Hello and good evening, and thank you for joining us today for Asian Paints Results Investor Relations team, and it's my pleasure to welcome you all. We are joined today by senior management of our team, including our.. This conference is being recorded. 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 Two and for the H1 Financial Year 24 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 upsurge 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 consumer's 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 quotient, 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 marketing. 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 in a very different way to that extent.
Therefore, that was a very big quotient in terms of what we used 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. One of the other areas amongst the many which we did were the area of backward integration, which we have spoken about earlier in terms of what has happened.
That is something which is one thing which has really gone strongly from a point of view of looking at giving us some advantage in the market. I'll try to cover some of these areas quickly for you. Namely, I think this was a season time when we launched newer campaigns. 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 a finish which inspires you to kind of do textures and wallpapers very, very strongly. We really kind of launched this entire campaign with a CTA which came in about a Glitz Decor Guide which was along with it. It was, I think, a very successful campaign first time comeback for Deepika as well for the brand in terms within a big way in terms of what we kind of unleashed.
The second area which we really focus is our core ownership of homes, which is very, very important. 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. That is the area of Har Ghar. We invoked Har Ghar very strongly because we know that that's the emotional connect. We always want to be the emotional energy in terms of how people associate with their homes.
That's why we 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.
हर घर चुपचाप से यह कहता है कि अंदर इसमें कौन रहता है। कौन यहां दीवारों को अपना टच देता है। कौन रसोई में ऑफिस बना लेता है। कौन यहां पेट्स को खुद के नाम से बुलाता है। कौन मेहमानों को रिश्तेदार की तरह खिलाता है। कौन यहां उल्टी नाव चलाता है। कौन वक्त के साथ बदलाव लाता है, पर यादों को नहीं बुलाता है। हर घर चुपचाप से यह कहता है कि अंदर इसमें कौन रहता है। एशियन पेंट्स, क्योंकि हर घर कुछ कहता है।
So, as you see it, I think a lot of emotions in terms of what we built in the whole relationship in 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 brought 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 adorned this can in their living rooms and are 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 off. 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 for that customer, so these are all smart products which offers various choices to the customer in terms of the type of finish. 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. For the first time, we really embellished this entire thing by looking at designer chrome and metallic shades which we introduced. This is something which has been the rage with the architect designer segment. Overall, we have got a fabulous response in terms of what these things call off. As I said, new products is a very strong part of our strategy. 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.
That is something which 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 invested in our Beautiful Homes 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. 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 a 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 in, especially from the point of view of our industrial range. So a series of services 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 a 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, two big things, so we just commissioned our white cement plant, which has unfolded in Dubai. And we have 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 more than about 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 about. And that is something which we are going to look at unfolding in the quarter one 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 about. 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 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. Especially to mention the premium/luxury category in emulsions is something, as I mentioned earlier, on the back 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. 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 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. So I think overall from the coatings piece, it improves when we look at the industrial coming along with the deco 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 number one integrated home decor player. We've got now 73 Beautiful Homes 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 performed. 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 saying we bring energy through not only our Beautiful Homes 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 four 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've 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 that out of it, which is the divestment we had made last year, we would be closer to about 10.5%-11% overall in terms of the growth in terms of what we have achieved. Here also, the focus has been on the premium/luxury and the waterproofing ranges, but I think the good part is that Asia is doing 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 kick in terms of looking at the overall profitability, which has really increased in a big way.
The PBT margins are also at about nine% for the quarter, higher by almost about 450 basis 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 PPG Asian Paints business, which is largely into auto OEMs and auto refinishes along with packaging and marine, they overall grew by a good 12% in the quarter two 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 the thing. 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.
The PBT margins have gone up to about 17.3%, which is higher by about 160 basis points. The second JV, which is about the general industrial kind of products overall, again, is something which is 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. 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 an 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 basis 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 one, 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 basis 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 standalone 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 basis points to about 43.7%.
PBDIT has grown by about 21% overall, and it is a margin of about 18.5%, higher by about 230 basis points. So I think overall, a strong performance in terms of how we see from the standalone perspective of Q2. At an H1 level, given the fact that the quarter one was not so strong, we are seeing a net sales growth of about 2%, gross margins of about 43.4%, which is about 150 basis 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 basis points higher. So that's the story at the standalone 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 standalone 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 basis points. And PBDIT growth of 21.3%, which makes the margin almost about 17.7% higher by 220 basis points.
Similarly, I think at 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 standalone and the consolidated levels in terms of what we have been able to get. We have declared interim dividend of ₹4.50 to that extent. I think that is in line with the performance in terms of what we have seen.
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. 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. It's not being 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. Finally, I think the whole GST, I think corrections have kind of would 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 three months and the six 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 two.
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 are our sustainability targets which we have taken.
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 galloping towards our target of 2030 to that extent. So whether it is the freshwater replenishment, the whole area of reduction in specific hazardous waste, reduction in specific effluent, reduction in Scope 1 and 2 emissions, or even in terms of the recycled plastic in 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. 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. Thank you, sir. We will now open the call for the Q&A session.
We will wait a few minutes for the Q2 FY24. We request participants to limit themselves to two questions each and return to the queue if they have any additional queries. To ask a question, please raise your hand using the participant tab on the screen. The first question is from Mr. Abneesh Roy from Nuvama. I request Mr. Roy to kindly unmute and ask his question.
Yeah, thank you. Thanks for the opportunity. I have two questions. My first question is on overall competition. I see that your gross margins are up both Q2 and YOY. 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 now withdrawing in many of the SKUs.
So 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 on 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, etc. So if you could comment on 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 focused 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 your 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 Q2.
Thank you. The next question is from Mr. Vivek Maheshwari from Jefferies. I request you, sir, to kindly unmute and ask your question.
Hi, good evening, team. 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. Yeah, yeah, yeah. 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 okay, 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%-4%.
I think, therefore, what we were very clear is that we need to kind of really shift a 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 whiff to our overall execution piece so that we could able 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 go 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 a 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 these 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 uptake 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 uptake given the fact that we were looking at very strongly in terms of our overall execution and consumer connect.
Thank you, sir. The next question is from Mr. Ravi Mehta. I kindly request Mr. Mehta to unmute and ask his question.
Yeah, hi, sir.
Yes, you are.
Sir, hi. So just two questions. First, given how you're seeing your initiatives pan out and the demand improving, would love to get your thoughts on how you see the full year volume growth and value growth kind of behaving for FY or for the industry to give us some sense. And second, 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 be helpful. Thank you very much.
Okay, so I think when we look at the next six months, we have 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 growths 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 mid-range 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%-5% to that extent. So I think definitely if you are able to hit mid-digit value growths 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.
Thank you. The next question is from Mihir Shah from Nomura. I request Mr. Shah to kindly unmute.
Hi, sir. Thank you for taking my question. Congrats on an excellent set of numbers. Just wanted to understand the numbers a bit better. So two 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 Q3 last year? And also, did you see any lost 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 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 Q1 levels, which ideally they're 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. Thank you.
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 painting the retail end 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.
I think those are stronger avenues 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. That is something which has been also supportive in terms of giving us across the product range benefits to that extent. 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 a 4%-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 end 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 on 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 two is something which we can give more weight to. And that is why I kind of look at keep on looking at the overall volumes far more holistically.
Thank you, sir. The next question is from Latika Chopra. I request Ms. Chopra to kindly unmute and ask a question.
Hi, thank you for the opportunity. Two questions from my side. The first one was on margins. You've always maintained an 18%-20% margin band for yourself. Given the raw material environment is benign, competitive intensity remains stable, though stiff, nothing incremental, hopefully. But clearly, there are a lot of cost interventions from your end. Are you comfortable to see visibility that you can land at the higher end of this margin band instead of the lower end, which has seen the performance in last few quarters?
And the second question was at an industry level, we have seen introduction of consumer financing for painting services. What are your thoughts on this? This is very nascent, but is it a meaningful driver of consumer demand? And is it something that you think you could explore or the industry players could explore in the future?
And the third bit, just a clarification on your previous answer, this gap between volume and value, I understand over the next six months, you are still looking at it at 4%-5%. But when you frame your plans for FY27 in terms of mix and all the initiatives that you've taken and also the salience of B2B, which seems to be increasing, do you sense that this gap will reduce or there is a conscious effort to do that? Thank you.
Okay, great. So I think from a point of view of overall margins, at the standalone level, we are at about 18.5 and at the consolidated level, closer to about 18 to that extent in terms of what we are. I think today we are making some very meaningful investments which are there from a point of view of our marketing efforts which are going in the market. We are also looking at investing in technology a lot in terms of what is going ahead to that extent.
We are possibly looking at bringing more innovation in terms of our initiatives which we are adding in the market and really kind of able to reach out to the consumer far more effectively as we go ahead. We also see a larger amount of competitive intensity which is going to happen in the market as we kind of go ahead. I think given all these, possibly I think it is kind of okay to maintain the whole guidance of 18-20 to that extent.
I would not qualify whether it should be at an 18 level or a higher level to that extent, but I think it's good to kind of maintain an 18 to 20 kind of a margin in terms of what we would like to maintain as we kind of go ahead. The second area which you raised in terms of consumer financing, I don't think so there is any new in this concept. It has been tried, tested for a long time. In fact, we were the first ones to introduce financing about almost five years back in terms of what we had done.
It is something which has got possibly not a very great response, a little bit of a muted response in terms of from the point of view of people because people are also wary about the fact that there are certain resultant charges which kind of really accrue to them and so on and so forth to that extent, and therefore, possibly it totally depends on the ticket size of painting in terms of what really comes into that extent and the ease of getting that finance overall to that level, so I feel that there is nothing new in the concept. It's been tried, tested earlier.
Possibly it will kind of give only that much of connect with the consumer, but possibly cannot become a big game changer as we kind of go ahead to that extent. The third area which is there from a point of view of the volume value gap which you spoke of, please remember that today when we reach out to the market, we are talking of reaching out to every segment of consumer, right from the segment at the economy level to the mid-level to the luxury level to that extent.
And therefore, we would not like to kind of really see that we are possibly losing out in any of these segments which are there to that extent. And today, the economy to the mid-level segments are fairly big and huge segments to that extent.
And therefore, what I would see is that as we kind of keep on going ahead, I think this kind of a volume value gap will persist if we are looking at a far more holistic approach from a point of view of both volume and value across the range of products in terms of what we are looking. And that is something what would be our endeavor in terms of going forward.
Thank you. The next question is from Mr. Manoj Menon, ICICI Securities. I request Mr. Menon to kindly unmute and ask his question.
Hi, team. Good to note your higher disclosures on the activities which you have undertaken and request please continue. Just one thing on those actions which you have taken, not really talk about macros and markets and industry growth, etc.
If we could comment about anything which you would have done in the last six months or one year with the dealers, anything different versus which is in the past, that would be very helpful. That's one. The second question is any color over the last six, nine months in terms of your regional mix changes. What I'm trying to understand is, for example, let's say in markets like Tamil Nadu, Karnataka, Kerala, where probably you are overindexed versus the national average. So let's say, how do I think about the four parts of India, the growth for you? Is it closer to the overall growth or is there a regional divergence? And also on the product mix. Thank you. And good luck.
So as we look at, I think for us, the retailers, that is the entire set of dealers are something which are core to it. I think what we have definitely looked at in the last possibly about six to nine months is the whole area in terms of building far more stronger relationships. I think that is something which is a very different thing in terms of what we have tried to do because for us, I think the relationships are much more important in terms of what we kind of really build up so that it kind of really then also kind of adds up to the overall business in terms of what we are doing to that extent.
The second area which we have looked at is in terms of generating more business for the retailer so that it is something which is very different from the industry standpoint of view of saying that today we get you better leads, we get you better business so that today the retailer gets more interested in terms of doing business with you in terms of looking for a brand which is really supplementing his or her efforts from a point of view of selling more.
And that is something which really matters to the dealer to that extent. I think the third area is to kind of really look at saying that he's earning well. And that earning well, basically we look at two initiatives. One is from the point of view of giving him a strong ROI in terms of his overall business.
Secondly, by virtue of a lot of variants, a lot of propositions, differentiated propositions, we try to give him higher margins so that the entire return on his investment kind of really amplifies a lot. I think those are some of the key areas in terms of what we have looked at really building from strength to strength in the last nine months in terms of what comes in. When we look at from the point of view of certain regions which you mentioned, especially the southern regions, I think largely what the tonality we have taken in terms of what is there, we have looked at a lot of regional initiatives which are basically tuned to that region in a very strong manner.
To give you an example, that if today we see that there is a region which is tuned to more in terms of looking at that, they are excited in terms of looking at a certain finish in a certain category at a mid-level to that extent, we would kind of try to give more wings to that category and that finish in that market through various mechanisms, whether it could be through the architects, the interior designers, or the painters, contractors so that we could kind of play on the fillip of that kind of category which is so good for that kind of a region in terms of what we will build on to that extent.
Similarly, I think the whole area of regionalization, which basically is the whole area of offering some areas like colors which suit that region, packs which suit that region, something which appeals to the art culture of that area, I think has been a strong galvanizing point in terms of what we are seeing where people are looking at aligning with you because that is something which the customer is asking and the customer is really enjoying. And that in the true sense of what I said is bringing joy and happiness to consumer lives. So I think that is something which have been the strong differentiators there.
Thank you. The next question is from Mr. Amit Sachdeva, UBS. I request Mr. Amit to kindly unmute and ask his question, please.
Yeah, hi. Good evening. Thank you for taking my question. Sir, my question is on that comparative intensity. I think last year we've seen, for lack of a better word, kind of bandwagon effect where a lot of dealers joined in, competition built up some scale. Now, is this because some sort of fatigue has set in there as well where dealers are going back to sort of buying Asian Paints again and some sort of that effect is waning?
And also related to that is that the painter commission that you also gave, you also accelerated quite a lot of it, I believe. How do you record that commission? Is it part of the net pricing or it sits on the other expenses? But I just wanted your reaction to it, whether competitive intensity actually is waning from a dealer adoption point of view.
So actually, it's very good that you asked this question because if you look at from a point of view of the consumer, the consumer is something. This is not an FMCG industry that you basically come in with a force and you look at possibly giving consumer a lot of goodies packed by people who are kind of aligning in terms of giving and offering those areas. I think it is also a question in terms of saying that this is a cycle which keeps on visiting you once in five years, which means that every year you have a new set of consumers which possibly are coming into the market.
This is a continuous process that if you don't build bridges with this customer over a longer period of time, a shorter term kind of an invasion will really not help you in terms of getting to the consumer. Having said that, at the same time, I think it is important that you build in the consistency of brand spending to that extent, which can only happen if you do it over a larger year of five years to 10 years to that extent so that you are able to get that customer, the newer customer, and then start basically getting a repeat from that customer as you kind of look at your long-term journey to that extent.
So therefore, I would say that while there are ways of accelerating in terms of incentivization which can come in terms of looking at discounting or looking at possibly what I call bribing the contractor overall to that extent. But I think the more important thing is the fact that are you building a connect in terms of ensuring that both the dealer and the contractor are able to get a continuity in terms of their business overall. And that is something which is very important that you work with the contractor in terms of one, increasing his business and not only in terms of looking at either discounting or giving him a benefit per liter, which kind of really works for that.
To my mind, I think some of those areas will have a little bit of a short-term effect to that extent, and it would kind of really call for really strong energy that you could kind of really leverage the areas of overall brand connect far more strongly along with the relationships, which would really work from a point of view for medium to long term.
Thank you, sir. The next question is from Mr. Tejas Shah, Avendus Spark. I request Mr. Shah to kindly unmute and ask his question, please.
Hi. Thanks for the opportunity and congrats on recovery. Sir, just in your presentation, you called out that part of translation from volume growth to value growth is also missing because of rebates. Just wanted to know how are we tracking and how is the overall industry also tracking on that front? Has the intensity on that particular line item come down?
So as I said, I think the important thing in this is that when you look at the overall segments, there is a certain kind of balance you will have to kind of really look at because it's a large product range today, as I said. And each segment basically is a larger contribution given the diversity of this country and the huge consumption in terms of what it brings to that extent. And therefore, possibly just blindly pursuing the fact that I need to kind of really just decrease the value volume gap might not be a great idea in terms of going forward. What really matters is that in each of the segments, are you really scoring out with the consumer? Are you really giving consumer a different segmentation?
Are you really winning in each of the segments in terms of going forward? The segment sizes vary to that extent in terms of what possibly economy contributes, what is the mid-end contributing, what is the luxury contributing. Therefore, just kind of really saying that I need to concentrate only at the mid and the luxury end and kind of look at possibly increasing my value might not be a great choice in terms of when you are looking at really kind of traversing the entire range of the country in terms of reaching out.
Especially when you talk of your retailing and your distribution strength, which is both very, very strong towards the urban and the rural centers in terms of what we see. So therefore, I would say that possibly a balanced approach in terms of as we are what we are taking, I think is a good option in terms of really maintaining this whole volume and value parity in terms of going forward.
Thank you. Our last question is by Mr. Jaykumar Doshi, Kotak Securities. I request Mr. Doshi to kindly unmute and ask his question.
Yeah. Hi. Thanks for the opportunity and congratulations on good performance. My question is on premium and luxury part of the portfolio. Could you give us some indications in terms of what has been the growth rate relative to the company? And the question comes primarily because a new entrant has indicated that for them, 65% of the portfolio is premium luxury.
And if that is mathematically, then it appears that either the market is growing at a supernormal rate, like 25%-30% plus in value terms for premium luxury, or maybe they are gaining share from others. So I would like to know your thoughts on that aspect.
So overall, I think I can speak for Asian Paints definitely here that today when you look at the luxury and the medium category today, it is not that kind of a large category in terms of what we see. The larger, bigger category obviously is the economy category to that extent.
Therefore, we have reason to believe that every new entrant who comes in basically tries to get a larger peek into the whole area of the economy to that extent in terms of what it looks like to that extent because it takes a lot of effort in terms of brand building, a lot of effort in terms of product differentiation to kind of start making forays from a mid-level to a luxury level kind of a zone to that extent. Therefore, what we believe is that obviously the economy segment will still be the largest segment in terms of the market to that extent.
And therefore, I think our endeavor is to kind of look at upgradation, which is a very strong initiative in terms of what we take in terms of how do we really upgrade people who are using distempers to the whole area of economy emulsions from economy emulsions to the mid-level emulsions and thereon to the luxury emulsions. I think we kind of really keep on prodding that pyramid far more strongly in terms of how it pans out. But the larger base of that pyramid is definitely the economy segment.
Thank you. We will take the last question from Mr. Prateek Godhi, HSBC Securities. I request sir to kindly unmute.
Yes. Thank you for the opportunity. I have a quick question on the mix again. Any color in terms of interior exterior performance in terms of mix?
Overall, when we see, I think the interiors would have done much better this quarter, definitely, given the fact that there was extended monsoon. Please remember in the monsoon, the exterior painting definitely suffers, especially large, big sites, especially in the B2B business. It definitely takes a toll in terms of the exterior painting because no one wants to risk painting at a time when it is incessant rains which are happening to that extent. I would say that this quarter has been much stronger from a point of view of all the interior finishes to that extent.
Just a quick one, if I can squeeze it in, on the waterproofing category or the construction chemicals category in general, any commentary there?
Yeah. I think that category has done very well for us. Overall, we are looking at growing more than double digits in terms of that category. And it is something which possibly there is a lot of innovation in terms of what we are bringing in terms of from the kind of products and really offering consumer a proposition, which is a strong waterproofing proposition which comes, which is able to be there. And also in the B2B business, it is basically foundational to get into the waterproofing first and then start supplementing it with the top coats to that extent as you go ahead. So I think it's been one category which has been doing very, very well for us over a period of time.
I thank everyone for their questions. With that, we come to an end of the Q&A session. On behalf of Asian Paints Limited, this Concludes Today's Conference. Thank you for joining us. You may now disconnect your line and exit the webinar. Thank you so much, everyone.
Thank you.