Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
KANSAI NEROLAC PAINTS LIMITED (NSE: KANSAINER) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Pravin Digambar Chaudhari — Managing Director
Jason Gonsalves — Director of Corporate Planning, IT and Materials
Analysts:
ANIRUDDHA JOSHI — Analyst
Abneesh Roy — Analyst
Mihir Shah — Analyst
Amit — Analyst
Mrunmayee Jogalekar — Analyst
Pratik Gothi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the consigned Nerola Q4 FY26 results conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on the Touchstone phone. I now hand the conference over to Mr. Anirudh Joshi from ICIC Securities Limited.
Thank you. And over to you, Mr. Joshi.
ANIRUDDHA JOSHI — Analyst
Yeah, thanks Rutuja. On behalf of ICICI securities, we welcome you all to Q4FY26 and FY26 results conference call of Consign Neurolect Paints Limited. We have with us today senior management represented by Mr. Praveen Chowdhury, Managing Director, Mr. Yash Auja, Chief Financial Officer and Mr. Jason Gonsalves, Director, Corporate Planning, IT and Materials. Now I hand over the call to the management for initial comments and then we will open the floor for question and answer session. And thanks to the entire management team for posting a strong set of numbers amid such a steep volatility.
Thanks. And over to you, Praveen. Sir.
Pravin Digambar Chaudhari — Managing Director
Yeah, I would request Jason, if you can walk them through the presentation.
Jason Gonsalves — Director of Corporate Planning, IT and Materials
So good evening everybody. I’ll just take you through our investor presentation which we have just uploaded a couple of minutes back from up. From an opening standpoint, reinstating our purpose. Our purpose was to create environments for a healthy and beautiful future. Our vision is to design solutions that protect, inspire and touch lives every day. And on the ESG front, neuralike has been working extensively over the years and it is today water positive. It is committed to emission reduction and increasing green energy.
From a brand perspective. For over a century, neuralac has stood tall as a heritage brand symbolizing excellence and innovation in the paint industry. Our strength lies in robust R and D capabilities and strategic technology partnerships. Particularly in the industrial segment where we deliver cutting edge solutions across diverse applications. Despite intense competition, Nerolac continues to command attention, proudly holding the position of the second most recognized brand in terms of top of mind awareness.
Nationally, one of our most enduring assets is the Nerolac jingle. A cultural touchstone that has resonated across age groups for more than three decades. This timeless melody continues to reinforce our brand identity and emotional connect with consumers. Building on our century old legacy, Nerolac continues to shape the future. And with breakthrough product innovations, our sustainable solutions reflect a deep commitment to progress, responsibility and customer trust, ensuring that we not only meet today’s needs but also safeguard tomorrow.
Looking ahead, this same technological edge will increasingly shape our decorative segment, enabling us to introduce breakthrough concepts that align with the growing demand for premium products. A prime example of this is our range of products which are exclusively category defining products launched a few years ago offering Indian consumers a truly differentiated experience in decorative paints. Commenting on the business environment, what we have seen this quarter is that there has been a significant surge in crude oil prices primarily because of the West Asia crisis.
There has been a sharp depreciation in the rupee. The West Asia crisis has created a lot of uncertainty. There is a supply chain disruption which has happened. Demand in automotive has continued to be healthy and there is a continued focus of the government on infrastructure. I will now talk about the decorative segment in which we will talk about the key elements of our decorative strategy which are built on five elements which are new products, new business, the projects, Business influencer program, branding and Marketing.
Coming to our new products, we have tried to bring out the salient details of our new products. I will just touch briefly on each of them. Our first product is Excel Sheen which is a modified acrylic emulsion with silicone additive superior sheen with best in class dust pickup resistance and anti algal performance across all weather conditions. Excel EverLast14, India’s first self cleaning paint powered by Japanese Pu silicon hybrid technology with anti algal NCAP technology delivering unmatched beauty and performance.
Excel Everlast 20 which is India’s first exterior paint with 20 year warranty. It is engineered with bulletproof nano silica technology for superior durability, crack bridging up to 2mm and weather resistant beauty. Gold washable plus which is an interior emulsion with rich sheen finish and 1.25 times higher washability than competition. It’s the only paint in the category that has both antibacterial as well as it’s the most washable product. Permano Heat Perma no Heat is a heat reflecting liquid applied waterproof coating based on acrylic copolymer emulsion.
It reflects visible radiation and infrared rays thereby reducing the surface temperature by up to 15 degrees. Soldier Rain Raksha is a high strength fiber reinforced elastomeric liquid applied waterproof coating. It is formulated with resilient acrylic copolymers and reinforcing fibers. Coming to the new growth drivers in that in the new business we have had robust growth in new businesses and the saliency of new business has increased further compared to the previous quarter and for the year the project business has also expanded to more towns, it has registered a high double digit growth and the saliency of projects for KNP has further increased.
We have given some of our marquee projects that we have painted the Jharkhand High Court, the Vidhan Sabhai Tripur and the General Pool Residential accommodation at Tripur Coming to our Influencer Program Paint as a Service is today present in more than 250 cities and we continue to invest aggressively in the next gen service. Our architect and interior designer program which is Illuminati today is present in more than 45 plus cities and it is also growing healthily over last year. Our secondary program for painters today covers more than 1.2 lakh painters which are associated with the program and secondary salience to primary has also significantly increased.
Coming to our retail platforms we had two platforms earlier which was the next gen Shopee and the Shop in Shop. We have now evolved and migrated to a new retail platform which is called the Nerolac paint plus zone and almost 250 plus shops stores have been opened across India. Coming to Branding and Marketing Our brand and marketing investments have remained strong with impactful campaigns running across both television and digital platforms. These initiatives are designed to deepen consumer engagement and reinforce Nerolac’s identity in the mind of the audience.
The Gharke Raunak program or campaign has beautifully captured the emotional essence of home, strengthening our bond with consumers by celebrating the joy and pride of living spaces. In addition, our association with the Asia cup has amplified our visibility on the national stage, connecting Nerolac with millions of passionate fans and further cementing our position as a brand that resonates across diverse audiences. Together these efforts showcase how Nerolac continues to blend heritage with contemporary relevance, ensuring our brand remains vibrant and top of mind.
Now coming to the industrial business, the industrial paints serves diverse applications and thus creates diverse business opportunities in the three segments of powder, general industrial and high performance coating. And as you’ve seen, we have shown some areas in each segment that the company is present in. Coming to new products our focus has been on enhancing finishes and functionality of offering versatile applications and prioritizing environment sustainability. Some of our products we have tried to spell out here.
In the passenger vehicle segment we have introduced products which are energy efficient wet on weight systems, structural primers for chassis as well as premier clear finishes. In the two and three wheeler segment we have introduced low back technology, we have got anti corrosive underbody protection products and high gloss clear coats which we have introduced in this year. For commercial vehicles we have introduced super low bake color coatings, anti corrosive casting sealers for castings and clear addition promoters.
Now when it comes to high performance coating again on the same three platforms the development has taken place and in general industrial and high performance coatings we can see that some of the products which we have introduced is highly flexible RoHS compliant coil coatings which withstand severe forming operations, high performance outdoor coating systems which have long term UV resistance and thermal insulating coatings. For powder coatings we have introduced low bake one shot matte powders, fusion bonded epoxy top coats and coatings for furniture and consumer durables which have got high scratch resistance properties.
Coming to the performance highlights of Industrial passenger vehicles as I mentioned earlier had healthy demand. New models and SUVs continue to support the passenger vehicle growth. In the two and three wheeler segment we have witnessed high double digit growth and growth was supported by low interest rates and easy financing options. In the commercial vehicle and tractors again we have had double digit demand and a strong harvest season supported this demand. In addition we have new segments where further saliency further increase in saliency of specialized products in passenger vehicle is where the company is putting a thrust in the ARF business.
As far as the business growth is concerned there has been moderate demand, there has been a thrust towards premiumization where the saliency of premium products have increased and there’s an active conversion of body shops from solvent bond coatings to waterborne coatings and there is a lot of digitalization of service operations which is being undertaken to improve the customer experience and interaction. In performance coatings. The liquid segment witnessed strong growth channel sales witnessed very strong growth and we maintained the premium saliency.
In powder coatings. The demand showed good recovery in Q4 and we witnessed mid single digit growth. Channel sales witnessed very good growth. Among the accolades which the company has won it has won quite a few accolades during the year. In decorative we have won the Dragon of Asia marketing awards in quarter two 25 where we won six awards for the Dukkan Eat Yourself campaign In the Mahakumb we won the Gold winner Ambient Media Award, the gold fest award 7 baby blue elephant awards. In industrial we have had some excellent awards.
One from TAFE at the Global Supplier Meet 2025 where we were awarded the best Supplier award, Toyota Kiloskar Motor Company has awarded as the best best raw material supplier Maruthu Suzuki has given us the Superior performance in Safety award, Suzuki Motorcycle has given us the Best Vendor award as well as the cost down award which we got from Suzuki motorcycle. Coming to the area of esg, KNP was rated in the B category in Climate Change and Water Security. In the CDB cycle. 2025 we have been awarded a bronze medal in EcoVadis.
The result places KNP among the top 26% of companies assessed by EcoVadis 2025 they have been recognized in the Strong category by CRISIL ESG ratings. 2025 we have been rated in the top 12 percentile companies within the Chemical Industry group in the SNP Global Large and Mid CAP ESG Index 2025 and we have been rated in the top and ranked 20 out of 577 companies in the chemical industry and have received a low risk rating indicating lower ESG risk in 2025. Coming to our CSR Initiatives through our CSR initiatives we remain deeply committed to driving positive change across multiple dimensions of community well being.
Our efforts span skill enhancement, ensuring environment sustainability and community development while also prioritizing preventive health care and sanitation. At the same time, we continue to invest in promoting education, empowering individuals and fostering inclusive growth. These initiatives reflect nerolac’s ongoing dedication to giving back to society in a meaningful and sustainable way, creating impact that uplifts communities and builds a brighter and healthier future for all. Coming to our financials for the quarter four on a standalone basis, the revenue growth is 7.6%, PBTIT was up 21% and PBT before exceptional items was up by 12.8% for the year.
On a standalone basis, net revenue is up by 3.2%, PPDIT is up by 1.2% and PBT before exceptional items was down by 0.9%. For the consolidated basis, growth in quarter four revenue was up by 7.5%, PBT it was up by 30.6% and PBT was before exceptional items was up by 23.2% for the full year. On a consolidated basis, net revenue is up by 2.9%, PBDIT was up by 3.4% and PBT before exceptional items was up by 1.4%. We have improved our working capital during the year though the numbering shows an increase, but our special focus has been on reduction on inventory.
The number of increase is because of investments. As far as the dividend is concerned, the Board has recommended a dividend for the year of 250% which comes to 2.5 per share. When it comes to capex, the capex is more or less normal and in line with previous years. Coming to Risk and Outlook
ANIRUDDHA JOSHI — Analyst
The
Jason Gonsalves — Director of Corporate Planning, IT and Materials
West among Risks West Asia crisis leading to supply chain disruptions is one of the key risks that we see in this quarter. High commodity prices due to crude oil price surge and impact on downstream products. Import cost surged due to rupee depreciation. And as far as the outlook is concerned, as per Irbi construction activity, momentum will be sustained. Paint price increase on account of steep material inflation is being taken. And considering the inflationary scenario, demand visibility remains more or less a wait and watch.
So with that I come to the end of the presentation and I now open up the floor for question answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Avnish Roy from Nuvama. Please go ahead.
Abneesh Roy
Yeah, thanks. My first question is overall competitive intensity. So we have seen severe cost inflation last two months. As a result of that we are seeing price hikes by almost all the paint players including new players fairly being similar on advertising promotional intensity. Are you seeing some reduction from the new player? Because they have never seen obviously this kind of inflation given the very short cycle. Any evidence you have seen either free grammage or in terms of dealer incentive?
Pravin Digambar Chaudhari
Yeah. So as far as we understand from our sources, you know that on economy the free thing has been withdrawn. But I don’t know, I mean that’s. There’s a mixed response always comes from the trade but I don’t know what is the policy. But that’s what you understand on this thing advertisement. See I think whatever we have seen in month of April was committed much before this geopolitical problem and inflation. So I think, you know, they would have to go through it. I don’t think there’s a much option left now it remains to be seen as to remaining months in quarter one and quarter two because this time Diwali is late so we might see some adjustment there.
It might happen. But as far as current quarter is concerned, I think April being committed, I think that intensity we could see that it was there. I mean people spend money on advertisement as well in month of April.
Abneesh Roy
Right. One related question is generally when we see sharp inflation in FMCG paints, local players lose market share. Now you are a respectable player in the legacy overall market share but overall your size is much smaller than Say the two legacy players and the number one new player is also very aggressive in that context. Are you gaining from the local players or are you now starting to lose some more share to the these three players? Given you have a overall pricing which is a bit delayed in the B2B and definitely those three players, those two legacy and that new player are very aggressive.
So overall you see this situation as a positive or a negative.
Pravin Digambar Chaudhari
So it’s very difficult to estimate, you know, how much unorganized players are gaining or losing. But we believe, I think they are there in the pockets and in difficult times they go down and again they, you know, emerge again. So very difficult to say as to whether we’re gaining or not. But what we are definitely seeing is since November there has been constant uptick in the market and I think that is a positive sign and this trend is only improving now if I talk about November, December and there was no sign of any war or nothing of that sort, it was pretty stable.
Raw materials cost has been a. And so I think with that thing also. So overall I think market is quite, I would say bullish in a way for decorative and this might be temporary pause I would say for unorganized sector. But remains to be seen, we have no data as such to really support that and very difficult I would say.
Abneesh Roy
Thank you. That’s all from my side. Thank you.
Pravin Digambar Chaudhari
Thanks.
Operator
Thank you. The next question is from the line of Mihir Shah from Nomura. Please go ahead.
Mihir Shah
Hi sir, thank you for taking my question and congrats on a good performance. So firstly just few bookkeeping questions. What was the growth between Deco and industrial given auto sales were relatively strong this quarter again. So what is the difference in the growth in both of those key segments? Also in Deco? If you can help us understand the volume growth and mix impact for you last last quarter it was quite negligible. But you know, what was it for this quarter? That’s my first question.
Pravin Digambar Chaudhari
As far as volume value gap for decade is concerned it is again not very significant. And I think that is how I have been stating right from quarter one that you know, our focus is very clear. We will be focusing on select market where you want to gain market share and concentrate. Second thing is profitable mix is very, very important. So we are cautiously, you know, curtailed our sale into items which are not profitable. So that might be seeing in terms of value but I don’t think that’s very critical going forward.
I think profitable growth with good margins and accretive is the key focus and we are confident the progression that you have seen from quarter one to quarter four, I think that journey I think is we are getting a lot of confidence now that I think we are on the right path. And I think there is no point in getting into this mad rush of market share at any cost anywhere. That is not the idea. I think it is important to deploy resources carefully and it’s a time where actually resilience will matter.
And I think if you pass through this, I think future is very bright for decorative paint as far as company is concerned. So that is the roadmap that we’ll have in future. Also as far as auto is concerned, Auto did grow by in double digit but we also have very sizable presence in induction which grew by single digits overall I would say it was mixed slightly mid digit plus as far as industrial is concerned and as far as the equity is concerned then obviously it will be also in that range. So overall I would say very balanced growth this quarter and that too I think with the good improvement in contribution and overall profitability.
Mihir Shah
Understood and thank you for the roadbag that makes, you know, this brings a lot of clarity there. So secondly, on the cost inflation that we are seeing, if you can highlight the kind of price increases that you have taken that will sit in one Q from here on. Also, given that you have a higher exposure to B2B players, historically we’ve always seen seeing some initial pressure on margins because the price hikes from B2B usually come with a lag. So how are your discussions with the B2B players? When do you expect the price hikes in industrial business to come through and the kind of price increases that you’ve taken in?
Deco.
Pravin Digambar Chaudhari
Yeah, so deco. I think we were the first one to go in the market with price increase. The first increase we took in month of March itself about 25 March we took the increase and then followed by 10 April followed by 21 April and now it will be 11 May. So this, this price this March was about I think 2%. After that it was all 5 to 6%. 5 to 6%. So net net I would say will be higher single digit as far as price increase is concerned in decorative as of now and in industrial also I think auto also we are very strong in terms of negotiations.
We got a good breakthrough. There are price increases which have been granted but obviously you know, it is not, I can’t see it for entire auto, but one thing is very clear that it might be slightly delayed negotiation but it is always with effective from so I think that is very important. So I think with that in mind I think we are not losing out on inflation as far as profitability is concerned. Maybe it will be slightly here and there in terms of timing in case of industrial there is a good mix of OE as well as channel.
Now when it comes to channel like decorative there also we announced the price increase and that new prices are effective mid April itself. Overall I would say it’s a pretty satisfactory price scenario and I think we are very cautious about our overall profitability when we are getting into the business and that is how the team is working on. I think as far as our investor community is concerned I would urge you know don’t look at it quarter wise what is happening. I think it’s important to look at on a longer run as to how is our overall strategy and direction is concerned.
But as far as profitability is concerned, definitely you know pressure is on on the team in terms of taking the price increases and direction is fairly positive. That is what I would like to comment.
Mihir Shah
Got it sir. Thank you very much for that. So lastly can I ask you if is there is any margin guidance for FY27 that you would like to share? Where do you think we will probably be aggregating towards for FY27 on console and standalone board?
Pravin Digambar Chaudhari
So like historically we have been talking about 13 to 14. I think that is what endeavor is this year also I think we were in that range only so definitely we would be there though our endeavor is always to go on higher end. But as of now I can leave it at that.
Mihir Shah
Got it. Thank you. Wishing you all the very best.
Pravin Digambar Chaudhari
Thank you.
Operator
Thank you. The next question is from the line of rehan Sayed from 3 Mitra Asset Management. Please go ahead.
ANIRUDDHA JOSHI
Hello.
Amit
Yeah,
ANIRUDDHA JOSHI
Thanks for taking my question. So I have two questions regarding our margins and cost structure side. So first is around there is material. So given the crude limit depreciation. So what is EBITDA margin sensitivity to a 5 to 10% increase input cost that we have shown in this quarter?
Pravin Digambar Chaudhari
I think if I and I could not hear you but if I understand question correctly or talking about inflation and its impact on profitability. Is that right? Is that what you want? Yeah. Yeah. So as I explained earlier I think we are going ahead with the price increase and trying to pass on inflation as much as possible. Second thing you know there is inventory that also we carry both on FG and rm. So to that extent there is a question available. But obviously you know the inflation already taking place will Come in refer sometime.
But we are aware of, we are hopeful that you know by then price increase also kicks in. So our endeavor is to neutralize so some impact cannot be ruled out.
ANIRUDDHA JOSHI
Okay, great answer. On second question was on industrial segment side that you have mentioned increased reliancy of specialized products in passenger vehicles. So what percentage of auto coatings revenue now comes from this high value products? Could you just tell me?
Pravin Digambar Chaudhari
Yeah, so you know, being a leader there, I think our endeavor is to increase penetration into each vehicle that gets produced. So in a vehicle there are many, many areas which are still unexplored. So we are trying to tap that each surface. If there is a paint application that is possible. And now the areas which are left are very, very niche but they are very I would say premium in nature. So I think that is the one area which now will tap so that more of a car I think is our endeavor. And that’s the, that’s the specialized trend we talk about.
ANIRUDDHA JOSHI
Okay, and just continuing with this part on how your performance coating and power coating, short recovery and growth in the quarter. So what is the current utilization level in these segments and capacity headers for growth going forward?
Pravin Digambar Chaudhari
Yeah, so in case of IND industrial, I think in powder and industrial liquid coating we have sufficient capacity. We should be operating about 70 to 75% as of now.
ANIRUDDHA JOSHI
Also. You have also the second part like segments our capacity address for growth in this, in this segment.
Pravin Digambar Chaudhari
Sorry,
Jason Gonsalves
Not able to understand the question.
ANIRUDDHA JOSHI
Like you have answered the current utilization. I’m asking about the segment capacity headroom for growth in the segment.
Pravin Digambar Chaudhari
You’re asking for outlook
ANIRUDDHA JOSHI
Like. Yeah, yeah, yeah,
Pravin Digambar Chaudhari
Yeah. So I think like we have been reporting, you know in growth areas like performance coating, we have been growing in double digit. I would say that’s our endeavor I think in infrastructure spend as long as it keeps happening. And we create, we start expanding a segment which had briefed in our strategy session in month of February. I think that’s our endeavor to really grow double digit as far as performance coating is concerned.
Amit
Okay, okay. Okay. Thank you.
Operator
Thank you. The next question is from the line of Ranmai Jabalekar from assetsi Mehta Investment. Please go ahead.
Mrunmayee Jogalekar
Hi sir. Good evening. I hope I am audible.
Pravin Digambar Chaudhari
Yeah, you’re audible. Yeah.
Mrunmayee Jogalekar
Historically Q4 has been a sequentially weaker margin quarter for us because of the mix being tilted towards industrial. This time if we see the margin pressure sequentially was much more compared to some of the historical Q4 numbers. So is it mainly because the scale was a little better? We are improving Sequentially or any other factor that you, you would like to highlight here.
Pravin Digambar Chaudhari
Yeah. So now one is in both industrial and decorative. Of course performance is better. And in decorative also mixed sizes are far better than last quarter quarter. And that I think has resulted into overall contribution improvement.
Mrunmayee Jogalekar
So mix you are seeing individually in both industries and decor.
Pravin Digambar Chaudhari
Okay,
Mrunmayee Jogalekar
Great, sir, Great. And secondly, after the price hikes that you mentioned, the four set of price hikes that you’ve taken, have you seen any impact on volume so far? I know it’s not a long period since the price hikes have been implemented, but any color you can give on how the volumes are shaping up
Pravin Digambar Chaudhari
As of now, frankly there is no impact we have seen. And if really this geopolitical situation, obviously someday we believe it is getting worse. Someday again we think, you know, it’s now not ending. But I, I hope if things change, I think we should be in a stable zone as far as quarter is concerned.
Mrunmayee Jogalekar
All right, sir, got it. Thank you.
Pravin Digambar Chaudhari
Thank you.
Operator
Thank you. The next question is from the line of Amit Purohit from Elara. Please go ahead.
Amit
Hi. Thank you for the opportunity and congratulations sir. I just wanted to understand on your outlook for the next year. You indicated that November is seeing an uptake from an industry growth perspective and for you as well and the context that till now you haven’t seen any significant negative impact. But how would the trend in terms of secondary sales now probably much of the activity would be primary or the secondary sale also because price increases have been taken. So stocking up might be happening.
How do I assess for the full year? If you could just give some sense on the industry growth.
Pravin Digambar Chaudhari
I mean, frankly difficult to predict at this stage. But if I have to go by the recent trend of last five months, if that is anything to do with the overall market and economy for economy which concerns paint industry. I think there has been significant improvement in all the verticals. I think if that is the indication which was pre war, that means there is a fundamental things are getting corrected or changed. I would say that’s, I would say green shoot that I’m seeing. And if this war gets over, I mean soon, I think then there should not be any impact as the overall year is concerned.
But of course if this gets dragged on and this then it starts impacting our daily levels in terms of fuel increase and all those other costs going up, then I think it is anybody’s guess. And if it happens to us, it might happen to entire, I would say other sectors also which are consumption driven. But it’s Like a very difficult to guess as to what will happen. As of now I am only relying on past five months trend and I. I’m pretty hopeful that if that trend has to sustain, I think we should have another good year.
I would say
Amit
Lucky on the project side, which is our. I mean give some indication on the new initiatives, new businesses and the project. What would be these as a percentage of our total sales
Pravin Digambar Chaudhari
Project? In a sense, decorative projects you are saying?
Amit
Yes, yes,
Pravin Digambar Chaudhari
I think decorative project should be now about. About 10% plus. Yeah, 10% plus.
Amit
And the new businesses which includes waterproofing, construction, chemical and even the wood finish,
Pravin Digambar Chaudhari
I think that also should be 10% plus but slightly on higher side than. Than project.
Amit
Okay. Okay, that’s it. Thank you so much.
Operator
Thank you. The next question is from the line of Pratik Gauti from hsbc. Please go ahead.
Pratik Gothi
Hello, Am I audible?
Jason Gonsalves
Yes,
Pratik Gothi
Yes. Hi sir, this is Pratik Gauti from HSBC. Thank you for taking my question. I have a 2 please. On delay incentives. If I remember correctly, delay incentives were increased across the board by all companies. I think when input costs were benign. Have you seen incentives lowered now that cost inflation is back? This is for you. And if you have a comment on the industry dynamics as well, that will also be helpful. Please
Pravin Digambar Chaudhari
See, you know, dealer incentives is also function of, you know, time and it varies month on month and April typically is also high stocking month. Otherwise also I mean forget this year with war and price increase, it could have been slightly accentuated. But otherwise also it happens. So I would say it’s very difficult to comment on just one month of inflation what has happened. But I think it is pretty much in line with what we would have seen otherwise also in last year or otherwise now it remains to be seen that if this inflation persists in next one or two months, then what happens?
And definitely, you know, whenever there is a price increase that happens. Incentives are obviously adjusted to certain extent. That is a normal practice which always happens in the industry.
Operator
Understood.
Pratik Gothi
And on paint demand, if we split the deco markets into projects business, construction, chemicals, wood finishes and what we can call as core retail deco paints business, basically business that goes through the dealers. Have you seen any improvement or growth in the core retail deco paints business?
Pravin Digambar Chaudhari
Yes, we have seen improvement.
Pratik Gothi
Okay. And in terms of mix, you mentioned that mix had improved for you. So can you give more color over there? How is that mix improvement coming about? Is that narrow like plus range that you have or any color on that would be helpful. Please.
Pravin Digambar Chaudhari
So you know, if you would Have I think in presentation, you know, this time we detailed out on our new products. So in a quarter four, I think a new product contribution is very high. And I think that is one thing is contributed. And all these products are launched in emulsion category which is obviously as such as a mix it is considered premium. And in that also when we classify the economic premium, super premium there also super premium has done well. I think that is the direction that obviously has taken.
So new product in that also it’s a super premium doing well. I think all in all that is why I call out that overall mix being better
Pratik Gothi
Understood. Okay, that helps. Thank you.
Pravin Digambar Chaudhari
Thank you.
Operator
Thank you. The next question is from the line of Tejas Shah from Avenda Spark Institutional Equities. Please go ahead.
ANIRUDDHA JOSHI
Hi, thanks for the opportunity. Sir. Sir, did I hear you correctly that you said that we focused on market share gain and we have gained market share in some focused market?
Pravin Digambar Chaudhari
Yes, you’re right.
ANIRUDDHA JOSHI
And so which region of which markets this would be?
Pravin Digambar Chaudhari
No, no, it is, you know, when we talk about focus market, it is Pan India. It is not like northeast. So each. So there are, you know, specific strategies for each town. And we are focusing on that to really gain share there. So that is what is working very well now.
ANIRUDDHA JOSHI
And so this would be urban largely,
Pravin Digambar Chaudhari
I would say T2, T3, mainly
ANIRUDDHA JOSHI
T2, T3. And sir just wanted to understand the character of the competition which is now put to test. And then this time I think there are two new players who are actually facing this inflation for the first time. And thankfully we have seen that at least the large listed players have taken price hike. But how the new competition is behaving and how the long list of a long tail of unorganized or large unorganized guys are behaving in this environment.
Pravin Digambar Chaudhari
I think, you know, they also took price increase. In fact, you know, they had announced price increase much before this war itself. One in Jan, one in Feb. Because they were anyway I think below market standard price. So they wanted to reach and bridge that gap. That is one. But after that, again, you know, this inflation has hit and I don’t know as of now whether really they have taken further price increase now. So as far as that remains, you know, in terms of what competition is trying to do, which is a new entrant and on an organized sector or small player, obviously, you know, there’ll be impact they’ll have because of their capacity to absorb inflation and more than inflation and I think it is availability also which is causing the trouble.
So definitely there will Be some, I would say impact that might be happening with unorganized and in month of April typically, you know, it’s a big stocking month. So as such inventory is stocked of all the leading brands. So in this month really it’s very difficult to say that whether unorganized got impacted and there is a sale that shift is happening. Very difficult. It will be only seen in next, I would say three, three to six months where that impact is really been seen. Where there is extraordinary demand that is coming of certain products.
And typically these are, you know, low end products like primers and all. I don’t see, you know there will be super premium, premium emulsion category. There is a major place it’s all standard products which I don’t think will be any significance as far as we are concerned.
ANIRUDDHA JOSHI
Last question, our margin guidance of 13 to 14% is it assuming citrus peribus on raw material to stay like this? There is a built in assumption that second half they kind of reverses and gives us some room to have that benefit.
Pravin Digambar Chaudhari
Yeah, I think there is a strong, I would say believe that things will change. I think we are seeing some signs and some of the raw material prices also got corrected now. I think the temporary surge that happened because of this uncertainty and panic I would say is now stabilizing. So we believe that. I think things should stabilize quarter on quarter. Very difficult to project because timing wise there is always issue. But I think overall I think things should be better
ANIRUDDHA JOSHI
Than. That’s all from my side, sir. Thanks.
Pravin Digambar Chaudhari
Thank you Tejas.
Operator
Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead.
ANIRUDDHA JOSHI
Yeah, hi sir, my question has largely been answered. I just wanted to clarify you say on the decorative growth and industrial growth this quarter. Could you kind of. I missed that comment sir. If you could kind of just repeat how much was the growth momentum in each of the segments?
Pravin Digambar Chaudhari
Yeah, we. So you know in industrial I was saying, you know there was reference to auto being double digit. I said yeah it is, it’s close to double digit. But we also have industrial section which is also large and that that is where. And my answer was in relation with a strategy where we focus on extremely premium profitable mix now and we are doing away with all low end non profitable items. So with that I think I was talking about slightly higher single digit as far as industrial is concerned and even depot.
I think we were pretty much mid single digit or lower than that around that. So I think overall I think was better. Better show as far as mix is
ANIRUDDHA JOSHI
Got it got it very clear. So just on that front, on the industrial side, I mean as we move now, you know there is obviously some inflation concerns. But auto industry is my understanding corrected. The growth momentum has sustained till this. Because there was a clarification that you said that in decorative the momentum has kind of demand momentum as the same. But is industrial also the similar kind of situation, especially auto. Okay. And sorry, if I may just from a thought perspective, would that increase the ability to take price increases in that sense?
Or is that. Would you kind of agree or what your comments on that would be helpful?
Pravin Digambar Chaudhari
No, I think even otherwise also I think whether it’s a low phase, high phase, I think and definitely we are looking at margin. Hence you know there is something which we will not forego. And after price increase. Now if you look at the scenario actually this is not a standard kind of a thing. Entire raw material has undergone change along with dollar appreciation. So I think customers are listening very carefully, engaging and I think based on justification they already started giving us price increases.
ANIRUDDHA JOSHI
Okay, sir, so some price increases already happened. Any quantum
Pravin Digambar Chaudhari
Auto. It’s very difficult. You will appreciate that.
ANIRUDDHA JOSHI
No, no. Fair enough. So that’s all from my side. Thank you very much.
Operator
Thank you. The next question is from the line of Anad Joshi from ICSS Securities. Please go ahead.
ANIRUDDHA JOSHI
Yeah, sir, the price hike in decorative effective price hike would be I guess in low ins for us as well as the industry. I guess. And if the war ends and if crude corrects materially so will there be price cuts? Or we will try to increase ad spends or we will try to increase the margins. So. So what will be the strategy of the company? Question number one. And in terms of how do you see the outlook for FY27 considering there will be steep inflation not just in pains but in general there is a possibility of material inflation in across commodities in India.
So how is the outlook and if you can share outlook in terms of decorative. Decorative projects. Well as industrial and auto. Yeah, thanks.
Pravin Digambar Chaudhari
Okay. So you know auto, as I said, you know it looks like demand is pretty strong. And most of our customers are talking about long waiting list as far as their products are concerned. So we are hoping that things should be okay for auto as a whole concern in other industrial segment. Also we are not seeing any change. I think infrastructure and even otherwise appliances and all that is going to pretty standard and normal. So we hope that also continues coming to deco. I just mentioned about last five months trajectory and I think that has also gone through April.
So we believe that things should Be okay as far as deco from demand perspective is concerned otherwise also unless you know something dramatically happens and you know there’s inflation which is beyond means and what we saw maybe three, four years back then of course a different story but as of now it’s too difficult to have extreme assumptions in both end. Very, very difficult. I mean it’s like a crystal gazing now as far as price increase topic that you have concerned and inflation or deflation.
I mean if inflation continues then obviously our price increases are there and we will we might take further price increase. Second thing is if there is a deflation that happens then typically what industry does in the short term is obviously obviously the scheme gets adjusted and if corresponding deflation if it is making sense is always passed on that happens when price increases there scheme gets adjusted reverse also happens and there is a deflation in a short period. Obviously if there is a sustained stability we see with the deflation then obviously price will get corrected downward but we don’t see that happening and the reason is crude of 60 or 70.
I don’t know whether we will go back so soon there and the structural imbalance that got created with all this shipping land disturbed and all of that I think also might take some time to settle in. So I think we have to live with the situation I guess for next six months with this and if things improve then maybe second half we might see a dramatic change. That’s what at least I believe and that’s how we are working with. Yeah.
ANIRUDDHA JOSHI
Okay, so last question. Assuming crude settles at let’s say 100 will there be any requirement to take further price hikes or current price hikes of low teams are in a way sufficient
Pravin Digambar Chaudhari
I think with 100 I think it should be okay. Okay, sure sir, this is
ANIRUDDHA JOSHI
Very helpful, many thanks.
Pravin Digambar Chaudhari
Right, thank you.
Operator
Thank you. The next question is from the line of Sid Gandhi from IFL Capital. Please go ahead.
ANIRUDDHA JOSHI
Hi sir, this is Percy Panthaki here. I just wanted to ask one question. On the other expenses line for this quarter it is down and it’s in terms of basis points about 150 basis points down yoy as a percentage of sales in absolute terms it’s about 1 1.5% down yoy while the sales has grown at 7 8%. So can you give any reason why there is such a big 150 basis points kind of saving in this cost item?
Pravin Digambar Chaudhari
Yes, if you look at absolute increase now from last year to current day it is same. Right. So because of fail increase you are seeing the drop out there.
ANIRUDDHA JOSHI
Yes, but as the business increases this cost would also normally increase, right?
Pravin Digambar Chaudhari
No, there is a fixed cost leverage optimization is also being done. So that also had mentioned earlier in quarter. So we are also looking at cost efficiency, spend efficiency. All that is also coming in now.
ANIRUDDHA JOSHI
Okay, so there is no full year throwing up in Q4 which is causing this movement, Is it? Okay. Okay. Yeah, that’s it. That’s all for me.
Operator
Thank you participants to ask a question, you may please press star and one. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. So you may please go ahead. We don’t have any questions. Any closing comments from your side?
Pravin Digambar Chaudhari
I think nothing. Thank you so much. I think it is first time we conducted our investor meet in the evening at 5:30. So thank you all for joining and hope to see you in next quarter. Thank you.
Operator
Thank you ladies and gentlemen, on behalf of ICIC securities limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.