Asian Paints Limited (ASIANPAINT) Earnings Call Transcript & Summary

Hello, and good evening, and thank you for joining us today for Asian Paints results call. I'm Lakshya Sharma from Investor Relations team, and it's my pleasure to welcome you all. We are joined today by senior management of our team, including our MD and CEO, Mr. Amit Syngle; CFO and Company Secretary, Mr. R.J. Jeyamurugan; Mr. Parag Rane, AVP Finance. I would now like to invite our MD and CEO, to give us his opening remarks. Over to you, sir.

Hello. Good evening to everyone. Welcome to the investor call for quarter 2 and for the H1 financial year '26 results. It's my pleasure to kind of address you and look at in terms of sharing what are the results which we have declared. When we look at our core purpose, this is something which we have been enumerating, delivering joy since 1942. We exist to beautify, preserve, transform all spaces and objects, bringing happiness to the world. And I hope this time the results give joy to you. This is a standard disclaimer in terms of what you're all aware. What really happened in this quarter was turning the whole story from a point of view of looking at a series of initiatives, which we had basically put into place for looking at accelerating growth and not looking at from the point of view of what the external conditions would be, and it was more driven internally from a point of view of what we wanted to achieve overall. Various initiatives included: one, a very, very big up search with respect to the overall spending on the brand, building the brand equity and really spending from the point of view of looking at getting the share of the consumers' mind, looking at the whole area of consideration to buy and really improving our overall reach to the consumer so that we are able to kind of connect to all our customers across the length and the breadth of the country very, very strongly. The second area, which as we have been speaking, we really dialed on the innovation question, both from the point of view of our new products as well as some of the newer initiatives in terms of what we kept in the marking. So the element was of differentiation, the element was something very different in terms of what we really dialed up in terms of looking at it. The third area, which was a very strong impetus in terms of what we gave was the whole area of really looking at the service economy and, therefore, putting an ignition onto our services. And that is something which is another big factor in terms of how it is bringing us closer to the consumer. The fourth area was about looking at the regionalization of our efforts so that we could kind of look at our execution far more strongly, look at micro markets, look at differential strategies, which span out into very, very different regions and a very different way to that extent. And therefore, that was a very big quotient in terms of what we use in terms of looking at saying what we can do about looking at really driving growth. The fifth area was overall in terms of our B2B business, where we looked at really widening the net and not only depend on the conventional builder kind of a community to that extent and looked at various other elements of this reach so that we could kind of broaden our net and look at really looking at sales coming in a very, very different manner. And one of the other areas amongst the many, which we did were the area of backward integration, which we have spoken about our investments earlier in terms of what has happened. And that is something which is one thing which has really gone strongly from a point of view of looking at giving us some advantage of the market. I'll try to cover one of -- some of these areas quickly for you. Namely, I think this was a season time when we launched newer campaigns and we not only launched newer campaigns, they were very differentiated campaigns, which possibly gave us that advantage in terms of being very, very different and also really giving us a fillip from a point of view of our premium and luxury emulsions in a very, very strong way to that extent. We looked up at this entire initiative, which came in, which we said that the whole decor is just not about finishes. It is the finish, which inspires you to kind of do textures and wallpapers very, very strongly. And we really kind of launched this entire campaign with a CTA which came in about a glitz decor guide, which was along with it. So it was, I think, a very successful campaign, first time come back for Deepika as well for the brand in terms of -- in a big way in terms of what we kind of unleashed. The second area, which we really focused is our core ownership of Homes, which is very, very important. And that is something which we have literally looked at from a point of view of corporate positioning being very, very strong in terms of what we have been doing. And that is the area of Har Ghar, so we invoked Har Ghar very strongly because we know that that's the emotional connect and we always want to be the emotional energy in terms of how people associate with their homes. And that's why -- we created -- came out with something, which was very different. It was very well entrenched in the Homes, had an emotional tug, but at the same time, had a contemporary feel to it in terms of looking at appealing to the Gen Z as well as a wide range of audiences to that extent. Quickly, we'll try to show you this entire creative in terms of how it unfolded? Let's see it. [Presentation]

So as you see it, I think a lot of emotions in terms of what we built in, the whole relationship with the Home, and I think it was very well received. And we have got really very strong brand recalls in terms of what people have kind of seen this as an integral part of the Asian Paints story. The other area, which I mentioned was about the whole area of regionalization. Today, this is a big marketing theme which is emerging that you can't look at a country like India in one span of kind of strategy. We looked at various regions and looked at doing things, which were very, very core to the culture of that region and very much appealing to the people. And I believe that this is something which is a phenomenon which IPL has bought, where people are proud of their own regions and we kind of really appeal to that. We did this innovation in terms of bringing regional packs, which is a huge logistical exercise, very difficult to replicate by any other player to that extent. And this is something, which really stood out where today in various parts of the country, we had a differential pack across various products appealing to the local culture, arts and so on and so forth. So that it kind of created a very strong tug for the customer in terms of relationship with the brand and relationship with the can, which was very, very strongly kept. What we hear is a lot of people have really adorn this can in their living rooms and really treasuring it as they kind of go ahead. So I think this was really a master move in terms of what really helped us in terms of really enriching the portfolio from a point of view of a region kind of attraction in terms of what we could kind of really talk of. The other thing was the innovation, as I said, around what we were able to leverage in terms of our excitements across various media properties, which we did. So whether it was the Asia Cup in terms of what we looked at, whether it was the India-England series, we really looked at basically taking the advantage in terms of really asserting some of the very big things in terms of what we had come out. Whether it was the area of warranty, whether it was the whole area of our waterproofing product in terms of what it does for that, we could kind of really amplify it, and these were really loved by the audiences and a huge recall in terms of what it has been done and so very differently done. We also looked at really carrying on that entire impetus so that basically the energy always remains in the market. And really, adorned the independence day with something which is core to us in terms of really talking of the colors of India in a very, very strong manner in terms of what brought in the whole flavor of warranty, which was what was clearly our game-changing move in terms of what we saw this year in terms of what we brought in. Not only this, the whole element of innovation continued where we looked at a series of newer products and whether it was from a point of view of the area of waterproofing where we kind of really elevated the story by launching something which was very different, but at a very good VFM price point in terms of what attracted the market, and this was something which, again, really have done extremely well for us to that extent. And not only this, we looked at also really looking at really inflating the affordable price point by offering propositions, which are so very strong in terms of that customer. So these are all smart products, which offers various choices to the customer in terms of the type of finish. And that becomes a real flaunting point in terms of -- for the customer point of view of showing that they are using something which is very different. But at the same time, it's a smart choice, which is affordable. At the same time, we looked at the whole world of wood finishes. And for the first time, we really embellished this entire thing by looking at designer, chrome and metallic shades which we introduced and this is something, which has been the range with the architect designer segment. And overall, we've got a fabulous response in terms of what these things call off. And as I said, new products is a very strong part of our strategy. And I think it is great to see that today, new products contribute to almost more than 15% of our revenue, which comes into that extent, and that is something which what we are really proud of in terms of what we are able to instill. The whole area of looking at the service economy because this is something which for any brand, I think, really matters as you kind of really connect with the consumers and really can offer a proposition which is very, very different. We really inflated our beautiful home service in terms of its reach, looking at more than 650 plus towns servicing it, looking at an element of technology so that we are able to service the customer better, looking at and bringing a whole element of AI as well in it to that extent, and that is something which really gave us very, very strong results in terms of what we have been able to do. The second area was Total Assure, a very unique service, which we offer in the B2B segment where we look at possibly standing by the customer, which could be the builder, could be a society in terms of looking at it and really treasuring the whole process of looking at how we stand by the customer in terms of the whole painting process so that we are able to kind of look at offering a service, which is impeccable at the same time, something which gives the customer a strong confidence in terms of what they're able to do. The third very unique service, which basically we gave wings to during this quarter was the whole Metacare service, which is really an asset protection service, very unique. No one offers this kind of a service where we really look at adopting industries, give them service throughout the year to maintain their plants, which could be of corrosion-free and other things. And this has really worked very well for us to kind of really enhance our overall basket and give us basically an insight into so many big players where we are able to get our products and especially from the point of view of our industrial range. So a series of services are really igniting the whole area in terms of what we were able to bring. Not only this, we looked at the B2B segment in terms of as one big foray, where we said that given the industrialization, which is taking place in India and the kind of expenditure, which the government is putting in, in terms of looking at really giving this country a real facelift from a point of development. We wanted to be part of that story and that is something which we have invigorated far more strongly in terms of what we could bring so that we could kind of embrace this area and not look at the conventional space of builders and CHS to that extent. And that is something, again, which has paid strong dividends to us in terms of what we have been able to achieve. Not only this, we have -- as promised to a lot of you over various quarters, we have looked at this whole area of backward integration. And I remember that a lot of people were asking us questions in terms of what is this all about. And then when we look at it, 2 big things. We just commissioned our white cement plant, which has unfolded in Fujairah in Dubai. And we are basically tested the product going up to about 90% of the capacity. And we have looked at dealing with both white cement and clinkers of white cement in a very strong way. And this is something which is now underway as a project which is really rolling out. The second area is the VAM-VAE project, which we have kind of put in of more than about INR 3,000 crores in terms of the CapEx, which we have committed to the project overall. This project is also nearing completion as one part of the project which we are talking of, and that is something which we are going to look at unfolding in the quarter 1 of the next year as we kind of look at it, and this is something which is a big story in terms of how we are looking at the Next Gen emulsion, which will come out, which will give the company the differentiation in terms of what we can talk of. And this is New Gen differentiation in terms of what we bring as a very new initiative, which is unbeatable. So I think these are some of these real advantages in terms of what we have taken from the backward integration part. Coming to the numbers, which all of you are now aware that we have done, I think, a good, strong achievement basically, although the base was supportive, as you all know. I think a good trajectory from a point of view of finally getting to the double-digit growth at about 10.9%. And looking at overall, this trajectory being very, very strong from the point of view of what we have been able to do over the various quarters to that extent. And that is something which has been very, very strong. So you can see the trajectory, which has come out in terms of the overall volume in a very big way. The second area, if you look at overall from a point of view of performance, we looked at volume of 10.9%, but we also looked at a value of about 6% in an environment, which was not too great. Overall, consumer sentiments were not too great from a point of view of what we saw. We also saw that while there was a little bit uptick from a point of view of festive season, but it was very, very short in terms of what we really experienced, and also the extended monsoon, which I think everyone has spoken about today, I think, took us by also surprise overall. But I think a series of our initiatives, which I just mentioned have really worked very well in terms of giving a broad-based growth across the urban and the rural centers in terms of what we see. On an H1, if you see, we are at almost at about a 7.2% volume and about a 2.1% value growth in terms of what we see overall to that extent, which I think in the current circumstances is something which is definitely good in terms of what we have been able to achieve. Overall, all product categories have done quite well overall. And especially to mention the prelux category in emulsions is something as I mentioned earlier, on the backing of good marketing effort has been able to move quite well overall. From the point of view of when we add the total coatings business, which is the decorative plus the industrial business overall, the number goes up further up to about 6.7% because overall industrial business has also done well and the volume goes to about 11% in terms of what we see overall to that extent. And therefore, I think from a coatings point of view, overall, both value and volume have gone -- done well. On an H1, consecutively, what we see is that there is a value growth of about 3% and a volume growth of about 7.4% in terms of what we have been able to achieve. I think overall, from the coatings piece, it improves when we look at the industrial coming along with the decor to that extent. The Home Decor foray, you are all aware that this is something which we have been pursuing for some time. And today, we claim to be the #1 integrated Home Decor player. We've got now 73 beautiful stores -- beautiful Home Stores working for us today across the length and breadth of the country, and we have been doing various collaborations in terms of this thing. And we exist in various categories which have come in. Obviously, this was one area where there was a little bit of a disappointment in terms of how we perform. However, we continue to launch newer ranges in terms of what is there. We launched a new range of kitchens, new range of wardrobes to that extent and really looked at releasing -- we bring energy through not only our beautiful Home Stores, but due to our stronger launches, which are coming into this place, so that we can get the customer excited. However, overall, as we see it out of the 4 bigger businesses only Weatherseal was something where we got a good revenue, which is there. And also basically, we were able to work better from a bottom line perspective. But when we look at the Kitchen, Bath business, both basically, I think while we possibly in the Kitchen business improved the PBT loss a little bit to that extent. But overall, top line has been a decline and so has been Bath overall in terms of what we have achieved. So this is an area of work in terms of what we see. A lot of initiatives are being put for the second half of the year in terms of how we need to galvanize this, get it possibly in a zone that it starts contributing to the core business as well as we kind of go ahead to that extent. So that's something, which possibly is an area we are looking at as we go forward. When it comes to the international business, this is our representations you see all across in the various brands, through which we operate in the international environment. I think it's been a strong quarter overall. We have done about a 9.9% kind of growth in INR terms, so almost a double-digit value growth in terms of what we have achieved. In terms of constant currency, given the fact that there has been devaluation in Ethiopia and other places. So we are looking at a 10.6% kind of a growth, which is there. Also, remember, we also have the base of Indonesia in this last year. If you take out that out of it, which is the divestment we had made last year, we would be closer to about 10.5% to 11% overall in terms of the growth in terms of what we have achieved. Here also, the focus has been on the prelux and the waterproofing ranges. But I think the good part is that Asia is betting well for us now with Nepal and Sri Lanka doing well. And in Middle East, UAE is what is driving the growth for us. So I think these are the key markets which have done. The best part is that I think the profitability story has been very, very good in terms of this thing. Last year was not so great. So overall, I think it's a combination of material cost deflation also in terms of possibly the mix in terms of what we have been able to sell and the overall top line numbers, which has given us a very, very strong tick in terms of looking at the overall profitability, which has really increased in a big way. The PBT margins are also at about 9% for the quarter, higher by almost about 450 bps points in terms of what we see. So all around, I think it's been a strong performance in terms of what we see from the point of view of international. Industrial. Again, as I said, both our JVs, which are on a very, very good thing. We are seeing definitely this trend, which I mentioned last time that the Industrial business continues to do well overall as we look at India. And in that category, today, the PPGAP business, which is largely into auto OEMs and auto refinishers, along with packaging and marine, they overall grew by a good 12% in the quarter 2 to that extent, and it's been a strong growth in terms of what they have been able to achieve overall from the point of view of this thing. So 13% growth in Q2 and about a 12% growth in H1 in terms of what we see. From a PBT level also, we see strong growths, which have come in and that this is something which is very, very strong from both the Q2 and the H1 level in terms of what we see. And the PBT margins have gone up to about 17.3%, which is higher by about 160 bps points. The second JV, which is about the general industrial kind of products. Overall, again, it's something, which is showing -- looking at a surge driven by the protective coatings overall to that extent. This quarter has been about a 10% growth in terms of what we have been able to achieve and H1 is at about 7% in terms of what we see. Similarly, the PBT story has been very strong here in terms of what is there. Q2, the profits are at a good growth overall. But overall at our H1 level also, we are at about a 5% growth. Here also, the PBT margins have gone up to about 8.9%, almost higher by about 190 bps points. So I think, again, a steady show in terms of what we have seen from the Industrial business point of view. This is a story in terms of how material prices have been behaving over a period of time. And if you look at from this point of view, I think the material prices have been fairly benign. Quarter 1, we had seen a deflation of about 1%. This quarter, we have seen a deflation of about 1.6%, which has really helped overall from the point of view of what we have been able to achieve. So if you look at the whole area of the gross margins, the gross margin story is quite good. We are up from sequential 43.2% to about 43.7%. At the same time, we are up almost about 270 bps points from the quarter-on-quarter of last year to that extent. So I think it's been, again, strong. This is also led by some of the work, which has been done from the point of view of sourcing and formulation efficiencies, which is something which has also contributed in terms of expanding the overall gross margins for us. So that's the story on gross margins. So finally, coming to the overall stand-alone financials. I think when we look at the net sales, as I said, is about 6% overall in terms of what we have been able to grow. Gross margins have expanded by 270 bps points to about 43.7%. PBDIT has grown by about 21% overall, and it is a margin of about 18.5% and higher by about 230 bps points. So I think overall, a strong performance in terms of how we see from the stand-alone perspective of Q2. At an H1 level, given the fact that the quarter 1 was not so strong, we are seeing a net sales growth of about 2%. Our gross margins of about 43.4%, which is about 150 bps points higher from what we were and PBDIT grew by almost about 5.9% in the first half. So the margins are at about 19% at the end of H1, 70 bps points higher. So that's the story at the stand-alone level. Let's look at what the summary at the consolidated level looks like, quite similar to in terms of what we see from a stand-alone perspective, net sales at about 6.4%. Overall, what we see -- this has been supported, obviously, by growth across Decorative, Industrial and International business. Gross margins, again, 43.1%, higher by about 250 bps points and PBDIT growth of 21.3% which makes the margin almost about 17.7% higher by 220 bps points. Similarly, I think at the H1 level, we see a growth of about 2.9%, both gross margins and PBDIT margins have expanded, and that is something which is a good story in terms of what we are able to see at the -- both stand-alone and the consol levels in terms of what we have been able to get. We have declared an interim dividend of INR 4.50 to that extent. So I think that is in line with the performance in terms of what we have seen. And for just comparison's sake we have given to you in terms of what we declared last year, in terms of the interim and the final dividend, which has been there to that extent. So I think, again, very clearly, the commitment in terms of return to the shareholders in terms of what we are looking at. From the point of view of outlook, all of you are interested in terms of knowing how are we proceeding? What do we see in the market? What we are definitely seeing is that the demand conditions for the entire industry have been not very great to that extent. Just about the industry, I think in the first half has just grown about 3%, 3.5% overall to that extent. So it's not been something which has been really great to that extent. Monsoons were the spoilsport a little bit in terms of this thing, a small bit of the festive season to that extent. But I think the good part is that there were still good shoots in terms of what we have seen in September and October, which is coming up to that extent. Overall, we are also seeing that as we go ahead, there is a very strong marriage season, which is going to provide support. We have had good monsoons, which would kind of augur for possibly some growth in terms of the rural markets in terms of what we see. And finally, I think the whole GST, I think corrections have kind of -- would kind of create an uptick in the consumption is what we all see in terms of what is happening. However, I think we need to kind of be a little bit conservative in terms of seeing how the overall environment kind of augurs out as we look at the next 3 months and the 6 months in terms of coming out. Overall, the competitive intensity will remain in the market. And I think we have all the players kind of putting their best foot forward in terms of what they are doing. We will stay focused on our core values of looking at the entire area of innovation, looking at the brand saliency in terms of what we want to kind of really build up, at the same time, building a very strong element of differentiation from the point of view of our executional regionalization, some of the good parts of the story, which we have kind of picked up from quarter 2. Momentum in Industrial and International business should continue is something, which we are kind of banking on as we kind of go forward. And I think the raw material prices will remain benign overall as we see. However, we are aware of that there could be some volatility, which can happen because of the geopolitical uncertainty, and that is something which we'll continue to keep a good watch in terms of as we go forward. Finally, I think something which is very close to us, something which we really invest a lot of money in and a lot of things which we think also is the future. How, as an organization, we are kind of going. I think our sustainability targets, which we have taken. So I think if you kind of see the overall performance from 2025 to the H1, I think good progression in terms of what we see, clearly, gallivanting towards our target of 2030 to that extent. So whether it is the fresh water replenishment, the whole area of reduction in specific hazardous waste, reduction in specific effluent, reduction in Scope 1 and 2 emission or even in terms of the recycled plastic and packaging, I think strong impetus is put in there. Renewable electricity is another big area in terms of what we keep on looking along with the bio-based materials, raw materials, which come in. And I think we continue to kind of look at our employee engagement very strongly from the point of view of looking at equity, diversity and engagement in terms of what we are able to kind of bring in overall. One of the big areas is our entire work in terms of increasing the livelihoods of a lot of artisans in this country and skilling them, and that is something which we did almost about 9.5 lakh trainings last year. This year, we've already done about 4.4 lakh training, and we are proud that our 23 academies across the country are yielding very, very good results for us in terms of really picking up a very big force of people who basically make the whole area of decor happen for the customers as they kind of go ahead. So I think that is possibly something which is a strong direction in terms of what we have taken. So that's all. Thank you so much. I think it's great speaking to you.

[Operator Instructions]. The first question is from Mr. Abneesh Roy from Nuvama.

I have 2 questions. My first question is on overall competition. I see that your gross margins are up both Q-o-Q and Y-o-Y. I do understand that the raw material side is favorable and the outlook also looks good. My specific question is in terms of the 10% free grammage in the different SKUs. What has been your reaction and the new players, what we are hearing is, is now withdrawing in many of the SKUs if you could comment on that. Also, I picked up that in terms of the tail of the distribution, there was some loss for you because of the new players coming in. So if you could comment how are things there? And from an advertising perspective also, I see Asian Paints now being much more aggressive in terms of all the key events of Cricket, et cetera. So if you could comment how is your market share in terms of the media presence. I'm not asking about volume market share, I'm asking about the overall media market share. That's the first question.

So thanks, Abneesh, in terms of some of those incisive questions in terms of what you placed. I think when we look at from the point of view of the whole area of additional grammage, the whole area of free, which kind of comes along with paint. We think it's something which is an area which has been tried and worked upon by various players earlier as well. It's something which is nothing new in that area, which comes in. It also basically reduces the turnover of the retailers from a point of view, what they will be able to sell to that extent, and it is very difficult to keep focus in terms of where that benefit goes from a point of view of consumer, painter, dealer to that extent. So I feel that possibly that's one area, which possibly is a strategy, which some of the competitors might take, but it is something which they will see the benefit in terms of what they are getting out of it in terms of looking at going. From the point of view of our perspective, what we are very clear is that our work on fundamentals, our work on execution, our work on brand building, our work on innovation will continue. And we keep on doing this work. This will definitely give us some gains in the market as we are seeing in this quarter, and that is possibly the whole consistency in terms of what we are taking in terms of our vision. We are very clear that possibly it is not something a game of just discounting alone. It is a game of in terms of how you look at basically placing a brand, how you look at basically upping the category from the point of view of premium luxury finishes in terms of really going. And that's something which what we have been kind of really looking at in terms of placing. From a point of view of building the brand equity, I think above the line, media has been very, very strong, and we have used it effectively from the point of view of reaching not only the entire country, but also at a regional level, very, very strongly in terms of what we have done. As we see it in terms of a share of voice, we would be definitely much higher than today, I think, the overall competition. And that is something which we have upped from a point of view of at a national level, at a regional level in terms of what we are doing. And for us, I think that kind of augurs well because: one, I think it really affects the top-of-the-mind awareness. And secondly, I think the whole area of the consideration to buy of the customer is getting influenced to that extent. And therefore, that is something which we have been taking very strongly, and that is why you see I think strong marketing spends in terms of what we have done in the second quarter.

The next question is from Mr. Vivek Maheshwari from Jefferies.

My first question is on the volume growth. So you mentioned about the macro as well as your own efforts. We have seen a double-digit volume growth in this quarter from your side. Two parts to this question. First is your presentation talks about consumer sentiments, whereas -- improvement in consumer sentiments, whereas what you articulated on the call, it looked like more of your internal factors, which is driving this growth. Can you just clarify as to sentiments versus your own efforts, which was the bigger driver? And how do you see this going ahead?

Sorry, I missed part of your question. Could you repeat your question, please?

So what I'm saying is we have seen double-digit volume growth from your side. I hope I'm audible to you, Amit?

Yes. Yes.

So I'm saying we have seen double-digit volume growth in a while from your side. And the presentation talks about improvement in consumer sentiments whereas your commentary on this call was much more around the fact that sentiments are somewhat okayish, but it is also the internal factors and your own efforts, be it on marketing or product innovation side, which helped. Can you just elaborate on how do you, let's say, qualify as to what drove this kind of double-digit growth?

So overall, as we see it, I think the demand conditions we are all aware in terms of have been really average. We have not seen too much as an uptick overall to that extent. The overall industry, as I said, would not be growing more than about 3.5% to 4%. I think, therefore, what we are very clear is that we need to kind of really shift our gear in terms of how do we kind of really galvanize the market? How do we look at possibly playing to our strengths in a very, very strong manner? And that is something which we activated. The whole area of looking at aligning to the consumer, getting the consumer on the fore was something which was one great thing, and that is why you would have seen that we have kind of unleashed so many kind of overall initiatives from the point of view of media and new advertising in terms of what has come across the range of products to that extent. And I think the bigger effort was to kind of ensure that something, which we have always thrived in to kind of really give a very strong lift to our overall execution piece so that we could able to deliver the right kind of servicing, the right kind of play from a point of view of generating demand, right kind of connect in terms of people overall to that extent and that has been a stronger focus in terms of what we have taken. So that basically, you talk of the executional excellence in terms of what really comes in, in terms of giving us that kind of a goal in the market to that extent. The other area has been the area of regional initiatives. So you look at micro marketing, you look at regional markets in a very strong way, you align to the markets. And basically, create an empowerment and the flexibility so that we are able to kind of perform much better from a point of view of looking at micro marketing and really reaching out to the smaller places much better in terms of what we could also do. The other area, which I think has been very important is that some of our innovations in terms of the new products have also galvanized the numbers for us, and that is something which is also very, very good. And our whole basically uptake in terms of looking at premium and luxury also has given us a good uptake in terms of how we are able to kind of really look at, really upgrading the consumer and look at possibly going that in a very strong way in terms of what we have been able to do. So I would say that it's a combination of this overall factors in terms of what has worked well. But I would also say that we saw some demand pickup in September for sure in terms of what we saw and also, I think the first fortnight of October has been strong from a point of view of the festival being there and some uptick in the demand, which has also helped us overall from the point of view of saying that we could kind of take advantage of that demand uptick given the fact that we were looking at very strongly in terms of our overall execution in Consumer Connect.

The next question is from Mr. Avi Mehta.

Am I audible?

Yes, you are.

Sir, just 2 questions. First, given how you're seeing your initiatives pan out and the demand improving, I would love to get your thoughts on how you see the full year volume growth and value growth kind of behavior for us or for the industry, if you could give us some sense. And second is just we have historically seen this industry do double-digit growth in value terms as well. What do you think is required? Or when do you see that panning out? Any thoughts over there would also..

Okay. So I think when we look at the next 6 months, we've always -- already spoken about in terms of where we are looking at the overall year going. We are still kind of looking at mid-digit value growth in terms of what we kind of really take in terms of the next -- for the full year. And as we kind of go ahead from a point of view of volumes would be definitely higher since we are now batting across the range of products right from undercoats to the economy to the midrange and to the top end products to that extent. And therefore, we would anticipate that the gap between the volume and the value would remain in that zone of about 4% to 5% to that extent. So I think definitely, if you are able to hit mid-digit value growth to that extent. I think to some extent, you -- overall, from a value point of view, you would come closer to a higher digit value growth in terms of what we will see at the end of the year to that extent. So I think that's the endeavor. But as I said, a lot depends in terms of how possibly the market pans out, how things will kind of augur as we kind of go forward to that extent. But I think that is something which is what we think we can really aim for.

The next question is from Mihir Shah from Nomura.

Congrats on an excellent set of numbers. I just wanted to understand the numbers a bit better. So 2 questions here. Firstly, there has been a sharp improvement in volume growth despite the extended monsoon quarter. Was this aided by festive demand, which was largely sitting in 3Q last year? And also, did you see any loss dealers coming back or restocking impact indicating that sustaining this double-digit volume growth in coming quarters can be challenging? Or do you see the double-digit growth -- volume growth to sustain in the coming quarters? Secondly, the mix, which is the difference between your volume and value has been much lower versus historical trend. What drove that? And despite being a seasonally weak quarter, gross margins are similar to -- or a bit higher versus 1Q levels, which ideally they are supposed to be down, which means that you have seen some benefits from lower raw material prices. Can these benefits continue in second half and margin expansion that we've seen in this quarter continue in the coming quarters as well. These are my questions.

Okay. So I think from a point of view of how basically we have seen the volume is, as I said, that I think this has been the quarter where we have kind of really approached the entire product category in a fairly holistic manner. We have not looked at possibly only certain ranges to that extent. We have been fairly holistic so that today, given possibly the overall equity of Asian Paints, we leverage that and look at possibly batting at the retail and with the full range of products to that extent. And I think that has given us leverage across the range of products, whether they are at the economy level or at the mid level or at the luxury level to that extent. We have also seen basically a clear focus from the point of view of our B2B segment, which has given us that entire advantage in terms of looking at really exploring the element, which is beyond the central theme of just the builders and CHS as I said. I think we've looked at the government, the factory segment also very, very strongly. And I think those are stronger revenues, which have also helped us sell a full range and really participate in the whole development story in terms of where government is spending a lot of money to that extent. And that is something which has been also supportive in terms of giving us across the product range benefits to that extent. And therefore, you see that the volume we have been able to expand because it has also been literally the consistency in terms of looking at the entire range and not looking at specific ranges. The second, I must say that the September month was definitely much better in terms of what we could see, and it has definitely upped the overall volumes in terms of what we see. I wouldn't say that from a point of view of festive season because the difference between last year and this year was just 10 days in terms of the overall festive season. But nonetheless, I think the first 15 days were strong in terms of what we see, a very good uptick at that point of time. So that has also added to the overall volume growth in terms of what we are able to see. And that is why I think I see one of the reasons in terms of that we are closer to this kind of a volume in terms of what we have been able to achieve to that extent. As we go ahead, I think within the same thing, we have also looked at saying that we have always given -- saying that we will maintain about 4% to 5% kind of a difference between volume and value to that extent. And we have been conscious of this that we need to kind of shape up our product mix despite the overall focus. So therefore, we have looked at the premium and the luxury and far more strongly. As I said, a lot of energies went in terms of upgrading the consumer also, so that we are able to showcase the benefits. And therefore, if you see a lot of our communications ran in terms of the premium and luxury emulsions in this quarter to that extent, which has really elevated the game from a point of view for mix for us to that extent. And that is where the demand -- the gap between the volume and the value stays in terms of this zone in terms of what we see to that extent. Now going forward, obviously, I think the endeavor would be in terms of looking at this area in terms of looking at a far more holistic performance in terms of what we will keep on doing to that extent and look at seeing that some of the initiatives which we have kind of kicked off in quarter 2 is something which we can give or more weight to. And that is why I kind of look at -- keep on looking at the overall volumes far more holistically.

The next question is from Latika Chopra.