Kansai Nerolac Paints · tone and specificity signals across the available quarters.
Language signals
We are seeing the reversal now, many dealers of ours who started betting with competition have now started coming back to us and that's a pretty positive sign for us. I think they're realizing the power of Nerolac brand as well as the ground work that our team does.
It is clearly a discretionary product and that is definitely postponable. I don't think it has to do anything with India versus Bangladesh sentiment. The economy state they are into right now, consumption patterns are very different.
Our response is not in terms of offering anything free but it is in terms of offering a better product which is offering better properties in terms of coverage as well as better performance. So that has been our offering and that particular area whatever action we have taken is doing pretty good.
Backward integration is also a double-edged sword because all these commodity items have a big cycle, two years up, two years down. I really doubt whether that really makes sense on a longer period.
We are clearly prioritizing our premium mix and we are not participating greatly into low margin high volume items where it is not adding to my strategic expansion of the market.
Our endeavor is to maintain 13% to 14% kind of margin level and in midterm our endeavor is obviously to go to higher end of 14% plus kind of a thing.
In powder coatings, we are the only one in India who manufacture full range of resins intermediate that are required for automotive right from CD to metallic to top coat to clear coats.
We are reducing our exposure on all these ancillaries and putties which is getting into a commodity play and trying people are using it as more of an entry product, but we are okay with it.
I don't see [margin pressure] changing and through our value engineering effort which our procurement and R&D is very active, I believe we should be reaching that [13%+ margin] in this year also.
My share in the counter has increased... that trend continues and our effort is always on in our focus towns where we really want that to happen more aggressively.
Our intent is to actually have it at same level which obviously means our quality of mix is better. So while I'm that is our endeavor but obviously quarter to quarter it keeps changing because mix are very different.
I don't think the industry penetration has reached saturation because we are still about one-third of global average. I think slowly and gradually that will get shifted to pure play emulsion which is what globally exists.
Going forward I think if our geopolitical situation remains as it is and if improvements that are happening currently if that continues I'm sure you can see some change but I don't think there'll be dramatic change.