Grasim Industries Limited

Ladies and gentlemen, good day and welcome to Grassen Industries Limited Q3 F526 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. 0 on your touchstone phone, please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Panchmatia, Head Investor Relations of Graphene Industries. Thank you and over to you Mr. Ankit.

Good morning and thanks to you for joining Graphene's 3rd quarter financial year 2020 journey course. The financial statements, press releases and presentation are already uploaded on the website of Stock Exchange and our website for your reference. For safe hours kindly refer to cautionary 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 Kampanya, Managing Director, Hiroshima Industries and Business Head Birla Opus Bains, Mr. Hemant Kalyan, Chief Financial Officer of the Hiroshima Industries. Also joining them we have with us Mr. Jayal Gokhale, Business Head of Chemicals, good morning and a very warm welcome to everyone joining us today at the outset

We wish all of you a Happy New Year 2026. We hope that the year has begun on a positive note for you and your families and it brings good health, continued progress and renewed optimism. As we step into 2026, we do so with a sense of confidence and purpose. While the global environment continues to evolve, the underlying strength of our markets The resilience of demand and our disciplined execution gives us optimism about the road ahead. The new year represents not just a change in calendar but an opportunity to build on momentum, sharpen our focus and deepen the value we place for our stakeholders. On that value creation, let me start sharing key updates on two of our latest growth engines. As announced earlier, our paint business Villa Opus CEO, Mr. Sachin Sahay, shall join us from 15 February 2026. Despite the absence of CEO, the existing paint team delivered an extraordinary performance, reaffirming the company is being built on rock-solid foundation and has a long pipeline of leadership who can take on the baton when the need arises. During the quarter 3 of FY26, Villa Opus, the third largest decorative paint player, expanded its revenue market share by more than 300 basis points year-on-year based on internal estimates and announced results of listed paint makers. On quarter-on-quarter basis, Villa Opus accelerated its market share gains with revenue growth of nearly three times the Indian decorative paint industry growth rate. inclusive of villa offers. Further, the combined revenue of villa offers and villa-wide putti business in Q3 FY26, the revenue market share gap with existing No. 2 paid players is now reduced to around 300 basis points based on the guided decorative segment revenues which includes their putti business as well. In Q3 FY26, Villa Opus sales volume has risen by 70% on year-on-year basis. Early this January, Villa Opus has crossed the milestone of 500 million litres of paint sales cumulatively. We believe that more than 6 million households are now experiencing superior quality of Villa Opus in a short period of 18 months. Villa Opus exponential growth is underpinned by rising brand acceptance, rapid expansion of distribution network, strong sales throughput from dealer councils to contractors and consumers, subsistence differentiation through superior quality, product quality, and focused brand building efforts. Let me give you finer details of execution on the buff. First, on brand reach, the presence of dealer offers has crossed 10,400 towns across 35 states and rural territories. We have covered all 50,000 population centres across India and more than 75% of the 10,000 to 50,000 population centres. The company will continue its expansion efforts deeper into Bharat. The active quarterly billing deal has grown in double digits along with a single high single-digit growth per dealer revenue throughput on month-on-month when compared to last year's same quarter. Additionally, Villa Office is transforming the paying consumer retail experience with company-exclusive franchise outlets nearing 1,000 Villa Office paying galleries. These galleries uplift consumer experience by selecting a paying brand and seeing premiumization of the categories. Institutional sales continued to gain traction during the quarter, supported by increasing project wins and specification approvals among clients including governments, builders, factories, hospitals and cooperative housing. The institutional sales grew by 40% quarter on quarter. As institutional orders had a long gestation period, happy to report more than 40,000 Mid and last size projects are in various stages of negotiations with nearly 25% build there were a strong project pipeline for future. Secondly, Villa offers remains focused on driving secondary sales from dealer-counsellors to contractors and consumers. The 10% free paint promotion continues on 10 and 20 days of past across all immersion, top course, waterproofing range however excludes sub-economy, and other categories. The company is equally focused on building relationships with paying contractors, the key influencers. For them, Villa Office has built an end-to-end, first-of-its-kind, digital platform to engage with contractors online on pan-India basis for product information, incentives and schemes, sharing consumer leads, open assurance registration, complaint handling, and much more. This platform is integrated with our unique track and trace system to monitor consumption by customers at sync code and dealer level. We are also implementing AI-based projects to improve on contractor connects and analytics. I am happy to share that over 7.5 lakh contractors and painters have applied and experienced build-out for superior range of products on pan-media basis. This online platform allows us to remain always in touch digitally with the unorganized painter community and instantly transfer accrued benefits to their banks on a click of a button on their app, anywhere, anytime and experience like UPI. Additionally, the centrally controlled tinting machine Enetics shows strong color and consumption across geographies. With over 35,000 active tinting machines in operation during Q3, the tinting start-ups are interesting to zoom our insights. The top two opus colors in the country include Fort Cochise, a dark bluish-gray color, and Morning Birdstone, a light bluish-gray shade, which are tinted by more than 30,000 dealers in the last one year. Thirdly, the foundation of our product strategy is built on R&D excellence with a portfolio design for performance, durability and unmatched finish. Billa Office has achieved what we believe is the fastest portfolio expansion by any brand in the industry. Today, Billa Office proudly offers one of the widest product ranges of more than 215 products 1,848 FUs across emulsion, enamel, waterproofing, wood finish, wallpaper and others. This year itself till now we have introduced 40 new products including the completion of retail waterproofing lines, launch of painting tools and indigently developed Italian hue, alkyd rings and many more. These innovations are Not just additions, they are accelerators of growth which is creating clear product differentiation, winning the trust of dealers and delighting consumers. The fourth powerful driver of Brilla Office is creating consumer cool via sustained brand resilience and differentiated marketing. According to Office Commission's Brand Fact Study, the top of mind brand recall for Brilla Office has surged into double digits considering us as the second most recalled paint brand in urban markets. With over 6 million satisfied home users acquired in a very short period, Villa offers brand acceptance to continue to escalate, providing solid impetus to growth. From builders and government bodies to industry, hotels, education institutions and MSMEs in the project segment to individual homeowners and housing cooperatives, Willow Opus brand trust is on the rise. With a strong media presence in Waterpour and high engagement campaigns, our brand talent is set to soar even higher. Watch out for our latest Opus Boy campaign, Color of Togetherness in the ongoing T20 World Cup and upcoming IPL 2026 and many other regional and national impact properties on television, digital and outdoor media. Our premiumization efforts continue with PaintCraft, recently launched, Billa offers professional painting services, fully GSE compliant, transparent pricing, attractive EMI options, end-to-end platforms from lead management to quotation to monitoring of services and quality approval, managed jointly by central and field teams. This service has expanded to over 5,000 pinkos and is offered to offer PaintCraft, on panel databases through the 1,000 paint galleries at the earliest. Separately, on Opus Assurance Services, where the company has given additional guarantee besides the standard warranty clause to redo the painting including labor, if need arise, more than 60,000 consumer sites have been registered through nearly 30,000 contractors under this first-of-its-kind program. The combination of paint craft and Opus Assurance will improve consumer experience, allowing us to sell higher-end products and premium services. The fifth powerhouse behind Billo Office Momentum is the second-largest manufacturing capacity holder in the industry, a formidable 24% capacity share. With the launch of Kharagpur and a steady ramp-up of capacity utilization across each of our six plants, the company has executed the natural production strategy by producing fast-moving category products closer to their market, cutting down the drag of logistics costs and inventory and staffing its service edge. With the completion of projects on time and within budgetary context, the focus of the company now is shifted to improve productivity, efficiency operations and bring down significant variable costs through optimization. At the heart of our manufacturing journey lies a bold embrace of Industry 4.0 with IoT-driven automation, helping standardization, and consistency of quality. This excellence is now officially validated. We are proud and excited to share that Bill of Ops has received Integrated Management System Certificate and compressing ISO 9001, 14001, and 45001 for all the six plants in one go. Achieving these certifications strengthens our organization framework and reinforces confidence of our customers, partners, stakeholders in our capabilities. Securing IMS certifications in less than 18 months of full-scale operations is an unprecedented milestone. It underscores our deep commitment to the highest standards of quality, safety, environmental stewardship, compliance, and operational excellence and marks a powerful step forward in an ongoing sustainability evolution. Before I move on to the next business, I wish to address the narrative about sluggish industry growth. Based on announced results of four listed paid majors and guidance on their decorative business, it appears the decorative field, excluding the law of first, has grown by 1-2% by revenue, by 7-8% by volume, in Q3 FY26 vs Q3 FY25. Now, when we add villa offers Q3 performance to these 4 layers decorative paint system, industry revenue growth including offers rises to 5-6% and volume growth jumps to 11-12%. In my economic understanding, a double digit volume growth reflects a good to strong consumer demand. However, the pain of industry is rate realisation, which we believe is lower due to combination of higher discounting and improved players' tendency to focus on low-value economy, sub-economy category and cheap discounted putti business. Villahopper's revenue is Villahopper putti and our growth remains balanced across all categories of paints with premium and luxury segments continues to contribute steady 65% in our overall revenue. We have taken 2-6% price rise in January and February against standard dealer price lists across a range of products to test the channel and consumer reaction. Coming to Villa Pivot, the B2B e-commerce business crossed the Rs 8,500 crore annualized revenue run rate ARR mark and remains on track to surpass the annual revenue of Rs 8,500 crore, way ahead of FY27 guidance. In a country as dynamic and fast-growing as India, the next great leap in commerce won't come from building another marketplace, it will come from digitizing and organizing B2B procurement at a scale and complexity few have ever dared to tackle. That's exactly what Birla Pivot is doing and we are taking one of the largest, most fragmented, operationally intense spaces in the economy and turning it into a trusted, tech-enabled, outcome-driven platform. Our vision is bold and unambiguous to become the most trusted B2B e-commerce platform in India and we're building it the right way by scaling a powerful buyer-seller network and compounding our advantage across the three pillars that truly matter in e-commerce, price, assortment and experience. Let's start with price. Because in B2B pricing isn't only about competitive parity, it's about removing friction from the system. India's raw material ecosystem is full of inefficiencies. Discovery gap, opaque comparisons, pragmatism, sourcing and complex multi-vendor procurement. Bill of Rewards doesn't make you negotiate price. We re-engineer the economics of procurement. We align supplier inefficiencies with buyer needs. enabling transparent discovery and comparison, helping suppliers reach demand more efficiently and absorbing the operational complexity of procurement at scale. In other words, we convert fragmentation into efficiency and we pass that value back to consumers. On the stock market, this is where Bill of Pivot is fundamentally changing how business and individuals buy project materials. We are building a true one-stop procurement engine 35 plus categories, 40,000 plus SKUs and solution aggregated from 300 plus top brands. The product category is covering everything from steel to tiles, cement to chemicals. This breadth isn't just impressive, it's transformational. It consolidates vendors, compresses procurement cycles, standardizes buying decisions and stabilizes approval and purchase planning. We are going to step further because in B2B, the ability to buy is open tied to working capital. And that's why Billa Pivot is enabling fast, easy, customized financing designed around real procurement needs so businesses can purchase with confidence, flexibility, and speed. And then comes our biggest differentiator, experience. Because B2B is not just physical, it's physical, operational, and relentlessly serviceable. Villa Pivot delivers B2C-like simplicity in a B2B world, powered by digital tools for order enablement and fulfillment, nationwide support backbone, and consistent, structured buyer experience. We are not simply building a website, we are building a reliability at scale. We are making complex requirements feel effortless, dependable, and reputable. That's the moment when a platform stops being a channel and becomes a habit. This momentum is not episodic. It's network-led, revenue-led, and scalable. As categories expand, network effects deepen, and digital adoption accelerates, Villa Pivot is uniquely positioned to play a defining role in shaping and leading India's B2B procurement digitization growth story. This isn't just about growth. its creation of a new infrastructure layer for Indian commerce. Moving on from new businesses and focusing on macros, India continues to stand out on a global growth map. India's domestic demand is resilient, investment cycle strength and policy support have kept growth momentum intact. The most recent Univazir reinforced this momentum with several strategic moves. is government's continued focus on infrastructure, housing and urban development, would drive growth for grassroots female business. India's push towards self-reliance, manufacturing scale and double supply chain integration would drive growth for our chemical business. The recent GSE rationalization and focus on improving India's per capita driven by higher disposable incomes Better quality housing and aspirational consumption would drive growth for decorative paints and premium textiles. Support for energy means by increasing finance, democratization and integrating into organized supply chain would drive growth for Aditya Villa's capital and Villa Pivot. Lastly, a balanced focus on renewable energy and energy security will drive growth for our renewable and insulated business. For investors seeking a single scalable entry into India's structural growth, Graspium represents a credible and well-diversified proxy. As India's growth story unfolds through these diverse teams, Graspium businesses remain deeply intertwined with each of these structural pillars presenting long runway of growth and value creation. Reflecting on this growth, I am happy to share that Graspium Consolidated Revenue For the current quarter, stood highest at Rs. 44,312 crores, an impressive improvement by 25% year-on-year, with building materials, financial services, cellular fibers, chemicals, and even premium textiles and insulators firing on all cylinders. The 9-month revenue stood at Rs. 1,24,330 crores, up 19% year-on-year, demonstrating consistency of performance. Standard revenue grew at even faster rate, reaching highest ever at Rs. 10,432 crores, up by 28% year-on-year, with strong contributions from both core and new businesses. I would now like to hand over the call to Hemant, CFO, to further discuss financial and key business highlights of other businesses.

Thank you, sir. Good morning, everyone. It's my pleasure to interact with you all again. Happy 2026 to all present on this call. I am very proud to say that we have closed the calendar year 2025 on a high note with two of our new businesses on track to achieve their stated goals. As on 21st December 2025, the PTM consolidated revenue is nearly Rs. 1,70,000 crore, growth of 14% compared to FY25 revenue. Currently, standalone revenue on TTM basis stands at 38,191 crore, up 21% compared to FY25. Based on the current quarter revenue, standalone businesses are now at annualized revenue run rate of higher than Rs. 40,000 crore. There has been a strong underlying growth across all the businesses. Consolidated EBITDA grew by 33% year-on-year, to 6,215 crores. Stand-alone EBITDA grew at a faster pace with growth of 57% year-on-year to 585 crores. Starting with key business, building material, revenue for the segment grew by 30% year-on-year driven by all-round performance across humans, trains and B2B. Led by the sector's strong outlook, Alta Tech is steadily expanding both size and scale. Alta Tech's clear vision and disciplined execution have led current capacity to reach 194.06 million metric tons with clear sight of reaching a capacity of 240.8 million metric tons by March 2028, which is a chatter of more than 10%. The capacity expansion is clear critical from three or four perspectives. Firstly, it reinforces our role as a key enabler of India's infrastructure and development journey. Secondly, it enables us to grow ahead of industry curves. Third, it narrows demand and supply cap across critical markets nationwide. And lastly, it further strengthens an ultra-tight leadership position. While capacity expansion remains core to our growth, We have embedded a culture of efficiency to ensure that our growth is resilient, sustainable and cost effective. Underpinning this system is our EBITDA growth, which grew by 29% year-on-year with a EBITDA per tonne of Rs. 1051. Our MD has already covered paint and B2B e-commerce business and let me now directly come to our core businesses of cellulose, fibre and chemicals. Highlights for these core businesses is that while we can keep on disrupting them individually irrespective of commodity cycles, both the businesses combined have delivered consistent EBITDA. Leadership, innovation, sustainability, capital allocation and cost effectiveness are key tenets to such consistency which are an integral part of RASIM's growth strategy. Starting with Pellilose Fiber, the business has delivered EBITDA of Rs. 491 crore growth of 48% year-on-year. This is driven by three factors. First, improved realization due to favorable content mix led by S-course. Second, operational efficiency due to volume growth. Third, declining input titers, mainly pulse and cortex. The demand for sagittarius fiber in China continues to exhibit stability due to global tightness in supply. In India, we have seen similar strength despite removal of quality control order. Due to this inherent trend, we have seen prices for cellulose fiber decoupling with other competing fibers which are on a declining trend over the past few quarters. Unlike cellulosic fiber which are largely stable have started to recover, cellulosic fiber segment also includes cellulosic person yarn business. The business performance for the quarter was subdued due to cheaper imports from China which has created oversupply and lower downstream demand. Secondly, chemical business, thus revenue growth of 5% year-on-year was largely driven by volume. Purchase product base volume for the quarter 3 F526 stood at highest ever 313,000 tons, up by 4% year-on-year. While CFR SEA prices are down on YOY basis, Domestic plastic prices are showing some resilience led by stable demand and rupee depreciation. EBITDA in chemical business was lower by 4% year-on-year due to lower ECU realization and lower profitability in specialty chemical business. Higher ACS price resulted in lower profitability and specialty chemical business which was partially offset by lower BPA prices. Coming back to the consolidated business, in the financial services, It is one of the fastest growing businesses in our portfolio. This is driven by their multi-channel approach aimed at providing customers with seamless experience across channels of interaction. The revenue was up by 29% year-on-year led by all-round performance across lending, asset management, insurance and advisory services business. Total lending portfolio which includes 20 FTN opting finance grew by 30% year-on-year to over Rs. 1,90,000 crore. On a strategic front, we would like to highlight the recent announced partnership with Advent International, which also marks an important milestone for Aditya Birla Capital. During the quarter, Aditya Birla Capital Board approved a primary capital inclusion of Rs. 2,750 crore into Aditya Birla Housing, valuing the business at approximately Rs. 19,250 crore on a course money basis. Advent will hold roughly 14.3% of housing finance with Ajithi Birla capital retaining about 85.7% subject to customary shareholder and regulatory approvals. In other businesses, starting with renewable business, Ajithi Birla renewable grew by 82% year on year largely led by higher capacities which now stands at 92% peak capacity compared to 1.2GW quarter 3 of 525. Ajithi Birla renewable has announced a strategic investment by global infrastructure partner which is a part of BlackRock. This deal marks one of the largest primary private equity commitments into an Indian renewable company. VIP will invest up to Rs 3000 crore comprising of an initial 2000 crore commitment with a green shoe option of 1000 crore. Subject to customary regulatory and closing conditions. Post this deal, the renewable business is valued at an EV of I am happy to say that this partnership is expected to uplift Aditya Villarinova's growth trajectory as it builds on its operational and contracted capacity of nearly 4.3 GW of peak capacity portfolio across solar, hybrid, floating solar and RTC assets and targeting saving capacity beyond 10 GW of peak capacity in coming years. This transition brings not only capital but also the GIPs global infrastructure operating experience to support disciplined expansion and contribute meaningfully to India's energy transition goals. As regards CACET, post commissioning of KADAKU plant, we have completed majority of the plant capital expenditure in decorative paint business. The capital expenditure spent on YTP basis is 1310 crore. Focus now remains on phase 1 of Harrier Lio-seal project for additional 55 As of 21st December 2025, net debt of the company stooped lower at Rs. 6,882 crore compared to Rs. 8,273 crore in the same period last year with net debt to PTM Nebeta empty at 2.1 level. That will now open the floor for Q&A.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touch-tone 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question comes from the line of Naveen Sahadev with ICICI Securities, C4N.

Yeah, good morning, sir. I hope I'm audible.

Yes, yes.

Yeah, so thank you for the opportunity and also thank you for the detailed initial comments. Two questions. First, of course, on the paints business. So needless to say, the company has done a commendable job. I believe for the quarter, the revenues given like, you know, a 1500 crore run rate for the Villa Pirate and numbers that are published for Ultratech, our sense is Paints would have done roughly 1200 crore kind of revenue in this particular quarter. This, of course, is great from the start that we have had. My question is, the growth is seen maturing. In the sense, in Q1, a similar sort of a very rough cut working suggested a 1100 kind of growth in the june quarter similar flattish in september and now we are at the 1200 uh give or take uh some margins there i mean some buffer there now to reach the scale of 10 000 crore exit by q4 28 which is a run rate i mean this is around 2500 crore revenue over the next nine quarters, we need to grow at 40% CAGR year on year for us. So, I am just trying to understand, first of all, what difference then now the company will do or what convinces us now, given that the growth is maturing in the last one, two quarters, how should one look at this target realistically being achieved and in that, what is also the industry value growth into consideration. That's my first question.

Okay. Thank you, Namin. So, while you have done your internal calculations, I am not going to either accept or deny it. But all I can say, both in quarter and quarter basis, we had a robust more than double basis levels of growth. Those are two between 18 to 20 percent on a quarter-on-quarter basis. On an annualized basis, these numbers are tending towards a three-digit growth. So, I don't know what numbers you have in your calculations and using words called mature when they have grown on an year-on-year basis by 300 basis points in the paint industry and the and we see a similar kind of consumer uptake in the current quarter. On overall basis, we are seeing across geographies very strong demand for villa upper space and a large number of existing dealers who have joined us have increased their throughput and they continue to grow at levels of a strong single digit on a quarter on quarter basis and we continue to add new dealers at a double digit level on a quarter on quarter basis and our equivalent half a year half a year basis So that is the part one. Second part, which is besides consumer and dealers, we are also getting very good attraction from the contractors. And as I mentioned in my opening speech, more than 7.5 lakh contractors have joined Hench. And this number of contractors give us confidence that the growth will continue. We have still a single digit market share there. We have a large capacity. Our presence is now on a family basis. We have reached every 50,000 population down. We are at least more than 75% of 10 to 50,000 population down. So the growths are happening. We have a large portfolio of businesses. Consumer demand is building up and we remain confident and And we continue to guide that we will deliver the 10,000 crores in the third year, in third full year of operation.

Understood. So, despite the price increase that we have taken, as you said, across 2 to 6 percent, despite that, you are saying we are confident to achieve the revenue target?

So, there are, okay, price, to understand the philosophy of price increase, we always want to maintain a particular distance from the market leader and we felt the distance was slightly more than what that was necessary and we are breaking that gap. That is the objective of price increase and there is no other objective. And we also want to test at what is the what demand of a zoomer and contractor remains at the device price.

Go ahead. That's fine.

Okay. Thank you. My second question then was on your Birla Pivot business and of course, extremely fast execution, much, much ahead of expectations. But we had also, I think, hinted the first time we gave this target, the road to profitability or break-even for this business was also like, you know, a billion dollar gap. kind of a revenue run rate. So, is it now fair that since you have achieved almost there, this business is breaking even or will start making positive contribution? How should one look at profitability for Birla Privat from now going ahead? Thank you. These are my questions.

Thanks. I mean, this is Sandeep here. On the, you know, on the profitability front, You know, we are making progress similar to how we have done, you know, how we have executed on the revenue side and the growth has been, you know, excellent over the last few quarters.

We have been making good progress on bridging the gap so that we can get to decision as well.

I think from our current estimate, we will exit FY27 at a decision level.

That is our current estimate. Thank you. Thank you. Next question comes from the line of Rahul Gupta with Morgan Stanley.

Please go ahead.

Hi, thank you for taking my questions. Two questions. One, continuing on the pivot point, I remember earlier you had made a point to earlier you had tied it to cash break even by 2030. So you are now front loading it, accelerating it to fiscal 27 and right?

Rahul, I don't think we gave the guidance of 2030 earlier, but, you know, as I mentioned in response to the earlier question, you know, FI27 exit, we should be exiting the year and breaking India.

Okay, that's great. My second question is, on the continuation of the point you made on the pink, you are testing waters with 2-6% hikes in general. You know, it's early days. Can you please help us understand how the acceptance has been And if we look at the industry which has been struggling with discounting, how should we look at the overall industry from here on? How volume versus value gap should move over the next year for industry and you?

Thank you. So first and foremost, as I mentioned in the previous answer, the gap between the leader and us was high and we have used this price increase primarily to be able to bridge the gap. We are still a single digit player and our aim is to bridge the gap between our capacity which is at 24% to our current revenue market share. So that is part one. It's early times we were able to say what is the response to the price increase because we have had certain range of products where we took price increase on 28th of January and the remaining range of products is happening on 25th of February. So it will be better I respond to the consumer and contractor response after the quarter 4 results are there. So we are still in the process of executing the price increase. But on a mid to long term basis, what is our view about the industry? he remained very bullish. There has been, as I mentioned in my opening speech, the industry in quarter 3 has grown by 10-11% or probably even 12% by volume. The challenges have been over-focused on economy, sub-economy and 50 place business. So, if we stop the down trading, And if you notice, Villa Opus wants to operate with a more balanced approach. It is making every effort to premiumize the service with the launch of its Gale Calories. And there, obviously, the ratio of premium and luxury is significantly higher. And same is true for our painting services. We are making every effort to premiumize and ensure that in the mix, our rate realization remains at a similar level to the volume and our attempt is volume and value to both meet in time. As far as the industry is concerned we believe that this year the industry including the law office may grow by 5-6% by 2025 it will grow by almost it was min and by 2027 we are hopeful that it will come back to a 8-10% growth rate.

Thank you so much Vishu. All the best. Thank you. Next question comes from the line of Neeraj Chimudia with MLS.

Please go ahead. Thank you for the opportunity. Just one question on the chemical side. For the epoxy business, just wanted to have a

Your thoughts, A, with the trade deal done with the USA now, and Chinese parents are also appreciating that close to around 8-9%. How do we see our exports to the USA market in the medium term? And on a longer term basis, with now USTA also in place, how do we see our volumes in terms of exports to that region as well? Thanks, Neeraj. Hi, thank you for your question. Can you hear me? Yeah, I can hear you. Both are positive for us, in a way. So, as you know that in epoxy, particularly in liquid epoxy resins, the Koreans have been available in India due to their FDA, you know, they get a certain advantage that they can bring in product without reducing. And also, you know, they had preferential access to to the US as well as Europe. Now clearly that advantage is going to go away. If you look in terms of timing, then the US deal probably will get actioned before the American deal. So I am seeing a positive effect on export of epoxy from India to the US. Now, how much quantity that will be, how that will ramp up, etc., is a matter of individual customer qualifications and those kind of things. That will be too much detail to get into right now. But we do see a positive impact on that side. Similarly, if you look at Europe, as you know very well, the European chemical industry is struggling with high costs, both from perspective of energy but also from perspective of extremely high labor costs. As you know, a lot of restructuring has been announced in Europe. You know equally that Westlake has stopped operations on their Rotterdam site. I think the India-Europe FDA in the longer term will have a much more significant impact on the Indian chemical industry. probably, in my personal opinion, more than the US. Of course, the speed at which Europe will ratify all this will get down into law, etc. will be a little bit slower, but I believe that will be more sticky. So, most of these arguments, sir, are, I think, positive for the industry. Got it, sir. So, just two clarifications here, sir. A, do we import any raw material from EU which were earlier subject to taxes and now could help us from the chemical business point of view also and from an overall business point of view also and any volume guidance which you would like to share from the epoxy business point of view for FY27 thank you so much if I look at imports from Europe yes we have I would not like to get into the details of what that is but those are like you know they are not a large part of our basket so I don't see really a large benefit from that. What I may think of is, you know, if decadence prices continue to remain high, then the propylene route to ECS has its own competitive advantage, right? And several of the propylene-based producers are western-based. But there is a logistic cost hurdle, so let's see how this plays out in the long term. If you look at volume growth, then if I look year on year, our overall you know epoxy business liquid epoxy plus formulations this year has grown or at least you know for the year over year we have grown by about six percent i expect this rate to ramp up next year now how much it will ramp up by is a matter of matter of speculation but i expect that rate to ramp up further got it it seems to come up the fundamental And safe to assume that this ECH price correction which will happen on the upside would translate into a similar increase in the prices of epoxy which generally gets passed on a lag basis.

Yeah, there is usually a timeline associated with that.

As I mentioned in the epoxy valuation, there are competing routes, glycerin-based ECH and propylene-based ECH. So, what may be a pass-through for me may not necessarily be a pass-through for somebody else, maybe nobody who may be properly integrated. So, depending on their crude prices, propylene prices, geocitin prices, the pass-through mechanism has a different cyclicality. But in the longer term, it all always passes on. It's always a matter of time. But the exact speed by which it passes on depends upon these three, four factors. Sir, last clarification if you allow. This quarter we have seen a dip in our epoxy revenues. So was it more because of the volumes were less of this quarter and that should start correcting next quarter onwards? Is this a right assumption to make? Just let me quickly check the data. Yes, so volumes were slightly under pressure on the liquid epoxy revenue side. Actually, maybe the better way to see it is, you know, we decided not to take certain volumes where we thought the margin was getting too squeezed. That's probably the better way to see it. If I look at the non-LER business, you know, all the formulations, specialties, so the specialties within the specialties, there actually we have not had any volume issue. It's on the margin there, perhaps the lowest profitable part of our LER business, we have been a little bit... you know, unwilling to allow our margins to get compressed. Thank you. Mr. Himudia, please rejoin the queue for more questions. Next question comes from the line of Amit Purohit with Kilara. Please go ahead.

Yeah, hi, thanks for the opportunity and thanks for the detailed data points on the field. Just to recap, on the overall change that we saw, you talked about 500 billion kilometers. That was, since the time we have been into the market, right? Is that trivialistic or did I hear this correctly?

500 billion meters, not 500 billion kilometers.

Okay, that is since the time we have started the operation. Okay, and secondly sir, also wanted to understand when you talked about 300 bits lower than the second player, that includes 50 in every tilt rate at this point of time. Exit market share you were talking about or?

what we said in the statement, opening remarks, Dilla White, Dr. Dilla Hopper, review, and guidance given by number two players. In our assessment, in terms of estimates, now the gap is 300 basis points. I would hope. And it is only Dilla White's 50 business. It does not include any other business.

Sure, sure. And so we talked about increase in new dealer edition. I just want you to understand the typical profile of these dealers. If you could just qualitatively highlight these are large dealers or these are dealers largely from the market leaders or if you could just call it some highlight because typically I mean there is different types of dealers and initially when we started off obviously there were challenges to reach out to the very very large dealers. What is the state now I mean in terms of acceptance?

We are taking blanks from all category of dealers. In our internal assessment, we have broken the dealers into A category which are more than 3 crores, B category which is 1 to 3 crores, C category which is 30 lakhs to 1 crore and D category into less than 30 lakhs. Most of the dealers are coming in the A, B, C. The small numbers also come in the D category. But I have focused in the A, B, C category.

Yeah. And lastly, the price increase that we highlighted, that is more from a testing perspective or is there any raw material pressure which kind of or do you think that from now on the brand is strong enough to kind of take pricing and still it adds value to the entire channel as well? Just wanted to know your outlook. as we highlighted that next year FY27 the growth in the industry could be close to about 8% so the pricing volume graph should reduce in the FY27 that's the last question sir.

Mr. Paul, there are no current raw material pressures. we've been consistently maintaining that we are at a lower price as a market leader and we felt the gap was higher and we reduced the gap. That has been the strategy around there. It is not a price increase strategy per se as you're reading it. We read it that we would like to maintain a certain gap with market leader and we want to test at that gap what is the consumer response. there was an X gap that existed and we reduced that gap.

Thank you so much. Thank you. Thank you. Next question comes from the line of Patanjali Srinivasan Patanjali with Sundaram Mutual Fund. Please go ahead.

Hello.

Mr. Patanjali, please go ahead.

Yeah, thank you for the opportunity. A couple of questions. So firstly, could you explain a bit on our share of retail business and institutional business? Because I believe we've grown pretty fast in our institutional business, but I was just trying to figure out if the base share is lower or are we tilted more towards institutional business?

Okay. So, to our understanding, the industry... Retail and institutional business mix is 85-15. We are not yet there on that mix. We are still a single digit on the institutional business. Retail is much faster to take off and institutional is there is a much longer gestation period. The message that I was communicating is that we have a strong pipeline and over hopefully by FY27 we should be able to come closer to the industry average between 12 to 15 percent on overall contribution from institutional business.

So could you give me some number sir where we are in terms of range here?

I will explain. We are single digit number and we are and we are we have a strong pipeline of institutions but DTEV continues to be the stronger forte for us at this point of time.

Sure. And just one more question. So this number of saying that 18% is grown last quarter and all of that. This is one part though where I have not been able to figure out. Like I met couple of dealers from the time we started and more recently. And I have seen some of them saying that they have either stopped doing business or they are finding it difficult or something like that. While my sample size is very small, I want to know like what is an acceptable level of pushback or reduction in dealers when we expand dealership and what are our targets here and where are we at?

So, it's a large dealership. There are over 100,000 dealers on and off the on an average in a quarter about 50-60% of the users are active. We are also experiencing a similar level. In fact, our census about 70-75% in a quarter are active around that and we are satisfied with the number of people who have onboarded with us with a number of cases were active in a given quarter. So, from that perspective, We are very satisfied both in the expansion phase of leaders both in the existing towns and new towns as well as the throughput phase of improvement of leaders. Most of the leaders who have joined us and have given consistent change have continued to stay with us. There is obviously a very focused on art collection and there are dealers who are the poor pay pastors are the ones probably you may be referring to.

Got it sir. Just to continue on that I just want you to know what is our policy dealers have not been doing as much goodness as we like to them. How are we dealing with them and have we started collecting money for printing machines as we have given to dealers?

No, we don't collect money because as we already explained, we give the dealers free of charge printing machines and that remains a consistent policy even in April 26th and going forward. only if a dealer does default on his payment for a long period of time are there any actions that are necessary, but this is few and far and probably not relevant for this natural platform.

Thank you. Mr. Patanjali, please rejoin the queue for more questions. Next question comes from the line of Satek Kumar with JetList. Please go ahead. Yeah, Dr. Peter, my question is on

Thanks, can you just confirm again the while you talked about your revenue expectation maintaining for FFMPH what do you think on top secrecy other related question you have like seen some increase in the expense and reputation is it completely related to capitalization of fixed plants or Also, if they are working roughly 10 years, which you expect because you are also in business.

I just want to be clear with your question. You are referring to overall drafting results and you are saying that the interest and depreciation component on up. Is that what you are referring to?

Yeah, that is right.

So, in drafting, if you are referring with the last year, the borrowing rate

for the Q1 and Q2.

Setting up the new plants was being capitalized. In the 15th of October we have commissioned our last six plants and now from next quarter onwards there will be no capitalization and all the interest costs will be coming to the engine account. Is this answer to your query?

Yeah, sure.

So, this is no material working casting changes because there are things like this. same segment business to more integration that doesn't have no integration.

This is quite interesting. Mr. Kwan, your voice is breaking. Can you just come a little closer to the mic and speak?

In same business, we have capitalized over all the six plants and no major capital is pending now.

If your question is on debtors, we are well in control of the debtors and working capital is not a challenge. We repeat again that the interest components in the past, a portion of that was getting capitalized and now it will not get, the portion is pretty much falling because from six plants down to in our 15th of October it is only one plant and that also a part of which was no work applied and the same applies to deposition. As now all the six plants are fully commissioned, their full deposition is reflecting in the books.

Thank you. And the other question was on paint segment profitability which we are expecting per second year. You maintain it as like turning positive per second year? Yes.

We maintain our guidance as we within three years of full scale operation we will we are targeting to reach a profitable number two position.

Thank you and all the best. Thank you. Next question comes from the line of Shreya Bhantia with Oakland Capital Management LLC. Please go ahead. Hello, thanks for the call.

Am I audible?

Yes, you are. Please go ahead.

Yeah, so my question is regarding the chemical segment. So, if you could share, what is the current share of renewable energy in the chemical segment?

Just a second.

It is around, exit rate is around 20 to 23 percent, right?

Thank you.

And we expect, we actually are targeting to reach an exit rate of over 40 percent by end of FY27, if you want to make a prediction.

Thank you very much. That was my question. Thank you. Next question comes from the line of Vipul Kumar Anupjan Shah with Sumangal Investments. Please go ahead.

Hi. Thanks for the opportunity, sir. So, when we start sharing the revenue and EBITDA numbers of our paint business, that means we are even today because that's why there was there is portion of the material that has been produced and was not sold and they are still reflecting revenues with the daily capitalized we expect you to complete that and we will move on to we will we will stay with you the exact dates when we do that but there is still and so that's why it is this gap between capitalization that's why the numbers what market calculates is there is a gap and we want to finish all the materials that we have produced before commissioning and consume it this remains in the capitalization so should we assume that from next financial year you will start sharing those numbers we will definitely come back ok thank you

Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today.

We have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments. Thank you so much for participating in the graphene course. We now go to close the course.

Thank you.

Thank you. On behalf of Graphene Industries Limited, that concludes this conference. Thank you for joining us. You may now disperse.