Key takeaways of the conference call

Gaining from the experience of the previous lock down the company was adequately geared up to ensure that the lockdowns do not severely affect the operations that are possible during this period as well as post lockdown period.

The quarter began as per plans till the second wave of the pandemic that caused partial lockdowns during the last week of April 21. Most part of Q1FY22 was hit by the pandemic related lockdowns but April and June were much better compared to corresponding previous year.

E-Comm Channel continued to contribute during Q1FY22, while other channels had to shut down for most of the quarter due to local lockdown related restrictions.

Post relaxations in lockdown, the business resumed to reasonable level only from early June 2021. The company has been doing well in July 2021 with all channels are operational in almost all states. Marketing inputs including advertisement have been put in place.

Share of e-commerce sales was at 32% during the quarter compared to 24% in Q1FY21. The company expects the e-commerce revenue share could stabilise to around 25% once the demand situation normalises and other distribution channels gain traction on removal of restrictions on trade.

Considering the Covid-19 related lockdowns, the trade collections were somewhat sluggish in Q1FY22 but improved since the beginning of Q2.

The company continued with production during lockdown in Q1FY22 in spite of lower sales.

The channel inventoryis stable at Q4FY21 levels.

Introduced 21 new SKUs during this quarter across all categories. The company has slated for launch around 80 new SKUs during Q2 of FY 22.

Gross margins in Q1FY22 maintained at healthy levels giving due weight to product/channel mix. On YoY basis the gross margin expanded due to combination of price hikes, better channel and product mix with increased sales of premium products.

The price increase in commodities continues in Q2 impacting the manufacturing cost. Necessary actions to mitigate this is being considered. The company has taken 5-6% hike in prices in July 2021 for certain product categories, which should support gross margins, going ahead.

The company is experiencing strong growth in exports. But for shortage of containers for exports the export sales would have been higher than what it was in Q1FY22.

The company is market leader in five of the six major product categories and it is also working towards gaining market leadership in mixer grinder category.

There is market share gain for organised players who have gained 2-3% market share from unorganised players.

The company is continuously expanding its reach. It has added around 7000 new outlets to its distribution network over the last few quarters.

The contribution of ‘Judge' brand to revenue currently is very minuscule. It is working on several initiatives to promote the brand. The share of ‘Judge' brand can scale up to around 10% over the next three to five years.

Company continued to pay full wages to all its employees during lock-down period and increments have been given effective from 1.4.2021.

The company carries substantial free cash in excess of Rs 490 crores post capex.

Agricultural activities are expected to pick up to normal levels from Q2 and with increased minimum price support rural consumption is expected to revive.

Monsoon has also adversely impacted some states with excess flooding. These markets may impact the performance in Q2 to some extent.

Horwood is expected to do well during Q2FY22 with further relaxations in lockdown in UK. Harwood Homewares, the UK Subsidiary of the company's transformation efforts and performance during Q1 has created a strong platform for the year. The sales across channels are good and expanding.

Domestic Sales grew by 71.3% from Rs 196.40 crores to Rs. 336.50 crore.

Export Sales for the quarter grew by 68.2% from Rs 12.14 crores to Rs 20.42 crore.