Ladies and gentlemen, good day and welcome to the Pidilite Industries Limited Q1 FY 2026 earnings conference call, hosted by Kotak Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jay Doshi from Kotak Securities. Thank you, and over to you, Mr. Doshi. Thanks, Manav. Good afternoon, everyone. On behalf of Kotak Securities Institutional Equities, I welcome you all to our conference earnings call of Pidilite. We have with us Mr. Sudhanshu Vats, Managing Director, Mr. Kavinder Singh, Joint Managing Director, Mr. Sandeep Batra, Executive Director of Finance and CFO, and Mr. Babesh Joshi, Vice President of Domestic Accounts and Taxation. I'll now hand over the call to Mr. Batra for opening remarks. Over to you, sir. Thank you, Jay, and good afternoon to everybody on the call. I'll quickly share my opening comments and cover the Q1 FY 2026 results, which were approved at our board meeting yesterday. To commemorate the 101st birth anniversary of our founder, Sri BK Parekh, the board has announced a special interim dividend of INR 10 per share, as well as a 1:1 bonus issue. As you would recall, this bonus issue comes after 15 years. Coming now to the performance for the quarter, the standalone revenue of INR 3,467 crore was higher than the same period last year by 10.6%, largely led by an underlying volume growth of 9.9%, with the remaining coming from price. Underlying volume growth for both Consumer and Bazaar and B2B was strong. Consumer and Bazaar UVG was 9.3%, and B2B was 12.6%. Within the geographical distribution for us, rural growth continued to outpace urban, and that has been the trend now for the last few quarters. Standalone gross margins were in line with Q1 last year. However, our EBITDA margins were higher than the same period last year by 101 basis points and stood at 25.6%. The standalone profit before tax and exceptional items was higher than last year by 18.5%, whereas profit after tax grew by close to 18%. Our domestic subsidiaries cumulatively reported a sales growth of 11.5% and 31.7% growth in EBITDA because of softening of input costs and some pricing action taken last year in ICA. International subsidiaries grew top line by 6.5%, but also improved their margins because the EBITDA growth was 9%. Consolidated revenues for the quarter at INR 3,742 crore were higher than last year by 10.6%, and EBITDA was higher than last year by 15.8%. That is an overall commentary and outlook on the end comments on the performance for the quarter. Open the floor for questions and answers. Thank you very much, sir. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands up while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have our first question from the line now. [Agniesz Choy, from New Amavelt], please go ahead. Yes, thanks and congrats on a very strong set of numbers. My first question is, in two quarters' gaps, you had highlighted two states where there was some level of slowdown, I think Gujarat and Andhra. In Q4, you said it is easing out. If you could update us now, are these two states now almost normal versus the Pan-India growth? Any other states where you would want to highlight which are the outperformers and which are the levers? Agni, first of all, very good to hear from you, and thank you. I think indeed these are strong set of numbers under the current context. I think Agniesh, you're right. As you rightly pointed out, from period to period, as we do analysis of different states and look at numbers and performances in every state, it keeps changing. The good news is, like we were telling you last time as well, anywhere where we see a weakness, we do a very detailed analysis in the company and we get into the root cause of why that has happened and put actions in place. As you would likely expect, and as you said yourself, some of the issues which were faced then, particularly in AP and in Gujarat, have beamed out. Competitive intensity in some parts of these states does remain. For instance, Hyderabad has very high competitive intensity for one of our businesses, as you would know. Gujarat has some level of competitive intensity on some of our other businesses. Overall performance of the states is improving quarter on quarter. If you were to ask me, are there any states which are a bit of an outlier as we go forward? There are always some, but I could say at the moment, Kerala is one state. When we look at Kerala, across our businesses, there are some challenges, but we will evaluate that also as we go forward, find solutions, and be able to address it. In summary, and a more conceptual point, just to let you know that we keep looking granularly at state by state, sometimes many x at districts and even town level, and find solutions right up to that, and sometimes even at the level. Just one follow-up here. Tile adhesives' cost is around 2x of cement, and almost many of the famed legacy players have now entered tile adhesives. If you could tell us in terms of pricing of the famed players versus your extremely strong brand Roff, how are you able to target premium still? On the Hyderabad specific example which you gave in terms of more competition, why can't that competition go to more markets? In India, we see that these types of issues are generally not specific to one city, right, in terms of competition. If you could elaborate on that. No, no. This is not a new competition. As a matter of fact, we are getting more competitive. If you were to ask the other side, they will say perhaps that Hyderabad now Roff is doing a lot. I think, as you note here, our key competitor had done a lot of work in projects well before us. I think now we are inching towards leadership overall in the country. We are already leaders in tile adhesives when it comes to retail business. Hyderabad tends to be the bastion or the guard of our erstwhile competitor who started the business there. That is why the shares are slightly disproportionate. I think will it travel elsewhere? If it had to travel, there were 20 years available for it to travel. Will it travel now? The answer is, in my environment, not very obvious. It is not a new phenomenon. It will not travel. As a matter of fact, if you were to ask the other side, you will perhaps see that there is a lot of heat on from our side there. I hope I have addressed your question. On the second part, I think our growth stats are really, really good in this segment. We continue to what we do here, I will tell you, Agni. You see, when it comes to tiles, and you know some of these statistics at the back of your hand, I think one in four people only use tiles. The purpose, the objective, and the broader purpose in this category is to grow the category and to grow it exponentially. You are absolutely right that cost of this is higher than cement, but tiles are getting more sophisticated. Tiles are getting thinner, better, also on vertical surfaces, sometimes even outside exterior surfaces. You need more sophisticated solutions. Our entire endeavor is actually to keep on premiumizing and building offers all through the pyramid. It is a classic pyramid, again, Agni, like you would understand from some other countries, other categories of companies in India. Tile adhesives is a classic pyramid. There at the bottom, you have these cementitious products, and then you keep getting into more and more sophisticated products as you keep going up for different types of tiles. We now are building that portfolio. We have almost a complete portfolio right up to the top. Our endeavor is to be actually growing much, much faster than the market, which indeed we think we are because our growths are very good. We are continuing to build our portfolio all across. As in the very bottom, we continue to enjoy a marginal premium over our competitors. I think that is where we are. I think with the progress of Roff, we are particularly satisfied and very happy both on Roff retail and Roff projects. Our growths are really, really good. To understand this for me, your presence in tile adhesives is far more comprehensive, far more scaled and offering versus the famed players which have a few offerings. Isn't that correct? Yeah, the different players will have different offerings and all that, but ours is a very comprehensive offering. I think if you understand, like other categories, particularly some of the other key companies, they'll tell you India has a pyramid structure for developing a full portfolio. You have to have big products. You have to have plenty of superior, you know, mass premium products. You have to have premium products. You have to have technology products. When it comes to Roff, we have everything. Last question. In the analyst suite, we were shown that it's going to be an interesting product. You know him. I understand it will take time for traction given it's a very different product. If you could talk about the retail journey, what are the learnings, what is the progress? On Haisha paints, anything you want to share given paint industry? There is a gradual revival, and the new large paint player, I think, seems to be now stabilizing. Any comments you have on what, say, the legacy paint players are saying on the new disruptive large paint player? Anything you have to further add on that? 10% extra grammage dealers returning some of the machines. Anything you want to add on that? As far as you are concerned, Agni, I think we are focused in the five states. We are very focused on Gujarat, which is rural and small town. I think that's where we are focused, so rural and small town India basically in these states. I think it's very similar to the commentary I gave last time, but there is progress, so I will repeat it. The good news from our end is that we are going quarter on quarter, month on month, every month. I think that's very good news. We are growing in all our pilot states. We are indeed growing. We are looking at all these comparisons and more like for like because I think, you know, it's because we are not now, we are focused on those five states. We are also looking at dealer like for like. The good news is that we are continuing to grow there. I think what we are still not satisfied with is the absolute numbers which we are getting or the milestone we have set for ourselves. What we are saying is that we will continue to fine-tune our offerings as we go forward. More importantly, fine-tune our go-to-market, our work with applicators, build those business modules, get that more which Pidilite has for, and get that advantage from there as well. Once we have that as we go forward and have a clearly clarified to win, we go ahead and we continue to remain focused on small town India and urban India. I think that's the first protocol. We are not, I think the commentary you are hearing is largely of the big paint players, largely of urban India and all that. We are focused where we are. We are doing, we are continuing to grow. We are doing work there. We are anticipating as far as we are concerned. Our number of dealers are growing. Our number of dealers are taking which means it's growing. As I was telling you, our like-to-like sales at those dealer places is growing. We are making steady progress. More work needs to be done before we extend and we're done here. On UnoFin. UnoFin, I think it's early days, but what we have done is, and I will ask Clemson also to pick me here for that too next. The headline is that we are sort of continuously understanding how it should go out and revalidating our process. We are also shifting a little bit UnoFin to larger projects. I think in the initial year it started a little bit more retail with more, you know, let's say more unloads and so on and so forth. We are now saying that we will look at it more like a project with larger projects, with those buildings. We are beginning to do that work. This is a piece which is, it's a habit conversion, as you would know, Agni. It will take some time. I will also present a study and talk about it. Yeah, I can take that over. Yeah. Thanks, thanks, Sudhanshu. Am I audible clearly? Yes. Yes, you are. Yeah, wonderful. I think the UnoFin question needs to be answered in two parts. One, what is exactly our strategy in this category? We believe that this is a bit of a game changer in the way if you look at exteriors. A typical painting process has four layers: primer, primer, and then you have once again the coat and coat. We are trying to create a category where the exteriors can be done with either one or two coats maximum, depending on the finish you want. This is sprayable. It is a very unique advantage in terms of the construction labor, which is the number one problem today the construction industry faces. More importantly, it has about 20 years- 25 years of life and is also water-resistant. The benefits are well known to people who understand this. Now, where the piece of strategy is falling in place is we are trying to now pitch it to masonry contractors because those are the ones who need to be converted. This will also go in places where the assets are owned by the owner. For example, if you take the hotels, if it's a brand, you don't reach the brand, you reach the hotel owner. The hotel owners love this idea because it reduces their downtime when it comes to repainting shampoos. Anywhere where there is ownership, where people own the assets, this is a great product to pitch. Also, the third piece is that we need to go to architects who understand and who recommend this. At this point of time, I will just give you a brief overview. We have this new group called Pidilite Professional Solutions. Pidilite Professional Solutions is getting reasonable success in getting it specified with the architect. Masonry contractors conversion is the second thing. Placing concepts as one solution and larger jobs and creating testimonials from these large, let's say, users or also the end users, which is the client, is the way forward in terms of driving word of mouth. Just to give you a sense, one of the big projects that we have recently done is the Jewar Airport in the Greater Noida area where the base coat was applied of UnoFin. There, we have got some success. Like that, we are now moving into larger and larger jobs. This is a bit of a slightly longer answer to your question, but this would give you a sense of how we are going about it. We are pioneers. We believe in building this category slowly but surely. Thanks, sir. I got the sense. This is very useful. Thanks a lot. That's all from my side. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one on your touch-tone phone. If anyone is willing to ask any questions, you may press star and one now. We have our next question from the line now. Latika Chopra from JPMorgan, please go ahead. Yeah, hi, Sudhanshu and team. My first question was, you know, trying to get some more color from you on demand sense. If you could comment on, you know, your confidence in sustaining or improving this 10% volume growth, which is fairly healthy. Also, if you could talk about some flavors on the subsegments in the B2C business, you know, on adhesives, Araldite, waterproofing. You know, you've already talked about tile adhesives are pretty strong. Some of the other store categories, you know, how are these placed versus the broader 10% volume growth that you have delivered? Also, you know, what kind of pricing growth you would anticipate to play out, you know, for this flavor? Oh, and guys, I'm good to hear from you. I think in terms of growth, I think, and you know, Sandeep talked to you about that, our 9.9% UVG growth, which is this time 9.3% Consumer and Bazaar and one2.6% B2B. This time around, this growth is very uniformly fair, if I can use the word, across the two segments where you have the numbers. I can also assure you and share with you that we are seeing consistent growth across regions, across categories, even across product groups. That is very heartening. Very specifically, if I was to talk about a few product groups or categories, as you spoke about, I think we've seen very robust growths on Roff, which we spoke about. We've seen further increased growths on our Dr. Fixit portfolio. Dr. Fixit overall is delivering very well on its promise. That has done very well in this quarter. Fevicol has done well. Araldite has done well. We've got growth basically on the core part of the portfolio, but also we are beginning to see some of our innovations in these areas which are beginning to do well, Latika. For instance, if you were to look at higher cost, if I was to give you one example, and if I was to pick up two of the newer areas we have sort of got into, one is to tackle multitasking, where we launched a product called [M-Seal Astra]. That product, I can tell you, is doing very well, very well. We are very happy with it. I think we've also done another thing that in India, laminates is a very, very important practice, and people want to change as you go forward some of their laminates. In order to make that task easier, we launched a product called [Reliance]. Again, [Reliance] has done very well. Just to give you a little bit of flavor. Now, similarly, if you look at our construction chemicals portfolio, once again, we have built products which are now delivering on the promise and are, therefore, you are delivering superior products at a much better value. There is a product which is doing very well now called Allclean, which is both for new construction and repair when it comes to that piece. That's an important one. [Barseal], as we have done so, therefore, you know, [Barseal's delegs], we call it. I think that's done very well. In our project, more in project, but in retail, there is Wonderproof. Just to give you an example, these are products which are now coming in new. These are newer projects, the products relatively, which have done well. I think across the spectrum, our premiumization put by purchasing, making things easier for people, improving the time needed to do the job, which is becoming important for the productivity of our users and our customers, are the areas where all these innovations are helping us. I think it's been a good listing. It does give us a considerable amount of confidence that as we go forward, we should be able to maintain or better our underlying volume growth. You saw these numbers. I think it's the overall demand sentiment mixed up, which you are hearing from everyone. That will be a little bit of further tailwind for us to be able to deliver better as we go forward. That's encouraging to know. Any comments on the pricing growth? You know, this quarter, we did see this turning positively. Do you think this can send in a firm up further, or are we still just with low single-digit pricing growth for the rest of the year? I think we can add more coming to it, but you've seen in this year's quarter about 70 bps of 9.9% UVP translating to 10.6% revenue growth. So 70 bps of pricing coming in. You will continue to see this in this range, I think, you know, a little bit. There will be pricing coming a little bit on top of the underlying volume growth that we deliver. That you will see. Are we going to, under current circumstances where input costs are benign, are you going to see considerable pricing to be taken up? I think the answer is no, but I'll ask Sandeep to add further if there's anything he wants to add. No, nothing. I think you summed it up very well, Sudhanshu. I think pricing will be more tactical. We don't see any commodity or input cost headwinds that will warrant an across-the-board increase in prices. Input costs overall do remain soft. All right. Just coming to margins, you know, there was a sense of moderation on a Q2 basis on gross margins. Is this to do with mix or if you know the underlying commodities are easy? Our margins, if you look at the same period last year, Q1Q, they are the same. Versus fourth quarter, they may have been a little bit of a decline. Partly could be because partly is because of NIx and partly also, I think the VAM consumption for the first quarter here was slightly higher. The price was slightly higher than fourth quarter. That was, I think, more momentary than a sign of things to come. Our margins, as we speak, should remain at the levels that we reported in the first quarter. Okay. You know, the other expenses too for the modest staff out there, how should one think about in a fully updated? You clocked 25%+ margins in this quarter, and it could be a quarterly trend. Do you think FY 2026 could land at the higher end of, you know, in a band of 20% to 24%? Yeah. First of all, Latika, as you rightly pointed out, and that's my request to everyone, you know, I keep saying this again, that I think first of all, look at this number on a more annualized basis. Don't look at it quarter to quarter because we do have seasonalities, right, number one. Quarter one tends to be our largest quarter of the year. We also do ANSP based on the requirement of the brand and business. We don't manage it for the quarter. We basically say what is needed, what are the activities you have, which brand or business needs that. That will change from quarter to quarter. You may have a slightly lower seasonal quarter and a lower in revenue decor slightly, but you may have ANSP spent commensurate or even higher because there are activities in that quarter, business needed it, brand needed it, and vice versa. I think in this quarter, which is the gone by, you've seen the effects of these two seasonality and also ANSP because it's been a bit low because of the intensity of the work which we needed to do on a few brands and businesses was different, and it will follow through in the year. Quarterly you should look at it, and that guidance which we've given, the corridor of 22%-24% is the corridor you should look at, and you should look at us. I think the way we started with the input cost being benign, are there chances that we will be on the higher end of this corridor this year? The chances are quite high. I think let's see how the year progresses. With the input cost being benign, with everything which we are doing, will we be on the slightly higher end of the corridor? Perhaps, yes. Understood. Thank you so much for this detailed answer. Thank you. We have our next question from the line now. [Tejasha from], please go ahead. Hi. Thanks for the opportunity. Just a couple of questions. Given the recent policy push to revive demand, especially at the urban side, are you seeing any early signs of improvement there? You've called out that rural still continues to do well for you. We just wanted to know your read on the ground. No, I think my view is very early to call anything. Having said that, we remain quite optimistic on the requirements which have been infused both through the budget in the hand of the consumers and also the last one NPC announcement of the Reserve Bank of India governor. I think overall liquidity should be good for us. I think that should play out. I also feel that some of the advantages or the cash in the hand of consumers will be more discretionary. Therefore, that should play out onto segments and sectors which are a little bit more discretionary, and we tend to be in that area, particularly in improvement and sometimes new construction. These benefits should flow through. Are we seeing any specific signs in the first three months for this? I think the answer would be still early. I don't think we've picked up any specific sign at this moment, but we remain quite, you know, bullish and confident on this space. Your observation or your data, internal data, are suggesting that rural continues to do well. Is it also to do with your extra focus on PKD, Pidilite Kidunia, and then rural distribution outreach that you have been doing for a while now? To some extent, I would say yes. If you look at our model, you see our model is actually about generating demand at the root. We go basically, as you're fully aware, we work with users right up to the bottom. Therefore, we then focus a lot on generating demand. I think it's the strength of our portfolio and the uniqueness of our model that allows us to deliver better results compared to some of the more conventional tiers as you look at them. This has happened quarter on quarter, including this quarter in 5HP. If you compare us to some of the other more very conventional tiers, either in one sector here or one sector there, you will see that Pidilite does better. I think it's because of our portfolio and our model, the way we go about doing our go-to-market and our emphasis on demand generation, field marketing, and all. When it comes to rural, as you call it, which is both rural and small town urban, basically, we also have the advantage that we are continuously expanding our distribution as well on top of it. I think that, and many of the people, as you keep going down the pops data in India, tend to be new users for most of our categories because our categories are slightly less penetrated. That advantage is there. You are absolutely right. If you were to look at our five-year horizon, and quarter to quarter, we keep adding numbers, but I was giving you a little bit, and last quarter we've added. If you were to look at five-year horizon, we have increased our direct coverage by 2x in rural and small town direct coverage. We weren't directly there. Now we are directly there with our stockists around things. We have increased our PKDs, as you talked about, by 3x We have increased our GFCs, which are Dr. Fixit centers, also close to about 3 x. You can see that this is the constant work which we do. Expansion of distribution, generation of demand in our unique business model, I think gives us an advantage. We feel that our rural should continue to deliver better growth compared to urban for a considerable period of time. Perfect, sir. My time is pleasing last one. You sounded very positive on a margin outlook. Looking at the volatile geopolitical environment and you all watching Twitter every day in the morning, are there any specific supply chain or sourcing exposures that you're actively monitoring or worried about which can pose some risk in the near term? The way I would look at it, I think just from a demand perspective or from our business top line perspective, our direct exposure to the U.S. is very, very small. It is very, very, very small. From a supply chain point of view, which is what you are asking, I think what we have is we have multiple sources for supply for our key raw materials. Therefore, in our preparedness, we do not anticipate anything specific unless something else blows up in that opinion. We as a company also plan for some of these things. If you were to look at a slightly larger lead time, which could happen in terms of some of the movements and so on and so forth, a little bit of bottlenecks, those kinds of things we plan for. We continuously do that in the way we saw and the way we plan for our supply chain and raw material inventories and others. Okay, sir. Thanks and all the best for coming to our talk. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask a question, you may press star and one now. We have our next question from the line of [Naveen Trimedi from Mojila Locale Financial Services]. Please go ahead. Yeah, hi. Good afternoon, everyone. Sir, Consumer and Bazaar business side, we have seen acceleration both at volume and the value growth level. While B2B business side affects a little bit of discrimination on the growth side, especially on the volume side, given the pain is small, B2B is also high. Do you think that this one-two kind of a growth should be the kind of a growth for the coming Q4 of Q2? I think the good news is I cannot comment on a specific number, but what I will tell you is, the good news is that it's the eighth quarter of Pidilite Industries Limited's underlying volume growth for B2B. You are right in your observation that the percentage growth, which you think you are going to see, seems to have moderated an increase than what we were seeing in the previous quarter. That's absolutely correct. I think what is happening there is, in terms of our impact, if at all, which I was saying in response to the earlier question, the response of all the macro geopolitical issues and specifically uncertainties tends to be more on our B2B business, a part of our B2B business, not actually. Some of it, a small part of it, has a direct exposure, our business, and some of the others have what I want to call a cascading exposure. Therefore, it's our industrial business, B2B business that supplies into industries or categories that have a large export intensity out of India. To that extent, is there a little bit of headwind on these categories as for the short-term? The answer is yes. I was also quickly needed to add that we are very confident of the growth because our project business, which is also part of our B2B business, project subsegments continue to do very well. There we have seen very robust growth, and therefore, all the things we were talking about in some earlier questions, that is very strong. We see that growth to continue. We are continuing to see that momentum. Some of the growth in what we call our segment of offsite, which is joineries, again, is seeing good growth. Therefore, there are parts of B2B business and, a big part now, a substantial part, which are delivering good growth. Are you going to continue to see double digit? Yes. What percentage we will come at, I think we'll see quarter to quarter. I don't want to comment on that, but we will deliver double digit robust underlying volume growth in B2B as well. Thank you so much. On the consumer business side, we've seen a bit margining, which was, I think, the highest in the last three-year quarter. Any kind of benefits you have seen this quarter? How should we look at this margin profile for the year? Although you alluded that for this year, given the RM kind of a business cycle, you still see the kind of a sort of a margin expansion tendency for the year. How should we look at the segment from the year's quarter for on the margin side? I usually normalize the margins. We should not look at the first quarter margins, which have a lot of benefits because of the scale or the size of the quarter. There is positive operating leverage. The whole size is less. We may not have spent at the advertising that we would like to spend for the full year. There will be many factors. It is better to look at the margin of last year, because when you look at the blended EBITDA margins, that we are comfortable with is in the 22-24% zone. If you look at last full year, last year margins, that would be the number that we could use as a reference. Okay, sure. Thank you so much, Doctor, from my side. Thank you. We have our next question from the line now. Amnish Aggarwal from PL Capital. Please go ahead. Yeah, hi. I have a couple of questions. My first question is regarding the Haisha pain because it's a large category and we are currently pursuing the five stays over there. What is the medium-term, you can say, goal over there? I think it's now more than a year we are there and it's a highly competitive category. What are the medium-term goals over there and what kind of investments we have made in this particular, you can say, venture? That is one. My second question is, which is a bookkeeping question regarding the ESOP expense last year because the last year ESOP expense has increased from INR 9 crore to INR 88 crore as per the annual report. Any clarification on that would be useful. Yeah, let's first take the pains question. Sandeep, you want to take the ESOP question? Hi, Amnish. I think, you know, last year we granted ESOPs after a gap of a couple of years. The way the ESOP charge is accounted, it is in some sense front-loaded. That is why you saw an increase in the ESOP charge last year. That will continue for the first 12 months. As you would recall from the notes to the results, even yesterday, the company has granted further options. I think the ESOP charge is likely to remain at the same level as we saw last year. If anything, there may be a slight increase because for the next 12 months, you will have ESOP costs for two grants, one that was granted last year and one tranche that was granted yesterday. Okay. It means it will remain, at least at the same level for another year, and after that, it will defer off? Yes. Okay. Just related to it, excluding ESOP also last year, there was around 18% increase in the overall salary cost. Any particular reason anywhere we are increasing our manpower significantly? The manpower costs are now, I think if you look at this quarter, let me look at this quarter, I think the percentage increase on manpower costs this quarter is almost in line with our, in terms of top line growth. What happens in our case is that, and we talk about this quite often, but I'll just again, Amnish, repeat this, is actually because we do a bunch of new ventures and some new pioneering activities from time to time. Some of the investments we make and the resources we put both in teams of staff, what you call staff costs, or also in what the quick other investments we make in driving demand tend to be front-loaded. What happens is that the teams tend to be, or the staff tends to be a little bit more front-loaded. Let me try and explain that to you. Where we go about doing most of our business is we pilot our projects. We always talk about pilots, and you know Haisha pilot, I've been talking about it again. What happens in pilots is that your resources for demand generation are restricted to that geography and to that pilot. To some extent, while they are high, they are commensurate to what the expected volume and demand will be. Whereas resources are a little higher, there is an on-ground resource which is commensurate, which is very similar to, let's say, the capital or office resource or any kind of resource. You have a team which is built in, and you sometimes get a few senior people to be able to drive that initiative. This happens over and over again. If you were listening to UnoFin, we've talked about Haisha, and I can keep giving you examples. That's our model. It's built into our model. I think that's the reason which happens. Therefore, we tend to be a little different in terms of benchmarking to manpower costs. We are confident of retaining them at reasonable levels. The growths are now moderated, as you are seeing. Will there be investment made for the right opportunity to lead a pioneering initiative? The answer is yes. I think therefore, that's what you should, that's what is the answer. Coming down to Haisha, I talked about it earlier, but just very quickly again. As far as investments are concerned, if we look at it, in some ways, in a very technical sense, Pidilite Industries Limited has been in paint business for some time because we have done, we keep doing our waterproofing coatings, especially for exterior, under the brand Raincoat. That is a business which has grown quite a lot in some years. Therefore, in the experiments which we are doing in southern states, the plant which is being put up is not a plant put up only for Haisha. It's a plant which is a composite plant for Haisha and coatings and other things. Therefore, there is some investment made, but do we have a dedicated investment for Haisha, or is it a very big investment? The answer is no. I think in terms of benchmarks and all that, as I spoke earlier, you are absolutely right. I think there is competitive intensity. The competitive intensity is higher in urban India, and it is slightly lower in the smaller town India and rural, because in these places, we see that not many paint companies reach directly. I think that's an observation we have. Our own distribution reach is arguably the best when it comes to home improvements. Therefore, we continue to see that as an advantage, continue to see that as building our portfolio and strengthening our go-to-market and maybe all the composite services to the customer as you go down the COPS data in India. We see evidence of this through our considerable lift in growth in our coatings as well. As we have launched Haisha brand, one is the performance on Haisha brand, but I think a concurrent benefit which we have seen is the growth which is disproportionately high on our coatings business, which existed even before Haisha. You can see that the portfolio is beginning to get some help. We have our benchmarks, and I'm afraid I can't share them publicly. We are working towards them, and as we reach them, we will expand beyond the price. Perfect. Thanks a lot. Thank you. I remind you all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Rahul Maheshwari from Dolat Capital. Please go ahead. Hello. Am I audible? Yes. Hello. I'm Rahul. First of all, congratulations to the entire team that in a tough environment within the entire building material space, Pidilite is one of the strongest to deliver. Kudos to the entire team. My two questions. First, in the analyst meet, you had mentioned that there are, at any period of time, 10-1 5 pilots which are being run. As you mentioned, UnoFin at that period of time, can you give some brief, or insights at what other categories or pilots which we can expect going ahead? Or you have found some success, early success into those categories? This is my first question. I'll get back to the second question after this. Rahul, I think it's a good question. Thank you for your, you know, thank you for helping. God is kind, and the team is very good. Fortunately, our model, as I keep saying, our business model and our portfolio give us an advantage. We are very satisfied with the strong results that we delivered. I think coming to your point on pilots, there are some pilots which are a bit more visible. The visible ones are as we talked about UnoFin. We talked about Haisha. We are doing some work in B2B if you want to place it in your category. Those are one set of pilots. The second set of pilots we have in the company are around newer subcategories of product categories. Premiumization, certain products, certain new product groups. These happen even more localized into one geography, one state. We don't talk about them publicly. As you expect, it's not fair for us to talk about it as well. In a way, we are piloting and testing some of our product portfolio as we are developing that. We don't want something widely clearly at that space available to someone if you see it. Therefore, it's a mix of these set of pilots. The more visible ones are the ones we've talked about quite a lot. There is nothing new at this moment which I would like to share on the more visible pilots, on the more category defining or more new areas kind of. Okay. As you always give the Pidilite between the core category and the growth and pioneer, can you give some directional growth that as of what extent the growth and pioneer category is growing compared to the core categories? Yeah. We've always said that. I think we are not revising that, which is basically our core categories tend to grow between 1x-2x of real GDP. Core categories tend to be a little bit more, you know, towards almost we are satisfied that it's growing with the GDP, to be honest with you, because some of the core categories are quite well established. That's the kind of growth we see. In the growth categories, we've always said that we want it to be 2x GDP to 4x GDP. We are very particular that we should see at least 2x and ideally a bit more on the, if I could say, the middle or to the higher end of that range which we talk about, 2x- 4x. I can share with you as I'm speaking to you that our categories are performing in that zone. Our growth categories are indeed performing to that 2x-4x. We are seeing that for all our growth categories which are there. Our growth momentum continues. Pioneering is a part of it where we basically say that our desire is once we've gone national with a pioneering initiative, we would like to be INR 100 crore. I think that's an absolute number, INR 100 crore in a period of three years from the date of going national. That's the stuff that may or may not substantially add to our top line as it keeps growing. I think that's the fuel for the future because once they become growth categories, then they start adding substantially as we go forward. Just a follow-up question to this. Apart from the pains which you mentioned in your earlier remarks, any category or product which is not as per your expectation or there is very steep competition in that and you have to do a lot of pricing actions to maintain the growth or market share? Let me be honest with you, Rahul. I think we are very candid and you know we share it as it is with all of you because Pidilite is a family and you guys are part of the extended family. I think in our models we keep perfecting everything. Even on paints, when I tell you, I'm saying for any other company, they would have been very happy because we are delivering those years. Are we delivering it to the required standard is the key issue. To answer your question, at this moment, if you are to look at some of my new subproducts, new variants, will there be a few which are doing well? Will there be a few where we need to iterate? The answer is yes. We continue to keep doing this. I think this is part of the model. We say, okay, we've gone to the market. This is working well. This is not working well. We work a lot with the users and applications almost day in and day out, almost on a universal basis. We pick up a lot of that feedback. I think that is what makes us unique and how we continue to iterate. I think because it was a slightly bigger initiative, you are hearing about it. This is our model. We keep iterating. In more cases than not, we get it right. I think we are very persistent as well as a company. I think, you know, we are iterating and persistent. We have to just keep on working on it, iterate it, and make sure that it works well for us. You know, that's it. Thank you so much and best wishes to the entire team. Thanks. Thank you. Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone who wishes to ask a question, you may press star and one now. We have our next question from the line of Jay Doshi from Kotak Securities. Please go ahead. Yeah. Hi, thanks for the opportunity. I've got three questions. The first one is just continuing on what Rahul asked earlier. Can you give us some color of what is probably driving the growth outperformance for Pidilite versus some of the other categories or companies that we've read? This is probably the ninth consecutive quarter where you have had 9%, 10%, 9% odd UVG, right? Is your core also growing faster than maybe some of the other categories or it's largely innovation and growth and pioneer? In FMCG, a lot of x some companies do indicate contribution of innovation to a growth or sales. Please give us some color on what that number would be for you. That's my first question, and I'll come back with the other two. Jay, I think it's a very good question, and I'm thankful for asking this. I think I've talked about it a little bit, but maybe at the risk of repeating it, I'll still say, the model itself which we have there is very unique, and our portfolio is very diverse compared to many of the peer companies we are compared to. If you were to look at the paint companies, they would have 80%- 90% of their business coming from paint. You look at FMCG, most of them are in both, you know, as you mentioned, even as a fast moving digital statement. If you look at our whole portfolio, portfolio is actually very diverse. We do different things like procurement and Consumer and Bazaar and B2B, and within that, there are different subgroups, products, and all that. We keep looking at them. One is the advantage that the portfolio gives us, which is all very much there. Second is that unlike consumer companies, if you look at or track FMCG, you operate a lot more on sample understanding and then some survey data. Your data is more survey data. It's like news and outputs and all that, as you know, on shares and all that. Your understanding of your products and all that is based on sample, quantitative or qualitative with consumers. The distinctive thing about Pidilite, and which I think makes us unique, is that this tends to be more universal for us. I wouldn't say we are 100% universal, but we work so closely with our applications and users that we cover a vast majority of our products and so on and so forth. Our ability to see what is their demand, what do they need extra, what is working at this moment, not working at this moment, and we tend to be very detailed, by the way. We tend to be very, very detailed. That is something which really helps us. That's one advantage. If I was to single out one product category that is doing very well at this moment, it is Roff. We spoke about that. Roff, that's tile initiative because tiles are growing, the surface itself is growing, and we are doing a very good job. Our distributed supply chain strategy, manufacturing, distributed manufacturing strategy is allowing us to deliver very robust growth in tile initiative. When I say tile initiative, I'm here including both our classic tile initiative and newer premiumization products, also grout, which is part of tiles, so which is doing very well, which is grouting of tiles and all that. That's doing very well. Momentum on waterproofing and Dr. Fixit brand continues. Some of that, and as I was responding to the earlier question, the growth categories, growth of growth categories is quite heartening. On the code, because of our style of working and our model, we tend to be closer to at least 1x of the GDP. Therefore, do we grow code as well, and are we very, very progressive, I could say, or very consistent about growing the code as well? That is also yes. Perhaps we do a little, we grow a little better. I don't know. I can't comment on others' code, and I don't know that kind of detail. I think we remain very strictly disciplined about it. As I keep saying, it's our portfolio strength, it's our business model, and it's also one or two categories which we talk about where there is considerable scope for market development and which are gaining ground now. I think those are the things which are helping us in our momentum and which are quite unique to us and which also are sustainable. I think, you know, which is what I, on behalf of the team, am very proud of. Understood. That's very helpful. Basically, core, which is roughly 50%- 52% of your business, is growing 1x GDP, and the rest of the portfolio, which is growth pioneer, is probably growing at somewhere between 2x to 3x GDP for overall growth to be 10%- 12%. Yes. Perfect. Our second is on tile adhesives. Can you give us some sort of help to understand, one is, you know, what is the competitive landscape in that space? Who are your key competitors, and how do they compare versus Roff in terms of product portfolio, distribution, strength, footprint? From a channel standpoint, which channel is the most relevant channel for tile adhesive products? I know when we studied waterproofing in the past, waterproofing used to sell through paint dealer networks as well as hardware stores, as well as various kinds of construction chemical stores. How should we think about tile adhesives overall from a channel standpoint, from a competitive landscape and product portfolio? Yeah, there are three points. Jay, I think let me answer all three. Maybe the product portfolio I gave answer in the context of earlier. I'm aware. Yeah. Who are the other players in the canvas who would compare? How does it compare versus? One of our key competitors here is a company from a classic company called Laticrete. I think in India, they were basically embarking Laticrete, as you know. Correct, yes. They have been around much before us. Their focus tended to be more on projects, whereas we've sort of started now building Roff in a classic retail way. Therefore, we are going retail. We are also doing projects. By the way, even our project business is doing quite well. In our understanding, we are the number two now. They are still ahead because they have some edge on projects. I think that's the piece. Other than that, there are national companies, some local, a few other multinationals, with the full spectrum, which is there in the state, and we keep monitoring that. The entire market itself is growing quite well. This market itself would be growing 2x GDP if you ask me. I think that's our understanding, maybe a bit more. Therefore, if the market is growing, we are arguably growing almost one and a half x the market or maybe even more. The point I'm making is that we are basically focused on what are the key competitors. In context to Amnish's first question, also I said there are a few pockets where their original center of excellence was. We are very focused on that as well. I think that's the piece which we are doing. We built a strong portfolio. We built a strong classic portfolio pyramid, which I talked about, and on the product, Jay. We also are very proud of this immediate ancillary, if I could call that, because when you're drawing tiles, wherever the tiles are drawing, you need to grout it with epoxy grout. Our epoxy grout under the name of Roff Starlike, which is part of our joint venture with an Italian firm, is doing very well again. It's doing very well. I think that's where we have a competitive advantage compared to people's 3,000-2,000, that kind of stuff. It is of course very easy to apply. It's a very, very good long-lasting epoxy bond. I think there are advantages. We continue to build on that piece. As far as channel is concerned here, interestingly, you see the business or the segment started there in smart Haisha team. Now that it's going retail, the segment is BMS, which is building the supply store segment, which we used to visit in any case for some construction chemicals business. Some of the construction chemicals I go and co-teach it a little bit, but largely BMS. What is happening progressively is that there are big specific tile dealers who are coming up, and we have a program for these large tile dealers. This business tends to be more concentrated with these dealers. We are basically now going out to them. We have a program for these dealers and so on and so forth, what we call raw premium partners and all that. In terms of channel, in terms of the channel content, because of our retail presence and because of our understanding of the name of the land and home improvement, I think we are able to reach that channel, arguably build that channel a little bit, and definitely build good relationships with that channel. That's very helpful. The last question is on the M&A front. Now, Pidilite Industries Limited has had a successful sort of a track record of successful acquisitions. The last relevant large one was five years ago, almost five years ago. How do you think about M&A opportunities in the coming future? Jay, that's a great question. I need to add if there's any, but we don't talk about vendors and no company should, in my opinion, in advance. Suffice to say, we basically keep looking at opportunities from time to time. When we explore opportunities, we tend to look at three dimensions. Are there any, is there something which we bring from a customer point of view? Is there something which we bring from a channel point of view? Is there something which we bring from a chemistry point of view? I think, are there any of those kind of ancillary categories? Are there categories in some of those we keep evaluating? Wherever we want to come in, we want to come in with more premium and specialized products, possibly at a premium end of the market, not necessarily at the mass end of the market because I think our right to win there and ability to differentiate is lower. Therefore, we go for that. As I speak to you, we are evaluating, we keep evaluating opportunities. We will keep looking at opportunities for what are the ancillary areas, what are more specialized areas, everything in the area of home improvement, a little bit more specialized, a little bit more differentiated in terms of product offerings, is something which we will keep looking at. I think that's where it is. I think you want to add anything, Amnish? No, I think the only point there to add was that, in addition to this classic M&A, which would mean a full buyout, we've also done very successfully many joint ventures, right, where you get a foreign partner to India, where you contribute your knowledge of the Indian market, your distribution, and the partner brings in maybe technology. That's another form that we've kind of expanded, what you may call our TAM, or the 10x [LitoCall] group of Omar. They are all examples in that. These are things that you can't certainly time. You can work towards it, but you can't time it, right? Yes, the big ones, actually. I think so, therefore, I have to look at it more from a partnership point of view, and we are always open to partnerships. You know, that kind of stuff. We do a lot of work in that area. Interesting that you mentioned home improvement. Historically, you've been sort of restricted yourself to adhesives or mostly very close adjacencies. Are you actually also exploring other categories within home improvement which may not be immediate or very similar to adhesives or sealants? See, our proclivity is to remain as close to what our netting is, but as we find a reason to be basically looking at something, we will definitely do that. I think progressively, as our portfolio expands, it is arguably a little bit more home improvement portfolio, I think. Our netting, as you rightly said, are more indeed what you call adhesive, sealant, and polymer. I think those are the two different ways of describing it there, but I think that's where we are. Thank you very much, and good luck for the rest of the year. Thank you. Thank you. Thank you. Ladies and gentlemen, due to time constraints, that would be the last question for today. I now hand the conference over to the Manager for closing comments. Yeah, thank you. Thank you very much to everybody who took our time and joined the call. Thank you very much, and have a good evening. Thank you. On behalf of Kotak Securities, that concludes this conference. Thank you for joining us, and you may now disconnect.