KANSAI NEROLAC PAINTS LIMITED (NSE: KANSAINER) Q2 2025 Earnings Call dated Nov. 08, 2024
Corporate Participants:
Anuj Jain — Managing Director
Analysts:
Aniruddha Joshi — Analyst
Abneesh Roy — Analyst
Mihir Shah — Analyst
Avi Mehta — Analyst
Darshit Vora — Analyst
Dhiraj Mistry — Analyst
Viraj Mithani — Analyst
Archana Menon — Analyst
Yash Goenka — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Kansai Nerolac Q2 FY25 result conference call hosted by ICICI Securities. [Operator instructions]
I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities. Thank you and over to you, sir.
Aniruddha Joshi — Analyst
Yeah, thanks Tanmaya on behalf of ICICI Securities, we welcome you all to Q2 FY25 results conference call of Kansai Nerolac Paints we have with us today. Senior management represented by Mr. Anuj Jain, Managing Director, Mr. Prashant Pai, Director-Finance and Mr. Jason Gonsalves, Director-Corporate Planning IT & Materials. Now I hand over the call to the management for the initial comments on the quarterly performance and then we will open the floor for question and answer session.
Thanks and over to you. Anuj, Sir.
Anuj Jain — Managing Director
Thank you Aniruddha and good morning. Everyone. I hope you all had a good and prosperous Diwali with family and our greetings to all of you and best wishes for New Year. I’m grateful for your continued support and interest in our company. And thanks for joining this call for Kansai Nerolac for quarter two of financial year 24-25. We have already submitted our presentation and in the presentation, if you go through one slide, I know it basically talks about the diversified portfolio, what we have and that slide basically talks about that. There is a bit of narrow in everyone’s life. It also says that we meet all customer needs and we have been adding more portfolio which also we have shown on that slide. We just diversified portfolio. We mitigate risk associated with relying on any single segment and ensure steady progress. As we have been speaking in the past that we remain a number two consumer brand and our strength is technology, Japanese technology, leadership in automotive and power coating and integrity. We have been leveraging JINGLE and Pain+ taking the advantage of again Japanese technology that also we have been doing. And this basically give us a combination of logic and magic because logic is the technology and magic is all about our JINGLE and the connect with the consumer. If you look at the current business environment of the auto demand is stable, the quarter one was good quarter, two slight moderation, but October was good infrastructure growth and good monsoons and easing of crude prices. So the challenges are geopolitical and rupee dere just to give you some highlights of you know, our industrial business in automotive, as I said, demand was moderate in quarter two. But on the back of our initiatives, we did better and we increased market share in automotive October. I think the last one week, 10 days, whatever was reported in the channels or news, I think the sale was good.
And I think that gives us the hope that even in the coming quarter, I think the demand could be a little better than quarter two. Our approach, we continue to focus on technologically superior products, which is in line with our strategy and have been launching expanding sustainable technologies to reduce resources and carbon emissions. So the new segment which we entered basically to expand the size of the market is a sea sealer underbody alloy wheels and we have been increasing our salience in these areas. Also some of the new products, you know, that gives us the edge in this automotive market. One is the high solid you know system which basically give high aesthetics. Also the lower voc lower carbon emission, shorter drying time, you know that enhances the productivity of the customer and the cost effective less evaporation of paint during the drying process. So some of these technologies, you know, we have been expanding, we’re also expanding the polyurethane mono code system, which is against the conventional system, conventional system to code. And this also helps in terms of enhancing the productivity and also the other parameters. We also developed some excellent corrosion resistance coatings or in the areas of commercial vehicles and tractors basically to overcome field failures of pain due to severe condition during pling operation in combination with fertilizers. So these are the examples of the new technology and there are many more. If you look at electrical vehicles, the penetration in the four wheeler is just about 2% to 3%. And in two wheelers, it’s about 78%. So it is going up.
But with a slow space three wheeler is more than 50%. And our penetration in the electrical vehicle is as good as the conventional system and we are holding higher market share in this segment. Also, if the order is finished where our market share is low, you know that the approach was to continue to put our systems in a class body shops. And we are expanding that, you know, because that’s where the premium business is there. And we are continuously expanding the business, the other part of industrial, which is a performance quoting or you know the liquid and part of business. So our strategy and focus was on performance quoting business there and there we have taken actions which we have spoken in the past. Also one that we have expanded our business development team and feet on ground. Basically to you know, it’s like a product management or business development segment where we have chosen the segment and they’re getting the approval and you know, matching the product with the customer requirement because they are generally, you have to have a customized kind of product to satisfy the requirement of the customer. So that’s what we are doing. There’s also a large amount of business in hypers quoting which happened to industrial dealers and they basically cater to mid size or low size, you know, industries. That’s the initiative we are taking and we are spending our distribution reach to reach out the small industries and our salience of this channel, you know has gone up. This is this is one segment of the business which is better placed in terms of the relatively gross margin. Also the one approach with approvals in high end coatings, for example, railways, bridges, oil and gas through use of new technologies.
And some of these technologies are like Fluoro Polymer Coatings anti carbonation. So some of the pictures what we’re given in our presentation, if you can see that, you know, these coatings have been applied in Mumbai coastal road and bullet train. So these are like bridges, you know that where we I applied anti carbonation coatings, anti carbonation coating, one that it is more durable, the other, you know that it resists the dust and the emission is set on the surfaces and therefore, it helps it looking better in terms of looks. Also, we have also applied in all these Fluoro Polymer Coatings on Trans Harbour, which is popularly known as Fluoros are very high end durable cooking, you know they would give the life of about 30 years. So this supplied on the steel structures, you know, which are there on the C so that’s what we’ve done. One also we spoke about and we have painted, you know, many trains on the. So if you see the trains which basically show now orange color, blue, color, white color, all that is Narela, most of it is painted by Narela and this is also a high end epoxy systems and with the top coat of some clear, you know, that also keeps it in a clean and aesthetically looks good. So some of these technology which we have been saying that in the high performance quoting 23 years back, we have created some low end business and the high end business we are entering and we are making a strong traction there. And based on these initiatives in the performance quotings, we have done well and witnessed strong protection and also have a strong pipeline.
If we talk about some of more new products in performance coating, the IP net coating which is concentrating coating, we got the approval from Mumbai Metro line and also we developed ROHS, you know, which is the hazardous, you know, which is basically that how to make it unless the artist compliance co so that approval also we got from some of the key customers. Therefore, you know, based on these technologies and the product launches, the premiums in the performance coating is going up some of the segments which we are catering for performance coating. I said like bridge, windmill appliances, construction equipment, helmets, and also in the powder category, we are like in the premium. So overall our market share is good and we are market leader in the premium segment. We have a potential to improve our market share. So, there we are focusing on Rebar coatings and construction equipment. Coming to decorative of some of the growth drivers which we have taken in decorative. One was related to a paint plus that how do we differentiate our products in the market? And that also lead to some kind of premiumization. So, so far we have introduced more than 25 products and 10 were added in the current year. So total number are more than 25 and their sales is continuously going up. It is almost in the double digit range. Now, all the new products that we introduced integrity in last three years, they are contributing more than 10% to our sale. And overall, if you look at this quarter or YTD, the premium did better and we had a de growth in the product like P and this temple about the new product which I would like to mention here.
In fact, last year when we had the in person meeting with all of you, we have demonstrated this product, but some of the new product that we introduced, one is the texture range where there are very high end kind of Italian or different kind of finishes. We have just introduced a product called no dust in category like Excel, which is a good proposition at a good value proposition. We also launch a range of and now we have expanded in the quarter to the white. So, in fact, you know, in many of the markets, the acceptance of the penetration of white shade is very high and we have launched in multiple product, the white, these are best of the white and also this product has a coverage which is higher by 15%. So this range also we are expanding and this is definitely a exclusive range which I think that customer and market will like. There are some products which we introduced in construction chemicals and wood finishes in wood finishes. We have introduced two component polyene product at a very effective value proposition and that will help us to expand our business in the wood finishes. So this these are now the details of the new products. If I talk about the new business, which is basically which has premium wood finishes and construction chemical and waterproofing. They’re continuously, our growth is strong and our failure from new business has gotten into a double digit. So I think here, in fact, we feel that our growth is better than the market growth, maybe the sales is still lower. But I think gradually we are picking up also in project business where we expanded our footprint.
And now we are available in more than 75 plus towns. They’re also, in fact, we are continuously growing in double digit and doing better than the market and our sales it’s under index but continuously is going up. And I think as a matter of time that we will be able to catch up with the market sales. Also in this business, the other part of decorative strategy was focusing on influencer and services. So and two years back, we introduced next gen painting services and the architect program which we call Illuminati, the program we have introduced and there, in fact, we are making a continuous progress now and as of now, in fact, are about 3% or more than 3%. Business contribution has started coming from this initiative alone. This initiative is basically the services today. It will be expanded and we are serving a large number of cities. The Architect registration program continuously quarter on quarter and we are increasing the number of architects which are enrolled with us in terms of secondary tracking. Because if you remember and recall that we said that one of the focus chain integrity is that how do we track secondary sales so that, you know, that we have more control in the business. So almost the categories, you know, that’s where we run the painter incentives and painter program mostly in the emulsion categories. They’re in fact, today, the secondary tracking has cost more than 40%. A number of painters are expanding. And today we have a good number of painters with us and the team feet on street who is connecting with this painter, demonstrating the product and helping them out to get the business and sites at the dealer front, distribution front.
Basically to give a better retail experience. We started the initiative called NextGen Shopee and Shop in Shop. In fact, we have also introduced the system called mix, which is, you know, basically a kind of Spectro Photometer. It’s, you know, AI enabled where it is able to advise and give consulting in terms of the shade combinations, what customers can go for a good response from the customers. And today, the NextGen Shopee along with this Shop in Shop Model, about 250 are already in place in the market. In terms of general distribution expansion, we have added about 2000 plus dealers and we are continuously looking for the expansion and we have objective in mind for the year as of now, we are on track related to that. So coming to the general performance. You know, for the quarter, the top line was up by around 1%. The EBITDA is down around 20% and cross margins down by 1.7% if we compare with the quarter three of last year. But if you compare with the quarter quarter, one then goes down by 3%. There are primarily three reasons for that. One is the change in revenue mix because as you know that we are generally 55% 45% industrial. But because the industrial growth is higher in the quarter, so the mix is in favor of industrial and in industrial, the material cost is higher. So that’s one main reason why there is a change in the gross margin. The second reason is the impact of price which happened last year. So that is the second reason and third is some material inflation, material inflation has continued to August from September. We are seeing softening of raw material, but that impact is theirs.
And partly we have been able to mitigate through cost effort, but there is some impact of material inflation also in terms of the outlook, you know what we see reporting from RB A bulletin and you know some news, rural trend, the rural demand is trending upwards. So as of now, if you look at quarter one quarter two, we can see some sign but difficult to come in in industrial two. Definitely we are seeing uptake in. But I think post good bonds and which will help the harvesting and crop. I think this is what I be able to say that demand is standing up for and they also say that urban continues to hold from, which is a little contrary to some of the news which we are hearing today that urban slow down. But I think we have to wait and watch the next quarter would be the right indicator that what is happening. Investment activities remain bind with government expenditure rebounding from a contraction in previous quarter. So that’s a good signal for us. You know that the second half this activity picks up, it will help you know our project business and also the performance coating business. Some of the other indicators are like, you know, passenger vehicle, the demand moderating quarter two. But based on the last week’s sale of October, the inventory has come down in the market. And therefore we feel that in the quarter three demand could be better than quarter two. Two Wheeler demand is being stable double digit demand and we hope this momentum will be maintained performance quoting. As I said that based on the investment government expenditure, we expect this market will continue to grow and based on our initiatives, you know that and the good order pipeline will continue to do well. Our model prices which have seen inflationary trend is in August towards the end of last quarter. We started seeing softening and that it can give some advantage of you know, going forward. So this is what I had to say on the quarter two and some of the actions and in what we have taken.
And I’m happy to answer your questions now.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question and answer session. [Operator instructions] The first question is from the line of Abneesh Roy from Nuvama. Please go ahead.
Abneesh Roy
So thanks. My first question is on the competition. So previous quarter, you had said that your confidence level is higher than what it was before six months and now further three months has happened. So if you could update on how competitive dynamics are currently and second is on exon clearly some form it will get sold either fully or partly. So essentially we are seeing one large player like grassy and then one the number four player kind of exist. So what will be your read across in terms of competition from it? Say one year or two years later, once the sale happens and one thing stabilized, you see essentially that the worst of the competition is behind this consolidation in that case.
Anuj Jain
Hi, thanks for the question. So on this new entry or, you know, this competition, I think the statement remains same because six months, nine months have passed and we are seeing some traction. Mostly the impact is different geography to geography. They’re more into the numeric reach as of now. I think it is still early to comment on that. You know to determine that how it will play out, we are monitoring the trend. But our understanding is that such moves stabilize over a period over a period of time. And I think our object to remain resilient and keep delivering value under this situation. But I think as we said earlier, also, I think it’s a slow pace, this industry in order to build the distribution, the painter, the brand, it takes time. I think that is what is being demonstrated in the market today. And I also still believe as I said earlier also that overall for last few quarters, the demand scenario is down. But I’m sure it’s a short term kind of thing, the sublet because never we have seen demand standing low for such a long period. I’m sure that later or the demand will come back. And in that situation, the size of the industry is good and more number of players, you know that help in terms of driving innovation, it raise the standard and expand the market. So, I think that way it’s a good scenario, but whatever statement we have made, we stand on that that particular thing. And I think based on our initiative, we are clear that how it is standing out, but we would like to wait for more time on the second question as of now, not much of comment, you know, because all that is there in media as of now that we have not received much information about it. So as of now, we know it’s a little premature and you know, too early for us to comment on that.
Abneesh Roy
So one or two specific follow up here. So, in terms of disruption from the new player, have you now seen any big impact? You did see some traction in some markets, but in terms of anything disruptive, in terms of what they’re doing, that is second again, confidence level, last quarter, you said it was higher than six months back. Would it be fair to say that versus three months back? Confidence level is similar for you in terms of fighting competition?
Anuj Jain
Yes of so when I said like this, you know, that obviously it’s natural to experience some impact when company enters this manner, but there’s no disruption and when you talk about the confidence and confidence is going up and up only.
Abneesh Roy
And what is driving that.
Anuj Jain
Driving one is that the initiative is what we started, you know that segment by segment when we are seeing, you know, the impact of that the second you know that earlier also we used to talk about that. If there’s a pricing strategy, a different pricing strategy which is taken in the market, whether how much it will work, how much it will put pressure on the, you know, that existing companies having seen all that, having seen the response from the customers, from the dealers from the painters, I think that’s what gives you more confidence.
Abneesh Roy
Hi, last question will be on the volume growth expectation. So the number two player has given kind of expectation that Q3 will be high single day volume growth for them. And the Q4 most likely double digit and they have been generally claiming to be gaining market share. And the data also seems to suggest that and now other paint companies are having a more cautious response and clearly there’s a one slow down. If I see from a MCG perspective, there’s a very clear indication of that. So, what will be your expectation of the industry or for your not asking guidance? I do understand, manage days are high, but these things can get postponed. I do understand, it always comes back. So pent up demand can come back in a 526. But from H2 perspective, would you also expect that industry could grow on a whole on the full six months, say close to high single day volume growth for the industry.
Anuj Jain
So Abneesh my comment is that definitely the demand, the demand will pick up. There will be uptick in demand if we talk about for the month of October, October Diwali was very early. But if we say from the Shaer to Diwali goes, I think from 12th of October to 31st of October. Those 18 days sale, retail sale in the market was good. And remember this summer is a good marriage season. So on back of it and now we definitely feel the demand will go up and gradually it will pick up. So third quarter will be better. Fourth quarter could be further better. I would not like to comment on the number as of now that how much it is, I think quantum is to be seen, but definitely we also feel that demand is going to go up.
Abneesh Roy
So thanks. That’s all from my side.
Anuj Jain
Thank you Abneesh.
Operator
Thank you very much. The next question is from the line of Mihir Shah from Nomura. Please go ahead.
Mihir Shah
Hi there. Hi, sir. How are you? So, thank you for taking my question. So with the change in industrial portfolio by to the high end premium, you know, segment pay in auto and performance and given last year, you had exactly the low margins. Can you share how much improvement was witnessed in the industrial margin. And now, you know, with the sale of the new launches, you know, new products increasing, ideally, they should have increased. But can you also share what is the difference, you know, in margins versus deco and intri things currently?
Anuj Jain
So, generally you know one is that the margins of equities are always higher, but in case of industrial with a change in the strategy and technology, the product, the premium. So if you remember, you know, if you see the history, one, the industry used to be more cyclical. And second, there used to be high volatility when it comes to the margins. So what we are able to do with the changes, one that you know that it gives the confidence that the company can use the itil and on the sustainable basis, no one can maintain the double digit margin. So I think with this credit change, this is what we are able to do. So, some of the dynamics of the industrial market remain, which we used to handle earlier also now also. But with these changes, I think we can produce more sustainable results. So that is that is one thing. And what was your second question here?
Mihir Shah
You know the difference between industrial auto used to be about 5%. Has that decreased with all these changes.
Anuj Jain
Marginally marginally, you can see. But they said that if you see the gross margin level, always the margins would be higher but you know, when it comes to the ata level because in decorative, there would be expenditure on marketing, sales promotion and all those things. I think at the level, you know, it has reduced.
Mihir Shah
Got it understood. Secondly, sir, would you still hold your guidance for maintaining margins for the full year? And how should we think about margins over the next two to three years? Especially given the change in portfolio mix that you are seeing from your side and including the competitive intensity that is there in the market.
Anuj Jain
So see if you know, when we started the year, obviously, we had estimate of topline growth. And obviously, as we have seen the quarter one and quarter two, the growth was lower than you know, that estimate of the industry growth. And even if there’s expectation that third quarter, fourth quarter, the demand will pick up. I think overall growth of the year, the top line growth is going to be lower than what we estimated to that extent. There is expected to be some impact on the bottom line. But I think we have been talking about that. Our endeavor is to maintain the margins, the range of 13% to 14%. I think we still stay with that. It may be because of the lower revenue growth. It may be on the lower side of that range. But we still, you know, our endeavor is to remain in that range.
Mihir Shah
Got it sir. So lastly, I wanted to check on 21 is the differentiated portfolio. I believe it’s about 10%. How should we think about the differentiated portfolio for the next two to three years? Will that go up by about 15%? And you know, you have also stepped up your staff cost material since one Q you know, so should one expect this to be a phenomenon for this year only or do you think that it should, it can continue for coming years as well?
Anuj Jain
We differentiate products of our, we have our internal number, which I would not like to speak about it. But obviously, we want to keep increasing that number, keep increasing that number over a period of you know, quarters and a year because as we keep doing that, it keeps you giving you more insulation in comparison to the competition, we have been launching product, we’ll continue to launch a differentiated product and this percentage will take up and up and you know, our targets are aggressive target and let’s see, you know how it, how it goes. So that’s on the photo, the staff cost staff cost is basically to back up, you know, the initiative that we spoke about. Unfortunately, because the topline growth is low, you know, as and when the market growth picks up, I think that will get absorbed because you know that the cost has gone up because we have been given the support to our initiatives. So as the growth goes up, which definitely we believe that coming quarters will be better and then coming years also would be further better. I think that we get aor.
Mihir Shah
Okay. Thank you very much. That’s all for myself. Wishing you all the best.
Anuj Jain
Thank you Mihir.
Operator
Thank you very much. [Operator instructions] The next question is from the line of Avi Mehta from Macquarie Research. Please go ahead.
Avi Mehta
Hi Sir, I just had one question. You know, while I understand the near term weakness that you had cited, but you’ve given the healthy growth in industrial segment, given our Paint+ initiatives. Could you help us understand how should we look at, you know, sales growth and a bit of margin as we go beyond this year? How do you see these initiatives spanning out or a sales growth and a bit margins that would be useful, sir?
Anuj Jain
And so we, so in terms of sales so that you said that if we compare with the quarter, one quarter, two quarter, three, quarter four, we’re expecting a better growth and gradually it will pick up. And therefore our belief is that when we enter the next year or next two years, the growth of the market will be back to in line with if you are closer to the GDP growth that is what we believe because it’s very difficult to assume that for such a long time, the market growth can remain down. Rural market is showing some kind of positive scenario in industrial. And I’m sure with this after good monsoons, so it will show in the decorative also in the urban, we believe that, you know, maybe like, you know, essentially saying urban demand is low. But if you see in paint today, the project is doing well and project penetration in urban market is very high. So, to that extent, I think, you know, even the urban market in the paint industry will hold the demand. So, I think we feel positive that the demand will pick up. And if you see next year or next two years, demand will be back closer to the GDP growth. And in terms of our bottom line, I think that 13% to 14% we maintain, you know, that will definitely be based on these initiatives that remain our range. And there we affector the effects of any new competition also. And if the effect of the new competition is less, it can become better. Otherwise, you know, that whatever we have seen in the market, whatever is visible, that we are affected and therefore that remains that range, remain intact.
Avi Mehta
Got it, sir. And sir, when you say, you know, I understand the industry growth will probably move towards closer to GDP growth. But how would you see it paying out for us? Would you expect us to continue growing ahead of market or is that how I should kind of build in? So if it’s, if the industry is growing closer to GDP would be slightly ahead of that, is that a fair assessment?
Anuj Jain
I mean, that’s our internal target always. And the fact, you know, 23 years back, I think in some of these segments, you know, we were not doing that, okay. Our growth was a little lower and some initiatives we have taken and today we are seeing the result in the new businesses or the project and because we are under index, so I think some difference has been there because of sale part. But at the segment level, I think we have, we have seen that continuously gradually, you know, we are getting the results and even if you are able to continue this particular case, I think it’s a matter of time, you know, slowly, gradually because that will be sustainable and resilient. I think, you know, we should be able to cross market growth.
Avi Mehta
Okay, sir. Perfect. That’s all from my side. I’ll come back in the queue for questions. Thank you.
Operator
Thank you very much. The next question is from the line of Darshit Vora from Asset Investment Intermediates. Please go ahead.
Darshit Vora
Am I audible?
Anuj Jain
Yes.
Darshit Vora
Yeah, hi. Thank you for the opportunity. And I have a couple of questions, some part of that has already been answered, but with respect to premiumization trend. So, what are your thoughts on the continuation of the trend is going to be? Is it going to be as it has been guided or do you see and what do you think about that product mix that is going to change with respect to more premium segment of products doing well and you know that entering into the volume numbers?
Anuj Jain
Okay. So premiumization, I think last few quarters, we have been seeing that the sales is going up and I think that trend will continue. And the you know, the premium was when the premiums goes up. There are two things when the sale of premium is going up. Second, I think in the economy segment, the sale is a little muted. Now there may be a possibility that when the rural market pick up, I know the economy segment of popular segment also start doing well. And if that sale pick up, I think it is overall good. So I think from the sales point of view, premium trend will continue from the sales point of view of the economic category picks up. So at least if you know the sale, it could be maintained. So, so that’s my answer to that.
Darshit Vora
Okay. And we speak to the gross profit margins. Where do you, when do you see them returning to the previous higher levels.
Anuj Jain
Previous high levels in the sense that as I said that for the A beta margins, what we are looking at is between in the range of 13% to 14%. And the loss margin. As I said that in our case, quarter on quarter basis because of the business mix, the revenue mix, it keeps on changing. But at the segment level, if you see, you know, ultimately the right indicators at the year end. So I think keeping in mind that what investment we are doing in capability building marketing and all those things. So I think that’s how we look at it. And mostly because you know that your gross margin could go up and then there are investment a plan that’s the more important is that how every time margins you’re looking at in the current situation, maintaining in the range of 13% to 14% is how we look at it.
Darshit Vora
Okay. Thank you so much and all the best.
Operator
Thank you very much. [Operator instructions] The next question is from the line of the Dhiraj Mistry from Antique Stock Broking. Please go ahead.
Dhiraj Mistry
Yeah, hi. Thank you. Good morning, sir. So I Just have one question. So, As you highlighted post the. Data until October and there was a good demand for decorative paint. So I just wanted to know the region wise demand if you can throw some light on that. And also like some of the consumer companies, I’ve been highlighting that. And even in your presentation, there is some moderation in urban market. And can you give some color on terms of Google demand versus urban demand and whether that has changed compared to previous quarter in this quarter.
Anuj Jain
The regional level, if we talk about the previous quarters, I think east and north or you can say a little better and towards the last quarter, I think the west picked up when I said October, what I said is the Shaer to Diwali because this time Diwali was on 31st October last year, it was on 12th of November. So and extended monsoon. So actually pre the value period, the number of days available were very less. So within that less period, the demand I’m talking about otherwise for the entire month, you know, because the the period was short. So even October is, you can say it’s very good but it’s better than the earlier month. But I think the the demand, what we are seeing between the share to Diwali and also because there are a lot of marriages, you know, marriage season during December that give us a feeling that, you know, the demand would be good. The the second part, you said is urban market, lower market in our industrial, it is visible, we are definitely seeing uptake in the demand of Two Wheeler from the rural. And that’s how to some extent the Two Wheeler demand has gone down in the urban market, but it has gone up in the rural market. And that is how the demand is holding in the decorative. As of now, we have not seen much change maybe slight in the incremental change in rural. But as of now, our data does not indicate much change in the rural. I think next quarter would be a better period, you know, after the months and how it pans out. I think we’ll have more clarity on the next quarter on that.
Dhiraj Mistry
Got it. Thank you. That’s it for me
Operator
Thank you very much. [Operator instructions] The next question is from the line of Mr. Aniruddha Joshi from ICICI Securities. Please go ahead.
Aniruddha Joshi
Yeah. So sir, two questions from my side first. How do you from your long experience in the industry? Probably what should the industry do right now to revive the growth? Is it the more discounting required or is it the more brand building efforts will be required at spend, etc. or more red push will be required? So essentially what should the industry do to get out of this L period? And again, means at least we have not seen any such prolonged, slow down period in the paint industry. So probably what should be the guidance in terms of let’s at the industry level in a 526 for the in a revival in the industry. That is question number one. And then second question is one of the MNC paint player is now almost on the block. So what will be concise strategy in in that case means again, going for an industrial paint or industrial coatings business of that MNC company will significantly spend on concise on industrial portfolio also. So what are the parts on in this regard? Yeah, these are the two questions.
Anuj Jain
So a very different question you asked. So I think what industry should do? Industry should keep patients at this point of time because our industry has demonstrated for many years, the equilibrium, the resilience and when the market demand is down. So whatever you do, I don’t think that the market demand, I think market demand will go up automatically because this is something related to a macro vector. And it’s not industry specific where industry can take any action and look and this the market discount or those kind of things can only disturb the margins. So I think at this moment, one should accept it that yes, market demand is down and a few percentage here or there, you know, for a shorter period of time doesn’t make, I think we should wait and we should believe in India’s story that it’s just a matter of time and the market demand will pick up until that time, we should keep the patients and therefore should be able to maintain equilibrium. So that’s my answer to your first question. Second question. I’ve already said that it’s too early for us to comment upon it as of now that we are navigating our own actions and seeing that, how do we keep accelerating the execution of those of those particular things, our strategy in which we already spoke about because we have a technology available, we are working on the approval so we want to continue on that. These are some of the changes which are going to happen in the market. But I think it’s a little early for us to comment on that on that particular part.
Aniruddha Joshi
Okay. Sure sir. This is very helpful. Thank you.
Operator
Thank you very much. The next question is from the line of Viraj from Jupiter Financial. Please go ahead.
Viraj Mithani
Yeah. Thank you for the opportunity Sir, My question, is it so much, so many initiative, is it fair to think will be growing in high, the high single digits from a year on which you talked about early. And the second question is you mentioned a bit of minus 13% right. Yeah, that’s all from my side.
Anuj Jain
So, initiative, if you, if you recall, if you heard our earlier presentations, yes. And we had a situation where you know, there was a GAAP from the market. And therefore these initiatives help us in terms of narrowing the GAAP. And today at the segment level in some segment, we are growing better, some segment, we are closer and some segment may we may still be lower. I think the first step was that, you know, we narrow the GAAP. And also because today the business is not that simple few years that used to be paying now we need to paint, there are too many things are there. So sometimes the you know, always a direct comparison with one company. The other company also is not right. What is important for us is that segment by segment, you know what initiatives we are taking and what direction we are seeing. And as of now, we are seeing positive detection and obviously as a company, it is always our endeavor to see that we keep doing better but better on the back of the initiative. And because our initiatives are showing us the progress trend, the positive traction. So we would like to keep the patience and keep working on this initiative so that we are able to get better growth and cause the market growth based on the initiatives.
Viraj Mithani
Okay. Any number. Would you like to put on to that?
Anuj Jain
No.
Viraj Mithani
Okay. Thank you.
Anuj Jain
Thank you.
Operator
Thank you very much. The next question is from the line of Archana Menon from Morgan Stanley. Please go ahead.
Archana Menon
Hi Sir, two quick questions. First, if you could help break down the 1% top line growth for this quarter across segments. And in terms of both volume and value, what would your decorative growth be like related to the industry This quarter.?
Anuj Jain
Volume growth would be overall volume growth is around 4%. Equity would be slightly lower. And industrial growth is value growth also is positive. Equity is slightly negative.
Archana Menon
Okay, sir. So would you think that your decorative value growth would be a part of the industrial?
Anuj Jain
Yes, it should be very close to that. As I said, you know that we look at the segment by segment level and therefore certain segment which are going faster today, new business and project business, where do we are doing better than the market? But our sales is lower under index. So, some one or 2% difference you see because of that particular reason, but the segment level will be very close to the market.
Archana Menon
Got it. Thank you so much.
Anuj Jain
Thank you.
Operator
Thank you very much. The next question is from the line of Yash Goenka from Orissa Capital Advisors LLP. Please go ahead.
Yash Goenka
Hi. Thank you. My question has been answered. Thank you. Thank you.
Operator
Thank you very much. The next question is from the line of Mihir Shah from Nomura. Please go ahead.
Mihir Shah
Hi, thanks for the follow up question. Welcome. To share your sales across North South East West in Deco. And which market.
Anuj Jain
You know, are you seeing an overlap with the CC? I have not talked about the numbers but ours is very high in North, followed by East, followed by West and followed by South. We are a weaker player and overlap I think because the new players are also ultimately, they are like all India and train. So overlap would be there in all the markets.
Mihir Shah
Okay. Understood any dealer feedback that you can share in any of the markets that you wear, you know, what, what is happening out there in each of the or is the same thing across geographies.
Anuj Jain
Not much, you know, because typically create, obviously there is some kind of more energy excitement, you know, because a lot of talks happening, the number of players are increasing as of now, I think more than the new intent, the market demand because that low and therefore a lot of actions are happening from the existing companies also. So the discussions are around that, the new intent, I think fine, you know, six months, nine months. And now people have seen that what kind of distribution is coming. Obviously, the pros are getting into the market, which is a, you know, I think if you look at 2025 years back, there used to be 78 players in the industry. And then maybe after a few years, some play existed and we are going back to the same stage where the number of players will increase. And to that an extent market will reset. Even if you see last 10 years, some new players have entered, maybe they have taken the approach which was more gradual and in the gradual approach also in those states, you can see some kind of resetting which has happened. So I think the only thing is that the new is more and they want to go with the speed. So over a period of time, I think it just gets reset. And I would say that the market feedback is in the same manner, what used to be earlier. Like, you know, if you’re going to the market, there are four people or five people. Generally people talk about then the complete scenario, what is happening. So the number of players have increased, that decision remains the same.
Mihir Shah
Understood because you know, with the product launch happened, the pricing was not particularly we understood that certain job, the 10% additional volumes were also kind of taken back while in certain other job they continue. Also. Secondly, you know, not much of disruption was seen in the dealer margins. Lastly, one was expecting that during the festive while there was a new ad campaign from their side. One was expecting, you know, some more firework, you know, on in the festive season, but that was also not witnessed.
Anuj Jain
Had it been so simple, you know, anyone could have done it. It’s been so simple, you know, because the brand that firework or that cannot happen overnight. This is what we’ve been talking about. We respect the entry of any new player in this industry or the merrier. It is good for the industry and we definitely respect the players, the kind the quality of players who are and I’m sure that they will put a good marketing effort which will be good for the entire industry and industry should accept it that, you know, over a period of time, some amount will get reset. But that’s okay. Then I think what is important is that today they are having a different kind of market share, maybe at some stage, it will get reset and everybody grow at the right rate, grow at the right rate in terms of top line and bottom line. That is how we should look at it. It doesn’t happen in overnight and nothing happened overnight.
Mihir Shah
Got it. Thank you. Thank you for that. Again, wishing you all the best, sir.
Anuj Jain
Thank you, Mihir
Operator
Thank you very much as there are no further questions. I would now like to hand the conference over to the management for closing comments.
Anuj Jain
Okay. Thanks everyone. For your questions. As usual, you know, the questions are always good insights, you know that for us. And I think we’ll continue to work the way what we have been sharing and looking ahead, I think we are definitely encouraged by the actions we have taken and we are implementing, we would like to accelerate some of the actions where we are seeing a better results coming. And these initiatives, we believe position us well to achieve better outcomes and we are actively tracking to regain the momentum. I want to assure you of the team commitment, our commitment to creating long term value and our team is focused on executing the strategy and overcoming near term obstacle and we appreciate your patience and confidence. Thank you all, everyone. Greetings again. Happy New year to you, to your family, to your friends. Thanks so much.
Operator
[Operator Closing Remarks]