Akzo Nobel India Limited — Q3 FY26

Akzo Nobel India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=TW-PcnsPbuM Published: 3 months ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to the Q3 and FI26 earnings conference call of Exonobyl India 0:09 9 seconds Limited hosted by ICICA Securities. As a reminder, all participant lines will be in the listenonly mode and there will be 0:16 16 seconds an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over 0:24 24 seconds to Mr. Aneruta Zoshi from ICAC Securities. Thank you and over to you. 0:31 31 seconds Thanks. Yes. On behalf of ICICI securities, we welcome you all to Q3 0:37 37 seconds FI26 results webinar of Exonobyl India Limited, JSW Group Company. We have with 0:44 44 seconds us today senior management represented by Mr. Rajiv Raj Gopal, joint managing director and CEO, Mr. Krishna R, 0:53 53 seconds wholetime director and CFO and Mr. Rajiv Elcha, General Council, company secretary and compliance officer. Now I 1:02 1 minute, 2 seconds hand over the call to Mr. Rajiv Ja to read out the disclaimer and then we will uh hand it over to the Mr. Rajiv Raj 1:09 1 minute, 9 seconds Gopal for initial comments. Post that we will do the question and answer session. Thanks and over to you Rajiv Jaser. 1:17 1 minute, 17 seconds Okay. So uh we welcome you all to this uh quarter uh third quarter and 9 months ended 31st December 2025 investor call 1:25 1 minute, 25 seconds and as per our process let me begin with the safe har statement that we usually you know that do this this media release 1:33 1 minute, 33 seconds contains uh statements which address such key issues as the company's growth strategy future financial results market positions product development products 1:42 1 minute, 42 seconds in the pipeline and product approvals such statements should be carefully considered and it should be understood that many factors could cause forecast 1:50 1 minute, 50 seconds and actual results or outcomes to differ from these statements. These factors include but are not limited to price 1:58 1 minute, 58 seconds fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and 2:06 2 minutes, 6 seconds environmental risks, legal issues and legislative, fiscal and other regulatory measures and approvals as well as 2:13 2 minutes, 13 seconds significant market disruptions. Stated competitive positions are based on management estimates supported by 2:20 2 minutes, 20 seconds information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business, please 2:28 2 minutes, 28 seconds see our latest annual report. And with this, I'm handing over to Mr. Rajiv Rajup. Thank you. 2:35 2 minutes, 35 seconds Thank you. Thank you, Rajiv. Uh thank you to the ICICI securities team and everyone on the call. wish all of you a 2:44 2 minutes, 44 seconds very good afternoon. Uh as always every quarter post our results. I think this has been a ritual for us but you know 2:51 2 minutes, 51 seconds that we sort of get to speak to you. Uh we've loaded the the investor deck uh onto the website. So uh as always we do 3:00 3 minutes we will not run you through a canned presentation because we would like to leave more time for the questions you may have. I will begin by giving a short 3:08 3 minutes, 8 seconds summary and will request uh CFO and wholetime director Krishna to also just run you through in terms of any 3:16 3 minutes, 16 seconds observations on the financials. I was sufficed to say that last quarter if you really look at it our revenue had was 3:23 3 minutes, 23 seconds reported was 907.7 cr which was approximately a 1% decline. Uh however I 3:30 3 minutes, 30 seconds would quickly like to add that in the revenue uh the standalone uh business domestic business grew almost by about 3:39 3 minutes, 39 seconds uh 2%. And the reason 1.8% and the reason for that is uh while you all understand that there are large parts of 3:47 3 minutes, 47 seconds Axonobel or there's a part of ael that got carved out which is specifically the powder coding entity and the IRC 3:54 3 minutes, 54 seconds business our international research center. Uh there are certain other elements of the business which also got 4:00 4 minutes retained by the Axonobyl powder entity uh powder India limited entity which is unlisted company uh by the parent which 4:10 4 minutes, 10 seconds includes specifically a couple of customers in the coil coating business uh and also the the we used to export a 4:19 4 minutes, 19 seconds lot of our uh you know uh dramatone and now the acetone which is a colorant into parts of Southeast Asia and Middle Ed 4:26 4 minutes, 26 seconds and as a part of the deal for now this is seized uh you know since uh the early part of the quarter. So so hence like to 4:35 4 minutes, 35 seconds like uh the total amount uh that got netted off was approximately in the range of about approximately 200 cr. So roughly about 25 cr a quarter is the 4:44 4 minutes, 44 seconds sort of impact that one would need to keep in mind other than the devestures which already have been shared with you right. So hence we when you look at it 4:53 4 minutes, 53 seconds we had a volume growth of 6% blended for both uh you know decorative and industrials and a revenue growth of close to 2%. Decorative alone I think 5:03 5 minutes, 3 seconds it's it was fantastic news to see the volume coming back. We grew at 8%. I think the highlight was the fact that we started growing almost mid- single digit 5:10 5 minutes, 10 seconds in the in the premium segment. Our challenge continues to be in the what we call the MEP which is a mass economy and primer and certain actions have been put 5:18 5 minutes, 18 seconds in place starting this quarter to look at really and you know enriching some of our premium primers and also to fight 5:26 5 minutes, 26 seconds the battle uh in a more strategic manner with some of the new entrance uh at reasonable margins right so that's the 5:34 5 minutes, 34 seconds that's the strategy that we've employed I just want to highlight both across the paints and coatings with the new uh uh 5:41 5 minutes, 41 seconds the new owner And uh you know we one of the things that we've done is to really say that look how do we really play in India how do we play across segments how 5:49 5 minutes, 49 seconds do we make sure that we are winning across our consumer bases customer bases and that's really been the mantra of saying how do we really drive revenue 5:57 5 minutes, 57 seconds growth and while doing so make sure that we don't dilute margins in a huge manner and we are doing it in a very uh you know intelligent strategic manner we are 6:05 6 minutes, 5 seconds not doing it just tactically we are making sure that we use a lot of science in the way we play I'll give you an example example when we looked at when 6:14 6 minutes, 14 seconds uh you know with the new mandate I think it's wonderful for people like us because we are quite enthralled to see that now volume growth and revenue 6:21 6 minutes, 21 seconds growth is the first mantra in the business typically it's not the same in an MNC business as many of you would agree and one of the things that we l 6:29 6 minutes, 29 seconds looked at was to look at our pricing across our premium brands and some of our other offerings in the market versus some of the lead players and we did see 6:37 6 minutes, 37 seconds that we were hugely overpriced between five and 9% % which is what had led to volume adosion. We've addressed some of 6:45 6 minutes, 45 seconds those and we've also started looking at how do we really look at the whole franchise of the customer bases and where we need to play. So that's what I 6:52 6 minutes, 52 seconds mean we do price elasticity studies to see that if there is a price drop what's the volume elasticity we get and till we are certain we don't take any actions 7:00 7 minutes and it's been very limited right but we are seeing some early actions and also as we start going a far more disciplined 7:07 7 minutes, 7 seconds way to sell in order to try and grow the business yeah so that's that's on the revenue side our codings business uh the 7:15 7 minutes, 15 seconds the challenge in the mix was that we grew faster in our coil coding business and uh In our uh automotive and 7:22 7 minutes, 22 seconds specialtity coding business, we had a bit of a challenge because of a high base last year because we had done many of the ships uh for the Indian Navy last 7:30 7 minutes, 30 seconds year. So that that was a one-time base correction which will get restored back in this quarter. Suffice suffice to say 7:37 7 minutes, 37 seconds that I'm fairly buoyant and confident as we progress into the last lap of this uh fiscal and you know at this point of 7:45 7 minutes, 45 seconds time we are looking at various strategies and plans of really saying within in uh now under the ages of Mr. 7:52 7 minutes, 52 seconds Pendle how we can have a larger play. 7:56 7 minutes, 56 seconds Let me just hand it over to Krishna to say a quick words on the financials and then we will hand it over to Anerud for the Q&A. Krishna I think uh thanks Rajiv 8:05 8 minutes, 5 seconds we have uploaded the G in terms of the details and we also given the like toight comparison of the exclude the results on a comparable basis which incl 8:14 8 minutes, 14 seconds which excludes the power quoting and international research center business and Rajiv has uh completely given a 360 8:22 8 minutes, 22 seconds 360° view in terms of uh what's happening in the business and uh definitely it's a exciting journey for 8:29 8 minutes, 29 seconds us in terms of how are we rewiring into the uh growth trajectory back into the back and bringing back into the 8:36 8 minutes, 36 seconds business. At the same time happy to say that we did protected our gross margins largely and there is a sequential uh 8:44 8 minutes, 44 seconds improvement of 80 basis points compared to the last quarter and uh we as as 8:50 8 minutes, 50 seconds Rajiv alluded we did deployed uh uh the royalty savings back into the business 8:57 8 minutes, 57 seconds to support the growth initiatives and to move the revenue trajectory and at the same time we also maintained our WD 9:05 9 minutes, 5 seconds profitability and evidas around 14.9 before the exceptional items as uh you might have most of you might have seen 9:12 9 minutes, 12 seconds the notes to the accounts. There are quite a few exceptional items which has which has impacted during the last uh uh 9:20 9 minutes, 20 seconds uh last quarter. One of that is one of one amount that which is significant impact is in terms of the uh impact of 9:27 9 minutes, 27 seconds labor boards which we clearly called out uh resultant excluding exception items grew by around 9:34 9 minutes, 34 seconds 5.9 uh 9% on a yearon-year basis with that Anuda I think you I will hand it all back to you to see the question 9:43 9 minutes, 43 seconds answers thank you very much we will now begin the question and answer session to ask a question please click on the raise an 9:51 9 minutes, 51 seconds icon tab available on your toolbar or on the QA tab available on your screen. 9:56 9 minutes, 56 seconds Kindly turn on your microphone when the operator announces your name. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 10:06 10 minutes, 6 seconds We'll take a first question from Abnish Roy from Noama. Please go ahead. 10:14 10 minutes, 14 seconds Thanks. Uh my first question is on the demand side. uh November, December I guess was much better than October. 10:21 10 minutes, 21 seconds October the rain season was there and early Diwali. So very little uh days to really paint house to capture the festival related uh kind of a behavior. 10:30 10 minutes, 30 seconds So how do you see uh Q4 because uh uh the other paint companies are saying that Q4 is likely to be better than Q3 10:39 10 minutes, 39 seconds in terms of volume uh uh in terms of deco. Would you also share similar thoughts? 10:44 10 minutes, 44 seconds Yes, Amish very much. uh two reasons uh one you are absolutely right uh I think in our view for us October was very 10:52 10 minutes, 52 seconds muted in fact it was a decline but we very we really bounced back in November and we had reasonable growths in December which is where where we are 10:59 10 minutes, 59 seconds when you take out you know the like to-like business of what we don't now operate in right um and our volume growths were pretty good because you 11:06 11 minutes, 6 seconds know 8% in decorative we are seeing it you know and when you look at that it was fairly secular actually like premium we were pretty happy with what came in 11:15 11 minutes, 15 seconds uh Yes. Uh in my view this quarter unless there are again any external events or hopefully no climate change 11:22 11 minutes, 22 seconds impacts but other than that it should be a pretty uh you know strong quarter from a volume uh perspective. You're right on decorative things. 11:31 11 minutes, 31 seconds One follow-up question on demand side. 11:33 11 minutes, 33 seconds Uh what is the gap you're seeing between the volume growth and sales? 11:38 11 minutes, 38 seconds See uh see from an industry perspective we expect it to be between five and six and however what's happening is that the 11:46 11 minutes, 46 seconds two reasons why you cannot exe exactly sort of pinpoint uh one because there is excessive uh discounting happening in 11:53 11 minutes, 53 seconds the market something that particularly in the mid uh you know economy sort of segments where we've not had great 12:01 12 minutes, 1 second success and we are reworking our strategies there. Second is as far as we are concerned as I mentioned we did as I told you some of the conjoint pricing 12:09 12 minutes, 9 seconds analysis and we took some actions given that we were at significant premiums to our market so we will be at about maybe 1 or 2% a little higher in terms of the 12:17 12 minutes, 17 seconds volume value gap for about a couple of quarters till it sort of posts. 12:22 12 minutes, 22 seconds Understood. Now a final question in terms of uh the new player uh middleas we saw very minor hike of 1 to 3%. uh 12:31 12 minutes, 31 seconds when you see the raw material side and when you see the heightened uh promotional intensity in industry and uh the new player has also reversed uh 10% 12:40 12 minutes, 40 seconds extra in the 4 liter pack. Would you say that worst of the promotional intensity competition intensity is now kind of at 12:48 12 minutes, 48 seconds the end uh or you think that this can continue at least in the next few quarters this remains as high as uh to the peak level. 12:58 12 minutes, 58 seconds Personally what I would love to believe is that the worst is behind us but I think what the reality of the picture is that I think it will still take a two 13:07 13 minutes, 7 seconds three quarters for it to really play out right because at at this point let's understand the maths I mean you know you're talking of a new entrance which 13:14 13 minutes, 14 seconds has come at prices which are anywhere between 12% up to 12% lower than the prices at which we operate in addition 13:22 13 minutes, 22 seconds to that additional discounts and then there was a free liter which while it's you say it's been called off it's still there in a few markets still running 13:30 13 minutes, 30 seconds pretty much right so you're talking of a band between 12 and 18% uh lower pricing which is not a small sort of a sort of a 13:38 13 minutes, 38 seconds negate right uh and what we are seeing is you see pricing is a lever in this industry works to a point the problem is if repeat demand doesn't come in at that 13:47 13 minutes, 47 seconds pricing it'll be very difficult for the new player any new player to take up the margins right the sort of cost cutting etc that one will have to do is going to 13:55 13 minutes, 55 seconds be immense we've seen it I mean we've seen being a relatively you know I'm saying when I joined the company in 2013 you know you would you would remember 14:03 14 minutes, 3 seconds Abish the Axo India profit was less than 80 crores I mean look at where we are it's taken a huge amount of effort a lot of work on cost structural cost uh 14:12 14 minutes, 12 seconds procurement raw material logistics we put a new route to market using the distributor which you know we went through a lot of banks when we did it 14:20 14 minutes, 20 seconds right so I think it'll require out of-box thinking it's not just going to be cyclical I do expect the competitive intensity will continue for a couple of 14:28 14 minutes, 28 seconds quarters but hey you know I think we are in it uh and now as a part of the new group I think the mantra is very simple 14:35 14 minutes, 35 seconds you would see us definitely I mean now as JSW group in the pains business I think we already number four I think apart's given us a very clear intent and 14:43 14 minutes, 43 seconds signal that we should get to you know uh uh number two in uh you know three to four years when he would want it even 14:50 14 minutes, 50 seconds faster perhaps uh so we've got a very clear plan I think what we are doing is very focusing on our executional excellence and looking at our innovation basket to 14:59 14 minutes, 59 seconds see how we can sort of get products which which will be slightly different from what we've been able to craft in the back. Yeah, Dulux as you know enjoys 15:07 15 minutes, 7 seconds a huge quality advantage of these and that's what we are relying on to take us through. 15:15 15 minutes, 15 seconds Thank you. That's all from my side. Thank you. 15:19 15 minutes, 19 seconds Thanks. We'll take our next question from Manoj Men from IC Securities. Please go ahead. 15:27 15 minutes, 27 seconds Hi team just just ensuring that I'm audible right there some challenges on connectivity. Yeah. 15:34 15 minutes, 34 seconds Yeah. Thank you Raj and good performance I must say in the context of the market and also the you know maybe rationality in parts of competition etc plus the 15:43 15 minutes, 43 seconds transition. I I got a few things but the most important thing comes to my mind is the uh revenue synergies right. If you could just talk a bit about uh you know 15:51 15 minutes, 51 seconds the whatever you can talk in a public domain speak in a public domain subject to confalities on the the revenue synergies let's say you know duallex 15:59 15 minutes, 59 seconds brand gaining from the JSW paint distribution or vice versa or both right or or just that you got a far bigger scale today your ability to accelerate 16:07 16 minutes, 7 seconds numeric uh so just just please talk a bit about revenue synergies would be super helpful thank you thank you manoj and I think it's a little too early for me to talk to be 16:16 16 minutes, 16 seconds very honest not for any other reason because everything is in scope right now and there are obviously certain ele elements of confidentiality uh that I'm 16:24 16 minutes, 24 seconds bound by. So uh if you permit I think the appropriate time would be to talk about it but at a very high level if you 16:30 16 minutes, 30 seconds were to ask look obviously if you look at Dulux right Dulux has got markets 16:37 16 minutes, 37 seconds where we've got greater than 10 15% market share in different states right we've got whether it's Bengal parts of 16:44 16 minutes, 44 seconds Gujarat right we've got multiple states and in JSW pains the I think the team has created a very good presence in the 16:52 16 minutes, 52 seconds southern markets and and a few other markets like West, Maharashtra etc. I so we need to look at in terms of what the 16:59 16 minutes, 59 seconds combined offering will bring and we need to get create those value propositions which will make sure that the dealers uh you know wherever there is a third brand 17:07 17 minutes, 7 seconds in in the you know outlets which have a higher shop share for either one of the two we have a clear strategy for it. So 17:14 17 minutes, 14 seconds that's broad thinking manoj uh also uh you know there there is a lot of synergy and there is a lot of uh you know in our 17:22 17 minutes, 22 seconds industrial business there are obviously scopes on a coil business and and a little bit in our protective business so those are the areas where synergy will 17:29 17 minutes, 29 seconds really pan out but too early I think it's not appropriate because work has just started and maybe at a later stage manoj I think it'll be more apt for me 17:37 17 minutes, 37 seconds to talk about. Sure. Sure. Good luck. Uh and the second and last one for today is that Rajie team again if you could talk 17:45 17 minutes, 45 seconds a bit about the uh integration aspect on the people side of it, the culture side of it, you know, and and and are you I 17:53 17 minutes, 53 seconds mean we currently I know that it's a work in progress right kind of you know but you talk about the people and the culture side of it. Thank you. 18:01 18 minutes, 1 second Look, I think for people I think uh there will be uh there there is a you know a reality check in terms of the fact that people who've been used to 18:09 18 minutes, 9 seconds working in a particular way of life in an MNC organization when you move to an Indian organization but you know bulk of our people uh around the table amongst 18:19 18 minutes, 19 seconds the leadership have worked in both uh you know we worked in Indian business houses and in MNC so I think the nuances 18:27 18 minutes, 27 seconds if you were to ask me first and foremost I must say is Manoj that we've been given a very warm welcome by Mr. Sajjin 18:35 18 minutes, 35 seconds Jindel Mr. Park Jindel and I think part in particular has been very you know caring in terms of making sure that 18:43 18 minutes, 43 seconds right from the word go when the leadership team came to GSW center uh and by the way we are in DSW center Mumbai today right taking the call uh 18:52 18 minutes, 52 seconds you know that the team is really welcomed and there is a very clear ways of working of course you know there would be like in any any business when 18:59 18 minutes, 59 seconds you when when a business gets acquired there'll be some challenges I think the key for us as leaders is to make there are key talent key people are are 19:09 19 minutes, 9 seconds uh retained and value propositions are there on both sides because you know I think JWP has also got a very good set of team members so I think that's the 19:17 19 minutes, 17 seconds thing that we will start doing again as I said manoj very early days I think these are questions uh you know it's just like it feels like you just got 19:25 19 minutes, 25 seconds married and entered and you were asking me you know how's it going to be two years from now uh it's it's a difficult question to answer but my answer to that 19:33 19 minutes, 33 seconds is look I think as In Indian customs, you know, the first thing you do is to make sure you come in and be a part of the family and that's what we are trying to do. 19:42 19 minutes, 42 seconds Thank you. Thank you. I like the analogy, Rajiv. And good luck team. Thank you. Thank you. 19:48 19 minutes, 48 seconds Thank you. We'll take our next question from Lakshmi Naran and Gapati from Tunga Investments. Please go ahead. 19:57 19 minutes, 57 seconds Yeah, I mean hope I'm audible. Yes, please go ahead. 20:01 20 minutes, 1 second Yeah. So Rajin I think there are two or three uh number questions and one is very conceptual question. So first is just want to understand from a 20:10 20 minutes, 10 seconds decorative volume growth 9 months to last 9 months like for like what has been the volume growth. Second question 20:16 20 minutes, 16 seconds is that uh what is the cash levels we actually carry right now approximately and the third is uh you talked about 20:24 20 minutes, 24 seconds royalty. I think royalty was around 140 crores or so. So the how does a company intend to use it? Whether it will flow into the bottom line or you would 20:33 20 minutes, 33 seconds actually use it for uh business expansion. How do you think about it? 20:38 20 minutes, 38 seconds These are the three uh questions from a number point of view. uh conceptually I just want to understand you know looking out 3 years uh if you want to I mean if 20:47 20 minutes, 47 seconds you are saying that look what will you call as markers of success for you and the management uh it could be market 20:55 20 minutes, 55 seconds share it could be revenue growth or it could be margins or ROC when you say that look we were we are successful 3 21:03 21 minutes, 3 seconds years out what are the two or three markers you like to use um and and say okay we have done well I think these are the questions Rajiv, thank you. 21:20 21 minutes, 20 seconds Uh sir, you're not audible. 21:22 21 minutes, 22 seconds No, I'm done. Sorry, I have I have closed my question. 21:24 21 minutes, 24 seconds Yeah, yeah, you are. Yes, we could hear you. Uh Krishna, sir, if you're speaking, we are unable to hear you. 21:34 21 minutes, 34 seconds I think uh that should uh answer your clarification in terms of the royalty. 21:39 21 minutes, 39 seconds Sorry sir, you are not audible. Can you repeat your answer please? 21:42 21 minutes, 42 seconds Okay. So as far as the royalty uh is concerned uh there are two portion of royalty. One is pertaining to the decorative paints and second is pertaining to the industrial quotings. 21:54 21 minutes, 54 seconds Uh in the month of June 2025 we acquired the decorative IP and the Jul brand brand is now owned by the Aonobal India 22:02 22 minutes, 2 seconds Limited listed entity. So the royalty cease to exist which translates to roughly around uh 65 60 to 65 crores 22:10 22 minutes, 10 seconds depending on the revenue revenue trajectory and that amount as Rajiv alluded in the initial comments we are 22:18 22 minutes, 18 seconds committed to redeploy towards the growth initiatives and and to gain the market shares. So that explains and as far as the industrial quotings is concerned 22:27 22 minutes, 27 seconds Exonob will continue to be the technological partner and we continue to pay the royalty as per the previous agreements. Hope this will answer the 22:34 22 minutes, 34 seconds royalty question. Coming back to the cash position, it's uh ballpark is roughly around 200 to 225 crores of free 22:42 22 minutes, 42 seconds cash is uh available in the balance sheet which is earmarked for the growth initiatives and the capex for the near 22:49 22 minutes, 49 seconds future and and volume growth on decoratives like for like for 9 months. 22:55 22 minutes, 55 seconds Yeah. So 9 months would be between 1 and 2%. Approximately I'll give you a range. Got it. 23:01 23 minutes, 1 second Yeah. So clearly Lakshmi two parts first of course there's been a huge bounce back and the reason for that is uh you 23:08 23 minutes, 8 seconds know there were two issues of course the the you know July August September as you know once the announcement happened uh there were a few challenges which I 23:17 23 minutes, 17 seconds mentioned in that quarter in the core uh where a lot particularly in the project segment in decorative we faced a lot of 23:24 23 minutes, 24 seconds challenges from repainting societies in terms of some of the various actions that we committed to in terms of warranties etc. All of which has got 23:32 23 minutes, 32 seconds advanced, right? All of which has got addressed, right? So I think now we are slowly bouncing back on the decorative retail side. We are starting to do well at secular growth across. 23:45 23 minutes, 45 seconds Yeah. Li. 23:48 23 minutes, 48 seconds Yeah. Yeah. Yeah. I think that answers all the number questions. So can you just move on to the other one which I asked in terms of what do you define 23:55 23 minutes, 55 seconds success and what are the markers you would like to use? 23:58 23 minutes, 58 seconds So look, I think uh success for first and foremost success is look for me is we are now thinking what's good for JSW 24:06 24 minutes, 6 seconds is good for JSW uh Dulux and as all of you know we've registered the new name of the company with the stock exchange. 24:13 24 minutes, 13 seconds It's gone to all our shareholders all of you for both. We hope you like the name. 24:17 24 minutes, 17 seconds uh we believe that I think it's it's the name for the future where it captures as part rightly says the agility uh and the 24:24 24 minutes, 24 seconds nimleness and the power and the strength of JSW and really the uh you know the the epidome and the the you know the 24:32 24 minutes, 32 seconds entire uh premiumness luxury uh feel of dulux right so we're bringing dulux 24:39 24 minutes, 39 seconds right up there in the company so JSW dulux now I think in terms of goalpost look I think the first is obviously how 24:47 24 minutes, 47 seconds over the you know next couple of years we start integrating the companies and while doing that we make sure that the companies are really growing well and actually gaining from other players in 24:55 24 minutes, 55 seconds the market all right the larger goal post as I mentioned to you is we are clear number four now with the combination uh there's no doubt on that 25:03 25 minutes, 3 seconds and the quick clarity is to say that how do we quickly move to number three and then beyond right to really how do you really progressively start moving ahead 25:12 25 minutes, 12 seconds I think that's really it in quotings I think we've now got all the recipes to start moving towards uh you know first being a number you know a number two and 25:20 25 minutes, 20 seconds then a number one player I think that's again the areas where we are because I think now the mandates would be really how do you drive growth in India for 25:28 25 minutes, 28 seconds India and made by India right uh and as we do that also we'll start looking at attractive opportunities that come our 25:35 25 minutes, 35 seconds way Lakshmi hopefully that addresses all the questions you asked yeah thank you thank you 25:42 25 minutes, 42 seconds thank you next question is from Pratik Goi from HSBC. Please go ahead. 25:51 25 minutes, 51 seconds Pratiki, can you please unmute your microphone? Yes. Go ahead. Hi. Can you hear me? Yes. 25:59 25 minutes, 59 seconds Yes. Thank you. Uh, so a quick question on the numbers. Uh, employee expenses were down I think 55 million quarter and 26:07 26 minutes, 7 seconds quarter. I think these are the continuing business numbers. So any clarification on that please? That's my first question. 26:14 26 minutes, 14 seconds So if you roughly see fatik thanks for asking this question uh as uh we clearly mentioned in the disclosures the last 26:22 26 minutes, 22 seconds year number is not comparable and uh last year include support reportings and IRC you could roughly see ballpark 26:29 26 minutes, 29 seconds number is 12% lower correct I'm I'm sorry sir uh quarter and quarter uh Q2 versus Q3 versus Q2 26:39 26 minutes, 39 seconds Q3 versus Q2 uh it's it's a combination of the iteration and then the refill rate of the company and there is no structural change per se in the Q3 versus Q2. 26:51 26 minutes, 51 seconds Okay. And second question is uh um are we thinking about changing the uh business model to becoming a direct 26:59 26 minutes, 59 seconds distribution play instead of a distributor play as of as we currently hold? 27:03 27 minutes, 3 seconds Prick I'll I'll look at that. Look, I don't think there's a perfect solution. There will be markets uh let's go back. 27:10 27 minutes, 10 seconds Okay. Why did we move to distributor? We moved to distributor for two reasons. As all of you know, global companies measure themselves on EIT percent margin and not an absolute bit or absute and 27:19 27 minutes, 19 seconds that that was a bit of a challenge and when you look at that bottle and look at in terms of service and when you want have a vision of becoming a larger player in the country. Uh we believe 27:27 27 minutes, 27 seconds that distributor would have been it and uh you know we've been now uh this journey started in 2013. We are in 2026. 27:33 27 minutes, 33 seconds We've got 153 distributors and more than 85% of our distributors are more than 10 years old. 82% of our distributors are more than 10 years old. Right? So 27:41 27 minutes, 41 seconds they've grown the business with us. Now obviously what we will look at is there are certain markets where we still believe because of the fact that we need to further invest in the brand uh to 27:50 27 minutes, 50 seconds drive offtake when you are starting to play the bigger players uh we will need to look at being direct. So there will be a combination and they will also continue to be our distributors. Our 27:58 27 minutes, 58 seconds distributors will continue that we will come back. We will take a couple of quarters to see what's the best model and we will come back to 28:06 28 minutes, 6 seconds Okay. Thank you. Uh if I can squeeze in another question. Sure. 28:12 28 minutes, 12 seconds Uh so on decorative side, can you elaborate a little bit more on the competitive intensity? Uh you talked about this higher discounting uh but uh 28:21 28 minutes, 21 seconds do you see competitive intensity in certain uh in certain segments? Do you see higher competition in the economy segment which where you are not 28:29 28 minutes, 29 seconds especially strong but say premium segment for example? Is there more competitive intensity there or anything? 28:36 28 minutes, 36 seconds uh and and some color on that. Yeah, I think look I think where all the new players have been able to really impact 28:44 28 minutes, 44 seconds is in the mass and the below right mass primers economy and then even some of the new categories waterproofing and 28:53 28 minutes, 53 seconds boot care right so that's where I think in premium I don't think that the order is really reversed while people have 28:59 28 minutes, 59 seconds tried reality is you know I I I just you know I can just give you examples uh uh 29:06 29 minutes, 6 seconds you know that uh one of the you know fastest growing newer emerging players when they got into the project business they started getting customer consumer complaints or customer complaints and we 29:15 29 minutes, 15 seconds started getting some of those business back so I think ultimately look I think what will play out is the quality of products because you know paint it's not 29:22 29 minutes, 22 seconds like you know paint there is a lot of engineering in paint so there's a lot of uh and being a chemical engineer I can tell you very proudly that there is a 29:30 29 minutes, 30 seconds lot of engineering in paint and so it's not that you know we create recipes and we start putting in the market uh that said to answer your question yes the 29:37 29 minutes, 37 seconds competitive intensity is more in these segments of the market. Uh but I would also suggest that look in the premium because everybody knows that that's what 29:45 29 minutes, 45 seconds gives them better margins. There will be a lot of action in premium too though a little lesser than the other segments. Pratik if I've answered your question. 29:54 29 minutes, 54 seconds Yes. Thank you so much. 29:57 29 minutes, 57 seconds Thank you. Next question is from Runay Zogrear from Asit Ma investment. Please go ahead. 30:06 30 minutes, 6 seconds Uh hi sir, thank you for the opportunity. I hope I am audible. Yes, please go ahead. 30:13 30 minutes, 13 seconds Yes. Okay. Uh sir, so my questions were uh mainly related to the quoting segment. I think you did refer to the 30:20 30 minutes, 20 seconds fact that you know you expect Q4 to be strong and you also expect to become the number two player and then gradually number one player on the quoting side. 30:29 30 minutes, 29 seconds So first part of the question is in the near term uh what will really drive the growth? It is is it broadly the industry-wide growth or you are seeing 30:38 30 minutes, 38 seconds some kind of market share or some new products or something like that. And the second part of that is just on the medium-term uh what strategy you're 30:47 30 minutes, 47 seconds thinking about from the quotings is strategy. Sorry, your last part wasn't clear. 30:54 30 minutes, 54 seconds Uh the medium-term strategy when looking at the quotings business now going ahead. So look I think in quotings we've been playing largely in the premium 31:03 31 minutes, 3 seconds space while we entered the midm market in each of the business I think midm markets is a huge opportunity again because of the challenges of uh being a 31:11 31 minutes, 11 seconds part of a mobile's uh you know looking at margins we never looked at it I think that's one area where we are now looking at and we're doing it in a very careful 31:19 31 minutes, 19 seconds manner it's not that we're just generally dropping prices we're looking at whether you know are these sustained growths before sort of making those commitments right one two obviously our 31:28 31 minutes, 28 seconds real focus in is around R&D ensuring technical expertise uh and and really making sure that our products are going 31:37 31 minutes, 37 seconds to be uh competitive uh while we're in the mid segment right so that's where the second leg is uh last but not the 31:44 31 minutes, 44 seconds least uh you know uh in in uh you know all our coaching B2B businesses I think it's also understanding customer and 31:51 31 minutes, 51 seconds consumer insights really understanding how you know how you can get in deeply into the business understand the customer businesses and That's what the 31:59 31 minutes, 59 seconds teams are right now engaging in. So hopefully I've answered your question. 32:07 32 minutes, 7 seconds All right. Does that answer about the near term? 32:11 32 minutes, 11 seconds Yeah. Just on the near term like the next couple of quarters if you can just talk about because you did say Q4 you're expecting strong performance in cens. 32:20 32 minutes, 20 seconds Yes. Yes. Uh so so look I think again you know you've got to keep in mind the fact that coding business has been an 32:27 32 minutes, 27 seconds outperforming business for us over the last if I take a three-year CAGR right so yes I think the key is we will 32:35 32 minutes, 35 seconds obviously continue to grow and in the near term what we are trying to do is to win uh customers across uh different businesses and make sure that while 32:43 32 minutes, 43 seconds driving growth we are also able to keep an eye on profitability because that's also been a key lever in the coding business and using techn technology as 32:51 32 minutes, 51 seconds as the sort of tool to drive that. Okay. So, thank you for that. 32:59 32 minutes, 59 seconds Thank you. Thank you madam. 33:01 33 minutes, 1 second Thank you. Take our next question from Anirut Zoshi. Please go ahead. 33:07 33 minutes, 7 seconds Yeah. Uh sir, two questions. One in terms of now there are royalty savings. 33:12 33 minutes, 12 seconds Secondly, over a period of time may not be let's say in H1 FI27 but post that we may see uh uh strong synergy benefits. 33:24 33 minutes, 24 seconds So uh also the company u uh in its new aar wants to invest more in uh brand building and uh overall growth of the 33:33 33 minutes, 33 seconds business also. So how should we think about the margins means earlier there used to be a band in which we uh used to 33:40 33 minutes, 40 seconds look at the margins. there was a minimum uh kind of a band. So how how should we think in terms of the margins? That is 33:48 33 minutes, 48 seconds the question number one. And question number two in terms of new product launches uh so uh uh how should we again see uh 33:58 33 minutes, 58 seconds will the brand shift to JSW Dulux or it will remain Dulux because the company name is also getting changed to uh JSW 34:07 34 minutes, 7 seconds Deluxe. Yeah, that's it from my side. So you know the the brand work is is just about to commence. The company name is 34:14 34 minutes, 14 seconds JSW Dillux. In terms of brands obviously you know I think there's a lot of clarity that obviously uh part has uh 34:22 34 minutes, 22 seconds you know made a significant investment to buy the brand of Dulux. So obviously the the endeavor will be to try and use it but there are certain areas or 34:29 34 minutes, 29 seconds segments where julak has not been uh very uh to be honest we've not been able to stretch the brand enough right so to put it right and that's where obviously 34:38 34 minutes, 38 seconds we've got a good brand in JSW pain so when you sort of look at it we'll have to we are studying it very closely to see how the combination of the two 34:45 34 minutes, 45 seconds starts really uh gaining significantly from the other players in the market so that's one yeah Krishna you want to on 34:52 34 minutes, 52 seconds the emit look I the guidance that I've given You know my view is as I said as we enter the midm market and some of it 34:59 34 minutes, 59 seconds you'd see a initial slight erosion uh of about a half point etc we are operating in the 14 to 15 14 and a half 14.8 8 35:08 35 minutes, 8 seconds sort of a bit margins right uh endeavor will be and I'm not talking any synergy I'm saying you know whatever synergy will come will come outside this uh and 35:17 35 minutes, 17 seconds at an appropriate time right but uh uh without synergy I think our endeavors to be in that band of uh you know uh more 35:25 35 minutes, 25 seconds towards 15 but the range I would give you is between 14 and a half to 15 14 to 15 right yeah and then to take it up to 35:33 35 minutes, 33 seconds 15 to 16 stories but at this point of time I would say around 15% is But really I want to keep the focus as I said the first task is really driving 35:42 35 minutes, 42 seconds revenue growth and you will agree I think really driving growth ahead of competition is most critical for us at this point of time. 35:53 35 minutes, 53 seconds Yes sure sir uh understood. uh in terms of uh the actions some of the pricing actions if you can indicate which we 36:01 36 minutes, 1 second would have initiated in the market and how has been the trade response because the transition is also underway but we have seen decorative uh India recurative volume growth is pretty strong at uh 8%. 36:13 36 minutes, 13 seconds So, so how uh is the trade feedback on the maybe mean just initial one two months but whatever you can share. No, I 36:21 36 minutes, 21 seconds think look this is something that the trade has been asking us for last couple of years. It's just that our ability to do that with Axonobel was very difficult 36:30 36 minutes, 30 seconds because AXO runs on global pricing modules, right? So the response has been good. It's it's a bit uh across the 36:37 36 minutes, 37 seconds portfolio large starting from super premium right up to you know some of our mass uh and the reason for doing that is 36:44 36 minutes, 44 seconds because we were completely off in terms of marketing prices. So as I told you we've looked at pricing elasticity sies which we've done got done third party 36:52 36 minutes, 52 seconds and also done a bit of warehouse growth to really look at what is the elasticity across different brands across the segments of dealers you know painters 37:00 37 minutes and consumers so we've done it across three segments and based on that study have we started taking the decisions initial response is good uh I don't know 37:09 37 minutes, 9 seconds but we'll have to wait and watch because for me I don't think see pricing is something which is what I would call a a good you know you need to be in a 37:17 37 minutes, 17 seconds particular range versus competition and there's a certain price premium but uh I think there are a lot of other actions which are happening under just to say 37:24 37 minutes, 24 seconds pricing is not the only driver of revenue. 37:30 37 minutes, 30 seconds Sure sir sure uh this is very helpful uh thanks thanks from my side. Thank you. 37:38 37 minutes, 38 seconds We'll take a last question from Akshai Krishnan from ICICA securities. Please go ahead. 37:45 37 minutes, 45 seconds Hi sir. uh so so I just want to understand uh you clearly mentioned that you wanted to scale up your the ladder 37:52 37 minutes, 52 seconds on the ranking aspect so so what will be the guard rails that you'll be looking at uh and uh let it be on the brand 38:00 38 minutes positioning or the pricing power or the channel economics uh which means that you'll protect yourself despite having a slower growth 38:09 38 minutes, 9 seconds even certain certain phases of your um the entire life cycle 38:16 38 minutes, 16 seconds So very good question A first and foremost you know I think to answer you know it's one point I didn't you know at least the start in January has been 38:24 38 minutes, 24 seconds fairly good so I we hoping that we continue second I think it's a very good question what are the guard rails look ultimately when you when you want to get 38:31 38 minutes, 31 seconds into the top zone on growth but you also need to maintain profitability it's it's absolutely essential that your premium your luxury brands and premium brands 38:40 38 minutes, 40 seconds also grow at least in line with GDP or outperform competitive landscape So that's one. So you know what are the drivers for it. So I'm not going to enumerate that. But suffice to say hence 38:49 38 minutes, 49 seconds brand uh making sure that uh we are able to drive productivity on our tinting machines. We are able to make sure that 38:57 38 minutes, 57 seconds we are engaged uh appropriately with our painters and our contractors. Making sure that we are driving you know not 39:04 39 minutes, 4 seconds just the width but also the depth of uh sharing an outlet is critical. Width of distribution and depth both right. So, 39:12 39 minutes, 12 seconds so the guardrail would be to make sure that when we are over, you know, we are not dialing in into uh one, you know, 39:19 39 minutes, 19 seconds area or one vector of growth. We are looking at playing it across the segments. That's one. The second is uh and the same thing both in decorative 39:28 39 minutes, 28 seconds and in codings right to make sure that we get a fairly secular circular growth across our businesses not and making sure that it's not the lowest margin 39:36 39 minutes, 36 seconds business that grows the highest and hence our high performing business are there. So that would be one. The second guardrail would be to ensure that look while doing this we continue our focus 39:45 39 minutes, 45 seconds in terms of innovation right we are entering into a period of integration etc. So running you know it's like I 39:52 39 minutes, 52 seconds remember an example when uh you know years ago that I was told that it's like you know making sure that you are still 40:01 40 minutes, 1 second running the F1 race with a bit of a flat tire right so you you don't have the luxury of getting out of the race and you got to wait uh to make sure that you 40:09 40 minutes, 9 seconds are able to change the wheels at the right appropriate time right or you don't you're you're in a house where you don't have the you know there's something which has got electrocuted you 40:18 40 minutes, 18 seconds don't have the luxury of switching off That's the situation we are in. I think it's a very competitive market but I 40:25 40 minutes, 25 seconds also believe it's a very exciting market and for me I think the beginning of the new journey the beginning of the you know the family that we went gives me 40:33 40 minutes, 33 seconds adequate you know confidence and backing to say that go for the moon and you know and that's that's the that's the sort of 40:40 40 minutes, 40 seconds thought that we are working with ash hopefully answered your question. Yeah. 40:45 40 minutes, 45 seconds Yeah. Yeah. And and and we we have many growth levers in the paint industry. Let it be on the pricing or let it be on the 40:52 40 minutes, 52 seconds adjacencies or the distribution integrities or so looks very attractive in an isolation path. But how do you 41:00 41 minutes evaluate the second order effect of these choice when you make on brand equity or the channel distribution or the return of capital on a full life 41:08 41 minutes, 8 seconds cycle? So what is a trade-off point that you're consciously looking on to accept in at today's point in time? 41:17 41 minutes, 17 seconds Yeah. Uh actually I'll be very honest. 41:18 41 minutes, 18 seconds The only reason I love this business because the business I was in earlier before I came into pain's business was telecom and the company was Airel and 41:26 41 minutes, 26 seconds you know what we've created. I ran the data business 2G 3G 4G launch of 5G and you've seen what that business did right. So for me I think cash is king. 41:34 41 minutes, 34 seconds Yeah. The reason Krishna and I get very excited about this business is because this business delivers cash, right? And as a number four player, if we've been able to do it, imagine the power of what 41:42 41 minutes, 42 seconds we can do as we scale up, right? So that's the most exciting part that it's a very cash business. It's a it's a the 41:49 41 minutes, 49 seconds brand has commands an equity. uh you know I don't think many players in the industry uh other than you know a couple 41:57 41 minutes, 57 seconds including the market leader and us uh and maybe you know number two player are able to debit dealers etc for 42:04 42 minutes, 4 seconds wrongdoings in the market right we do that we've consistently done that for now you know 14 15 years of existence so that tells you the strength of the brand 42:12 42 minutes, 12 seconds that tells you the strength of the relationship we're very transparent in the way we work right and I think what where we lacked was firepower uh in 42:20 42 minutes, 20 seconds India to win in India you need firepower. you need a micro market battle strategy as part you you know keeps articulating those are some things 42:29 42 minutes, 29 seconds that we are fine-tuning and now really entering and that's what I'm most excited about you know this you know for me this is really the excitement that 42:37 42 minutes, 37 seconds we're really wanting to win in India we're really wanting to be a part of the larger story and I'm very I think it's you you know I think let you know I 42:44 42 minutes, 44 seconds think let the performance speak up perfect so so so post post merger what 42:51 42 minutes, 51 seconds do you think will be most critical to get in the right to get in right at an early point in time. So is it more on 42:58 42 minutes, 58 seconds the um impact of the long-term growth valuation or is it more on the distribution aspect that you 43:06 43 minutes, 6 seconds I think a combination of both because you know there is no long-term without managing the short and medium term. So uh for me I think managing all first and foremost managing all stakeholders. 43:16 43 minutes, 16 seconds Yeah. managing employee uh our channel partners our customers I think those will be the critical part during the integration part right how do we 43:24 43 minutes, 24 seconds together because you know remember that the two teams have been also in a way not in a huge way competing in markets right so how do you really bring the best of both uh how do we really 43:33 43 minutes, 33 seconds integrate into the families uh the join the family now and how do we really make sure that the two brands you know for for me it's today I'm very clear in the 43:42 43 minutes, 42 seconds role that I do uh you know what's good for JSW is what's good for Dula I'm very clear I mean ever since uh you know I've 43:50 43 minutes, 50 seconds I've sort of moved into the family in from July and you know the I so I think every as long as every employee understands that they are first thinking 43:57 43 minutes, 57 seconds JSW first thinking India then thinking JSW and then thinking Jill I think we'll be on the right path 44:05 44 minutes, 5 seconds perfect great and good luck thank you thank you thank you ladies and gentlemen that was the last 44:13 44 minutes, 13 seconds question for today I now hand the conference call to the management for closing provinces. Over to you, sir. 44:20 44 minutes, 20 seconds Uh first and foremost, you know, thank you once again. Uh you know, we are we are delighted uh and we know that we 44:27 44 minutes, 27 seconds have each of your support. Uh if you have any further clarifications, do re reach out to Rajiv Ja, company secretary. We would be happy to sort of 44:36 44 minutes, 36 seconds engage. U we one of the things that I'm most fascinated about is that engagement with all of you. uh over the last couple of years we've had the opportunity of 44:44 44 minutes, 44 seconds also physically meeting some of you and uh our board yesterday in the board meeting also encouraged us to continue that exercise. So we look forward to not 44:53 44 minutes, 53 seconds just having these calls but on a structured manner getting an opportunity for you to also meet the some of our 45:00 45 minutes leaders and at an appropriate time also our chairman right so I think we are quite excited uh everybody in the group 45:08 45 minutes, 8 seconds you know both would like to thank each one of you for your incredible support and you know as I always say you know this is uh this industry is a very 45:16 45 minutes, 16 seconds exciting industry to be in and that's the reason why you know people like me have spent so long I've completed 14 industry now time flies right so I wish 45:25 45 minutes, 25 seconds all of you the very best uh you can count on us uh you know we are the sort of team that works uh 24 by7 we 45:33 45 minutes, 33 seconds understand that many of you made significant investments in the company and on the brand and you can be rest assured that uh you know that's what we 45:41 45 minutes, 41 seconds will keep in our mind as we progress ahead thank you very much have a great day thank you sir ladies and gentlemen on behalf of ICA 45:49 45 minutes, 49 seconds securities that concludes today's session Thank you for your participation. You may now exit the meeting.