Q1 2027 Pidilite Industries Ltd Earnings Call

Speaker #1: Ladies and gentlemen, good day and welcome to Pidilite Industries Limited Q1 FY27 earnings conference call hosted by Aquarius Securities. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Pranav Mehta from Aquarius Securities. Thank you, and over to you, sir.

Speaker #2: Yeah, thank you, Pralak. Good afternoon, everyone, and thank you for joining this call. From the management side, we have Mr. Sudhanshu, Managing Director; Ms. Kavitha Singh, Joint Managing Director; Mr. Sandeep Batra, Executive Director – Finance and CFO; and Mr. Pravesh Joshi, Senior VP – Domestic Accounts and Taxation.

Pranav Mehta: Yeah. Thank you, Palak. Good afternoon, everyone. Thank you for joining this call. From the management side, we have Sudhanshu, Managing Director, Kavinder Singh, Joint Managing Director, Sandeep Batra, Executive Director of Finance and CFO, and Bhavesh Joshi, Senior VP, Domestic Accounts and Taxation. I will now hand over the call to Sandeep for his opening remarks. Over to you, sir.

Speaker #2: I'll now hand over the call to Sandeep for a qualitative interview. Over to you, sir.

Speaker #3: Thank you. Thank you, Pranav, and good afternoon. And a warm welcome to everybody on the call. I'll just keep my opening comments brief. And the board added meeting yesterday approved the results for the first quarter of the current fiscal and, of course, after that, we had our AGM at which the proposed dividend of 11 rupees 50 paise was approved by the shareholders.

Sandeep Batra: Thank you, Pranav, and good afternoon and a warm welcome to everybody on the call. I just keep my opening comments brief. The board at its meeting yesterday approved the results for the first quarter of the current fiscal. And of course, after that, we had our AGM, at which the proposed dividend of INR 11.50 was approved by the shareholders. Coming to the performance for the quarter, standalone revenues grew by 22.2% with an underlying volume growth of 11.3%. In absolute terms, the revenue was INR 4,237 crores. As we had mentioned in the full year earnings call, we had taken price increases, and which were taken across all categories, to offset the increase in input costs. If you look at the underlying volume growth for the quarter, consumer and bazaar businesses underlying volume growth was 12.2% and for B2B was 7.3%.

Speaker #3: Coming to the performance for the quarter, standalone revenues grew by 22.2%, with an underlying volume growth of 11.3%. In absolute terms, the revenue was ₹4,237 crore.

Speaker #3: As we had mentioned in the full-year earnings call, we had taken price increases, which were taken across all categories to offset the increase in input costs.

Speaker #3: If you look at the underlying volume growth for the quarter, Consumer and Bazaar businesses' underlying volume growth was 12.2%, and for B2B, it was 7.3%.

Speaker #3: The reason why the B2B underlying volume growth was lower was largely because of lower exports. B2B exports UVG for the quarter was minus 8.4%, and overall exports for the company also degrew in the first quarter, largely because of geopolitical issues in some of our key markets.

Sandeep Batra: The reason why the B2B underlying volume growth was lower was largely because of lower exports. B2B exports UVG for the quarter was -8.4%, and overall exports for the company also de-grew in the first quarter, largely because of geopolitical issues in some of our key markets. Gross margins at 52.5% were lower than last year, same period by 90 basis points. VAM consumption in the quarter was at $1,370 as compared to last year, $924, and the fourth quarter was in the $800 range. However, total costs below gross margin increased slower than the revenue growth. The total cost increase was 14.5%. A large chunk of that was advertising and sales promotion, and this operating leverage flowed into the EBITDA. EBITDA margins at 26.4% improved by 80 basis points quarter-on-quarter. Profit after tax grew by 27.7%. This was the standalone performance.

Speaker #3: Gross margins at 52.5% were lower than the same period last year by 90 basis points. WAM consumption in the quarter was at $1,370, as compared to last year's $924, and the fourth quarter was in the $800 range.

Speaker #3: However, total costs below gross margin increased slower than the revenue growth. The total cost increase was 14.5%. A large chunk of that was advertising and sales promotion.

Speaker #3: And this operating leverage flowed into the EBITDA. EBITDA margins at 26.4% improved by 80 basis points, quarter-on-quarter. Profit after tax grew by 27.7%.

Speaker #3: This was the standalone performance. If I look at the performance of the subsidiaries, both the domestic as well as the overseas subsidiaries reported double-digit revenue growth.

Sandeep Batra: If I look at the performance of the subsidiaries, both the domestic as well as the overseas subsidiaries reported double-digit revenue growth. Domestic subsidiaries grew by 11.5% and international subsidiaries grew by 12%. Again, the growth there was led by consumer and bazaar businesses in the domestic subsidiaries, which grew by 17%. The B2B part of the domestic subsidiaries had a modest growth of 3.5%. International subsidiaries, again, growth was reasonably broad-based with Bangladesh, Egypt, and Kenya subsidiaries recording much better than their past growth records. Consolidated revenues at INR 4,541 crore were up by 21.3%. EBITDA margin improved by 120 basis points over the same period last year, and profit after tax grew by 30.3%. That's all from an opening remarks point of view. Happy to open the floor for questions.

Speaker #3: Domestic subsidiaries grew by 11.5%, and international subsidiaries grew by 12%. Again, the growth there was led by consumer and bazaar businesses in the domestic subsidiaries.

Speaker #3: Which grew by 17%. And the B2B part of the domestic subsidiaries had a modest growth of 3.5%. International subsidiaries, again, growth was reasonably broad-based, with Bangladesh, Egypt, and Kenya subsidiaries recording much better than their past growth records.

Speaker #3: Consolidated revenues, at ₹4,541 crore, were up by 21.3%. EBITDA margin improved by 120 basis points over the same period last year, and profit after tax grew by 30.3%.

Speaker #3: So that's all from an opening remarks point of view. Happy to open the floor for questions.

Speaker #1: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touch-tone telephone.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchtone 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'll wait for a moment while the question queue assembles. The first question is on the line of Abneesh Roy from Nuvama. Please proceed with your question.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Avnish Roy from Nuvama.

Speaker #1: Please proceed with your question.

Speaker #4: Yes. Congratulations on a great set of numbers. First question is on the exports. When the geopolitical issues get resolved, would you expect bunched-up demand or pent-up demand, or was some part of this demand met by other suppliers?

Abneesh Roy: Yes. Congrats on great numbers. First question is on the exports. When the geopolitical issues get resolved, do we expect a bunch of demand or pent-up demand, or some part of this demand was made by other suppliers? If you could clarify on that.

Speaker #4: If you could clarify that.

Speaker #5: Yeah. So I think, Avnish, thank you first of all, and always good to, you know, hear from you. And I think, you know, it's so good that you've been—you’re always our opening, the opening battlements, I think.

Sudhanshu Vats: Yeah. I think, Abneesh, thank you, first of all, and always good to hear from you, and it's so good that you're always the opening batsman, I think. Thank you. Thank you once again for the results. We've delivered strong set of results, so thank you very much. I think on exports, as the situation normalizes, lot of our export business will come back. It will come back. Now, because most of our contracts are there. Now, it is also possible that in this interim period, some of the people may have made some alternate arrangements, and I don't want to get into specifics of it. Suffice to say, to answer your question, that as the geopolitical situation stabilizes, our exports will come back.

Speaker #5: And thank you. Thank you once again for the results. We've delivered a strong set of results, so thank you very much. I think on exports, as the situation normalizes, a lot of our export business will come back.

Speaker #5: It will come back. Now, because most of our contracts are there now, it is also possible that, in this interim period, some of the people may have made some alternate arrangements.

Speaker #5: And I don't want to get into specifics of it. But suffice to say, to answer your question, that as the geopolitical situation stabilizes, our exports will come back.

Speaker #4: Sure. The largest paint company has put up the WAM VAE facility. And you do compete with that company in many segments. From a relative positioning perspective in terms of cost and, say, product pricing, does this change anything meaningfully for you?

Abneesh Roy: Sure. The largest paint company has put up the VAM facility, and you do compete with that company in many segments. From a relative positioning perspective in terms of cost and, say, pricing and product pricing, does this change anything meaningfully for you?

Speaker #5: So Avnish, our understanding is that I think it's best, of course, answered by the company that has put up the capacity. But our under first of all, fundamentally, there are two business models.

Sudhanshu Vats: Abneesh, our understanding is that I think it's best, of course, answered by the company that has put up the capacity. First of all, fundamentally, there are two business models. Both business models are good business models. You could have something captive and perhaps operate in the entire value chain. Or you could have, basically, you have your brand and your product, and you focus on your brand and product quality and servicing the customer. From the procurement point of view, you operate through basically what is in the market, and you basically ride the crests and troughs of the raw material. I think the point is, we are in the latter camp, I think as you are aware. I don't think it should change anything materially.

Speaker #5: And both business models are good business models. So, you know, you could have something captive and perhaps operate in the entire value chain, or you could basically have your brand and your product, and you focus on your brand and product quality and servicing the customer.

Speaker #5: And from the procurement point of view, you operate through basically what is in the market and you basically ride the present trends of the raw material.

Speaker #5: So I think the point is we are in the latter camp, I think, as you are aware. I don't think it should change anything materially.

Sudhanshu Vats: In our assessment, multiple times over on ours, when we've done it ourselves, and also when we have looked at and talked to a few of the experts in this space who know this very well, and some of the large companies across the globe, I think the competitive advantage cake for India, from availability of base raw material, from the point of view of the scale needed to get that kind of cost leverage and advantage, doesn't seem to come through in all our conversations. I just wanted to share that. Having said that, I think they've chosen to do this. My understanding is also it may or may not be directly for adhesive. It may be for other things as well. I think that's the piece which is, so therefore they have multiple businesses.

Speaker #5: And in our assessment, multiple times over—on ours, when we've done it ourselves, and also when we have looked at and talked to a few of the experts in this space who know this very well, and some of the large companies across the globe—I think the competitive advantage case for India, from availability of base raw material, from the point of view of the scale needed to get that kind of advantage, that kind of cost leverage and advantage, doesn't seem to come through in all our conversations.

Speaker #5: I just wanted to share that. Having said that, I think we have chosen to do this. My understanding is also that it may or may not be directly for adhesive.

Speaker #5: It may be for, you know, other things as well. So I think that's the piece which is so therefore there are multiple businesses. So I think the point I'm making is that that's an independent decision.

Sudhanshu Vats: I think the point I'm making is that's an independent decision. It's a different business model. As far as our business model is concerned, our way of doing things is concerned, we've sort of revisited this. We've had detailed conversation with some of our large partners and vendor suppliers, and we are confident of running this as well as we've done in the past, and should not have any impact.

Speaker #5: It's a different business model. As far as our business model is concerned, our way of doing things is concerned, we've sort of revisited this.

Speaker #5: We've had detailed conversations with some of our large partners and vendor suppliers, and we are confident of running this well, as well as we've done in the past, and there should not be any impact.

Speaker #4: Sure. My next question is on the two innovations you have put in the presentation. So, what will be the expectation from this most technologically advanced adhesive?

Abneesh Roy: Sure. My next question is on the two innovations you have put in the presentation. What will be the expectation from this most technologically advanced adhesive? Is this too niche? It says anti-bending property. For what use case it is? Similarly for the professional end feel washable, are these very disruptive products or these are just some good niche products, or are these big potential long-term from a revenue perspective?

Speaker #4: Is this too niche? It says anti-bending property. So, for what use case is it? And similarly, for the professional M-seal washable—are these very disruptive products, or are these just some good niche products, or are these big potential long-term, from a revenue perspective?

Speaker #5: No, Avnish, that's a very good question, and I'm glad you asked it upfront. I think both these innovations, which we put up this time around, are fundamental innovations.

Sudhanshu Vats: No, Abneesh, that's a very good question. I'm glad you asked it upfront. I think both these innovations which we put up this time around are fundamental innovations. They are technologically advanced products in that space. Within our business, they are not fringe innovations. They're core innovations. Let me just give you a quick this thing and maybe take one example, but it's true for both. Let me take the example of Fevicol Expert. You see, when you do woodworking in your house, particularly when you do almirah doors, covered doors. Depending on the laminate you've used on one side and the laminate you've used on the inner side, or sometimes no laminate on the inner side, because that's the practice in India. The laminate used on the front side is of a different quality and different things.

Speaker #5: They are technologically advanced products in that space. And within our business, they are not fringe innovations; they are core innovations. Let me just give you a quick example and maybe take one instance.

Speaker #5: But it's true for both. But let me take the example of Fevicol Expert. So you see, when you do woodworking in your house, particularly when you do almira doors, you know, cupboard doors, depending on the laminate you've used on one side and the laminate you've used on the inner side—or sometimes no laminate on the inner side, because that's a practice in India.

Speaker #5: The laminate used on the front side is of a different quality and different, this thing. And the laminate used, which is on the reverse of the door, as you open the door, either there is no laminate or it's of a different quality.

Sudhanshu Vats: The laminate used which is on the reverse of the door as you open the door, either there is no laminate or it's of a different quality. Based on this, what one common complaint we used to hear was what is called bending of the door. I'm saying, therefore I want to take a minute to explain that how much core or central it is. I think this technology, one of the biggest advantages of the technology is also anti-bending. Therefore, once you are able to use this product, you are assured of the doors not bending, doors closing properly. That is a common problem faced, therefore you are addressing a relatively prevalent or relatively quite prevalent kind of a problem with the product. I think the other one is very similar.

Speaker #5: Based on this, what one common complaint we used to hear was what is called bending of the door. So I'm saying, you know, so and therefore that I just want to take a minute to explain that how much core or central it is.

Speaker #5: I think this technology—one of the biggest advantages of the technology—is also anti-bending. So, therefore, once you are able to use this product, you are assured of the doors not bending, doors closing properly—basically, not sort of... that is a common problem faced.

Speaker #5: And therefore, you are addressing a relatively prevalent, or relatively quite prevalent, kind of problem with the product. And I think the other one is very similar.

Speaker #5: It's basically multiple things. Its core is on, as we call this, the M-Seal Advanced. It's lower on VOC, it's very low on smell, and easy to wash off.

Sudhanshu Vats: It's basically multiple things which go on, as we call this the M-Seal Advance. It's lower on VOC, it's very low on smell, easy to wash off. You can use it on different types of plastic pipes and all that. Both are very fundamental innovations. I would call them core innovations, with strong potential.

Speaker #5: It's also a multi—you can use it on different types of, you know, plastic pipes and all that. So both are very fundamental innovations. I would call them core innovations with strong potential.

Speaker #4: Sure. Last question. So essentially, WAM went up sharply and has also come down very sharply. If you could tell us the current price, and since crude has also fallen.

Abneesh Roy: Sure. Last question. Essentially, VAM went up sharply, has come down also very sharply. If you could tell us current price, and the crude has also fallen. Is your double-digit price hike, which you have taken at the company level, is that now too much? Are you giving now more trade discounts and basically trade margins? How are the local players or the other players responding? Because it is a competitive market, and definitely your double-digit price hike is unprecedented. Then we have seen the RM fall also very sharply.

Speaker #4: So is your double digit price hike which you have taken at the company level is that now too much? So are you giving now more trade discounts and basically trade margins?

Speaker #4: And how are the local players or the other players responding? Because it's a competitive market, and definitely your double-digit price hike is unprecedented.

Speaker #4: And then we have seen the RM fall also very sharply.

Speaker #5: So maybe I'll ask Sandeep to also tell you exact numbers, but I can give you order of magnitude. But I tell you, Avnish, basically this is fluctuating quite a lot here.

Sudhanshu Vats: Maybe I'll ask Sandeep to also tell you exact numbers, but I can give you order of magnitude. I think, Abneesh, basically this is fluctuating quite a lot. Therefore, to tell something at this point in time, I'm saying, it did go up very sharply. You're absolutely right. From about $800, $900 to maybe all the way close to $2,000, then fell down quite a lot, then maybe going up a little. It's far more dynamic than maybe we've seen in the past. Maybe we've seen it once or twice, but even there, the yo-yoing is, I think, quite unique. As you know, VAM is a little bit decoupled from directly crude as well. I think there are multiple other factors which are sort of driving some of these things in.

Speaker #5: So therefore, to tell something at this point in time, I'm saying that it did go up very sharply. You are absolutely right; from about $800–$900 to maybe all the way close to $2,000.

Speaker #5: And then it fell down quite a lot, but then maybe went up a little. So the dynamic is a little bit more—it's far more dynamic than maybe we've seen in the past; maybe we've seen it once or twice.

Speaker #5: But even there, the yo-yoing is, I think, quite unique. And as you know, WAM is a little bit decoupled from crude as well.

Speaker #5: So, I think there are multiple other factors which are sort of driving some of these things. And so, what we've done—and to your point, what we do—is we take the feedback of the market.

Sudhanshu Vats: What we've done, to your point, what we do is we take the feedback of the market. Fortunately, as a company, we are very close to our customer, therefore we understand what is happening, what are their pain points, and so on and so forth. You are right in your conceptual thinking that depending on the movement of this, we could end up giving some rebate. It's possible that in a period, I'm saying, we would be giving a rebate, and that's absolutely correct. It's possible that in a period we would sort of withdraw that, and so on and so forth. If you remember correctly, while the quantum you are right, this time we were more proactive, more than the quantum. We were proactive, I think that really helped, and you can see that in the numbers as well.

Speaker #5: Fortunately, as a company, we are very close to our customer. You know, and therefore, we understand what is happening, what are their pain points, and so on and so forth.

Speaker #5: So, you are right in your conceptual thinking that, depending on the movement of this, we could end up giving some rebate. So, it's possible that in a period, I'm saying, we would be giving a rebate.

Speaker #5: And that's absolutely correct. And it's possible that in a period, we would sort of withdraw that and so on and so forth. So and if you remember correctly, while the quantum you are right is this time, we were more proactive more than the quantum.

Speaker #5: We were proactive, and I think that's really helped. You can see that in the numbers as well. But my point is that we were, and we spoke about it in the last call—in our full year and Q4 FY26 call.

Sudhanshu Vats: My point is that we were, we spoke about it in the last call, in our full year and Q4 FY26 call. We covered for the increase in raw material price. We did not cover fully for the margins. In a manner of speaking, we had taken some of the hit, we had basically passed on a lot of that hit, but we had absorbed a little bit of it as well. The point is that between the two, we are broadly okay. We will play with a little bit of rebate. As far as competition is concerned, we keep a close eye on competition anywhere in the country, we will continue to do that. In this particular example, especially in this example, Abneesh, in this category, competition tends to follow us almost to the T.

Speaker #5: We covered for the increase in raw material price. We did not cover fully for the margins. In a manner of speaking, we had taken some of the hit and we had sort of we had basically parked on a lot of that hit, but we had absorbed a little bit of it as well.

Speaker #5: So the point is that between the two, we are broadly okay. We will play with a little bit of rebate. And so far as competition is concerned.

Speaker #5: We keep a close eye on competition anywhere in the country. And we will continue to do that. And in this particular example, especially in this example, Avnish, and in this category, competition tends to follow us almost to the tee.

Speaker #5: So I saw when we have taken up the prices, almost everyone has taken up the prices. When we are taking a rebate, almost everyone is taking a rebate.

Sudhanshu Vats: I saw when we've sort of taken up the prices, almost everyone has taken up the prices. When we are taking a rebate, almost everyone is taking a rebate. Sometimes you could actually, if you mark the letter, the letterhead of the letter, you will see they are almost identical. To that extent, I think that I just anecdotally to tell you. Having said all of this, we keep a very close watch. More importantly, at Pidilite, we have always believed in a win-win philosophy, where we will make sure that the value to our customers is right, and we are doing what is right in their interest as much as it is in ours. I think as long as we follow that philosophy, I think we are in a good space, in my judgment.

Speaker #5: Sometimes you could actually, you know, if you mask the letter the letterhead of the letter, you will see they are almost identical. So to that extent, I think just anecdotally to tell you, I think but we keep it we are having said all of this, we keep a very, very close watch.

Speaker #5: And more importantly, at Pidilite, we have always believed in a win-win philosophy where we will make sure that the value to our customers is right and therefore and we are doing what is right in their interest as much as it is in ours.

Speaker #5: So, I think as long as we follow that philosophy, I think we are in a good space, in my judgment.

Speaker #4: One follow-up here, and I'll end there. You want to change the lower end of the guidance because in most quarters, either you are at the top end or you are even beating the top end.

Abneesh Roy: One follow-up here. I'll end there. You want to change the lower end of the guidance because in most quarters, either you are at the top end or you are even beating the top end. Structurally, is there any change to the margin profile? The 20% lower end of the margin may not have any relevance now because 4, 5 quarters have happened.

Speaker #4: Structurally, is there any change to the margin profile? And so the 20% lower end of the margin may not have any relevance now because four or five quarters have passed.

Speaker #5: Avnish, you know, while if you look at our last few quarters' performance, what you say is valid. But if you look at a slightly longer period, particularly the time when we saw a very steep increase in input costs, our margins had indeed fallen into the high teens.

Sudhanshu Vats: Abneesh, while if you look at our last few quarters' performance, what you say is valid. If you look at a slightly longer period, particularly the time when we saw very steep increase in input costs, our margins had indeed fallen into the high teens. Of course, they recovered. The world that we are living in with all these risks and uncertainties, we would still prefer to keep a corridor which gives us enough operating flexibility. No need to change it at this stage.

Speaker #5: And of course, they recovered. And, you know, the world that we are living in, with all these risks and uncertainties, we would still prefer to keep a corridor which gives us enough operating flexibility.

Speaker #5: So no need to change it at this stage.

Speaker #4: Sure. Thank you. That's all from my side. Thank you.

Abneesh Roy: Sure. Thank you. That's all from my side. Thank you.

Speaker #1: Thank you, sir. The next question is from the line of Jaykumar Doshi from Kotak Securities. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Jay Doshi from Kotak Securities. Please proceed with your question.

Speaker #4: Hi, team. Congratulations on good set of results and thanks for the opportunity. I've got two questions. So first one is, standalone consumer bazaar UVG was around 15% last quarter.

Jay Doshi: Hi, team. Congratulations on good set of results, and thanks for the opportunity. I've got two questions. First one is, standalone consumer bazaar UVG was around 15% last quarter. I think this calendar year started off on a very strong note. Last earnings call until then, you were fairly confident that the momentum at that point of time had indicated that the momentum had continued into April and May as well. Slight moderation to about 11% or 12% from 15%. I'm just referring to C&B right now. Did you see any moderation in June, anything to call out here? The second is, should this be considered as a more as a normal UVG band for rest of the year? Or are you expecting some acceleration going ahead?

Speaker #4: I think this calendar year started off on a very strong note. And last earnings call, until then, you were fairly confident that the momentum at that point of time—you had indicated that the momentum had continued into April and May as well.

Speaker #4: So the slight moderation to about 11 odd percent or 12% from 15%. I'm just referring to CNB right now. Has did it did you see any moderation in June that, you know, anything to call out here or, you know, and second is, should this be considered as a more as a normal UVG band for rest of the year or are you expecting some acceleration going ahead?

Speaker #5: So Jay, I think I don't know whether both the questions. So thank you first of all, Jay, and thank you for the compliments as well to all of Pidilite and to the team.

Sudhanshu Vats: Jay, I think, I don't know whether both the questions. Thank you first of all, Jay, and thank you for the compliments as well to all of Pidilite and to the team, I think, from your side. I think the way I interpret this data, let me also share the data with you, and I think we talk about this. I think if you look at our C&B business, and I'm trying to give you now, three-year CAGR, two-year CAGR, last year and this quarter. If you look at, from my point of view, our three-year CAGR is let's say, nine something.

Speaker #5: I think, you know, from your side—I think the way I interpret this data—let me also share the data with you. And I think we should talk about this.

Speaker #5: So I think if you look at our CNB business, and I’m trying to give you now, you know, three-year CAGR, two-year CAGR, last year, and this quarter.

Speaker #5: So, if you look at it from my point of view, our three-year CAGR is, let's say, nine-something. Our two-year CAGR is about ten-something.

Jay Doshi: Yeah.

Sudhanshu Vats: Our two-year CAGR is about 10 something. Our last year or 10 point something higher than our last year, full year, actually in C&B again, is around 11 something. Against that, we are now in Q1 at 12 and a half. Therefore just the Q4, I think is one data point. If you remember, even in our last call, we had said that treat our last year's UVG as 11.1 or what the number if I remember right, 11.1 for the year. I think that's a step up on our previous year, which was nine point something. Therefore, it is a step up. We recognize that. We would like to continue that step-up. I think in that context, we see this as a normal trend. There's nothing no month or any such thing.

Speaker #5: Our last year was 10 point something higher. Then, our last year full year, actually in CNB again, is around 11 point something. And against that, we are now in quarter one at 12 and a half.

Speaker #5: So therefore, just the quarter four, I think is one data point. And if you remember, even in our last call, we had said that treat it treat our last year's UVG as 11.1 of what the number, if I remember right, 11.1 for the year.

Speaker #5: And I think that's a step up on our previous year, which was nine point something. So, therefore, it is a step up. We recognize that.

Speaker #5: We would like to continue that step up. So, I think in that context, we see this as a normal trend. There's nothing—no month or any such thing.

Sudhanshu Vats: I think we should be looking at similar listing, especially in this year, Jay, because you should see that this UVG underlying volume growth is coming on the price which is there. I think to be able to deliver this UVG with this price, broadly this price, where as we see as the year progresses, nobody can say anything at the moment here. The point I'm making is that in this context, assuming this is the context and there's some price which is there through the year, I think this is a good number. This is the quantitative aspect of it, Jay. I think from the point of view of market, and you know all of us keep traveling all the time, Kavinder, myself, we are all in the market, most of, and even more so now.

Speaker #5: And you are absolutely right, and I think we should be looking at something similar, especially in this year, Jay, because you should see that this UVG—underlying volume growth—is coming on the price which is there.

Speaker #5: So I think to be able to deliver this UVG at this price, broadly this price there, and as we see as the year progresses, nobody can say anything at the moment here.

Speaker #5: But the point I'm making is that, in this context—assuming this is the context and there's some price which is there throughout the year—I think this is a good number.

Speaker #5: This is a quantitative aspect of it, Jay. I think from the point of view of the market, and you know, all of us keep traveling all the time. Myself, we are all in the market most of the time, and even more so now.

Speaker #5: I can tell you very, very categorically that the demand is holding quite well. So I think there is no—we are not seeing any kind of concern on demand at the moment at all.

Sudhanshu Vats: I can tell you very categorically that the demand is holding quite well. I think we are not seeing any kind of concern on demand at the moment at all.

Speaker #5: So I think demand is holding well, and in our judgment, the trend is positive. I'm in the right direction.

Jay Doshi: Got it.

Sudhanshu Vats: Demand is holding well, and then in our judgment, the trend is positive and in the right direction.

Speaker #4: Thank you. One more question. One of the South India-based regional cement companies, as you know, is planning to foray into tile adhesives with very ambitious targets.

Jay Doshi: Thank you. One more question. One of the South India-based regional cement companies is planning to foray into tile adhesives with very ambitious targets. What are your thoughts? Are you seeing any sort of change in the competitive intensity on the ground and any thoughts here?

Speaker #4: You know, so what are your thoughts? Are you seeing any sort of change in the competitive intensity on the ground and any thoughts here?

Speaker #5: Yeah, so let me quickly give you one headline thought, but I'll pass it on to Kavendra to talk about this in quite some detail for you.

Sudhanshu Vats: Yeah. Let me quickly give you one headline thought, but I'll pass it on to Kavinder to talk about this in quite some detail to you. I think first of all, I think as this segment is growing, there will be competition. I think competition could come from cement manufacturers, they could sometimes come from tile manufacturers themselves thinking, "We do tile, we should also do adhesive." Of course, there has been an existing competition from some of the larger players. I think the competitive intensity could vary and could change, but I think we are quite well equipped with all that. I think that's a headline thought. Let me just ask Kavinder to give you a little bit more context and color.

Speaker #5: I think first of all, I think as this business as this segment is growing, there will be competition. And I think competition could come from cement manufacturers.

Speaker #5: They could sometimes come from tile manufacturers themselves, thinking, "We do tile; we should also do adhesive." And, of course, there has been existing competition from some of the larger players.

Speaker #5: So I think the competitive intensity could vary and could change. But I think we are quite well equipped with our brand. But I think that's a headline thought that we just shared.

Speaker #5: Let me just ask.

Speaker #6: Kavendra to give

Speaker #5: you a little bit more context and color.

Speaker #4: Thank you so much, too. I'll just sort of build a little more from where Sudhanshu left off.

Kavinder Singh: Thank you, Sudhanshu. I'll just sort of build a little more from where Sudhanshu left off. See, this category is facing intense competition. The South Indian manufacturer that you talked about, we are aware of that. On the ground, if I were to say, we are maintaining our momentum. In fact, we are accelerating, number one. Number two, we are also very mindful of the emerging competition. Our biggest strength today, which is sort of known also, and I would reiterate, is our wide plant network, which we are expanding. Number two, consistent quality. We are investing in our plants, in a manner that the quality consistency improves. These products are susceptible to product inconsistency. Therefore, if you have not got the right technology, the right level of, let's say, automation, you could get into the consistency problems.

Speaker #5: See, this category is facing intense competition. And the South Indian manufacturer that you talked about, we are aware of that. So, on the ground, if I were to say, we are maintaining our momentum.

Speaker #5: In fact, we are accelerating, number one. Number two, we are also very mindful of the emerging competition. Our biggest strength today, which is, you know, sort of known also—and I would reiterate—is our wide plant network, which we are expanding.

Speaker #5: Number two, consistent quality. We are investing in our plants in a manner that the quality consistency improves. These products are susceptible to product inconsistency.

Speaker #5: And therefore, if you have not got the right technology, the right level of, let's say, automation, you could get into the consistency problems. Third, extreme focus on cost management both on the input side as well as, let's say, we use the concept called total delivered cost.

Kavinder Singh: Third, extreme focus on cost management, both on the input side as well as, let's say we use a concept called total delivered cost. When I look at these metrics of cost, quality, and timely availability through the plant network that we have built, we are building our own moat. Of course, Roff as a brand has seen significant investments on the ATL as well. Our team on the ground is constantly working both on the distribution side, which is the sales part, and the business development team is continuously working with the contractors who are in this business. Our moat is always to work very closely on the ground with the tile dealers who comprise majority of the sales now of this particular category. Of course, there are other dealers also. Also the contractors.

Speaker #5: So, when I look at these metrics of cost, quality, and timely availability through the plant network that we have built, we are building our own moat.

Speaker #5: And of course, ROF as a brand has seen significant investments on the ATL as well. Our team on the ground is constantly working both on the distribution side, which is the sales part, and the business development team is continuously working with the contractors who are in this business.

Speaker #5: So our moat is always to work very closely on the ground with the tile dealers, who comprise the majority of the sales now of this particular category.

Speaker #5: Of course, there are other dealers also, and also the contractors. So, we will continue to focus on our playbook while being mindful of the new competition that is emerging.

Kavinder Singh: We will continue to focus on our playbook while being mindful of the new competition that is emerging.

Speaker #5: And our team is quite motivated to deal with this challenge of seeing increased competition. Our focus remains on our playbook and continuously adjusting depending on what we see in the market.

Sudhanshu Vats: Our team is quite motivated to deal with this challenge of seeing increased competition. Our focus remains on our playbook and continuously adjusting depending on what we see in the market. By the way, since we are on the call, I will also highlight that one of the products that we have launched about two quarters ago, and we have mentioned this already, our new Pro, is seeing increased momentum, and we are now going beyond one plant to four plants to ensure that this is available in wider geographies. This is a product that we have launched through our joint venture with our Spanish partners. This is something that we can also share the good news that the premium end of the market, we effectively occupy extremely well, and that's another area that we are focused on in terms of premiumizing our range as well.

Speaker #5: By the way, since we are on the call, I will also highlight that one of the products that we have launched in about two quarters ago and we have mentioned this already, called New Pro, is seeing increased momentum and we are now going beyond one plant to four plants to ensure that this is available in wider geographies.

Speaker #5: This is a product that we have launched through our, you know, joint venture with our Spanish partners. And this is something that we can also share the good news that the premium end of the market, we effectively occupy extremely well.

Speaker #5: And that's another area that we are focused on in terms of premiumizing our range as well. So I hope, to some extent, this answers your question.

Sudhanshu Vats: I hope to some extent this answers your question.

Speaker #4: Thank you very much.

Jay Doshi: Thank you very much.

Speaker #5: Thank you, Jay.

Sudhanshu Vats: Thank you, Jay.

Speaker #2: Thank you, sir. The next question is from the line of Arnav Mitra from Coleman Tech. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Arnab Mitra from Goldman Sachs. Please proceed with your question.

Speaker #4: Yeah. Hi, I'm again congratulating you on a great quarter. My first question is on demand. We've seen price increases from Pidilite as well as all other building material companies.

Arnab Mitra: Hi, again, congratulations on a great quarter. My first question was on demand. We've seen price increases from Pidilite as well as all other building material companies. Have you seen at all the price hikes have fully happened by June, any impact of price elasticity on demand on any of your categories? A related question is, in this quarter, there was some news flow around shortage of construction material like tiles and things like that. Did it have any impact on the growth during this quarter?

Speaker #4: Have you seen at all if the price hikes have fully happened by June? Any impact of price elasticity on demand on any of your categories?

Speaker #4: And a related question is, in this quarter, there was some news flow around a shortage of construction materials like tiles and things like that.

Speaker #4: Did it have any impact on the growth during this quarter?

Speaker #5: Yeah. Arnav, thank you for the, you know, thank you for your compliments. And I think Pidilite and the team fully deserve it. I think so I'll pass it on to everyone.

Sudhanshu Vats: Yeah, Arnab, thank you for your compliments, and I think Pidilite and the team fully deserve it, I think. I'll pass on to everyone. Thank you so much. Let me take the second question first. I think tiles per se as a sector had reasonably high market inventory, if I could call it. Particularly premium tiles, where most tile adhesive gets used. Therefore, the impact on the industry, which we saw at the beginning of the last quarter from the point of view of availability of gas and others, did not immediately impact the market. Definitely not the higher-end market. There could be sporadic cases here and there, but not meaningfully in any which way. That's the first part. I think on the second part of your question, just remind me the question again, Arnab, the first part we discussed of the question.

Speaker #5: Thank you so much. I think on the let me tell the second question first. I think I see tile tiles per se as a sector has reasonably high market inventory, if I could call it, particularly premium tiles.

Speaker #5: Most tile adhesive is used in this segment. Therefore, the impact on the industry, which we saw at the beginning of the last quarter from the point of view of availability of gas and other factors, did not immediately impact the market.

Speaker #5: Definitely not the higher-end market. There could be sporadic cases here and there, but not meaningfully in any way. So that's the first part.

Speaker #5: I think on the on the second part of your question, just remind me the question again, Arnav, the first the first part which you said on the question.

Arnab Mitra: Just the general price elasticity of demand during-

Speaker #4: Is this the general price elasticity of demand?

Speaker #5: Yeah, yeah, yeah. Great. So I'll tell you two, three things, you know, and I've been discussing this internally quite a lot. I think first is I want to give a little bit of context to everyone here.

Sudhanshu Vats: Yes. Agreed. I tell you two, three things, and we discuss this internally quite a lot. First is what to give you a little bit of context to everyone here. Unlike fast-moving consumer goods, where there is a direct comparison of a product price from month to month, because by definition, they are used at that kind of frequency. The impact by the consumer is felt immediately. In our kind of categories, largely Bazaar particularly, people plan their project and say that they have an outlay for the project, and then they work within that outlay. Let's say you plan your project, and then you have budget for your project. While the prices have gone up, and if the project is already on, then people normally don't stop it.

Speaker #5: I think, see, unlike fast-moving consumer goods, where there is a direct comparison of a product price from month to month—because, by definition, they are used at that kind of frequency—the impact on the consumer is felt immediately.

Speaker #5: In our kind of categories, largely bazaar particularly, people plan their project and say that they have an outlay for the project and then they work within that outlay.

Speaker #5: So they have a let's say you plan your project and then you have a budget for your project. So I think while the prices have gone up, we've seen and if the project is already on, then people normally don't stop it.

Speaker #5: So that continues. And if you start anew, then you can sort of, you know, sometimes think through it or recalibrate it. So to answer your question, I don't see—we have not seen any impact on demand at the moment.

Sudhanshu Vats: That continues, and if you have to start anew, then you can sort of sometimes think through it or recalibrate it. To answer your question, we've not seen any impact on demand at the moment. Most of the pricing has gone in into the market by June. That was the question you had. Most of the pricing has gone in in June. We've not seen any substantial impact, therefore our hypothesis that people plan a project outlay in a very different way. They interact with our product from a pricing point of view at a frequency of once in two years, once in three years, sometimes once in five years, depending on what you are doing, kind of project you are doing and all that.

Speaker #5: And also, most of the pricing, I think, has gone into the market by June. I think that was a question you had. So, most of the pricing has gone in by June.

Speaker #5: We've not seen any any substantial impact. And therefore, our hypothesis that people plan a project outlay in a very different ways, they interact with our products from a pricing point of view at a frequency of once in two years, once in three years, sometimes once in five years, depending on what you are doing kind of project you are doing and all that.

Speaker #5: So, it's a little so for us, and if you were to look at the weighted average increase on some of our categories and brands, I think that's not substantial because, you know, price had gone up, then it came down a little bit.

Sudhanshu Vats: If you were to look at weighted average increase on some of our categories and brands, that's not substantial because price had gone up, then it came down a little bit. Therefore from that point of view, I don't think we've seen anything on that count, and that is good news for us and maybe on similar industries in my judgment.

Speaker #5: So I think so, therefore, from that point of view, I don't think we've seen anything on that count, and that is good news for us and maybe for similar industries in my judgment.

Speaker #4: Got it. That's very helpful. My second and last question is actually on margins. So, given the very strong margin performance this quarter, I just wanted to understand if you had some benefit of low-cost inventory in this quarter or consumption averages, and therefore, should we expect gross margins to move down from here as the full impact of inflation hits? Or would you say that, given they're broadly spot prices, you had very similar costs in the last quarter as well?

Arnab Mitra: Got it. That's very helpful. My second and last question is actually on margins. Given the very strong margin performance this quarter, just wanted to understand if you had some benefit of low-cost inventory in this quarter of consumption averages. Therefore, should we expect gross margins to move down from here as the full impact of the inflation hits? Would you say that given where broadly spot prices are, you had very similar costs in the last quarter as well? Just wanted to understand, were there any one-off benefits which kind of goes away, and therefore margins trend back to that historical range?

Speaker #4: So, just wanted to understand, were there any one-off benefits which kind of go away, and therefore margins trend back to that historical range?

Speaker #5: Yeah. No, so therefore in this quarter, I think your observation is correct. See, three things happened in the quarter. Basically, this time around at Pidilite, we were very proactive in taking pricing.

Sudhanshu Vats: Yeah. Therefore, in this quarter, I think your observation is correct. I see three things happened in the quarter. Basically, this time around at Pidilite, we were very proactive in taking our pricing. Pricing based on replacement margins, which is depending on what the price of that commodity or raw material was at that point in time, we were pricing it based on that. That's replacement margin. Therefore pricing was proactive. Pricing went into most of the quarter, at least part of the quarter as the pricing was planned in phased manner. Basically there was in certain categories, not varied from raw material to raw material, product to product and all that, but there was some amount of carryover inventory as well. That's the correct observation. I think that's what consumed in the last quarter. That's absolutely correct.

Speaker #5: Pricing was based on replacement margins, which depended on what the price of that commodity or raw material was at that point in time. We were pricing it based on that.

Speaker #5: So that's replacement margin. Therefore, pricing was proactive. Pricing went in for most of the quarter, or at least part of the quarter, as the pricing was planned in a phased manner.

Speaker #5: Then basically, in certain categories—not, it varies from raw material to raw material, product to product, and all that—but there was some amount of carryover inventory as well.

Speaker #5: So that's the correct observation, and I think that got consumed in the last quarter. That's absolutely correct. And lastly, because of prices going up last quarter, almost, you know, and maybe in two or three stages—not only for us, but across the board as you had asked in your previous question—there was also some moderation in scheme.

Sudhanshu Vats: Lastly, because of prices going up last quarter, almost and maybe in two or three categories, not only ours, across the board, as you had only asked in your previous question. There was also some moderation in schemes. I think combination of all three gave us the advantage here. I think some of it will correct in Q2. My view is that you should first of all look at H1 when you look at Pidilite as H1. What gives us confidence at the end of Q1 is that with the proactive pricing that we have taken, and with the way we are managing our business, and with demand holding on, I'm saying all three conditions, I think we will see a year where we manage our margins quite well, is all I can say.

Speaker #5: So, I think the combination of all three gave us the advantage here, and I think some of it will correct in the second quarter. But my view is that you should, first of all, look at the first half when you look at Pidilite—as in, the first half. But what gives us confidence at the end of quarter one is that, with the proactive pricing that we have taken, and with the way we are managing our business, and with demand holding on—I'm saying all three conditions—I think we will see a year where we manage our margins quite well, is all I can tell you.

Speaker #5: And I think, of course, our range is known to you, which is 20 to 24. And therefore, from this high which you've seen in this quarter, could it moderate a little bit?

Sudhanshu Vats: I think, of course, our range is known to you, which is 20% to 24%, therefore, from this high, which you've seen in this quarter, could it moderate a little bit? It could moderate a little bit, and it will perhaps moderate a little bit. It will moderate a little bit. I'm saying that's the point. As we stay to the range which we talked about, therefore, that's something I can tell you.

Speaker #5: It could moderate a little bit, and it will perhaps moderate a little bit, but it'll moderate a little bit. I'm saying that's the point.

Speaker #5: But as we stay within the range which we talked about, and therefore, you know, that's something I can tell you.

Speaker #4: And also, Arnav, if I may add, I think the right way to look at our margin is not on a quarter-to-quarter basis.

Kavinder Singh: Also, Arnab, if I may add, I think the right way to look at our margin is not on a quarter-to-quarter basis, because a quarter will have many variables. Some will play out favorably, some may not play out favorably. The fact that I think Sudhanshu mentioned is that 100 is obviously the benefit that we got in Q1 of consuming lower priced inventory. That benefit will unravel in Q2 because we have bought inventory at, or materials at higher prices than what prevail today. Some of it will come as the inventory gets consumed in Q2. If you look at a normalized H1, I would not say there is any major concern on that.

Speaker #4: Because the quarter will have many variables. Some will play out favorably, some may not play out favorably. But the fact that I think Sudhanshu mentioned is that 100 is obviously the benefit that we got in the first quarter of consuming lower priced inventory.

Speaker #4: That benefit will unravel in the second quarter because we have bought inventory or materials at higher prices than what prevail today. So, some of it will come as the inventory gets consumed in the second quarter.

Speaker #4: But if you look at a normalized H1, I would not say there is any major concern on that.

Speaker #5: Yeah, absolutely.

Sudhanshu Vats: Yeah, absolutely.

Speaker #4: Got it. Very, very helpful. Thanks so much. All the best.

Arnab Mitra: Got it. Very helpful. Thanks so much. All the best.

Speaker #5: Yeah.

Speaker #1: Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants on the conference call, please limit your questions to two per participant.

Operator: Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your question to two per participant. The next question is from the line of Rahul Maheshwari from Ambit Investment Advisors Private Limited. Please proceed with your question.

Speaker #1: The next question is from the line of Rahul Maheshwari from Ambit Investment Advisors Private Limited. Please proceed with your question.

Speaker #4: Good evening to the entire team, and first of all, congratulations on excellent execution on a consistent basis. I have two questions. First, among the Core, Growth, and Pioneer categories, can you give some directional sense of how these categories have grown? Also, within these categories, are there a few segments that are moving up the curve?

Rahul Maheshwari: Good evening to the entire team. First of all, congratulations on excellent execution on a consistent basis. My two questions. First, among the core growth and pioneer categories, can you give directionally that how these three categories have grown? Also within the categories, any few categories which are moving up the curve will be very helpful. This is on first. Second, also on the distribution, how the distribution expansion is taking place and what is the trajectory? Thank you.

Speaker #4: I will be very helpful. This is on first and second, or also on the distribution—how the distribution expansion is taking place, and what is the trajectory?

Speaker #4: Thank you.

Speaker #5: Yeah. No, Raul, thanks for the compliment and good question. I think as far as our core businesses are concerned, we are basically seeing steady growth on core and, you know, we sort of talk about 1x to 2x GDP.

Sudhanshu Vats: Yeah. No, Rahul, thanks for the compliment and good question. I think as far as our core businesses are concerned, we are basically seeing steady growth on core. We sort of talk about 1X to 2X GDP. I think we are seeing that in our core businesses. I think what we are beginning to notice, I'm saying we talked about it in last quarter as well, this quarter again, Kavinder alluded to it in context of Roff. I think for our growth businesses, particularly Dr. Fixit, Roff, even our projects business, if you look at Pidilite Professional Solutions and others, some of our other growth businesses, we are seeing accelerated momentum. I'm saying, that's good news. We are in the range of that 2X to 4X, but we are seeing accelerated momentum in the underlying volume growth in some of our categories.

Speaker #5: So, I think we are seeing that in our core businesses. I think what we are beginning to notice—and I'm saying we talked about it in the last quarter as well, and this quarter again, and Kavitha alluded to it in the context of ROC—I think for our growth businesses, particularly Dr. Fixit, ROF, even our projects business, if you look at Pidilite Projects Group and others, some of our other growth businesses, we are seeing accelerated momentum.

Speaker #5: I'm saying so that's good news. We are in the range of that 2x to 4x, but we are seeing accelerated momentum in the underlying volume growth in some of our categories.

Speaker #5: And I think in the I we've spoken about it many times, Raul, but in the in the interest of once again explaining to people that when we talk of underlying volume growth, we are not talking of volume growth, total volume growth.

Sudhanshu Vats: I think we've spoken about it many times, Rahul, but in the interest of once again explaining to people that when we talk of underlying volume growth, we are not talking of volume growth, total volume growth. Our total volume growths tend to be much higher than the underlying volume growths. Most of the companies talk of volume growth, simple total volume growth. I think therefore our momentum is strong, I think that continues. Therefore, as far as core growth ratios are concerned, we've talked about it, we are in that relatively sweet spot of about nearly 50/50, but I think that's the way it will sort of maintain as we go forward, I think that's the beat which is good for us. I hope I've answered your question. Was there a follow-up question as well? I think you've covered both of them.

Speaker #5: Our total volume growth tends to be much higher than the underlying volume growth. Most companies talk of volume growth—simple, total volume growth.

Speaker #5: So, I think therefore our momentum is strong. And I think that continues. So, therefore, as far as core growth ratios are concerned, we've talked about it.

Speaker #5: We are in that relatively sweet spot of about nearly 50-50, but I think that's the way it will sort of maintain as we go forward.

Speaker #5: And I think that's the piece which is good for us. So I think that's the—I hope I've answered your question.

Speaker #5: Was there a follow-up question as well? I think you've covered both of them.

Rahul Maheshwari: Yeah. The follow-up question was that last time when we met, you told UnoFin, the render, is one of the most disruptive category, the product by your end. Can you just brief about UnoFin, how it's doing, are we up to the mark of INR 100 crore sales?

Speaker #4: Yeah, yeah. The follow-up question was that last time when we met, you told Unofin the render is one of the most disruptive categories, and the product by your end.

Speaker #4: Can you give some brief about Unofin, how it's doing, and are we up to the mark of ₹100 crore business?

Speaker #5: Yeah, so it's progressing well. Let me again ask Kavitha to talk to you a little bit about Unofin and add more color to it.

Sudhanshu Vats: Yeah. It's progressing well. Let me again ask Kavinder to talk to you a little bit about UnoFin and add more color to it.

Speaker #4: So yeah, Unofin

Kavinder Singh: Yeah. UnoFin, again, is a product which comes out of our joint venture with a Spanish company. The good news that I want to share with you is that we are beginning to see green shoots in the UnoFin side of the business. We have been working with almost for a year plus, actually even more, to get, let's say, specified as well as accepted amongst the architects who are looking for newer finishes for their projects. We are seeing acceptance in commercial projects, high-end residential projects. We are beginning to have some big names. Of course, I can't take the names of the architects who are now beginning to recommend UnoFin and because there is a possibility to have this product has this unique advantage of giving us approximately 15 years of waterproofing as well as no repainting cycle needed, plus sprayable technology.

Speaker #5: Again, it's a product which comes out of our joint venture with a Spanish company. So the good news that I want to share with you is that we are beginning to see green shoots in the Unofin side of the business.

Speaker #5: We are beginning to get—we have been working with them almost for a year plus, actually even more—to get, let's say, specified as well as accepted amongst the architects who are looking for newer finishes for their projects.

Speaker #5: We are seeing acceptance in commercial projects and high-end residential projects. So we are beginning to have some big names—of course, I can't take the names of the architects—who are now beginning to recommend Unofin. Because there is a possibility to have this product, it has this unique advantage of giving us approximately 15 years of waterproofing, as well as no repainting cycle needed. Plus, you know, sprayable technology. There are these nuances which are now beginning to get accepted in the market.

Kavinder Singh: There are these nuances which are now beginning to get accepted in the market. Still, I would say early days, but there is momentum that we are seeing. We have also reorganized our sales and go-to-market strategy, going through the architects through our Pidilite Professional Solutions. We have a projects group which is going out and selling it to the various segments. There is a lot of work that we have done at the back end, including training, and also reformulated the product also for cost efficiency. We believe that we are now on the right track and we will see some more momentum. Yes, coming back to your question on whether it's INR 100 crores in three years or not. I would not comment on the number. We are right now focused on building the base.

Speaker #5: Still, I would say it is early days, but there is momentum that we are seeing. We have also reorganized our sales and go-to-market strategy, going through the architects via our Pidilite Professional Solutions group, and we have a Projects group which is going out and selling to the various segments.

Speaker #5: So, there is a lot of work that we have done at the back end, including training, and we have also reformulated the product for cost efficiency.

Speaker #5: So we believe that we are now on the right track, and we will see some more momentum. Yes, coming back to your question on whether it's ₹100 crore in three years or not.

Speaker #5: I would not comment on the number. We are right now focused on building the base and, yes, sometime around next year, maybe we can see whether the green shoots that we are seeing are actually prospering and moving forward, and then we can look at numbers.

Kavinder Singh: Yes, sometime around next year, maybe we can see whether the green shoots that we are seeing are actually prospering and moving forward, and then we can look at numbers. Internally, we believe that this product and the proposition has reasonably good potential and a good proposition. We continue to be at it. Like in typical Pidilite style, we do not give up easily. We keep working closely with the relevant stakeholders, and that's exactly the playbook we are again deploying in the case of UnoFin. Thank you.

Speaker #5: Internally, we believe that this product and the proposition have reasonably good potential and a good proposition. So we continue to be at it. Like in typical Pidilite style, we do not give up easily.

Speaker #5: We keep working closely with the relevant stakeholders, and that's exactly the playbook we are again deploying in the case of Unofin. Thank you.

Rahul Maheshwari: Batra, just last one.

Speaker #4: That's very helpful. This last one—distribution expansion.

Operator: Sorry to interrupt, Rahul, sir. May we request that you attend to the next caller? Thank you, sir. The next question is from the line of Latika Chopra from JP Morgan. Please proceed with your question.

Speaker #3: Sorry to interrupt. Rahul Sir, may we request that you return to your question? Caller.

Speaker #4: Okay.

Speaker #3: Thank you, sir. The next question is from the line of Lathika Chopra from J.P. Morgan. Please proceed with your question.

Speaker #4: Thank you. Hi, team. Always good to see robust performance from you. My first question is just trying to understand better the cumulative price increases that you have taken for the Consumer and Bazaar segment.

Latika Chopra: Thank you. Hi, team. Always good to see robust performance from you. My first question was just trying to understand better the cumulative price increases that you have taken for Consumer and Bazaar segment. It seems in the quarter you had a weighted price increase of close to 10%. Is this number going to sustain in Q2 or you are going to see a lagged impact of some pricing interventions that you took through the quarter and hence the pricing component increases as we move into Q2, Q3?

Speaker #4: It seems in the quarter you had a weighted price increase of close to 10%. Is this number, you know, going to sustain in Q2, or are you going to see a lagged impact of some pricing interventions that you took during the quarter and hence the pricing component increases as we, you know, move into Q2, Q3?

Speaker #5: Yeah, Lathika, I think first of all, always great to hear from you—thank you. I think on pricing, Lathika, two, three things. I think one is that we've taken prices in Consumer and Bazaar, you know, and they vary by category and they vary by brand.

Kavinder Singh: Yeah. Latika, I think first of all, always great to hear from you. Thank you. I think on pricing, Latika, two, three things. I think one is that we've taken prices in Consumer and Bazaar, and they vary by category, and they vary by brand. The range is pretty wide. It could go from, let's say, a 2% to about a 12%, to be fair. Some of it has a component of the time-weighted component. Therefore, it all didn't go on 1 April, to just put it in perspective. To that extent, you're right that some of that additional impact should come in Q2 and therefore in Q3 as well.

Speaker #5: So I think they are, and you know, the range is pretty wide. It could go from, let's say, 2% to about 12%, to be fair.

Speaker #5: And some of it has a component of the, you know, time-weighted component. So, therefore, it all didn't go on April 1st.

Speaker #5: You just put it in perspective. So, to that extent, you're right that some of that additional impact should come in Q2, and therefore in Q3 as well.

Speaker #5: But as you would remember, I'm saying—if you've been on the call—there was another gentleman who asked this question on, you know, with the fluctuating raw material, there could be some rebates passed on, particularly in our Bazaar business, to play the more win-win and a more fair play.

Kavinder Singh: As you would remember, I think if you've been on the call, there was another gentleman who asked this question on, with the fluctuating raw material, there could be some rebates passed on, particularly in our Bazaar business to play the more win-win and a more fair play. It's quite dynamic, Latika. My sense is, it's not so straightforward that you put those prices in and then everything else is constant and therefore this quarter you should get the full time-weighted advantage of it. Yes, we will. Our time-weighted advantage we will get, but with the movement in VAM, if you remember one of the question which was asked, we are and we would be passing a little bit of rebate in that area. It is also possible with movement in some other raw materials because it's been really volatile, as you know, Latika.

Speaker #5: So, it's quite dynamic, Lathika. So my sense is, it's not so straightforward that you put those prices in and then everything else is constant, and therefore, this quarter you should get the full time-weighted advantage of it.

Speaker #5: So yes, we will. Time-weighted advantage we'll get, but with the movement in VAM—if you remember, one of the questions which was asked—we are and we would be passing a little bit of rebate in that area. It is also possible with movement in some other raw materials because it's been really volatile, as you know, Lathika.

Speaker #5: I'm saying crude at $100 back to crude at $80. From crude, I can at least tell you, and you know, it's fluctuating week on week.

Kavinder Singh: I'm seeing crude at INR 100 back to crude at INR 80. From crude, I can at least tell you. It's fluctuating week on week, it's so volatile and therefore, in what price you picked up, what is happening. Overall, also, commodity is quite volatile. This kind of volatility I think is very unprecedented in my opinion. And partly caused by ourselves, all of us. As in during the geopolitical situation. I think my view is that to answer your question, yes, there could be theoretically a time-weighted advantage of this, but it may get nullified with some of the rebates and other movements.

Speaker #5: So, it's so volatile and therefore, you know, in what price you picked up, what is happening. Overall, also, commodity is quite volatile. It's this kind of volatility I think is very unprecedented, in my opinion.

Speaker #5: I'm saying, you know, and and partly caused by ourselves all of us. I'm saying as in during the in the geopolitical situation. So I think my view is that it's so to answer your question, yes, there could be theoretically a time-weighted advantage of this but it may get nullified with some of the rebates and other movements.

Speaker #4: Understood. And the and the second, you know, question was, you know, you've already touched upon you know, some of the core businesses and how they're doing but just wanted to get from you any updated thoughts on progress on your forays into electronic investors in Spain.

Latika Chopra: Understood. The second question was, you've already touched upon some of the core businesses and how they're doing, but just wanted to get from you any updated thoughts on progress on your forays into electronics and paints. Anything incremental that you'd want to share? Thank you.

Speaker #4: Is there anything incremental that you'd want to share? Thank you.

Speaker #5: Yeah, yeah. So on electronics business and overall, I'm saying, therefore, as we look at electronics and as we look at additional sectors of electronics, we are beginning to make more progress.

Kavinder Singh: On electronics business and overall, as we look at electronics and as we look at additional sectors of electronics, we are beginning to make more progress. I can share with you, I think our emphasis initially was more consumer electronics. We are also looking at auto EV, and that is becoming more and more paced there. I think the full gamut of electronics as we understand, I think we are beginning to do a lot of work in that space. We are beginning to see some initial round of one or two places, even some commercial pitches coming up, but there is always a lag in specification. Making good progress on that, I can tell you very clearly.

Speaker #5: I can share with you, I think our exits initially were more in consumer electronics. We are also looking at auto, auto EV, and, you know, as that is becoming more and more a piece there. And I think, therefore, the full gamut of electronics, as we understand, I think we are beginning to do a lot of work in that space.

Speaker #5: We are beginning to see some initial rounds at one or two places, even some commercial pieces coming up, but there is always a lag in specifications.

Speaker #5: Making good progress on that. I can tell you very clearly, I think on paint—as I've always maintained—that in the places we are, I think we are seeing something. But we are still not confident of our full playbook, particularly the urban playbook, which we are refining as we go forward. And then you will see in future, as we go forward, a little bit more acceleration.

Kavinder Singh: I think on paints, I think as I've always maintained that in the places we are, I think we are seeing something, but

Sudhanshu Vats: We are still not confident of our full playbook, particularly the urban playbook, which we are refining as we go forward. You will see, in future, as we go forward, a little bit more acceleration. It's a little bit more calibrated at this moment, if I could say, without doubt.

Speaker #5: So it's a little bit more calibrated at this moment, if I can say, without doubt.

Speaker #4: Sure. Thank you so much, and wish you the best.

Latika Chopra: Sure, sir. Thank you so much, and wish you the best.

Speaker #5: Thank you.

Sudhanshu Vats: Thank you.

Speaker #3: Thank you. Thank you, ma'am. The next question is from the line of Ranjit S from Avendus Spark Institutional Equities. Please proceed with your question.

Operator: Thank you. Thank you, ma'am. The next question is from the line of Ranjit S. from Avendus Spark Institutional Equities. Please proceed with your question.

[Company Representative] (Avendus Spark): Hi, sir. Thanks for the opportunity. This is Tejas from Avendus Spark. Sir, first of all, congrats on super set of numbers. Just wanted to know that in a quarter which was so volatile on pricing, should we see this as a validation of consumer behavior also kind of being so robust? It could be a mix of that, there can be some pre-buying from channels hence it should not be seen as at a consumer optic level also it will be this robust. Just wanted your opinion or view on this.

Speaker #4: Hi, sir. Thanks for the opportunity.

Speaker #2: This is Pidilite from Spark, Avendus Park. Sir, first of all, congrats on a super set of numbers. I just wanted to know, in a quarter which was so volatile on pricing, should we see this as a validation of consumer behavior also being so robust? Or could it be a mix—that there may have been some pre-buying from channels, and hence, it can't or should not be seen that at the consumer offtake level, it will be this robust as well?

Speaker #2: Just wanted your view on this.

Speaker #5: I think, Tejas, first of all, good to hear from you. I think, from a—which we talked about this in the context of Consumer Bazaar UBT—I would say that the behavior is very robust.

Sudhanshu Vats: I think, Tejas, first of all, good to hear from you. We talked about this in the context of consumer bazaar UVG. I would say that the behavior is very robust. I think in the quarter that has gone by, because it was a quarter of calibrated but multiple price increases, could there have been a little bit more of stocking? Perhaps yes. If I look at aggregate numbers, I would say the demand is steady, we talked about it earlier as well. I would say we are seeing the right progression, particularly in our consumer and bazaar business on underlying volume growth. I would say that all things being equal, that should continue as we go forward.

Speaker #5: I think in the quarter that has gone by, because it was a quarter of calibrated but multiple price increases, could there have been a little bit more upstocking? Perhaps yes. But if I look at aggregate numbers, I would say the demand is steady, and we talked about it earlier as well.

Speaker #5: I would say we are seeing the right progression, particularly in our Consumer and Bazaar business, on underlying volume growth, and I would say that, all things being equal, that should continue as we go forward.

Speaker #2: Perfect. And sir, we had seen such cycles in the past, in 2009 and 2011, when there was sharp inflation followed by deflation. And if my memory serves me right, we used that cycle to seed many new growth engines. So, at this point, when we are at the upper end of our margin guidance, also, let's say, if we had to face deflation again, how would you prioritize using the extra margin?

[Company Representative] (Avendus Spark): Perfect. Sir, we had seen such a cycle in past, in 2009, 2011, when there was a sharp inflation followed by deflation. If my memory serves me right, we used the cycle to seed many new growth engines. At this point, when we are at the upper end of our margin guidance also, let's say if we had to face deflation again, how would you prioritize to use the extra margin? Will it be to kind of protect the core and go more intense there? You will kind of expand the pioneer portfolio by adding more engines of growth for future?

Speaker #2: Will it be to kind of protect the core and go more intense there, or will you kind of expand the pioneer portfolio by adding more engines of growth for the future?

Speaker #5: So, I think, Tejas, that's a very good question. I think we find a balance, but as you know Pidilite philosophy—so we are, and we take that as well, that we are pioneering.

Sudhanshu Vats: I think, Tejas, that's a very good question. I think we find a balance. As you know, Pidilite philosophy, and we state that as well, that we are pioneering. We continue to look at newer opportunities, and Kavinder spoke about a couple of them in some detail in this call also. In general, and I think you know that we are looking at some of the other electronics and industrial pieces. There is work which we are doing on multiple fronts, Tejas, and none of this can be specifically spoken about in the call. I can tell you that as a company, our philosophy is to continue to do pioneering work to find the right usage of the margins in capital or money that we generate. I think we are at it.

Speaker #5: So we continue to look at newer opportunities, and you know, Karinder spoke about a couple of them in some detail in this call also.

Speaker #5: But in general, and I think you know that we are looking at some of the other electronics and industrial pieces. So there is work which we are doing on multiple fronts, Tejas.

Speaker #5: And none of this can be specifically spoken about in the call, but I can tell you that, as a company, our philosophy is to continue to do pioneering work to find the right usage of the margins and capital, or money, that we generate.

Speaker #5: And I think we are at it I think Sandeep and all of us as a team is basically we are you will you will hear a more of it when it is when something we can talk about and we will definitely talk about that.

Sudhanshu Vats: I think Sandip and all of us, as a team, basically you will hear more of it when it is something we can talk about, and we will definitely talk about that.

Speaker #2: Thanks, and all the best for coming forward with this.

[Company Representative] (Avendus Spark): Thanks and all the best for coming quarters.

Speaker #5: Thank you.

Sudhanshu Vats: Thank you.

Speaker #3: Thanks. Thank you, sir. The next question is from the line of Bharat Seth from Quest Investment Advisors Private Limited. Please proceed with your question.

Operator: Thanks. Thank you, sir. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please proceed with your question.

Speaker #4: Hi Sridhan too. Congrats and Ravinder and Sandeep congratulations on good set of number in challenging time. Sir, my question is related to like say tile fixing we introduced chemical a few years back and then now it has become a kind of a core category kind of a thing.

Bharat Sheth: Hi, Sudhanshu, Kavinder, and Sandeep. Congratulations on good set of numbers in challenging times. Sir, my question is related to tile fixing. We introduced chemical a few years back, now it has become a kind of a core category kind of a thing. The underlying business dynamics are also changing. People are adopting more new practices in India. Simultaneous as well we are also introducing electronic chemicals. If I have to understand, Kavinder also stated within our tile fixing, premiumization over a period then become a kind of general acceptance. How do we understand the way we are doing business and continuously introducing new categories?

Speaker #4: So the underlying, I mean, business dynamics are also changing. People are adopting more new practices in India. And simultaneously, as well as, we are also, like, you know, seeing our construct—I mean, electronic chemical—we are introducing.

Speaker #4: So if I have to understand, I mean, like Karinder also stated, within tile fixing, I mean premium—so premiumization over a period then becomes a kind of general acceptance.

Speaker #4: So, how do we understand the way we are doing business and continuously introducing new categories?

Speaker #5: So Bharat, first of all, thank you for the compliments, and आप तो बोल ही रहे थे. Now you are seeing the numbers in the zone which we have spoken about.

Sudhanshu Vats: Bharat, first of all, thank you for the compliments and now you have seen the numbers in the zone which we have spoken about. I think the point is that these are things which we do continuously, and unfortunately we first walk the walk and then talk that walk at an appropriate time, and I think that's the way it should be in our judgment as well. I think there are multiple things which we will keep doing. Some of them will grow faster, some of them will grow into bigger. Bharat, one thing I do want to tell you is that even in what you are saying that Roff has been around for some time, there is a lot of growth opportunity in Roff.

Speaker #5: I think the point is that these are all—these are things which we do continuously, and unfortunately, we don't—we first walk the walk and then talk that walk at an appropriate time.

Speaker #5: And I think that's the way it should be, in our judgment as well. So, I think there are multiple things which we will keep doing.

Speaker #5: Some of them will grow faster some of them will grow into bigger but Bharat one thing I wanted to do I do want to tell you is that even in what you are saying that ROF has been around for some time there is a lot of growth opportunity in ROF and as you know we pointed out as well earlier in the call the momentum is continuing if at all picking up a little bit more.

Sudhanshu Vats: As you know, we pointed out as well earlier in the call, the momentum is continuing, if at all, picking up a little bit more. Even in our growth categories, which are now around for some time, that's what you meant. There is a lot of growth opportunity which is there. We will continue to look at newer things, the momentum on our growth categories is strong, we feel that there is a lot to be done in that space as well.

Speaker #5: So even in our growth categories, which are now around for some time, and that's what you meant after your सवाल से थोड़ा ऐसा लग रहा था, उसमें भी अभी there is a lot of growth opportunity which is there.

Speaker #5: So we will continue to look at newer things, but there is a lot in our—the momentum on our growth categories is strong, and we feel that there is a lot to be done in that space as well.

Speaker #4: So, I mean, to understand a little more on this, is this changing the consumer pattern or underlying customer pattern? So, how is this one side competition also? But how do we see the TAM is growing faster than the competition, or how do we understand this from a, say, two- to three-year perspective?

Bharat Sheth: To understand a little more on this changing consumer behavior pattern, consumer or underlying customer pattern. How this inside competition is also there but

Kavinder Singh: How do we see that paint is growing faster than the competition or how we understand it from, say, two, three years perspective?

Speaker #5: Yeah, no, so we measure this, Bharat, I think. So basically, we know how much the market is growing by. We know that very well.

Sudhanshu Vats: Yeah. Also we measure this, Bharat. I think we know how much is the market growing by. We know that very well. We have a sense of what the other players are growing by. Sometimes they are listed, their numbers are available, but other times we have a good sense. We have a very good listing on our own business, so we know market growth and our growth. In some of these categories, our growth is a factor of, you know, it could be 1.5x, could even be between 1.5 to 2x, if I could use the word, if I could give the factor of the market growth, and that is clearly market share accretive. Very clearly market share accretive. We are gaining market share in a rapidly growing market, and there is competition coming in.

Speaker #5: We have a sense of what the other players are growing by. Sometimes their numbers are available, but other times we have a good sense. But we have a very good, very good feel for this thing on our own business.

Speaker #5: So we know market growth and our growth and in some of these categories our growth is factor of you know so give me 1.5x could even be between 1.5 to 2x if I could use the word of the market growth of of the of the if I could give the factor of the market growth and that is clearly market share accredited very clearly market share accredited.

Speaker #5: So, we are gaining market share in a rapidly growing market, and there is competition coming in—which was a question that came in earlier as well. We responded to it, but I think we are basically continuing to grow market share in growing categories. And, because of the way we do business, I think that's the piece I'll ask a little bit further about, yeah.

Sudhanshu Vats: That's some question which came in earlier as well. We responded to it. I think we are basically continuing to grow market share in growing categories. Because the way we do business, I think that's the reason. I'll ask a little bit of further

Kavinder Singh: Yeah.

Speaker #2: Bharat, your question specifically on, you know, we started tile adhesives, others have come in, etc., etc., and even in Onokin. How do we think about the size because players will come in?

Sudhanshu Vats: Details.

Kavinder Singh: Bharat, your question specifically on, we started tile adhesives, others have come in, et cetera. Even in UnoFin, how do we think about the size because players will come in. Just to give you a sense, the penetration of tile adhesives in India is still not more than 25%, at best 30%. The room for growth exists for all players. We can only confirm that we are growing fastest amongst all the players, which means we are gaining share in a fast-growing category. Fundamentally, even though there will be other players that will come in, the size of opportunity is big and competition is good because it keeps us obviously sharp.

Speaker #5: Just to give you a sense, the penetration of tile adhesives in India is still not more than 25%, at best 30%. So the room for growth exists for all players.

Speaker #5: We can only confirm that we are growing fastest amongst all the players, which means we are gaining share in a fast-growing category. So fundamentally, even though there will be other players that will come in, the size of opportunity is big, and competition is good because it keeps us, obviously, sharp. What we are trying to do is continuously, as I mentioned earlier, work very closely with the contractors, the tile channel, and also build our plant network in response to the tile piece and build the total delivered cost in a manner that we remain competitive.

Kavinder Singh: What we are trying to do is continuously, as I mentioned earlier, work very closely with the contractors, the tile channel, and also build our plant network, among responding to the tie-ups, and build the total delivered cost in a manner that we remain competitive. It's a combination that will eventually win in the marketplace, and we remain humble enough to admit that we are also learning every day, and our approach will be not to give up the advantage that we have, in fact, increase that. The good news is that the penetration is low. There is room for people to grow, and we should not be worried too much about the new competition coming in. As long as we are able to penetrate and expand the category, and almost as a leader in the category, it's our job to expand the category.

Speaker #5: So, it's a combination that will eventually win in the marketplace, and we remain humble enough to admit that we are also learning every day. Our approach will be not to give up the advantage that we have.

Speaker #5: In fact, increase that, and the good news is that the penetration is low. So there is room for people to grow, and we should not be worried too much about new competition coming in as long as we are able to penetrate and expand the category. And almost as a leader in the category, it's our job to expand the category. Same is true for categories like Onokin and many other categories where we tend to be pioneers. In some cases, we are trying to grow faster than the others; in some cases, we are pioneering. We are also moving towards a solution approach, and that's something that I have said earlier. You know, with this Pidilite Professional Solutions in the projects area particularly, we are not trying to offer products but actually offer systems. And that, to my mind, is a very big moat we are building for the future, where the architects and structural consultants will, in a way, recommend our systems because the systems together can perform better than an individual product.

Kavinder Singh: Same is true for categories like UnoFin and many other categories where we tend to be pioneers. In some cases, we are trying to grow faster than the others. In some cases, we are pioneering. We are also moving towards a solution approach, and that's something that I've said earlier. With this Pidilite Professional Solutions in the projects area particularly, we are not trying to offer products, but actually offer systems. That, to my mind, is a very big moat we are building for the future, where the architects and structural consultants will, in a way, recommend our systems because the systems together can perform better than an individual product. There are multiple levers we are pressing to remain ahead of the curve, even in a highly competitive but under-penetrated category. Thank you, Suhas. Thank you. Suhas, with your permission, one question may I further ask?

Speaker #5: So, there are multiple levers we are pressing to remain ahead of the curve, even in a highly competitive but underpenetrated category.

Speaker #4: Thank you. Thank you. And Sudhash, with your permission, may I ask one further question?

Speaker #5: Go ahead go ahead Bharat.

Sudhanshu Vats: Go ahead, Bharat.

Speaker #4: See Simon, can you say, like in our original category-wide view, that what we are seeing is that competition is already picking up? But simultaneously, several ply manufacturers have started supplying pre-laminated ply also. So, do we see that those kinds of growth can happen on the consumption side?

Bharat Sheth: Simultaneously, I feel like in our original category, white glue, what we are seeing that competition is already picking up. Simultaneously, like several ply manufacturer has started supplying pre-laminated ply also. Do we see that those kind of de-growth can happen in the consumption side?

Speaker #5: I mean Bharat we actually see the contrary see क्या है कि हर चीज it's so in the under indexed in India even now I'm saying across the board so if you look at 205 more recent innovation so I'm saying whether it is multi lock so multi lock basically what is happening is Bharat there are multiple types of materials which are coming in into home construction now.

Sudhanshu Vats: No, Bharat, we actually see the contrary. It's so under-indexed in India even now, I'm saying across the board. If you look at two of our more recent innovations, I'm saying whether it is Multilock. Multilock, basically what is happening is, Bharat, there are multiple types of materials which are coming into home construction now. While we use the word ply, it's not only ply. There are multiple types of products that are there. Our Multilock product is doing exceedingly well. We just, in the beginning of the call, talked about Expert. Our original products which have been around are also continuing to do well. I think the point is that we have to continuously innovate, do the right thing, find the right solutions for the right products, and we will continue to grow.

Speaker #5: So, while we use the word 'ply', it's not only ply—there are multiple types of products that are there. So, our Multi-Lock product is doing exceedingly well.

Speaker #5: We just, in the beginning of the call, talked about our expert and our original products, which have been around, are also continuing to do well.

Speaker #5: So I think the point is that I we have to continuously innovate do the right thing find the right solutions for the right products and and we will be we will continue to grow.

Speaker #5: And mind you, Bharat, we have a joinery business in our Fevicol division as well, which continues to grow faster than our core Fevicol retail business. And the joinery business is where we captured some of these opportunities—where you talk about pre-laminated, or you talk about, you know, prefabricated kind of stuff.

Sudhanshu Vats: Mind you, Bharat, we have a joineries business in our Fevicol division as well, which continues to grow faster than our core Fevicol retail business. Joineries business is where we capture some of these opportunities where you talk about pre-laminated or you talk about pre-fabricated kind of stuff. Our joineries business is very robust, and that's doing really well.

Speaker #5: So our joinery business is very robust, and that's doing really well.

Speaker #4: Okay. Thank you, and all the best.

Bharat Sheth: Okay. Thank you, and all the best.

Speaker #5: Thank you.

Sudhanshu Vats: Thank you.

Speaker #3: Thank you. Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your questions to two per participant.

Operator: Thank you, sir. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your question to two per participant. The next question is from the line of Sid Gandhi from IIFL Capital. Please proceed with your question.

Speaker #3: The next question is from the line of Sidh Gandhi from IIFL Capital. Please proceed with your question.

Speaker #4: Hi sir, this is Percy Panthaki here. My question is again on margins. See, when the war broke out and at the beginning of Q1, possibly the sort of expectation was that this year might be towards the lower end of the 20 to 24% margin because of the cost inflation.

Percy Panthaki: Hi, sir. This is Percy Panthaki here. My question is again on margins. See, when the war broke out and at the beginning of Q1, possibly the sort of expectation was that this year might be towards the lower end of the 20% to 24% margin because of the cost inflation. Now, this quarter you have done 26% margin. Would it be fair to say that if crude and related commodities maintain at, let's say, somewhere in the mid-80s, then you would actually be at the higher end of the margin this year?

Speaker #4: Now, this quarter you have done a 26% margin. Would it be fair to say that if crude and related commodities maintain at, let's say, somewhere in the mid-80s, then you would actually be at the higher end of the margin this year?

Speaker #5: Yeah, Patil, I think maybe Sandeep can also add a quick point, but let me, I think in the interest of time, very quickly respond to you.

Sudhanshu Vats: Yeah, Percy, I think maybe Sandip can also add a quick bit, but let me, I think in the interest of time, very quickly respond to you. I think the thing here is, I think first of all, don't look at it quarter to quarter. I think that's the point he made as well. I think Q1 tends to be the biggest quarter. It does give you the leverage and all that stuff. The way we have managed our pricing and the way we have executed, if some of the things, there's a if, and I'll say IF.

Speaker #5: I think the thing here is, first of all, don't look at it quarter to quarter. I think that's a point he made as well.

Speaker #5: I think quarter one which is at quarter one tends to be the to the to the biggest the biggest quarter. It does give you the leverage and all that stuff.

Speaker #5: The way we have managed our pricing and the way we have executed if some of the things there is a there is a if and I'll say IF if the if the crude remains as you said and if the volatility is not going to increase and and the you know some situation eases a little bit there you know even if it remains dynamic I think your assumption is correct that we would be we would manage the business well within the band and it is quite possible that we could be and middle to higher end of the band easily it's possible.

Sudhanshu Vats: If the crude remains as you've said, and if the volatility is not going to increase, and some situation eases a little bit, even if it remains dynamic, I think your assumption is correct that we would manage the business well within the band. It is quite possible that we could be middle to higher end of the band easily. It's possible. That's why I'm again repeating and saying big if, but we are going to do the best we can. We have demonstrated again. I think that we will continue to deliver to the best of our capability, both in the quality of execution, speed of execution, agility which we need. I think all that will be there in all aspects of our business.

Speaker #5: I'm saying it, but there is—and that's why I'm, again, repeating it, saying 'big if.' But we are going to do the best we can.

Speaker #5: We have demonstrated again so I think and we will continue to you know deliver to the best of our capability both in the quality of execution, speed of execution, agility which we need.

Speaker #5: I think all that will be there in all aspects of our business.

Speaker #4: Got it. And on volume growth I mean I know you have answered this earlier but just to get a little more clarity are we saying that sort of a 9 to 10% volume growth is something that is most likely over let's say a three year kind of a period plus or minus on a yearly basis it might go up or down but let's say on a medium term three four year basis 9 10% volume growth UVG is what we are looking at.

Percy Panthaki: Got it. On volume growth, I know you have answered this earlier, but just to get a little more clarity, are we saying that sort of a 9% to 10% volume growth is something that is most likely over, let's say, a three-year kind of a period, plus or minus on a yearly basis, it might go up or down. Let's say on a medium-term, three, four-year basis, 9%, 10% volume growth, UVG is what we are looking at.

Speaker #5: Yeah yeah underlying volume growth as we say which is you know like to like volume and and mix so therefore it's not simple volume growth.

Sudhanshu Vats: Yeah. Underlying volume growth, as we say, which is like to like volume and mix. Therefore it's not simple volume growth. I think we've always maintained that we will deliver double digit. As a matter of fact, our endeavor will be to slowly but surely inch it up a little bit.

Speaker #5: I think we've always maintained that we will deliver double-digit. As a matter of fact, our endeavor will be to slowly but surely inch it up a little bit.

Percy Panthaki: Yeah, that's also my-

Speaker #1: And also, Percy, I think you look at it in the context of the overall GDP growth because we always index our growth of our categories to a multiple of the real GDP growth.

Kavinder Singh: Percy, I think if you look at it in the context of the overall GDP growth, because we always index our growth of our categories to a multiple of the real GDP growth. On the hypothesis that real GDP in India will grow at the 6% to 6.5% range. If you apply the range that we give for our core growth categories, you will end up at a double-digit underlying volume growth.

Speaker #1: So on the hypothesis that you know real GDP in India will grow at the six six and a half percent range if you apply the range that we give for our core growth categories you will end up at a at a double digit underlying volume growth.

Speaker #4: Got it, got it. That's all from me. Thanks, and all the best.

Percy Panthaki: Got it. That's all from me. Thanks an all of you.

Speaker #3: Thank you, sir. The next question is from the line of Prateek from HSBC. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Satik from HSBC. Please proceed with your question.

Satik Gochi: Hello, everyone. Am I audible?

Speaker #4: Hello everyone. Am I audible?

Speaker #5: Yes yes audible.

Sudhanshu Vats: Yes.

Kavinder Singh: Yes, Satik, you're audible.

Speaker #4: Thank you for taking my question. This is Prateek Gothi from HSBC. I just have one question. Similar to the tile adhesives, can you also throw some light on the waterproofing chemicals space—the rising competitive intensity there and your improving performance in FY26? Any color on demand in FY27 so far, and just the runway for growth, like you talked about for the tile business, please?

Satik Gochi: Thank you for taking my question. This is Satik Gochi from HSBC. I just have the one question. Similar to tile adhesives, can you also throw some light on the waterproofing chemicals space, the rising competitive intensity there, and your improving performance in FY26? Any color on demand in FY27 so far and just the runway for growth, like you talked about for tile adhesives?

Speaker #5: Yeah, yeah, yeah. So we will be—basically, I'll ask Kavinder to comment more on it, but we are making continuous— we are sort of—this is another category which is growing, and it's also picking up the pace.

Sudhanshu Vats: Yeah. Basically, I'll ask Kavinder to comment more on it, but continuously, this is another category which is growing and it's also picking up the pace.

Speaker #5: So yeah, we ended up discussing a lot about tile adhesives, so let's move on to a little bit on waterproofing as you requested.

Kavinder Singh: Yeah, we ended up discussing a lot about tile adhesives, let's move on to a little bit on waterproofing, as you requested. See, Dr. Fixit as a brand in the retail segment is by far the most powerful brand with regards to waterproofing solutions. In fact, our brand promise is waterproofing expert, and that is something that we are beginning to see again, momentum in this category. There are multiple actually solutions in this category. There are solutions which are around improving the performance of concrete. There are solutions about how to do the waterproofing in a manner where no leakage will happen. As you know, this is one area where a skilled applicator is critical. What we have been doing is, again, our playbook is to create large set of trained applicators. We have training centers.

Speaker #5: See, Dr. Fixit as a brand in the retail segment is by far the most powerful brand with regards to waterproofing solutions. In fact, our brand promises 'waterproofing expert,' and that is something where we are beginning to see, again, momentum in this category.

Speaker #5: There are multiple, actually, solutions in this category. There are solutions which are around improving the performance of concrete. There are solutions about how to do the waterproofing in a manner where no leakage will happen. And as you know, this is one area where a skilled applicator is critical.

Kavinder Singh: We are investing behind them, ensuring that our pool of trained applicators grows. On the other hand, we are also making significant inroads on the project side of waterproofing. We are now tapping into multiple segments, whether residential, commercial, hotels, et cetera. As you know, the construction is still doing well in our country. We have Pidilite Professional Solutions, which has a construction solution group, which is focused on working with architects and structural consultants to get ourselves specified. Our systems are now getting specified, not just the products. This is helping us to build momentum in the projects business, as Sudhanshu also mentioned earlier. Even in retail, the waterproofing piece. In retail, as I said, there are product categories which are around improving the concrete performance, which is a different kind of a segment.

Kavinder Singh: There is a coating segment that you may be familiar with, where people have waterproofing coatings. We are also in that segment. We are seeing, again, momentum in both the coatings which go on the walls, as well as on the roof side. Dr. Fixit, by far, is a leader in the roofing part of it. On the wall side, we are making significant inroads, and we have actually got a strategy to go after driving the waterproofing solutions in a manner where we are seen as the technical expert in not only giving the best waterproofing solution, but also an applicator who is trained to deliver it. Because in this business, one is knowing what needs to be done, particularly when it comes to repairs and rehabilitation.

Kavinder Singh: In the new construction also, people need to trust you that you will have an applicator who will deliver the solution rather than just the products. Focus on systems, focus on winning big projects, focus on ensuring the retail distribution, ensuring that the trained waterproofer exists at various levels of, let's say, smaller waterproofer to medium to large waterproofer, well-trained, and Dr. Fixit is backing them up with regards to warranties as well as, let's say, technical training. Because here, what people really expect is that are our people, meaning the applicators who are not exactly ours but trained by us, can they deliver? We are seeing, again, momentum. We have moved into high double digit, basically mid-teens plus category in this area as well, which is something that we were not in the last year.

Kavinder Singh: There is momentum that we are seeing based on the new strategy that we have followed with regards to both focusing on retail and projects. There are competitors in this business. It's not that the category does not have competitors. There are multinational competitors, there are local competitors, and they've been around for some time. Our aim is to go deeper, penetrate also wider. Even now, there is a huge opportunity, particularly we see in the small builders area, where enough and good waterproofing is not being done. We have an opportunity of, again, creating the category, leading it in the sense by educating both the key account, basically the client, as well as the applicators, and then ensuring that we are able to supervise the work that is being done at the sites. We provide that service also, site supervision on certain level of projects.

Kavinder Singh: It's a business which requires creating an ecosystem, we are building on that ecosystem as I described, that is what truly is going to be the moat in this business as we move forward. Again, there is an opportunity because of the mega trend of construction growing. There's an opportunity of better waterproofing systems as people evolve. These are the things that we are trying to do to build on this business.

Satik Gochi: Thank you for the detailed response.

Operator: Thank you, sir. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for closing comments.

Sandeep Batra: Thank you, everybody, for joining the call, wish each of you a good evening. Thank you very much.

Operator: Thank you, sir. On behalf of Equirus Securities, that concludes the conference call. Thank you for joining us, and you may now disconnect your line. Thank you.

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