Consumer products bottom line has been affected due to
Some part of the incremental cost of EPC business has been added to it.
Incremental advertisement spending- Rs 29 Cr (4.7% of consumer sales is spent on ads.)
Logistics outsourcing to Mahindra logistics is still going on. It will be completed by the next quarter. Hence, the inefficiencies have multiplied and the COVID impact.
Employee incentives have gone up in this quarter.
Starlite merger has been fully completed and the synergies are looked into to gain cost efficiencies.
Net Debt at 434 Cr. The company plans to have a zero debt position in terms of its standalone business at the end of FY-22.
Consumer Products EBIT Margins will hover around 9% for this year. In the next year, the company is planning to have 10% EBIT margins.
Gross margins were affected due to raw material price rise. Some of the impacts were passed away to consumers albeit later.
Research and Development costs will be around 2% for this year. Going forward the company will reduce it towards 1 to 1.5%.
EPC business is still in the red. The company is expecting a turnaround in the business till Q4. In the EPC, Illumination has seen a turnaround but the Transmission and Distribution segment is still making losses.
Margins and Profitability will get normalized in the coming quarters.
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