Hi, good evening. Good to see everyone here. I think a lot of people are attending online, and we have a mixed crowd in terms of someone turning physically and someone on the online. I think we'll start with the opening areas in terms of what we are looking. First of all, I wanted to just talk about the core value at Asian Paints, which is what we have been doing since 1942. It's all about looking at existing to beautify, preserve, and transform all living spaces, objects, so that we are able to bring happiness and joy to the world. I think that has been the core value in terms of what we have looked at.
Through this process, appropriated not only homes, but looked at any surface which really comes away in terms of what we can do in terms of really looking at a transformation in that piece. The standard disclaimer in terms of how we look at from the point of view of how it goes by. Overall, I think it was a tough quarter in terms of the demand conditions being pretty tough in terms of how we could kind of look at. From that perspective, I think it is, if we see the overall numbers, the volume growth in quarter four is about 1.8% in terms of what we have got. The value is a degrowth of about -5% in terms of what we have seen for the quarter. If you look on a 12-monthly basis, then we are up by about 2.5 percentage points.
On a value, we are down by about -5.7%. Overall, even from a year perspective, all of you have seen that through the various quarters, it has been overall fairly tough in terms of how we have seen the overall paint industry this year. That is something which is possibly reflected also from the weak demand conditions which we have seen throughout the year in terms of what has kind of come by. I think the decorative business has been far more affected than the industrial business. When we kind of add the industrial business, overall, the industrial business seems to be doing much, much better in terms of the overall growth. When I say industrial, it includes auto, it includes industrial paints in terms of the protective coatings which are there, powder, and refinishes.
All these paints are clubbed under industrial in terms of what you see. I think this is something which has been overall growing quite well, quarter on quarter in terms of what we have seen. If you add these numbers, obviously the volume growth goes to 2.1% on quarter four. For value, the value growth also kind of goes up, and it is at minus 4.1% in terms of what you have seen. On a 12-monthly level, the volume will stand at about 2.8% and the value at about minus 4.6%. You could see that because of the industrial, this is something which is there. Also to notice that overall, the industrial trajectory seems to be kind of really still going quite well overall in terms of what we are able to see in this year.
This is something which some of you have been seeing in terms of our overall trajectory. The CAGR numbers, which is the five-year CAGR numbers over the various quarters, have been still very, very strong in terms of what we have been able to achieve, which kind of just shows the health of the organization from a point of view of last five years in terms of what we have grown. Obviously, I think last two quarters have been a little bit lower in terms of from the CAGR perspective only, but I think we continuously keep on looking at driving the growth overall from the point of view of going forward. As I said, overall quarter was kind of affected by the weak demand conditions in terms of what we were able to see.
Like last time we said, the T3, T4 tier cities did relatively better as compared to the T1, T2 cities to that extent. Therefore, I think the urban centers were much more slower in terms of what we have been able to see overall to that extent. This is a trend which continues into the fourth quarter in terms of what we have seen. Overall, our initiative in terms of looking at more distribution points as the country continues to expand, both from a point of view of suburbs which are there in terms of the larger cities or from the point of view of smaller towns expansion, I think that foray continues. We have almost about 1.69 lakh touch points in terms of what we have kind of created over a period of time.
That is a fairly strong number in terms of how it kind of comes. This keeps on increasing quarter to quarter. Over the years, in terms of the numbers, it has really gone up. The other advent has been in terms of the area of services. I think that has been a very strong focus at Asian Paints. This is something which we have been really taking very, very strongly. Therefore, the whole area of really taking the trend of service economy and really riding it from the point of view of what we offer is something which we are fairly strong at in terms of what we have done. The service now has been in operation for the last about six years strongly. Earlier, we used to run something called the Home Solutions.
It is more like a franchise service in terms of what we run across the country. This service has given us large dividends in terms of gains which are there. We are present across more than 600 cities and towns across the country. This is something which basically helps us reach the consumer literally directly in terms of looking at working from a point of view of CRM and really associating with trends which are happening at a consumer level to that extent. I think as part of our service foray, this is a strong service in terms of what we are anyway running. The other area which has done extremely well is the area of B2B is what we call. Now this area literally becomes what we call as the B2C, which is directly to some of the smaller builders and CHS.
It is B2B to large corporates and large builders and key accounts. B2G, which is directly to the government. That is the constitution of the overall B2B business in terms of what we look at. This is a strong foray which has been growing again over a period of time. In Q4 also, we have seen a fairly strong trajectory in terms of what we have been able to deliver from the point of view of the overall B2B business which has come in. When we look at from the point of view of innovation, that is something which you are all aware that Asian Paints has been strongly straddling this space in a very big way.
Last five years, we have seen almost close to about 300 plus new products in terms of what we have been able to launch across the market because we truly believe that the brand is really making differential propositions in the market to excite the customers and the dealers to that extent. This continues to be a big initiative. We have more than 130 patents in terms of what we have created in the last five years. More than that, this trajectory has created in quarter four almost about a 14% contribution to the top line in terms of how it comes. Very strong initiative from a point of view of innovation in terms of what is there. The other big strategy which we had taken on course was the area of backward integration.
This is something which you are all aware that we invested into a white cement plant, which is what we had done at Fujairah in Dubai, a plant of 2.75 lakh tons capacity which is there. The plant should be operational by June of this year to that extent. We will continue to kind of really look at white cement coming from this plant for us, which is a first foray into cement in terms of what we are looking to that extent. The second big investment has been in terms of looking at the most progressive emulsion which would be there. It is a futuristic project from a point of view of an emulsion which will be environment-friendly. It is futuristic. Only about four players in the world have technology for it.
This is the first plant we are putting up almost with a CapEx of more than INR 3,000 crore in terms of what we are kind of putting into that extent. This should be operational partially in the month of March, April of 2026, and fully by April of 2027. That is how the trajectory of this plant would be there. We believe that once these forays are complete, they significantly add to our overall margins in terms of the game we are able to play, plus also from the point of view of innovation in the products from the qualities which we can impart. I think very strong objectives which we have kind of put onto place.
The other strategy has been on premiumization and really kind of associating with the consumer very, very strongly in a category which always is something which is more like an interaction once in five years which the consumer faces. As part of this premiumization drive, we have really revamped our packaging. Today we can claim that it's one of the best packaging in terms of what we see today across the industry in terms of what is there. We keep on doing innovations here. What you see on the screen is the innovation which we did as part of the pack of making the regionalism come far more strongly so that we are able to really be closer to the customer in the region. We have seen the phenomenon of IPL in terms of how IPL has created a regional fervor.
Riding on that same flavor, we are doing now regional packs which kind of take the culture of that region and really create an association of a consumer which is far more strong. That is something which we did in this pack, which is a premium exterior coating called Ultima in terms of what is there. It was used with technology. If you have a QR code, you just click it and you really get the flavor of that entire culture to that extent. I think quite innovative, first time in the industry anyone has done this kind of a zone. It kind of brings us very close to the consumer in a drive for premiumization strongly. Not only that, these are more examples of our regional packaging which has been done.
You can appreciate the fact that today, for the kind of size of supply chain we have to kind of really look at regionalism, I think it is a very strong customization story in terms of what's coming in. We are finding that all the places where the regional packs are going, we are definitely getting a higher traction in terms of overall growth which we are able to get. From a premiumization perspective, this really works very well for us. Not only that, it's also about the whole new area of ingredient marketing in terms of what we have looked. Each of the packs now, today we talk of an ingredient which kind of lends special properties to the pack.
What you see on the screen is a pack which is of Ultima Protect, which has a special ingredient called graphene, which by virtue of its own kind of existence is a very special raw material which adds to the strength of the overall coating in a very, very big way. That is why it adds to the durability and the warranty of the product to that extent. I think, again, differentiation in terms of looking at ingredients. Now this ingredient story comes across our various products in premium and luxury. In Royal, we have something called a Teflon. In some other products, we have something which is called a PU serum and so on and so forth.
Lots of areas of looking at strengthening our products, our quality in terms of what we are able to do with new age materials which are kind of coming into that extent. Second, looking at products which can never be imagined or thought of, the example of SmartCare Infinity in terms of what you see, it is a futuristic product with almost what we call is a lifetime warranty, easily can go beyond 25 years of life for terrace waterproofing. It's really a high-end technology product which has been introduced by us in terms of what is there.
Not only this, we keep on looking at expanding our innovation with respect to various areas, whether it is tools or rollers in terms of what we have, or it is from the point of view of any other areas which are relating to waterproofing or to wood finishes and so on and so forth. Just to kind of give you a flavor that this is a continuous path in terms of what we are taking strongly to that extent. Not only this, I think while premiumization is one of the objectives, the other big area is to keep on looking at exploring the bottom of the pyramid far more strongly, looking at getting the unorganized customer into an organized brand.
From that perspective, we look at this entire campaign, which is the start point of an emulsion which is there, which is the ACE and the Tractor Emulsion in terms of what we have, where we get the person who's a value seeker in terms of buying a product to give him the value proposition coming in strongly. That's why the whole area of a proposition of budget come, warranty medum, kind of a zone which comes in. A person buying is comforted that he's getting something in a certain value. At the same time, something which is durable comes with a warranty and comes with the trust of Asian Paints very, very strongly. I think that's again a very strong campaign which we have unleashed along with IPL.
That is something which is even playing now as we kind of really enter the months of April and May to that extent. That was a strong thing in terms of what we did in Q4 to kind of really rejuvenate some of these products and look at basically bringing some excitement at that level to that extent. The other big area in terms of what we invoked, all of you are aware that Harghar has been a very strong strategy and a corporate positioning in terms of what we have taken. We really looked at the fact that today, given the large portfolio, one of the things which we really stand out is the fact that the quality which we give and the kind of durability we are able to offer is very, very strong.
Given the fact that you talk of a certain kind of a share in the market, we almost spoke of that every second house is today painted by Asian Paints to that extent. This has been a legacy of the last 80 years in terms of what we have seen. Given that kind of an overall presence, we felt we really kind of researched and looked at physically shooting 12-14 homes across the country where possibly these were real shoots where we looked at houses painted with Asian Paints and how they really bring about the whole area of warranty and credibility and trust far more strongly. We say it is a winner campaign in terms of what has been running.
This is something which we launched in Q4 and now running into April and May just to kind of give you the idea in terms of saying that today warranty for Asian Paints would mean that
हर दूसरा घर कुछ कहता है. Let's take a look at this visual, please. कहता है उषा सदन और कहता है आशा भवन, महक चहक सी व्यू हिल व्यू और कहता है शांति निकितन. अन्नाई इलम कहता है, पद्मा निलयम भी कहता है, मोहन का विश्वास कहता, गुल और बगिया कहता है, कहता है, कहता है गांगुली बाड़ी, कहता है नानाची वाड़ी, अम्मी की आँखों का नूर और आसमा कहीं दूर कहता है. है कहता काशी वृंदावन जन्नत मन्नत भी कहता है. विला, महल, कुंज या कासल, एशियन पेंट्स की वारंटी इंडिया का हर दूसरा घर कहता है.
I think it is something which has really caught the fancy of the consumer, touched the consumer right in the heart because it's a real campaign. It's not something which is concocted. It's something which is real, what you see around to that extent. I think it really says a lot in terms of possibly the whole area of emotion every home brings along with a sense of trust and durability in terms of what it conveys from a warranty point of view. I think that's what we ran. As a continuation of the Harghar, we felt that not only surfaces, we need to look at spaces. That is why we appropriated entering into home décor. In home décor, we talk of surface décor, which is all about the surfaces. We talk about the space décor, which is there.
Today, I think one of the things to understand is that it is something which is a very strong diversification because what we speak is that today when you make a new home, only 2% of that cost is paint. When you look at the full home in terms of the space, you have very high spends which happen in the home with respect to all other categories, whether it is furniture, furnishing, kitchen, bath, flooring, and so on and so forth. The idea was to kind of extend the same customer who's into painting, into getting into home decor because painting is episodic. It happens once in five years as a maintenance cycle. Home decor is a continuous process. You keep on doing your home, whether it is a cushion, whether it is a furniture, whether it is a lighting.
I think it's a continuous piece. The idea was that the brand always is part of the decor life cycle of the customer in terms of what is there. That's how the whole home decor piece kind of comes into place to that extent. We have been strongly kind of looking at the strategy as an integrated strategy for the last about now four years to that extent. Earlier, we had kitchen and bath, which we had purchased separately as an acquisition, which is what we did. I think last four years, we have been into this foray of home decor. We have looked at possibly spaces which can offer home decor under one roof. As part of that, we have our Beautiful Homes stores, which are today about 67 stores across the country in 53 cities in terms of what we have.
They are very strong proponents of offering integrated home decor under one roof. That is why we say that we are now number one players in terms of offering an integrated home decor. As part of this, if you look at the kitchen business, in modular kitchens, we are number one. As part of decorative lighting, we acquired White Teak. We are number one in terms of the lighting business to that extent. We also have a bath brand called SS to that extent. We have aligned with a brand called Pure in terms of looking at furnishing. Lots of areas, a lot of kind of collaborations with Sabasa Achi, Sarita Handa, and so on and so forth to offer a full package of home.
Now we talk of full homes from a Harghar perspective, surface decor and space decor combined in terms of what we speak of. While I think this strategy we have taken the last year, overall, we looked at even kind of exploding that space even more. We found that today, if you look at, we were there at the premium segment, but at the luxury segment, it was a vacant position. Therefore, we looked at opening world's first design destination for a global luxury in Mumbai. This is a 100,000 sq ft space which has been opened in Lower Parel in Mumbai called the Nilaya Anthology. Nilaya being our super luxury brand in terms of what we speak of. This is a design destination which basically looks at really celebrating art, culture, and design in a very strong way.
The whole concept is based on confluence, confluence of India design and international design, where you kind of find the best of art, artisanal, cultural stuff, as well as the best of international design in furniture, kitchen, furnishing, and so on and so forth, every category combined together to that extent. If you get a chance, possibly do visit. This is one of the best stores across the world in terms of what you see. Kind of really places Asian Paints right up there from a point of view of luxury positioning, which is no one else has kind of taken this positioning today in the market. It is not very easy to kind of really go into a luxury positioning to that extent.
Along with this, we are launching, we have launched Nilaya Emulsions, which are there, which kind of really integrate with the concept of luxury, which comes in strongly. That is how it kind of really integrates in terms of taking forward. Not only this, we have looked at very, very premium Beautiful Homes stores now, which has come in. We have in a city like Mumbai, we have two very big stores, one of almost about 14,000 sq ft in Borivali and the other of about close to 15,000 sq ft on the Linking Road in Bandra West to that extent. What you also see is a store in Surat, which has been put, another store has been put in Guwahati. I think today this is a very strong spread in terms of offering home décor under one roof to that extent.
While I think these are initial stages, I would say it takes time to kind of build up this category because all of you are aware that today the home decor category is a large unorganized sector where it kind of really dominates. I think last year, again, for home decor has been tough in terms of what we have seen. This is a glimpse of the wallpapers we do in terms of the textures, wallpapers we bring to the theater. I was talking about the industry being tough last year in terms of what we have seen overall.
From a point of view of if you look at both kitchens and bath, kitchen has been again flat in terms of what we see overall to that extent in terms of what we have been able to achieve from a point of view of the overall 12-monthly performance, whereas from a bath perspective, we have seen some single-digit growths which have kind of come into that extent. I think the concern here is that in both the categories, there is a certain loss which we are making in quarter four and as well as for the year. That is something which we need to set it right as we are kind of going ahead. Secondly, we faced a lot of headwinds in White Teak.
For the last five months, we have not been able to really bill anything to that extent, which has taken a toll with respect to overall this thing, given the fact that there are some BIS specifications which come in and a lot of input comes in from China. I think we have been able to, we have been stuck in White Teak and not able to really look at any selling which has happened in a big way in terms of the last four, five months, leading to possibly a negative degrowth which has happened with respect to this. Again, in Weatherseal, which was a brand which we acquired two years back on doors and windows, top line, two years the growth was good. This year, the growth is there, but very, very small in terms of which is there to that extent. Again, muted demand.
Again, I think this is something which we are looking strongly even from the point of view of what we are able to build together as we grow ahead in terms of the profitability. We must understand that all these are the constituents of that integrated home decor. That is why we have to carry all these categories in terms of what is there. That is something which we are still committed to in terms of how we would kind of really take it ahead. Coming to AP Global business, again, this is spread across largely in terms of Africa, Middle East, and Asia in terms of what you see in terms of the locations.
Overall, another challenging year in terms of global, in terms of what we see overall from a perspective, we see that in quarter four, we were at about -1.5% kind of a zone, which is there. Although in constant currency terms, we were still at about 6% in terms of what we saw. However, from even an early perspective, overall, we are just at about base in terms of the overall numbers in terms of what it pans out from this thing. Largely, if you look at the geographies of Middle East and Asia, have done relatively better.
However, I think Africa has underperformed where we have been seized by the devaluation in terms of the currency which has been happening, which has taken a toll with respect to both the top lines and the bottom lines in terms of what we have been able to register. Even from a point of view of overall PBT, we see a decline which has happened in AP Global this year overall to that extent. That is how overall the profitability has also suffered as a combination of one, which is market-led, and second, from a point of view of currency devaluation in terms of what we see. That is the global business for you. Looking quickly at the industrial business, again, this business, as I said, we have two joint ventures with PPG.
PPG is one of the largest coatings company worldwide with a large base in the US. These JVs have been now existing. One JV has been there for more than 25 years. The other has been there for more than 15 years to that extent in terms of what we have been doing. If you look at the performance of PPG AP, which is the JV which is with auto and auto refinishes, largely marine business to that extent, that is something which overall has grown this year to that extent. What we see is that from a point of view of overall perspective in Q4, we see almost about 3% kind of growth, whereas for the year, the growth is close to about 6% in terms of what we are able to see to that extent.
However, from a profitability point of view, while Q4 was a little bit depressed, overall, the business has done well. We see almost about 14.6% in terms of looking at the PBT margin, which was there last year. This year, it is about 12.1%. From a PPG point of view, Q4 has been a strong revenue growth, almost double-digit 10% in terms of what we have kind of got. The growth is across business segments of powder, protective, and so on and so forth, which is there. However, PBT margin has been something which is under pressure, is about 8.3% vis-à-vis 10.7% of last year in terms of what we have seen. Overall, top lines have been strong in terms of what is there for the year.
Both businesses combined together, you see a top line of almost about a 6% value in terms of what has come in to that extent. So that's the industrial business in terms of what is there. Just to give you an idea in terms of what's happening from a point of view of inflation, deflation overall, if you see the last quarter, we saw a deflation of about 1-1.5% kind of a deflation in terms of what we have seen. We have done a small price decrease of about just 0.4% overall in terms of what we have looked at to that extent. But overall, this year, it has been fairly good. We have not seen any big inflations which are there to that extent. And that is something which has been an overall good trend in terms of what we have been able to see.
Now, if you look at, therefore, the financials in terms of how these financials pan out, it is very clear that overall, the value has had an impact with respect to the overall margins. We have seen some bit of downtrading, which has really happened. I spoke of the standalone at about -5%. From a point of view of gross margins, they have gone up, combination of some deflation and some of the work which has been done from a point of view of sourcing formulation efficiencies in terms of what we have brought in. The gross margins is at its peak in a way in terms of what we see, almost about 44.9% in Q4. This is an increase over what we have seen of Q4 over last year to that extent.
Overall, PBT IT margins are in the zone of our guidance of 18%-20% at about 18.5%, although they are a notch lower than Q4 of last year in terms of what is seen and also sequentially a little bit lower than that of Q3 in terms of what we have seen. I think that's how the overall numbers stack out from a standalone business. From a console business, if you look at, obviously, since standalone is a big part of it, the top line trajectory is a decline of 5.4% given the fact that even global markets have not really grown to that extent. Gross margins are at about 43%, which is 42.9%, a little bit decline over last year in terms of console, what we are able to see.
PBT margins are still good at about 18.9%, although lower than what we have seen last year to that extent. I think that's how the numbers stack out from a point of view of both standalone and consolidated business in terms of how we are able to see it to that extent. When we look at from a point of view of the console, sorry, I just missed the point last. What I said was for the standalone, which was for quarter four and for the year. For the consolidated now, for the quarter four, in terms of what we are looking is almost a gross margin of about 43.7% in terms of what is there, which is an increase over Q4 of last year, as we have seen in the overall business in standalone as well to that extent.
We look at from a point of view of gross margins, we are at about 43.7%. PBT margins are at about 17.2%. Here, there is, I think, a little bit lowering of the margin, which is there, which is something which is a concern in terms of what is what we are looking at. If you look at from an FY2025 perspective for the full year in terms of consolidated, again, the sales have declined by about 4.5%. Gross margins are at about 42.3%, almost about 100 basis points decline, which is there. In terms of PBT margins, it is 17.8% in terms of what we have overall.
If you look at from a point of view of both standalone and consolidated, obviously, the gross margins have gone up, but the PBT margins have come down a little bit to that extent overall from last year as well as sequentially to that extent. That's the standalone and the consolidated business in terms of what you see. Some exceptions, which I must highlight overall. We have taken an impairment in terms of White Teak. This was obviously, we've seen that today we had to take a provision because of the fact that the trajectory of the business was not at as per what we had kind of really predicted. Therefore, a fair valuation loss on derivative contracts for the future stake purchases is what we have taken. If you look at it, the total impairment provision on goodwill consolidation is INR 77.8 million.
On standalone, the impact is about INR 78.5 crore in terms of what we see. So that's on White Teak. Similarly, there has been on the consolidated financials, what we have seen as an impact, which is there from a point of view of some other exceptional items. We had announced our divestment in terms of the Indonesia operations, which were there. Therefore, with respect to that, there is a recognized loss of about INR 83.7 crore in terms of the consolidated financials is what we have taken for the quarter. Then we have a company which we acquired in Sri Lanka, Causeway Paints. There we have taken an impairment loss of about another INR 21.5 crore, which is the goodwill on consolidation, which comes in.
I think these are the special exceptional items for the quarter four financials in terms of what we look at in terms of what have come about. Overall, I think, yes, we'll be curious to see in terms of how we are looking at quarter one. Obviously, the larger area is that you don't see too much in terms of from a point of view of demand coming back very, very strongly. While the tier three, tier four cities are batting a little bit better, I think it is still a cautious, optimistic mood in terms of what we are taking in terms of looking forward in terms of how it will go. Monsoon prediction has been strong. I think that is a positive point in terms of what we look forward to.
Overall, I think there is an element of flux which is happening from the geopolitical situation which is going around. We'll have to wait and see in terms of how things kind of really mature there in terms of their overall normalcy, which kind of comes into that extent. Given that, I think, and seeing the certain demand which is there, we are still kind of cautiously optimistic about the coming quarter in terms of what we see. That's our overall listing. Just a quick point, the dividend payout is something which you have seen consistently. We have been able to kind of grow and maintain. We have taken a dividend payout at 60% as well for this year in terms of what has been put into that extent in terms of what comes in.
Just a bit in terms of the ESG bit, which has been a core to our strategy in terms of how we are building up. I think on all the fronts, whether it is environment, social, or governance, strong imperatives, strong commitment in terms of what the organization is showing and taking it ahead in a big way to that extent. That is something which we have seen strongly. Overall, from a point of view of how we have looked at our numbers in terms of going forward, today, the current status is that all the numbers seem to be growing strong from the point of view of what we have done.
Whether it is from the point of view of freshwater replenishment or from the point of view of greenhouse gases and therefore the footprint reduction with respect to the CO2 imprint, or from the point of view of specific effluent, I think that is something which has been strong. From a social point of view, we run something called the Beautiful Homes Color Academy, where we are able to really work around the livelihood of so many people who are plumbers, carpenters, and painters. That is something which has been a very strong imperative where we are able to train more than 845,000 people in a year. I think that has been a strong imperative from a social point of view. These are what we are kind of committed to in terms of looking forward.
I think on to our overall targets, numbers in terms of what we are kind of taking to that extent. That is something which we are confident in terms of what we should deliver to that extent. Thank you for that. This is what you see is our association with Start Foundation, where we look at democratization of art across the country as our foray into color very, very strongly. Thank you so much.
Thank you, Mr. Amit, for your opening comments. A very good evening to one and all present here. Today, we have participants who have joined us physically as well as virtually on Zoom video platform. Requesting all the participants in the ballroom to raise your hands to ask questions, our team will pass the mic to you. Kindly introduce yourself with your name and your company name before asking a question.
Requesting the participants who have joined us through video conferencing, please rename yourself with your name and your company name. Plus, use raise hand feature to ask a question. Unmute when given a chance to ask the question. You can also post your question on chat box. We will ask them out on your behalf. Please restrict your questions to two per participant. We will first begin the participants in the ballroom. Please raise your hand to ask a question.
Yeah, thanks. I have two questions. My first question, so I'm Abneesh Roy from Nuvama. My first question is on the warranty bit, which you discussed in the presentation. One is, is there a cost escalation because of this? Because I remember earlier it was more of a three-year warranty. Now you're talking about four-year. And in some products, you're talking about 25-year warranty on the rooftop.
Is there a cost escalation from a raw material perspective and from a claim perspective? Because obviously, if from three years you move to four years, and how important is this from a consumer decision perspective? Given the competitive scenario and the new player was more on slow four player, and now you're matching that. How important and how it will help in FY2026?
I think, first of all, when we have looked at seeing our warranties, we have looked at our formulations. The formulations have been done in such a manner that the overall margins which we derive out of the product, we don't have an impact from a cost perspective to that extent. It's more a chemistry marvel in terms of what you have kind of put in terms of looking at an innovation which comes in the formulation to that extent.
That's point one. Second, warranty becomes a de facto correlation to the quality of the product to that extent. It's not necessary that every customer will look at five years or 10 years or 15 years in terms of repainting, which is there. It becomes definitely a strong correlation with respect to how you perceive the quality of the product. It gives you an assurance in terms of that this product, if it is going to be talking of this kind of a warranty, it's looking at possibly giving me this kind of durability over a period of time to that extent. We think the relationship of the customer with the warranty is very, very strong in terms of what comes in.
In fact, Asian Paints was the first one to introduce warranties about 20 years back in terms of when we started looking at all these warranties coming into picture to that extent. I think that's how we kind of look at one, cost neutrality. Second, from a point of view of looking at these warranties becoming a very strong signature of your trust on durability and performance.
One related question to my first question is in terms of advertising. The new player which entered a few quarters back, if I see their advertisement, they are talking that why continue with the legacy brand, and they are trying to connect with the Gen Z and the new age customer. I understand the warranty bit helps from a quality perspective, but how are you addressing this aspect?
See, overall, today when a customer is buying, customer is today relating to a lot of new stuff in terms of what we are doing. For example, we recently launched what is called Chromacosm, which is the world's largest color system, which offers more than 5,300 shades. This is today the world's best color system in terms of what we have in terms of what is launched to that extent. Today, we offer more than 1,000 shops across the country, which offers the best color consultancy which is offered, which is what possibly any Gen Z or a millennial customer would kind of really look at from the point of view of appropriation when they are looking at it. Today, I think the most important part is the visualization.
The work we do on digital, whether it is with apps or whether it is on our website, is absolutely led through artificial intelligence and looking at all the latest stuff which kind of comes in from the perspective of what it influences the customer. I think saying is something, but people experiencing it is something very, very different to that extent. As we know it today, possibly we invoke the latest and the best technology. One technology is signified by the innovation which you are bringing. For example, a product which can last on a terrace waterproofing for 25 years is a sign of innovation, which really connects with a modern age customer to that extent. Secondly, the work around color consultancy, color in terms of what you do is something which is there.
I think we believe that as a brand which has been there for so many decades, we don't have to go on the rooftop and shout that what we are not doing or what we are not changing. We believe we are bringing the customer the latest.
My second and last question is on the divestment which you did in Indonesia. Now in international markets, if I see Sri Lanka has been challenging in FY 2025, and Africa, Egypt, et cetera, have been challenging now for many quarters. Similarly, in home décor, if I see you have listed nine verticals and you have taken impairment losses in that in this quarter and earlier quarters also in some of those. My question here is, are you evaluating more such divestment in international any of the markets?
Even in home decor, would you now need to evaluate whether you need to exist in all those nine verticals?
How we see it from a global perspective, right now we are looking more at consolidation in terms of what we want to do because now some of these units are not of a small size, except for a South Pacific operation in terms of what we have is a small operation. Our presence in Middle East is now big in terms of what is there. Similarly, when you look at Bangladesh and Sri Lanka, I think the investments are big in terms of what we have made. The entire foray there is to kind of really see that you are amongst the top two players in those countries.
That is something which is what our belief is in terms of really strengthening our position to that extent. Similarly, when we look at from a home decor perspective, I was just explaining the rationale in terms of why home decor, because as part of our corporate positioning, we are the only paint players possibly who are into the whole area of home very strongly. There is no one who is which is appropriating home in such a way in terms of what we are doing because we believe that if you are part of the decor life cycle of the customer, then whether it is a rented home, whether it is a first home, it's a renovation, it's a second home, or even a kid's home, you are part of the decor life cycle of the customer very, very strongly in terms of what we believe.
Therefore, I think there also what we are looking at is consolidation. We want to say that in all the brand spaces, if you are not one or two in terms of looking at the businesses, we should not kind of exist there as we kind of go forward. At this stage, I think the other foray there is to offer a complete offer to the consumer so that we are able to kind of really say it is truly decor under one roof in terms of what comes in. Similarly, I think in the paint business also, we have looked at waterproofing. We have looked at textures. We have looked at tools to kind of really complete the overall offering in terms of what we are able to make.
Everywhere, the endeavor is that if you have to exist, you have to really look at number one or number two position being there.
Thank you.
Yeah, hi sir. This is Atul Mehra from Motilal Oswal Asset Management. Sir, if we look at the current financial year gone by, it is by far like one of the worst financial years we've had in a long time. Yes. How much of this would you attribute to new competition, and how much of this would you attribute to the broader economy? That's the first question, sir.
As we see it, I think if you look at over the last two decades, and this is something which I'd commented last quarter as well, we have not seen possibly demand conditions like this on the paint industry ever like this to that extent.
If you look at the overall organized paint growth, especially in the decorative sector, it is negative this year. Okay. If you trace back for the last full two decades, there is not a single year where you have got a negative growth in terms of the paint industry to that extent. I would say that one would largely attribute it to the slowing down of the market in terms of what has happened, demand conditions being very, very challenging, both from the point of view of new construction, second from the point of view of repainting, and third to some extent, while the B2B business is good, it is not compared to what we have seen in the last five years or so to that extent. I think that is one answer.
The second is while we have always seen competition in the market, we have had newer players like JSW and Indigo and so on and so forth, which have come into the market. Yes, this year we have seen force of about three, four new other players which have kind of come into the market to that extent. I would say that possibly to some extent in a market which is already slow, the intensity of competitive action has been much more as well to that extent. To some extent, it is, I think, double whammy in terms of as a combination of the market slowing down, plus in terms of the increased competition coming from both the existing and the newer players in terms of what we see.
Thank you, sir.
Sir, secondly, in terms of given what you said in terms of increasing competitive intensity, what is our strategy going to be to defend market share, to defend profitability? If you can talk a little bit about how we plan to come out of this particular competitive environment in a positive way.
I think our stand is very clear that we would kind of look at playing to our strengths in terms of what we would like to kind of do in terms of this environment. I think the whole area of Asian Paints bringing a certain quality, bringing a certain kind of loyalty, bringing a certain value to the consumer is something which is very, very important because we believe that if your value proposition is strong, the customer will buy into it. It's not a question of just discounting.
It's not a question of offering something very cheap to that extent. It's the value which really counts to that extent. Therefore, we would continuously play on the value proposition very, very strongly in terms of what we want to offer, whether it is from the point of view of economy, whether it is from a point of view of premium or luxury. I think the proposition is very important in terms of what we have been fighting on and which we will continue to fight as we kind of really go ahead in terms of looking at the market. We also believe that we have a very, very strong network. I spoke about 1.69 lakh distribution points to that extent. I think that's the other area which we will keep on expanding to that extent in terms of looking at.
As I see it, I think the moment the demand conditions are back, I think we would see much better kind of a performance in terms of what is there overall as we see ahead. I think from a competitive intensity, some of it will continue, I think, but it has to be kind of really countered only to an extent possibly that it does not go beyond a certain value in terms of what we are able to offer to the consumer.
Thank you, sir.
Hi, this is Latika from JPMorgan. Just extending from the previous comment that you made, clearly competitive intensity of acknowledge is going to stay high.
Just want to get a sense check on, do you see a downside to this 18-20% margin guidance that you have shared considering you sense there is more need to spend in the market, whether in terms of increasing the brand loyalty part, visibility part, improving the value proposition further, probably investing more in the market? Any thoughts on that? How are you thinking about it?
I think there is no two ways about it that possibly you will have to spend more in the market very clearly.
Whether it is from a point of view of building the brand or whether it is from the point of view of looking at seeing that you are present across the country in terms of your distribution spends in terms of what you need to kind of make, or even from a point of view of looking at elasticity of your pricing in terms of how you want to kind of behave vis-à-vis any other competition to that extent. Therefore, we are still very confident that today as we are going ahead, there are a series of things in terms of as an organization which we have kind of taken up, whether it is a very big area of backward integration which we have built in.
As I said, I think we saw it coming earlier in terms of what was going to happen in terms of the competitive intensity. We invested earlier. Not only this, we have already unleashed three of the backward integration initiatives which are already in operation right now, two I spoke of which are going to kick in now and next year as we see it to that extent. I think that is going to bring us a very strong cushion in terms of some of the spends which we are going to be able to make in the market.
Second, I think our constant work around looking at sourcing, purchasing efficiencies in terms of what is there, given the fact that you are able to buy materials at scale, I think that is something which is going to be very, very important in terms of looking at it in terms of going forward. Therefore, I think we are looking at definitely some saving which comes out of that to kind of really expend money in the market. The third area is there, what we also see is that these times call for very strong cost efficiency measures, which would be in terms of the way we spend, the way we look at our existing models and redefining our models. We have already kicked in an exercise to kind of really look at in terms of what we can do in that space.
The last area which is still getting comforting right now, we've seen a deflation in the last quarter. We see in the current quarter also there would be a deflation of about at least 0.5%-1% in terms of what would kind of happen. I think all these are good arsenals to kind of give us good kind of spending power in the market at the same time maintaining a guidance which we have in terms of what we are going to maintain.
Understood. The second question was on demand. You gave three reasons why FY2025 was soft for the category, decor category. One was new construction not being as much. Second was renovation intensity was probably not as much high, which is repainting. And the third one was you would have expected B2B to have done better.
Now, as you look through FY26 or sequentially as you're going through this quarter or how you executed the March quarter, which of these three you sense is going to pick up first? Would you want to hazard a guess where you land or the category lands in FY26 because FY25 was a negative year?
Overall, when we look at FY26, there are some good areas which are auguring in terms of what we are seeing. First, as we see it, I think what we are seeing from the last third and the fourth quarter is the government spending is coming back, which was disrupted in the first half because of elections or otherwise in terms of what you see.
That is a very big source today in terms of, I think, as Asian Paints, we are looking at any other airport, tunnels, bridges in terms of what are happening. That is something which we look at in terms of contributing to that extent. We feel that that is something which is going to give us a good gain from a point of view of our whole B2B kind of a business, which is going to come up to that extent. That is one area which we are very confident in, and that is something which is going to increase. Second, we also see that the mid to luxury housing is something which is going to flare up as we are kind of going ahead.
We are already seeing second homes coming up in a very big way in terms of this thing, which basically gives a flip to the premium and the luxury products in a very big way to that extent. That is something which we see will go up to that extent. Third, T3, T4 is a good indication which is coming in terms of looking at some of the rural demand coming back to that extent. Given the fact that last year was good monsoon and we are looking at a predictability of a good monsoon coming further, I think that is another big bright spot in terms of what we see, which would kind of augur well in terms of going ahead to that extent.
I think given these factors which are there, and unless there is a geopolitical event which really kind of really looks at spoiling this kind of trajectory, we think that FY 2026 should be definitely much better in terms of from the point of view after this thing. Obviously, there is a caution till the time we really see that demand really picking up to that extent. Therefore, I think we are still being overall cautious in terms of what we would look at. I think the idea is to kind of really aim for single-digit value growths for the year FY 2026.
Thank you. If I could squeeze one on CapEx, because you mentioned INR 3,000 crore, if I heard correctly, on futuristic emulsion plant that you're putting up. That's right. I think between FY 2026 and FY 2027.
Any color on standalone out and consolidated CapEx for FY2026 and FY2027 for Asian Paints?
We have already, about a year and a half back, announced our overall consolidated CapEx, which was closer to about INR 9,000 crore in terms of what we were, INR 8,500 crore which we were spending. As part of that, we had budgeted for these spends which are there to that extent. If you look at it today, we have been able to spend a considerable portion out of that till FY2025 in terms of what we see. As we look at FY2026, our overall CapEx will be complete from a white cement perspective, which is there. It is only part of the CapEx of the VAMVA plant, which is going to kind of go till about FY2027 to that extent, which would be left out of that INR 3,000 crore.
I think that would be something which would kind of come in this year to that extent. Overall, from a standalone and a console, overall CapEx this year, we would be spending. You're expecting about INR 700 crore-INR 800 crore outflow this year and probably a similar number next year.
Thank you so much.
Hi, this is Jai from Kotak Securities. First is, was there a conscious decision to improve gross margin in this quarter because the sequential improvement is fairly impressive? On the other side, I think that even underperformance versus market has also increased, or maybe some of the companies are yet to report. Do you think you may have lost some market share because of this gross margin focus?
See, it's not that the gross margin came at two levels. One was the deflation, which kind of really happened in the market.
Overall, second, what we see is that overall, from the point of view of the raw material efficiencies which have been built in in terms of the work which we have done, I think basically looked at improving the overall gross margins which is there, which has kind of come into that extent. I do not think so. I think the foray in terms of looking at cost continued from a point of view of raw materials, which basically jacked up. I think the bonus came in from the point of view of deflation, which was there in the market to that extent, which gave us the overall gross margins which have gone up.
I think from a point of view of overall share in the market, as I said, that we will have to kind of wait for all the results which would kind of come in for Q4 to that extent. But given the fact that we are talking of a market being overall negative, there could be possibility of some loss which could have happened to some of the either the existing players or some part to the new competition as well. Sure.
Second is just clarification. Single-digit value growth for FY2026, that is your outlook for the category overall industry or for Asian Paints? For Asian Paints. Okay. You still maintain 18-20% consolidated EBITDA margin guidance?
That's right.
Finally, one year ago, most of us in this room would have probably expected Asian Paints to defend market share better when the new entrant came in.
We would have not expected the consolidated EBITDA margin to drop below 18%. I mean, when I look at the end of the year with hindsight benefit, we feel that this entire thesis has not played out. Maybe number two, number three player have defended market share better. What do you think has played out this year which resulted to these outcomes?
Overall, when you see the overall market, if you see, I think the factors which have been played are multiple, as I said. First of all, I think given the fact that the overall market has not kind of really played up to that extent, I think we did not anticipate possibly the kind of competitive intensity which would have kind of come up given the fact that demand was not there and everyone was fighting for the same share to that extent.
I think, and given the fact that possibly you have a certain share to that extent, you were possibly coming under glare from all the competition to that extent. It is not about one competition. It is about everyone kind of really fighting for the same pie in terms of what we see. Second, I think what we see is that possibly when you look at from the point of view of price elasticity and when you look at from fighting the competition on a certain pricing level, I think you would be kind of be very clear that you would kind of go to a certain level which is sustainable and you will not go to a level which is unsustainable to that extent. I do not think so. It is a years game.
It is a game of looking properly at the next three years as well in terms of how it pans out. Because I think some of those performances can be just a flash in the pan in terms of what we can see in terms of what is really happening. I think sustainability is more important. We could have kind of guided the share much better in terms of expending some more money and so on and so forth. I think one very clear thing is that you are looking at possibly an area of sustainability, what you want to maintain the market when you look at possibly even preventing your share erosion to some extent.
This strategy will continue even going forward that you will not you would want to respond on pricing or.
It is not that.
We are getting into a deflationary environment, so.
It's not that we look at saying that we have not responded on either on the pricing or in terms of the product innovation. As I said, I think we are focusing very clearly in terms of looking at the value proposition.