Hi, good evening, everyone. This is Nitin Gupta from Emkay Global. I would like to welcome all to Berger Paints India Limited's Hi, good evening, everyone. This is Nitin Gupta from Emkay Global. I would like to welcome all to Berger Paints India Limited's Hi, good evening, everyone. This is Nitin Gupta from Emkay Global. I would like to welcome all to Berger Paints India Limited's Q3 FY25 result conference call. I thank Berger Paints management for allowing us to host. We have with us today Mr. Abhijit Roy, Managing Director and CEO, Mr. Kaushik Ghosh, CFO, Mr. Sujyoti Mukherjee, Vice President, Finance and Accounts, and Sayantan Sarkar, GM, Finance and Accounts. I shall now hand over the call to the Management for the opening remarks, post which we will proceed with the Q&A session. Over to you, gentlemen. did the volume go, Firoz?[inaudible] Hello? Hello? Yeah, Nitin. Yeah, we can start. Yeah, yeah. Thank you, Nitin. Good evening, ladies and gentlemen, and a warm welcome to Berger Paints India Limited earnings update call for Q3 FY25. The management presentation on the earnings for the quarter has already been uploaded on the website, and I hope you have already gone through it. I will now request Mr. Abhijit Roy, our MD and CEO, for his opening comments and also to run you through the presentation, post which we will open this session for Q&A. Over to you, Mr. Roy. Thank you, Sujyoti, and good evening to all of you. Sorry for keeping you waiting a few minutes. Let me start with the Q3 presentation that we have. Give me a minute. Firoz? Q3, we had a high single-digit volume growth in the decorative segment. There was an uptick in both sequentially. There was an uptick both in volume and value growth. Protective business has a strong performance in the quarter. We continued to gain market share in Q3. Current market share is in excess of 20%. Operating margin remained in the guided range and improved sequentially. Company improved its net cash position at the end of the quarter. If you look at the volume growth for Q3 FY 25, that is, last quarter, we had a volume growth of 7.4%. On a YTD basis, we had a volume growth of 7.7%. Value growth 0.4%. On a YTD basis, it is 0.9%. The volume-value gap that you see is mainly on account of two reasons: one, product price decrease undertaken in earlier quarters, and second, stronger sale of high-volume and low-value products like texture paints, tile adhesive, and admixtures, and muted sales of high-value products like enamel. Exterior Premium segment did well. Waterproofing and Construction Chemicals segment had a strong double-digit growth. Protective Coatings and infrastructure business continued its good performance in the quarter. Sustained growth trend was observed. If you see four years figure, the volume growth is 15.6 at the CAGR level, and value growth is 16.7. If you come down to three years, also 11.8 and 10.4. So the volume-value gap in both these cases, if you see, is negligible. But on a two-year and this year, there is a gap. On a two-year basis, it is 9.3 volume growth and 3.6 value growth. As I said, two primary reasons. One is, of course, the price drop of 4%-5%. And the second reason is increased sale of categories like tile adhesive, texture coatings, and admixtures, which are mostly of waterproofing and construction chemicals, which results in distortion in the volume growth compared to the value growth. If you look at the gross margin percentage, it's been pretty healthy, as you can see. And at 39.8% of quarter three, it is more or less hovering around in that range of 39.3%-40.5% over the quarters. It's been in that range. So no great change as far as the gross margin is concerned. In spite of intense competition, gross margins are being held at those levels. The same holds true for EBITDA margin as well. It's at 16.2%. It's been hovering in that range only. We have always guided that it will possibly be in the 15%-17% range. It's ahead of 16%, so that 16.2% is where we are as far as operating margin is concerned. Gross margin contracted marginally over the corresponding period of last year on account of product price reduction undertaken in the last financial year, currency depreciation in the current quarter, and some inventory impact of monomer price increase. However, prices have now started coming down. Operating margin was lower on a year-on-year basis. However, improved sequentially on the back of some operating leverage. Operating margin, however, remained on the higher end of the band of 15%-17% as guided earlier. Profit growth at net level saw an uptick, aided by dividend received from BJN Nepal. This is in terms of numbers: 0.4% total income from operations, operating profit negative 2.8%, PBT 11% growth, and PAT 16.3%. PBT, as I mentioned, there is a BJN Nepal dividend which came in, and that's why it is positive so much. On the consolidated, it is 0.9%. On On YTD basis for standalone, it is 0.9%. EBITDA is negative 4.6%. Profit is 7.2%, 1.9% negative in PBIT. PBT is 0.8% negative, and PAT is 0.9% positive. Decorative business recorded high single-digit volume growth. Exterior Premium segment did well in this quarter. Construction Chemicals, Waterproofing, and Wood Coatings products had a robust performance, strong double-digit growth. Aggressive network expansion continued. Added 2,000-plus retail touchpoints, installed around 1,800 ColorBank tinting machines. Our urban initiative is progressing well. Many of the high-growth products continue to do well. The waterproofing and Construction Chemicals, we have added a few more products. The range has expanded, and we are doing very well in this category. Many new stores have been set up, especially in the urban centers, and they are giving us good results. Experienced business outlets, which are working well for us. Berger Exclusive Stores, which are basically these are exclusive points where one can see, touch, feel the textures, the various types of paints, spend some time with the family, and then buy paint. Industrial business, protective coatings business continued its leadership position with strong performance in the quarter, aided by infrastructure push from the government. Automotive, general industrial, and powder coatings business line had a muted growth. Improved net cash position in the quarter. December 2024 from September 2024 level, it improved from INR 242 crores to INR 377 crores. On the consolidated level, our total sales growth or income from operations was 3.2%. EBITDA level, if you look at it, 1.7% negative, and PAT 1.4% negative again. YTD, December 1.9% growth. EBITDA 5.4% negative, and PAT is 2.9% negative. Company's overseas subsidiary, Bolix, Poland, had a steady top-line growth. The profitability was muted on account of some one-off project expense, which will not be there in the next quarters. Company's overseas subsidiary, BJN Nepal, had a robust turnaround performance on top-line, aided by a low base and improvement in business conditions in Nepal. Profitability growth was strong, aided by the scale effect. Company subsidiary, STP Limited, had a quarter of steady top-line growth. However, profitability suffered on account of deterioration in product mix, owing to low traction in admixture sales. SBL Specialty Coatings also had a modest growth in top-line and a flat growth at the operating profit level. The joint venture, Berger Becker Coatings, had another quarter of very healthy growth of top-line and profitability. Company's joint venture, Berger Nippon Paint Automotive Coatings, had a strong top-line growth and profitability and showed significant improvement, aided by gross margin expansion. Business outlook: we remain optimistic on decorative business improving its growth sequentially on the back of likely improvement in consumer sentiment, fueled by favorable budget announcements and adequate monsoon, and the volume-value gap is expected to bridge due to waning of price decrease impact in the coming quarters. Protective business prospects seen better on the back of government spending on infrastructure. Automotive and other industrial businesses likely to perform better in the coming quarters. Geopolitics and currency depreciation appear as likely risks. This is our new head office from where I am speaking. Therefore, this little delay because there were some small issues there. In a new place, always there are some challenges so this is in the form of a paint can, as you can see, with a rooftop, which is solar-powered. It's a unique architecture and the 100th year, we had to shift out from the old premises. We are running out of space so this is the new office which we have come out with. Yesterday, in fact, was the inauguration, inaugurated by the West Bengal Industries Minister, Shashi Panja and this is one photograph where all of us are present from Berger side and the minister herself. Thank you, and I await questions from all of you. Thanks, Abhijit. So we will now start with Q&A session. I hand over the call to my colleague, Kevin Shah, to moderate the Q&A session. Over to you, Kevin. So those of you who have questions can raise your hand now. We will announce your name, and you can unmute your line. Please highlight your full name and the organization you are representing. The first question is from the line of Aniruddh Joshi. Please go ahead. Hello. Yes, Aniruddh. Go ahead. Yeah, so thanks for the opportunity. Sir, we have seen the new entrant in the market has reached more than almost 1,200 crore sales probably in nine months itself, and now the new plant will also start in the Eastern India. So now Berger, in a way, uniquely has got some extra time compared to other peers to understand the strategies and the aggression and even the product portfolio, etc., so now what will be our strategy to counter as it enters the key region of Eastern India? That is question number one. Question number two is we are from the channel checks, and even other companies have also highlighted that there are some green shoots visible in January, so is that trend observed by Berger also? And do we see the overall growth rates sustaining in this entire quarter also? Or is this a structural reversal in the growth rates of the entire sector? Or we will have to wait for more time to see how the trend pans out? Right. To answer the first question first, I don't think there is any material impact on where the factory starts its production because they have enough production capacity. And it's not that in one place they start production and immediately that place starts getting affected. It doesn't happen like that because it's not as if the suppliers are not there. The suppliers are coming from all over, and they have started operations in the East. Maybe the supply will improve a little bit, but it's not going to substantially change the scenario on the ground. As of now, yes, they are a serious competitor, as I have always maintained. And there has been some sales growth impact as far as the existing players are concerned. All of us would have been impacted in small measure. Our estimate is that Birla has got about, on a YTD basis, about 3.5% of the market, right? Which is, if you consider five main players which produce the result and take also Birla in that, which is the sixth player, then in that six players, they have about 3.5%, right? On a YTD basis. Now, that I don't think is going to materially impact anything or substantially the growth of any of the companies. It does impact to the extent of 3.5%. So that impact is there. Some of the players may get impacted by 5%. Some of the players may get impacted by 2.5%. But the broad range is in that category, right? So that's the growth rate impact which is there so far, right? Now, if you do away with that, with the paint industry, there have been three major problems this year. Number one problem was that there was a price decrease which we had done, which is about 5% last year, right? Which lasted right up to January, which has impacted the paint growth rate. The second is the slowdown in the market itself, which is to the tune, in my opinion, of 3.5% is on account of the slowdown. So 5% plus 3.5%, 8.5%, these two are temporary in nature. These two are completely temporary in nature. 5% the price decrease is already off from middle of January. So therefore, this quarter itself, we will see that impact. The second part is related to the slowdown. That also is temporary, hopefully. And that with the budget that we have seen, we look forward that a large part of that will get bridged from April onwards. So therefore, one part is going to go away largely in this quarter itself. And the second temporary part is possibly going to change scenario from April onwards. As far as the competition is concerned, that will continue. That for every player, as I said, is different for different players. In our case, our impact is slightly lesser than the 3.5%. So we are impacted to that extent, right? And that impact will continue going forward as well. We don't anticipate that going away completely. But as I have always said, 2.5%-3% is expected that the growth rate will be impacted by the new entrant. Then we have to ensure that we restore that growth rate through our own measures, our own initiatives. Our own initiatives in terms of distribution expansion at a much faster pace than what we do normally. Also the urban initiative which we have undertaken, we are reasonably confident that we should be able to overcome this backlog of 2.5%-3% so that we don't get into any problem of growth. This is my reading of the situation. Okay, sure. So this is very helpful. Just regarding your view on one of the MNC players has plans to sell out the decorative business. So what is Berger's view on that? We keep hearing from media news flows, but maybe what is the stance Berger is taking? No, I've given media statements already that it doesn't, as of now, doesn't fit in strategically with what we think of doing, and we have therefore not bid for this for the time being. Okay, sure. And the margin guidance 15%-17%. So do you see the margins remaining closer to the top end or lower towards the lower end considering where the crude oil level or even the INR depreciation has also happened? And also the competitive intensity will be at peak in FY26? The competitive intensity is already there. Nothing much has changed in the overall scenario. I don't think any significant change will happen in the future. It will remain possibly in that band of 15%-17%. That's the guidance that we maintain. We have maintained that, and we are continuing to maintain that. Okay, sure. This is very helpful. Many thanks. Thank you. Thank you. The next question is from the line of Mihir Shah. Please go ahead. Hi sir, good evening. This is Mihir Shah from Nomura. Thank you for taking my question. So firstly, congrats on your new head office. Looks quite nice. Hope to come down and meet you soon there. Sure. Again, congrats on your strong volume performance. There seems to be a very stark difference between Berger's volume performance versus all the other listed players this quarter. Can you help us dissect and understand why this divergence? Is it due to the regional presence that you have versus other players? And/or is it because Grasim's entry may be a little more in the other regions and probably less in your region or your stronger markets? Any insights on why the divergence in volume growth versus everybody else, sir? So I think we make too much out of this Grasim entry. Yes, it has impacted some of the players slightly more. But that is not the primary reason for the difference because, as I said, their total share, as I said, is 3.4%, right? YTD. So even on this quarter, probably it would have been higher because this quarter they did better than what they have been doing in the previous quarter. So probably it would have gone up somewhat. But still, it's not the major force which is impacting everyone else, right? So different players have got impacted differently. In our case, I think the divergence is coming out of two factors primarily. Distribution expansion, which is happening at a very good pace, I would say. And in fact, we would like to accelerate that further. And the second is the urban initiative that we have undertaken. Small results have started coming. I think it will further give better results going forward. Perfect, sir. That's wonderful. Secondly, if I can check on the gross margins, I mean, I thought historically third quarter margins highly should be better than the second quarter margins given the exterior paints start to sell in the third quarter versus the second quarter. However, maybe in this result, we are not seeing that much of a difference in gross margin profile. Also, the mix seems to have deteriorated further in your case if I'm assuming a minus two pricing. So firstly, would we have a minus two pricing this quarter and which ideally should become a plus two from next quarter? So that's one, and maybe why are we still seeing a small dip in the gross margins despite higher sales of exterior paints and premium paints? So actually, this quarter, every year, the premium sales and the luxury category sells very well. The third and the fourth quarter, typically after the rains, tends to pick up momentum in terms of luxury product sales and premium product sales. So the base effect is also there. Last year also, these products would have sold very well. The growth rate, as we have seen for most consumer categories, hasn't done anything substantially great there. So the growth rate has been very limited as far as this exterior category or premium category or luxury category is concerned. Especially on the interior luxury, we had a muted growth. We had a good growth in the exterior category, but in the interior luxury category and the premium category, the growth was relatively muted. Also, the fact that when you are talking of the volume value gap that you are seeing, as I explained to you, part of it is price decrease, but you are rightly saying that what about the balance? The balance is not because the mix has deteriorated as such, but the fact is that tile adhesive as a category did not exist two years back, but that volume is large and it is coming and it's a good profitable item, so we continue to sell that. The second is texture coatings. Now, we were not present in that particular segment, but in projects, especially in the western and southern parts of India, texture coatings has become sort of de rigueur for almost every building, so now the texture coating volumes goes up. This is a low value item, but high volume. So therefore, all of these are nuances which are difficult to explain individually, but these are the things which impact the volume value gap that you are seeing. And you will see that for most of the leading decorative players, this type of gap will happen if they sell these types of products. If they're not selling, obviously, the volume value gap will be less. So it is not because the mix is deteriorating or improving. It is because of the sort of products that are being sold as of now, which is distorting the picture a little bit. But that's about 2%-2.5% distortion because of that. And 4%-5% is due to the price decrease which was there. That 4%-5% will go away. The 2%-2.5% will remain. In terms of volume value differential, you can expect a 2%-2.5% to sustain in the next few quarters. Got it. Thank you. So lastly. Okay. [crosstalk] No, very clear. This is very clear. So thank you so much for that. So lastly, if I could just ask on the current months or the January months trajectory, I might have missed your comment. Are you seeing a pickup in the sales on volume front? Yes. Sequentially, there is an improvement for sure. So as I had indicated in the last meeting in quarter two results also, that quarter three sequentially will be better than quarter two, which we did. Not very significant, but there is an improvement compared to what the market has done. And in quarter four, it is going to be further improvement. We are at 7.4% or something in volume. I expect that we will possibly go up more towards the double-digit figure in terms of volume growth. And in value growth, as I said, there will be a differential of 2%-2.5%, 3%. So we expect bit single-digit growth in terms of value growth. Got it, sir. Thank you very much, and wishing you all the best, sir. Thank you. Thank you. The next question is from the line of Ajay Thakur. Please go ahead. Your line is on your turn. Hi. Thanks for taking my question. So sir, I wanted to understand there was some mention about the valuation part while you were commenting on the pull-out from the AkzoNobel deal in the media. So if you can just throw some light on what kind of valuation has been quoted for AkzoNobel and. [crosstalk] So if you can just throw some. Ajay, I haven't mentioned. These guys can write anything. They first wrote that we are bidding, that we are the most serious player. Then they wrote that we are not happy with the valuation, etc., etc. I want to get into these things. As of now, I would just say that it doesn't have a strategic fit. The value benefit equation doesn't fit in with our requirements. So we are not therefore a serious contender in this race as of now. This is all that I can tell you. Understood, sir. Sir, second question would be in terms of if you were to look at the leaders' number for the quarter and also for the last quarter. We have seen a very dismal performance from them. And even if you were to kind of add up the new player, roughly about 3.5%, so will it be kind of a fair estimate to say that the leader would have lost more than 3.5% market share given the fact that our value share has at least been better versus the others, given that our growth has been better versus the others? So you can do that math. It's very simple math. I don't think I need to say anything on that. Obviously, there will be the net sum is 100%, right? If someone gains, someone has to lose. We are not losing. That's all that I can say. What has happened and who's lost, you can easily calculate and find out for yourself. Understood, sir. Sir, just last one. Obviously, it is related to, again, the AkzoNobel. But any potential new entrant, can it again, we already are seeing quite a bit of competitive intensity, a potential new entrant from the buyer of the AkzoNobel, can it lead to further kind of a competition in the space that we are already seeing? I know it depends. I foresee no such great problem because AkzoNobel has already been in existence in India for possibly 100 years or so, right? So whoever acquires it will be running that same company with same brands. Maybe they will do some plus minus. But it's not going to change dramatically the picture. This is not a newcomer who is coming into the industry. So I see no major issue there unless there is some major change happening on the ground. Only time will tell what happens. But as of now, I don't see anything majorly happening there. Thanks. Thanks for answering all my questions. Thank you, sir. Thank you. Thank you. Participants, request you to call out your full name and organization you are representing. We have the next question from the line of Amit Roy. Please go ahead. Hi sir, good evening. Thank you for the opportunity. Am I audible, sir? Yes, yes, you are. Please go ahead. Yeah. Yeah, sir, just I mean, based on your comments on the Q4, it seems that probably industry should also be growing at mid- to high-single-digit, right? Is that a fair assumption in value terms? No, I don't think so. In value terms, no way. Q3, no way. Q4, Q4, I'm saying. Q4. Okay, Q4. Yeah, Q4 possible. Possible that volume terms, it might be in high single digits. Value terms, I don't think so as far as the industry is concerned. Based on the comments that have been made so far, I don't think that is possible or feasible. And secondly, sir, when I look at, I mean, for us also, like you indicated that there will be some impact because of the new products that you are selling largely on the construction chemical and tile adhesive side. This would be true for even next year also, right? The math that you explained us for Q4 should be relevant for FY26 as well. Is that a fair? It will be relevant for a few more quarters, maybe, because still the base catches up because it's actually growing at a very fast pace from very low base, so once it reaches a steady base, then it will become a normalized growth and it won't have that much of an impact. Sure. And sir, if you could provide some insights on your urban initiatives and also the exclusive dealers, what is the profile of the dealer who is taking up a Berger Paints? I mean, I'm just asking this because now he has an option to look at a Birla Opus and a Berger. So what does Berger bring on the table? Or he's an existing paint dealer who is becoming an exclusive dealer? Or is it an altogether new individual who is entering into the paint industry as becoming a fresh dealer? Just if you could highlight that. And also on the urban strategy, is there a link towards this exclusive dealer and the urban strategy, anything? So in urban, basically, we need to get foothold in the marketplace. If most of you are based out of Mumbai, you will see that very few Berger dealers are visible on the ground. So the first task is to get dealers to stock and sell our products because though a customer might want this product because he might have used it in the past or he likes the product, but the availability becomes a major issue. The same holds true for even the painters or contractors. When they don't get material at short notice, they also try to avoid this particular brand. So therefore, getting foothold into the market and getting some of the dealers to stock this material becomes very important. The second is having got him to stock, we need to also ensure that the sales happen from his counter. That's something which we earlier days, we never used to work on that, but we have learned our lessons from various experiments that we did. And we focus on getting the sales going or being sustained. So based on these two, we are looking at all options. It can be competition dealer, it can be non-dealer, it can be someone who is interested, very enthusiastic, energetic, who wants to come into the paint business. So combination of any factor is fine as long as we get good representation across points. And then we work with them to ensure that the sales happen. So other details, I will not be able to share with you, but we are quite hopeful that this will work very well for us. Typically, the urban demand is largely. It would be a fair assumption that it will be more incrementally project-led, and hence exterior paints becomes far more important for us. Since we have a very strong brand and we can kind of scale up from there for it. Yes, to some extent, you are right that it is much more exterior-focused in the urban centers because the towns and the cities, the urban centers, big ones at least, are mostly vertical. So mostly exterior paint-oriented. So that game has to be played well, basically. Sure. And sir, lastly, on the margin, you indicated 15%-17%. I just want to have your thoughts. I mean, we really don't know how next six months will play out because even the new entrant has aspirations of reaching out high single-digit market share. And the leader has also indicated till the time the high single-digit market share is not achieved, they are also not considering the new player as to be serious enough. So from that perspective, we see that say maybe second half of the next financial year, there could be assuming the continued trend, there could be some activity on competitive intensity which may rise and the increments also start indicating some kind of pressure on margins. So I just want your thoughts on one, on the openness of are you looking when the demand restores to double-digit, you're looking to relook at 15%-17%, kind of maybe look at lower end of the 15%-17%, or you would still believe that that should not be a challenge given your urban initiative and premiumization towards exterior paints that will cover up for that? Yeah, I think it should not be a challenge. I think we should be able to hold at these levels, at 15%-17%. In fact, we have always indicated that we are not interested in this game of no profit or less profit and trying to do some sale somehow. That's not what we are interested in. We are looking at doing it sensibly. So sales and market share, as I have said, we have managed to gain even in this situation. Even with competition, even with the new competitor, if you add them up also, we have gained market share over last year. So there is nothing much to worry on that count. I, unlike what other people have said, take them very seriously. I think they are a serious competitor. Whether they reach high single digit, when they reach, they will possibly reach there two years, three years down the line maybe. But the issue is how long can they sustain these losses that they are incurring? That has to be seen. There will be huge losses there this year itself for them. And how much time they can incur these losses has to be seen. We want to grow profitably. Our logic is very simple. We carry on with our work. We carry on with our growth rate, both in sales and maintain good profits. That's how we would look at it. Sure. That's it for me. Thanks a lot. Thank you. We have the next question from the line of Karthik Chellappa from Indus Capital. Please go ahead. Yeah, thank you very much for the opportunity. Am I audible? Yes, you are, Karthik. Great. Thank you very much, sir. Just a couple of questions from my side. Now, I noticed that in the standalone statement, our other expenses are actually down year on year, despite being a festive quarter and despite the demand conditions actually being challenging this year compared to, say, last year or so. So what would be some of the expenses which we have managed to save this quarter, and how sustainable are they? So there are many areas where we had opportunities to save, and I think we still have opportunities to save. These are costs which are of the nature which are non-essential, I would say. We have looked at each of those areas and tried to conserve as much as possible. As you can well understand, these are challenging times, and therefore, more work needs to be done around those. There are large work. In fact, if you look at our advertisement spend, which doesn't come separately broken, but in many cases, people have reduced their ad spends. We have maintained our ad spends at levels which were there earlier as well. But there are other areas where we have cut back, which I think we can cut back. And those are areas which are easily. The overheads have been reduced to a large extent. Some amount of technology has been brought in. Some new startups have helped us in generating savings there, so some of these are happening, which will enable us to, going forward also, you will see these costs being kept under control. Sorry, sir. Just to clarify, when you said you have maintained ad spends, I mean, this quarter, our revenue, at least in the domestic business, has been flat. So when we say we have maintained, is it as a percentage of revenue, or is it just in absolute terms? Also it has been flat year- on- year? In absolute terms, it has been more or less flat. Okay. So we did not feel the necessity to increase our ad spends in the light of the entrant which is coming in and stepping up, basically? No, not really. Not as of now. We may be conserving some of our energy for later date. Okay. Okay, fair enough. My second question, sir, is the 7.4% volume growth, it actually seems to be a standout based on what other companies have reported till date. In fact, even smaller companies also. Is there any geographical salience to it, or could you give us some qualitative comments on region-wise? How did that demand play out for you? No, it's more or less spread across most parts of the country. One or two areas did not do all that great. Like the West, we struggled a bit this quarter. But otherwise, most other locations, we had decent growth. So including East, East also was a positive volume growth geographically? Yes, this time, because until second quarter, we were struggling a bit. Third quarter, including East, as you said, yes, we had some growth in the East as well this time. Okay. Got it. Thank you very much for these useful data points, sir. Wish you all the best for the following quarters. That's all from my side. Thank you. Thank you. Just a reminder, those of you who have questions may raise a hand option. We have the next question from the line of Tejas Shah. Please go ahead. Hello. Yeah. Hi, sir. Am I audible? Yes, Tejas. Sir, thanks for the opportunity and congratulations for the new office. Looks very classy and clean. Sir, a key pillar of our strategy for last few quarters, which we have called out, is this proportionate focus on urban expansion, so any number that we are running with in terms of how many dealers we want to add or in percentage terms, what growth or what expansion we are targeting in that part of the market, that's one, and second, let's say the addition that we would have done last year, how's the retail offtake in all those counters? And how's the health of the inventory in some of those additions that we would have done last year? Right. So yes, the urban centers contribute a significant portion of the total business. See, paint mostly is consumed in urban markets, right? But what we have done is we have selected some of these markets, defined them as urban where we are relatively weak in terms of market share, and called them our urban markets. So it's not like paint gets used in rural huts or something. It is always used mostly in urban markets, but it can go down to tier two, tier three. Those are also towns. Those are also urbanized. But the maximum concentration in our effort has been on key markets where we are relatively weak, but the potential is very large. So that's what we have defined as urban. In those markets, we are growing at a faster pace than the normal growth rate, obviously, at a substantially faster because its base is very low, and therefore, when you are adding dealers, when you are sustaining them, you tend to grow much faster in those markets. The second part which you asked is, what are you doing to sustain this, right? Yeah. And sir, health of the inventory, retail offtake. The health of the inventory. So sustenance, we are more or less because we have managed to create secondary sales demand for liquidating the stock. And therefore, the inventory, in fact, it is quite dry. You will be surprised. I think if the market sentiment improves, there will be quite a good sales growth happening because what they used to hold at one point of time, the inventory levels in most dealer counters have come down. We do a tracking every month of what is being lifted from each dealer counter. And that trend clearly indicates that the stock level has been coming down for most dealers. So the inventory level holding of dealers is at a low level. As soon as the situation improves and sentiment improves, we might see a good increase in impetus and demand. Clear, sir. And sir, you spoke about that the new player would have garnered somewhere around 3%-3.5%. So just wanted to understand, where is this market share coming from? Is it at a very premium and economy or mass market? Mostly economy and mass market as of now. Okay. And sir, lastly, on volume growth that we have reported, which is a very strong number, just wanted to clarify, will it be like-for-like versus last year because you also? Yes, it is like-for-like over last year. Because some of the products. [crosstalk] Tile adhesives also, that's why I'm clarifying. Tile adhesive was there last year, but the growth rate in that is higher. So from that perspective, it might give you a slight increase there, but it is like-to-like. Okay. Okay. Great. But the product was there, but the growth rate, obviously, the base was small, and it is growing at a much faster clip. So therefore, you might have some added volume growth coming out of these products. Obviously, that is happening. All of these two, three products which are growing much faster is adding to 2%-2.5%. But the rest is normal volume growth. Perfect. And sir, waterproofing also will be part of this high growth portfolio, or will it be part of the normal one? Waterproofing is high growth. High volume growth and value growth also is fairly good there in waterproofing. Perfect. That's very great. So thanks and all the best for coming quarters. Thank you. Thank you. We have the next question from the line of Darshit Vora. Please go ahead. Yeah. Hi. Am I audible? Yes, you are, Darshit. Yeah. So thanks for giving me the opportunity and congratulations for the relatively good results. So my question was that relatively other companies are saying that their rural is doing better and urban is doing slightly diminished, although we know that they have their own ways of categorizing urban and rural. But is that a similar trend being observed by you as well? So as I said, Darshit, since we are relatively was a weak player in the urban areas and we are focused there much more strongly, actually, we are getting better growth rates there. So we might not be the representative sample of the entire industry. As far as we are concerned, we aren't seeing any great difference. In fact, we are seeing a slightly higher growth for ourselves in the urban market. As I said, slightly lower bases were there, and therefore, we are growing at a higher clip there. All right. All right, and would you be able to give slightly more context on the urban initiative that you say has brought you such volume growth? So I just mentioned, Darshit, I hope you're listening in. So I did mention that these are the things which we are doing. We are looking at establishing, getting dealers on the ground first, and then working with those dealers to ensure that they stabilize their sales. We work on the secondary side of it and try and grow that market. So that's the whole objective. All right. All right. Thank you so much. Thank you. We have the next question from the line of Nithin Jain. Your line is unmuted. Please go ahead. Hello. Can you hear me now? Yes, Nithin. We can. Thank you for the opportunity, sir, and congratulations for the standout result. So I have just one question in the context of Q4. So we have seen that the currency has depreciated significantly in the last two months or so, almost to the tune of 2%-3%. So to what extent do we see this impacting our margins in the coming quarter? Yeah. So you are right. There has been a currency depreciation. But the quantum of imports that we do, which is about in terms of RMC total cost, is about 25%-30% is imported, which will get impacted. 70% won't get impacted. So to that extent, yes, there is some impact, but not very significant as such. There have been some price adjustments also, lowering of prices in some of the other items. So it balances out more or less. So it's not a great impact so far. But if it further depreciates and if the prices also start going up, which is unlikely because oil prices, I think, are likely to remain stable given what Trump has said that drill, baby drill and all. So he's going to, the oil prices are unlikely to therefore sharply move upwards. It's going to remain in the stable zone. Therefore, chances of raw material prices misbehaving are low. I don't see any challenge there, frankly speaking. Okay. Great. That's quite helpful, sir, and all the best for the coming quarter. Thank you. Thank you, Nitin. Thank you. Next, we have a follow-up question from Aniruddh Joshi. Please go ahead. Yes, sir. Thanks for the follow-up. Just one question. Sir, why do we think the new MNC player, the MNC player which is selling the decorative business, is probably not a strategic fit considering it operates at the top end of the market? So definitely, Berger has got Silk offering also. But Berger can definitely benefit at the top end of the market. Plus, it has relatively higher share in certain pockets like larger cities in Delhi, Bengaluru, Pune, or some cities in Gujarat also. So I guess metro presence is also relatively better in Western as well as the overall metro presence. I've got your question, Aniruddh. I've understood. But see, we also have a very good presence in many of these markets, in the urban markets, even in the project segment where they play. We also have got a very strong presence there. So a class of interest to some extent is there. There are advantages. It is the value benefit equation which you have to look at very seriously, right? It's not something which is coming cheap or you can just take that risk very easily. So having weighed everything very carefully, looking at the value benefit analysis that we did for ourselves, we did not find it attractive enough for us. It may be very attractive for others, but for us, it was not sounding very attractive. Okay. Okay. Okay. Sure, sir. Understood. Thank you. But for example, in the urban market, the exterior segment is a strong one. They also have very good brands. We also have very good brands, right? WeatherCoat is a very, very strong brand. Long Life is a strong brand. So there is what do you do with fighting amongst each other? And then you have two teams going into the same places and fighting. So there are confusions which can be tackled. But then you have to look at the value benefit overall and then decide. Okay. Okay. Sure, sir. Sir, really helpful. Thank you. Thank you. Thank you. We have a follow-up question from Karthik Chellappa. Please go ahead. Yeah. Thank you, sir. Just one industry-level question. So in the past cycles, we have noticed that paint demand growth has always been a multiplier of the GDP growth. Now, in this cycle, it is running at probably 0.5 times GDP or probably even lower, which is very, very unusual. While the urban slowdown is well documented and shared by companies across other industries as well, for some reason, paint is turning out to be much weaker than even other consumer categories. So what I wish to know is, are there any other nuances that you have observed in this cycle which is causing the slowdown to be deeper than what you would normally expect? Yeah. This question has been asked repeatedly. I've explained, but let me try and explain to you again, and in fact, right at the beginning, I said the same thing. See, normally, what was happening was when the GDP was, say, growing at 7%, as you rightly said, 1.5 times of that, which is 10.5%, was the value growth of the paint companies of 11%, you can say. In that 11%, there was a volume growth of possibly 9% and a 2% price inflation which used to happen, and that used to take it to 11%, right? This was the trend line which was there for the last many years. So always, there used to be price increases because oil prices will go up, and there will be some price increase happening in most years. So 2%-3% will come out of that, and 9%-10% volume growth will happen. So you'll get 11%-12% of value growth happening right through the years. Now, this year, there have been three peculiarities which have impacted the paint industry. One was there is instead of a value growth, we have a value dip of 5%, right? So when you have a volume growth of 10%, you are only getting a value growth of 5%. So you see on the, oh, it is only 5% growth. So earlier, it was 1.5 times GDP. Now, it has become less than GDP. Then you have a competition which is picking out 3.5% from the total market, right? So that reduces it further by 3.5% because that industry, it is there. But since they are not publishing results and you're not seeing it in the overall industry, the growth seems coming down by another 3.5%, right? So when you remove from 10% volume, 5% and 3.5%, it comes to 1.5%. So that is why it looks like GDP or paint is underperforming. That is why I explained that this is going to go away. This 5% is temporary. So once that goes away, you will see a much closer approximation, possibly equal to GDP or slightly ahead of GDP it will become. And then the other two problems which are plaguing this, one is the consumption slowdown itself. Hopefully, that will change from April onwards. The other one, which is the competitive intensity which has gone up and therefore some share loss, that will continue for most players. And therefore, that cannot be avoided. These two will restore itself back. The price decrease impact will go away. Hopefully, there will be some price increase impact soon. The second part is related to the other factor, which is the sentiment improvement. In that case, again, you will see GDP into 1.5. There is no permanency of this whole thing. It is purely temporary. It will restore itself very soon. So in your view, there has been really no change per se in the repainting cycles or anything of that sort? No, no. Nothing has happened. Cycle hasn't changed. Cycle remains. The people are still the only thing which has changed a little bit is the sentiment, which for all consumer categories, as you are aware, has been a little bit slower than normal. Once that comes back and once this price differential of 5% goes away, you will see a change scenario. Perfect. Thank you, sir. Thank you very much and wish you all the very best. Thank you. Thank you. As there are no further questions, we consider that as the last question for the day. I hand over the call to management for closing remarks. Thank you all for coming and spending time today evening. Hopefully, I've been able to answer most of your queries to your satisfaction. Thank you once again and see you again next quarter. Thank you. We thank you on behalf of Emkay Global Financial Services, and this concludes the conference. Thank you for joining us. Thank you.