while the number is very high, the annual impact is not very significant. So that's something that we should keep in mind.
As far as profitability is concerned, we are supplying to an OEM, and OEM supplies generally are not as profitable as what you would supply to an end customer. That is on the equipment side. So this contract is a combination of both equipment and service support over a 30-odd year period. So the profitability on the service, which is kind of back ended, will be healthier than the company average. But the profitability on the equipment would be marginally lower than the company, yes.
[Operator Instructions] We'll probably take another question from Mr. [ Vipul Kamasa ] . I think we're still facing some technical issues from [ Vipul's ] side. The next question, I'll take it from the line on Prolin Nandu. I don't see Prolin unmuting herself, so I'll wait for that.
Until then, I have a question from Mr. Vipul in the chatbox. Sir, what is our annual spend on the research and development? And how much is our strength in R&D?
Our spend in R&D, if you look at our people cost, the material that we spend, the tools, the software, it could be in the neighborhood of about 4% to 5%. But what we need to understand is that we are trying to be a building products for the whole world.
So if I have to look at the global cost of the number of people that we have employed and then take it as a percentage of our revenue, it's probably in the neighborhood of 8% to 9%. So we put a very high emphasis on investing into development of not just products but also technology.
Now your second question, I could not understand. What is our strength, I will try to answer it to the best I've understood. Today, we build products that are world class. We don't have any license from anyone for compressors. So this is technology that we have in-house, and we build -- use that technology to build some of the best compressors in the world, not only in terms of performance, energy efficiency, reliability, but also on the quality of the product.
We've -- through our own technology, we developed a water-injected compressor, which we launched 4 years ago, and it's had very good traction in the market. That's another -- that's a significant sign of our technical capabilities. And the fact that we are selling our products in our own brand repeatedly to the same customers and some of the marquee customers in Europe and America is also a validation of the performance and quality of our products.
So -- and we continue to invest in innovation and technology. We have some very exciting things which hopefully will be able to announce in the next quarter, which could be quite a big transformation of the air compressor business.
Sure, sir. I'll take Prolin's question, which has come in the chat box. Sir, can you please clarify in the segment or sub segment what type of compressor that we are facing competition from China?
It -- the Chinese compressors are in the low kilowatt of oil-lubricated screw compressors. So bulk of it is below 37-kilowatt compressors of oil-lubricated screw.
The next question I have is from Mr. Rahul Gajare.
I just had 1 question. Following up on your commentary on imports from China and the fact that we have seen some correction in the commodities. Now in a scenario where you are facing competition, maybe market share is going to some of these low cost compressors. Do you see that price -- reducing pricing is a way to get back some of this market share? Is that something that brings on your mind?
Reducing pricing? Is that your question, Rahul? No. No, no, no. I don't think -- the Chinese compressors are coming in at prices that you can't compete by just reducing your price. We need fundamentally different because these compressors are high-performance machines.
If you look at efficiency of the machines, they are nowhere near what is best-in-class. And in reliability service, they are all not best-in-class in India. These are segments of customers who are extremely price sensitive, for which we need to engineer a new solution, right? Now having done that, we have the capability to do that, which we will do. But I don't think it is just product alone. We need to reach these customers. And they are not as visible as our normal industrial customers are. So it's a whole new marketing program that we need to embark it. So it's not just product. It is certainly not just reducing the price of our existing machine. It is engineering a new solution and building a new marketing program.
Okay. And given that we have seen expansion in margin in this particular quarter, especially on the standalone. Typically, when commodities come off, do you tend to reduce prices?
We don't reduce prices. There are sometimes challenges when commodity prices go up. And if the market is extremely sticky, we don't pass them up, right? But we have never had a situation where we had to reduce prices.
I'll take a couple of questions from the chat box again. So why are we not demanding antidumping duty on Chinese markets?
Well, it's a long, tedious process. Probably, we will have to do it, but this is not something that we have talked about, right. Yes.
Sir, the next question is, can we know the size of the low [ KWA ] oil screw compressor market, if you could give us any number?
I'm making a guess here. It's anywhere between 4,000 to maybe 6,000 machines a year.
Sir, the next question is the Q3 trend and your outlook with respect to demand from oil-free, water well and construction segment.
Sorry, can you repeat that question, please?
So the Q3 trend and outlook with respect to demand from oil-free, water well and construction segment. .
Okay. So the water well segment, we have regained our position in the market. We lost it many years ago. We built a new product. Like I've been saying, it's an outstanding product, took a while for the customers to believe it. Now there is a huge traction. And we are doing exceedingly well, and the market seems to be opening up.
Not to the extent of the size of the market is not to the extent of what it used to be, but it's certainly better than what it was 2, 3 years ago. So that's a very positive development for us.
Construction and mining is also doing well for us so far. And I think the expectation is it may not grow at the same level as this year, but there will be marginal growth next year as well. Oil free, we are doing well in this year, and we expect that it will continue to do well next year as well. So all 3 of these segments are doing quite well for us.
Thank you, sir. The next question is, I would like to understand how easy or difficult it is to switch from compressor supplier from organized to some other Chinese players? If we compare our industry with motors industry or some other engineering goods, how do you see barriers to entry in compressors?
There are 2 different -- there are 2 segments in the market. There is a segment that buys purely on value, which is performance, efficiency, aftersales support, longevity of the machine and the overall life cycle cost, which is bulk of the market, 75% to 80% of the market buys on that basis. There is 20% to 25% of the market, which buys purely on price.
Now they are all short-cycle application, low-duty cycle, low duration markets. Now the value buyers are not going to switch to the low-cost machines, and the low-cost customers are not going to pay the price of a value machine. So these are 2 distinct segments, and these segments exist all over the world, right?
In India, it didn't exist because bulk of the market was split between the premium value was screw compressors and the low end was piston compressors. Now the Chinese have come in. Chinese make of compressors have come in to the bottom of it. So some of the piston machines they are replacing, and they are kind of cannibalizing into the low end of the screw compressor market. Now this is a shift in the market. I don't think it's going to be a transformation of the market.
Now that it has reached a certain thing, we believe that there is an opportunity for us to use our technology, build machines that are will be a very strong competitive response to the price-sensitive segment of the market, which will also help us to protect our piston machines.
[Operator Instructions] I do not see any further questions coming in, sir. Just a second. I just got one. Can you please guide us on the growth CapEx for the next 4, 5 years, sir?
Okay. So there are 2 types of CapEx. One is the CapEx that I talked about for moving our city campus to our new campus out in -- where our air center plant is. That would be about INR 500 crores over a 6-year period. We will come back by the -- hopefully, by the first -- end of first quarter of next year with a much more precise number. But that's a 6-year investment.
As far as our regular operational, regular CapEx is concerned, we would be in the neighborhood of about INR 50 crores to INR 60 crores every year. I don't see that increasing. These are balancing CapEx that we need to do in terms of our machinery and in assembly lines and systems and software and tools.
The next question I have in the chatbox is how long it will take to launch a competitive product in response to these Chinese products?
We should be able to do it within a year's time once we start the project. We are exploring the project in terms of defining the product, the price points, the performance points reliability points. We are doing a global search, not just in India search.
So once we start -- we hope that the next couple of months, we will finalize it. And then we should have the product up and running in about a year's time because the fundamental building blocks we have. So it's not anything new.
Sure. Sir, within the value-conscious market, not where Chinese competitive products are, how do you see barriers to entry in different kind of compressor subsegments?
Can you read that question again, please?
Sir, with the value-conscious market in bracket where the Chinese competition is, how do you see barriers to entry in different kind of compressor subsegments?
Barriers to entry for new players is difficult because the segment where the Chinese imports are not playing are really looking to -- looking for service, looking for support, and those are not easy to provide for any newcomer who just has a compressor. Just because you have a compressor doesn't mean that you can enter into certain customers who have -- who are value conscious, but -- and price conscious, but not necessarily purely driven by price, who are looking for support and aftermarket service and all that.
[Operator Instructions] First, since I see no other questions, I would probably ask you to please give your closing statement followed by a vote of thanks from Mr. Kamlesh Kotak from Asian market.
Thank you very much. Ladies and gentlemen, thank you for -- sorry, Kamlesh, you had -- I think you had a question, sorry, go ahead.
No, no. That's fine, sir.
Yes. Go ahead, Kamlesh.
No, sir. There is no question from my side.
Okay. Okay. So anyway, ladies and gentlemen, thank you very much for your time and your patience and your insightful questions. Like I said, Q3, the top line was a bit of a disappointment for us. Bottom line continues to remain strong. These are assignable causes.
We are quite confident that Q4 will be better. And certainly, FY '25 is going to be a pretty strong year for us for the various reasons that I talked about, both on the top line and the bottom line. So we are quite confident. And on the cash flow side as well, we are going to be far better than where we are today. And so overall, the foundations of the company are quite strong. So thank you.
Thank you, sir. Thanks for providing us an opportunity to host the webinar. With that, we conclude the call. Thanks, participants for joining in. With that, we end the call. Thank you.
Thank you. Thank you very much.