Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Nitin Gupta from Emkay Global Financial Services. Thank you, and over to you, sir. Okay. Good evening, everyone. I would like to welcome the management and thank them for 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 management for the opening remarks. Over to you, gentlemen. Good evening, Nitin, and good evening, ladies and gentlemen. A warm welcome to Berger Paints India Limited earnings update call for third quarter FY24. Incidentally, the company also celebrates its centenary year this year, and we thank all of you to be a part of the journey. The management presentation on this performance for third quarter has already been uploaded in the website and in the exchanges. As usual, we have with us today Mr. Abhijit Roy, our MD and CEO, and Mr. Kaushik Ghosh, Vice President and CFO. So I would now request Mr. Roy to update you on the results, followed by your questions. Over to you, Mr. Roy. Thank you, Sujyoti, and a very warm welcome to all of you. I hope you can hear me, though I'm traveling, so hopefully, you know, my voice is audible there. I will first talk about the standalone results for this quarter, and then, you know, I will go to the consolidated results as well, and some of the highlights of the performance, and then open for question and answer. So on the standalone side, on for the quarter three, the volume growth has been about 9.1%, value growth 6.4%, and EBITDA growth 38%. We see sustained, encouraging top-line growth for the quarter, both on volume and value terms. The decorative business outperformed others with double-digit volume growth, strong profitability growth on a year-on-year basis. Gross margin was at 10-quarter high. Operating margin expansion both on a year-on-year basis and quarter-on-quarter basis. We have likely gained market share. All four results are out. Amongst the top four companies, we have definitely gained market share with the highest, revenue growth rate. The Indian operation maintained its improved market share at around 20%. YTD December, our volume growth rate stands at 10.9%, value sales growth at 6.5%, and EBITDA growth at 34.2%. On looking at, you know, the various figures which are there in the standalone, 6.4%, as I said, income from operations, 38% on operating profit. The PAT at 27.1% and the PBIT at 26.4%, largely because last year, there was a dividend income from Nepal. So in the consolidated, the figures are fine, but in the standalone, you see a slightly lower growth rate in PBT and PAT. YTD basis, we continue to register good growth rate, volume growth rate in double digit, and the value growth rate of 6.5%, operating profit at 34.2%. Now, this is an improvement over the this quarter, we see an improvement in the volume growth of corresponding period over last year by 9.1%, and value improvement is by 6.4%. The volume value gap in this quarter reduced from what it was in quarter two, as you would have seen. Some impact of that gap still exists, and there are two reasons for this. One, of course, is the price decrease, which we have taken, which we took in the month of November. And, there was a higher sale of the economy segment, specifically the Economy Emulsion, compared to the Luxury Segment, and so there was bit of an impact because of that as well. The growth rate was much higher, in the eco segment. So this is, explaining the gap, but the gap has narrowed down from what it was there in quarter two. In EBITDA front, if you look, you know, robust profitability growth, driven by further improvement of gross margin. That's true for the industry, and that's true for us as well, and this is the 10, I would say amongst all 10 quarters previously, this is the highest at 30.3%. Gross margin improvement mainly aided by lower raw material prices, also some formulation savings and better purchases. Operating margin expansion of 380 basis points on a year-on-year basis and 20 basis points on a quarter-on-quarter basis as well. Operating margin expansion, however, was lower, if you see the gross margin, it is much higher level, but in the operating margin hasn't expanded as much. That is because we took a conscious call to spend more on advertisement in quarter three. Primarily in the World Cup, we took a heavier presence in the digital route. We have a significant presence built up there. So ICC Cricket World Cup fell in the third quarter, so our spends have gone up there. Advertising expense as a percentage of sales went up by about 1.5% in this quarter, which compressed the margin a little bit, otherwise the growth would have been even higher. Industrial business line also showed significant improvement in operating margin. We have been very consistent in our growth trajectory. If you look at YTD December 2023 volume sales CAGR, two years CAGR is 13.9, three years 18.3, four years 14.6, and five years it is 13.6%. YTD December 2023 value sales CAGR, two years 15.5, three years 22.4, four years 14.5, and five years 13.2. So it's been consistently double-digit volume and value, and is almost in the mid-teens, where we have been across volume and value. So, whichever parameter you take, you know, the growth rate has been pretty consistent right through. Now, if you look at the gross margin, as I said, in the last 10 quarters, this has been the highest. Last quarter too, we were at 40% gross margin. This quarter it has further expanded to 40.3%. Standalone operating margin improved from 16.5% last quarter to 16.7% this quarter. As I said, it could have been higher, but we took a conscious call to spend more on advertisement. Otherwise, this particular percentage would have been even higher. Decorative business for quarter three, financial year 2024, the decorative business showed double-digit growth in... The value growth was lesser though, because of price decrease, and also due to the fact that more of the economy range sold compared to the luxury range. The construction chemical and waterproofing business had another quarter of stellar performance. Wood coating business also did extremely well. The Tier 2 and Tier 3 cities showed greater traction in our case than the Tier 1 cities. Both urban and rural business witnessed growth. Aggressive network expansion continued in the quarter. We added more than 2,300 retail touchpoints in quarter three, and we installed around 1,300 ColorBank machines in the same quarter. We introduced a few new products, Roof Kool & Seal, sealant and Ceiling White, which is a paint primarily focused on the Kerala market, but also relevant for other markets as w ell. The Roof Kool & Seal, you know, is a product which is there for all India. It, as the name suggests, is for the roof, it cools and it seals. With an 8-year warranty in the roof segment, I think this product will do very well in the future. Top-performing innovative products, we continue to do well. In Easy Clean, we continue to maintain our leadership in the market. In the anti-dust, WeatherCoat Anti Dust exterior emulsion segment, we maintain our leadership there. In long life span, we have a very strong presence in many markets. We are a leader in this segment as well. In the waterproof putty, we have a clear leadership in most markets across the country. So these innovative products, which we have launched over the years, in the last few years, continues to do very well, grow very well. It has a price premium in the market, and we are quite comfortable with the brand presence of these particular innovative products. On the digital side, you know, we are working very hard in some areas. We are introducing Salesforce, you know, as a front-end package for our sales team, which is going to make, you know, things easier for them. We have already executed many e-commerce for painters under the e-Sambandh brand name. We have some very interesting packages working for the applicators, for the dealers. For our own sales team, lead generation and monitoring, we have this Express Painting program, which is one of the largest in the country, and we were the first player to come in with this particular service in India, and it continues to grow. Every year, you know, the number of markets in which this is present and doing well is increasing, so that we will continue. On the industrial business side, protective coatings maintained a consistent growth in the quarter. Automotive and general industrial business had decent growth in this quarter, even on a high base in the corresponding quarter, aided by growth in commercial vehicles and two-wheeler industry. Powder coating business line had a modest growth in the quarter on the back of demand revival of fan industry and new customer acquisition. Our net debt, at one point of time because of the Sandila factory, you know, we had run up debt, which was to the tune of almost INR 1,000 crore, has now become cash positive at the end of December. And this is likely to remain on this zone in the foreseeable future. As far as consolidated sales is concerned, we have a value sales growth of 7% and an EBITDA growth of 37.3%. This, against standalone, is an improvement in sales growth, because sales growth in standalone was 6.4, and consolidated, 7. And EBITDA growth is nearly similar at 38% for standalone, and consolidated, it is 37.3. The consolidated top line performance outperforms standalone on the back of consistent top line growth, especially in, you know, the Bolix subsidiary, wh ich did very well this year. Overall, as I said, you know, in the consolidated sheet, if you see, we had a income growth of 7%, operating profit growth 37.3%, and tax growth of 49.2%. YTD December on the consolidated level, our value sales growth is 6.8%, EBITDA or operating profit growth is 35%, and tax growth, a very healthy 40.5%. Company's overseas subsidiary, Bolix Poland, had a quarter of strong double-digit growth in top line and profitability, helped by a sharp expansion in operating margin. The company also achieved a constant currency growth, a strong constant currency growth in the quarter. Company's overseas subsidiary, BJN Nepal, had another quarter of degrowth in top line and profitability, impacted by downturn in economy and liqui dity issues, as was guided earlier. The situation is likely to remain tough in Nepal, you know, this quarter as well. Company's subsidiary, STP Limited, had another quarter of healthy top line growth and strong profitability growth on the back of operating margin expansion, aided by improvement in gross margin on lower raw material prices, and as well as improvement in product mix towards admixture and waterproofing products. We expect the growth performance to further continue in quarter four of this year. Saboo Specialty Coatings had a decent top line growth, aided by uptick in the fan segment and some additional line of business, and a strong double-digit profitability growth on softening RM prices. We expect value growth to continue in this quarter. The joint venture, Berger Becker Coatings, experienced another quarter of decline in both its revenue and profitability, primarily attributable to manufacturing capacity constraints, as mentioned earlier. As you know, we had a fire in our Goa factory, and it will come on stream from March of... which means next month onward. So this will, next year we'll have a good run because, you know, the capacity will come back, the sales will return, and therefore we will have fairly good growth next year. Company's joint venture, Berger Nippon Paint Automotive Coatings, had another quarter of double-digit top line and robust profitability growth, riding the strong performance in passenger car and SUV sector. We expect strong growth to continue in quarter four of this year as well. As far as business outlook is concerned, company expects demand momentum to continue in quarter four in decorative segment on the back of improvement in rural demand. Automotive business is expected to continue with double-digit growth on the back of sustained demand in auto sector. Protective coating business to do well on account of high government spending on infra. General industrial and powder coatings business also expected to do reasonably well in quarter four. Operating profit growth may taper down a little in quarter four in comparison to quarter three on the back of product price reduction. However, there will be growth on a year-on-year basis. That's all that I have to say as far as our take on the quarter three and YTD status is concerned. Open for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Mm-hmm. Participants are requested to use handsets only while asking a question. Mm-hmm. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mihir Shah from Nomura. Please go ahead. Hi, sir. Thank you for taking my question. So Berger is thus far the only paint company to see higher growth in Tier 3 and 4 versus Tier 1 and 2. And probably, you know, one looks at, also includes FMCG companies, and Berger is one of the fewer players that is seeing better growth in rural than urban. So do you see this demand, market demand environment, conducive enough to drive higher than double digit volume growth in FY 2025, say at mid-teens levels, or do you think it is still some time away? You know, if maybe not for the market, then do you see your own growth being better than the market, like you've demonstrated over the past few quarters, past many quarters? What can one think as the key differentiating points versus the market growth for you going forward? Thank you very, Renu. So you asked a few questions there in that. So if, to answer you, you know, I would say that, you know, it depends on a few factors, you know. There are certain markets where we are relatively strong. And in those markets, you know, if the market does well, we tend to do well as well, right? For example, say, in Uttar Pradesh, if the market is doing well, we are reasonably strongly present there. We will tend to do better than others if they are not so strong in UP compared to other locations. So it depends on the mix of the geography that you have. It's also dependent on the fact that, you know, we, from our side, you know, we have a distribution level which is much below the leader, and there is a lot of growth opportunity there. As you saw, you know, we have installed about 2,300 plus, you know, new retail touchpoints, and more than 1,300 ColorBank machines. This can go on, you know, especially in the western and southern parts of the country. There are big gaps there which can be filled up. So as far as we are concerned, we think that, you know, this area can further improve, and therefore our growth can be protected to some extent. The market definitely has slowed a little bit. October was much better. November, December, was muted, and January also was a bit muted. So from that perspective, whether we will get, you know, mid-teen growth or not is difficult to say at this stage. You know, once the elections are over, I think things will become clearer because now inflation is being kept under tight control, and, you know, the general economy is not very buoyant. But I presume that might change after the elections are over and once the results are out. So therefore, going forward, I think we have been consistently, as you saw, 2-year, 3-year, 4-year, 5-year, whichever parameter you take, we have been in that level. We would love to be at that level as well next year as well, but only time will tell. Got it, sir. Thank you for that. So given the industry has started to implement price cuts on the back of soft raw material prices, despite reaching the higher levels of pre-COVID on gross margins, can one assume that there is still room for margin improvement in the near term, specifically, despite price cuts? Or do you think that margins, gross margins basically have peaked out here, at least for the near term? I would say that, you know, gross margin is at a level which is very healthy now, and whether it has peaked out or not is difficult to say. But I don't see this improving from here on. It is possibly because, you know, we have taken a price cut, as you know. That's going to impact, you know, a little bit on the gross margin side. So therefore, expectation that, you know, it will further increase, I think is not fair. We are comfortable at these levels. At these levels, the EBITDA levels are also reasonably good. We have always given a guidance that our EBITDA will remain in the 15% to 17% bracket, and that's where we have been hovering, and that's where we would like to remain, you know, so that's how I see it. Got it, sir. Thank you. That's all from my side. Wishing you all the best, sir. Thank you. Thank you. The next question is from the line of Abneesh Roy from Nuvama. Please go ahead. Yeah, thanks, and congrats on turning net cash positive and the market share gain. My first question is on margins. So when I see first quarter versus second quarter, third quarter, gross margins improved in second quarter, third quarter, but the EBITDA margins, there is almost 200 basis points drop. And this was also seen last year, that first quarter margin was superior, and then 200 basis points kind of drop happened. I understand 150 basis points of ad spend in third quarter and Diwali normally, either because of festival or because of sports, this could happen. But any other cost item you can control so that your EBITDA margins are a bit more in tighter range? We don't see this much a variance normally in some of the other larger companies. So, wanted to understand if there is some cyclicality in terms of seasonality in terms of the other cost items. Right. You know, actually, Abneesh, you know, thank you, you know, for your congratulatory message. But, you know, just to answer your question, if you look at the first quarter, you are right that, you know, it was, you know, much higher than what we are in second quarter and third quarter. And the reason is, you know, there are twofold. You know, one, typically in our case, the first quarter is, you know, you should see a face value. It is on a much higher side. It, it is the first and the third quarter where we do very high sale. Typically, the first quarter for us is, you know, skewed, you know, because we have a high, very high, April, which we tend to have every year. The second, you know, therefore, since we have a higher volume, we get a scale advantage there. The second reason is, as you said, you know, in third quarter, we spent money on advertisement, so it would have probably gone very close to, you know, the first quarter margin if we had not done that spending. Typically, the Diwali period, you know, we tend to spend more money on ad as well. So the first quarter tends to be, in our case, it is higher, and then, you know, the third quarter tends to be close to that first quarter, this year being a little bit of an aberration. Sure, understood. My second question is, slight clarity I wanted on the slide of top-line performance. You have mentioned, the mix improvement happened, and that's why gap was lower in terms of volume and value. But the... Mm. line after that says that the economy grew faster, so are you referring to putty sales being lower in third quarter? That's why the gap... That is... Okay. You are right, absolutely. The putty growth rate, you know, actually was much lower. We had an Economy Emulsion which grew, and it is more profitable, but it grew at a faster pace. And so did some of the other products, which are priced low, but, you know, has a good margin. Putty sales being lower, any particular reason for that? Well, you know, it was becoming too competitive in the marketplace. You know, we decided to, you know, give up some of those, you know, places, you know, in terms of volume, therefore, it got impacted. It's purely a price game, and we decided to stay away in certain markets, so that's the major reason why it got impacted. The second, you know, reason also was that the enamel growth rate, which is a high-value item, was a bit low in the third quarter, comparatively. Much lower than what we normally do. So that also impacted the... Because it's got high value and it is not growing, so it tends to impact, you know, the overall scenario. Understood. Last question. The third-largest paint company today said in call that, for the industry, premium part of the portfolio in deco is around 35%, and they are at 30%. In pre-COVID, they were 25%. So 25% was premium pre-COVID, and now it's 30% for them. And for industry, it's around 35%. I wanted to understand, for you, how these numbers would h ave flown pre-COVID versus now, in terms of premium? We normally we haven't done this analysis, so I can't tell you offhand. You know, I can take a look at those figures, and I haven't seen what was pre-COVID and what is pre-COVID. All I can say is that the luxury category was growing very well, you know, after the COVID period. It was, you know, growing at a good pace. This year it has been slightly on a slower path. In fact, the economy category has done slightly better than that. So from our perspective, that's the reality, which is this year. But, you know, it keeps changing. Quarter-over-quarter comparison is difficult. On a yearly basis, we are fairly comfortably placed across all categories. If you look at it pre-COVID, post-COVID, really, you know, we haven't done that, you know, analysis, so I can't comment on this. Sure. One last follow-up on roof cool and clean. Are you able to charge a premium? Because product seems very relevant for a warm country like India, which also has got water leakage issue. If you could tell us like to like what is the kind of discount this product has with the market leader, and versus your normal roof product what is the kind of premium you are able to charge for this? We know, this product is unique, you know, as you said rightly. You know, the name is also unique, and it, it does the function, you know, which is very relevant for coastal warm belts, you know, and, and that's where we are focused initially now. I think, you know, overall, all across India, it has a good demand. It's a warm country, it's a hot country in many places, and, and it also chills. So it does both the jobs. As of now, it is priced competitively. We need to establish this, and it's doing quite well in the markets where we have introduced it. And as it, as things progress, as we grow our volumes, we will see if we can take a price premium, and how much of it can be taken. But as of now, it's almost matched to the market leader in this segment. Understood. Thanks a lot, very helpful, sir. Thank you. Thank you. Thank you, Abneesh. The next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi. Thanks for the opportunity, and congrats on a good set of numbers. My first question is, we have been kind of accelerated our dealer addition in last three quarters. We started with somewhere around 1,300 odd, and for last two quarters, we have been adding somewhere around 2,000. So just wanted to know, is it like we're going deeper into existing markets, or are we adding more regions? And is it also an outcome of Sandila plant being operational, and we are adding more, kind of populating more dealer network around that plant? Right. You know, so, it's a mix of both, you know. Not so much the Sandila plant, I don't think that has had any great impact there, though we have improved our presence in UP, but nothing related with the plant as such. But it is, you know, a mix of both that you mentioned, you know. So, we are aggressively looking at it because we see this as an opportunity for us, because there are large gaps in various parts of the country. We are doing it more scientifically now, finding out those gaps and populating those, you know, and filling up those gaps. We are using our own, you know, ability to strengthen our presence in distribution. So that is working in our favor, you know, so this trend is likely to continue. We are likely to be quite aggressive in new dealer addition going forward as well. At least for the next 1-2 years for sure, we will be adding a larger number of dealers, and we'll continue to do so. Sir, when we see overall industry level also, there is an acceleration of adding dealer network. So just wanted to understand, are we adding new paint dealers to the ecosystem, or these are the existing paint dealers of, let's say, some other brands, whom we are targeting? And in some form there is a limited working capital in the industry. So just wanted to understand how they are rationalizing, this working capital among all these brands. So it works, you know, both ways, you know. So in the stronger markets where we have a very good presence, in many cases, we are able to get competition dealers to stock, you know, our material as well. And then that's where we tend to focus and grow the network. In the weaker markets, sometimes we don't have that ability to do that, so we look for other non-paint dealers who are able to come to us and are able to align with our thoughts. So that's how it happens. Both the segments are growing therefore. Sure. And so last question, I'll try my best not to make it a rhetorical one. But we are entering a very interesting phase, for next year and perhaps going forward. And we are entering this phase, with a very high base of margins, and this is true for larger part of industry as well. So, as you said, you won't like to expand margins from here on, but let's say if competitive pressure has to remain intense, at least in the near term, would you prefer prioritize, margins over market share, or, or, is there any other order that you prefer? So we would prefer to balance both, you know, but if push comes to shove, you know, we would prefer to maintain our market share, and have a little bit of dilution on the margin. Though we are, you know, I think, you know, we can figure out ways of maintaining a margin at some decent level. I've given a guidance of between 15% to 17%, we should be hovering in that range. Sometimes it can go more towards 17, sometimes it can go towards, you know, 15. That's where we will remain. And we will try and, you know, protect our market share. That will be our priority. Very clear, sir. That's all from my side, and all the best for. Thank you. Thank you. Just a reminder to all the participants that you may press star and one to ask a question. The next question? The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Good evening, Abhijit, sir. Thanks for the opportunity and congratulations. Sir, one clarification: You mentioned that market share has improved to 20%. Is it volume or value? So it is value, because we don't have the volume, the data of the companies. The published results are there only for value. It's based on value and based on, if you see that the India operations which we mentioned, so that includes, you know, two of our subsidiaries, which is Saboo Coatings and STP, which operates... But it is in the consolidated level, it is there, but in the standalone, it doesn't reflect. So if you add up those two companies with our sales, we are in that range of 20% for the top five companies which we, which publishes the results and which is traded in the market. This doesn't include the small players, you know, so that, if that happens, it will get diluted further in terms of market share. But in the top five companies, in the India operation, we are at about 20%. Okay. Second clarification I was looking, in the domestic decorative, we have outperformed double-digit growth. But just more curious, what would be the economy emulsion? Because you spoke, economy emulsions has done better over enamel. Yeah. So it's in double-digit, you know, so, and a decent double-digit in Economy Emulsion. So, that's how it is. But, as far as, you know, the Luxury Emulsion is concerned, it's been mid-single digits sort of, you know, so that's the difference. Overall Economy Emulsion would be about one third of our decorative business now? I can't say. I don't think I have looked at it in that way, but, I have no comments to make on that. Okay. My second-last question on the Sandila plant: What contribution of volume would have come in now, or maybe you can say capacity utilization, whatever, yes? Yeah. So we are still, you know, operating at about 35% odd level. So there is a long way to go, and we can keep improving on that, you know, and so it was built with an objective that it should last for at least 4-5 years. We don't have to look forward to addition in the north central area. So from that perspective, it is fine. You know, it is doing its job. Okay. The last question, you mentioned that there was a pricing action which we have taken. So is there any pricing cut we have taken over last fortnight, last one month, or in the near future? Yes, you know, we had taken a price cut. You know, as the industry took a price cut, you know, in the month of January. So that's about, you know, 2.7% odd, you know, overall impact to sales. There were, you know, some 3-4 products which had very good sales, but where we took, you know, major price decreases and price cuts. So that's going to impact us in this quarter. So you have matched the price cuts to whatever the industry has taken? That's right. That's right. Do you anticipate any further before the season? Well, you know, not really. You know, maybe some of the other products which are still left over, because most of the main products have been taken. Some small adjustments might happen, but that we have to take a look, you know, at where the drops can possibly be done or if at all it is required. Only if, you know, it matters, you know, because in terms of demand, if it is fine, then why, why do it? Okay. All right, sir. Thank you, and all the best. Right. Thank you. Participants may press star and one to ask a question. The next question is from the line of Amit Purohit from Elara. Please go ahead. Yeah, good evening, sir. Thank you for the opportunity. So just on this, premium side of the segment, for the paint industry, wherein while we—what we understand is that the exterior paint, we have done pretty well, and you've been highlighting in your slides as well, that the Anti Dust and WeatherCoat has been doing well. But on the interior side, a few quarters back, I remember you were highlighting that some more work has to be done, to drive, especially on the luxury side. So over a longer period, I mean, I just wanted to understand is that when I look at the other player also, like, who talks about that their salience in the premium is low. So what is it that a company number 2 or number 3 has to do? Why it is so difficult to change or, I mean, to gain market share from the leader in the luxury and the premium segment? Just your thoughts on that. Right. So, you know, if you look at the luxury and premium segment, as in the exterior category, we are doing quite well. In fact, you know, in the semi-luxury category for us, which is between the premium and the luxury, we are a leader with our WeatherCoat Anti Dust. Sure. We continue to do very well there. Even in the luxury segment, we have WeatherCoat Long Life 10 and 15, which does quite well in our markets, where we are strongly present. So there we are quite comfortable, and in terms of percentage to sale, I think we'll be very close to the leader in the exterior category. It is in the interior, where we have some work to do. As you rightly said, I have been saying that on the luxury segment, we have a pain point, right? In the semi-luxury, in interior also, we are a clear leader with Easy Clean. You know, it remains a leader in that category. It is in the category of luxury, there it is dominated by the leader, there, you know, with the Royale brand, which is there. And so we are working on various brands. We have a product called Silk Glamor, which is there, but you know, it doesn't do as well because it is largely, very strongly brand driven, and the amount of money that one has to spend there to establish oneself in that particular segment is something which we don't do, and that is why it is a problem. If we had spent, say, you know, double the spend and done it for five years, we possibly would have established ourselves in that particular segment as well. But it has been difficult to do that. It has to be built therefore on a different platform, and that's something which we are trying to do. Sure. Just a follow-up on this, and when we know that there are two players in the premium side, which has a significant market share, I don't know, but the fourth player, AkzoNobel, would also have a strong positioning in the premium side. But they've been kind of not moving in line with the industry. So there lies an opportunity, right? So for someone to take on that. Yeah, you know, there is always... I won't comment on, you know, what others are doing. As far as we are concerned, and we look at it, you know, that the luxury segment is a brand-driven segment, and one needs to have built up a strong positioning there also. You know, so if you have a differentiated product which resonates very well with the consumers, then it tends to work much better with a lesser spend as well. We have done that with Easy Clean. Now we are launching a new product, you know, this month, called Easy Clean Silky Touch. Riding on the strength of Easy Clean, we are trying to upgrade consumers onto a better finished product. It may not completely substitute the luxury segment, but it will definitely create some gains for us. That's something which we are looking at, because we have a strong presence in, as I said, in the Easy Clean segment, and we are leveraging that particular brand to gain a foothold in the luxury segment. That is a more wiser thing to do than to get into a head-on fight with them. Sure. Okay. Thank you so much. Thank you. The next question is from the line of Mihir Shah from Nomura. Please go ahead. Hi, sir. Thank you for taking my question again. So I just wanted to know your thoughts on these differentiated products, you know, which are coming with a higher number of years of warranty. Do you think that the repainting cycle can get affected by these products, or you know, or because of the extreme weather conditions that we have, and the leakages that we get, the repainting cycle can continue to shorten from here? So we, you know, to answer your question, it will be answered in two parts. One, of course, you know that there is not a static customer base. If it was a static customer base and the limited number of customers who keep painting every year and the rest don't paint, then what you are saying will hold true. Because if you have, you know, number of years which has gone up, and therefore, you know, the same customers are coming back at a later date, so the volume will shrink, right? But, you know, we are getting many new customers who come in at a lower price point, with, you know, and there the products are already there, you know, which where the cycle continues as is, right? So it's a mix of new customers coming in, customers who are using a later, you know, number of years product, which will continue, and there will be some customers who will get upgraded onto better quality products. So the volume gain will come from the mass segment, and the value upgradation will happen at the luxury segment. So this is how it will continue to happen. Got it. And, sir, any insights on how to accelerate growth or from the unorganized players? You know, I believe there's still a one-fourth of the market is still led by regional or unorganized players, and that continues. In fact, in the recent times, post the raw material prices cooling off, we are hearing a lot of noise around unorganized players coming back in various categories, including paints. Given the competitive intensity in organized players will increase, can one assume that the gray growth can be chipped away from unorganized players, going forward? No, I have always consistently, if you hear me speaking earlier, you know, the unorganized players will remain, you know. To some degree, you know, they're doing a lot of innovation, a lot of speed in the business, you know, two things which you know matter to some of the consumers, right? And some of the customers. Especially on industrial side, you know, they will continue to do better because they respond very fast. And then requirements are met very fast by them, because small quantities can be serviced by them very fast. And then they innovate, you know, because they have to survive. To survive, they innovate. You know, so they are not mass producers. They do small, small, small, small things and keep servicing that. So they are going to continue in that domain. You know, you can't completely wish them away, and neither should we, you know. So it is something which will remain. Incremental changes will keep happening. Some of them, you know, who are not so, you know, managing their finances well and not very innovative, you know, not up to speed, will lose their way, and then that will incrementally keep coming to the bigger players. This is what is likely to happen, right? When the prices were going up, they were under tremendous financial strain to come. Additional losses might have happened in that period, which some of them would have recouped. Those who are better off would have come back into the market. This situation, I don't think, is dramatically going to change going forward. Understood. Very interesting, sir. Thank you very much. And again, wishing you all the best, sir. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. I just wanted to clarify two things. One, the double digit growth is essentially in value terms, right? In the decorative business that we saw this quarter. It is in volume terms, you know... Okay. N ot in value terms. Okay, sir. Sorry. And then I just... and the second bit, sir, on the margin front, to the earlier participant had highlighted that, I mean, let me clearly highlight my question. From a 3Q sense, whatever operating margin we saw, would it be fair to say that near-term, the price cuts would now not likely to weigh on that? Or, because, you know, you obviously have a contrasting ad spend increase that was materially higher than normal. Is that the right way to look at near-term margins, or that would not... If you could kind of give us that sense? Yes. Sort of, you know, you can say that, you know, part of it will be neutralized because we got a 2.7% drop, and we had a 1.4-1.5% increase in ad spend, so it will get partly neutralized. But it will still have a little bit of a drop coming in, in the fourth quarter. And then possibly going forward, it might get, you know, evened out, you know? So, in the immediate quarter, yes, you know, there might be little bit of an impact. And lastly, sir, as we see the, you know, we've obviously seen price cuts, but we are also seeing next year the entry of a new player. In the way I heard you is, while you essentially work on maintaining market shares, would you argue for distribution gains being the way forward or continuing that way? How are you looking at this internally? If you could give us some sense, because there is too many uncertainties as we speak. So would love to hear your thoughts on how are you evaluating or looking at the new competitor. Yes, so, you know, it is, you know, one is to try and protect, you know, what you have in the marketplace. You know, second is to grow. You know, distribution is one of the levers, you know, which is available to us. As a number two player, we have a fairly decent brand standing across many locations. And, you know, that can be leveraged quickly by adding more distribution points. So that's an easier and a quicker pathway for growth for us. So whatever little loss that might happen on, you know, assuming that, you know, some losses will happen with the entry of a new player, that can be recouped through a faster, vigorous growth in the distribution network in areas where we are not so present as of now. There is also this, you know, some product categories like the construction chemical and waterproofing area, which can grow at a faster pace, and therefore, you know, give us a volume value growth, which is almost equal to what we have been achieving for the last few years. Got it, sir. Got it. And lastly, sir, because there is also a lot of discussion on premium and, and a belief that, you know, that could help in offsetting an impact. Would my understanding be fair to say that, you know, geography-wise, market shares are also a big hurdle for anyone new to kind of counter? It's not just, it's, you know, it's not considered a me- too product anywhere. It's just, there is geography-wise salience, which has a divergent impact, which is what could help us in, you know, place us well, if I'm... Would that be a right understanding, sir? Yes. You know, it takes a longer time, you know, in this type of an industry. This is not very oriented towards directly towards consumers. The D2C don't exist here almost, you know? So it is this, you know, intermediaries, whether it is a dealer, architect, builder, painter, contractors, who play a very important role. And you know, it varies from region to region, this trend, and therefore, you know, to replicate that across markets becomes much more time-consuming and difficult. So what you're saying is true. Geographically, there is some protection, and there is a protection as far as the brand is concerned, so both help to that extent. Got it, sir. That's all from my side. Thank you very much, sir. That's all. Thank you. The next question is from the line of Lovish Soien from Phoenix Advisers. Please go ahead. Thank you for the opportunity, sir. My first question is, in the long term... Sorry to interrupt, sir, your voice is not that audible. If you're using the speaker mode, can we request you to use the handset mode, please? Yeah, sorry, is it better? Yes. Yeah. Yeah. So my first question is, in the long term, what will be the growth driver for the industry? I mean, will the growth be driven by premium segment or the economy segment? And my second question is, I believe the unorganized players have close to 30% share of the market, and you mentioned that they will continue to be present in the market. So what is Berger and the industry as a whole doing to shift consumers from the unorganized players to the organized players? And that, I'm talking about in a sustainable manner. We saw that during COVID, there was a shift from unorganized to organized, but that is moving back. So what is... How will this play out over the long term? Thank you. Right. You know, so to answer your second question first, you know, you said that, how are we, what are we doing? You know, we, as I said, you know, they will remain, you know, and then, we have to create value for the consumers. If they find that, you know, that our quality is good, it is acceptable to them, and there is a brand name associated with it, some of them will shift, some of them will still continue to deal with them. You know, for example, you know, there are certain dealers who might want to stock this local product for two reasons: One, they get extended credit, which we can't give, right? The second, they may also have, you know, unique brands for themselves on which they make more margin, so they may continue to sell those, localized brands where no one else is selling in that area, and so they are able to get a higher margin on that product. So there are many reasons for it, why these local brands sometimes continue, you know, and then it is difficult to therefore snatch away the way, you know, people think that it is so easy. It won't, you know, and, and therefore we have to keep working on this, adding value to the customer, you know, and to the intermediaries involved. If they see value in it, then only you will be able to progress in this direction. So this is as far as the second is concerned, you know. The first question was what? You know, what did you say? What will be the growth driver for the industry? Will it be driven by the premium segment or the economy segment in the long term? In the long term, you know, both segments will grow, you know. Actually, if you look at it, you know, in terms of urbanization level, we're still at about 34-35%. Europe is at 80-82%. And we are nowhere near that, you know, so there is a long runway for urbanization happening. And as much as urbanization happens, you know, and people move to cities and towns, there will be consumption of paint happening, first-time painters, and then again, after 5, 4 years, 5 years, 6 years, again, there will be painting. So this, this will be the major driver. Now in this, there are both users of economy segment and some amount of upgradation happening from those who are using economy to luxury category, which I was explaining earlier. So both these categories will continue to grow because the market itself is expanding in both ways, horizontally and also upgrading itself. So therefore, you know, both segments have growth potential. Got it. Thanks. And if I could have just one follow-up. So one of your competitors is focusing also on the water-based paints. So how is that going to impact the economy segment? Because we believe that that is a lower price product, and that could eat into share of either the unorganized or the economic segment of the other people. So how would you... I think that... What, what is it, you know, water-based what? Pigment? Water-based paints. Water-based paints? Yeah. No, I don't know who is doing what, you know, because as far as we are concerned, you know, we are quite well-placed, overall across categories. We have got brands which are there, which can take care of customer needs as of now. If we find that, you know, there is some product which has been launched by someone, which is gaining traction in the market and, you know, has got good potential, so, you know, in paint industry, there is no rocket science. We can always come with similar products and start, you know, looking at, you know, introducing that in the market. So that's not going to sustain over a long time. We need to do things which are fundamental to the industry, and that's what we are looking at. You know, something which is unique, differentiated, positioned well, advertised well, can sustain. At the lower end, it's difficult, because then anyone can copy and, you know, you have to give the price and you have to give the product. Both of these can be very easily copied. Got it. Got it. Thank you, sir. Thank you so much. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you all, you know, and, and wish you all the best. You know, this is our hundredth year that we have entered into, and will close in December 2024 this year. So we have a series of events planned out. Hopefully, you know, we'll get to interact with you, more frequently and on a better note, going forward. Thank you. Thank you. Thank you!