Akzo Nobel India Limited (NSE: AKZOINDIA) Q3 2026 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Unidentified Speaker
Rajiv Rajgopal — Joint Managing Director and Chief Executive Officer
Rajiv Jha — Company Secretary and Compliance Officer
Krishna Rallapalli — Chief Financial Officer
Krishna Rallapalli — Wholetime Director and Chief Financial Officer
Analysts:
Unidentified Participant
Abneesh Roy — Analyst
Manoj Menon — Analyst
GANAPATHI LAKSHMINARAYANAN — Analyst
Mrunmayee Jogalekar — Analyst
Akshay Krishnan — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q3 and FY26 earnings conference call of Axonobel India Limited hosted by ICICI 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Aniruddha Zoshi from ICICI Securities. Thank you. And over to you.
Unidentified Speaker
Thanks Yashastri. On behalf of ICICI securities, we welcome you all to Q3FY26 results webinar of Exonobel India Limited JSW Group Company. We have with us today senior management represented by Mr. Rajiv Rajgopal, Joint Managing Director and CEO. Mr. Krishna R. Whole time Director and CFO. And Mr. Rajiv El Cha, General Counsel, Company Secretary and Compliance Officer. Now I hand over the call to Mr. Rajiv Jha to read out the disclaimer. And then we will hand it over to the Mr. Rajiv Rajgopal for initial comments. Post that we will do the question and answer session. Thanks.
And over to you, Rajiv Jasar.
Rajiv Jha — Company Secretary and Compliance Officer
Okay, so we welcome you all to this quarter, third quarter and nine months ended 31 December 2025 investor call. And as per our process, let me begin with the safe harbor statement that we usually. You know that to this. This media release contains statements which address such key issues as the company’s growth strategy, future financial results, market positions, product development, products in the pipeline and product approvals. Such statements should be carefully considered and it should be understood that many factors could cause forecast and actual results or outcomes to differ from these statements. These factors include, but are not limited to price fluctuations, currency fluctuations, developments in raw material and personnel costs, pensions, physical and environmental risks, legal issues and legislative, fiscal and other regulatory measures and approvals as well as significant market disruptions.
Stated competitive positions are based on management estimates supported by information provided by specialized external agencies. For a more comprehensive discussion of the risk factors affecting our business, please see our latest annual report. And with this I am handing over to Mr. Rajiv Rajpopal. Thank you.
Rajiv Rajgopal — Joint Managing Director and Chief Executive Officer
Thank you. Thank you, Rajiv. Thank you. To the ICICI securities team and everyone on the call. Wish all of you a very good afternoon. As always, every quarter post our results. I think this has been a ritual for us, you know that we sort of get to speak to you. We’ve loaded the investor deck onto the website. So as always we do we will not run you through a canned presentation because we would like to leave more time for the questions you may have. I will begin by giving a short summary and will request CFO and whole time Director Krishna to also just run you through.
In terms of any observations on the financials, I would suffice to say that last quarter if you really look at it, our revenue was reported was 907.7 crore which was approximately a 1% decline. However, I would quickly like to add that in the revenue the standalone business, domestic business grew almost by about 2%. And the reason 1.8%. And the reason for that is while you all understand that there are large parts of Azonobel or there’s a part of Azonobel that got carved out, which is specifically the powder coating entity and the IRC business, our international research center, there are certain other elements of the business which also got retained by the Axonobel Powder entity, Powder India limited Entity which is unlisted company by the parent, which includes specifically a couple of customers in the coil coating business.
And also we used to export a lot of our Dramatone and now the Aquatone which is a colorant into parts of Southeast Asia and Middle East. And as a part of the deal for now this is seized since the early part of the quarter. So hence like to like the total amount that got netted off was approximately in the range of about approximately 200 crore. So roughly about 25 crore a quarter is the sort of impact that one would need to keep in mind other than the divestitures which already have been shared with you. So hence when you look at it we had a volume growth of 6% blended for both decorative and industrials and a revenue growth of close to 2% decorative alone.
I think it was fantastic news to see the volume coming back. We grew at 8%. I think the highlight was the fact that we started growing almost with single digit in the in the premium segment. Our challenge continues to be in the what we call the MEP which is a mass economy and primer and certain actions have been put in place starting this quarter to look at really enriching some of our premium primers and also to fight the battle in a more strategic manner with some of the new entrants at reasonable margins. So that’s the strategy that we’ve employed.
I just want to highlight both across the paints and coatings with the new the new owner and you know we one of the things that we’ve done is to really say that look, how do we really play in India? How do we play across segments? How do we make sure that we are winning across our consumer bases customer basis? And that’s really been the mantra of saying how do we really drive revenue growth and while doing so make sure that we don’t dilute margins in a huge manner. And we are doing it in a very intelligent strategic manner.
We are not doing it just tactically, we are making sure that we use a lot of science in the way we play. I’ll give you an example. When we looked at with the new mandate, I think it’s wonderful for people like us because we are quite enthralled to see that now volume growth and revenue growth is the first mantra in the business. Typically it’s not the same in an MNC business as many of you would agree. And one of the things that we looked at was to look at our pricing across our premium brands and some of our other offerings in the market versus some of the lead players.
And we did see that we were hugely overpriced between 5 and 9% which is what had led to volume erosion. We’ve addressed some of those and we’ve also started looking at how do we really look at the whole franchise of the customer basis and where we need to play. So that’s what I mean. We do price elasticity studies to see that if there is a price drop, what’s the volume elasticity we get until we are certain we don’t take any actions and it’s been very limited. Right. But we are seeing some early actions and also as we start going a far more disciplined way to sell in order to try and grow the business.
Yeah. So that’s on the revenue side, our coatings business, the challenge in the mix was that we grew faster in our coil coating business and in our automotive and specialty coating business. We had a bit of a challenge because of a high base last year because we had done many of the ships for the Indian Navy last year. So that was a one time base correction which will get restored back in this quarter. Suffice to say that I’m fairly buoyant and confident as we progress into the last lap of this fiscal and at this point of time we are looking at various strategies and plans of really saying now under The Ages of Mr.
Part General how we can have a larger play. Let me just hand it over to Krishna to say a quick words on the financials and then we will hand it over to Anudh for the Q.
Krishna Rallapalli — Wholetime Director and Chief Financial Officer
And A Krishna I think thanks Rajiv. We have uploaded the deck in terms of the details and we also given the like to like comparison of the exclude the results on a comparable basis which include which excludes the powder coatings of international results central business and Rajiv has completely given a 360 degrees view in terms of what’s happening in the business and definitely it’s a exciting journey for us in terms of how are we rewiring into the growth trajectory back into the back and bringing back into the business at the same time. Happy to say that we did protected our gross margins largely under the sequential improvement of 80 basis points compared to the last quarter.
And we as Rajiv alluded we did deploy the royalty savings back into the business to support the growth initiatives and to move the revenue trajectory and at the same time we also maintained our double digit profitability and EBITDA stood at around 14.9 before the exception items. As you might have most of you might have seen the notes to the accounts. There are quite a few exceptional items which has impacted during the last quarter. One of that is one among that which is significant impact is in terms of the impact of labor codes which we clearly called out resultant excluding exception items.
The PAT grew by around 5.9% 9% on a year on year basis. With that Aniruddha, I think I will hand it over back to you to see the question answers.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. To ask a question please click on the Raise and Icon tab available on your toolbar or on the QA tab available on your screen. Kindly turn on your microphone when the operator announces your name. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take a first question from Abnish Roy from Nuvama. Please go ahead.
Abneesh Roy
Thanks. My first question is on the demand side. November, December I guess was much better than October. October, the rain season was there and early Diwali. So very little days to really paint house to capture the festival related kind of a behavior. So how do you see Q4? Because the other paint companies are saying that Q4 is likely to be better than Q3 in terms of volume in terms of deco. Would you also share similar thoughts?
Rajiv Rajgopal
Yes, very much. Two reasons. One, you are absolutely right. I think in our view for us October was very muted. In fact it was a decline. But we really bounced back in November and we had reasonable growth in December which is where we are. You take out the like to like business of what we don’t now operate in. Right. And our volume growths were pretty good because you know, 8% in decorative we are seeing it, you know and when you look at that it was fairly secular actually like my premium, we were pretty happy with what came in. Yes, in my view this quarter unless there are again any external events or hopefully no climate change impacts but other than that it should be a pretty, you know, strong quarter from a volume perspective you’re right, non decorative rates.
Abneesh Roy
One follow up question on demand side, what is the gap you’re seeing between the volume growth and sales growth?
Rajiv Rajgopal
See from an industry perspective we expect it to be between five and six and however what’s happening avnish is that the two reasons why you cannot exactly sort of pinpoint one, because there is excessive discounting happening in the market is something that particularly in the mid economy sort of segments where we’ve not had great success and we are reworking our strategies there. Second is as far as we are concerned, as I mentioned Abneesh, we did as I told you some of the conjoint pricing analysis and took some actions given that we were at significant premiums to our market.
So we will be at about maybe 1 or 2%, a little higher in terms of the volume value gap for about a couple of quarters till it sort of post cut.
Abneesh Roy
Understood. Now a final question. In terms of the new player we saw very minor hike of 1 to 3%. When you see the raw material side and when you see the heightened promotional intensity in industry and the new player has also reversed 10% extra in the 4 liter pack would you say that worst of the promotional intensity, competition intensity is now kind of at the fag end or you think that this can continue at least in the next few quarters. This remains as high as to the peak level.
Rajiv Rajgopal
Firstly, what I would love to believe is that the worst is behind us but I think what the reality of the picture Abnesh is that I think it will still take a couple, two, three quarters for it to really play out right. Because at this point let’s understand the maths. I mean you know you’re talking of a new entrant which has come at prices which are anywhere between 12% up to 12% lower than the prices at which we operate. In addition to that additional discounts and then there was a free litre which while it’s who say it’s been called off it’s still there in a few markets still running pretty much.
Right, so you’re talking of a ban between 12 and 18% lower pricing, which is not a small, sort of a, sort of a negate. Right. And what we are seeing is, see pricing is a lever in this industry. Works to a point. The problem is if repeat demand doesn’t come in at that pricing, it will be very difficult for the new player, any new player to take up the margins. The sort of cost cutting, etc. That one will have to do is going to be immense. We’ve seen it, I mean we’ve seen it being a relatively.
I’m saying when I joined the company in 2013, you would remember Avnish, the Axo India profit was less than 80 crores. I would look at where we are. It’s taken a huge amount of effort, a lot of work on costs, structural costs, procurement, raw material, logistics. We put a new route to market using the distributor which, you know, we went through a lot of banks when we did it. Right. So I think it’ll require out of box thinking. It’s not just going to be cyclical. I do expect the competitive intensity to continue for a couple of quarters.
But hey, you know, I think we are in it. And now as a part of the new group, I think the mantra is very simple, Avnish. You would see us definitely, I mean now as JSW group in the pains business. I think we are already number four. I think part’s given us a very clear intent and signal that we should get to number two in three to four years when he would want it even faster perhaps. So we’ve got a very clear plan. I think what we are doing is very focusing on our executional excellence and looking at our innovation basket to see how we can get products which will be slightly different from what we’ve been able to craft in the back.
Dulux as you know, enjoys a huge quality advantage and that’s what we are relying on to take us for.
Abneesh Roy
Thank you. That’s all from my side.
operator
Thank you.
Rajiv Rajgopal
Thanks.
operator
We’ll take our next question from Manoj Menon from ICICI Securities. Please go ahead.
Manoj Menon
Hi team. Just, just ensuring that I’m audible right. There’s some challenges on connectivity.
operator
Yeah, we can hear you.
Manoj Menon
Yeah, thank you. Raju and Tim, good performance, I must say in the context of the market and also the, you know, maybe rationality parts of competition etc, plus the transition. I got a few things but the most important thing comes to my mind is the revenue synergies. Right. So you could just talk a bit about, you know, whatever you can talk in a public domain. Speaking of public domain, subject to confidentialities on the revenue synergies, let’s say, you know, Dulex brand gaining from the JSW paint distribution or vice versa or both. Right. Or just that you got a far bigger scale today, your ability to accelerate numerical. So just please talk a bit about revenue synergies. It would be super helpful. Thank you.
Rajiv Rajgopal
Thank you, Manoj. And I think it’s a little too early for me to talk, to be very honest. Not for any other reason because everything is in scope right now and there are obviously certain elements of confidentiality that I’m bound by. So if you permit, I think the appropriate time would be to talk about it but at a very high level. If you were to ask. Look, obviously if you look at Deluxe, right. Deluxe has got markets where we’ve got greater than 10, 15 market share in different states. Right. Whether it’s Bengal, parts of Gujarat.
Right. We’ve got multiple states. And in JSW paints, I think the team has created a very good presence in the southern markets and a few other markets like West Maharashtra, etc. So we need to look at, in terms of what the combined offering will bring and we need to get create those value propositions which will make sure that the dealers, you know, wherever there is a third brand in, in the, you know, outlets which have a higher shop share for either one of the two, we have a clear strategy for it. So that’s broad thinking, Manoj.
Also, you know, there, there is a lot of synergy and there is a lot of, you know, in our industrial business there are obviously scopes on a coil business and, and a little bit in our protective business. So those are the areas where synergy will really pan out. But too early, I think it’s not appropriate because work has just started. And maybe at a later stage, Manoj, I think it’ll be more apt for me to talk about it.
Manoj Menon
Sure, sure. Good luck. And the second and last one for today is that Rajivan team. Again, if you could talk a bit about the integration aspect beyond the people side of it, the culture side of it, you know. And are you. I mean we currently. I know that it’s a work in progress, right. Kind of, you know, like. But yeah, just talk about the people and the culture side of. Thank you.
Rajiv Rajgopal
Look, I think for people, I think there will be, there is a, you know, a reality check in terms of the fact that people who’ve been used to working in a particular way of life in an MNC organization, when you move to an Indian organization. But you know, bulk of us people around the table Amongst the leadership have worked in both. You know, we worked in Indian business houses and in mnc. So I think the nuances, if you were to ask me, first and foremost I must say this, Manoj, that we’ve been given a very warm welcome by Mr.
Sajan Jindal, Mr. Park Jindal and I think part in particular has been very, you know, caring in terms of making sure that right from the word go when the leadership team came to JSW Center. By the way, we are in JSW Center Mumbai today, right. Taking the call, you know that the team is really welcomed and there is a very clear ways of working. Of course, you know they would be like in any, any business when you, when a business gets acquired there’ll be some challenges. I think the key for us as leaders is to make sure there are key talent key people are retained and value propositions are there on both sides.
Because you know, I think JSW Pence has also got a very good set of team members. So I think that’s the thing that we will start doing again. As I said Manoj, very early days, I think these are questions, you know, it’s just like it feels like you just got married and entered and you were asking me, you know, how’s it going to be two years from now? It’s a difficult question to answer. But my answer to that is, look, I think as in Indian customs, you know, the first thing you do is to make sure you come in and be a part of the family.
And that’s what we are trying to do.
Manoj Menon
Thank you. Thank you. I like the analogy, Rajiv. And good luck team.
Rajiv Rajgopal
Thank you.
operator
Thank you. We’ll take our next question from Lakshmi Narayanan Ganapati from Tunga Investments. Please go ahead.
GANAPATHI LAKSHMINARAYANAN
Yeah, I mean hope I’m audible.
operator
Yes, please go ahead.
GANAPATHI LAKSHMINARAYANAN
Yeah. So Rajiv, I think there are two or three number questions and one is very conceptual question. So first is just want to understand from a decorative volume growth nine months to last nine months like for like what has been the volume growth. Second question is that what is the cash levels we actually carry right now approximately. And the third is you talked about royalty. I think royalty was around 140 crores or so. So how does the company intend to use it? Whether it will flow into the bottom line or you would actually use it for business expansion.
How do you think about it? These are the three questions from a number point of view. Conceptually I just want to understand, you know, looking out three years if you want to, I mean if you are saying that look what will you call us markers of success for you and the management? It could be market share, it could be revenue growth or it could be margins or roc, when you say that, look, we were, we are successful three years out. What are the two or three markers you like to use and. And say okay, we have done well.
I think these are the questions. Rajiv. Thank you.
operator
Sir, you’re not audible.
GANAPATHI LAKSHMINARAYANAN
No, I’m done. Sorry, I have closed my question.
operator
Yeah, you are. Yes, we could hear you. Krishna sir, if you’re speaking, we are unable to hear you.
Krishna Rallapalli
I think that should answer your clarification in terms of the royalty.
GANAPATHI LAKSHMINARAYANAN
Sorry sir, you are not audible. Can you repeat your answer please?
Krishna Rallapalli
Okay, so as far as the royalty is concerned, there are two portion of royalty. One is pertaining to the decorative paints and second is pertaining to the industrial coatings. In the month of June 2025 we acquired the decorative IP and the Dulux Ban brand is now owned by the AkzoNobel India Limited listed entity. So the royalty cease to exist which translates to roughly around 60 to 65 crores depending on the revenue trajectory. And that amount, as Rajiv alluded in the initial comments, we are committed to redeploy towards the growth initiatives and to gain the market shares.
So that explains. And as far as the industrial coatings is concerned, Axono will continue to be the technological partner and we continue to pay the royalty as per the previous agreements. Hope this will answer the royalty question. Coming back to the cash position, it’s ballpark is roughly around 200 to 225 crores of free cash is available in the balance sheet which is earmarked for the growth initiatives and the capex for the near future.
GANAPATHI LAKSHMINARAYANAN
And volume growth on decoratives like for like for nine months.
Rajiv Rajgopal
Yeah, so nine months would be between 1 and 2% approximately. I’ll give you a range. So clearly Lakshmi, two parts. First, of course there’s been a huge bounce back and the reason for that is, you know, there were two issues of course. The, the, you know, July, August, September. As you know, once the announcement happened there were a few challenges which I mentioned in that quarter in the call where a lot, particularly in the project segment and decorative, we face a lot of challenges from repainting societies in terms of continuance of some of the various actions that we committed to in terms of warranties, etc.
All of which has got addressed right. All of which has got addressed, right. So I think now we are slowly bouncing back on the decorative retail side. We are starting to do well at Secular growth across geographies. Yeah, Lakshmi,
GANAPATHI LAKSHMINARAYANAN
Yeah, yeah, yeah. I think that answers all the number questions. So can you just move on to the other one which I asked in terms of what do you define success and what are the markers you like to use?
Rajiv Rajgopal
So look, I think successful, first and foremost, success is, look for me is we are now thinking what’s good for JSW is good for JSW Dulux. And as all of you know, we registered the new name of the company with the stock exchange. It’s gone to all our shareholders, all of you, for vote. We hope you like the name. We believe that. I think it’s, it’s the name for the future where it captures, as Parth rightly says, the agility and the nimbleness and the power and the strength of jsw and really the, you know, the, the epitome and the, you know, the entire premiumness, luxury feel of Dulux.
Right. So we’re bringing Dulux right up there at the company. So JSW Deluxe. Now, I think in terms of goal post look, I think the first is obviously how over the, you know, next couple of years we start integrating the companies and while doing that we make sure that the companies are really growing well and actually gaining from other players in the market. Right. The larger goalpost, as I mentioned to you, is we are clear number four now with the combination. There’s no doubt on that. And the quick clarity is to say that how do we quickly move to number three and then beyond right to. So really, how do you really progressively start moving ahead? I think that’s really it in coachings. I think we’ve now got all the recipes to start moving towards. You know, first being a number, you know, a number two and then a number one player. I think that’s again the areas where we are because I think now the mandates would be really how do you drive growth in India for India and made by India.
Right. And as we do that also we’ll start looking at attractive opportunities that come our way. Lakshmi, hopefully that addresses all the questions you asked.
GANAPATHI LAKSHMINARAYANAN
Yeah. Thank you. Thank you.
operator
Thank you. Next question is from Pratik Goti from hsbc. Please go ahead. Pratik, can you please unmute your microphone? Yes, go ahead please.
Unidentified Participant
Hi, can you hear me?
Rajiv Rajgopal
Yes,
Unidentified Participant
yes, thank you. So a quick question on the numbers. Employee expenses were down, I think 55 million quarter and quarter. I think these are the continuing business numbers. So any clarification on that, please? That’s my first question.
Krishna Rallapalli
So if you roughly see Pratik, thanks for asking. This question, as we clearly mentioned in the disclosures, the last year number is not comparable and last year includes supportings and IRC. If you roughly see ballpark number is around 12,000 lower. Correct.
Unidentified Participant
I’m sorry, sir. Quote on quarter Q2 versus Q3 versus. Q2,
Krishna Rallapalli
Q3 versus Q2, it’s. It’s a combination of the iteration and then the refill rate of the company. And there is no structural change per se in that Q3 versus Q2.
Unidentified Participant
Okay. And second question is, are we thinking about changing the business model to becoming a direct distribution play instead of a distributor play as we currently hold?
Rajiv Rajgopal
Pratik, I’ll look at that. Look, I don’t think there’s a perfect solution. There will be markets. Let’s go back. Okay. Why did we move to distributor? We moved to distributor for two reasons. As all of you know, global companies measure themselves on EBIT percent margin and not on absolute ebitda. That was a bit of a challenge. And when you look at that bottle and look at, in terms of service and when you want to have a vision of becoming a larger player in the country, we believe that distributor would have been it. And you know, we’ve been.
Now this journey started in 2013. We are in 2026. We’ve got 153 distributors and more than 85% of our distributors are more than 10 years old. 82% of our distributors are more than ten years old. Right. So they’ve grown the business with us. Now, obviously what we will look at is there are certain markets where we still believe because of the fact that we need to further invest in the brand to drive offtake. When you are starting to play the bigger players, we will need to look at being direct. So there will be a combination. And they will also continue to be our distributors. Our distributors will continue that. We will come back, we will take a couple of quarters to see what is the best model. And we will come back to you.
Unidentified Participant
Okay, thank you. If I can squeeze in another question.
Rajiv Rajgopal
Sure.
Unidentified Participant
So on decorative side, can you elaborate a little bit more on the competitive intensity? You talked about this higher discounting, but do you see competitive intensity in certain, in certain segments? Do you see higher competition in the economy segment, which, where you are not especially strong, but say premium segment, for example, Is there more committed intensity there or anything?
Rajiv Rajgopal
Yeah, I think, look, I think where all the new players have been able to really impact is in the mass and the below. Right. Mass primers, economy and then even some of the new categories, waterproofing and wood Care. Right. So that’s where I think in premium, I don’t think that the order is really reversed while people have tried. Reality is, you know, I, I just, you know, I can just give you examples. You know that one of the, you know, fastest growing, newer emerging players, when they got into the project business, I started getting customer consumer complaints or customer complaints and we started getting some of those business back.
So I think ultimately, look, I think what will play out is the quality of products because you know, paint, it’s not like you know paint. There is a lot of engineering in paint. So there’s a lot of. And being a chemical engineer, I can tell you very proudly that there is a lot of engineering in paint. And so it’s not that, you know, we create recipes and we start working in the market. That said, to answer your question, yes, the competitive intensity is more in these segments of the market. But I would also suggest that look in the premium because everybody knows that that’s what gives them better margins.
There will be a lot of action in premium too, though a little lesser than the other segments. Prateek, if I’ve answered your question.
Unidentified Participant
Yes, thank you so much.
operator
Thank you. Next question is from Runmay Zogrekar from Asitsi Mehta Investment. Please go ahead.
Mrunmayee Jogalekar
Hi sir, thank you for the opportunity. I hope I am audible.
operator
Yes, please go ahead.
Mrunmayee Jogalekar
Yes. Okay sir. So my questions were mainly related to the coating segment. I think you did refer to the fact that, you know, you expect Q4 to be strong and you also expect to become the number two player and then gradually number one here on the coating side. So first part of the question is in the near term what will really drive the growth. It is, is it broadly the industry wide growth or you are seeing some kind of market share or some new products or something like that. And the second part of that is just on the medium term, what strategy you’re thinking about from the coating.
Rajiv Rajgopal
Strategy. Sorry, your last part wasn’t clear.
Mrunmayee Jogalekar
The medium term strategy when looking at the coatings business now going ahead.
Rajiv Rajgopal
So look, I think in coatings we’ve been playing largely in the premium space while we entered the mid market in each of the businesses. I think mid markets is a huge opportunity again because of the challenges of being a part of Akzonobels, you know, looking at margins, we never looked at it. I think that’s one area where we are now looking at and we’re doing it in a very careful manner. It’s not that we just generally dropping prices. We’re looking at Whether, you know, are these sustained growths before sort of making those commitments. Right. One, two.
Obviously our real focus in our is around R and D, ensuring technical expertise and really making sure that our products are going to be competitive in the mid segment. Right. So that’s where the second leg is last. But not the least, you know, in you know, all our coatings, B2B businesses. I think it’s also understanding customer and consumer insights, really understanding how, you know, how you can get in deeply into the business, understand the customer businesses and that’s what the teams are right now engaging in doing. So hopefully I’ve answered your question.
Mrunmayee Jogalekar
About the new term. Yeah, just on the near term, like the next couple of quarters, if you can just talk about because you did say Q4, you’re expecting strong performance in codings.
Rajiv Rajgopal
Yes, yes. So. So look, I think again, you know, you’ve got to keep in mind the fact that coding business has been an outperforming business for us over the last if I take a three year cagr. So yes, I think the key is we will obviously continue to grow and in the near term what we are trying to do is to win customers across different businesses and make sure that while driving growth we are also able to keep an eye on profitability because that’s also been a key lever in the coding business and using technology as the sort of tool to drive that.
Mrunmayee Jogalekar
Okay, so thank you for that.
Rajiv Rajgopal
Thank you, thank you,
operator
thank you. Take our next question from Aniruddh Dhazoshi. Please go ahead.
Unidentified Participant
Yeah, sir, two questions. One, in terms of now there are royalty savings. Secondly over a period of time may not be, let’s say in H1FY27 but post that we may see strong synergy benefits. So also the company in its new avatar wants to invest more in brand building and overall growth of the business also. So how should we think about the margins means earlier there used to be a ban in which we used to look at the margins. There was a minimum kind of a band. So how should we think in terms of the margins? That is question number one and question number two, in terms of new product launches.
So. How should we again see will the brand shift to JSW Deluxe or it will remain Dulux because the company name is also getting changed to JSW Deluxe. Yeah, that’s it from my side.
Rajiv Rajgopal
So Aniruddh, the brand work is just about to commence. The company name is JSW Deluxe. In terms of brands obviously, you know, I think there’s a lot of clarity that obviously part has you Know made a significant investment to buy the brand of Dulux. So obviously the endeavor will be to try and use it. But there are certain areas or segments where Dulac has not been very. To be honest, we’ve not been able to stretch the brand enough. Right. So to put it right. And that’s where obviously we’ve got a good brand in JSW pain.
So when you sort of look at it, we love to. We are studying it very closely to see how the combination of the two starts really getting significantly from the other players in the market. So that’s one. Yeah. Krishna, you want to on the look the guidance that I’ve given, you know my view is as I said as we enter the mid market and some of it you’d see a initial slight erosion, half, about a half point etc. We are operating in the 14 to 15, 14 and a half, 14.8 sort of a bit margins.
Right. Endeavor will be and I’m not talking any synergy, I’m saying, you know, whatever synergy will come will come outside this and at an appropriate time. Right. But without synergy I think our endeavor is to be in that band of, you know, more towards the 15. But the range I would give you is between 15, 14 and a half to 15. 14 to 15, right. Yeah. And then to take it up to 15 to 16 stories but at this point of time I would say around 15% is where really I want to keep the focus. As I said the first task is really driving revenue growth and Aniruddh, you will agree, I think really driving growth ahead of competition is most critical for us at this point of time.
Unidentified Participant
Yes, understood. In terms of the action, some of the pricing actions if you can indicate which we would have initiated in the market and how has been the trade response because the transition is also underway but we have seen decorative India recurity volume growth is pretty strong at 8%. So. So how is the trade feedback on the maybe means it’s just initial 12 months but whatever you can share.
Rajiv Rajgopal
No, I think look, this is something that the trade has been asking us for last couple of years. It’s just that our ability to do that with Axonobel was very difficult because Axo runs on global pricing modules. Right. So the response has been good. It’s a bit across the portfolio large starting from super premium right up to some of our mass. And the reason for doing that is because we were completely off in terms of market operating prices. So as I told you we’ve looked at pricing elasticity, sarees which we’ve done, got done third party and also done a bit of in house work to really look at what is the elasticity across different brands across the segments of dealers, you know, painters and consumers. So we’ve done it across three segments and based on that study have we started taking the decisions.
Initial response is good but we’ll have to wait and watch because for me I don’t think see pricing is something which is what I would call a good, you know, you need to be in a particular range versus competition and there’s a certain price premium. But I think there are a lot of other actions which are happening on your. Just to say pricing is not the only driver of revenue growth.
Unidentified Participant
Sure sir, sure. This is very helpful. Thanks, thanks from my side.
operator
Thank you. We take a last question from Akshay Krishnan from ICICI Securities. Please go ahead.
Akshay Krishnan
Hi sir. So I just want to understand you clearly mentioned that you wanted to scale up your the ladder on the ranking aspect. So what will be the guardrails that you will be looking at and let it be on the brand positioning or the pricing power or the channel economics which means that you’ll protect yourself despite having a slower growth even in certain phases of your the entire life cycle.
Rajiv Rajgopal
So very good question first and foremost. You know I think to answer Anirud’s one point, I didn’t, you know at least the start in January has been very good so we are hoping that we continue. Second, I think it’s a very good question what are the guardrails look ultimately when you, when you want to get into the top zone on growth but you also need to maintain profitability. It’s, it’s absolutely essential that your premium, your luxury brands and premium brands also grow at least in line with GDP or outperform competitive landscape. So that’s one. So you know one of the drivers for it.
So I’m not going to enumerate that but suffice to say hence brand making sure that we are able to drive productivity on our tinting machines. We are able to make sure that we are engaged appropriately with our painters and our contractors making sure that we are driving, you know, not just the width but also the depth of sharing an outlet is critical. Width of distribution and depth both. Right. So the guardrail would be to make sure that when we are over, you know, we are not dialing in into one, you know, area or one vector of growth. We are looking at playing it across the segments. That’s one. The second is and the same thing both in Decorative and encodings. Right. Make sure that we get a fairly secular, secular growth across our businesses not. And making sure that it’s not the lowest margin business that grows the highest and hence a high performing business are there. So that would be one. The second guardrail would be to ensure that look, while doing this we continue our focus in terms of innovation.
Right. We are entering into a period of integration etc. So running, you know, it’s like I remember an example when you know, years ago that I was told that it’s like you know, making sure that you are still running the F1 race with a bit of a flat tire. Right. So you, you don’t have the luxury of getting out of the race and you’ve got to wait to make sure that you are able to change the wheels at the right appropriate time. Right. Or you don’t, you’re, you’re in a house where you don’t have the, you know, there’s something which has got electrocuted. You don’t have the luxury of switching off the. That’s the situation we are in. I think it’s a very competitive market but I also believe it’s a very exciting market. And for me I think the beginning of the new journey, the beginning of the, you know, the family that we went to gives me adequate, you know, confidence and backing to say that go for the moon. And you know, and that’s, that’s the, that’s the sort of thought that we are working with.
Akshay hopefully answered your question.
Akshay Krishnan
Yeah, yeah, yeah. And we have many growth levers in the paint industry. Let it be on the pricing or let it be on the adjacencies or the distribution integrity. So it looks very attractive in an isolation path. But how do you evaluate the second order effect of these choice when you make on brand equity or the channel distribution or the return of capital on a full life cycle. So what is a trade off point that you’re consciously looking on to accept in today’s point in time?
Rajiv Rajgopal
Yeah, actually I’ll be very honest. The only reason I love this business because is the business I was in earlier, before I came into Payne’s business was telecom and the company was Airtel and you know what we’ve created. I ran the data business 2G, 3G, 4G, I launched a 5G and you’ve seen what that business did, right. So for me I think cash is king. The reason Krishna and I get very excited about this business because this business delivers cash. Right. And as a number four player we’ve Been able to do it. Imagine the power of what we can do as we scale up.
Right. So that’s the most exciting part, that it’s a very cash business. The brand has commands and equity. I don’t think many players in the industry other than a couple including the market leader and us and maybe number two player are able to debit dealers, etc. For wrongdoings in the market. We do that. We’ve consistently done that for now 14, 15 years of existence. So that tells you the strength of the brand, that tells you the strength of the relationship. We’re very transparent in the way we work. Work. Right. And I think where we lacked was firepower in India.
To win in India you need firepower, you need a micro market battle strategy as part, you know, keeps articulating. Those are some things that we are fine tuning and now really entering and that’s what I’m most excited about. You know, for me this is really the excitement that we’re really wanting to win in India. We’re really wanting to be a part of the larger story. And I’m very, I think it. You, you know, I think let you know, I think let the performance speak actually.
Akshay Krishnan
Perfect. So, so post posting merger, what do you think will be the most critical to get in the right. To get in right at an early point in time. So is it more on the impact of the long term growth valuation or is it more on the distribution aspect that you.
Rajiv Rajgopal
I think a combination of both because you know there is no long term without managing the short and medium term. So for me I think managing all, first and foremost managing all stakeholders. Yeah. Managing employee, our channel partners, our customers. I think those would be the critical part during the integration part. Right. How do we together because you know, remember that the two teams have been also in a way not in a huge way competing in markets. Right. So how do you really bring the best of both? How do we really integrate into the families to join the family now and how do we really make sure that the two brands, you know, for me it’s today I’m very clear in the role that I do. You know what’s good for JSW is what’s good for Dualux. I’m very clear. I mean ever since, you know I’ve sort of moved into the family in from July and you know the I.
So I think every, as long as every employee understands that they are first thinking jsw, first thinking India, then thinking JSW and then thinking I think we’ll be on the right part.
Akshay Krishnan
Perfect. Great and good luck. Thank you.
Rajiv Rajgopal
Thank you.
operator
Thank you, ladies and gentlemen. That was the last question for today. I now hand the conference call to the management for closing comments over to you, sir.
Rajiv Rajgopal
First and foremost, you know, thank you once again. You know, we are, we are delighted and we know that we have each of the your support. If you have any further clarifications, do reach out to Rajiv Jha, company secretary. We would be happy to sort of engage. We. One of the things that I’m most fascinated about is that engagement with all of you. Over the last couple of years, we’ve had the opportunity also physically meeting some of you and our board yesterday in the board meeting also encouraged us to continue that exercise. So we look forward to not just having these calls, but on a structured manner, getting an opportunity for you to also meet the some of our leaders and at an appropriate time, also our chairman. Right. So I think we are quite excited. Everybody in the group, you know, both would like to thank each one of you for your incredible support.
And you know, as I always say, you know, this is, this industry is a very exciting industry to be in. And that’s the reason why, you know, people like me have spent so long. I’ve completed 14 years in the industry now. Time flies, right? So I wish all of you the very best. You can count on us. You know, we are the sort of team that works 24 by 7. We understand that many of you made significant investments in the company on the brand. And you can be rest assured that, you know, that’s what we will keep in our mind as we progress ahead.
Thank you very much. Have a great day.
operator
Thank you, sir. Ladies and gentlemen, on behalf of ICICI securities, that concludes today’s session. Thank you for your participation. You may now exit the meeting.