Pidilite Industries Ltd

NSE:PIDILITIND

Earnings Call Transcript 2023-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Pidilite Industries Limited Q2 FY '23 Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Krishnan Sambamoorthy. Thank you, and over to you, sir.

[Krishnan Sambamoorthy, analyst]

Thanks, Mike. On behalf of Motilal Oswal Institutional Equities, I welcome you all to the 2Q and 1H FY '23 results conference call of Pidilite.

As always, it's a pleasure to host the management of Pidilite Industries. We have with us Mr. Bharat Puri, Managing Director; Mr. Sudhanshu Vats, Deputy Managing Director; Mr. Sandeep Batra, CFO; as well as Mr. Sunil Burde, Vice President, Accounts.

I'll now hand over the call to the management for opening comments.

[Sandeep Batra, executive]

Right. Good afternoon. This is Sandeep Batra from the offices of Pidilite. I will begin with a summary of the financial performance for the quarter and half year ended 30th September.

On a consolidated basis, net sales for the half year stood at INR 6,090 crores, a growth of 34.1%, which was aided by strong volume growth across categories and geographies. Our growth was broad-based across Consumer and Bazaar segment, which grew 35%, and the B2B segment, which grew by 33%. This growth was enabled by distribution expansion, innovation, a very responsive supply chain and our ongoing digital initiatives.

For the quarter, net sales -- consolidated net sales was INR 3,000 crores, a growth of 14.8%. This quarter saw input costs at all-time high levels, with the material cost as a percentage to net sales higher by 436 basis points over the same period last year, and 74 basis points sequentially.

Calibrated price increases as well as a sharp focus on operational efficiencies helped us to maintain EBITDA margins in line with the previous 2 quarters. Absolute EBITDA for the half year at INR 1,029 crores was up by 14.7% over the same period last year. EBITDA for the current quarter at INR 500 crores was lower by 9% over the same period last year.

Now moving on to stand-alone financial performance. Net sales for the half year at INR 5,481 crores was 35% higher than same period last year, again, led by 35.4% growth in Consumer and Bazaar and 33.7% growth in the B2B segment. For the quarter, net sales at INR 2,703 crores were higher by 15.1%.

The consumption rates of our key raw material, VAM, has continued to increase during the quarter. Q2 VAM consumption rate was $2,491 per ton versus the first quarter -- by the previous quarter being $2,231 per ton. Our current rates at which we are ordering are ranging between $1,200 to $1,400.

EBITDA before nonoperating income for the first half was 11.5% higher at INR 951 crores. And profit before tax and exceptional items for the half year at INR 876 crores was 14.2% higher.

I'd also give a quick overview of the performance of our subsidiaries. Domestic subsidiaries maintained positive momentum with the Consumer and Bazaar-oriented subsidiaries continuing to deliver industry-leading growth and margins, whilst the B2B subsidiaries reduced their losses significantly. International subsidiaries witnessed good sales growth, but EBITDA remained under pressure due to higher input costs.

We remain cautiously optimistic on improving demand conditions aided by favorable monsoon and increase in construction activities. And with the decline in commodity costs, particularly VAM, profitability will improve sequentially. Our focus continues to be to deliver broad-based profitable volume growth.

With this, open to any questions that the participants may have.

[Operator]

[Operator Instructions] We have the first question from the line of Avi Mehta from Macquarie.

[Avi Mehta, analyst]

I'm sorry, I just missed the initial comments on the VAM. Could you kind of highlight that first? That was the first one.

[Sandeep Batra, executive]

Sure. You want to respond to that. So the consumption rate for VAM for the second quarter was $2,491 per ton as opposed to $2,231 in the first quarter of this fiscal. And last year same period, it was $2,071 per ton. Current spot rates are ranging between $1,200 to $1,400.

[Avi Mehta, analyst]

So just kind of taking this forward, given where the VAM situation is -- more or less kind of back to pre-COVID levels or actually closer to that, would you now argue for a more front-ended return to the earlier shared guidance of 20% to 24% EBITDA margin in the second half? Would that be the right way to see this?

[Sandeep Batra, executive]

See, I think there are 2 factors to be looked at. One is while VAM is a very important and key raw material, it is maybe about 20%, 25% of our raw material basket. There are other raw materials, which have not yet come back to the kind of pre-COVID levels.

Secondly, the currency has depreciated by more than 10%. And thirdly, we are carrying inventory, both of raw material as well as finished goods. So I think on a blended basis, certainly, while we see margins improving and maybe in the fourth quarter, we should be able to report EBITDA margins north of 20%, but to give a very specific number at this stage would be difficult.

[Avi Mehta, analyst]

Fair enough, sir. This is helpful. The second bit, sir, I just wanted to kind of better appreciate the demand situation. You highlighted there have been some tailwinds for demand as we go forward given that construction activity has improved.

How -- but you kind of shared some caution because there was weakness in this quarter. So would -- in your best estimate, do you see that we are now in the path of recovery to reach in fact a double-digit level in volume growth? Or is this going to take some time more for us to kind of move back to that level? How -- any comments on that front would be useful, sir.

[Bharat Puri, executive]

Okay. I'll take that. Avi, I think that's the right question. See, my invitation to you is if you look at and pick out quarter, then it tends to distort the picture. If you look at the first half, and we also look at CAGR, which I think probably is the best indicator of including over the pre-COVID period, you would find that for the first half, whether it is our value or volume growth, both will be in a CAGR basis in the mid-teens.

Therefore, to my mind, as far as demand is concerned, while obviously the jury is out to see how does rural and semi-urban come back in the third and fourth quarters, there is sufficient evidence to show that there is a tailwind, especially in urban, including the Class I, Class II towns, both from a real estate, construction activity and the consumer's overall attitude towards the home.

So if you were to ask me at an overall level, obviously, our objective would be volume growth -- profitable volume growth. And the way it looks currently is, while -- for example, I can tell you that last year, the second and the third quarters were bumper quarters for 2 reasons.

One was -- the first quarter was a quarter of a lot of closures and therefore there was a lot of pent-up demand in the second quarter. In the third quarter, there was substantial pricing that we had taken, 2 large price increases because of the raw material situation, and therefore dealer inventories have substantially gone up.

When you equalize this over the year, we are -- our objective remains double-digit volume growth, and we are very confident that for the year, that's where you believe always trended and said, listen, core categories at 1 to 1.5x GDP growth, growth categories at 2 to 5x GDP growth, and pioneer categories at INR 100 crores in 3 years.

If you look at it the last 3-year period, we're actually fairly consistent on these parameters, in fact, beating them by some distance.

[Avi Mehta, analyst]

Yes. So I mean, what -- if I hear you correctly, as you said, quarterly it's getting a little noisy, that's why I just wondered kind of would you say -- because price hikes were also, as you rightly said, we started in the second half, so they're not yet in the base as we speak.

So is the right lens to see is as pricing starts to become normal, this pricing growth will move towards volume? Or that's not the right way? That's what I was trying to appreciate better.

[Bharat Puri, executive]

I think the right way to look at it is 2 things. One is definitely volume growth, because in any emerging market, that is a greater indicator of greater usage as well as new customer. And we -- what I -- we will also keep looking at because we've had these unnatural years where somewhere second quarter was impacted, somewhere third quarter. So we're also looking at CAGR over the pre-COVID period and seeing that is an overall, equalizing for all of this, are we growing substantially or not? And fortunately for us, the answer is yes.

[Avi Mehta, analyst]

Okay. Okay. Got it, sir. And sir, just the last bookkeeping request. Would it be possible to give us a sense on the volume growth for the quarter? It just helps us appreciate the 3-year CAGR on volume a lot better?

[Bharat Puri, executive]

See about 1.2% to 1.5% on Consumer and Bazaar. And overall, I think in the point -- overall, you can take it as pretty much on par, point something it is.

[Avi Mehta, analyst]

Okay. So similar as the Consumer and Bazaar. Okay, sir. Overall.

[Bharat Puri, executive]

Yes. And for the first half, it is about 21% volume growth.

[Avi Mehta, analyst]

21% on overall basis?

[Bharat Puri, executive]

Yes.

[Operator]

[Operator Instructions] We have the next question from the line of Ritesh Shah from Investec.

[Ritesh Shah, analyst]

Sir my first question is how do you reflect upon the recent amendment, which has come to Section 194R under the Income Tax Act? Basically, it reflects on the incentives like gift and perk benefits, which are given to the channel partners. How does it impact us? Or how should we understand this particular variable for the company?

[Bharat Puri, executive]

I think that's a great question. It definitely impacts us because, obviously, our incentives and -- for all leading companies, companies with leader products, what you try and do is give dealers noncash incentives so that there is no undercutting in the market.

Now we've obviously therefore evolved the set of policies while taking this into account. I mean, it's something that -- it's something that we don't welcome, but it is something we have to live with, and we will live with it. You know what I mean?

[Sandeep Batra, executive]

Yes, so I think we are, from a compliance point of view, totally on top of it in terms of -- and not only how it impacts us, but also how it impacts our channel partners. So we have, from that point of view, educated all the channel partners, the implications that this has on us, on our business with them and on their business. And we have factored the impact of that in our business model going forward.

[Operator]

Mr. Ritesh, is that all?

[Ritesh Shah, analyst]

Hello. I'm audible?

[Operator]

Yes, now you are.

[Ritesh Shah, analyst]

Sir, let me just rephrase the question. I'll just take a step back. If I have to understand how much is the money that we put on the table for the distributors, for the dealers and the influencers separately?

If you can explain it from a margin standpoint, or if you are selling something for INR 100, basically, if there's a bridge available, taking into account the margins for the different parts of the value chain?

[Sandeep Batra, executive]

We have not reduced or adjusted the margins of the channel partners. Whatever is the impact we have, as I said, factored that in our business model going forward. The amount, in any case, is not very material.

[Ritesh Shah, analyst]

Okay. But sir, when we look at this particular variable from a marketplace standpoint, is it something that we are -- we will incur more expense so that the dealer gets the same quantum? Or basically, we are telling the dealer that you'll get less because we are adjusting for the tax deduction?

[Sandeep Batra, executive]

I think it is a combination. We are not -- it's not a hard and fast rule, depending upon the program that we are running, the kind of benefit that is being given. We will -- we have calibrated that accordingly. So there is no hard and fast rule that either dealer will bear, or we will bear.

It's something that we have, as I said, first of all, it is not very material. Secondly, we have factored that in, without in any way trying to compromise the relationship that we have with our channel partners. And I'm very happy to connect with you outside this call if you have any other specific questions on this topic.

[Ritesh Shah, analyst]

Sure. I'll connect with you separately on this.

Sir, my second question is on price growth. You did indicate variables of rural and urban demand. Plus, there will be some benefits on raw material prices actually softening going forward. So how should we look at incremental pricing trends for the 2 segments? If you can provide such color over here, that would be useful.

[Bharat Puri, executive]

See, as far as pricing is concerned, we don't see ourselves taking any more pricing. I think we are currently fully priced and, therefore, we see no further pricing actions from us either on a B2C or a B2B basis. In fact, in B2B in certain cases, we will be looking at a reduction in prices. In B2C, we will start look at the rupee as well as the overall cost of raw materials and then take appropriate calls. But we don't see any further pricing action in terms of increasing prices.

[Operator]

[Operator Instructions] We have the next question from the line of Latika Chopra from JPMorgan.

[Latika Chopra, analyst]

A couple of questions. The first was if you could provide some flavor on what is the contribution or exposure of your portfolio towards new construction? And what is the kind of momentum you are witnessing on that part of the business?

[Bharat Puri, executive]

Good to hear from you, Latika. See, it's a very difficult question, and I'll tell you why. Because different divisions of ours had different exposures to new construction. There are some which are more correlated like, for example, the tile-adhesive business. And obviously waterproofing, especially new construction tends to be larger users.

Having said that, the basic ground rule that we follow, but don't hold us to it -- to the last decimal point is, it's 2/3 and 1/3. 2/3 of our business tends to come out of renovation and repair, and 1/3 of our business tends to come out of new construction.

Clearly, there is a certain tailwind as far as new construction is concerned across the board. And it is visible both in an organized real estate sense as well as new constructions in Class 1 and Class 2 towns.

[Latika Chopra, analyst]

Sure. My second question was around innovation intensity. You've alluded to the fact that you're looking to pace it up and probably every division will see one new launch every quarter, if I remember correctly.

I wanted to understand what's been the progress on that aspect. What are the kind of product introductions you are rolling out across your core categories and some of the new emerging categories?

And what kind of revenue share some of these new products could eventually have in your view? Or what kind of sort of growth contribution can these products do to the overall Consumer and Bazaar, in particular, segment growth?

[Bharat Puri, executive]

That's a good question. In a steady state, the objective we give our people is, hopefully, 1/3 of our growth should come out of innovation and 2/3 of our growth should come out of growing the core.

Now we've got a whole set of products. Again, it is different for different divisions. A lot of them, for example, have been launched already in the last 6 months. You will see launches happening across the next 6.

As things normalize and as we are able to undertake a whole lot of field activity and now, we have enough flex in terms of being able to invest behind new products, you will see this as the intensity go up.

At Pidilite, we are clear that our 4 big drivers of growth remain: a, innovation; b, sales and distribution; c, digital; and the last being resilient supply chain, which needs better service and, therefore, growth. And on all 4, we have an ongoing very aggressive program, which is to my mind tracking on schedule.

[Latika Chopra, analyst]

Okay. Recently, you just alluded to the fact that for B2B segment, you may take some price reductions, while for B2C, one has to see how commodity trends behave. So one part was what is the savings of B2B generally in your overall business mix?

And second was, in the past cycles, when commodities have seen deflation, how have your pricing strategy behaved for the core adhesives portfolio or waterproofing portfolio in the past? I mean, is there actually a need to return back to the full price increases that you've taken because these have been very significant. How would you think about that?

[Bharat Puri, executive]

See, again, great question. If you look at the core adhesives portfolio from a B2C perspective, clearly, we've always maintained that we thought that this raw material inflation was not permanent. It was temporary and, therefore, we will only price at 75% of inflation.

So in our Bazaar and Consumer segments, we have -- we deliberately called out that we're going to reduce our margins because we believe that this is not something that is permanent. And fortunately, we've been proven right as prices have now come southwards.

Now as far as we are concerned, our overall principle, Latika, yields that we believe in the core adhesives portfolio, our brands command a premium of about 15%. The kind of premium that we maintain from a pricing point of view. We believe any premium that we take more than that tends to affect our volume growth, and our mantra remains profitable volume growth. Therefore, that's the stance we will continue to follow as we go forward.

As far as B2B is concerned, remember in B2B, you raise prices also much faster and you reduce them because the customer is getting impacted straightaway. And given its size, B2B remains about 15% of our business, so it's not a substantial impact. But from a profitability point of view, we've already obviously worked that through our plans.

[Operator]

[Operator Instructions] We have the next question from the line of Krishnan Sambamoorthy.

[Krishnan Sambamoorthy, analyst]

Yes, Mike, am I audible?

[Operator]

Yes, we can hear you, Krishnan.

[Krishnan Sambamoorthy, analyst]

My question is on the comeback of smaller regional unorganized players. I think various estimates have been at about -- put them at about 1/3 of the market. Now given that we're seeing extremely sharp commodity cost inflation and particularly on a sequential basis, do you see a risk that the -- since they are coming back, they could be -- even if the market situation improves, would we see slower growth as some of these players who were badly affected by RM price made their businesses unviable? Or given the shortage of VAM global, we're not even able to procure that? Would that affect your growth in the time that these guys come back?

[Bharat Puri, executive]

Sure. Good to hear from your Krishnan. See, listen, as far as the -- there is no doubt about the fact that the smaller regional players will have greater access and lesser inventory and, therefore, they will come back.

Remember, a large part of their share has been taken by the bigger competitors who could be regional or even national, for example. We have tended to take far lesser share from them because these tend to operate at the price competitive end of the market, at the lower end of the market.

Having said that, I think, yes, you will see greater competition, but I do also think that given the current trends, you will also see greater demand. And therefore, even though we will come back to a situation of normal fee, I suspect by the first quarter of next year.

[Krishnan Sambamoorthy, analyst]

Sure. That's useful, Bharat. My second question is on -- given that Sandeep mentioned that there's been such a steep reduction in your purchasing costs, have you taken any price reductions in the last month or so?

[Bharat Puri, executive]

We've taken price reduction only for B2B customers where it was necessary. We haven't taken in B2C areas because, remember: a, we haven't priced to the full extent; b, remember, the 1,200 price was at INR 73, INR 74, and not INR 81, INR 82 as it is now.

So therefore, working that out, if there is a need -- as I said, remember, our stance is very clear. We will work with a price premium of about 15%. If we find that the premium is going higher, we will reduce prices, now it may be via discounts or it may be via price increase -- price list cuts.

[Operator]

[Operator Instructions] We have the next question from the line of Shirish Pardeshi from Centrum.

[Shirish Pardeshi, analyst]

Bharat, just two questions at this point of time. What is our weighted inflation which we are seeing? Because I heard in the previous commentary that some prices of raw material has not softened. So in that context, I just wanted to hear what is the current inflation and how the sequential inflation has moved?

[Sandeep Batra, executive]

I'll give you -- and the underlying index, we have a raw material index that we track internally. '19 -- if you take base year '19/'20, that index has reached to 193 in June, went up to 200 in September. So sequentially, quarter-on-quarter, there was an increase. And we now see that index coming down to maybe 180 or something in the third quarter.

And keep in mind that even versus same period last year, in material margin we have 500 bps gap, right, even if you take last year second quarter as the base.

[Shirish Pardeshi, analyst]

Thank you, Sandeep. That's helpful. The second question I have, if you can share some context into Consumer and Bazaar, the distribution expansion. And I think I really like that this time there is some more information which has happened, but maybe our efforts on expanding the distribution, if you can give some color.

[Bharat Puri, executive]

Sure. See, we've consistently maintained, Shirish, that one of our drivers of growth is sales and distribution. And in our categories, even equalized for income, we believe there is a substantial opportunity in small town and rural India, which is why we set up a separate division called Emerging India, which over the last 4 years has made a tremendous amount of progress.

Currently, for example, over the last 2 years, we have increased coverage in towns and villages below 10,000 by about 20,000 -- we now -- sorry, covered 24,000 such villages against about 13,000 or 14,000 a year. In 10,000 to 20,000, we are pretty much now covering the large part of the universe. So is it at 25 to 50?

So we have a whole set of initiatives around both reach the availability and the quality of availability and then obviously demand generation, teaching people how to use. We have an initiative called Pidilite ki Duniya, which is small rural stores and villages below 10,000. We are now slowly reaching about 7,000 such stores across rural India.

So on a consistent basis, we believe over the next, not just 12 or 24 months, but possibly over the next 3 to 5 years, this will remain an avenue of growth for Pidilite.

[Shirish Pardeshi, analyst]

That's helpful, Bharat. Just one follow-up on here. When we track the paint companies, they're also making an effort. Now I do understand the comments what you passed on last quarter call. But just more curious to understand, if -- what is the distribution advantage to the paint companies versus Pidilite?

[Bharat Puri, executive]

See, I think very simply, if you look at the number of outlets that paint companies cover directly vis-a-vis us, our number is far, far larger largely because of the range that we have, the kind of price points that we have. So for example, we would be actually covering pretty much twice the number of outlets that the largest paint company covers on a direct basis.

[Operator]

We have the next question from the line of Ritesh Shah from Investec.

[Ritesh Shah, analyst]

Sir, you gave a very interesting data point. You indicated we try to maintain a 10% premium on the brand as that impacts our volumes. Did I hear it right, sir?

[Bharat Puri, executive]

Yes, 10% to 15%.

[Ritesh Shah, analyst]

Sir, how should one better understand this number if one has to look at it from a price elasticity of demand standpoint? And if you could bifurcate it between B2B, B2C, I think that would be awesome?

[Sandeep Batra, executive]

This is purely on B2C and not B2B. B2B tends to be different for different because B2B has a very large number of segments. And therefore, like for example, what you will do in textile emulsion is very different from what you will do in pigments, which is different from what you will do in joinery adhesives.

So leave B2B aside for a moment, B2B is much more a price value relationship. In B2C, really, we look at our competitors who we believe are competing head on against us, and we believe we -- a, we always maintain a product advantage. One of Pidilite's philosophies has always been to offer a better product, which is demonstrably better and can be demonstrated so to the consumer.

And then obviously, on that, we overlay our brand-building activities, both with the consumer as well as the user, and that gives us a premium of between 10% and 15% in the market.

[Ritesh Shah, analyst]

Sir, if one had to include the quantum of discounts over here, which we give the value chain, how will this number change from 10% to 15%?

[Bharat Puri, executive]

It's the net. I'm talking of net. Post all discounts, I mean every competitor of mine will be -- if you look at their price list, they will price at the same rate as us, but they will be giving discounts 4 or 5x us.

[Ritesh Shah, analyst]

Okay. So this is net of discount, that's great.

And sir, what was the number -- similar number on the B2B side? It was significantly lower, right? Sir, how should we understand that? And has that number changed given the competitive intensity has increased in the several segments that we operate at?

[Bharat Puri, executive]

See, in B2B, it's very difficult. But as I told you, there are very distinct segments and technology plays a very large part. Like, for example, if I give you an example of organized furniture, the large furniture makers, they use a technology called hot melt adhesives, right?

We are one of the few people in India who make European quality because we have a collaboration with the leading European. We're the only guys who make it. Everybody else imports it. Now obviously, therefore, the margins there would be very healthy. So it depends product to product and what's the price premium.

But as a company, one of our movements over the last, I would say, 5 to 10 years has been to consistently keep moving up the value chain and vacating the commodity end of the market.

Unlike a lot of say, other companies in other sectors who have been going after volume for volumes, we don't do that. We actually -- our mantra is profitable volume growth, not just volume growth.

[Ritesh Shah, analyst]

Sorry for a follow-up, sir. Can you highlight any particular segment that we have vacated over the last, say, 5 years, 7 years, specifically on the B2B side of things?

[Bharat Puri, executive]

See, we had a whole range of lower-priced, for example, products, which were at the base level in, say, for example, for furniture centers, joinery, et cetera. Over time, either we've improved them, we don't price those higher and had better products or we vacate those. So we've got -- I mean you will see this both in B2C and B2B.

[Operator]

[Operator Instructions]

[Krishnan Sambamoorthy, analyst]

I'll quote in. Particularly with the growth that you have indicated in rural in towns with over 20,000 population as well as with between 10,000 and 20,000. Has the regional skew of your business change that which -- particularly towards the northern and the eastern part of the country?

[Bharat Puri, executive]

Actually, no. I mean, overall, our growth has been fairly secular across all regions of the country. We haven't seen -- I mean, there are -- at times, you will find, for example, in 1-year or 2 years. But over a larger period of time, actually, we follow a system where we correlate to ability to pay. And there, frankly, our penetration is fairly -- I mean, our penetration and market shares don't change dramatically over the 4 regions of the country.

[Krishnan Sambamoorthy, analyst]

Okay. And as the waterproofing business becomes larger, would that regional SKUs remain similar to your Consumer and Bazaar segment?

[Bharat Puri, executive]

No. In the waterproofing segment, by definition, wherever there is more water, therefore higher rainfall, those markets tend to be bigger. So as waterproofing gets much bigger, the coastal areas of the country, the areas where there is higher rainfall, will tend to play a larger role than the drier part of the country where the problem, therefore, of waterproofing is not such like you don't need solutions that are very rigorous and expensive.

[Krishnan Sambamoorthy, analyst]

Got it. My last question on -- is a bookkeeping question. Given the continued healthy demand prospects, what are your CapEx plans for both FY '23 as well as FY '24?

[Bharat Puri, executive]

See, as we've maintained over the -- one of the first things we did during COVID, Krishnan, was we realized that supply chains will have to change dramatically. And in the course of the last 3 years, we've actually completely rejigged our whole supply chain network.

We now have -- 20 of our facilities across the country have been expanded substantially. These are brownfields. In addition, we put 11 new factories in place. We now have more than 60 manufacturing locations across India, forgetting those abroad for a moment.

We have plans, obviously, and we are clear that we are positioned for the next phase of growth. Whenever we find and we plan on a 3-year basis, remember, we plan even in 3 years later based on our projections, we may be running short, we will always start looking at plans.

So we have -- you would see over the last 3 years, and you will see it over the next 3, our CapEx tends to remain between 3% to 5% of sales. But it remains a very active part of our growth plans going forward.

[Krishnan Sambamoorthy, analyst]

Okay. Just a follow-up to that question. Are these new 11 new plants that you indicated, are there something similar to what the FMCG companies are doing? [indiscernible], Unilever, smaller and more nimbler plans closer to demand locations?

[Bharat Puri, executive]

Absolutely, yes.

[Operator]

Thank you. We have no further questions. I would now like to hand it over to the management for closing comments.

[Sandeep Batra, executive]

So thank you very much. Thank you to all the participants for your continued interest in Pidilite, and we'll connect again for the -- after the third quarter results.

Thank you very much. And thank you very much, and have a good evening.

[Bharat Puri, executive]

Thank you.

[Unknown Executive]

Thank you.

[Operator]

Thank you. on behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.