AKZOINDIA - Akzo Nobel India Limited Share Price

Here are the major questions from the Q&A section of Akzo Nobel India Limited's earnings transcript along with detailed answers, as requested:

Question 1: Mihir Shah from Nomura asked, "Just to understand a bit deeper on the price correction that you have taken. Any initial feedback that you can share from the dealers or from the consumers on how they are accepting the price correction and the positive effect that will have on your volumes? And what is the kind of pressure that we can expect on the margins because of the price corrections that have been put into the market?"

Answer 1: I indicated that the price correction has been around 1.5% to 2%. Feedback from the trade suggests that our stance is seen as aggressive post-acquisition by JSW. However, it's too early to gauge the full impact, as the corrections made in September will take time to show results in volumes. We expect the real assessment will emerge in the fourth quarter.

Question 2: Mihir Shah further asked, "How should one think about the competitive intensity in the industry now? We have seen the other larger players, probably the intensity has kind of reduced in some way...do you think intensity will remain healthy and whoever puts their best foot forward in terms of efficiency, good product, good servicing will be the key winner out of this entire thing?"

Answer 2: I believe that a long-term perspective emphasizing quality and sustainable practices yields better results than short-term pricing strategies. While competition remains intense, especially between major players, building something sustainable is crucial. We're seeing some recovery in markets after aggressive discounting. It's a physical battle, with a focus on execution and maintaining market share, which we are committed to prioritizing.

Question 3: Lakshminarayanan KG. mentioned, "If I just look at the aggregate revenues...the industry for some reason has been having a very, very low growth...So, I just want to understand, is the industry growing in terms of revenue numbers? And what gives you confidence that there will be growth?"

Answer 3: The industry has indeed seen some growth, albeit not as robust as before. Many established players faced challenges against aggressive pricing from newer entrants. However, I see a changing trajectory as larger players, including us, regain momentum. I anticipate stronger growth as consumers return to repainting cycles, particularly since economic indicators suggest an uptick in overall demand.

Question 4: Avi Mehta from Macquarie requested, "So with correction in commodity prices, what can be the maximum potential for price cuts for the industry to remain at current margins?"

Answer 4: While commodity prices have dropped, the antidumping duty relief is still pending full execution. Price stability is hard to predict, but we're likely near our maximum limits. Increased efficiency and brand power will mitigate pricing pressures. It's more about sustained performance rather than aggressive discounts, as we strive for long-term growth.

Question 5: Aniruddha Joshi asked, "Both in terms of the royalty payments and any guidance regarding margins moving forward?"

Answer 5: The royalty for our Decorative IP ceased on July 1, 2025. We've factored this into our results, although we still pay for Industrial coatings. We estimate sustainable EBITDA margins of 14% to 16%. As revenues improve post-quarter, we expect operational efficiencies to materialize and impact our financials positively moving forward.

These answers reflect key insights about business strategy, market conditions, and future expectations from the management team.