Saurabh Pant: Okay, Soma perfect. No, that’s a good answer. A quick follow-up on the Drilling Technologies side of things, I know you said in your prepared remarks, you are seeing a solid recovery in January and customers are coming back and ordering more cutters. Just so that I appreciate the magnitude of the recovery, how should we think about, do you get back to third quarter revenue run rate in the first quarter, in the second quarter? And then just related to that on the margin front, I know absorption does move the margins pretty quickly in this business, right? How should we think about margins going forward in Drilling Technologies? And I know the mix has been shifting between cutters and bearings, right? So keeping all that in mind, how quickly should we expect a recovery in the top line and how should we think about margin trajectory through 2023?
Sivasankaran Somasundaram: Yes. So Saurabh, on the top line, again I wanted to, first what we saw was that temporary destocking, and we have seen this before, we have seen this before. What I mean by that is even in a constructive environment, sometimes you find in Q4 particularly in Drilling Technologies, you will see this type of an impact sometimes because customers are focused on some yearend working capital management items. So I would rather back in the deck, as you know, we have that chart where we show the destocking, restocking. In that chart I think it’s on page 17, if I remember and if you look at the couple of quarters if you want to have a reference point, you go back and look at Q4 2011 and Q4 2013, and then look at the rebound in Q1 of 2012 and Q1 of 2014, the subsequent quarters, you will see the similar phenomena.
And what we are experiencing is that similar phenomena, even in a constructive market environment, you see this type of phenomena. So we are not concerned about that because we have seen in January, so what you would see is a solid sequential growth, and we are seeing that. Now coming to margins, so as Ken mentioned in the prepared remarks, so we are experiencing some higher tooling costs. So if you look at our Q4 margins, the reason the margin is down to 20% is because one is the volume, but the other issue is we are experiencing higher tooling costs in particularly in our high pressure new products. So our teams are working on it. So we are very focused on delivering the products. So that’s happening, but we are experiencing higher tooling cost.
So the teams are working on it, and we have already seen in January that we are starting to see some improvement in it, but it’s going to take us couple of quarters to get to the normalized margin. So going forward, when you put this together along with the mix issue of bearings, and I think what you should do is what you should see in the second half of 2023 is we are returning back to that 30% level of margin, and then we can grow from there. So that’s what I would say.
Saurabh Pant: Okay, perfect. No, Soma, that’s perfect. Thank you. I’ll turn it back.
Sivasankaran Somasundaram: Thank you, Saurabh.
Operator: Thank you. The next question comes from Atidrip Modak of Goldman Sachs. Please go ahead.
Atidrip Modak: Hi Soma, good morning. I just wanted to touch on guidance for 1Q. What are the drivers of the low and high end of the revenue and EBITDA guidance? How should we think about the moving parts? Is it just a function of the degree of seasonality or are there other elements across the segments that we can think about?
