Ladies and gentlemen, welcome to the Q4 and FY 2023 Results Conference Call of Berger Paints India Limited, hosted by Emkay Global Financial Services. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference, please signal an operator by pressing Star then Zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Nitin Gupta of Emkay Global Financial Services. Thank you. Over to you, sir. Thank you, Dobin. Good evening, everyone. I would like to welcome the management and thank them for giving this opportunity. We have with us today Mr. Abhijit Roy, Managing Director and CEO, Mr. Kaushik Ghosh, Vice President and CFO, and Mr. Sujyoti Mukherjee, Vice President, Finance and Accounts. I shall now hand over the call to the management for the opening remarks. Over to you, gentlemen. Thank you, Nitin. Good evening, ladies and gentlemen. A warm welcome to Berger Paints India Limited earnings call for Q4 FY 2023, as well as for the financial year 2023. As always, we have with us today Mr. Abhijit Roy, our MD and CEO, and Mr. Kaushik Ghosh, Vice President and CFO. We're really encouraged by your participation. I would like to inform you that the management presentation on the performance has been uploaded in our website as well as in the stock exchanges. I would now like to hand over this call to Mr. Abhijit Roy for his comments on the performance. Over to you, sir. Thank you, Sujyoti. A very warm welcome to all of you to this earnings call. We will begin first by looking at what we have done for the year. The company recorded a strong performance for the year. Our consolidated top line crossed INR 10,000 crore in this particular year in 2023. India operations top line almost touched INR 10,000 crore as well. Company gained market share in 2022/2023. The standalone turnover growth was 22.3%, highest in the industry. Consolidated turnover growth was 20.6%. Double digit operating profit growth at 13.8% in the standalone and 11.7% on the consolidated business. Company added around 8,000+ retail touchpoints in financial year 2023 and installed about 5,200 color bank machines. The Protective Coatings business itself crossed INR 1,000 crore. We are the market leader and continue to remain a market leader in this segment. The non-auto industrial business also recorded market leadership with top line of above INR 1,450 crore. All industrial business lines showed improved profitability at operating margin level. Company successfully set up its biggest manufacturing facility in Sandila, Uttar Pradesh, of 33,000 metric ton capacity with an investment of INR 1,037 crore. We have had consistent growth over the years. If we look at this year's growth as well, you know, volume sales growth versus 2022 and 2023. In 2023, we had a volume sales growth of 15.5%. The decorative volume growth is in the range of 17.6%. Three years compounded growth rate of the company per se is 16.6%. Value sales growth this year, 22.3%. Three years compounded growth rate, 18.5%. This comes on the backdrop of a robust 28.6% last year as well. Over the years, if you look at the standalone performance this year, as I said, the value growth of 22.3%, operating profit growth of 13.8%, EBIT 13.4%, PBT 9.7%, and PAT 10.5%. The financial results are there, you know, similar on the figures which are available. In terms of PBDIT growth 13.8%. PBDIT to sales, it is at 14.2% for the year. A growth rate consolidated 20.6% revenue growth. PBDIT 11.7%. PAT 3.3% brought down basically because of the Sandila investment. The depreciation and the interest cost has gone up substantially, reducing the PBT and PAT. If we look at some of the other issues in our present capacity that we have 95,000 metric ton. Biggest plant went on commercial production in February 2023 with 33,000 metric ton capacity, which will manufacture products across all categories. Presently, the capacity utilization is hovering in the range of around 40%-50%. Some capacity additions in existing plants, but no further greenfield project can be charged for financial year 2023-2024. The new plant at Panagarh in West Bengal to be commissioned around March 2025 to produce industrial paints and conduct construction chemicals. Looking at the Q4 performance now. The volume sales growth was at 11.1% overall for the company, and for decorative it was slightly in excess of 14.5%. In case of value sales growth, we registered 13.6%. Three years compounded volume growth at 19.4%, and three years compounded value growth is at 23.1%. Decorative business, you know, as I mentioned, both double digit volume and value growth, both in excess of 14%. Construction chemical segment also recorded a robust growth for the quarter. Several new products were launched in the quarter. In the industrial segment, we had a flattish volume or negative volume for some of these, like powder coating, but the value growth for all the industrial divisions were in excess of double digit, primarily driven by price increases. Innovations for success and new product launches, we introduced Anti Dustt Kool, and there were three products in the wood coatings range Imperia Trends, Imperia BDZ and Imperia Duracoat. Some of these are very interesting finishes which you can possibly see if you are looking at the presentation. You know, interesting finishes are metallic finishes, filament finish, hammer tone finish. These are different types of finishes which are there for decorative finishes for wood coating. Similarly, a product which got introduced called Duracoat, again in an epoxy-based product, very popular for hobbyists and, you know, small interior decorators as well. Tables et cetera, which can be created with different types of designs, some of which are shown in the photograph there. Media campaign continued. We in fact spent, you know, a little bit extra money, in both in digital media and television as well. In this period, in quarter four of this year compared to quarter four of last year. The spend% in advertising went up a little bit. In 2021-2022 Q4 we had cut back, you know, on the advertisement spend. This year we actually increased it, the growth in advertisement spend has been much beyond the sales growth in this quarter. Industrial business, automotive, general industrial, protective, as I mentioned, all had double-digit value growth, volume growth were, you know, negligible, primarily because they were led by price- increase- led growth. Powder coating continued to have a negative growth rate both in volume and value terms. As far as gross margin is concerned, as we had mentioned last time, we have seen a restoration of the gross margin on the back of drop in, you know, raw material prices. It's bounced back from 33.8% of Q3 to 39.6%, as you can see in the graph. We are expecting that, you know, we will be able to maintain the gross margins at these levels, which is a healthy gross margin to be at, you know, and we have been consistently been in this range of 38%-40%, and that's where we would like to be in the future as well. As far as PBDIT is concerned, it did not go up to that extent. It actually moved up from 12.9%-15.6%. We could have been, you know, higher at about probably around 16.6%-17% range, which is where we would expect to be in quarter one. This quarter we had some one-off expenses, and that's where, you know, we got impacted a bit. There were three issues. One was overhead and pre-operating expenses in account of Sandila project, which got completed in the month of February. We started what we had recruited from the month of November. That expense came in, much of it, all the workers, officers, managers, and then that added up to an overhead expense, which was in excess of what the normal expense is. The second part of it was, you know, we had done some Andhra Pradesh school project, which was a big project which we had done the year before. In that 90% of the payment we received. 10% of the payment, you know, it comes delayed normally because lots of formalities to be filled up before that payment is released. That was taking time, and we have provided for it therefore. If we had not done these two one-off expenses. This is an expense which we are very sure that we will get back either this quarter or the next quarter. We wanted to be doubly safe, and therefore we have provided for it. Had we not done it, our, you know, EBITDA would have possibly been about 1% higher, which would have given us a growth rate in the range of 16%-17%. Which would have been a healthier growth rate. Operating margin excluding other income, however, showed an improvement sequentially of 270 basis points. We expect gross margin to hold, as I mentioned, at the same level going forward. Operating margins are expected to improve in Q1 of financial year 2024 itself. PAT has been lower over corresponding quarter last year on account of higher depreciation and finance cost on the Sandila project, which will be normalized in the coming quarters. The net debt situation, which had risen to about INR 1,000 crore in September 2023, has come down to INR 610 crore and at the end of March, and we would expect that, you know, we will become net cash positive by the end of financial year 2024. Company presently has the shortest receivable collection days in the industry at around 37, 38 days. If you look at the decorative, again, it will be probably the lowest in the industry at about 23 days. Standalone growth for quarter four, I have discussed already. Just to reiterate, you know, 13.6% in terms of income growth, EBITDA growth, you know, 9%. PBT and PAT at -3.2%, primarily because of the depreciation and interest cost of the Sandila plant. Financial results over the years, income from operations has been fluctuating, you know, from quarter one of financial year 2022 due to COVID issues. You know, 96%, 26%, 21.2%, 7.3%, then again bounced back to 53.7%, 22.52%, and now 13.6%. Consolidated results on similar count. The consolidated result, if you observe, is lower than that of... In terms of profit and also in sales growth rate, PAT and PBT are especially lower. The EBITDA lowering is due to primarily Bolix and Nepal operations, which went negative, you know, in this quarter. Therefore, you know, you see a lowering from 9% to 6.4%. In case of PAT and PBT, we had a fire in our Berger Becker plant in the month of March. We had to provide for this of, you know, our portion of it, which is about INR 28 crore-INR 29 crore. As a result of that, you know, we have taken this provision, though we have applied for the insurance and we are reasonably certain that, you know, we should get it in quarter one or quarter two. Since it will take some time, we have provided for this, and as and when it comes back, it will be restored back into our accounts. Therefore, this is the reason why you see an extraordinary drop in PAT and primarily because of the fire incident and the provisions made thereof. Income from operations growth trend for consolidated on similar lines as that of standalone. The performance of our consolidated company subsidiary, STP Limited, showed robust top line and profitability growth, aided by high gross margin and reduction in overheads. This is the construction chemical company which we had acquired some time back and did very well in quarter four and also right through the year. SBL, which is Saboo Coatings Limited, had a marginal degrowth in top line in for the year, but showed improvement in profitability. The company's overseas subsidiaries, BJ and Nepal, had a degrowth in top line and profitability on account of steep inflation and cash crunch in the economy, whereby company decided to hold back on extended credit. The outstandings were going up, and we decided not to extend it anymore, and therefore we cut back on the sales a little bit and suffered because of that. Company's overseas subsidiary, Bolix Poland, also had a degrowth in top line and profitability on account of Ukraine war and inflationary environment. U.K. operations were also impacted by high inflation. It's coming back, but we have to see. It's too early to call as far as Bolix is concerned. Company's joint venture, Berger Nippon Paint Automotive Coatings, had a very strong quarter of top line and profitability growth, aided by the growth in the automotive sector. Company's joint venture, Berger Becker Coatings's financial performance, was negatively impacted on account of the fire and the loss in one of the factories in this quarter. An amount of about INR 28 odd crore was provided for the same. Claims are being processed. Strategizing for growth, you know, we will expect to continue to grow at a good, healthy pace. Network expansion, we are already having 40,000 retailers. We plan to add 8,000 retail touchpoints in the year 2023/2024 as well. In terms of product innovation, we have done several product innovations in the recent past. Some more are there in the pipeline, which will come in this year in 2023/2024. The focus in advertising will be on the digital side of advertising, though our advertising spends will increase considerably this year, both on television and on the digital media once again. Influencer outreach. Company has about 1.3 lakh contractors and painters with regular offtake of company's products. We plan to scale up significantly in this area. Cost restructuring, working with R&D to find more cost-effective alternative formulas and efficient formula. Improvement in manufacturing efficiencies through automation and overhead reduction will carry on as we have been doing in the past. All this we will do, you know, still focus on the ESG part of it, environment, social and governance aspects. We have, you know, even in the recent plant in Lucknow, it's probably one of the greenest plant around. Complete solar power generation, excellent, you know, water recycling and wastewater reduction. We have taken lots of measures across various factories, in order to become far better in terms of our environmental footprint. Similarly in terms of social issues and governance. The company expects to continue double-digit growth in decorative business in the coming quarter as the demand outlook remains good in view of lower inflation and prediction of normal monsoon. I think, you know, so far April has begun very well, and we expect that May and June should also be good. Industrial sales outlook remains strong on the back of upturn in automotive and infrastructure sector. Raw material prices other than any exchange rate fluctuation appears benign as of now. We therefore expect that our gross margins will hold. Profitability expected to improve in Q1 of financial year 24 on the back of improvement in operating margin. The one-off expenses that we incurred won't be there, and therefore we expect, you know, good solid improvement as far as EBITDA is concerned. Company is confident to have a strong performance in its 100th year of operation. Thank you. You know, we can field the questions now. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead. Yeah, thanks. You have shown good improvement in the volume growth trajectory. My questions are essentially on the cost aspect. First is on the Andhra government delay in the receivables. Would you be fully confident of this? If you could quantify how big is the amount? In the past, have you seen such delays in other state government receivables also? Does this change your aggression in any way to the state government? Abneesh, you know, yes, you know, we are very confident of this amount that we should be getting it. You know, basically, they have a system whereby it is automated, and this amount goes to a, through a portal, you know, which is called CFMS, in their terms, you know. Once it reaches there, it gets disbursed. Of the total quantum which was there, you know, in excess of INR 300 crore, we have received 90% of it, and 10% was what was left. Out of that, you know, what they had indicated was that this is the last percent portion which is there, for which there is a procedure that we have to get certifications from the headmasters and the assistant engineers of each of the schools. There are 12,000 of them. We have so far collected about INR 8,000. We have to collect this balance INR 4,000, which is taking some time because it is disbursed and we have to contact both of these guys and it takes some time. Once we get it, once we submit this, we are 100% confident that the payment will come through. No worries as far as this is concerned. As far as other state government, yes, we keep doing projects elsewhere, and so far there has been no such defaults from anywhere in the country. Sure, understood. My second question is on the advertising spends, which you said has gone up significantly this quarter on year-over-year basis. Next quarter and for the next full year also, FY 2024, you do expect ad spends to go up, which I understand given the gross margin expansion. If I see the market leader Q4 results also, their other expenses has gone up. If I compare your ad expense versus pre-COVID as a percentage of sales, if you could give clarity there. I understand year-over-year because of the COVID etcetera, wave three, year-over-year it has gone up. Versus pre-COVID, where do we stand in terms of ad spend as a percentage of sales? Year-over-year, as you are rightly saying, you know, it's because, you know, we had cut back little bit and now, you know, we are going back to normal spend levels. Pre-COVID, you know, we are marginally ahead of that. You know, we are spending a little bit extra, especially on the digital media, there has been a substantial increase in spends there. The TV hasn't gone up so much, but the digital there has been a massive increase. Digital increase, is it due to any particular reason, or is it just cost optimization versus the TV media? Also other paint companies are saying a lot of activity happening from their side on the architecture side. Is that also a meaningful expense from your side? On the architecture side, we haven't gone, you know, in such an extent. The digital media we are, you know, going primarily because we see the audience, you know, quite a lot shifting in that direction. We have started targeting because it also helps us, you know, because we don't want to scatter our money uselessly, you know, into places where it may not be so useful for us. In certain states where we want to do activities on certain brands which are not that strong all India, we would prefer to go digitally there. There are certain brands like that where we want to advertise digitally, and that's where the spend is going up. Corresponding, you know, little bit of reduction might be happening on the television. Overall, therefore, compared to pre-COVID period, there has been an increase, but marginal increase on television and a much more substantial increase on digital. Sure, sir. That's all from my side. Thank you. Thank you, Abneesh. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Sir, I just wanted to clarify the amount that is left from Andhra Pradesh school project is INR 30 crore, or what is the amount? I sorry, I missed that one in the earlier. No. Total amount that is, you know, due is approximately INR 30 crore, of which, you know, we took a hit of about, you know, INR 20-21 crore this quarter, primarily because they have crossed one year period. You know, some of it, you know, it's in phases. We have done some schools- Got it. which were much earlier. That which crossed 1 year, we have taken the complete provisioning for that. Okay, perfect. That's very clear, sir. Sir, the second bit, when I look at the EBITDA margin, what you've kind of indicated, would it be fair to say that the 16.5 or 16.6%-17%, given input costs are also remaining benign, and we should expect or we can expect such a performance for the year as well, obviously assuming that input costs remain at benign. Is that a fair way to look at this or how... If you could help me understand that, sir? You know, I can predict for you for the first quarter, you know, because that's more closer and we have got one month which has already gone past. Therefore we can with a reasonable degree of certainty comment on that. If the prices remain similar, if all other conditions remain similar, then yes, you know, of course, you know, we are looking at that type of EBITDA range which is there. However, if we see some activities happening which are beyond the normal, then obviously things might change. Yes, you know, if everything remains same, that is where the range will be. Those activities will largely be input cost related, right, sir? That's how I should. Yes, yes. You know, primarily that. You know, unless of course, you know, also towards the end of the year, you know, we expect competition to come in form of, you know, some of the players who have declared that from the fourth quarter they will jump in. At that point of time, you know, it might be, you know, some sort of a skirmish in the market for a short while. There, you know, we don't know what will be the situation, but, you know, otherwise, yes, you know, this is where we will be. Perfect, sir. Sir, on this, you know, when you answered the ad spend remaining ahead of pre-COVID, that was ad spend to sales, right? I just wanted to clarify that part also. Yes. Yes. Yes. Yes. Okay. Both. Yeah. Uh- Both in terms of absolute and in ad spend to sales as well. Last bit, sir, if you could give us a sense on the construction chemicals business and how do you see the growth in this category? If you could give some understanding of how large is it for us right now, and whether it's only in the subsidiaries, or whether it comes in standalone. Sorry, it's a mix of too many questions, but I just wanted to understand this construction chemicals business better, sir. You know, in as far as Berger is concerned, by within Berger itself, this is growing very well at a very robust pace. It is now becoming more and more significant. We expect this, you know, construction chemical to be around the range of 8%-10% of the decoratives business in the next two years. That's for sure it looks like, the way it is growing at present. In addition to that. Pardon me. Sorry. Sorry. Go on, sir. Yeah. You know, you know, in addition to this, we have of course, our subsidiary company, which is STP, which is also in the construction chemical space, which also is growing quite fast. Overall, it should be around the 10% range comfortably, in the next one and a half to two years. Sir, sorry, just on that bit. Currently, what is the ceiling, sir? That will give us a sense on the growth that we are expecting. Currently, both put together, we will be somewhere around INR 1,000 crore. Okay. Okay, perfect, sir. I have some questions more, but I'll come back in the queue. Thank you very much, sir. Yeah. Thank you. We have the next question from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. With some amount of decline in crude and crude related input costs, how are you looking at sort of the pricing scenario in the next few months? When I say pricing, I'm talking about consumer pricing and plus any extra activity in the trade via discounts, rebating, et cetera, et cetera. Crude has come down, you know, it's true. The prices of raw materials have become benign, as we can see from the gross margin expansions also. It is quite evident. However, you know, it's a competitive industry and, you know, typically, you know, if there is competition, you know, you tend to fight it more fiercely in the market and the prices do, you know, settle to a level which is sensible. I think, you know, there will be some amount of rebating which is going to go up a little bit possibly, but not significantly. Because this is the level where we were, you know, pre-COVID, and we... You know, it's not something which is substantially different from where we were pre-COVID. Right, sir. You also spoke in your initial comments that, our gross margins, I mean, sustainable basis, you would like to maintain it around the 38% to 40% mark. If you can also give a similar idea as to your EBITDA margins, please. EBITDA margin has been, you know, if that is the range, you know, normally we operate at 16%-17% range of EBITDA. That's where we can be, you know, going forward as well. This is on a console basis, right? That is right. Okay, sir. That's all from me. Thanks, and all the best. Thank you. The next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi, sir. Thanks for the opportunity. You spoke about adding somewhere around 8,000 dealers on the base of 40,000, that's a very healthy 20% addition. Historically, how does this translate into growth? A 20% addition on distribution footprint will translate into 5%, 10%, 15%. How does it actually impact the growth in the year where you are expanding? Typically, you know, this will probably result in 5%-6% of increase over additional increase over whatever normal increase we would have got otherwise. If we are normally growing at 7%-8%, this will give us 5% additional, which is about 13 odd%. Sure. Sure. Sir, if you can give some insights on, are we specifically targeting any geography where we are under-indexed in terms of our presence, and we are disproportionately adding dealers there, or it is a normal course of expansion that we have been doing so, for last many years? Normally we have been growing at about 5,000, 4,000-5,000 outlet. Last year, you know, 2020-2023 we grew slightly faster. We grew about 7,000 outlets, of which 5,000+ were machines. This year again, we want to go slightly ahead of that from 7,000 instead to 8,000 outlets. Therefore, you know. If you have seen last year also in terms of value phase growth, we were the highest in the industry. This would help us, you know, this year as well in growing at a faster pace than the industry in general. Sure. Last question, if I may, on your margins guidance. Your own commentary on the existing competitive scenario at the end of the year, you also highlighted there's a competition which is coming. Your guidance on going back to 14%-16% kind of EBITDA margin, do you think that the upper end it is slightly aggressive, or you believe that with raw material benefit coming through, you can actually revert back to those levels? I didn't get it. Can you repeat the question, please? Sir, 14%-16% you said, right? Consolidated margins. 16. I said, you know, it will be in the range of, you know, 16%-17%. That's where we should be. Okay. That's a healthy expansion on where we are exiting this year. Right. Looking at you qualified this year to be slightly competitive than the past years. Just wanted to know how confident are we? Because I'm assuming that a large part of this benefit or expansion will be gross margin led. Looking at our stepped up investment on ANP commitment and then competitive landscape also, how confident are we to actually kind of revert back to those levels of margins? You know, it's a combination of two, three factors. You know, one of course is that, you know, there was this one-off expenses which were there, you know, this year, which will not be there next year. The second is that, you know, we are doing a lot of exercise on our overhead front, which we expect that, you know, will yield very positive result, and we should be able to reduce our overhead percentage to sales in, you know, at least by 0.5% is what we are looking at. This is something which is a work in progress, but we are reasonably confident that we should be able to deliver on that front. You know, lastly, you know, it is true that there will be an expansion in the margin, in the gross margin, which will happen. You know, the competitive spirit that we are looking at, you know, it's not necessary that always that price will, you know, start falling and therefore it will drag down the EBITDA. That's not what we have seen so far in the industry. We expect that that trend will continue in the future as well. Very clear, sir. Thanks, and all the best. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, sir. Good evening. Thanks for the opportunity. I have 3 questions. You just touched upon the competition. Would you be able to give us some color how the competition is behaving at this time? What we gather from the trade is that they're expecting a very strong either improvement in terms of their profitability on the account of either dropping the prices or from the point of increasing the discounts because the competition is really heightening at the trade. I'm more interested in looking at what's your comment on that. No, the ground realities are slightly different. I think, you know, in fact, you know, the hyperactivity that we had seen about one year back, is no longer there. It is much more, you know, normalized. If this trend continues, I don't see any reason to be worried about, you know, in terms of delivering on the EBITDA margins as well. Do you think there is a pressure from the trade that to drop the prices? I haven't seen that, you know, because, you know, I don't think that's the scenario now. The trade seems to be at least in the month of April, they were pretty okay. In the month of May, in the first 7, 10 days, there's a bit of a slowdown, but it's picking up now again. I don't see that pressure coming in from the trade, which will, you know, force all of us to look at, you know, trying to get additional sales through additional rebating. Okay. My second question on the regional split. I guess, North has a lot of issues in terms of the offtake in the beginning, but now it's improving, while South has done well. In terms of your salency, which segments or which markets has grown faster for you? Almost across the board, you know. You know, we are, relatively a weaker player in the South. You know, for us, it's been, you know, East and then North and West, you know, which have been growing. South also has grown well on a lower base for us. Okay. The last question on the initial slides, what you have mentioned, that this 33,000 metric ton, what we had added in the month of February, and I think the present capacity is 95,000 metric ton, and you said that it's about 40, 50 thousand utilization. To your understanding, when does this 40, 50 thousand capacity utilization will happen for Sandila? You know, Sandila is operating at 40%-50%, you are right. You know, that will take about 1.5, 2 years, you know, for it to reach to 75%-80%, which is when. For us, you know, normally the seasonal months it tends to go up to 100% utilization. Normal months it is about 65%, 70%, 75%. That's a good figure to be at. You know, in 1.5-2 years timeframe, we should be able to reach that level of 70%, 75% at Sandila as well. Meanwhile, you know, in the next two years after, you know, we will have to start looking at brownfield expansions in our existing plant and also a greenfield, possibly in the state of Odisha, which we will start setting up from 2026 onwards. Okay. just one follow-up on the account of Sandila. You said that the overheads has actually picked up your cost. Is there anything one-off which is going to come in FY 2024 because of Sandila plant? No, nothing more to be there. We have taken whatever had to be taken. Okay. Thank you, sir, and all the best. Thank you. Thank you. We have the next question from the line of Jay Doshi from Kotak Securities. Please go ahead. Yeah. Hi, thanks for the opportunity and congratulations on, you know, three consecutive quarters of market, industry-leading growth. I have two questions. The first one is just a bookkeeping question. You called out, INR 20, 21 crore of provisioning done on account of the Andhra Pradesh school project. You also indicated there was some more provisioning at subsidiary level and some one-off costs associated with, the opening of the Sandila plant. Is it possible to quantify that? Essentially just trying to understand what's the extent of impact, you know, one time, cost as a percentage of consolidated revenues. Approximately it will be another, you know, INR 8 crore or INR 9 crore, you know, in addition to this, you know, this Andhra Pradesh school. Approximate value will be about INR 28 crore, which is there, which is a one-off cost. You can build that in as a percentage, you know, and understand whatever it is. Second is just, you know, could you give us some color on what is your market share, you know, in, the 4 regions, North, South, East and West? Ballpark numbers will also be fine. Very difficult to say. You know, Jay, you know, we don't calculate it in that way. I can't tell you. You know, I can only let you know that in the East we are, you know, the strongest. You know, in North also we are well-placed. Relatively weaker in the West and the South. It varies from state to state, even in these areas. For example, in UP we might be, you know, relatively much stronger. Much stronger than, say, in Punjab or Himachal Pradesh. It's a very broad term to use, and I don't think, you know, it makes any sense. Overall, our market share hovers between 19%-20% in the All India scenario. In the East, obviously, therefore it is much higher. North, you know, will be also slightly higher than the average, and relatively weaker in the West and the South. Weaker in South, my understanding is you're strong in Kerala. That's right. have presence in AP, Telangana as well, right? It's Karnataka and Tamil Nadu are the two markets where you have a very low market share. Also Telangana, we are weak, very weak, you know. Andhra we are strong and Kerala we are strong, but the other three states we are relatively much, much weaker. Much. Hello. That's it from my side. Thank you so much. That's it from my side. Thanks. Thanks. Bye. Thank you. The next question is from the line of Harsh Shah from Incred Capital. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. You talked about improving profitability in your industrial business. Can you quantify or just give an indication as to at what level are the margins at EBITDA or PBDIT, whatever you're comfortable sharing, sir? You know, the industrial also, different businesses have different levels. You know, powder coating, which is degrowing in sales, has a very high EBITDA to sales as of now, you know, quite close to decorative actually. As far as, you know, protective coatings is concerned, it is below decorative, but it is improving every quarter. The last quarter, it was in a good double digits. In, in case of, automotive and general industries, it's, you know, again, you know, it started at a very low level. By the end of Q4, it was in double digit, just about. That is how it is. On a blended basis, would the sustainable margins for, let's say, the entire industrial, including auto and non-auto being put together, would that be in low teens for you? For the industrial business, yes. You know, it will be somewhere in between 12%-14% blended, you know, if we assume that, this quarter four results will continue. The decorative is much higher, of course. Okay. Okay. Thank you so much, sir. Thank you. We have the next question from the line of Mihir P. Shah from Nomura. Please go ahead. Hi. Good evening, sir. Thank you for taking my question. firstly on historically between the value growth and volume growth, there used to be a difference between the value and. There used to be a negative mix effect historically, but we've seen over a period of time that mix kind of going away. I just wanted to check with you, is this because, in this quarter, you know, probably is it because there is no pricing and mix has gone away or there is still some element of pricing and an element of mix which is still leading to value and volume growth to be in the similar range? This quarter, you know, the price increase benefits that we were getting in the second quarter and to some extent even in the third quarter has completely vanished in quarter four. You know, the volume value gap became negligible except for the positive mix change if any which was to happen. You know, when we sell, you know, this low-end emulsions, et cetera, those are also priced, you know, comparatively lower, and they are growing at a reasonably good pace. As a result, sometimes the volume growth might exceed the value growth if you are looking at those in that way. That can explain the slightly higher volume growth than the value growth in this quarter. Got it, sir. Sir, suffice to say that, I mean, of course, this can be some seasonality effect, et cetera, but on a steady state basis, how should we think about the negative mix that we used to see in the earlier years? Can that settle down completely or, you know, it'll be a quarter-to-quarter phenomena? It can be a quarter to quarter phenomenon. You know, it depends on every quarter. Things, scenarios change a little bit in the paint industry. For example, in the second quarter, you know, it will be the mix normally tends to reverse, you know, in the, in the negative direction because, you know, a lot of sales of distemper, primers, et cetera, happen in that quarter. Again, in the third quarter and the fourth quarter, it tends to pick up, especially in the third quarter in the October, November, December Diwali period. The emulsions sale go up significantly, and that too high-end emulsions, and then you have value growth far in excess of volume. It varies from quarter to quarter. It's very difficult to give you a generalized picture for the whole year. Got it, sir. Sir, how should one think about pricing now, given raw materials are completely back? In your view, do you think that there can be a case for price cuts, in the industry? In my, you know, current, you know, situation, I don't see that, you know, immediately, you know, what is required to be done, especially if the demand scenario is decent and good, you know, there is no need for that at all. If the situation so arises that, you know, the demand starts faltering and we see the prices remaining benign and stable at these points, or reducing further in terms of raw material prices, then maybe a price cut might be required, but not at this stage. Got it, sir. The other question I wanted to check with you was on, you know, the product mix that you have. If you can share any, you know, broad range, of your product mix between premium, mid, and mass. Where is it standing currently, and where do you see that in the next, three odd years? We've seen a lot of new differentiated high-end launches that are happening. If you can throw some light on that, product mix change that you are endeavoring to do. The growth, you know, is improving as far as, you know, the premium luxury category is concerned for us. That continues to happen over the period of years. You know, we have seen that improving. We have become in the pre-lux category, not in the luxury category. We still need to do some work on the luxury category. I believe that, you know, there is a lot of growth opportunity in the luxury category as well, where we have, you know, a product called WeatherCoat Long Life in the exterior category, which is doing very well. In the Silk Glamor, which is, you know, the interior luxury, that hasn't grown all that well, you know, that we would have anticipated. There is some space there for growth in that particular category. We are doing very well, and we are a leader in the immediately below luxury category, which is called the premium luxury category, which where we have two brands, Easy Clean and Anti Dustt. Both are leaders in their own category in that particular, you know, segment. That continues to grow very well, and we will be investing in advertisement and also in terms of other activities to grow this premium luxury and the luxury category to help premiumization of our entire product portfolio. Got it, sir. Thank you. My last question, sir, is on the subsidiaries of Polycab. On the any visibility by when do you expect an improvement in that region, sir? When we can start seeing some growth numbers versus a degrowth and improvement in margins? you know, last three months, you know, which is January, February, March, which gets actually consolidated with our April, May, June accounts, that has been good. But you know, it's very difficult to say, how things will be going forward, you know. As of now, the situation there remains tense because the war continues, you know, and lots of refugees flow into Poland and it creates some amount of disturbance. You know, the inflation is at a high level. Though we managed to sell and do reasonably well, whether we will be able to continue that, you know, that is something which I can't give visibility on. Difficult. But it's a small operation for us. You know, overall the stakes are not so high, and so it doesn't impact us so much as far as the overall result is concerned. Thank you very much, sir. Wishing you all the very best. That's all from my side. Thank you. Thank you. Ladies and gentlemen, to ask a question, you may please press star and one. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. I just wanted to check on this fans business in the powder coatings. When do you see that kind of turning around? It's been some time since that weakness has been continuing. That's, that is true, you know, we were expecting that, you know. The summers are setting in and, you know, so in April, May, it should have been much better. April it did improve, you know, to some extent because this, all this, you know, 5-star rating, et cetera, you know, has settled down. The expectation was that, you know, it will do much better. It did improve, you know, not to the extent that we would have loved it to. It is still below the threshold level that, you know, one would have expected. May again, there has been further more improvement on that. Hopefully, you know, this trend will now continue to improve because the pipeline which had got reduced considerably needs to be filled up again. Gradually, I think, you know, it will come back. Okay, sir. Okay, that's all from my side. Thank you very much, sir. Thank you. Thank you. The next question is from the line of Deepak Parmar, an individual investor. Please go ahead. Hi. Thank you for taking my question. My question is among the listed, competitors, are we planning to grow at the fastest in FY 2024, I mean, that is, and gain market share? Can you put some color on this? Yeah. The intention is that, you know, because last year also we grew the fastest and we gained market share. My estimate is about, you know, 0.4% in the overall market for the companies which are in the listed space. We are the only company which would have grown significant market share, you know, in the year gone by. We expect that this year too, in 2023-2024, we would gain some market share. The quantification is difficult, but, you know, we would like to be the fastest growing definitely in the market. Okay. Thank you so much. another point is this UP plant, how is going to help in terms of improving margin? North is your second best market. Will it help in terms of, you know, improving the margin, the UP plant which has come up? Yeah. Some amount of help definitely will happen. You know, two things which is there. You know, one of course is the freight cost reduction will happen to a large extent, you know, and the responsiveness of the company to certain changes in requirements also will be much faster. Thereby, you know, both sales and in terms of operating margin, the freight cost reduction will help. In addition, of course, you know, we have some tax benefits which will come in, you know, which will kick in also. Okay. One last question. As you rightly said, you know, with a lot of other competitors coming in by Q4 and Telangana, Maharashtra and Karnataka, these are one of the biggest paint markets. How are we going to, you know, counter the current existing players and the new players in our weaker markets? I mean, what are our strategy to counter these players? You know, these have been markets which where we have been traditionally, you know, on the weaker side. We have taken some initiatives which are out of the box little bit and, you know, attempting those things. Last year we did that and, you know, we achieved some degree of success, I would say. You know, this is something which needs to be continued this year as well, and hopefully, you know, we will be able to grow at a reasonable pace even in these markets. Okay. Thank you so much, and all the best. Thank you. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir. Thank you. You know, this has been a good year for us, you know, and we are entering into the 100th year. This will be, in fact, you know, our 100 year in existence in India. We started our journey in 1923 in the month of December. Therefore, we will touch exactly 100 years in December of, you know, 2023. We expect that, you know, this year will be a good year for us and the 100 year will be one of the best that we have seen so far. We have crossed this milestone of INR 10,000 crore. That gives us some wind in, you know, to our journey. And we hope that the year which is ahead of us, we should be able to deliver on the promises that we have made. Thank you once again for listening to us and, you know, patiently and hope and wish us the luck as well for the coming year. Thank you. On behalf of Emkay Global Financial Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.