Grasim Industries Limited

Ladies and gentlemen, good day and welcome to the Grassland Industries Limited Q2F526 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the call, please signal an operator by pressing star then zero on your touchtone phone.

I now hand the conference over to Mr. Ankit Panchmatya, Head of Investor Relations at Gatham Industries. Thank you and over to you, sir. Hi, thanks, Kareem.

And good evening and thank you for joining everyone on Gatham's second quarter financial year 2026 earnings call.

The financial statements, responsibilities and recommendations are already uploaded on the websites of public changes and our website for your reference.

for safe harbour kindly refer to quarterly statement highlighted in the last slide of our presentation.

Our management team is present on this call to discuss our results and business performance. We have with us Mr. Himanshu Kappanya, Managing Director, Grassim Industries and Business Head, Birla Opar Space. Mr. Hemant Chedil, Chief Financial Officer of Grassim Industries. Also from the business team we have with us Mr. Jayanth Dugle, Business Head of Chemicals, 106 Fashion Yarn and Insulator Business. Mr. Wadiraj Kulkarni, Business Head of 106 Fiber Business. And Mr. Sanjeev Komaragali, CEO, Birla Pivot, our B2B E-Commerce Business.

Let me now hand over the call to Himanshu sir for his opening remarks on macro and updates on key businesses.

Over to you sir. Thank you Ankit and good evening to everyone. We welcome you to Grasping Industries' earning call for the quarter ending 30th September 2025. Hope you had a good Diwali and New Year. Vikram Sambar, 2022. Also, as today is Guru Nanak Jayanti, may you be blessed with peace, happiness and love. Starting with macroeconomics, we have now entered the final lap of this calendar year 2025 with a global economy that is not in recession but not in a synchronized expansion either. We are living in a world where trade is rewiring, capital is repricing, and geopolitics has once again become a single-order economic variable, not a background noise. On October 29, 2025, the Fed cut the target range for the federal fund rate by 25 basis points to 3.75 to 4 percent, the lowest in three years. This followed an earlier cut of 25 basis points in September. The rate cuts indicate balance of risks are now shifting towards risks of growth and employment. Add to that the Trump administration's renewed emphasis on Paris-based negotiations, especially on Europe and key Asian blocs may amplify short-term noise. However, the structural drivers of demand, competitiveness, and consumption momentum remain intact. China is the second spotlight. China's GDP grows slow to 0.8% year-on-year in Q3 of this calendar year 2025, the weakest pace in a year. Data shows China is not in an acute crisis but in a structurally low growth orbit. Property demand is frozen, household confidence is weak and private entrepreneurs are holding back CapEx decisions. The upcoming five-year plan will be closely watched as it will set national priorities through 2030. Just to summarize the situation that global trade is seeing is more pressure point. It is not a collapse but more friction and friction slows velocity. And then India. The country is the positive outlier in the sentimental spectrum. But even India cannot fully decouple from the global liquidity and global trade. In a landmark move in September 2025, the center rationalized GST stats from 4 to 3 reducing taxes across essential and aspirational items. The reforms simplify GST rates, eases compliance, boosts disposable income, and supports long-term economic revival. India's GDP growth for FY25-26 was devised upwards, thanks to a strong domestic consumption, robust investment activities, and resilient exports. Supportive government reforms and RBI's accommodative monetary policy has further boosted demand while moderate inflation provides room for sustained growth. So, if I had to summarize the world in one line today, globally, this is a low-speed economy with pockets of strength, intermittent confidence and policy makers for moving carefully, not boldly. The world is not constant and in this environment, Winners will not be those who bet on direction. Winners will be those who stay flexible on timing. It is an era where optionality has more value than certainty. We don't need to predict the future with 100% precision. What we need to do is stay prepared for multiple futures. Grassin's multi-segment presence creates a synergistic engine of growth combining resilience with opportunity. The growth continues to exhibit resilience with trading 12-month revenues now nearing 1,60,000 crores, that is over 18 billion US dollars, compared to approximately 95,000 crores, that is 11 billion US dollars in FY22 when measured on equal currency rates. a remarkable growth of 14%. Moreover, the standalone business continues to gain shares now at 24% in Q2, Feb 26 in the overall consolidated revenues, nearing its highest ever milestone of 10,000 crores per quarter. Our CFO, Mr. Hemant Kedars, will further touch upon these numbers in detail, however, as I said earlier, We do not live in a constant world which is why two years back we entered into two new high growth businesses and I am very happy to say that both these businesses are on track to achieve their stated targets. I will talk Villa growth businesses, paints and B2B e-commerce businesses. Villa Opus is now a distinctive host in India's decorative paints landscape, not as another brand in the self This is resetting expectations of what premium should actually mean in India. From application science to film durability testing to shade integrity, to dealer enablement, we are building this new gold or should we say platinum standard. This is why Villa Opus is becoming integral in conversations across the value chain, whether it is with retailers, contractors, applicators, builders, institutions and homeowners. Because we have not just launched decorative paints, we are raising the reference benchmark for how paints should be engineered sold and serviced in India. I am happy to share that we are to commence production at our largest and sixth plant in Kharagpur, West Bengal on 15th October 2025. The plant has 236 million litres per annum capacity and is one of the largest paint plants in West Bengal and Eastern India. This plant can manufacture water-based paints, solvent-based paints, colorants and distemper paints. It will significantly improve our serviceability to eastern and central India markets and bringing network efficiency. With this plant commercialization, the announced project phase of decorative paints concludes and the decorative paints installed capacity is now 1332 million litres per annum across the six plants. This makes VilaOffers the second largest decorative range company commanding 24% of the industry capacity. A speed unmatched around the globe for speed and cost. Now we focus all our energies to bridge the gap between our volume market share and capacity share. Coming to the performance of decorative segment, VilaOffers continues to grow its market share and expands its position as number three decorative brand with double-digit market share, including Villa Opus and Villa White footy revenues, similar to the revenue reporting by legacy companies of all paint majors. Despite the extended monsoon, Villa Opus hit its highest-ever monthly sale in the month of September and saw an equally strong October month indicating increasing brand salience across markets. Not only the primary sales at highest level but also the secondary sales have been touching levels higher as a percentage of primary sales indicating fast movement that is off day from dealers to contractors or from dealers to customers from these counters. As per internal estimates, The organized decorative paint industry has grown in low single digits on a Y-on-Y basis in Q2 FY26, largely due to incumbents' push for lower-end economy products. However, as far as estimates excluding Villa Opus are concerned, the organized decorative paint industry has de-grown slightly on a year-on-year basis. Villa Opus continues to disrupt through innovation, and launched two big consumer propositions in the second quarter. First one was the Villa Opus Assurance Campaign, the first ever written paint promise by any paint company to assure the customers of painting performance backed by superior product qualities of Villa Opus products. This campaign was another disruptive and depreciated campaign in which we launched four twins that we must have seen on print, television, and digital media. The campaign has received overwhelming response from customers, contractors, painters, builders, and thousands of paint projects under Biller Office's assurance program have been undertaken and continue to be executed. We expect the demand of Biller Office's assurance to accelerate snowballing into basic consumer expectations during painting beyond product warranties. The second one was expansion of Villa Offers painting services offered under Paintcraft brand through our dealers and franchise partners on a pan-India basis. This is first of its kind differentiated painting services offering that leverages digital technology and integrates the platform for all stakeholders including company, franchise, applicators, painters and consumers. PaintCraft is a win-win for all stakeholders as it offers A. Transparent consumer pricing B. PMI financing on painting first time in India C. End-to-end company oversight of dealer-led painting services through trained exhibition network and D. A fully GST compliant painting service The network has appreciated these initiatives by dealer offers to bring a standardized painting service in the market. We are happy to announce that PaintCraft has already scaled up across 117 170 towns and expected to reach 300 plus towns by Q3 and through companies, dealer-operated franchises and high-performing dealers. We remain on track to build India's differentiated and largest painting service network service through the largest branded franchise network. Customers can simply log in to Brilla Office website and avail the benefit of these two unique programs. The success of these campaigns is reflecting in a brand's course as well. Our independent research shows the consumer love for Brilla Office brand continues to rise as Brilla Office has become the number two brand in top of mind recalls across India at the end of Q2 2016. Such brand recall within 18 months of our launch and 12 months of family operation is quite unheard of in the marketing world. On the product front, the premium and luxury products revenue contribution was upwards at 65% of revenue covering all categories across immersion, enamel, wood finish and waterproofing including retail and institutional segment. The company has also launched an array of new products and crossed 190 plus products in its portfolio. Out of this, 30 new products were launched during this quarter. The company launched a new branded tool segment with a range of non-mechanized tools under the sub-brand known as ARTIST. The company is proud to launch in-house, made in India, high-quality range of wallpapers which has seen excellent network response. The other new products launched are pure elegance of shine, aerosol, aluminium paint, clear varnish and few new bases in the existing product range. The Villa Opus products have been now applied by over 6 lakh painters and contractors across lakhs of residential sites making it one of the largest contractor-painter network in India. On distribution front, The brand has crossed its earliest guidance and reached to over 10,000 towns on a pan-India basis, which is a historic achievement in such a short time. The focus now shifts to depth of presence in each of these 10,000 towns. The company's branded franchise store network has crossed 500 plus towns present and will soon cross four-digit mark of branded exclusive store towns, making it amongst the largest branded stores in the country. The total capex expense for Spain's business stood at 9,727 crores as of 30 September 2025. Graphene applauds the bill-holders' team for flawlessly executing a large and global-scale greenfield project, commissioning six state-of-the-art plants simultaneously, achieved without cost overruns With rapid scale-up and consistent first-time ride quality across 190 plus products, this piece showcases exceptional physical, financial discipline and manufacturing and supply chain excellence. A truly unparalleled achievement by a dynamic startup. Finally, continuing on below us, our CEO, Mr. Ratheesh Agave has decided to pursue opportunities outside glassing. Today, Grasim NRC has accepted his resignation and approved his request to exit the company effective 6th December 2025. Rushis joined Grasim in November 2021 and has played significant role as the builder of the startup space and initial scaling of the decorative paint business. Today, the operations are stable and we have built a high-performing team. In the last four years, this team has helped establish six integrated manufacturing facilities, scale distribution, build brand salience and supply chain network. I believe we have built a rock solid foundation for next level growth in the decorative paint business which has all the necessary ingredients to achieve number two revenue market shares and committed profitability in the three years of full-scale operations. The company appreciates Rashi's contribution and wishes him the best for the future endeavour. Rashi's successor will be announced in due course. In the interim, I, as business head for the last five years of Paint's business, and who heads conceptualise, strategise, plan and execute this large project, will directly oversee the Paint's business until the new CEO is appointed. Moving on to other new business, Birla Pivots which has been marching steadily and strongly. Birla Pivots was created to solve a pressing challenge in India's business landscape, simplifying building and other sectors' raw material procurement for the companies that power the nation's growth. Today, it has evolved into a one-stop-shop B2B platform covering the complete spectrum of procurement, fulfillment, assured quality and quantity with financing solutions of material needs from steel and cement to tiles and chemicals, all in one smart, seamless ecosystem. By enabling digital adoption across the B2B, apologies to everybody, I am going to start again on the new business, Moving on to other new business, Billa Pivot, which has been marking steadily and strongly. Billa Pivot has created to solve a pressing challenge in India's business landscape, simplifying building and other sectors, raw materials procurement for the companies that power the nation's growth. Today, it has evolved into a one-stop shop B2B platform, covering the complete spectrum of procurement, fulfillment, assured quality and quantity with financing solutions of material needs from cement and steel to tiles and chemicals, all in one smart, seamless ecosystem. By enabling digital adoption across the B2B ecosystem, Billa Pivot is not just a procurement platform, it is a catalyst for efficiency, transparency and growth in India's industrial and construction sector. Post a successful foray into building materials, The business now expands its product portfolio to become Foodstack's raw material procurement platform. The platform has now added a diversified range of raw materials including polymers, solvents, textile chemicals and non-ferrous metals. For your reference, B2B e-commerce market is set to hit USD 200 billion dollars by 2030 forward by strong demand from chemicals, metals, infrastructure and construction sector. Bill of Pivot expansion is well timed to capture this momentum enabling smarter tax-enabled procurement. As digital penetration remains below 2%, India's B2B e-commerce trade is on the cusp of a major shift. What does such product additions give to us? First and foremost, growth momentum reduces what is It is visible in Q2 FY26 where the revenues are sequentially higher by 15% in spite of monsoons. Secondly, it also gears up for new aspirations which means newer targets for businesses beyond its stated revenue guidance of achieving 8,500 crores or a billion dollar mark by FY27. To conclude, Graphing's diversified business model spans India's high growth sectors from cement powering infrastructure, decorative frames enabling urban aspiration, B2B commerce and financial services driving enterprise and inclusion to chemicals and sustainable fibers like cellulosics, linen, wool and cotton addressing industrial and global demand. This multi-segment presence creates a synergistic engine of growth combining resilience with opportunity, growth, building India, enabling aspiration and driving sustainable progress. Let me now hand over the call to Hemant for discussing financial performance and highlight on our core business which is cellulose fibers and chemicals. Over to you, Hemant.

Thank you, Imanshu. Good afternoon and festive greetings to everyone. It is a privilege to address all of you on this early call in my capacity as CFO. I have been with the group for more than 30 years And during this journey, I have been part of the core management team, leading several strategic initiatives and governance responsibilities. My experience spans across corporate finance, risk management, emergency vaccinations, and enterprise-level initiatives. As a CFO of a conglomerate like RASIM, my role is to ensure that our financial strategy and execution are fully aligned with the five pillars that have defined our organization's long-term growth journey. which is Leadership, Innovation, Sustainability, Capital Allocation and Parts Leadership. Coming to our current quarter performance, Graphene has delivered consistent revenue growth for 21 consecutive quarters on year-on-year basis, with trailing 12 months consolidated revenues of Rs. 1,59,653 crore, up by 8% compared to up by 25 revenues. The standalone revenue grew at a faster pace, reaching a record high of Rs. 9,610 crore, up by 26% year-on-year. Let me now talk about business price performance. Firstly, cellulose fiber business, the average quarter 2 of by 26 cellulose stable fiber utilization rate in China has improved 29%. And inventory days, though higher year-on-year, have sequentially reduced to 15 days. Total sales volume of CSF was lowered by 5% year on year due to logistics related issues at Vilayat which is now normalized. Specialty fiber volume mix improved to 24% led by higher exports of specialty fiber. Improved product mix and currency depreciation supported blended realization of CSF. Cellulosic fashion yarn sales volume grew by 3% year-on-year led by festive demand. However, the realizations continued to remain impacted by cheaper imports from China. The salinistic fiber pigment revenues were up 1% year-on-year to Rs. 4,149 crore. High input types of key raw materials impacted the Iberia, which de-grew by 29% to Rs. 350 crore. Coming to our chemical business, the business revenue stood at 2-year high levels driven by all-round performance across caustic soda, chlorine derivatives and specialty chemicals. While the global caustic prices have softened with CFR SEA down by 5%, domestic caustic prices stood higher due to stable demand and rapid appreciation. The improvement in caustic prices led to higher recoups which was partially impacted by increasing negative closing realizations. Costed sales volume for the quarter were flat due to constrained production on account of lower power availability. Specialty chemicals revenue multiplication improved to 30% versus 26% in Q2 of 2025, driven by volume growth of 34% year-on-year due to stabilization of newer capacities. Specialty chemical profitability remains impacted by elevated raw metal prices. During the quarter, chlorine derivative capacity increased by 11 kTPA with addition of aluminum chloride capacity. Two key projects, CPVC in partnership with Lobrigol and ECUX remain on track. A mechanical completion is expected by QC of 526. Post completion of on-going projects, chlorine integration is expected to reach 70%. compared to current 264%. In our cement business, Ultratech's capacity expansion continues to reinforce its position as the backbone of India's infrastructure build-up. With every incremental million ton added, the business is structurally strengthening supply to support the country's historic cataclysm across roads, ports, industrial corridors, objective infrastructure and housing. The business has recently announced capacity expansion targeting total grey cement capacity of over 240 million metric tons per annum by March 2028. Compared to its current capacity of 192.3 million metric tons per annum for Q2 of 2026, the consolidated sales volume was up by 6.9% year-on-year to 33.85 billion metric tons. Operating EBITDA per metric ton grew by 32% year-on-year through 966, led by volume and realization growth, coupled with lower power, fuel, and logistics costs. Summing on financial services business, Aditya Birla Capital's financial services portfolio continued to alternate focus on September 1st execution. While leveraging cross-business synergies to strengthen outcomes, revenue for Q2 FY26 grew by 3% year-on-year, led by growth in MDFC, housing finance, and health insurance segments. Total lending portfolio that is NPFC and housing finance stood highest ever at nearly Rs. 1,78,000 crore of 29% year-on-year. The NIMS has started to marginally improve quarter-on-quarter. Total asset under management of AMC, life and health insurance grew by 10% year-on-year at nearly Rs. 5,50,000 crore. Talking about other businesses, firstly, textile revenue grew by 6% year-on-year to Rs. 586 crore. The business has demonstrated remarkable turnaround, returning to profitability with EBITDA of Rs. 34 crore. Due to normalization of input prices in these segments. Just as reference, this business historically demonstrated A to 10% EBITDA margins. Second to renewable business, Aditya Billa Renewable's revenue nearly doubled on year-on-year basis to Rs. 259 crore, led by newer capacities and one-time revenue of Rs. 50 crore on account of rate differentiation. The business' current peak capacity stood at nearly 2 GW and is lying the foundation for a greener, more resilient India. It is also playing its part in the group's collective transition to a sustainable energy future. Let me now briefly touch upon the capex. Krasin has outlined a capex outlay of Rs. 2,263 crore for FY26, of which Rs. 941 crore was deployed in first half of FY26. The live fuel capacity expansion with the cellulosic fiber business is progressing as scheduled and remains on course for commissioning by mid-2027. On sustainability front, happy to share that Birla Cellulosic Cellulosic Fiber Division of Brathen has received the highest rating of Dark Green Shirt in the Canopy Hot Button Report for the sixth consecutive year, reflecting its focus on sustainability. We remain committed to continuously elevating our sustainability performance. A key thrust will be to improve the capacity share of renewable energy and increasing recycled water usage to structurally reduce our dependence on fresh water. These trips are integral to upgrading resources efficiency into our operating model and strengthening long-term environmental resilience. On the value side, net debt declined by Rs. 292 crore and stood at Rs. 6,861 crore as on 30th September 2025 as against 7,153 code locations as on 30th June 2025. Stand alone, net debt to TTM EBITDA stood at 2.19x as against 2.41x. With this, we open the floor for question and answers.

Sure, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, may press star and 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from Avi Mehta from Macquarie. Please go ahead. Yeah, hi sir.

Sir, my questions were on the pain business. Especially wanted to better understand your thoughts towards the resignation of Rakshath. you know in terms of you know there are timelines successor announcement and changing growth strategy aggression would love to hear your thoughts on that and uh so the second question if i can put it up front is on the performance in the chain business in the quarter on a sequential basis uh we did use this point towards market share gains but the other peers have seen you know we've announced this you know almost a 10 percent decline given the weak monsoon weak environment would love to know how does the business stack up versus set.

Thank you. Thank you. In the life of a professional, individuals take their call on where they want to build their careers. Raksha has helped Birla Opas from the very start of the business to build the project and in the initial phase of launch. The Now Birla Opus has a very strong high performing team and will continue to stay core on the vision that has been announced to the market. I like to remind you the vision that the company has announced to the market. We have committed to be number two as well as profitable within three years of full scale operation. We will stay course on that. the performance of quarter two. This is our first time that we have faced a full monsoon season and the first time we saw that the overall industry on a quarter on quarter basis has had a double digit decline and it is our internal estimate on an year on year basis. If you were to eliminate the performance of Birla Hoppers, the industry is slightly negative in performance. Our bill offers on a year on year basis had a significant growth but on a quarter on quarter basis had a low single digit decline which was primarily during the periods of July and August. We turned back very strongly in the month of September as well as in the month of October as I mentioned in my opening remarks. We are seeing very strong secondaries or movement of paying buckets from the dealer counter to the contractors and consumers and as well as return of the institution business, we remain committed to growth and we remain committed to the vision that has been articulated to the market.

I wanted to say that Lakshit will be there with us till 5th of December. Thank you.

Before we take the next question, a request to participants to please limit your questions to two per participant so that the management is able to address questions from all the participants in the conference. We'll take the next question from Rahul Gupta from Morgan Stanley. Please go ahead.

Hi. Thanks for taking my question. A couple of questions. First, just as a continuation on the paints question earlier, now that we are out of a pretty long and persistent monsoon season, how should one look at the industry demand for the second half and to that extent with khadapur now fully commercialized how should we look at your ramp up in second half from that perspective so that's my first question thank you rahul we are

highly optimistic and results of September and October bear us out of a strong quarter three both on a year-on-year basis as well as a quarter-on-quarter basis. So, our guidance is continued double digit growth on a quarter-on-quarter basis and a significantly high growth on a year-on-year basis. Our capacity, as we mentioned, we are at 1332 million litres per annum. With Kharagpur's arrival, in the short term, it will help our managing our logistics costs and better servicing the eastern and central India. But in the long term, our aim is to ensure that the volume market share and capacity market share converge and all efforts all investments and all efforts whether it's advertising, bank card, distribution, servicing and any new initiatives will be directed towards to match our volume market share closer to our capacity share.

Got it. Maybe we will revisit on the industry a quarter later. My second question is on B2B e-commerce. So the business is growing at a very fast pace and if I look at this quarter number, the revenues are analyzing more than 6,000 crores. Now you have guided for 8,500 crores for fiscal 27. Is there a case for this number getting revised or will you be reaching this targeted number sooner than fiscal 27 is? So, any color on this will be very helpful.

Thanks Rahul. This is Sandeep here. I think your observation is right. Our growth has been you know compared to what our expectations I think we will be doing very well compared to our plan. We are on track and I think our earlier recommendation was that we will achieve a billion dollar scale in FI27. there is a likely chance that we will get there and hit that milestone sooner. But, you know, for now, we are not changing any of our, you know, direction as of now.

Thank you. Next question is from Avit Gupta from ICICI Securities. Please go ahead. Good evening, sir. Am I audible? Yes, please.

Thank you. This is Naveen from ITX Charity. So two questions, one on Pains and the second on B2B commerce. On Pains, if you could just give us more details about the number of dealers in this particular quarter versus the last quarter. And the reason I'm asking this is because this time Diwali was a little advanced. As you mentioned in your presentation, there is net addition to the number of towns from 8,000 in the previous quarter to 10,000. The SKUs have gone up. The product portfolio has also expanded. But yet, sequentially, as you mentioned in your opening comments or the previous questions, there is a marginal low in the digit and a drop in revenue. So how should one look at this in terms of the expanding network in the first place?

Thank you, Nami. You are right. We have expanded our distribution network to beyond our original guidance of 8,500 towns to 10,000 towns. And we continue to be able to expand beyond urban into the rural and the small town category. As regards dealers, the way to look at it is either we measure dealers on a quarter-wise basis or we measure on a month-wise basis. Your concern has been how is it that we have been spending our each and it is not translating to revenue. To measure that, we should look at the number of dealers that have participated with us in September and October and there have been We have been growing dealer participation on a month-on-month basis. There was a lull in July and August and it has returned back to a significant growth, almost a double-digit growth of dealer participation in September and the same momentum has continued in the month of October. So, the overall number of dealers have continued to grow, if I were to measure the total number of dealers who participated in quarter two over quarter one. what is important is you would say the throughput may have fallen. The throughput may have fallen on a quarterly basis but when we measure on a September basis the throughput is bad and both in September and in October dealer throughput is at levels and slightly higher than what it was at quarter one. So we are our focus is both expansion as well as depth of performance and currently if we have While we are getting a lot of dealers to sample our products and start using our products, there are dealers who have sustained with us now for more than one year. And almost 30% of the dealers are currently doing more than 40 to 50 products for us. And that number continues to grow. And the dealers, I am very happy to report, the dealers who have worked with us over one year, we sustained a large percentage of them. So I hope that answers your question.

No, just to clarify, if you could give the number of dealers and secondly, the traction that you said or rather a spurt that you have seen in September and October, is it led by the consumer style financing or the PMI options that you introduced a couple of months back?

So, those are factors which help in secondary sales. So, I will not mix the two topics. Let me first focus on primary sales, that is sales from company to dealers. number of dealers participation has grown as well a number of products sold has grown both in september and october now once this is grown how has been the throughput from this different from from our legacy companies which have a track record and they are able to force dealers to stock most of our dealers prefer to buy and keep a very low stock so for them the most important is throughput or secondary sale and what is been encouraging for us is number one we have a central monitoring system of our tinting and we are finding that the secondary on our tinting for dealers in September and October has been almost 120 to 130 percent of the volume that they purchase in September and April showing a very strong secondary of throughput from the dealer on to customers as well as reducing their inventory significantly. That is part one. Second thing we have helped is assurance. So it is helping painters and contractors to tell to customers of the assurance program and we had thousands of projects being registered are in multiple stages of execution at this point of time, their assurance plans. And the third is the new painting services. Both assurance and painting services are secondary based programs as well as dealer stocking and dealer purchase are the primary based programs. So both are running strong. I hope that clarifies.

First, thank you. My question second was on B2B e-commerce. So, if we just help us understand these private labels now are what percentage of our revenues and in the same way then what difference from the technology or any other innovation that we are doing in this B2B e-commerce which gives the confidence that we might be able to surpass the revenue target sooner. But that was my question. Thank you so much.

I will answer the question on innovation that we are doing and what is the confidence that we will grow and continue on this growth momentum. So, as you are aware, we have built an integrated e-commerce platform. It fundamentally forms a digital platform and connects pretty much every stakeholder in the entire ecosystem. Starting from the brands, to our buyers who are consuming these products. logistics service providers who are actually moving the materials to our lending partners who are providing financial solutions to all other network you know operators who plug into our into this backbone and what this fundamentally helps us is in creating this end-to-end visibility which is predominantly not there in most of the sectors or most of the materials that are fundamentally contracted today and that i think is where our ability to bring in efficiency, ability to provide the best price, ability to provide providers' assortment, ability to provide a very reliable experience, all of that comes into place. And this is already showing up in the way our retail transactions are happening, in the way the buyers are coming back to our platform to keep buying. And just as an indication, all the buyers who we acquired last year, they've already purchased on an average more than twice the amount this year, you know, giving us the confidence that whatever experience that we are delivering through both a combination of our equipment and our technology backbone is giving results. And I think that is one of the biggest reasons why we believe our growth momentum will continue. And, you know, to drive all of this, we've built These are custom-built tech modules that we've built from the ground up and they are very specific in terms of addressing the use cases that are for B2B. There are a bunch of solutions that have come up in the past for B2C e-commerce, but B2B e-commerce is a lot more complex, there are a lot more stakeholders. To fulfill a single transaction, it requires more than 30-40 touchpoints and to orchestrate all of this system that is seamless is where our edge comes in. I hope that answers the question on innovation. On the second part or on the first part that we had asked about private levels, we are right now not breaking down our revenues into different product categories and we will share that at the right moment. I'll share this that our private labels since the time of launch, they have seen very good acceptance. You know, most of the buyers who are coming to our platform to buy some of the bulk categories, as the project progresses, they are shown very good interest to continue that purchasing experience with us. They started buying behind the wall categories and now they have also started buying the finishing categories. So we are currently operating in tiles, fly, back air and faucet air and we continue to increase our penetration there. What we are also seeing is that we see great acceptance for these private labels in our retail channels. So we fundamentally have two channels. One is the project channel where we are able to directly supply materials to the site locations and the other channel is the retail channel wherein we work with retailers to further then sell a lot of the finishing products to individual home builders or smaller contractors or smaller retailers. there's been great acceptance for these private labels in the retail channels because you know they are seeing a great way to diversify their portfolio without having to do higher investment or having to keep inventory at their location and that is what is driving acceptance of these private labels. So overall I'd say all indicators are towards you know good experience, reliable experience but I will end here.

Thank you so much.

Okay, awesome. Thank you.

Thank you. Next question is from Percy Pantaki from IIFL Securities. Please go ahead.

Hi, sir. Can you just tell us the number of distributors? Your target was 50,000. Have you achieved that target?

Yeah, we are there.

Okay. Okay. And how many of them would be monthly active distributors, as in ordering at least once a month?

Yeah. We believe we are better than the industry standards.

In percentage terms?

Yes, right.

Understood, understood. And your guidance of 10,000 crore turnover by FY28, does that remain valid?

Yes.

Understood, understood.

Yes.

Also just wanted to understand what is the next push in terms see when you started off the first push was in terms of making the distribution available and increasing the number of distributors. Now more or less that lever is sort of done. Of course there will be some incremental growth there but nothing major. So for the sales growth to continue double digit on a slow Q level What is the next thing that you will focus on? What is the next lever that will drive this growth?

I think this is very typical of any business. Focus is on consumer. So you need a distributor or a dealer to be able to make sure the products are available at the right time, at the right place. That activity we have managed. So all our attention is moving to consumers. And there are two types of consumers. one is a painter contractor and second is direct homeowners that's the reason why we continue to be the most visible brand amongst the most visible brand and we are really happy to report that within a period of one year it is last world cup then we started to advertise and this world cup this happens to women's world cup and we won both the world cups and we had In the results, we saw that we have top of mind recall, we are number two brand, which is the starting flag of consumer to be able to go and ask for bill of offers at the dealer outlet. So that is the one step and we believe 30 to 40% of the consumers make direct purchase of paints. Remaining 60 to 70% of the consumers do it with the help of the painters and contractors. So, all our effort is to be able to attract maximum number of painters and contractors, ensure these painters and contractors are able to experience our high performing products and superior products as well as able to offer to customers two very new services. Number one, direct painting services from branded by us. which has transparent pricing, EMI, as a GHC bill, and also assurance, where not only the customer gets product warranty, but we will get in the first year itself, if there is any problem, our commitment to not only replace product, but also cover its labor costs. So, we will give assurance both to the printer and contractor, as well as to consumers. So, all the focus of the business is to be able to do consumer related activities and that will help us in what is happening with that is helping us dealers who first joined and took a small percentage of our 192 products and now we are getting dealers with increasing the number of products that they are buying and offering to consumers.

Thank you. Next question is from Manish Podar from Inverco. Please go ahead.

So, just want to get some sense for, let us say, you know, because of this reinclusion, has there been any sort of, you know, impact in this Q2 thing? And that is why you are calling out, let us say, you know, the early part of the quarter was tapered. And despite you adding stores or, you know, adding distribution, you have not seen performance to that extent. Because what is happening in the market always correlates individually at the top to the degree of outcomes. And if that is so, I am just trying to get some sense on that. Thank you.

Understood, Manish. So, let me first clarify. We believe that we have the best growth on a quarter-on-quarter basis. Obviously, when you measure on a year-on-year basis, we are a triple-digit growth. So, that may not be so relevant. But on a quarter on quarter basis, we had a least decline when industry had a double decade decline and almost flat or slightly negative or on decline basis. What is the reason for this decline? Broadly, whenever there is monsoons, the exterior products and institution business flows down and that is a peak monsoons in July and August. So if a part of our business is not happening that is the reason why the slowdown happens and that is historic of industry on a quarter on quarter basis. Quarter two is amongst the slowest quarter for the industry and we faced it for the first time. But having said that we have to measure the overall industry on an year on year basis. If you remove Birla Opus performance industry has had a slightly negative growth is what our assessment is based on various feedback that we got from the market not every company has yet reported their financial results but whatever our study of the market is against but Birla Opus with Birla Opus there has been a low single digit growth that has happened and Birla Opus continues to have grow the market

at this point of time. I hope that answers the question. Thank you. Next question is from Nirav Jumoria from Ambil Wealth.

Please go ahead.

Yes sir, thanks for the opportunity. I have two questions on chemicals. Sir, the first is when we see our EBITDA run rate for chemicals like last year we were at anywhere between 250 to 300 crores. And today when we see we have reached up to anywhere between 350 to 400 crore. So, just want to understand from you that when can we again start seeing the meaningful improvement in the EBITDA run rate for chemical and if you can explain this in context of a chlorine value added product. So, is there an hope for improvement in per kg margins here? newer capacities like ECH and CPVC and when it should start contributing meaningfully. And three, whether the benefit of the power cost reduction with our shift to renewables is optimally achieved or there is a further scope of improvement. Sir, your voice is not audible properly.

This is better. This is better?

Yeah. This is better, sir.

So, I'll go in reverse order of your questions to the extent I remember all of them. So, firstly, we are at about 24-25% renewable level as of now, right?

If I look at all that we have and all the state level regulations, we expect that in the next few years, we should be able to technically

get to 40%. And I use the word technically because we have not yet, you know, envisaged those projects, we have not yet signed the PPAs, but that would be a kind of aspirational level for the next three years. I can't forecast because as you know, every state has its own regulation on banking, building, surcharges, etc. We think that the current 25% has feasibility to reach 40%. Then I think your second last question was ECF and CPVC.

Yeah, when it should start meaningfully contributing in terms of the operating profit.

So that ECF and CPVC would be meaningfully contributing from Q1 of next financial year. This will be mechanical complete by Q3. worst case situation January but the startup times of these plants are long and complicated and as you know that some of it are there are safety risks as well so we expect that meaningful contribution will happen from first quarter of next financial year then I think we had a question on chlorine derivative profitability rather large basket of products we have probably the largest basket of chlorine derivatives in India And some of them are pretty seasonal because, for example, you know, water treatment in monsoon has a higher season, right? Plastics has other high seasons. So, I think these are mature products. It's not like you are going to see breakthrough profitability in any of these traditional serving derivatives. But it is necessary for us to do them so that we can get the cost utilization rates that we want. And then your very first question, was around you know what could be the catalyst for the next improvement, step improvement I think in profitability and you know Nirav the honest answer to that is it essentially depends on equal right given our large exposure still to the chlorophyll business. It's a combination of caustic prices and chlorine demand in India that is the most meaningful factor that drives what is happening and you know The business of predicting profit price for a long time is very tricky.

So far we can make our best estimates but it is a tricky business. Thank you. Next question is from Jay Doshi from Kotak. Please go ahead. Hi, thanks for the opportunity.

My question is generally on market share trend. Now, last year, you know, during the course of the year on a QSU basis, you were adding 100-150 basis points of market share every quarter. It seems to have moderated to about 20 basis points starting this year. So, is this entirely the difference between primary, secondary? That's my first question. Second is, is there a risk that it decelerates further or you think that you will be able to gain 20-30 basis points market share QOQs from year onwards over the next few quarters as well? And lastly, mathematically, for you to sort of, you know, 10,000 crores in FY28 means 13-14% market share. So, whereas, if I understand correctly, you may be at 6.5% today, gaining 20-30 basis points quarter and quarter. So, what do you think from here can sort of, you know, drive acceleration in sequential market preference? That's it from my side. Thank you.

Thank you, Jay. I am not sure how you are doing your calculations and how you are rising at quarter 1, 20 basis point or quarter 2 at a slow market share growth. So, first and foremost I want to register the revenue reporting of paint company has three broad components, decorative paints, foot tea business as well as industrial paints. now we have a fair bit of idea of their industrial paints some of them are also reporting a breakup between industrial and decorative paints now with decorative paints and gupti business of of the legacy players and decorative paints and gupti business of billa white our assessment is we have grown very significantly and last quarter we have talked about reaching double digits and we have grown more than 700 to 800 basis points in this quarter further so we are there on a standalone basis our assessment is we will be in quarter 4 to quarter 1 of next year double digits we are trying to reach in the quarter 4 but we are between a quarter 4 of this year or quarter 1 of next year we should be in a double digit number and we are our degree of confidence remains solid around there so you may have your own internal calculations and the number that you are giving us as the end market share is quite different from the number that we have on our internal distribution rate.

Thank you. Next question is from Prateek Kumar from Jefferies. Please go ahead. Yeah, good evening. I have couple of question.

Firstly, on BFF segment and toxic performance on a cumulative basis remains range-bound like past two quarters. Do you see any figures which could provide any positive change in performance? Some of it you have already alluded in like on an answer back.

Yeah. See, we expect slightly better performance in Q3. But obviously, there are a lot of instant bugs in terms of US tariffs, in terms of global health prices.

We expect stability and a slightly better performance for Q3. Okay.

Also, another question is on designation of rough hits comes with a big setback for anyone who has been tracking the lawful policies. My question is, do investors view this transition as a natural phase in generally typical competitive business or as inflection point of any risk-ride strategy? Thank you.

It's a natural phase of professionals going in their careers. This will have no impact on the business and business will be as usual.

And there will be no change in the growth strategy. Alright, so thank you. Thank you. Next question is from Rashi from Citical. Please go ahead.

Thank you. I just had a clarification. When you are saying that the paint industry has grown at low single digits in the second quarter and it's negative, including bill offers, this is just decorative organized paints or adding putty as well?

Including putty.

All right. Thank you.

Thank you very much. Due to time constraints, we'll have to take that as the last question.

on behalf of Gratham Industries Limited. That concludes this conference. Thank you for joining us, ladies and gentlemen.

You may now disconnect your lines.