Kansai Nerolac Paints Limited (KANSAINER) Q4 FY23 Earnings Concall Transcript

Kansai Nerolac Paints Limited (NSE:KANSAINER) Q4 FY23 Earnings Concall dated May. 09, 2023.

Corporate Participants:

Prashant Pai — Director, Finance

Anuj Jain — Managing Director

Analysts:

Mihir Shah — Nomura — Analyst

Archana Menon — Morgan Stanley — Analyst

Presentation:

Prashant Pai — Director, Finance

Good afternoon to you all. Let me welcome you all for this Kansai Nerolac Paints Investor Meet and Q4 and FY23 earnings. It’s a long-time that we had this Investor Meet maybe 20 years back and we always wanted to have this. And our new Managing Director. Sorry for this interruption. So, our new Managing Director, Mr. Anuj Jain, who took office from — who took this position from April 1 has been consistently telling me, we should have this meet and as per his direction we are having this meet today, and it will be our endure to have this every year.

So, today, let me welcome Mr. Anuj Jain, who is here to come on stage. Mr. Anuj Jain, is with the company for the last 34 years and he has risen from the Manager position to this position and he has been in various fields, marketing, manufacturing, research — various, he’s been heading various portfolios. I also welcome Mr. Jason Gonsalves, who is a Director Materials and Supply Chain and IT.

We also have our entire management committee here, which you can interact with them during the course. And now I request Mr. Anuj Jain to take the stage.

Anuj Jain — Managing Director

Hello? Is the sound okay in the back side?. Good evening friends, namaskar, welcome all of you. Really a great pleasure I think when I took over last year. He said April, so it was not this April, it was last year April 1 and when I took over I think I had a chat with some of you and you only advised that it will be a good practice, if we do this kind of meet, physically once in a year. So, this is the first time we are attempting that and as Prashant said, it will be our endeavor to do it, every year.

So welcome all of you and thanks for your cooperation, support and valuable insight, which we keep getting from all of you. Thanks for that and continued support. We have the entire management community here. You know, Prashant Pai, very well, CFO and in the company for last two, 33, 35 years. You know, Jason Gonsalves he has been a part of all this online, but Jason Gonsalves is heading the supply-chain, the corporate planning, the procurement. So he is also in the company — it’s the first company he joined as an MBA, and he continued — he’s also gone through various kind of portfolios.

We also have here Abhijit Natoo, Abhijit please get up. Maybe the MC committee, if you can just come here I can just introduce all of you, but the entire team is here. So Abhijit Natoo, he is the manufacturing head, a very good person, in fact he has been having experience — he had experience in Asian Paint and then he is with us for last 12, 14 years. He understand the best practices for manufacturing and all new things what we are trying in the manufacturing is something about his leading.

Rohit Malkani, is my mike working? So even if it’s not working I think my voice can reach to you. So, Rohit Malkani is the Head of Sales and Marketing of Decorative. He joined company two years back. He has worked with Gillette, Asian Paints, last he was in Crompton, but very long-time Asian Paint, so he is the head. Ram is the sales head, so very good — excellent relations with the dealers in the market for many, many years. He had worked in the — many geographical geographies and now he is — heading the sales.

We have Govindarajan, who is our company secretary. The legal expert, again, a very long hand in the company 100% compliance for last so many years, he has been maintaining. We have Kotera san, so Kotera san recently got posted in India. He is also a part of marketing. One of the initiative what we are driving [Technical Issues] one of initiative — Kotera san is driving. So, he’s representative of Kansai Paint Japan in India.

Sudhir Rane, had a variety of experience. He handled decorative, he handled industrial and currently he’s the Head of HR, he also handle all our subsidiaries which are international subsidiaries and local subsidiaries so quite again a big a number of years around 30 years, he is with us. We have Laxman Nikam a very, very solid hand in terms of technology he’s one of the master in technology — his expertise is there in the automotive, general industries, and in the decorative also. So one of the very rare person who has this kind of technological experience. So he is working with us for many, many years.

We have Yukata [Phonetic] san who is the Head of Technical and quality control, so Yukata san is also there in India for few years now, four years, he’s also a representative of Kansai Paint in Japan and they provide us the technology and they help to see that our quality, focus remain at the top. We have Amrit Rekhi, he is the Head of Sales and Marketing of Industrial which covers automotive, general industrial, auto refinishes so this entire team, we thought that when we talk to you, quarterly basis maybe we are not able to showcase the entire team to you, since we are doing it physically, I thought it’s the right opportunity to showcase the entire team.

So, this is the team which is keeping this company resilient and they are the people who are bringing a lot of innovations in the company and taking the company forward. Thank you all of you.

So I’ll just take you through to the presentation today and will try to share some of the things related to company. So this is the agenda and not that I’m going to go through every slide because this the uploaded, but maybe some of the slide where I want to talk about, maybe I want to share something on that. So this slide is on the business environment, but I’m not going to talk much on that. I think you’re aware of the challenges, which are going on in the country, in the world or maybe in the industry. What I want to share with you is the Nerolac story, I think that would be something interesting for you to know.

So, if you see, our purpose has been create environment for a healthy and beautiful future. So we want to see that today, we are conscious that we are inclusive organization and when we are working, we must ensure that the product, the environment, the atmosphere it should be good for our future generations. That was one of the reason that in the past, we were the first company to introduce Healthy Home paints low VOCs, zero VOC, lead-free, those initiatives because this is our purpose. The reason is, we design solutions that protect, inspire and touch lives every day. So basically we provide beauty and protection to the surfaces, okay.

Maybe we are known as decorative industrial company more than industrial company, but we provide beauty and protection to the all kind of services. So if you see this picture. Now, this is very close to our heart. So inside or outside any kind of surface you see, we have a product available for that. So generally, we believe that every second house or third house has something there which is painted with Nerolac, because it could be refrigerator, it could be oven, it could be microwave, it could be a fan, it could be air-conditioner, it is hair-pin, the ladies what they put hair pin that is also painted with Nerolac.

The artificial jewelry, we supply coatings for that, then two-wheeler, three-wheeler, tractors, the bridges, the metro so many things and obviously the interior walls and exterior wall. So that’s what we take pride that each and every surface and that’s what our motto is that any service which is emerging surface we should have a coating for that. As a brand we are our Power Brand. So today, maybe in terms of our share of size, we are number three, but in terms of Mindshare we are number two and solid number two brand. We are known for our innovation so if you look at Japanese technology, which is that we stand for the high-quality and the jingle Jab Ghar Ki Raunak Badhani Hoor it’s a very, very — the asset what we have created over a period of a year and people still — even the new-generation sing that jingle, know that jingle very well and some of the product, which I am going to talk in the subsequent slides also what we’ve introduced are different kind of products.

So that’s there in our DNA that we keep innovating, and this is what we have created in last 100 years and obviously, that’s our legacy, what we have built at 103 years, the brand because in today’s time I think there are less number of companies who are able to survive for 100 years, so I think if we are able to come to this stage, the adaptability is something which is our forte.

So that’s something what we created in 100 years, what I want to talk today is about this slide and this is what I think if you’ve been attending the quarterly calls, I’ve been talking about it, that what we have been working on for last one year, so we have been in decorative that the innovation because when we talk about the market is changing, the competition is changing all these things happening, what we are going to do to see that we are on the path of success. So this is, in short like Paint+ that’s a new positioning we said because paint is supposed to be about color, okay.

But today if you see, we are known for technology in the industrial also and technology is playing a bigger role because technology is functionality, technology is sustainability, technology is something which is giving you something which you have not thought about the product. So Paint+ in the decorative is the creation of the technology where we said it is not all about color, it is about functionality and sustainability, we started with Beauty Gold washable, which is safe paint, then we get into Mica Marble Stretch and Sheen, which is the stretch paint, but there are two-part of Paint+ one is a unique product the second is that offer a feature, which is available at a higher price in the market, but you make it available at a lower-price, so that you are able to increase the volume of that product.

Recently, we introduced Excel Everlast 12, which is like a self cleaning paint. So with every rain, when the rain comes, a thin layer of the paint comes off and your building looks new, 12 years warranty Excel Everlast. We introduce a product in waterproofing, NoDamp which bring down the temperature of the surface by 14 degrees centigrade and 12 year warranty of the waterproofing we give for that product. So that product also we have introduced. The Kashmir — Impression Kashmir, the No Smell, it’s a very pure product. So if there are children at-home, the old age people at-home, they have some kind of allergy with the product, so Impression Kashmir it’s like a pure product and the No Smell product, that’s something we have introduced. So we have decided the range of product in this year and the entire range, we have executed in this year so we wanted to place the product which are at the different price points, different value proposition that Paint+ portfolio in this year, 2023 be completed. Second part services. We introduced the services in the year 2000, but maybe the market was not catching up, but post COVID, we are seeing the change — the behavior of the consumer. Today, we feel the time is apt and right to get into the services.

So, we started our service, first-quarter we started this initiative, and it took time, because you have to build lot of infrastructure, so we — actually we placed the team in around more than 450 cities but digitally, we started with 50, 60, 70 and now we have almost crossed 100 cities for the services and the proposition is that 5 days, next-generation 5 days painting is the proposition which is very-very unique, dust free painting which is very-very unique and what we have done during the year, is that we have created a setup of lead-generation and the lead conversion. The call-center setup and then how do we complete this — taking the lead and converting to a business?

When we started our conversion rate because this is all-digital system and it works on the conversion basis, when we started the conversion rate of 1%, 2%, slowly we are reaching around 7% 8% going closer to 10%, which is supposed to be a benchmark in the lead-generation model. The call-center because of who attends the customer, the turnaround time we say that when we started, it was some hours, now it is about 10 minutes then attending the customer, again it was in days taking 7 days to 10 days time, now it has come down in 3 days time. So, we implemented this system and now it is taking a shape and digitally now we have started printing 500 homes every month. So, on the yearly basis about 6,000 homes we have painted — painting 500 homes per day and in totality as I said, this is online and digital but if I include the offline also then about 20,000 homes we have painted.

But this has picked up the pace in last three-four months because earlier we were setting up digital system infrastructure and then we said that now we are going to scale it up. So, this is one area which we are ready with. Then the painters, because our industry is quite divided, almost 40% 50% people go with the recommendation of the painters, influencers. So we have set-up a team which is a promotion team who deals with the painters and basically idea is that the painter has a potential from there how do we get share of wallet how do we increase our share of wallet.

So in terms of training, incentivization, the discussion about the product, helping them going to the sites so that consumer confidence goes up. So that’s another activity what we have created and so-far when we exited the year 100,000 painters have started participating, where we are able to and saw the painter which got dropped when we were losing some share in the past, yesteryears, we are able to get them back, so this has picked up some traction. The contractor which is basically related to our project business because there is verticalization happening in the — earlier it used to be a phenomena of metro cities than it has gone into the other A Class cities and now it is spreading.

So we were there in 35 cities and we said we’ll go to 70, 75 cities over a period of time, we have already crossed 55 be specific 57 cities now we have placed our team and trained them and created a standard operating process. The pipeline system, because this was on how many sites are there in the pipeline and then what is the conversion rate and we are gaining maturity in this contractor business. The next thing is about architect, interior designer, so earlier traditionally, the influence of the architect interior design used to be 5%, 6% in the country, but there, there are town and we have identified around 27 towns where the influence of the architect, interior decorator is about 20% and that is quite high and architect interior decorators are like doctors in the medical field once you prescribe, then people use that shade or use that paint.

So, again our team setup the digital methodology interface with the architect and the team where we have started registering the architects, their sites we have started registering, we have started providing them the support and we have started generating some business because it’s a different business model, but we had given it a shape and now we have started generating business through this also. So, these are some of the initiatives what we have taken during the year. So, we had our brand, the mindshare, but we’ve said that at the field, once we execute, so that we are able to connect these dots, so this is some of the work, which we have done and why we are talking about this work today, because we have started gaining the traction for this particular work and therefore we are going to expand it further.

This slide, I already spoke about we can see some of the examples here, same the product and project. I think I covered the point when I was talking about it, but you can refer to the slide later. These are the number of products, the Paint+ product which I spoke that we launched. If you see the packaging here it is very clear that when the customer goes to the market, what is the journey he goes through?

So, he talked about the brand or not a brand — and want to understand that whether I want this sheen finish or the matte finish, thereafter what is the single parameter where the product is different, so the packaging is designed in a manner that if the consumer is looking at the packaging he is able to understand what is the unique difference in the product on the side if he goes on the packaging he’s also able to identify the other benefit. To talk about this benefit through the digital medium on the website we are placing the difference that how this product is different and if somebody wants to — because in the paint industry the problem — the pain point of the customer point is, he doesn’t understand that how this paint is different from the other paint.

So. we are working to ensure that he is able to understand that how this product is different from this and if I’m paying a price why I’m paying a price. So that is how we’ve created this packaging and these are some of the things which are related to, if you remember, we spoke about in the distribution, so we started a concept of shoppe so this is the actual picture of the shoppe, we have already crossed. There are two kind of models, so overall, it’s about we have crossed 100, but typically for the shoppe, we have executed 50 in the market — the response is good and I think going-forward we will increase the numbers of the shoppe also. These are some campaign, so you know that in this year we have increased our marketing expenditure and we are doing a lot of work on expanding the communication.

So these are some of the communication, which we have done then in the product related, which I spoke about Paint+ so these the — some of the campaign and some of the new films which we have executed very recently I’m not sure whether you would have seen it so we would like to showcase some of the new films here. So this is for Nerolac Impression Kashmir No-Smell.

. So, this is Nerolac Kashmir no smell.

This is our new.

This is second, third is the Beauty Gold Washable. This is Excel Everlast, the self cleaning paint with 12 years of warranty.

This is Mica Marble special sheen

Yeah, so if you see, these are multiple ads what I said the Paint+ what you started, you can see Paint+ in all this communication, the Japanese technology, you can see in all these communication, there is a Japanese expert who is there in all these presentation and jingle, which is a part of all this communication. So, what we have created over a period of 100 years time, which is a Japanese technology and jingle is a part of each and every communication so that even if you have the multi communication, people are able to connect it with one single outcome, which is Paint+ Japanese technology from Nerolac and you can see our aggression in terms of the multiple communication, multiple ads which are coming up, one of ad was Malayalam ad, but it is there in different languages. So this is related to our communication, new businesses which we were the late entrant.

We started, but now, we completed the range in-construction chemicals the range what we wanted to complete not that we want to get into everything. The wood finishes premium and the adhesive, which we have a subsidiary and today our contribution is almost touching 7% to 8% and now we have picked-up this business is growing at a good rate.

Our first objective was that, whatever distribution we have, who has started taking the waterproofing from the other companies that we should be able to get back. We are now making some progress in this regard. Shifting to industrial side from the decorative and you know that we are the number-one in terms of automotive and even industrial, our position is numero uno position we are holding ad this is our pride. So actually if you see, whether it is four-wheelers two-wheelers, commercial vehicles and this is basically we are into this market with the technology and technology always has been there, but I think now the kind of technologies what we are launching, which is in the area of again energy-efficient that whether we can have the product which has to be baked at the lower temperature in less number of minutes and therefore a lot of energy-saving at the customer and the productivity goes up. So we are making good strides there high solid paints and this low bake paints we are doing.

Some of the new segment, seam sealer, underbody black, I spoke about, we have now installed the capacity and the supplies are starting. The partner which is one of the subsidiary of Kansai Paint, Helios who is in Europe with their support this is again, we have got the approvals and we are starting the supplies and it’s not mentioned in this slide, but I spoke about the pre-treatment chemicals, the booth chemicals, so because the car gets painted in the automotive factory that goes to the body where there’s a booth which requires booth chemicals so those areas are also that we have entered.

So this is basically a step towards how do we increase the addressable market size in this category, where we have the leadership because when we are going to the paint both, whatever is applied in the paint booth is what we’re taking forward. Technology is giving you advantage whereas earlier people used to feel that in this business it’s difficult to charge price and the technology is the answer which we have started deploying. In two-wheeler and commercial vehicle, we have gained market-share, we are working on the technology like our Prime Minister launch Ethanol 20, Ethanol 30, earlier the ethanol used to be 5. So the same — the paint product if your petrol is mixed with Ethanol, 20 or Ethanol. 30, it may not work so the technology alignment to see that the product work on this kind of thing.

And lot of work on the colors. So in this industry also it is not completely industrious. It is also becoming like a glamorous and decorative industry where along with this — so there in the decorative we are seeing along with the color we gave the functionality, here along with the functionality, how do we give the beauty. So this is related to this and as I said the addressable market size, what we are planning to increase. This is the refinish market where again we were late entrant, our market-share is single-digit, but our market-share is continuously for last two-three years. We have started increasing the market-share and our confidence has now gone up, that we’ll be able to increase the market-share in auto refinish and auto refinish relatively is better profitability, so the more market share we increase there, partly along with the auto we are able to see the impact of that in terms of the profitability.

Performance coating, now this is a big area. There’s a lot of investment happening from the government side also and this industry, this size is becoming larger than the automotive market now and this market is again that infrastructure and lot of segments are there in this particular market and we have started expanding this area also. And here, in fact I spoke in my earlier meetings also, we had a problem related to the margins where we looked at how do we increase the margins in this category, and therefore, exited the business, which was low-margin business, around 10% of the business we made that exit in this quarter, that part would be complete and our complete focus is on the premium category products, which are high-tech products and that’s what we are concentrating upon all the premium products and the Trans Harbor Link, the bullet train project.

This kind of project, what we are looking at which are premium, we have good business and it’s a reasonably profitable business so this is one area which we are making on strength. Lots of technology is required and fortunately, we have this tech support available from Kansai Japan and the subsidiaries like in Europe and Turkey. So all this knowledge, wisdom, we are using to make an impact in this line, you need lot of approvals. So we have set-up a team which is basically to take the approval because once you get the approval, then taking the business becomes easy. In this year 2023 we just worked in terms of taking the approval and we made a good progress in getting the approval and now the business will start coming in.

Shifting to the manufacturing. This is our capacity 606 million liter and the digitalization, which we piloted in one of the factory basically to see that consistency in the quality, the cost goes down, the cycle time goes up and we are getting a good return out of that and which we are planning to take it forward further. There is a backward integration resin which we used to buy from outside, but then we started making. We have been making it but now, we expanded the capacity so that the cost part now we are able to take care of and so this is related to manufacturing.

In supply-chain the focus in terms of engaging the services, how do we provide so in fact, we have taken lot of initiative where we’re increasing the service at the local level, at the up country level in some of the cases, we are drastically if you are supplying in 24 hours time, ours, we are bringing down the time to 10 hours to 12 hours time, so that is what we have done. In select cities we have introduced this premium services where the premium product, which is a Paint+ product can be supplied to a dealer in one hour time and it is already implemented in how many cities — around 60, 67 cities, we have already implemented. This has started working.

Human capital, which is very close to my heart and when I started the first part what we look at it is, people first, that is what I believe in that the future is dependent on the people and we have to ensure the people who are working with us and today’s competitive situation is very-very different — people are in any field people are working hard. So when they are working hard and external challenges are so high internally we have to create some life and we have created a life at Nerolac, people are working and feel happy about it. These are the areas like health and well-being, security, lifestyle, learning development awards and recognition, we started in learning and development, we initiated called Taj, which is Tapp, Abhyaas and Jab, which is basically, we have a mission and vision but ultimately abhyaas, the practice and we have curated courses, which are like how do we bring the leadership capability in the people and that program, we have started. In awards, we were finally able to launch RSU scheme for our select leaders, so basically to see that they continue to work with the company and they contribute to the company. So a lot of things we did in this area.

There are points which are mentioned here. We have created for one sector like sales force we have created auto system, in terms of that if you perform you get the promotion [indecipherable] some of the innovation we have done in this particular area and the digitalization. This is a big effort, which we are doing and it is obviously taking time, but probably 70% 80% work we have already completed, because today the behavior change, the consumer and if you actually want to read the mind of the consumer, no research can read and that’s why it is not so easy that any company come in and they say we’ll be able to understand consumer because consumer say something, think something but do something and that only you can read that if you have digital processes in-place through which you are able to track the customer on his journey and in this case, we are talking about the paint.

So, if you see in the next slide there’s lot of digital initiatives, so virtually that whether it is our sales force, whether it is our painters with their demand-generation, the dealers, the territory marketing officers, everything we are trying to digitalize so that you are able to and through the digitalization process now we have started tracking that how much sale we are able to convert to the secondary, so what material we are selling to the dealer now it has already reached to 34%, 35% to 40%, so the moment we are able to cross 50% 60% then we know that whatever we are selling, we are able to convert to secondary sales therefore how your primary sale can go up.

So we are working in this area continuously. How do we take care of the consumer experience and there are lot of nudges which we are going to bring in as a differentiation, as a part of this digital strategy. This is related to our safety we go through the global safety, quality and we our scores are on the high range. These are some of the awards which we have won, one of the award we got is Dream Companies to Work For and then there are quality awards and digital in the manufacturing.

ESG, as I said, it is linked to our purpose also and we are part of Kansai Paints Japan they’re also very conscious about it so we are working in the area emission, energy, climate, water in the water we are already neutral now heading towards the water positive. We are the company who has committed for science-based target for the emission and in energy management we are the science based target and the climate change TCFD is something which we are adopting. There are very less number of companies in India, who are doing this, but we are doing this and we got some of the from S&P, FTSE and CRISIL where we have been rated, in our industry, we have been rated at top-level, but even in the — if you compare with the other companies, we are in the higher quartile.

This is CSR initiative, which is like the UN objective we they have sustainable development goals and we have a social purpose so we have chosen 7 out of that and our CSR money gets spent in terms of education, the water conservation so these are some of area we are spending our CSR. These are some picture — where is sound coming? Okay, so these are some of the pictures of CSR. Shifting to the financial performance so you must have seen the results, so this is our growth in this quarter. All the businesses have done well, all the businesses are double-digit growth. Our integrity also double-digit growth.

The volume growth is also double-digit and obviously, EBITDA — these numbers, you must-have seen this is on the consolidated basis, result. You must-have seen that. In the working capital also. We have reduced our inventories so their working capital which was around 30% of the revenue, it has come down to 26% now, so here also, we have made a good progress in this year.

Dividend to be declared 270%, last year it was 225%, but we are in the range of that one-third payout 30% to 32% is something which we have been following. And also this year because 2010 was the last year when we offered the bonus and we wanted — we thought centenary year but all COVID so this year we considered 1:2 bonus also obviously, this is subject to the shareholders’ approval, but this is another thing which you can and this is our capex, you can see the numbers. In the subsidiaries Nepal is going through some tough time, but fortunately we have been doing good for so many years but currently, the time is not so good for this and Bangladesh, we got the positive EBITDA for the year, it was negative earlier and there our strategy is basically to chase the profitable growth and it has made progress.

Sri Lanka despite what has happened, Sri Lanka, we have grown at a rate of 83% Sri Lanka and increased our market-share some different strategies are at work for us, the Sri Lanka is becoming good and Nerofix we have acquired 40% of the equity and it has become a wholly-owned subsidiary of Nerolac now. So, coming back to the Nerolac story so we are obviously, when you say decorative industrial business and I discussed with lot of you, but what we believe and that’s the reason what I was talking about that we are beauty and production.

So we are reorienting our thinking, it is no more decorative or industrial. What we say is that we are providing beauty and production and we have surfaces are home interior, exteriors, mobility appliances, infrastructure so tomorrow there could be new surfaces, but for all those offices whether we have some kind of solution available. So today, if you look at it’s a common topic we discussed about the competition, in one of these offices, the competition is emerging, but the diversification of what we have and that is something which is our strength that there are different surfaces and how we are looking it in some of the areas where we looked at our challenges.

Somewhere it was profit, somewhere it was sale, we are trying to come up with that. So this is I think the strength what we have, that we are very diversified company and there are areas that because some of the business — some of the surfaces based on our technology strength and the surface strength. I think they give us a very stable revenue stream, which is predictable. So if there is a risk in terms of the competition on one side you have your strategy in terms of seeing that because in this time of competition we are just trying to enhance our ability to respond to the competition because that’s the best what a company can do and that is what I was trying to showcase to you that what we are doing, but I think the stable revenue stream, which is predictable and there what segments we have chosen and what we are working upon is the strength what we bring to you.

These are the micro step in summation, what we have done in last one year. These are small, small steps we have taken, because we are looking for the sustainable growth and we feel that we have enhanced our capability and ability and therefore, we are better prepared for the future and tomorrow. Thank you so much.

So, now we invite the questions that you would have. Can you ask someone to combine this.

Questions and Answers:

Mihir Shah — Nomura — Analyst

Hi sir, this is from Mihir from Nomura. Thank you for taking my question. Sir, firstly on congrats on the Paint+ range of products. If I can just ask the Paint+ range you’ve kind of filled the portfolio gaps the white spaces that are present. So has all the white spaces in your mind that you want it to be present in thrilled with the Paint+ range, so that’s point one. And a few sub-questions, if you can share what is the saliency of Paint+ products in our entire sales so that’s question number-one, sir.

Anuj Jain — Managing Director

Yeah, so actually. We decided the list of the product which we wanted to introduce in 2023, 100% we executed…

Archana Menon — Morgan Stanley — Analyst

Hi sir, this is Archana from Morgan Stanley. Two questions. Firstly, just continuing from the point on the capacity addition site, what are the plans that you have for the medium-term to expand capacity to benefit from the growing demand? And secondly, just to get a broad sense of your revenue split right now earlier, you all used to mention a split of around 55% deco, 45% industrial. How does that look like right now. Also one request sir, it would be helpful to us if you could start disclosing segmental performance also in terms of numbers.

Anuj Jain — Managing Director

Capacity. As I mentioned in the presentation 606 million liters is the capacity what we have, we already announced the capacity expansion partly the water based capacity expansions about INR300 crores in the spend which we have announced over a period of 18, 20 months which has started last year so that’s the capacity expansion we are doing. Split, yes, generally only we maintained 55:45 obviously, sometime it goes 2% higher sometime 2% lower. It keeps ranging from 53 to 57, obviously, in the last year the industrial contribution was more — decorative contribution has come down.

So it’s not — to be very frank with you we generally don’t give exact figure when we say 55:45, sometime it has gone up to 57 so it is in that range only. Segment-wise reporting we generally don’t give.

Archana Menon — Morgan Stanley — Analyst

Thank you.

Anuj Jain — Managing Director

Anyone else? So with that I think if there are no more questions, we will end this. So I think we have received some questions from people who were attending on the Zoom also. There is a question on ROCE in financial 2023 is around 13%. By when can we expect it to go back to historical rate of 20%? I think our ROCE is about 14 plus. So we have already made some progress 12.5% to 14% we have come to 20% I don’t know, but I think, in our mind, 17% 18% is the right figure and I think that’s the right, in our kind of mix for the industrial that is what we are looking at. By when will the land of — value of 660 will complete that is not 655 so that is in the process, so we hope to get it sooner. So this was one question.

So thank you all, thanks for your question and thanks for the participation. After this, we have arranged high tea. Kindly please enjoy and during this course, we can always discuss if you have any further questions.

Prashant Pai — Director, Finance

Thanks for coming. Thank you so much. Wish you all the very best.