Thanks, Rutuja. On behalf of ICICI Securities, we welcome you all to Q4 FY '26 and FY '26 results conference call of Kansai Nerolac Paints Limited.

We have with us today senior management represented by Mr. Pravin Chaudhari, Managing Director; Mr.

Yash Awhuja, Chief Financial Officer; and Mr. Jason Gonsalves, Director - Corporate Planning, IT and Materials.

Now I hand over the call to the management for initial comments, and then we will open the floor for question-and-answer session. Thanks to the entire management team for posting a strong set of numbers amidst such a steep volatility.

Thanks, and over to you, Pravin sir.

I would request Jason if you can walk them through the presentation.

Good evening, everybody. I'll just take you through our investor presentation, which we have just uploaded a couple of minutes back.

From a opening standpoint, restating our purpose, our purpose was to create environments for a healthy and beautiful future. Our vision is to design solutions that protect, inspire, and touch lives every day.

On the ESG front, Nerolac has been working extensively over the years, and it is today water positive. It is committed to emission reduction and increasing green energy.

From a brand perspective, for over a century, Nerolac has stood tall as a heritage brand, symbolizing excellence and innovation in the paint industry. Our strength lies in robust R&D capabilities and strategic technology partnerships, particularly in the industrial segment where we deliver cutting-edge solutions across diverse applications.

Despite intense competition, Nerolac continues to command attention, proudly holding the position of the second most recognized brand in terms of top-of-mind awareness nationally. One of our most enduring assets is the Nerolac jingle, a cultural touchstone that has resonated across age groups for more than three decades.

This timeless melody continues to reinforce our brand identity and emotional connect with consumers. Building on our century-old legacy, Nerolac continues to shape the future with breakthrough product innovations.

Our sustainable solutions reflect a deep commitment to progress, responsibility, and customer trust, ensuring that we not only meet today's needs, but also safeguard tomorrow. Looking ahead, this same technological edge will increasingly shape our decorative segment, enabling us to introduce breakthrough concepts that align with the growing demand for premium products.

A prime example of this is our range of products which are exclusively category-defining products, launched a few years ago, offering Indian consumers a truly differentiated experience in decorative paints. Commenting on the business environment, what we have seen this quarter is that there has been a significant surge in crude oil prices, primarily because of the West Asia crisis.

There has been a sharp depreciation in the rupee. The West Asia crisis has created a lot of uncertainty.

There is a supply chain disruption which has happened. Demand in automotive has continued to be healthy, and there is a continued focus of the government on infrastructure.

I will now talk about the decorative segment in which we will talk about the key elements of our decorative strategy, which are built on five elements, which are new products, new business, the projects business, influencer program, branding and marketing. Coming to our new products, we have tried to bring out the salient details of our new products.

I will just touch briefly on each of them. Our first product is Excel Sheen, which is a modified acrylic emulsion with silicon additive, superior sheen with best-in-class dust pick-up resistance and anti-algal performance across all weather conditions.

Excel Everlast 14, India's first self-cleaning paint powered by Japanese PU silicon hybrid technology with anti-algal encaps technology, delivering unmatched beauty and performance. Excel Everlast 20, which is India's first exterior paint with 20-year warranty.

It is engineered with bulletproof nanosilica technology for superior durability, crack bridging up to 2, and weather resistance. Beauty Gold Washable Plus, which is an interior emulsion with rich sheen finish and 1.25 times higher washability than competition.

It's the only paint in the category that has both anti-bacterial as well as it's the most washable product. Perma No Heat: Perma No Heat is a heat-reflecting, liquid-applied waterproof coating based on acrylic copolymer emulsion.

It reflects visible radiation and infrared rays, thereby reducing the surface temperature by up to 15 degrees. Soldier Rain Raksha is a high-strength, fiber-reinforced elastomeric liquid-applied waterproof coating.

It is formulated with resilient acrylic copolymers and reinforcing fibers. Coming to the new growth drivers, in that, in the new business, we have had robust growth in new businesses, and our salience of new business has increased further compared to the previous quarter and for the year.

The project business has also expanded to more towns. It has registered a high double-digit growth, and the salience of projects for KNPL has further increased.

We have given some of our marquee projects that we have painted: the Jharkhand High Court, the Vidhan Sabha at Raipur, and the General Pool Residential Accommodation at Raipur. Coming to our influencer program, our Paint+ Service is today present in more than 250 cities, and we continue to invest aggressively in the next-gen service.

Our architect and interior designer program, which is Illuminati, today is present in more than 45-plus cities, and it is also growing healthily over last year. Our secondary program for painters today covers more than 1.2 lakh painters which are associated with the program, and secondary salience to primary has also significantly increased.

Coming to our retail platforms, we had two platforms earlier, which was the NextGen Shoppe and the Shop-in-Shop. We have now evolved and migrated to a new retail platform, which is called the Nerolac Paint+ Zone, and almost 250-plus stores have been opened across India.

Coming to branding and marketing, our brand and marketing investments have remained strong with impactful campaigns running across both television and digital platforms. These initiatives are designed to deepen consumer engagement and reinforce Nerolac's identity in the mind of the audience.

The 'Ghar Ki Raunak' program or campaign has beautifully captured the emotional essence of home, strengthening our bond with consumers by celebrating the joy and pride of living spaces. In addition, our association with the Asia Cup has amplified our visibility on the national stage, connecting Nerolac with millions of passionate fans, and further cementing our position as a brand that resonates across diverse audiences.

Together, these efforts showcase how Nerolac continues to blend heritage with contemporary relevance, ensuring our brand remains vibrant and top of mind. Now coming to the industrial business, the industrial paints serves diverse applications and thus creates diverse business opportunities in the three segments of powder, general industrial, and high-performance coating.

As is seen, we have shown some areas in each segment that the company is present in. Coming to new products, our focus has been on enhancing finishes and functionality, offering versatile applications, and prioritizing environment sustainability.

Some of our products we have tried to spell out here: In the passenger vehicle segment, we have introduced products which are energy-efficient wet-on-wet systems, structural primers for chassis, as well as premier clear finishes. In the two- and three-wheeler segment, we have introduced low-bake technology.

We have got anti-corrosive underbody protection products and high-gloss clear coats, which we have introduced in this year. For commercial vehicles, we have introduced super low-bake color coatings, anti-corrosive casting sealers for castings, and clear adhesion promoters.

Now when it comes to high-performance coating, again on the same three platforms the development has taken place. In general industrial and high-performance coatings, we can see that some of the products which we have introduced is highly flexible, RoHS-compliant coil coatings, which withstand severe forming operations; high-performance outdoor coating systems, which have long-term UV resistance; and thermal insulating coatings.

For powder coatings, we have introduced low-bake one-shot matt powders, fusion-bonded epoxy topcoats, and coatings for furniture and consumer durables which have got high scratch resistance properties. Coming to the performance highlights of industrial, passenger vehicles, as I mentioned earlier, has had healthy demand.

New models and SUVs continue to support the passenger vehicle growth. In the two- and three-wheeler segment, we have witnessed high double-digit growth, and growth was supported by low interest rates and easy financing options.

In the commercial vehicle and tractors, again we have had double-digit demand, and a strong harvest season supported this demand. In addition, we have a new segments where further increase in salience of specialized products in passenger vehicle is where the company is putting a thrust.

In the ARF business, as far as the business growth is concerned, there has been moderate demand. There has been a thrust towards premiumization where the salience of premium products have increased, and there's an active conversion of bodyshops from solvent-borne coatings to waterborne coatings.

There is a lot of digitalization of service operations, which is being undertaken to improve the customer experience and interaction. In performance coatings, the liquid segment witnessed strong growth, channel sales witnessed very strong growth, and we maintained the premium salience.

In powder coatings, the demand showed good recovery in Q4, and we witnessed mid-single-digit growth. Channel sales witnessed very good growth.

Among the accolades which the company has won, it has won quite a few accolades during the year. In decorative, we have won the Dragons of Asia marketing awards in quarter two '25, where we won six awards for the Dukan-It-Yourself campaign in the Mahakumbh.

We won the Gold Winner Ambient Media award, the Goldfest award, seven baby blue elephant awards. In industrial, we have had some excellent awards: one from TAFE at the Global Supplier Meet 2025 where we were awarded the Best Supplier Award; Toyota Kirloskar Motor company has awarded as the Best Raw Material Supplier; Maruti Suzuki has given us the Superior Performance in Safety Award; Suzuki Motorcycle has given us the Best Vendor Award, and as well as the Cost Down Award, which we got from Suzuki Motorcycle.

Coming to the area of ESG, KNPL was rated in the B category in climate change and water security in the CDP cycle 2025. We have been awarded a bronze medal in EcoVadis.

That result places KNPL among the top 26% of companies assessed by EcoVadis 2025. We have been recognized in the strong category by CRISIL ESG ratings 2025.

We have been rated in the top 12 percentile companies within the chemical industry group in the S&P Global Large and MidCap ESG Index 2025. We have been rated in the top and ranked 20 out of 577 companies in the chemical industry and have received a low risk rating, indicating lower ESG risk in 2025.

Coming to our CSR initiatives, through our CSR initiatives, we remain deeply committed to driving positive change across multiple dimensions of community well-being. Our efforts span skill enhancement, ensuring environmental sustainability, and community development, while also prioritizing preventive healthcare and sanitation.

At the same time, we continue to invest in promoting education, empowering individuals, and fostering inclusive growth. These initiatives reflect Nerolac's ongoing dedication to giving back to society in a meaningful and sustainable way, creating impact that uplifts communities and builds a brighter and healthier future for all.

Coming to our financials, for the quarter four on a standalone basis, the revenue growth is 7.6%, PBDIT was up 21%, and PBT before exceptional items was up by 12.8%. For the year on a standalone basis, net revenue is up by 3.2%, PBDIT is up by 1.2%, and PBT before exceptional items was down by 0.9%.

For the consolidated basis, growth in quarter four, revenue was up by 7.5%, PBDIT was up by 30.6%, and PBT before exceptional items was up by 23.2%. For the full year on a consolidated basis, net revenue is up by 2.9%, PBDIT was up by 3.4%, and PBT before exceptional items was up by 1.4%.

We have improved our working capital during the year, though the number shows an increase, but our special focus has been on reduction on inventory. The number of increase is because of investments.

As far as the dividend is concerned, the board has recommended a dividend for the year of 250%, which comes to ₹2.5 per share. When it comes to capex, the capex is more or less normal and in line with previous years.

Coming to risk and outlook, among risks, West Asia crisis leading to supply chain disruptions is one of the key risks that we see in this quarter; high commodity prices due to crude oil price surge and impact on downstream products; import cost surge due to rupee depreciation. As far as the outlook is concerned, as per RBI, construction activity momentum will be sustained.

Paint price increase on account of steep material inflation is being taken. Considering the inflationary scenario, demand visibility remains more or less a wait-and-watch.

With that, I come to the end of the presentation, and I now open up the floor for question-answers.

Thanks. My first question is overall competitive intensity.

We have seen severe cost inflation last two months. As a result of that, we are seeing price hikes by almost all the paint players, including new players, fairly being similar.

On advertising, promotional intensity, are you seeing some reductions from the new players because they have never seen, obviously, this kind of inflation given their very short cycle? Any evidence you have seen, either free grammage or in terms of dealer incentive?

As far as we understand from our sources, that on economy that free thing has been withdrawn, but I don't know. There's a mixed response always comes from the trade, but I don't know what is the policy.

That's what you understand. On advertisement, see, I think whatever we are seeing in month of April was committed much before this geopolitical problem and inflation.

I think they would have to go through it. I don't think there was much option left.

Now it remains to be seen as to remaining months in quarter one and quarter two because this time Diwali is late, we might see some adjustment there. It might happen.

As far as current quarter is concerned, I think April been committed, I think that intensity we could see that. It was there.

People spend money on advertisement as well in month of April.

Right. One related question is generally when we see sharp inflation in FMCG paints, local players lose market share.

Now you are a respectable player in the legacy overall market share, but overall your size is much smaller than, say, the two legacy players and the number one new player is also very aggressive. In that context, are you gaining from the local players or are you now starting to lose some more share to these three players given you have a overall pricing which is a bit delayed in the B2B, and definitely those three players, those two legacy and that new player, are very aggressive?

Overall, you see this situation as a positive or a negative?

It's very difficult to estimate how much unorganized players are gaining or losing, but we believe, I think, they are there in the pockets, and in difficult times, they go down, and again they emerge again. Very difficult to say as to whether we're gaining or not.

What we are definitely seeing is since November, there has been constant uptick in the market, and I think that is a positive sign. This trend is only improving.

Now if I talk about November, December, Jan, there was no sign of any war or nothing of that sort. It was pretty stable.

Raw materials cost was benign. I think with that thing also, overall, I think market is quite, I would say, bullish in a way for decorative, and this might be temporary pause, I would say, for unorganized sector.

Remains to be seen. We have no data as such to really support that, and very difficult, I would say.

Yeah.

Sure, thank you. That's all from my side.

Thank you.

Right, Avnish. Thanks.

Hi, sir. Thank you for taking my question, and congrats on a good performance.

Firstly, just few bookkeeping questions. What was the growth between deco and industrial given autosales were relatively strong this quarter again?

What is the difference in the growth in both of those key segments? Also, in deco, if you can help us understand the volume growth and mix impact for you?

Last quarter, it was quite negligible, but what was it for this quarter? That's my first question.

As far as volume-value gap for decorative is concerned, it is again not very significant. I think that is how I have been stating right from quarter one that our focus is very clear.

We will be focusing on select market where you want to gain market share and concentrate. Second thing is profitable mix is very, very important.

We have cautiously curtailed our sale into items which are not profitable. That might be seeing in terms of value, but I don't think that's very critical going forward.

I think profitable growth with good margins in decorative is the key focus. We are confident the progression that you have seen from quarter one to quarter four, I think that journey, I think, we are getting a lot of confidence now that I think we are on right path.

I think there's no point in getting into this mad rush of market share at any cost anywhere. That is not the idea.

I think it's important to deploy resources carefully, and it's the time where actually resilience will matter. I think if we pass through this, I think future is very bright for decorative paint as far as company is concerned.

That is the roadmap that we'll have in future also. As far as auto is concerned, yeah, auto did grow by in double digit.

We also have very sizable presence in industrial, which grew by single digit. Overall, I would say it was mix, slightly mid-digit plus as far as industrial is concerned.

As far as decorative is concerned, then obviously it'll be also in that range. Overall, I would say very balanced growth this quarter, and that too, I think, with good improvement in contribution and overall profitability.

Understood. Thank you for the roadmap.

That brings a lot of clarity there. Secondly, on the cost inflation that we are seeing, if you can highlight the kind of price increases that you have taken that will set in 1Q from here on?

Also, given that you have a higher exposure to B2B players, historically, we've always seen Kansai seeing some initial pressure on margins because the price hikes from B2B usually come with a lag. How are your discussions with the B2B players?

When do you expect the price hikes in industrial business to come through? The kind of price increases that you've taken in deco?

Deco, I think we were the first one to go in the market with price increase. First increase we took in month of March itself, about 25th March we took the increase, and then followed by 10th April, followed by 21st April, and now it will be 11th May.

This March was about, I think, 2%. After that, it was all 5% to 6%, 5% to 6%.

Net-net, I would say we'll be higher single digit as far as price increase is concerned in decorative as of now. In industrial also, I think auto also we are very strong in terms of negotiation.

We've got a good breakthrough that our price increases which have been granted. Obviously, I can't say it for entire auto.

One thing is very clear that it might be slightly delayed negotiation, but it is always with effective from. I think that is very important.

I think with that in mind, I think we are not losing out on inflation as far as profitability is concerned. Maybe it will be slightly here and there in terms of timing.

In case of industrial, there's a good mix of OE as well as channel. Now when it comes to channel, like decorative, there also we announce the price increase, and that new prices are effective mid-April itself.

Overall, I would say it's a pretty satisfactory price scenario, and I think we are very cautious about our overall profitability when we are getting into the business, and that is how the team is working on. I think as far as our investor community is concerned, I would urge don't look at it quarter-wise what is happening.

I think it's important to look at on a longer run as to how is our overall strategy and direction is concerned. As far as profitability is concerned, definitely, pressure is on team in terms of taking the price increases, and direction is fairly positive.

That is what I would like to comment.

Got it, sir. Thank you very much for that.

Lastly, can I ask you if there is any margin guidance for FY '27 that you would like to share and where do you think we will probably be aggregating towards for FY '27 on consol and standalone both?

Historically we have been talking about 13% to 14%, I think that is what endeavor is. This year also, I think we were in that range only.

Definitely, we would be there. Though our endeavor is always to go on higher end, but as of now, I can leave it at that.

Got it. Thank you.

Wishing you all the very best, sir.

Thank you, Mihir. Thanks.

Hello. Am I audible?

Yeah.

Good evening to the management. Thanks for taking my question.

I have two questions regarding margins and cost structure side. Firstly, around the raw material on the event of crude-led inflation and rupee depreciation, what is EBITDA margin sensitivity to a 5% to 10% increase in input cost?

Do you have [unclear] in this quarter? I think

I could not hear you, but if I understand question correctly, you're talking about inflation and its impact on profitability. Is that right?

Is that what you want to ask? Yeah.

As I explained earlier, I think we are going ahead with the price increase and trying to pass on inflation as much as possible. Second thing, there is inventory that also we carry both on FG and RM, to that extent there is a cushion available.

Obviously, the inflation already taking place will come in the effect sometime. We are hopeful that by then price increase also kicks in.

Our endeavor is to neutralize. Some impact cannot be ruled out.

Okay. Cool.

Sir, second question on your industrial segment side where you have mentioned increased salience of specialized products in passenger vehicles. What percentage of auto coating revenue now comes from this high-value product, roughly estimated?

Being leader there, I think our endeavor is to increase penetration into each vehicle that gets produced. In a vehicle, there are many, many areas which are still unexplored.

We are trying to tap that each surface if there is a paint application that is possible. Now the areas which are left are very, very niche, but they are very, I would say, premium in nature.

I think that is the one area which now will tap so that more of a car I think is our endeavor, and that's the specialized paint we talk about.

Okay. Just continuing with this part, sir, on performance coating and powder coating showed recovery and growth in this quarter.

What is the current utilization level in these segments and capacity headroom for growth going forward?

In case of industrial, I think in powder and industrial liquid coating, we have sufficient capacity. We should be operating about 70% to 75% as of now.

Sir, you haven't answered the second part like segment's capacity headroom for growth in this segment.

Sorry? Not able to understand the question.

You have answered the current utilization. I'm asking about the segment capacity headroom for growth in this segment.

You are asking for outlook?

Yeah.

I think like we have been reporting in growth areas like performance coating, we have been growing in double digit. I would say that's our endeavor.

I think in infrastructure spend as long as it keeps happening, and we start expanding a segment which had briefed in our strategy session in month of February, I think that's our endeavor to really grow double digit as far as performance coating is concerned.

Okay. Thank you.

Hi, sir. Good evening.

I hope I'm audible.

You're audible. Yeah.

Sir, historically, Q4 has been a sequentially weaker margin quarter for us because of the mix being tilted towards industrial. This time, if we see the margin pressure sequentially was much lower compared to some of the historical Q4 numbers.

Is it mainly because the scale was a little better? We are improving sequentially or any other factor that you would like to highlight here?

One is in both industrial and decorative, of course, performance is better. In decorative also, mix-wise, we are far better than last quarter.

That, I think, has resulted into overall contribution improvement.

Mix you're saying individually in both industrial and deco?

In both. In both.

Yes.

Okay. Great, sir, great.

Secondly, after the price hike that you mentioned, the four set of price hike that you've taken, have you seen any impact on volumes so far? I know it's not a long period since the price hikes have been implemented, but any color you can give on how the volumes are shaping up?

As of now, frankly, there is no impact we've seen. If really this geopolitical situation obviously someday we believe it is getting over, someday again we think it's not ending.

I hope if things change, I think we should be in a stable zone as far as quarter is concerned.

All right, sir. Got it.

Thank you.

Thank you.

Sir. Hi.

Thank you for the opportunity, and congratulations. Sir, I just wanted to understand on your outlook for the next year.

You indicated that November you've seen an uptick from the industry growth perspective and for you as well. The context that till now you haven't seen any significant negative impact, but how would the trend in terms of secondary sales?

Now probably much of the activity would be primary, or the secondary sales also, because price increases have been taken, stocking up might be happening. How do you assess for the full year, if you could just give some sense on the industry growth?

Frankly difficult to predict at this stage. If I have to go by the recent trend of last five months, if that is anything to do with the overall market and economy which concerns paint industry, I think there has been significant improvement in all the verticals.

I think if that is the indication which was pre-war, that means there is a fundamental things are getting corrected or changed, I would say that's the I would say green shoot that I'm seeing. If this war gets over soon, I think then there should not be any impact as the overall year is concerned.

Of course, if this gets dragged on and then it starts impacting our daily lives in terms of fuel increase and all those other costs going up, then I think it is anybody's guess, and if it happens to us, it might happen to entire, I would say, other sectors also which are consumption-driven. It's very difficult to guess as to what will happen.

As of now, I'm only relying on past five months trend, and I'm pretty hopeful that if that trend has to sustain, that means we should have another good year, I would say.

Sir, lastly, on the project side, if you could give some indication on the new initiatives, new businesses, and the projects, what would be these as a percentage of our total sales, if that's a possibility?

Project, in a sense, decorative projects you are saying?

Yes, yes, sir. Yes.

I think decorative project should be now about 10% plus, yeah, 10% plus.

The new businesses, which includes waterproofing, construction chemical, and others, even the wood finish?

I think that also should be 10% plus, but slightly on higher side than projects.

Okay. Okay.

That's it. Thank you so much.

Okay. All the best.

Hello. Am I audible?

Yes.

Yes. Hi, sir.

This is Pratik Gothi from HSBC. Thank you for taking my question.

I have two, please. On dealer incentives, if I remember correctly, dealer incentives were increased across the board by all companies, I think, when input costs were benign.

Have you seen incentives lowered now that cost inflation is back? This is for you, and if you have a comment on the industry dynamics as well, that'll also be helpful, please.

See, dealer incentive is also function of time, and it varies month on month. April typically is also high stocking month otherwise also.

Forget this year with war and price increase, it would have been slightly accentuated, but otherwise also it happens. I would say it's very difficult to comment on just one month of this inflation what has happened, but I think it is pretty much in line with what we would have seen otherwise also in last year or otherwise.

Now it remains to be seen that if this inflation persist in next one or two months, then what happens. Definitely, whenever there's a price increase that happens, incentives are obviously adjusted to certain extent.

That is a normal practice which always happens in the industry.

Understood. On paint demand, if we split the deco markets into projects business, construction chemicals, wood finishes, and what we can call as core retail deco paints business, basically business that goes through the dealers, have you seen any improvement or growth in the core retail deco paints business?

Yes, we have seen improvement.

Okay. In terms of mix, you mentioned that mix had improved for you, can you give more color over there, how is that mix improvement coming about?

Is that Nerolac Plus range that you have, or any color on that would be helpful, please?

I think in presentation this time we detailed out on a new products. In our quarter four, I think our new product contribution is very high.

I think that is one I think is contributed, and all these products are launched in emulsion category, which is obviously as such as a mix it is considered premium. In that also, when we classify as economy, premium, super premium, there also super premium has done well.

I think that is the direction that obviously has taken. New product in that also it's a super premium doing well.

I think all in all, that is why call out as a overall mix being better.

Understood. Okay.

That helps. Thank you.

Thank you.

Hi. Thanks for the opportunity, sir.

Sir, did I hear you correctly that you said that we focused on market share gain and we have gained market share in some focused market?

Yes, you are right.

Sir, which region or which markets this would be?

No, no. It is, when we talk about focus market, it is pan-India.

It is not like North, East. There are specific strategies for each towns, and we are focusing on that to really gain share there.

That is what is working very well now.

Sir, this would be urban largely?

I would say T2, T3 mainly.

T2, T3. Sir, just wanted to understand the character of the competition, which is now put to test.

Then this time, I think there are two new players who are actually facing this inflation for the first time. Thankfully, we have seen that piece, the large listed players have taken price hike, but how the new competition is behaving and how the long list of or long tail of unorganized or large unorganized guys are behaving in this environment?

I think they also took price increase. In fact, they had announced price increase much before this war itself, one in Jan, one in Feb, because they were anyway, I think, below market standard price.

They wanted to reach and bridge that gap. That is one.

After that, again, this inflation has hit, and I don't know as of now whether really they have taken further price increase. Now so as far as that remains in terms of what competition is trying to do, which is a new entrant.

On unorganized sector or small player, obviously, there'll be impact which they'll have because of their capacity to absorb the inflation. More than inflation, I think it is availability also which is causing a trouble.

Definitely, there'll be some, I would say, impact that might be happening with unorganized. In month of April typically, it's a big stocking month, so as such inventory is stocked of all the leading brands.

In this month, really it's very difficult to say that whether unorganized got impacted and there's a sale that shift is happening. Very difficult.

It will be only seen in next, I would say, three to six months where that impact is really been seen where there is an extraordinary demand that is coming of certain products. Typically, these are low-end products like primers and all.

I don't see there'll be super premium, premium emulsion category may there's a major play. It's all standard products, which I don't think will be any significance as far as we are concerned.

Got it. Sir, last question.

Our margin guidance of 13% to 14%, is it assuming ceteris paribus on raw material to stay like this or there is a built-in assumption that second half they kind of reverses and gives us some room to have that benefit?

I think there is a strong, I would say, belief that things will change. I think we have seen some signs, and some of the raw material prices also got corrected now.

I think the temporary surge that happened because of this uncertainty and panic, I would say, is now stabilizing. We believe that, I think, things should stabilize.

Quarter-on-quarter very difficult to project because timing-wise, there is always a issue. I think overall, I think things should be better.

Thanks. That's all from my side, sir.

Thanks.

Thank you, Tejas.

Hi, sir. My questions have largely been answered.

I just wanted to clarify, you said on the decorative growth and industrial growth this quarter, I missed that comment, sir. If you could kind of just repeat how much was that growth momentum in each of the segments?

Avi, in industrial, I was saying there was reference to auto being double digit. I said, yeah, it was close to double digit.

We have also have industrial section, which is also large, and that is where and my answer was in relation with our strategy where we focus on extremely premium, profitable mix now, and we are doing away with all low-end and non-profitable items. With that, I think I was talking about slightly higher single digit as far as industrial is concerned.

Even deco, I think we were pretty much mid-single digit or lower than that, around that. I think overall, I think it was better show as far as mix is concerned.

Got it. Got it.

Very clear. Sir, just on that front, on the industrial side, as we move now, there is obviously some inflation concerns, but auto industry, is my understanding correct that the growth momentum has sustained till this because there was a clarification that you said that in decorative the demand momentum has sustained, but is industrial also the similar kind of situation, especially autos?

It is holding on.

Okay. Sorry, if I may, just from a thought perspective, would that increase the ability to take price increases in that sense or would you kind of agree or what are your comments on that, sir?

That would be helpful. No,

I think even, Avi, otherwise also, I think whether it's a low phase, high phase, I think definitely we are looking at margin, and hence, there is something which we will not forgo, and team is after price increase. Now if you look at this scenario, actually this is not a standard kind of a thing.

Entire raw material has undergone change along with dollar appreciation. I think customers are listening very carefully, engaging, and I think based on justification, they have already started giving us price increases.

Sir. Some price increases have already happened.

Any quantum you could

In auto, it's very difficult, Avi. You'll appreciate that.

Yeah.

No, no, fair enough, sir. That's all from my side.

Thank you very much, sir. That's all.

Thank you.

Yeah. Sir, effective price hike would be, I guess, in low teens for us as well as the industry, I guess.

If the war ends and if crude corrects materially, will there be price cuts or we will try to increase ad spends or we will try to increase the margins? What will be the strategy of the company, question number one?

In terms of how do you see the outlook for FY '27 considering there will be steep inflation not just in paints, but in general, there is a possibility of material inflation across commodities in India. How is the outlook?

If you can share outlook in terms of decorative projects, as well as industrial and auto. Yeah.

Thanks, sir.

Okay. Auto, as I said, it looks like demand is pretty strong, and most of our customers are talking about long waiting list as far as their products are concerned.

We are hoping that things should be okay for auto as a whole concerned. In other industrial segment also, we have not seen any change.

I think infrastructure and even otherwise appliances and all that is going pretty standard and normal. We hope that also continues.

Coming to deco, I just mentioned about last five months trajectory, and I think that has also gone through April. We believe that things should be okay as far as deco from demand perspective is concerned otherwise also, unless something dramatically happens and there's a inflation which is beyond means than what we saw maybe three, four years back.

Then, of course, it's a different story. As of now, it's too difficult to have a extreme assumptions in both ends, very, very difficult.

It's like a crystal gazing. Now as far as price increase topic that you have concern and inflation or deflation, if inflation continues, then obviously our price increases are there, and we might take further price increase.

Second thing is if there is a deflation that happens, then typically what industry does in a short term is obviously the scheme gets adjusted, and if it is making sense, it's always passed on. That happens.

When price increase is there, scheme gets adjusted. Reverse also happens when there is a deflation in a short period.

Obviously, if there is a sustained stability we see with the deflation, then obviously price will get corrected downward. We don't see that happening.

The reason is crude of $60 or $70, I don't know whether we'll go back so soon there. This structural imbalance that got created with all this shipping lane disturbed and all of that, I think also might take some time to settle in.

I think we have to live with the situation, I guess, for next six months with this. If things improve, then maybe second half we might see a dramatic change.

That's what at least I believe, and that's how we are working with. Yeah.

Okay. Sure, sir.

Last question: Assuming crude settles at, let's say, $100, will there be any requirement to take further price hikes or current price hikes of low teens are, in a way, sufficient?

I think with $100, I think it should be okay.

Okay. Sure, sir.

This is very helpful. Many thanks.

Right. Thank you.

Hi, sir. This is Percy Panthaki here.

I just wanted to ask one question on the other expenses line for this quarter. It is down and it's in terms of basis points about 150 basis points down YoY as a percentage of sales.

In absolute terms, it's about 1 1.5% down YoY while the sales has grown at 7-8%. Can you give any reason why there is such a big 150 basis points kind of saving in this cost item?

If you look at absolute increase, no, from last year to current year, it is same, right? Because of same increase, you are seeing that drop out there.

Yes, but as the scale of the business increases, this cost would also normally increase, right?

No, there is a fixed-cost leverage. Optimization has also been done.

That also I had mentioned earlier in quarter. We are also looking at cost efficiency, spend efficiency.

All that is also coming in now.

Okay. There is no full year truing up in Q4 which is causing this movement, is it?

No, no, no.

Okay. That's it.

That's all from me.

Right, Percy. Thank you.

No, I think nothing. Thank you so much.

I think it is first time we conducted our investor meet in the evening at 5:30. Thank you all for joining, and hope to see you in next quarter.

Thank you.