Thank you and a very warm welcome to all of you to today's earnings call for quarter four of financial year '26. I'll take you through a short presentation giving the details of this quarter's presentation and the annual presentation, and then subsequently open it up for question and answer.

The first part is dealing with the standalone results of quarter four financial year '26. Volume growth of 11.8% driven by healthy traction across key business segments.

Value growth stood at 6.7% during the quarter. Indian operations market share amongst listed peers remained strong at slightly above 20%.

Gross and operating margins expanded to a 12-quarter and 10-quarter high respectively, supported by favorable mix, operating leverage, and, of course, reduced raw material cost. Operating profit grew 18% nearly with both sequential and year-on-year margin expansion.

PAT before exceptional items increased 23%, while PAT after exceptional items grew 38%, aided by insurance claim recognition during quarter four. Now if we look at the decorative business line, delivered strong double-digit volume growth with sequential improvement in value performance, supported by pre-price hike channel pickup and premium emulsion traction.

Construction chemicals and waterproofing continue to outperform, sustaining robust momentum across key markets. Protective coatings registered healthy high single-digit volume and value growths on a strong base.

Automotive coatings delivered strong double-digit volume and high single-digit value growth driven by healthy demand in two- and three-wheelers supported by lower financing cost and GST cuts. GI business posted robust double-digit volume and value growth, while powder coatings witnessed sequential and year-on-year recovery.

On a CAGR basis, if we look at the two-year, three-year, and five-year, for the quarter, if we look at the two-, three-, five-year volume, it is more or less at that level of 9% to 11% in terms of the volume growth. In value growth again, it hovers between 5% and 7%, it's 5.5% for a two-year CAGR, 4.6% and 6.9%.

On operating profit level, growth, 18.8% for two years, three years it is 10.2%, and five years it is 8.7% for the quarter. Quarter seems to be, quarter four is much stronger in terms of operating profit growth whether you look at, the two-year figure, and even in the volume, value, it is pretty comfortable.

On the annualized basis, however, though the volume growth is similar in two, three, and five years, the value growth reduces. One was primary reason was, of course, the price drop which we had about two and a half years back, and that has impacted both the three-year and two-year CAGR.

The operating profit also shrunk in the last two years a little bit, the CAGR has been at 0.1% for the two-year CAGR. Now the trend for gross margin has been very encouraging this quarter.

It has been the highest in the last 12 quarters, in fact in the last 16 quarters this was the highest at 42.3%. Margin trajectory remained resilient despite elevated competitive intensity and sharp rupee depreciation.

We lost some profit element because of the rupee depreciation, but in spite of that, our gross margin was at 42.3%. Gross margin improved sequentially and year-on-year, aided by favorable mix enrichment, waning impact of economy segment price cuts, and partial benefit from withdrawal of anti-dumping duty on titanium dioxide.

In terms of operating margin also, it was one of the highest in the last 10 quarters, it was the highest in fact at 18.3%. The robust operating profit was driven growth of 17.8%, gross margin expansion by 110 basis points, and operating leverage and sustained cost optimization measures continue to support margin expansion amid competitive market conditions.

If we look at the trend quarter-on-quarter beginning from quarter three of financial year '24, this is the highest at 18.3%, 10-quarter highest operating margin was achieved this quarter. Decorative business: The decorative segment delivered double-digit volume growth while value growth was supported by improved product mix across premium and economy emulsions.

New offerings in premium emulsion categories such as Color Plus and Color Plus Glow performed well, while WeatherCoat Anti Dust in exterior segment continued to outperform with double-digit growth. Construction chemicals and waterproofing continued to perform well.

Wood coatings business continued to witness robust double-digit growth across markets. Retail footprint expanded to 1,900 stores with over 700 additions during the year, while tinting machine installations crossed 10,000 units with 2,600-plus deployments in quarter four alone.

Industrial business: Protective coatings delivered strong volume and value performance during the quarter, while operating margins remained at high teens. Automotive coatings registered healthy growth in both volume and value, driven by sustained traction in the two-wheelers segment.

If you look at the financial results, this is how it looks. Total income from operations had a growth of 6.7%, operating profit 17.8%, PBIT is 23.6% growth, profit before exceptional item and tax 25% growth, PBT grew at 36.6%, and PAT at 38%.

There is one exceptional item which is in terms of the insurance cost due to the fire which we had in our Barasat warehouse. We had taken a provision in quarter one of this year which got reversed when we got the money in quarter four.

That's about 36 crores which came in, which took up therefore the profit PBIT from 25% to PBT at 36.6%. Overall a good sales growth and a very strong operating profit and PBT growth.

In terms of the standalone annual performance highlight, it's a high single-digit volume growth. The value growth was relatively muted.

The value-volume gap was due to higher contribution from construction chemicals, textures, and tile adhesives, which I had mentioned in my last call as well, economy segment price cuts, and some impact of extended monsoon when this year has been had been quite bad, and we lost out a significant portion of our exterior emulsion and roof coating sales, which is high-value items, in quarter two and partly in quarter three as well, which is why the annual value growth was slightly depressed. Automotive coatings outperformed on improved demand post GST cuts, while protective coatings witnessed recovery towards the end of the year.

Gross margins improved year-on-year, driven by favorable mix, muted RM prices despite competitive intensity and sharp rupee depreciation. Operating margins moderated slightly in FY '26 due to muted value growth impacting operating leverage and mark-to-market impact from rupee depreciation.

YTD margins, however, remains within the guided range of 15% to 17%, which we have always maintained. On a 12-month basis therefore, if we look at it, our income from operations grew at 2.5%, operating profit at 0.7%, and PAT at 1.7%.

We introduced a few interesting, innovative products. One of them is the Cool range: Roof Cool & Seal, Tank Cool, and WeatherCoat Anti Dust Cool.

In the summer months when in this heat, these are products which will probably be very, very useful for the Indian consumer, especially in the north where the heat is very strong this time. We expect good sales coming out of this set of products.

The another product which we have is the Roof Cool & Seal, which is doing very well, in fact in April it had a record sale. This product continues to go from strength to strength.

This is a product applied on the roof which protects it from the heat and also seals it from water leakage, which is why the name Roof Cool & Seal. There is a set of products which we introduced in quarter four called Color Plus Glow, and then we had introduced earlier Color Plus.

Both of these products in the mid-premium segment, actually in the premium segment is where it is placed. We had a brand called Rangoli.

In that segment itself, this has been introduced. It's doing quite well and very well accepted in the market today, is getting spread across the country, and we have good expectation from this particular brand this year.

We introduced metallics, and both Silk Metallics, which was introduced in quarter four, and before that in quarter two we had introduced Luxol Metallics for metals. This Silk Metallics is for the walls, both of which have started doing very well.

We had again a record sale of these two products in the month of April. This is Luxol Metallics, which was introduced in quarter two.

We have, of course, many stores across the country, in the urban areas specifically where we have this different model with SIS stores coming up in good numbers in the weak urban markets of ours. In terms of consolidated results, Bolix, the top line and operating profit growth was strong, partly aided by the PLN appreciation, the local currency of Poland.

BJN, Nepal, revenue growth and profitability remained subdued during the quarter due to the elections and the resultant turmoil there. However, improvement in political stability along with recent price increases is expected to support recovery in the coming quarters.

We have already seen robust double-digit growth in the recent one, two months, and therefore Nepal is back in growth path. STP Limited, top line continued to be impacted, operating profit muted due to scale.

We had consciously there was a incident in our Jamshedpur factory in STP, and we had to close it down for two, three months to get it repaired and running again. However, we are slowly getting gaining back the customers in this particular it used to supply to some OEMs, and therefore it had a little bit of an issue last year.

We are expecting to come to the growth path in STP again. We were growing at a very fast pace, and we expect the growth rate to be restored.

However, gross margins improved on account of the mix change which happened due to the closure of that factory. SBL Specialty Coatings, revenue growth at mid-single digit, improved sequentially and year-on-year.

Profitability, however, was affected by scale, high RM prices, and some impact of mix. Berger Becker Coatings, robust sales growth on a low base and strong profitability driven by scale and margin expansion.

It did very well, coming back from the fire incident the year before, and it had a slightly weak base, but it had strong double-digit value and profit growth. Berger Nippon Paint Automotive Coatings, strong double-digit revenue and profit growth backed by buoyant demand in the passenger car and SUV auto space.

Both Becker Coatings and Nippon Coatings, of course, are joint ventures where we have 49%, it doesn't get added to our sales, but the profit is added to the extent of 49%. Now if we look at the results, total income from operations, 6.1%, operating profit growth, 12.6%, largely impacted by underperformance of STP and Nepal, both of which should do much better this year.

PBIT, 13.1%, profit before tax grew at 25.3%, PAT at 27.5%, and total comprehensive income for the period grew at 38.4%. On the 12-month basis, again, slightly muted, but growing at 2.9%, operating profit marginally negative at 1.2%, and PAT at minus 4.6%, total comprehensive income for the period growing at 1.7%.

The net cash position is positive, and has been growing. As you can see, in financial year '24 we were at 351 crores, it has moved to 689 crores last to last year, and then last year '25-'26, it has improved further to 1,198 crores.

Group continues to remain net cash positive. Business outlook for financial year '27: Demand conditions continue to be closely monitored with gradual recovery expected across decorative and industrial businesses.

Staggered price hikes from March onwards expected to support gross margins and rising raw material costs, while sustained cost optimization initiatives likely to keep operating margins within the guided range, which we have always maintained. Competitive intensity expected to remain elevated.

Growth momentum expected to be led by strong traction in construction chemicals, waterproofing, and wood coating segment and upcoming product launches. Continued investments in branding, distribution expansion, and stores-led urban market initiatives should yield positive results.

Protective coatings business outlook remains positive, supported by expected increase in government capex spending. West Asian disturbances, volatility in crude-based derivatives, rupee depreciation, supply-side disruptions, and potential inflationary pressures remain key monitorables for the sector.

Thank you. We can open up for questions.

Hello, Mihir. I can't hear anything.

Hello. We can't hear anything, Mihir.

I think we can...

Yeah.

Hi, sir. I hope I am audible now.

Yes, you are. Yes.

Great. Thank you.

Thank you for that. Firstly, congrats on a great set of numbers.

This step-up in volume growth that we are seeing, what according to you would be the impact of pre-buying before the price increases, and how should one think about the 1Q volumes? Will this pre-buying have any impact on 1Q volumes?

That's my first question.

There is some impact, but obviously the volume growth was improving month on month. We saw an improvement in January from December and February from January, and then March it was slightly better than February as well.

It's not fully as if it is because of the price increase. The second is that in quarter one as well, there have been actually three price increases, and the fourth one is coming up on the 15th of May for us.

There will be a healthy growth in quarter one as well.

Understood. Any level of secondary sales for 4Q that you think that you can share?

Secondary sales had improved from what it was. As I said, Q3 was better than Q2 and Q4 was better than Q3 in terms of secondary sales also.

If we saw, say 11.5% to 12% approximately in terms of volume growth, then I would say that the secondary would be around 8% to 9%, and 3% to 4% would have been the bunching up of purchasing which would have happened due to the price increases.

Got it. That is clear, sir.

Thank you for that. Secondly, sir, given the cost inflation, what is the level of cost increase that you are seeing in RMs currently?

What is the cumulative price increase of these four price hikes that will sit in 1Q? Should one expect margins, given the timing issue, to compress in 1Q and to what level?

More or less whatever has been the raw material price increase so far, unless the prices again start shooting up, you never know these things. As of now, we are more or less covered.

Except for solvents where there might be still a gap, almost every other product category, we are more than adequately covered as far as price increases are concerned compared to the raw material price. Of course, the timing, a little bit of delayed price increases would have happened, but then we were carrying some stock as well from earlier period.

Therefore, more or less it should neutralize each other. I don't see any major impact in the profitability that way.

Fantastic, sir. Fantastic.

That holds true for decorative, but for industrial, there might be a little bit of a delayed price increase because there you need to negotiate. That's a smaller portion of our business, primarily in automotive where this is there, that you need to negotiate.

Normally they give from prior period the price increases, and hence that might impact a bit, but otherwise it's fine.

Understand. It's a B2B usually.

Sir, lastly, I wanted to check on the level of volume growth that one should expect in FY '27 given '26 has a favorable base. Also, it is a El Niño year.

Do you think that there can be more painting days and it can lead to higher volume growth? Can one expect double-digit volumes for full of FY '27 with no impact on margins?

It's a difficult question to answer, Mihir, at this stage. There are negatives and there are positives.

As you said, there is this favorable base and at the same time more stability in the competitive intensity. These two factors are in our favor.

The third is, of course, there is no price decrease happening, which tends to depress the value. On the other hand, in terms of the volume getting impacted a bit, inflation will be on the higher side, that might soften the demand a little bit.

At the same time, the El Niño effect that you mentioned, we don't know how much of the impact it will have in the upcountry areas. The uncertainty which is there overall might also impact the demand.

It's a mixed equation. Very difficult to project at this stage what will happen, but we assume that it will be a fairly decent volume growth in spite of all of these challenges.

Got it, sir. Thank you very much, wishing you all the very best.

That's all from my side.

Thank you.

Hi, sir. Am I audible?

Yes, you are. Go ahead, please.

Sir, I wanted to kind of check with you on two things. One, conceptually, this cumulative price hikes, I don't know if you could kind of give us a number for it.

Do you see it kind of improving the growth trajectory from the 6%? Basically, is the volume impact likely to be lower than the price hikes is what I wanted to kind of understand based on what we've seen historically.

Right. The price increase that we have taken is about 11% to 12% depending on the mix of the products that we sell, actually, but should be around that point.

Now in terms of what will happen to the volume-value equation, this time it will reverse, which means that the volume growth, there used to be a differential of about 4%, 5% between the volume and the value. It might go the other way around, which means the value growth will be higher than the volume growth.

We expect the volume growth to marginally reduce or be at the levels at which it was earlier, but the value growth will definitely be significantly higher than what it was last year.

Got it. Very clear, sir.

Sir, the second bit was just a follow-up to what you kind of clarified to the earlier person, to Mihir, that we have taken price hikes to offset the input inflation till date. When you say this offset, is this a absolute inflation number in rupees that has been passed on or is it percentage margin?

How should we look at that?

It neutralizes the percentage margin sort of, rather than the absolute.

Okay. On a percentage margin basis, we've maintained it given

That's right.

Got it, sir. Perfect.

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

Thanks for this.

Thank you.

Please go ahead. Hello, am I audible?

Yes, you are. Go ahead, Percy.

Yeah.

Just wanted to understand, in terms of volume, see, in the last crude upcycle which happened during COVID times, we actually saw even volumes doing very, very well, even better than what it was earlier. This was because, I think, it was a very special case where people were spending times at home and they wanted to spend money on home improvement because they could not spend it on many other things.

That's why the volume growth was very strong. This time the environment is different.

If we take significant pricing, don't you think there could be a sort of backlash in terms of volume? How do we sort of figure out whether this will happen or not?

Do we have any previous experience in this apart from the COVID period, or how do you try and look at this question internally? That is my first question.

Right. Okay.

You're right that after the COVID, though there was a significant price increase, the volume growth also went up. That was largely a part of it was due to the pent-up demand of the COVID period which came into play after the COVID.

That will not hold true this year. Though there was some depressed situation there in quarter two, quarter three of last year due to the extensive monsoon, this time it will be lesser monsoon, and hence we may get a much better situation there in quarter two and quarter three of this year.

Difficult to comment these things as to how it will pan out. Earlier in previous records, we have studied whenever these price increases have happened, in fact, every three, four years, this type of a situation arises.

The prices do go up, and then one one year and a half years down the line, it tends to slide downwards. That has been the record for every time the oil prices have gone up.

It always slides down in a period of one and a half years. Sometimes it happens in 8 to 10 months, sometimes it happens in one to one and a half years, but it will always slide.

The issue is that, at the time when it goes up, the raw material prices do go up for the paint industry, and prices also are taken up. Typically with a little bit of a lag.

This time we have been slightly more proactive and increased the prices because the price increase of raw materials was much higher. We were forced to increase the prices.

There was no choice there. We believe that of the total paint cost, only 40% is the paint cost and 60% is labor cost.

Hence, the inflation to the customer is only 4% to 5% of the total paint job. I think given the current inflationary situation across product categories, this type of a inflation can be absorbed.

It may have a little bit of an impact on the demand, but then, as I said, the bases are favorable. The competitive intensity or the strength at which it was growing has reduced, and therefore those two are in our favor.

Therefore, more or less we should be able to hold on to the volume growth that we had last year, and that implies the value growth will be stronger.

Understood. Second question I have is on inflation.

Crude is up 40%, 50% versus pre-war. I'm assuming crude derivatives which you use would be up in a similar fashion.

TiO2, of course, is up to a lesser extent. On your overall COGS basket, what is the inflation today compared to the pre-war situation?

It's about 22%, 23%, and that's more or less covered through the price increase.

How is it covered, sir? Because if you want to protect your margin, you will have to take a 22% price increase also, which is not taken, right?

No. Raw material is at 60% of the total cost or 58% of the total cost, the way you look at it.

You have covered the rupee impact, not the percentage margin impact, right? With a 10%, 12% price increase, your gross margin will still fall, right?

No, it won't. That's exactly what I'm trying to explain.

That if you take 20% increase in raw material prices, which is in terms of 60%, it will become approximately 12% because 60% of 20% is 12%. We have taken up price increases of 12%, and there are savings elsewhere which we have to bring on the table, which we work on always.

Therefore, we will be able to maintain our gross margin.

Okay. Understood, sir.

Understood. Because whenever there has been such a big cost inflation in the past, at least temporarily for three, four quarters, all the industry players including yourself have seen gross margins go down.

I'm a little surprised when you're saying that even temporarily we do not see that.

It used to happen that way, you are right absolutely, because the price increases used to be in a more staggered manner. This time because of the suddenness and the quantum of increase that have happened, we were left with no choice but to increase the prices very rapidly, and that is why I'm saying that it will not impact to that extent.

Sir. That's all from me.

Thank you, sir.

Am I audible?

Yes, Abneesh.

Thank you. Congrats on excellent numbers.

My first question is on your home state where your headquarters are. We have seen a government change.

Obviously, double engine ki sarkar generally works. Specific question is how big is Bengal market for you as a percentage of revenue?

Last two, three years, is there a slowdown? Related question is a lot of Bengali workforce came back to Bengal to vote.

Absolutely unprecedented levels. Does that impact painter availability in April month in anyway across India?

Let me answer the first question. It is, a good thing that, has happened, in terms of having a government in the state which is of the same party as that in the center.

This has happened after 49 years in West Bengal. We expect less skirmish and more cooperation, and hence the growth rate is likely to accelerate.

That will be, quite evident especially in the infrastructure segment. Quick completions of projects will happen, and therefore, also the central money for the various schemes which were stalled will come into existence.

We expect therefore the growth rate to accelerate in the state of West Bengal for sure. We have a significant stake in West Bengal.

In fact, we are overindexed in West Bengal compared to the entire industry. Our headquarters is here, we have two factories here, we have a very strong brand equity, our presence is extremely strong in this particular state.

Last two years, we have been specially last year has been a weak year in West Bengal. It was, suffering a bit, and as a result, our performance was also getting impacted.

We expect that, this time there will be significant growth coming out of West Bengal. Combination of two factors: One, is that, the economy is likely to do well, and we are much better placed in this state, we we'll gain from this as far as West Bengal is concerned.

The second is in terms of the infrastructure also. We are the leader in any case in protective coatings across India, therefore, that will also help us in growing faster in the state of West Bengal.

On the question of the painter, yes, they did come back, a large number of them. In fact, almost reaching a crore number is what I am told across, in terms of population, total population.

Of course, the workers would have been in lakhs, and they did come back, the painters, and now I think most of them have gone back. It did impact a little bit in some areas, you know.

There was this crisis of painters, but not so much that it impacted sales.

One thing you didn't answer: Bengal will be high single digit as a percentage of sales for you?

No, it is double digit, actually.

Understood. My second question is on your commentary on slight moderation on the competitive intensity.

Now when I see any metric, for example, gross margin three-year high, EBITDA margin close to two and a half year high, and you said volume growth ex of the price increase behavior is also reasonably good. If you could explain then why is the competitive intensity high?

Ultimately it has to reflect in any of these numbers, because in December quarter also your margins did expand. Second related question is when I see media as a consumer, I see outsized presence of obviously the market leader, which is always there.

The new player is also very aggressive. I don't see Berger with 20% market share in the legacy paint players having that kind of a media presence as a customer.

If you could tell us what is your media share when we take the new player also into account, and why are you underinvesting, if you are?

Right. Competitive intensity, why I have said is that because it is still quite strong, and the figures may indicate a different scenario altogether.

The leader also might exhibit very strong figures because the bases are muted for them and for us as well. We had a good base, but yet we did well.

Part of it would be the price increase impact which would have helped, but the intensity exists on the ground. There is no doubt on that count, though as I said, the growth which was there has completely tapered off, and so now it is there in the form of any other competitor who's relatively doing well.

One more competitor has been added, and therefore some share which had gone to them remains with them. That is how it is, I would place it in that manner.

What was the second part

which you asked? Media share.

Media. We have not increased or decreased our spends.

Our spends remain at our market share sort of, which is 20%. Since Asian, the market leader, is at 52-odd percentage, they spend 2.6 times us, they're much more visible.

We are also not so present in the sports, which is where some of you might be seeing, and hence we're less present there. We were much more present in the news channels.

We are correcting that media mix a bit this year. We were there also in the GECs more.

We've reduced the spends there and increased our spends on the sports this year, you'll get to see much more visibly our brand in the sports channels as well. The new entrant actually spent far, far beyond their market share, so that's something which is their choice.

We have always maintained our share of voice at a similar level as to our share of market. We don't go overboard, we don't underspend as well, and we maintain our profitability at the band at which we maintain.

We have no surprises therefore on any of these. We are slightly boring, but consistent.

Sure. Thanks, sir.

That's all from my side.

Thank you for the detailed comments and the presentation. Just wanted to double-click on the point that you made on margins.

Just roughly, if 100 is your sales, 60 is your raw materials, just for the sake of argument, you said that 60's got 20% inflation, your raw material cost will go up by 12, and which is the price increase that you've taken. Now I get that an absolute gross margin in this scenario doesn't change, but in an accounting sense, the percentage gross margins would be lower, no, sir?

I'm just sort of wanting to be on the same page here.

Yes, you are right. It will have an impact slightly on the gross margin.

We have, however, initiated certain measures which we believe will give us some savings on the gross margin on account of the formulation efficiency and at the same time in terms of sourcing efficiency that we bring to the table. That we have done last year as well, and this year also we believe that some of those advantages that we got last year will continue this year, plus we will add a few more.

That's one impact. It will still have possibly a slow 1%, 1.5% impact on the gross margin, but that will get neutralized in the EBITDA margin because of the scale efficiency which will come into play.

Fair. Percentage gross margin is lower, and then whatever efficiencies we get on costs and operating leverage will drive the EBITDA, this thing.

Now we've not seen a period where we've had 10%, 15% price hikes, only a few times in the past.

Correct.

You mentioned that elasticity is lower. What's giving you that confidence?

Because, see, discretionary spends could be under pressure given where inflation is, no? Do you see downtrading as a risk?

Do you see volume as a risk? I know it's a little bit of an unknown, but just wanted to pick your brains over there

because

you would have seen more cycles than us.

No, true. We have gone through this type of a cycle many times.

We have not seen this type of increase of 12%, 13%, but we have definitely seen 7%, 8% price increases at least four, five times earlier. Which is a very similar type of, okay, 3%, 4% more maybe in terms of inflation, in terms of prices, but that's very fairly similar.

Whenever that had happened, the expectation was that it will impact volumes somewhat. It did impact, but very marginal, on the margins.

Sort of, really those who will paint will paint. 3%, 4% inflation in overall painting cost, if a person is willing to spend 1 lakh, I'm sure he is willing to spend 1 lakh 5,000, and instead of saying that no, 1 lakh abhi 1 lakh 5,000 ho gaya, and therefore I will not spend anything.

That rarely happens. That is why I am saying, more or less, it doesn't impact so much the volume.

Okay. One very last question, sir, is on your comments on competitive intensity.

We've discussed what the strategy for the new entrant has been and how in the past you've seen that as unsustainable. We've also seen one more player become a little more serious towards the paint business.

Just generally your comments

on

what's giving you the confidence that it's not increasing any further.

Your

comments seem to be on stability.

Right. No, I will just explain why I said.

Two things. One, as far as the new entrant is concerned, it has increased the dealer price list much more than what we have done or what the leader has done.

In fact, it used to operate at 5% discount. Now, except for the low-end economy emulsions where it has a 2% advantage in price, everywhere else the prices are same.

In fact, one or two cases, they are higher. Therefore, that price advantage which they were giving in the marketplace does not exist anymore.

The second is in terms of the painter amount that they were giving to the painters in terms of various types of schemes, there also there has been a substantial reduction announced this year. Overall, they are trying to shore up their profit.

As I said, it was not sustainable, it's evident from the current actions that they are trying to correct the situation and make the operation profitable. From that perspective, it will have an impact on their volumes and the growths that they were registering.

That's one, which is why And then we have seen for the last almost five, six months, our report from the market says that it's more or less stable sales for them. It's not growing at the pace at which it had initially started growing.

It's month on month, quarter on quarter, if you track their figures, more or less it is at similar levels as it was the previous month or the previous quarter. This is how it has been.

In March, they did well because I think their quarter- and year-end schemes ended, suddenly there was some amount of sales which would have happened at that period because most of the dealers that we spoke to said that they have stocked up a little bit. From that perspective, it would have gone up a bit, but otherwise it has been relatively stable sales.

Now with this price increases in the DPL of dealer price list and reduction in expenses on painters, I don't think the growth rates will be the way it was in the first year. This is why I said competitive intensity remains, but is stable, it's not growing at a faster pace.

As far as the other new player is concerned, yes, they have plans, but we have both these players existed in the market, we know what they have done or what they can do. It's not something that they're coming from zero base or something.

Even if they grow, it won't impact so much the overall market.

Okay. Thank you, sir.

I'll fall back in the queue.

Thank you. The next

Sir, again harping on the same point as margins and raw material price increases that have been taken. Fair to assume that there may be a slight percentage reduction in gross margins, but at least gross profit that we'll be having on a per-liter basis should be remaining the same or possibly expanding a little because of formulation benefits, and at the EBITDA margin side, at the EBITDA margin line, even percentage margins should be remaining broadly similar.

Is that...

Right. Absolutely.

Your understanding is correct.

Perfect, perfect, sir. Sir, historically what we have seen is then when raw material prices start cooling off, paint companies have been able to retain a part of the advantage.

Of course, every time that this had happened, it was before the Birla Opus era. Given the kind of pricing discipline that the industry has shown in this hyperinflationary environment, is it fair to assume that a similar kind of a theme may play out once crude prices start correcting?

Is that what your approach is likely to be?

It might happen. It all depends on what happens now to the prices of the raw material.

Typically you're right that partly it is kept to some extent depending on the brand strength and some of the products where we might have an advantage. We don't tend to pass on the full price decrease benefit at that point of time as and when the situation arises.

We will have to wait and see what happens. There are two new competitors now, it may not hold true completely.

At the same time, wherever the brands are strong for any individual player, this may hold true. Some of the commodities, it may get passed on fully.

Some of the branded items where there is possibility of retention, it might be retained.

Sure, sir. Sir, historically you have guided for roughly 15% to 17% kind of an EBITDA range.

Is that the range that you'll stick with even in this inflationary environment and as raw material costs cool off, or do you think maybe we should be at the upper end of that range?

No, we stick to that 15% to 17%. Like this quarter, we did exceed that, we went up to 18.3%, but more or less our track record has shown that we typically remain in that 15% to 17%.

Sometimes when it goes up, consistently if it is remaining at those higher levels, we will spend more on advertisement and brand building, rather than go up to 18%, 19% or something.

Sure, sir. That's very helpful.

Thank you so much.

Hi, Abhijit, sir. Thanks for the opportunity.

Just a clarification on your previous response. So 15% to 17% that you guide, is it always on standalone or is it at a consol level?

Because consol this quarter is 16.8% if I'm not mistaken.

Correct. That's true.

It was on the slightly lower side compared to the standalone.

Your guidance is at a standalone level or consol level? When you generally talk about 15%

to 17%? Primarily I talk about standalone, but in the consol also because more or less consol follows the standalone.

It should be somewhere around the same level.

Perfect. Second is you did mention that the dealer price list of Birla Opus has gone up by a higher percentages than let's say Berger or Asian Paints, they've narrowed the gap.

After rebates and trade schemes, do you think that net of all those schemes and rebates also the gap has narrowed?

Yes. That's right.

Similar.

By how many percentage points ballpark do you think that gap would have narrowed?

3% to 4%.

Understood. That's very clear.

Thank you. Last one is, you did mention that material cost is only 40% of the total project cost, 1 lakh rupee budget goes to 1 lakh rupee 5,000.

Right.

What we've seen in the past is that in an inflationary environment, painters also actually increase their labor charges and basically per square feet painting cost at a similar kind of inflation. Do you think this time around also it would be same or you think this time it will be different?

Or if you can share your experience from the last inflationary cycle where the industry had taken almost 24%, 25% price increase over a four- to six-quarter period. How did labor cost move then?

Yeah. It does move up a little bit.

It's not as if it remains completely static, but not to the extent of the material cost. Because there is competition there in that segment.

A lot of the players, a lot of the painters may not raise their prices, some of them may, and therefore the competitive intensity is much stronger there, you cannot charge much higher amount therefore and get business. Their tendency is that there is a little bit of an increase, because the overall cost for them also goes up, but it doesn't increase to the level of the material cost.

The material cost, as I said, if suppose it has gone up by 11%, 12%, the labor cost may go up by 3%, 4%. Therefore the impact will be much lesser as far as the labor is concerned.

Okay. One final one, please.

See, if we look at the history of the industry, historically in all inflationary cycles, all the players took gradual price increases, and in a deflationary cycle, it resulted in improvement in profitability for the industry, and it was quite a rational competitive environment. We saw similar trends in 2022, '23 inflationary cycle as well.

Then subsequently after entry of Birla Opus, because of higher rebates, discounts, competitive pressures, that discipline went away. Right?

This time around, do you expect that what we had seen in the previous cycles will continue, or are you very comfortable and confident that... Jay, to answer,

it is self-evident from this price increase itself that Birla has actually increased more than what the industry has done. In fact they were increasing from the month of January itself to narrow the gap between the industry and themselves.

Obviously they're behaving as a responsible player within the industry and maintaining parity with the industry. No reason for us to believe that suddenly they will change behavior and create a gap for themselves when they have narrowed it down completely.

I think it will behave in a similar fashion it has happened. The industry, whatever has seen earlier, should repeat itself.

Thank you very much, and all the best.

Thank you.

Hi, sir. Good evening.

Amit here from Elara. Sir, just on your comment on industry growth, I just wanted to know one on the trends with respect to luxury, premium, and economy.

Any changes for some quarters we've been hearing that consumers are downtrading and economy segment of the lower-end segments have been doing well. Any trend change that you have seen with the growth gradually improving?

No, so as far as the trend is concerned, typically what happens is in the second and the third quarter due to the rains, and this time it was excessive, the premium emulsion for exteriors and luxury emulsions for exteriors and the roof paint, the Roof Cool & Seal type of product, does not sell much. Typically the second quarter has a poorer mix for all paint companies.

It improves in the third quarter, and fourth quarter it improves further. That was the trend which was seen, and that is why you see our operating margin has moved up.

A part of the reason is because of better sale of premium and luxury emulsions comparatively this quarter. It is not a trend shift sort of.

Seasonality is a factor there, and every time, typically the third and the fourth quarter seems to do much better, and it continues in the first quarter as well. Means suffice to say that this year, given the fact that we

have an El Niño and more numbers, have we seen similar signs in April month? I just wanted to know one.

Yes, that's right. Similar signs in April as well.

Yeah. Okay.

The trend in April would have been very strong in terms of primary, right, because much of the price increase are happening now? Is the secondary also decent enough during the April

month? This question was asked, and I did answer that yes, not to the tune of the primary that we did, but the secondary was strong enough.

Okay. Last question on the painter that you indicated on the price increases, typically just wanted to understand in markets like metros and all, we understand it's all per square feet.

Is it the same phenomenon across the country, or material cost is bought and then labor is appointed? How do you...

No, it changes from city to city.

It is

location to location. Some places they leave it to the contractors.

Some places it is that the consumer goes and buys himself, and the labor is provided by the contractor. It changes, and so there is no hard and fixed rule like that.

Typically in the urban centers, it used to be mostly, it still is, that the contractors play a larger role. In the upcountry areas, they have a little bit more time on hand, and they go and pick up the material along with the contractor.

That's how it happens.

Okay. Thanks a lot, sir, and all the best.

Thank you.

Hello.

Yes, Aniruddha.

Yeah. Sir, most of my questions are answered, but now I guess you have already crossed the age of 60, and you have been in the role for 15 years, and you have spectacularly led Berger to very strong market share gains with strong profitability.

How should we think about next 5-year, 10-years as such? Whether there will be continuity from your side itself or how the leadership roles will change, emerge?

If you can provide any clarity on that, it will be very helpful.

I am there. In fact, probably you will get to hear soon that I am there till '31.

Five more years to go. You will have to bear with me.

That's how it is.

No, sir. You have been doing probably the best work.

Sure, sir. Sure.

Five years, so that answers the question. Sir, in terms of last question, is the channel inventory really at a high level right now?

That is whatever checks we would have done, it seems to have gone up materially. Is that a fair understanding?

Because if the entire industry has 10% price hike is taken, for example, let's say a dealer is keeping inventory worth 5 lakh rupees in his shop, now he cannot suddenly change his budget, he will reduce the volume, actually, because the paint prices have gone up by 10%. We still don't see the reduction in volumes.

In fact, volumes are also higher. Is there a material increase in the trade channel inventory, or is there reduction in the trade inventory for multiple smaller stroke unorganized players?

Both are happening. There is a little bit of stocking up happening.

They're putting in more money from their kitty because this type of large price increase gives them an enhanced margin for themselves because they can sell and make good margin. They tend to stock up a bit more.

That's one thing which is definitely happening. The second part is, some of the marginal players will get squeezed out in the process because they know that the branded items will be easier for them to sell.

Since the price increase is happening, they tend to concentrate on the branded items, stock them up more. The leaders in respective categories, wherever they are, will tend to gain more.

Okay. Sure, sir.

This is very helpful. Many thanks.

Thank you.

Right. Thank you, everyone, for coming and joining for this Q4 results analysis.

Have a great day and carry on. Thank you.