Berger Paints India Ltd — Q4 FY26

Berger Paints India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=CYrcpmbq-9U Published: 1 day ago

0:02 2 seconds Hi uh good evening everyone. This is Rajesh Kumar from MK Global. I'd like to welcome all to the Burgger Paints India Limited Q4 FI26 results conference call. 0:13 13 seconds I thank BJ Paint Management um sorry I thank VJ Pain's management for allowing us to we have us today Mr. 0:22 22 seconds Abijit Troy managing director and CEO Mr. Koshik Goj CFO Mr. Dr. Santan Sarkcar GM Finance and Accounts. I shall 0:30 30 seconds now hand over the call to the management for the opening remarks post which we will proceed with the Q&A session. Over to you sir. 0:38 38 seconds Thank you and very warm welcome to all of you uh to today's earnings call for quarter 4 of financial year 26. 0:47 47 seconds I'll take you through a short presentation giving the details of this quarter's presentation and the annual presentation 0:54 54 seconds and then uh subsequently open it up for question and answer. 0:59 59 seconds Uh so uh the first part is dealing with the standalone results of quarter 4 1:06 1 minute, 6 seconds financial year 26 volume growth of 11.8% 8% driven by healthy traction across key business segments. 1:17 1 minute, 17 seconds Value growth stood at 6.7% during the quarter. 1:21 1 minute, 21 seconds Indian operations market share amongst listed peers remained strong at slightly above 20%. 1:29 1 minute, 29 seconds Gross and operating margins expanded to a 12 quarter and 10 quarter high respectively 1:37 1 minute, 37 seconds supported by favorable mix operating leverage and of course reduced raw material cost. Operating profit grew 18% 1:46 1 minute, 46 seconds nearly with both sequential and yearon-year margin expansion. 1:52 1 minute, 52 seconds PAT before exceptional items increased 23% while PAT after exceptional items grew 2:00 2 minutes 38% aided by insurance claim recognition during quarter 4. 2:08 2 minutes, 8 seconds Now if we look at the decorative business line you know delivered strong doubledigit volume growth with 2:16 2 minutes, 16 seconds sequential improvement in value performance supported by pre-pric hike channel pickup and premium imulsion traction. 2:30 2 minutes, 30 seconds Construction chemicals and waterproofing continue to outperform sustaining robust momentum across key markets. Protective 2:39 2 minutes, 39 seconds coatings registered healthy high singledigit volume and value growths on a strong base. Automotive coatings 2:48 2 minutes, 48 seconds delivered strong doubledigit volume and high singledigit value growth driven by healthy demand in two and three wheelers 2:55 2 minutes, 55 seconds supported by lower financing costs and GST cuts. GI business posted robust doubledigit volume and value growth 3:04 3 minutes, 4 seconds while powder coatings witness sequential and yearon-year recovery 3:22 3 minutes, 22 seconds on a CAGR basis. If we look at the 2ear 3 year and 5 year for the quarter if we 3:29 3 minutes, 29 seconds look at the 2 3 5 year volume it is more or less at that level of 9 to 11% in 3:35 3 minutes, 35 seconds terms of the volume growth in value growth again it hovers between 5 and 7% 3:42 3 minutes, 42 seconds so it's 5 12% for a 2ear CAGR 4.6 and 6.9 and an operating profit level you know 3:51 3 minutes, 51 seconds growth 18.8 8% for 2 years, 3 years it is 10.2 and 5 years it is 8.7 for the 4:00 4 minutes quarter. So quarter seems to be you know quarter 4 uh is much stronger in terms of operating profit growth whether you 4:08 4 minutes, 8 seconds look at you know the 2-year figure and even in the volume value it is pretty comfortable on the annualized basis. 4:15 4 minutes, 15 seconds However, though the volume growth is similar in 2, 3 and 5 year, the value growth reduces. One was the primary 4:24 4 minutes, 24 seconds reason was of course the price drop which we had uh about 2 and 1/2 years back and that has impacted both the 3ear and 2ear CAGR. 4:35 4 minutes, 35 seconds The operating profit also shrunk in the last two years a little bit. So the CAGGR has been at 0.1% for the 2-year CAGR. 4:47 4 minutes, 47 seconds Now the trend for gross margin has been very encouraging this quarter. Uh it has been the highest in the last 12 4:56 4 minutes, 56 seconds quarters. In fact in the last 16 quarters this was the highest at 42.3%. 5:01 5 minutes, 1 second Margin trajectory remained resilient despite elevated competitive intensity and sharp rupee depreciation. So we lost 5:10 5 minutes, 10 seconds some profit element because of the rupee depreciation but in spite of that our gross margin was at 42.3%. 5:19 5 minutes, 19 seconds Gross margin improved sequencially and yearon year aided by favorable mix enrichment waning impact of economy 5:26 5 minutes, 26 seconds segment price cuts and partial benefit from withdrawal of anti-dumping duty on titanium dioxide. 5:37 5 minutes, 37 seconds In terms of operating margin also uh it was one of the highest in the last 10 quarters. It was the highest in fact at 18.3%. 5:47 5 minutes, 47 seconds The robust operating profit was driven growth of 17.8%. 5:53 5 minutes, 53 seconds Gross margin expansion by 110 basis points and operating leverage and sustained cost optimization measures 6:01 6 minutes, 1 second continue to support margin expansion amid competitive market conditions. 6:09 6 minutes, 9 seconds If you look at the trend quarter on quarter beginning from quarter 3 of financial year 24 this is the highest at 6:17 6 minutes, 17 seconds 18.3% so 10 quarter highest operating margin was achieved this quarter 6:26 6 minutes, 26 seconds decorative business the decorative segment delivered doubledigit volume growth while value growth was supported by improved product product mix across premium and economic Imulson. 6:37 6 minutes, 37 seconds New offerings in premium imulsson category such as color plus and color plus glow performed well while weather 6:46 6 minutes, 46 seconds coat antid-dust in exterior segment continued to outperform with double-digit growth. Construction 6:52 6 minutes, 52 seconds chemicals and waterproofing continued to perform well. Wood coatings business continued to witness robust doubledigit 7:00 7 minutes growth across markets. Retail footprint expanded to 1,900 stores with over 700 7:08 7 minutes, 8 seconds additions during the year. While tinting machine installations crossed 10,000 units with 2,600 plus deployments in quarter 4 alone. 7:21 7 minutes, 21 seconds Industrial business protective coatings delivered strong volume and value performance during the quarter while 7:29 7 minutes, 29 seconds operating margins remained at high teens. 7:32 7 minutes, 32 seconds Automotive quotings registered healthy growth in both volume and value driven by sustained traction in the two wheelers segment. 7:43 7 minutes, 43 seconds If you look at the financial results, this is how it looks. Total income from operations had a growth of 6.7%. 7:51 7 minutes, 51 seconds Operating profit 17.8%. PBT PBIT is 23.6% growth. 8:01 8 minutes, 1 second profit before exceptional item and tax 25% growth. PBT grew at 36.6% and PAT at 38%. 8:12 8 minutes, 12 seconds There is one exceptional item which is uh in terms of the insurance cost due to the fire which we had in our Baraset uh 8:20 8 minutes, 20 seconds warehouse we had taken a provision in quarter 1 of this year uh which got reversed when we got the money in 8:28 8 minutes, 28 seconds quarter 4. Uh so that's about 36 crores which came in uh which took up therefore 8:35 8 minutes, 35 seconds the profit uh PBIT from 25% to PBT at 36.6%. 8:44 8 minutes, 44 seconds Uh but you know overall uh a good sales growth and a very strong operating profit and PBT growth 8:54 8 minutes, 54 seconds in terms of the standalone annual performance highlight. It's a high singledigit volume growth. Uh the value 9:02 9 minutes, 2 seconds growth was relatively muted. The value volume gap was due to higher contribution from construction 9:09 9 minutes, 9 seconds chemicals, textures and tile adives which I had mentioned in my last call as well. The economy segment price cuts and 9:16 9 minutes, 16 seconds some impact of extended monsoon when this year has been had been quite bad and we lost out a significant portion of 9:25 9 minutes, 25 seconds our exterior mal and roof coating sales which is high value items in quarter two and partly in quarter three as well 9:32 9 minutes, 32 seconds which is why the annual value growth was slightly depressed. Automotive coatings outperformed on improved demand post GST 9:41 9 minutes, 41 seconds cuts while protective coatings witnessed recovery towards the end of the year. 9:46 9 minutes, 46 seconds Gross margins improved year on year driven by favorable mix muted RM prices despite competitive intensity and sharp rupee depreciation. 9:56 9 minutes, 56 seconds Operating margins moderated slightly in FY26 due to muted value growth impacting 10:04 10 minutes, 4 seconds operating leverage and marktomarket impact from rupee depreciation. YTD margins however remains within the 10:11 10 minutes, 11 seconds guided range of 15 to 17% which we have always maintained on a 12-month basis. Therefore, if we 10:20 10 minutes, 20 seconds look at it, our income from operations grew at 2.5%, operating profit at 0.7%. 10:28 10 minutes, 28 seconds And PAT at 1.7%. 10:32 10 minutes, 32 seconds We introduced a few interesting innovative products. One of them is the cool range roof cool and seal tank cool and weather coat antid-dust. 10:44 10 minutes, 44 seconds uh in the summer months when in this heat these are products which will probably be very very useful for the 10:51 10 minutes, 51 seconds Indian consumer especially in the north where the heat is very strong this time and so we expect good sales coming out of these this set of products. 11:02 11 minutes, 2 seconds The another product which we have is the roof cool and seal which is doing very well. In fact in April it had a record 11:11 11 minutes, 11 seconds sale. Uh and this product continues to go from strength to strength. Uh this is a product applied on the roof which 11:19 11 minutes, 19 seconds protects it from the heat and also seals it from water leakage which is why the name roof cool and seal. 11:28 11 minutes, 28 seconds There is uh a set of products which we introduced in quarter 4 uh called color plus glow and then we had introduced 11:36 11 minutes, 36 seconds 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 11:46 11 minutes, 46 seconds Rangoli uh in that segment itself this has been introduced. is doing quite well and very 11:53 11 minutes, 53 seconds well accepted in the market today is getting spread across the country and we have good expectation from this 12:00 12 minutes particular brand. This year we introduced metallics uh and both silk metallics which was 12:09 12 minutes, 9 seconds introduced in quarter 4 and before that in quarter 2 we had introduced luxol metallics for metals and this silk 12:17 12 minutes, 17 seconds metallics is for the walls. uh both of which have started doing very well. We had again a record sale here of these two products in the month of April. 12:27 12 minutes, 27 seconds So this is Luxol metallics which was introduced in quarter 2. 12:31 12 minutes, 31 seconds We have of course you know many stores across the country in the urban areas specifically where we have this 12:38 12 minutes, 38 seconds different model with SIS stores coming up in good numbers in the weak urban markets of ours. 12:47 12 minutes, 47 seconds Uh in terms of consolidated results, Bollix the top line and operating profit growth was strong partly aided by the 12:55 12 minutes, 55 seconds P&L appreciation the local currency of Poland. BJ and Nepal revenue growth and 13:03 13 minutes, 3 seconds profitability remained subdued during the quarter due to the elections and the resultant turmoil there. However, 13:09 13 minutes, 9 seconds improvement in political stability along with recent price increases uh is expected to support recovery in 13:17 13 minutes, 17 seconds the coming quarters. We have already seen robust doubledigit growth in the recent one two months and therefore 13:24 13 minutes, 24 seconds Nepal is back in growth path. STP limited topline continued to be impacted. Operating profit muted due to 13:33 13 minutes, 33 seconds scale. We had consciously there was a you know incident in our Jamspur factory 13:40 13 minutes, 40 seconds in STP uh and we had to close it down for 2 3 months uh to get it repaired and 13:47 13 minutes, 47 seconds running again. Uh however you know we are slowly getting gaining back the customers uh in this uh particular uh it 13:55 13 minutes, 55 seconds used to supply to some OEMs and therefore it had a little bit of an issue last year but we are expecting to come to the growth path in STP again. 14:06 14 minutes, 6 seconds They 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 14:15 14 minutes, 15 seconds which happened uh due to the closure of that factory. SBL speciality quotings revenue growth at mids single digit 14:24 14 minutes, 24 seconds improved sequencially and yearon year profitability however was affected by scale high RM prices and some impact of 14:31 14 minutes, 31 seconds mix BGER Becker quotings robust sales growth on a low base and strong 14:39 14 minutes, 39 seconds profitability driven by scale and margin expansion. So it did very well you know coming back uh from the fire incident 14:47 14 minutes, 47 seconds the year before uh and it had a slightly weak base but it had strong double-digit volume value and profit growth. Burgger 14:56 14 minutes, 56 seconds nippon paint automotive coatings strong doubledigit revenue and profit growth backed by bant demand in the passenger 15:03 15 minutes, 3 seconds car and SUV auto space. Both Becker quotings and napon coatings of course are joint ventures where we have 49% so 15:12 15 minutes, 12 seconds it doesn't get added to our sales but the profit is added to the extent of 49%. 15:21 15 minutes, 21 seconds Now if we look at the results you know total income from operations 6.1% 15:28 15 minutes, 28 seconds operating profit growth 12.6 six uh largely impacted by underperformance of STP and Nepal uh both of which should do 15:38 15 minutes, 38 seconds much better this year. Uh PBT PBIT 13.1% 15:44 15 minutes, 44 seconds uh profit before tax grew at 25.3% PAT at 27.5% 15:52 15 minutes, 52 seconds and total comprehensive income for the period grew at 38.4%. 15:58 15 minutes, 58 seconds on the 12-month basis. Uh again, you know, slightly muted, but growing at 16:05 16 minutes, 5 seconds 2.9%, operating profit, marginally negative at 1.2% and PAT at minus 4.6%. 16:14 16 minutes, 14 seconds Total comprehensive income for the period growing at 1.7%. 16:20 16 minutes, 20 seconds The net cash position is positive you know has been growing as you can see in 16:27 16 minutes, 27 seconds financial year 24 we were at 351 crores it has moved to 689 crores last year uh 16:35 16 minutes, 35 seconds last to last year and then last year 2526 uh it has improved further to 1198 16:43 16 minutes, 43 seconds crores group continues to remain net cash positive Business outlook for financial year 27. 16:54 16 minutes, 54 seconds Demand conditions continue to be closely monitored with gradual recovery expected across decorative and industrial businesses. 17:02 17 minutes, 2 seconds Staggered price hikes from March onwards expected to support gross margins and rising raw material costs while 17:10 17 minutes, 10 seconds sustained cost optimization initiatives likely to keep operating margins within the guided range which we have always maintained. 17:19 17 minutes, 19 seconds Competitive intensity expected to remain elevated. 17:23 17 minutes, 23 seconds Growth momentum expected to be led by strong traction in construction chemicals, waterproofing and wood coating segment and upcoming product 17:32 17 minutes, 32 seconds launches. Continued investments in branding, distribution expansion and storesled urban market initiatives should yield positive results. 17:44 17 minutes, 44 seconds Protective quoting business outlook remains positive supported by expected increase in government capex spending. 17:53 17 minutes, 53 seconds West Asian disturbances, volatility in crudebased derivatives, rupee depreciation, 18:00 18 minutes supply side disruptions and potential inflationary pressures remain key monitorables for the sector. 18:10 18 minutes, 10 seconds Thank you. We can open up for questions. 18:16 18 minutes, 16 seconds Thank you sir. Uh we will now start with the session. I hand over the colleague Moid D to moderate the question and answer session. Over to you Mohammed. 18:28 18 minutes, 28 seconds Thank you. Those of you who have questions can raise their hand now. We will announce your name and unmute your line. Please highlight your full name and the organization you are representing. 18:44 18 minutes, 44 seconds The first question is from the line of Miisha. Please go ahead. 18:54 18 minutes, 54 seconds Hello mir I can't hear anything. 19:11 19 minutes, 11 seconds Hello. We can't hear anything. 19:21 19 minutes, 21 seconds I think we can just a second sir. Yeah. Hi sir, I hope I'm audible now. Yes, you are. Yes. 19:28 19 minutes, 28 seconds Okay, great. Thank you. Thank you for that. Uh so firstly, congrats on a great set of numbers. Uh so this step up in 19:35 19 minutes, 35 seconds volume growth that we are seeing uh what according to you would be the impact of pre- buying uh before the price 19:43 19 minutes, 43 seconds increases and how should one think about the oneu volumes uh will this pre- buying have any impact on one volumes. So that's my first question. 19:51 19 minutes, 51 seconds So you know uh there is some impact uh but obviously uh the volume growth was improving month on month. we saw an 19:59 19 minutes, 59 seconds improvement in January from December and February from January uh and then March it was slightly better than February as 20:07 20 minutes, 7 seconds well. Uh so it's not uh fully as if you know it is because of the price 20:13 20 minutes, 13 seconds increase. The second is that you know uh in quarter one as well there have been actually three price increases 20:23 20 minutes, 23 seconds uh and the fourth one is coming up in on the 15th of May for us. 20:28 20 minutes, 28 seconds So uh there will be uh a healthy growth you know in quarter 1 as well. 20:37 20 minutes, 37 seconds Understood. Uh any level of secondary sales for uh 4Q that you think that uh 20:44 20 minutes, 44 seconds uh you know you can share? secondary sales had improved you know from what it was as I said you know Q3 was better 20:51 20 minutes, 51 seconds than Q2 and Q4 was uh better than Q3 in terms of secondary sales also so uh if 20:59 20 minutes, 59 seconds we saw you know say 11 12% or 12% approximately in terms of volume growth uh then I would say that you know the 21:08 21 minutes, 8 seconds secondary would be around 8 to 9% and then 3 to 4% would have been the bunching up of uh purchasing which would 21:15 21 minutes, 15 seconds have happened uh due to the price increases. 21:19 21 minutes, 19 seconds Got it. That is clear sir. Thank you for that. Secondly, uh sir, given the cost inflation, what is the level of cost increase that you are seeing in RMS 21:26 21 minutes, 26 seconds currently? Uh uh and what is the cumulative price increase of these four price hikes that will uh sit in one Q? 21:34 21 minutes, 34 seconds Uh and should one expect margins given the timing issue uh to compress in one Q 21:40 21 minutes, 40 seconds and to what level? So you know uh more or less whatever has been the raw material price increase so far uh unless 21:50 21 minutes, 50 seconds the prices again start shooting up you never know these things. Uh but uh as of 21:56 21 minutes, 56 seconds now we are more or less covered. Uh so except for solvents where there might be still a gap uh almost every other 22:04 22 minutes, 4 seconds product category uh we are more than adequately covered as far as price increases are concerned compared to the raw material price. So uh of course the 22:13 22 minutes, 13 seconds timing a little bit of you know delayed price increases would have happened but then we were carrying some 22:22 22 minutes, 22 seconds stock as well uh from earlier period and therefore more or less it should neutralize each other. So I don't see 22:30 22 minutes, 30 seconds any major impact in the profitability that way. 22:36 22 minutes, 36 seconds Fantastic sir. Fantastic. Uh so that holds true for decorative but for industrial there might be a little bit of a delayed price increase because 22:44 22 minutes, 44 seconds there you need to negotiate and sometimes you know but that's a smaller portion of our business you know 22:51 22 minutes, 51 seconds primarily in automotive where where this is there that you need to negotiate but normally they give from you know prior 22:58 22 minutes, 58 seconds period the price increases uh and hence you know that might impact a bit but otherwise it's fine 23:06 23 minutes, 6 seconds Understand? So B2B usually we understand that it'll take a bit of a uh so lastly I wanted to check on the level of volume 23:13 23 minutes, 13 seconds growth that one should expect in FI27 given 26 you know has a favorable base. 23:20 23 minutes, 20 seconds Uh also it is a El Nino year. So do you think that uh there can be more painting days uh and it can lead to higher volume 23:28 23 minutes, 28 seconds growth? Uh can one expect double digit volumes portfoli 27 with no impact on margins? So it's a difficult question to 23:37 23 minutes, 37 seconds answer me at this stage you know as it is it is so volatile that you know so there are negatives and there are positives as you said you know uh there 23:45 23 minutes, 45 seconds is this uh favorable base and at the same time more stability in the competitive intensity. These two factors 23:54 23 minutes, 54 seconds are in our favor and the third is of course there is no uh price decrease uh happening which which tends to 24:03 24 minutes, 3 seconds depress the value. The on the other hand in terms of the uh volume getting impacted a bit you know the inflation 24:11 24 minutes, 11 seconds will be on the higher side uh that might you know soften the demand a little bit. 24:17 24 minutes, 17 seconds uh at the same time the elino effect that you mentioned uh we don't know how much of it of the impact it will have in 24:23 24 minutes, 23 seconds the upcountry areas uh so and the uncertainty which is there overall might 24:29 24 minutes, 29 seconds also impact the demand so it's a mixed uh equation very difficult to project at 24:37 24 minutes, 37 seconds this stage what will happen but we assume that you know it will be a fairly decent volume growth in spite of all of 24:44 24 minutes, 44 seconds these challenges is got it sir. Thank you very much. Wishing you all the very best. That's all from my side. 24:51 24 minutes, 51 seconds Thank you. 24:54 24 minutes, 54 seconds Thank you. To enable the management to answer most questions, I I would like to request that each member kindly keep the 25:01 25 minutes, 1 second number of questions to two. The next question is from the line of Aimea. Please go ahead. 25:10 25 minutes, 10 seconds Hi sir, am I audible? 25:12 25 minutes, 12 seconds Yes, you are. Go ahead please. Sir, I wanted to kind of check with you on two things. One, conceptually, you know, this cumulative price hikes, uh, you 25:21 25 minutes, 21 seconds know, I don't know if you could kind of give us a first a number for it and would it be uh do you see it kind of 25:28 25 minutes, 28 seconds improving the growth trajectory from the 6%? Basically, is the volume impact likely to be uh lower than the price 25:37 25 minutes, 37 seconds hikes? Uh, is what I wanted to kind of understand based on what we've seen historically, right? you know so uh the growth rate is 25:45 25 minutes, 45 seconds likely to you know the price increase that we have taken is about 11 to 12%. 25:51 25 minutes, 51 seconds Uh depending on the mix of the products that we sell actually but should be around that point. Uh now uh in terms of 26:01 26 minutes, 1 second what will happen uh to the volume value equation this time it will reverse which means uh the volume growth uh there used 26:09 26 minutes, 9 seconds 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 26:18 26 minutes, 18 seconds than the volume growth. We expect the volume growth to marginally you know reduce or be at at the levels at which 26:26 26 minutes, 26 seconds it was earlier. Uh but you know the value growth will be definitely be significantly higher than what it was 26:34 26 minutes, 34 seconds last year. Got it very clear sir. So the second bit was just you know a followup to what you kind of clarified to the 26:41 26 minutes, 41 seconds earlier part to me that we have taken price hikes to offset the input inflation till date. When you say this 26:48 26 minutes, 48 seconds offset, is this a absolute uh you know inflation number in rupees that has been passed on or is it 26:57 26 minutes, 57 seconds percentage margin? How should we look at that? 26:59 26 minutes, 59 seconds It neutralizes the percentage margin sort of you know uh absolute. 27:05 27 minutes, 5 seconds Okay. So on a percentage margin basis we should we have neutral we have maintained it given. Okay. Got it sir. 27:12 27 minutes, 12 seconds Perfect. That's all from my side. Thanks a lot sir. Thanks for this. Thank you. 27:18 27 minutes, 18 seconds Thank you. The next question is from the line of Percy Pantagi. 27:31 27 minutes, 31 seconds Hello. Hello. Am I audible? Yes. Yes, you are. Go ahead. Percy. 27:38 27 minutes, 38 seconds Yeah. So just wanted to understand uh I mean uh in terms of volume see in the last crude up cycle which happened 27:46 27 minutes, 46 seconds during covid times uh we actually saw even volumes doing very very well even better than what it was earlier but this 27:53 27 minutes, 53 seconds 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 28:02 28 minutes, 2 seconds could not spend it on many other things and that's why the volume growth was uh uh very strong But this time the 28:09 28 minutes, 9 seconds environment is different if we take uh significant uh pricing. 28:16 28 minutes, 16 seconds Don't you think there could be a sort of uh backlash in terms of uh volume and how do we sort of figure out whether 28:23 28 minutes, 23 seconds this will happen or not? I mean do we have any uh previous uh experience in this apart from the covid period or uh 28:33 28 minutes, 33 seconds uh uh I mean h how do you try and look at this question uh internally that is my first question 28:40 28 minutes, 40 seconds right okay you know so uh you are right that in after the covid uh though there was a significant price increase the 28:48 28 minutes, 48 seconds volume growth also went up and that was largely you know a part of it was due to the pent-up demand of the COVID period 28:56 28 minutes, 56 seconds which came into play uh after the covid that will not hold true this year uh 29:04 29 minutes, 4 seconds though there was you know some depressed uh situation there in quarter 2 quarter 29:11 29 minutes, 11 seconds 3 of last year uh due to the extensive monsoon this time it will be lesser monsoon uh and hence you know we may get 29:20 29 minutes, 20 seconds a much better situation there in quarter two and quarter 3 of this here. So, uh difficult to comment these things you 29:27 29 minutes, 27 seconds know as to how it will pan out. Uh earlier in previous records we have studied. Uh whenever these price increases have happened uh this has 29:37 29 minutes, 37 seconds happened quite in fact you know every 3 four years this type of a situation arises. Uh the prices do go up and then 29:44 29 minutes, 44 seconds one one and a half years down the line it tends to slide downwards. Uh that has been the record for every time the oil 29:51 29 minutes, 51 seconds prices have gone up. uh it always slides down in a period of one and a half years. You know sometimes it happens in 29:58 29 minutes, 58 seconds 8 to 10 months, sometimes it happens in 1 to one and 1/2 years but it will always slide. Uh but the issue is that 30:07 30 minutes, 7 seconds you know at the time when it goes up raw material prices do go up for the paint industry and prices also are taken up uh typically with a little bit of a lag. 30:17 30 minutes, 17 seconds This time we have been slightly more proactive and increase the prices because the price increase of raw materials was much higher. We were 30:25 30 minutes, 25 seconds forced to increase the prices. There was no choice. Uh there uh we believe that you know of the total paint cost only 30:33 30 minutes, 33 seconds 40% is the paint cost and 60% is labor cost. Uh hence the inflation to the 30:40 30 minutes, 40 seconds customer uh is only you know four to 5% of the total paint job. uh and I think 30:48 30 minutes, 48 seconds given the current inflationary situation across product categories this type of a inflation can be absorbed. It may have a 30:56 30 minutes, 56 seconds little bit of an impact on the demand but then as I said the bases are favorable. The comparative in intensity 31:03 31 minutes, 3 seconds or the strength at which it was you know growing has uh reduced and therefore those two are in our favor. Therefore, 31:11 31 minutes, 11 seconds 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. 31:19 31 minutes, 19 seconds Understood. And uh second question I have uh is on inflation. So uh crude is 31:26 31 minutes, 26 seconds up 40 50% versus pre-war. I'm assuming uh crude derivatives which you use uh 31:34 31 minutes, 34 seconds would be up uh in a similar fashion. Ti2 of course is up to a lesser extent. So 31:41 31 minutes, 41 seconds on your overall COOGS basket, what is the inflation today compared to the pre-war uh situation? 31:50 31 minutes, 50 seconds It's about 22 23% and and that's more or less covered through the price increase. 31:56 31 minutes, 56 seconds How is it covered sir? Because if you want to protect your margin, you will have to take a 22% uh price increase also which is not uh taken right. 32:06 32 minutes, 6 seconds No, no, no. It is you know it is raw material is at 60% of the total cost or 58% of the total cost the way you look 32:13 32 minutes, 13 seconds at it. So you have covered the rupee impact not the percentage margin impact right with the 10 12% price increase 32:21 32 minutes, 21 seconds your gross margin will still fall right no it won't you know so that's exactly what I'm trying to explain that if you 32:28 32 minutes, 28 seconds if you take 20% increase in raw material prices which is in terms of 60% uh it 32:35 32 minutes, 35 seconds will become approximately 12% uh because 60% of 20% is 12%. We have 32:43 32 minutes, 43 seconds taken up price increases of 12%. And there are savings elsewhere which we have to bring on the table which we work 32:51 32 minutes, 51 seconds on always. So therefore you know we will be able to maintain our gross margin. Okay. Understood sir. Understood. 32:59 32 minutes, 59 seconds Because wherever whenever there has been such a big uh cost inflation in the past at least temporarily for the three four 33:07 33 minutes, 7 seconds quarters uh all the industry players including yourself have seen gross margins go down. So I'm a little surprised when you're saying that even 33:15 33 minutes, 15 seconds temporarily we do not used to happen that way. You are right absolutely because it used to be in a the price increases used to be in a more 33:23 33 minutes, 23 seconds staggered manner. this time because of the suddeness and the quantum of increase that have happened we were left with no choice but to increase the 33:31 33 minutes, 31 seconds prices very rapidly you know and that is why I'm saying that it will not impact to that extent 33:37 33 minutes, 37 seconds okay sir that's all thank you so much thank you the next question is from the 33:44 33 minutes, 44 seconds line of roy please go ahead uh am I audible 33:51 33 minutes, 51 seconds yes yeah thank you Congrats on excellent numbers. Uh my first question is on your home state where your headquarters are. 34:00 34 minutes Uh so we have seen uh government change obviously double engine key circar generally works. So specific question is 34:09 34 minutes, 9 seconds uh how Ben how big is Bengal market for you as a percentage of revenue and last 2 three years is there a uh slowdown? 34:18 34 minutes, 18 seconds Related question is uh lot of Bengali workforce came back to Bengal to vote absolutely unprecedented levels. 34:26 34 minutes, 26 seconds Does that impact uh painter availability in uh uh April or yeah April month in in in any way across India? 34:36 34 minutes, 36 seconds Yeah. So you know let me answer the first question. You know uh it is you know a good uh thing that you know has 34:44 34 minutes, 44 seconds happened you know in terms of having a government in the state which is of the same party as that in the center. This 34:52 34 minutes, 52 seconds has happened after 49 years in West Bengal. Uh so we expect less kerish and more cooperation and hence the growth rate is likely to accelerate. 35:04 35 minutes, 4 seconds uh and and that will be you know quite evident especially in the infrastructure segment you know quick completions of 35:12 35 minutes, 12 seconds projects will happen uh and therefore you know also the central money for the various schemes which were stalled will 35:20 35 minutes, 20 seconds come into existence uh we expect therefore the growth rate to accelerate in the state of West Bengal for sure uh 35:27 35 minutes, 27 seconds we have a significant uh stake in West Bengal in fact you know we are overindexed in West Bengal compared to 35:34 35 minutes, 34 seconds the entire industry. Our headquarters is here. We have two factories here. We have a very strong brand equity. Our 35:41 35 minutes, 41 seconds presence is extremely strong in this particular state. Last two years we have been especially last year has been a 35:48 35 minutes, 48 seconds weak year in West Bengal. Uh it was you know uh suffering a bit. Uh and as a 35:55 35 minutes, 55 seconds result our performance was also getting impacted. We expect that you know this time there will be significant 36:03 36 minutes, 3 seconds growth coming out of West Bengal. Uh combination of two factors. One you know uh is that you know the economy is 36:11 36 minutes, 11 seconds likely to do well and we are much better placed in this state. So we we'll gain uh from this uh as far as West Bengal is 36:20 36 minutes, 20 seconds concerned. The second is in terms of the infrastructure also you know we are the leader in any case in protective 36:27 36 minutes, 27 seconds coatings across India. So therefore you know that will also help us in growing faster in the state of West Bengal. uh 36:34 36 minutes, 34 seconds on the question of the painter yes you know they did come back a large number of them you know in fact almost reaching 36:41 36 minutes, 41 seconds a cr number is what I'm told uh across you know in terms of population total population of course you know the 36:49 36 minutes, 49 seconds workers would have been in lakhs uh and they did come back the painters and uh now I think most of them have gone back 36:58 36 minutes, 58 seconds uh but it did impact a little bit in some areas you know there was this crisis of painters uh but not so much 37:07 37 minutes, 7 seconds that it impacted sales uh one thing you didn't answer Bengal will be high single digit as a 37:14 37 minutes, 14 seconds percentage of sales for you no it is double digit actually okay understood uh my second question is 37:21 37 minutes, 21 seconds on uh uh your commentary on uh slight moderation on the competitive intensity now when I see any metric for example 37:30 37 minutes, 30 seconds gross margin threeear I abita margin close to 2 and a half year high and uh you said volume growth x of the price 37:38 37 minutes, 38 seconds increase uh behavior is also reasonably good. Uh but uh if you could explain then why is the competitive intensity 37:47 37 minutes, 47 seconds high? Ultimately it has to reflect in any of these numbers because in December quarter also your margins did expand. uh 37:54 37 minutes, 54 seconds but second related question is when I see uh media as a consumer I see outsized presence of obviously the market leader which is always there but 38:03 38 minutes, 3 seconds the new player is also very aggressive uh I don't see Burgger with 20% market share in the legacy paint players having 38:12 38 minutes, 12 seconds that kind of a media presence as a customer so if you could tell us what is your media share when I when we take the new player also into account and why are 38:20 38 minutes, 20 seconds you underinvesting if you are right you know So uh competitive intensity why I have said is that you know because 38:29 38 minutes, 29 seconds it is still quite strong you know and the figures you know may indicate a different uh scenario altogether you 38:36 38 minutes, 36 seconds know the leader also might exhibit very strong figures because the bases are muted for them and for us as well. uh we 38:44 38 minutes, 44 seconds had a good base but yet we did well and a part of it would be the price increase impact which which would have helped uh 38:51 38 minutes, 51 seconds but the intensity exists you know on the ground uh there is no doubt on that count though as I said uh it is you know 39:00 39 minutes the growth which was there has completely tapered off and so now it is there in the form of you know 39:09 39 minutes, 9 seconds any other competitor like you know who's relatively doing Well uh so one more competitor has been added and therefore 39:17 39 minutes, 17 seconds you know some share which had gone to them remains with them you know so that is how it is I would place it in that manner uh the other question which you 39:26 39 minutes, 26 seconds uh said was what was the second part which you media media media huh media so you know we spend about you know we have not increased or 39:34 39 minutes, 34 seconds decreased our spends you know our spends remain uh at our market share sort of you know which is 20% and since Asian 39:42 39 minutes, 42 seconds when uh the market leader is at you know 52 odd percentage so they spend 2.6 six times hours. So they are much more 39:49 39 minutes, 49 seconds visible. Uh we are also not so present in the sports which is where some of you might be seeing and then hence you know 39:58 39 minutes, 58 seconds we are we are less present there. We were much more present in the news channels. Uh we are correcting that media mix a bit this year. We were there 40:06 40 minutes, 6 seconds also in the GC's more. We have reduced the spends there and increased our spends on the sports this year. So 40:13 40 minutes, 13 seconds you'll get to see much more visibly our brand in in in that uh in the in the sports channels as well. Uh but you know 40:22 40 minutes, 22 seconds uh the new entrant actually spent far far beyond their you know market share. 40:29 40 minutes, 29 seconds So uh that's something which is their choice. We have always maintained our uh share of voice at a similar level as to 40:37 40 minutes, 37 seconds our share of market. Uh we don't go overboard. We don't spend as well. uh and we maintain our uh you know 40:45 40 minutes, 45 seconds profitability at the band at which we maintain uh we have no surprises therefore on any of these we are slightly boring but consistent. 40:56 40 minutes, 56 seconds Sure. Thanks. That's all from my side. 41:00 41 minutes Thank you. The next question is from the line of Akshand Takar. Please go ahead. 41:09 41 minutes, 9 seconds Yeah, thank you for the detailed comments and and the presentation. Just wanted to double click uh on the point 41:16 41 minutes, 16 seconds that you made on margin. So you know just roughly 100 is your sales, 60 is your raw materials just for the sake of 41:24 41 minutes, 24 seconds argument. You said that 60 has got 20% inflation. So your raw material cost will go up by 12 and which is the price 41:32 41 minutes, 32 seconds increase that you've taken. Now I I get that absolute gross margin in this scenario doesn't change but in an 41:41 41 minutes, 41 seconds accounting sense the percentage gross margins would be lower. No sir I'm I'm just sort of wanting to be on the same page here. 41:49 41 minutes, 49 seconds Yes you know you are right you know it will have an impact know slightly on the gross margin. uh we have however 41:56 41 minutes, 56 seconds initiated certain measures which we believe will give us some savings on the gross margin on account of you know the 42:03 42 minutes, 3 seconds formulation efficiency and at the same time in terms of sourcing efficiency that we bring to the table. So that you 42:11 42 minutes, 11 seconds know 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 42:20 42 minutes, 20 seconds plus we will add a few more. So that's one impact. It will still have possibly a slow slow uh one one and a half% 42:28 42 minutes, 28 seconds impact on the gross margin but that will get neutralized in the AIDA margin because of the scale efficiency which will come into play. 42:38 42 minutes, 38 seconds Fair. So so percentage gross margin slower and uh then whatever efficiencies we get on costs and operating leverage 42:47 42 minutes, 47 seconds will will drive the ITA this thing. Now uh I we've not seen a period where we've had 10 15% price hikes only a few times in the past. Correct. 42:58 42 minutes, 58 seconds Uh you you mentioned that elasticity is lower. I mean what's giving you that confidence because see um you know 43:07 43 minutes, 7 seconds discretionary spends could be under pressure given where inflation is. No. So uh do you see downtrading as a risk? 43:15 43 minutes, 15 seconds 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 you know so we I have 43:23 43 minutes, 23 seconds gone through this type of a cycle many times you know and and we have not seen this type of increase of 12 13% but we 43:31 43 minutes, 31 seconds have definitely seen 7 8% price increases at least four five times earlier you know which is a very similar 43:38 43 minutes, 38 seconds type of you know okay 3 4% more maybe in terms of inflation in terms of prices but that's very fairly similar and 43:46 43 minutes, 46 seconds whenever that had happened the expectation was that you know it will impact volumes somewhat thought it did impact you know but very marginal on the 43:55 43 minutes, 55 seconds margins you know so sort of you know uh really you know those who will paint will paint uh 44:03 44 minutes, 3 seconds 3 4% inflation on overall painting cost if a person is willing to spend one lakh I'm sure he's willing to spend 1 lakh 44:11 44 minutes, 11 seconds 5,000 you know and and instead of saying that no no one lakh be one lakh 5,000 and therefore I will not spend anything 44:20 44 minutes, 20 seconds that's rarely happens So you know that is why I'm saying you know more or less you know it doesn't impact so much the volume. 44:29 44 minutes, 29 seconds Okay. And one very last question sir is on your comments on competitive uh 44:36 44 minutes, 36 seconds intensity. Uh you know we've we've discussed what the strategy for the new intent has been and how in the past 44:44 44 minutes, 44 seconds you've seen that as unsustainable. Uh we've also seen one more player become a little more serious towards the pain 44:51 44 minutes, 51 seconds distin just generally your comments on what's giving you the confidence it's not increasing any further your comment seem to be on stability 44:59 44 minutes, 59 seconds right no so I'll just explain why I I said through two things one you know as far as the new entrance is concerned 45:07 45 minutes, 7 seconds uh it has you know increased the dealer price list uh much more than you know what we have done or what the leader has 45:16 45 minutes, 16 seconds done you know so in fact it used to operate at 5% discount uh now except for you know the low-end economy emulsions 45:24 45 minutes, 24 seconds where it has a 2% advantage in price everywhere else the prices are same in fact one or two cases they are higher so 45:31 45 minutes, 31 seconds therefore you know that price advantage which they were giving in the marketplace is does not exist anymore 45:39 45 minutes, 39 seconds the second is in terms of you know the painter amount that they were you know giving to the painters in terms of 45:48 45 minutes, 48 seconds various types of schemes. There also there has been a substantial reduction uh announced this year. Uh so overall 45:55 45 minutes, 55 seconds they are you know trying to shore up their uh profit. As I said it was not sustainable. So it's evident from the 46:03 46 minutes, 3 seconds current actions that you know they are trying to correct the situation and make you know the operation profitable. So 46:12 46 minutes, 12 seconds from that perspective you know it will have an impact on their volumes uh and the growth that they were registering. 46:20 46 minutes, 20 seconds So that's one uh which is why uh and then we have seen for the last almost 5 6 months our report from the market says 46:28 46 minutes, 28 seconds that uh it's more or less stable sales for them. It's not growing at the pace at which it had initially started 46:37 46 minutes, 37 seconds growing. So it's month on month, quarter on quarter if you track their figures more or less it is at similar levels uh 46:44 46 minutes, 44 seconds as it was you know the previous month or the previous quarter. So uh 46:51 46 minutes, 51 seconds this is how uh it has been you know in March they did well because I think their quarter and year end schemes 46:59 46 minutes, 59 seconds ended. So suddenly you know there was some amount of sales which would have happened at that period because most of the dealers that we spoke to said that 47:07 47 minutes, 7 seconds they have stocked up a little bit. uh so so from that perspective it would have gone up a bit but otherwise it has been 47:16 47 minutes, 16 seconds you know relatively stable sales and now with these price increases in the DPL of dealer price list and reduction in 47:25 47 minutes, 25 seconds expenses on painters I don't think you know uh the growth rates will be the way it was in the first year so this is why 47:34 47 minutes, 34 seconds I said competity in intensity remains but is not is stable Well, it's not growing at a faster pace. Uh as far as 47:43 47 minutes, 43 seconds the new other new player is concerned, yes, you know, they have plans. Uh 47:50 47 minutes, 50 seconds but you know, we have uh both these players existed in the market. We know what they have done or what they can do. 47:59 47 minutes, 59 seconds So, you know, it's not something that they are coming from zero base or something. So even if they grow it won't 48:06 48 minutes, 6 seconds impact so much you know the overall market. 48:10 48 minutes, 10 seconds Okay. Thank you sir. I'll fall back in the queue. 48:14 48 minutes, 14 seconds Thank you. Question is from the line of Adita Barta. Please go ahead. 48:24 48 minutes, 24 seconds Um so again harping on the same point as margins and raw material price increases that have been taken. Uh so fair to 48:32 48 minutes, 32 seconds 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 uh should be 48:41 48 minutes, 41 seconds remaining the same or possibly expanding a little because of formulation benefits and at the AIDA margin side at the Aida margin line uh even percentage margin 48:50 48 minutes, 50 seconds should be u should be remaining broadly similar is that absolutely your understanding is correct. Perfect. Perfect sir. And so 48:58 48 minutes, 58 seconds historically what we have seen is uh then when raw material prices start cooling off uh paint companies have been able to retain a part of the advantage. 49:08 49 minutes, 8 seconds Of course every time that this had happened it was before the bila opus era. Uh but given the kind of pricing 49:16 49 minutes, 16 seconds discipline that the industry has shown in this uh uh uh hyperinflationary environment, is it fair to assume that a similar kind of a theme may play out once uh crude prices start correcting? 49:27 49 minutes, 27 seconds Is is that what your approach is likely to be? 49:30 49 minutes, 30 seconds Well, it might happen. You know, it all depends on what happens, you know, to the prices of the raw material. uh typically you are right you know that 49:38 49 minutes, 38 seconds partly you know it is kept uh to some extent depending on the brand strength and some of the products where we might 49:47 49 minutes, 47 seconds have an advantage we don't tend to pass on the full price decrease benefit at that point of time uh as and when the 49:56 49 minutes, 56 seconds situation arises you know so we will have to wait and see what happens there are two new competitors now you know so 50:05 50 minutes, 5 seconds uh it may not hold true you know completely but at the same time you know wherever the brands are strong for any individual player uh this may hold true. 50:14 50 minutes, 14 seconds So you know some of the commodities it may not uh it may get passed on fully some of the branded items where you know there is you know possibility of 50:23 50 minutes, 23 seconds retention uh there might it might be retained. 50:26 50 minutes, 26 seconds Sure sir and say historically you have guided for roughly 15 to 13% kind of an IBIDA range. Uh is that the range that 50:36 50 minutes, 36 seconds you'll stick with um even in this inflationary environment and as raw material costs cool off or do you think 50:43 50 minutes, 43 seconds uh uh maybe we we we should be at the upper end of that range? No, we stick to that 15 to 17%, you know, like this 50:51 50 minutes, 51 seconds quarter we did exceed that you know we went up to 18.3%. 50:56 50 minutes, 56 seconds uh but you know more or less you know our track record has shown that we typically remain in that 15 to 17. Uh 51:05 51 minutes, 5 seconds sometimes when it goes up consistently if it is remaining at those higher levels we will spend more on advertisement and brand building you 51:13 51 minutes, 13 seconds know rather than you know go up to 1819 or something. 51:18 51 minutes, 18 seconds Sure sir that's very helpful. Thank you so much. 51:22 51 minutes, 22 seconds Thank you. For the benefit of everyone like to request that each member kindly keep the number of questions to two. 51:29 51 minutes, 29 seconds The next the next question is uh from the line of Jay Dhi. Please go ahead. 51:38 51 minutes, 38 seconds Hi Abijit sir thanks for the opportunity. Uh just a clarification on your previous question uh previous response. So 15 to 17 that you guide is 51:47 51 minutes, 47 seconds it always on standalone or is it at a console level because console this quarter is 16.8 date if I'm not mistaken. 51:54 51 minutes, 54 seconds Correct. That's true. You know, it was on the slightly lower side uh compared to the standalone. Uh but your guidance is at a standalone 52:02 52 minutes, 2 seconds level or console level when you when you generally talk about 15 to 17 when you know primarily I talk about standalone but you know in the console 52:10 52 minutes, 10 seconds also it remains at because you know more or less console follows the standalone you know so it it should be somewhere around the same level. 52:18 52 minutes, 18 seconds Perfect. Second is you know uh you know uh you did mention that the dealer price list of bera opus you know has gone up 52:26 52 minutes, 26 seconds uh you know by a higher percentages than you know uh let's say burgger or Asian paint so they've narrowed the gap 52:34 52 minutes, 34 seconds uh after rebates and trade schemes do you think that net of all those uh schemes and rebates also the gap has 52:41 52 minutes, 41 seconds narrowed yes that's right similar and uh by how many percentage points ballpark do you think the gap would have 52:50 52 minutes, 50 seconds narrowed 3 to 4%. Understood. Uh so that's uh very clear. 52:56 52 minutes, 56 seconds Thank you. And uh last one is uh you did mention that you know uh material cost is only 40% of the total project cost. 53:06 53 minutes, 6 seconds So 1 lakh rupee budget goes to 1 lakh rupees 5,000 right? uh you know what we have seen in the past is that in a inflationary environment painters also actually 53:15 53 minutes, 15 seconds increase their labor charges and basically you know per square feet painting uh you know uh cost uh at a 53:24 53 minutes, 24 seconds similar you know similar kind of inflation. So do you think uh you know this time around also you know it would be same or you think this time it will 53:33 53 minutes, 33 seconds 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 4 to 53:42 53 minutes, 42 seconds six quarter period. So you know how how did labor cost move then? 53:46 53 minutes, 46 seconds So you know it does move up a little bit you know it's not as if you know it remains completely static but not to the extent of you know the material cost. So 53:55 53 minutes, 55 seconds it typically you know because there there is in competition there in that segment you know lot of the players lot 54:02 54 minutes, 2 seconds of the painters may not raise their prices some of them may and and therefore you know uh the competitive 54:09 54 minutes, 9 seconds intensity is much stronger there so you cannot charge you know uh much higher amount therefore and get business. So 54:17 54 minutes, 17 seconds the tendency is that you know there is a little bit of an increase you know because the overall cost for them also goes up uh but it doesn't increase to 54:25 54 minutes, 25 seconds the level of the material cost. The material cost as I said you know if suppose it has gone up by 11 12%. The labor cost may go up by 3 4%. So 54:35 54 minutes, 35 seconds therefore the impact will be much lesser as far as the labor is concerned. 54:39 54 minutes, 39 seconds Okay. And one final one please. Uh so see if we look at the history of the industry you know uh historically you 54:47 54 minutes, 47 seconds know all in all inflationary cycles all the players took gradual price increases and at the end of you know in a 54:55 54 minutes, 55 seconds deflationary cycle it resulted in improvement in profitability for the industry and it was quite a rational competitive environment. uh we saw 55:04 55 minutes, 4 seconds similar trends in you know 2022 23 pricing you know inflationary cycle as well but then subsequently after entry 55:11 55 minutes, 11 seconds of beropus you know uh because of higher rebates discounts competitive pressures you know that discipline of uh you know 55:20 55 minutes, 20 seconds went away right so this time around you know do you do you expect that you know what we had seen in the previous cycles 55:27 55 minutes, 27 seconds will continue or do you are you very comfortable and confident that uh uh you know to answer you know 55:35 55 minutes, 35 seconds it is self-evident from this price increase itself that you know BA has actually increased more than uh what the 55:42 55 minutes, 42 seconds industry has done you know in fact they were increasing from the month of January itself uh to narrow the gap between the industry and themselves so 55:50 55 minutes, 50 seconds you know obviously they are you know behaving in a very responsible uh as a responsible player within the industry you know and and maintaining parity with 55:58 55 minutes, 58 seconds the industry so uh no reason for us to believe that you Suddenly they will change behavior and create a gap for 56:05 56 minutes, 5 seconds themselves you know when they have narrowed it down completely. So I think you know 56:13 56 minutes, 13 seconds it will behave in a similar fashion that it has happened the industry whatever has seen earlier should repeat itself. 56:20 56 minutes, 20 seconds Thank you very much uh and all the best. Thank you. 56:26 56 minutes, 26 seconds Thank you. The next question is from the line of Amit Purohit. Please go ahead. 56:33 56 minutes, 33 seconds Hi sir, good evening. Uh Amit here from PLA. Uh sir just on your comment on industry growth. Uh I just wanted to 56:42 56 minutes, 42 seconds know one on the trends uh with respect to luxury premium and economy any changes like I mean for some quarters 56:49 56 minutes, 49 seconds we've been hearing that consumers are downgrading and economy segment or the lower end segments have been doing well. 56:56 56 minutes, 56 seconds any trend change that you have seen uh with the growth gradually improving? No. 57:02 57 minutes, 2 seconds Yeah. So as far as the trend is concerned in the the typically what happens is in the second and the third quarter due to the rains and this time 57:10 57 minutes, 10 seconds it was excessive you know the premium imulsion for exteriors and luxury emulsions for exteriors and the 57:18 57 minutes, 18 seconds roof paint you know the roof cool and seal type of product uh does not sell much you know. So typically uh the 57:26 57 minutes, 26 seconds second quarter has a poorer mix for all paint companies and it improves in the third quarter and fourth quarter it 57:34 57 minutes, 34 seconds improves further. Uh so that was the trend which was seen and that is why you see our operating margin has moved up. 57:42 57 minutes, 42 seconds Uh a part of the reason is because of better sale of premium and luxury emulsions uh comparatively this quarter. 57:50 57 minutes, 50 seconds So it is not a trend shift sort of you know seasonality is a factor there and every 57:57 57 minutes, 57 seconds time you know typically the third and the fourth quarter seems to do much better and it continues in the first 58:04 58 minutes, 4 seconds quarter as well. So uh then suffice to say that this year given the fact that uh rains are uh I mean we have an eldino 58:12 58 minutes, 12 seconds and more numbers so premium segments to and have we seen similar signs in April month uh uh I just wanted to uh one 58:21 58 minutes, 21 seconds yes that's right you know similar signs in April as well. Yeah. Okay. Okay. Okay. 58:28 58 minutes, 28 seconds Uh and what would be the like you indicated that uh had this um I mean is the trend in April would have been very strong in terms of primary right because 58:37 58 minutes, 37 seconds much of the price increase are happening now uh uh is the secondary also uh decent enough uh in during the April month. 58:44 58 minutes, 44 seconds Yeah this question was asked and I did answer that yes you know not to the tune of the primary that we did but the secondary was strong enough. Okay. And 58:53 58 minutes, 53 seconds last question on uh um uh on the paint pain painter that you indicated on the price increases. Uh typically just 59:01 59 minutes, 1 second wanted to understand uh in markets like metros and all we understand it's all per square feet. Uh yeah is it the same 59:09 59 minutes, 9 seconds phen phenomena across the country or it is u material cost is bought and then labor is appointed. How do you 59:17 59 minutes, 17 seconds no it's so it changes from city to city everywhere it is perspective. It is you know location to location. Some places 59:24 59 minutes, 24 seconds you know they leave it to the contractors. Uh some places you know it is uh that the uh consumer goes and and 59:34 59 minutes, 34 seconds buys himself and and the labor is provided by the contractor. Uh it changes you know and so there is no hard 59:41 59 minutes, 41 seconds and fixed rule like that. Uh typically in the urban centers it used to be mostly it still is that the contractors 59:49 59 minutes, 49 seconds play a larger role. uh and in the upount areas you know they have a little bit more time on hand and you know they go and pick up the material along with the contractor that's how it happens. 1:00:01 1 hour, 1 second Thanks a lot sir and all the best. Thank you. 1:00:06 1 hour, 6 seconds Thank you. We take the last question from the line of Anera Jooshi. Hello. 1:00:16 1 hour, 16 seconds Yes. 1:00:17 1 hour, 17 seconds Yeah. Uh sir uh most of my questions are answered but uh uh now I guess uh you 1:00:24 1 hour, 24 seconds have already crossed the age of 60 and uh you have been in the role for 15 years and uh you have spectacularly laid 1:00:32 1 hour, 32 seconds bger to very strong market share gains with strong profitability. 1:00:37 1 hour, 37 seconds So how should we think about next five year uh 10 years as such. So whether you uh means whether there will be 1:00:46 1 hour, 46 seconds continuity from your side itself or um how the leadership roles will uh uh 1:00:52 1 hour, 52 seconds change emerge. If you can provide any uh clarity on that it will be very helpful. 1:00:59 1 hour, 59 seconds So I I I am there you know and I in fact you know probably you'll get to hear soon that I'm there till 31 you know. So 1:01:08 1 hour, 1 minute, 8 seconds uh so five more years to go. 1:01:13 1 hour, 1 minute, 13 seconds uh you'll have to bear with me. So that's how it is. 1:01:16 1 hour, 1 minute, 16 seconds No sir, you have been doing the probably the best work. Uh sure sir, sure. So 1:01:23 1 hour, 1 minute, 23 seconds that's uh uh answer the question. Um answer uh in terms of last question uh is the channel inventory really at a uh 1:01:32 1 hour, 1 minute, 32 seconds high level right now. Um at least whatever the checks we would have done uh it seems to have gone up materially. 1:01:39 1 hour, 1 minute, 39 seconds Um so is that a fair understanding because if if if the entire industry has 10% price uh is taken mean for example 1:01:48 1 hour, 1 minute, 48 seconds let's say a dealer is keeping inventory worth 5 lakh rupees in each shop now he cannot suddenly change his budget so uh 1:01:56 1 hour, 1 minute, 56 seconds he would have reduced he will reduce the volume actually because uh the paint prices have gone up by uh 10%. But uh we 1:02:03 1 hour, 2 minutes, 3 seconds still don't see uh the reduction in volumes in fact volumes are also higher. 1:02:08 1 hour, 2 minutes, 8 seconds So is there a material increase in the trade channel inventory or is there reduction in the trade inventory for 1:02:15 1 hour, 2 minutes, 15 seconds multiple smaller stroke uh unorganized players? 1:02:18 1 hour, 2 minutes, 18 seconds So both are happening you know so there is a little bit of stocking up happening you know so they're putting in more money from their kitty because this type 1:02:26 1 hour, 2 minutes, 26 seconds of large price increase gives them you know uh an enhanced margin for themselves because they can sell and and 1:02:34 1 hour, 2 minutes, 34 seconds make good margin so they tend to stock up a bit more. So that's one thing which is definitely happening. Uh and and the 1:02:41 1 hour, 2 minutes, 41 seconds second part is you know some of the marginal players will get squeezed out in the process because they know that you know the branded items will it will 1:02:49 1 hour, 2 minutes, 49 seconds be easier for them to sell and since the price increase is happening they tend to concentrate on the branded items stock them up more and so the leaders in 1:02:58 1 hour, 2 minutes, 58 seconds respective uh categories you know wherever they are uh will tend to gain more. 1:03:06 1 hour, 3 minutes, 6 seconds Okay, sir. This is uh very helpful. Many thanks. Thank you. 1:03:12 1 hour, 3 minutes, 12 seconds You that was the last question for the day. I now have the call to the closing remarks. 1:03:18 1 hour, 3 minutes, 18 seconds Right. So, thank you everyone for coming and joining for this you know quarter 4 results analysis. You know uh have a great day and you know carry on you know. Thank you. 1:03:30 1 hour, 3 minutes, 30 seconds Thank you on behalf of MBA Global Financial Services. That concludes this conference. Thank you all for joining