Century Plyboards (India) Limited — Q2 FY26

Century Plyboards (India) Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=8PEf6VRJI9w Published: 6 months ago

0:02 2 seconds Good day ladies and gentlemen. Welcome to Century Plyboards India Limited's Q2 FI26 earnings conference call. As a 0:10 10 seconds reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the management's opening remarks. 0:18 18 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that 0:26 26 seconds this conference is being recorded. I now hand the conference over to Mr. Naven Agraal, head institutional equities, SKP 0:34 34 seconds securities limited. Thank you and over to you sir. 0:40 40 seconds Good afternoon ladies and gentlemen. I'm pleased to welcome you to this financial results conference call on behalf of Century Plyboards and SKP securities. 0:48 48 seconds We have with us Mr. Sanjay Agarwal MD and CEO along with Mr. Arun Jalasara CFO Mr. Mr. Sumant Watas CEO MDF and 0:57 57 seconds particle boards business and Mr. Vishu CEO laminates business. We'll have the opening remarks from Mr. Sanjayal 1:05 1 minute, 5 seconds followed by Q&A session. Thank you and over to you Sanjay G. 1:10 1 minute, 10 seconds Thank you Vinnie. Thank you. 1:14 1 minute, 14 seconds Good afternoon everyone and a very warm welcome to our Q2 FI25 earnings conference call. 1:24 1 minute, 24 seconds Before we begin, please note the standard disclaimer. Today's discussions will cover the company's past 1:32 1 minute, 32 seconds performance and future outlook and is not intended as a solicitation to invest. 1:40 1 minute, 40 seconds The earnings results and analytical presentation have been shared with you and are also available on the stock exchange websites. 1:50 1 minute, 50 seconds The company delivered a strong and broad-based performance during the quarter with growth across all key business segments. 1:59 1 minute, 59 seconds Our performance underscores the resilience of our business model, the strength of our brands and the success 2:07 2 minutes, 7 seconds of our ongoing initiatives to enhance productivity and operational efficiency. 2:15 2 minutes, 15 seconds At the consolidate level, the company delivered a robust performance with ever highest quarterly revenue of 1386 2:25 2 minutes, 25 seconds crores up 17.1% year on year. 2:32 2 minutes, 32 seconds This growth was driven by healthy demand pull of our products and robust performance from our newly commissioned units. 2:42 2 minutes, 42 seconds On a halfearly basis, H1 revenue was 16.7% higher over the same period last year, 2:50 2 minutes, 50 seconds demonstrating our ability to sustain momentum despite a challenging macroeconomic backdrop. 2:59 2 minutes, 59 seconds In terms of profitability again at the consolidated level, the company delivered even ever highest AITA X4X of rupees 181.7 crores. 3:12 3 minutes, 12 seconds AITA margin X4X improved to 13.1% versus 10.3% in Q2 FY24. 3:23 3 minutes, 23 seconds This improvement was primarily supported by higher volumes and the benefits of our ongoing cost optimization programs. 3:33 3 minutes, 33 seconds We have also taken meaningful steps to strengthen our balance sheet efficiency. 3:39 3 minutes, 39 seconds On a standalone basis, our working capital cycle reduced to 63 days as compared to 76 days at the end of FY24. 3:49 3 minutes, 49 seconds On consolidate level, it has improved to 70 days from 74 days. 3:56 3 minutes, 56 seconds This was achieved through tighter inventory management, improved payable management and efficient cash flow discipline across divisions. 4:06 4 minutes, 6 seconds Overall, the quarter reflects not just growth but also improving quality of earnings. 4:13 4 minutes, 13 seconds Segmental performance. 4:15 4 minutes, 15 seconds Let me now take you through the detailed performance of each of our business segments. Plywood segment. 4:23 4 minutes, 23 seconds The plywood business delivered an exceptional quarter achieving its highest ever quarterly revenue of 760 4:30 4 minutes, 30 seconds crores registering a 16% growth year on year and 17.5% sequential growth quarter on quarter. 4:40 4 minutes, 40 seconds This performance was supported by healthy volume growth and improved distribution reach. Evita margin stood at 14.2%. 4:50 4 minutes, 50 seconds supported by higher volumes and stable input prices. 4:56 4 minutes, 56 seconds Lemonade segment the lemonade division continued to improve its performance trajectory. Revenue which is at ever 5:04 5 minutes, 4 seconds highest quarterly revenue at rupees 188 crores at the consolidate level grew by 5:10 5 minutes, 10 seconds 16.6% yearonear and 8.4% quarter quarter. 5:18 5 minutes, 18 seconds We are witnessing encouraging demand both in the domestic market and exports especially from designdriven and premium SKUs. 5:27 5 minutes, 27 seconds The AITA margin expanded to 9.5% supported by better cost absorption favorable product mix and internal efficiency in initiatives. 5:39 5 minutes, 39 seconds Going ahead, we expect steady improvement in both volumes and profitability as the segment continues to benefit from the brand's strong recall and enhanced manufacturing scale. 5:53 5 minutes, 53 seconds Now I will move to MDF segment. Our MDF business continues to deliver robust growth with revenue increasing 27.9% 6:03 6 minutes, 3 seconds yearonear and 32.4% 4% sequentially and clocking ever highest quarterly revenue at 343 crores. 6:14 6 minutes, 14 seconds The growth was primarily driven by higher volumes of tech and improved plant utilization across units. While 6:22 6 minutes, 22 seconds Avita margin stood at 13.6% against 14.3% in the previous quarter. The slight moderation was due to temporary cost pressure. 6:34 6 minutes, 34 seconds Now to particle board sement. We are pleased to inform you that the new particle board plant commenced commercial production and sales during 6:42 6 minutes, 42 seconds the quarter. As expected, AITA for this business remains under pressure due to higher fixed cost during the ramp up phase. 6:52 6 minutes, 52 seconds Financial overview. 6:54 6 minutes, 54 seconds From a financial perspective, Q2 reflects consistent improvement in both scale and quality of earnings. Our 7:02 7 minutes, 2 seconds continued focus on operational excellence and disciplined capital allocation has helped us maintain healthy return ratios. 7:12 7 minutes, 12 seconds We also remain committed to investing in brand building technology upgrades and distribution enhancement to support 7:19 7 minutes, 19 seconds long-term growth. Cash flows from operations have improved to rupees 269.4 7:26 7 minutes, 26 seconds 4 cr in H1 against negative 2.73 crores in FI2425 enabling us to capex requirement and 7:34 7 minutes, 34 seconds largely through internal equals out looking ahead we expect the growth momentum to continue across all major 7:43 7 minutes, 43 seconds business segments the medium-term outlook for the building material and interior solution industry 7:50 7 minutes, 50 seconds remains positive supported by rising urbanization higher disposable incomes and increased consumer preference for 7:59 7 minutes, 59 seconds branded and premium products. With a diversified product portfolio, a strong brand, expanding distribution network, 8:08 8 minutes, 8 seconds and upcoming capacity additions, Century Plyboard is well positioned to deliver sustainable revenue growth in the coming quarters. 8:17 8 minutes, 17 seconds We will continue to focus on value creation through operational efficiency, prudent financial management and 8:25 8 minutes, 25 seconds responsible growth. Keeping shareholders return at the core of our strategy. That concludes our management commentary. We will now open the floor for questions. 8:37 8 minutes, 37 seconds Thank you very much. We will now begin the question and answer session. Each participant is requested to limit himself or herself to a maximum of two 8:46 8 minutes, 46 seconds questions. Time permitting, we will respond to any further questions that you may have that remain unanswered. 8:53 8 minutes, 53 seconds Anyone who wishes to ask a question may press star and one on the touchdown telephone. If you wish to remove yourself from the question queue, you 9:01 9 minutes, 1 second may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 9:08 9 minutes, 8 seconds wait for a moment while the question queue assembles. 9:17 9 minutes, 17 seconds We'll take our first question from the line of Kesha Loti from HDFC Securities. Please go ahead. 9:25 9 minutes, 25 seconds I thank you for the opportunity. Yeah. Yeah. Hi. 9:28 9 minutes, 28 seconds So firstly congratulation on strong set of number in all segments. Uh what I want to understand firstly laminates you 9:36 9 minutes, 36 seconds are planning for a debut again. If I see this water, hello. I was saying in MDF you're planning for debut like in writing H2 in 9:43 9 minutes, 43 seconds earlier call you highlighted. So is that running on track? You plan to do it in H2 or any change? 9:51 9 minutes, 51 seconds Yes. So we talking about uh MDS or laminates? MDF. 9:59 9 minutes, 59 seconds Uh no problem. This is Sum. Uh look we were planning for a extension line extension on our south uh plant which 10:07 10 minutes, 7 seconds will increase capacity of the south plant by about 25%. Uh we will not uh do it in H2 of uh this year. It will most likely happen in H1 of next year. 10:19 10 minutes, 19 seconds Understood. Got it. As I can see this quarter your you know MBA plant would be operating at 85% utilization which you 10:26 10 minutes, 26 seconds say is a peak utilization in Q2. So do you feel you will face capacity constraint in this segment when the you know when you talk about demand is 10:34 10 minutes, 34 seconds growing by 20 25%. And even after line extension overall at a group level the capacity will just increase by 10%. So 10:42 10 minutes, 42 seconds how you you know feel to service the demand for next two to three years. What is the view on the so so you you're correct. I mean as of now we have healthy utilization levels. 10:52 10 minutes, 52 seconds It's about 80% uh across both our plants north and south. uh in H1 like I mentioned we'll take a line extension uh 11:00 11 minutes which will take our capacity from the current uh 525 lakh uh 5.25 25 lakh cubic meters to about six lakh cubic 11:07 11 minutes, 7 seconds meters next year. So that's a bit of capacity relief. Uh as of now uh you know obviously we are very bullish on the industry. The industry will grow by 15 20% and that's our outlook as well. 11:18 11 minutes, 18 seconds uh you know with the current capacities we'll continue to optimize for product rates value add so on so forth and uh you know internally we are deliberating 11:26 11 minutes, 26 seconds on on what how to think about future capacity expansion but nothing concrete at at this point in time 11:34 11 minutes, 34 seconds understood but anything you can say from initial discussion what are the thoughts you want to put up a new plant whether it will be brownfield possibly when you 11:42 11 minutes, 42 seconds are planning maybe in FY28 we'll do something because maybe till FY20 you'll have the capacity maybe in FY2 28 peak quarter you might face you know capacity constraint. 11:52 11 minutes, 52 seconds Look uh all options are open on the table. It's a bit too early uh to comment. 11:58 11 minutes, 58 seconds Got it. That's it. Thank you. That's it from Thank you. ladies and gentlemen to ask a 12:06 12 minutes, 6 seconds question please press star N1 on your phone. We'll take our next question from the line of Provin Sahai from PL Capital. Please go ahead. 12:15 12 minutes, 15 seconds Yeah. Hi sir. Thank you for opportunity. 12:17 12 minutes, 17 seconds My question related to yeah thanks sir uh so uh sir my question is related to laminate uh definitely 12:25 12 minutes, 25 seconds like uh revenue growth is there uh but it's largely uh due to a realization improvement so can you give some color 12:34 12 minutes, 34 seconds on how how high as mix has changed which product or which uh uh market basically 12:42 12 minutes, 42 seconds the expansion and which led to the realization improvement and how it's sustainable Okay. Hi, I wish you the side and thanks 12:51 12 minutes, 51 seconds for the question. So I think u two three areas. Okay. One uh to the question of how the product mix has changed. So this 12:59 12 minutes, 59 seconds is a broad-based uh you know kind of a recovery we are seeing. Okay. So and this actually expands both for our domestic as well as our international 13:08 13 minutes, 8 seconds operations. So at this stage it is not a specific geography or the set of geographies wherein we are working towards improvement of the product mix. 13:17 13 minutes, 17 seconds However, this is a more broad-based strategy change which we are looking at you know wherein uh the the premium mix is something which we are pushing and 13:25 13 minutes, 25 seconds that actually is impacting our realizations in a positive way. So that's where you know we are working on and that's a sustainable in the nature 13:34 13 minutes, 34 seconds way forward we will see continue such kind of a realization. 13:38 13 minutes, 38 seconds Yes. So uh it should be sustainable because uh as we move forward you know we are now proactively looking at uh 13:46 13 minutes, 46 seconds avenues in terms of uh the entire ecosystem specifically you know the influencers including the architects you 13:53 13 minutes, 53 seconds know some of the premium uh markets as well as exports are concerned and a certain conscious effort to look at a high premium product mix both for our 14:01 14 minutes, 1 second international as well as our domestic markets. So we strongly believe that as we move forward the the premiumization 14:09 14 minutes, 9 seconds on the category is something which will continue. 14:13 14 minutes, 13 seconds See basically the train of lemonade had derailed for you know the experiments very very you 14:21 14 minutes, 21 seconds know very serious very deep experiments we were doing and they were not really working. So it was like a train which 14:28 14 minutes, 28 seconds had derailed derailed but now actually it has come on the rails that you can see it is progressing now very soon in a 14:37 14 minutes, 37 seconds year year or so you will see we'll be back absolutely on the full swing that is what happens derailed yeah yeah 14:46 14 minutes, 46 seconds good sir uh sir next question is related to particle board uh even though that's a contribution is very low but uh your 14:53 14 minutes, 53 seconds guidance is a 40% for a sales growth uh but in the first half uh uh there is a decline in the revenue. So uh how in 15:03 15 minutes, 3 seconds the second half you are looking at uh very uh exponential growth. 15:08 15 minutes, 8 seconds Yeah, thank you. Thank you for the question. uh you know in the sort of Q2 uh revenue and volume numbers that you see there's a there's a footnote uh 15:17 15 minutes, 17 seconds about 10,000 11,000 CDN cubic meters of sales we actually calculated which is about 23 K worth of sales if you take 15:27 15 minutes, 27 seconds that into account these were trial sales uh you know of sales of trial material uh which as companies 15:35 15 minutes, 35 seconds if you take that into account you two actually have seen expansion growth as compared to Q1 and hence we are quite 15:43 15 minutes, 43 seconds confident of the 40% guidance uh that we've given the 40% growth essentially means ending the year at about 200 odd 15:51 15 minutes, 51 seconds correspondence 16:10 16 minutes, 10 seconds Right sir. Right. Uh thank you and I'll come in the queue. Thank you. Thanks a lot. Thank you. 16:18 16 minutes, 18 seconds Next question is from the line of Sneighha Talia from Nama. Please go ahead. Hi again. 16:25 16 minutes, 25 seconds Hi. Hi Sneha. 16:27 16 minutes, 27 seconds Hello just two questions from my end. Uh firstly just wanted to understand if I'm not wrong you've already spoken about 16:34 16 minutes, 34 seconds it. this particular port impact on the MD side of it. I can't I can't hear clearly actually. 16:40 16 minutes, 40 seconds Hello use your handset mode please. Is it better now? 16:49 16 minutes, 49 seconds Uh are you able to hear her? Yeah. Yeah. We can hear you. 16:55 16 minutes, 55 seconds Yeah. Just wanted to understand the raw material cost impact on the MBA front. 17:01 17 minutes, 1 second Although I understand we've seen some increase in raising prices. Have you already started seeing decline there or uh that's still on the elevated level? 17:09 17 minutes, 9 seconds If yes, uh you know by when can we see easing out of those rail prices and what impact did it have it on our margin level? 17:19 17 minutes, 19 seconds Yeah. So uh thanks for your question. Uh look this quarter there were there was pressure on raw material uh on both wood 17:27 17 minutes, 27 seconds and chemicals. Uh let me take take it one by one. From view especially in north uh there was this pressure on 17:34 17 minutes, 34 seconds account of supply shortage uh in Punjab where our plant is uh there were there was significant rains and floods and as a result of which there was uh 17:42 17 minutes, 42 seconds availability constraint and cost pressure on on timber in north. Uh however having said that south continues to stabilize 17:49 17 minutes, 49 seconds uh and maybe even soften a bit. Uh this this is a temporary phenomenon. It is stabilizing already on the wood front. 17:57 17 minutes, 57 seconds On chemicals again we don't see uh the the cost pressure to sustain. It's it's a temporary blip. As you're aware most 18:04 18 minutes, 4 seconds of our chemicals are basic chemicals linked to uh you know global commodity movements and glob global trade movements uh be it natural gas or be it 18:12 18 minutes, 12 seconds crude. Uh we believe this will also stabilize uh in in maybe a month or so. 18:22 18 minutes, 22 seconds Understood. So secondly on u thanks thanks for that. Second B just wanted to get a clarity on your uh particle board 18:30 18 minutes, 30 seconds division this particular quarter of course we cataly everything uh and you have made you know trial runs how's the response in the market and how 18:38 18 minutes, 38 seconds do we see gradual run rate improving from you yeah so uh you know uh the the plant 18:45 18 minutes, 45 seconds that we've commissioned is a top-of-the-line continuous uh line and the technology is actually quite uh you know quite cutting edge uh the board 18:54 18 minutes, 54 seconds that have come out have received very good uh feedback uh from from the market uh the board quality, the surface quality etc is very very robust. Uh so 19:03 19 minutes, 3 seconds we're very hopeful of a of a good response uh in the coming quarters and a and a good scale upha 19:13 19 minutes, 13 seconds the quality of the particle board has come out so well that we are very very confident that uh selling it will not be 19:22 19 minutes, 22 seconds difficult for us. Of course, the market prices will prevail, but selling it will not be very difficult and we'll be able to ramp up soon. 19:34 19 minutes, 34 seconds Does that answer your question? 19:37 19 minutes, 37 seconds Hello, Sneha. Are you on mute? Please check. Yeah. Yeah. Got the answer. Thanks. Thanks a lot. Thank you. 19:45 19 minutes, 45 seconds All the best. Thank you. Thank you. 19:49 19 minutes, 49 seconds We'll take our next question from the line of Amit Purohit from Aara. Please go ahead. 19:55 19 minutes, 55 seconds Yes sir. Thank you for the opportunity and congratulations. Hi. Hi Amir. 19:58 19 minutes, 58 seconds Hi sir. Uh sir just uh on the uh segmental wise if you could help us uh in uh one any price increase that you 20:06 20 minutes, 6 seconds would have taken in the uh plywood or MDF segment and also the uh cost pressure in terms of uh the uh timber 20:14 20 minutes, 14 seconds pricing for uh uh plywood and uh u MDF. 20:19 20 minutes, 19 seconds As far as plywood is concerned, there are no cost pressures. Uh little bit of prices have softened in India. 20:29 20 minutes, 29 seconds So some of the manufacturers, the small ones are using more of local material and it's good for us because we want to 20:36 20 minutes, 36 seconds manage quality and the pressure which was there on imports is little bit reducing. So neither there is any increase of prices 20:44 20 minutes, 44 seconds nor there is any reduction in prices and that's why we have also not increased any prices on our products whether we 20:52 20 minutes, 52 seconds are getting benefit because of the volumes increase the automatic cost reduction happens a little bit that's 20:58 20 minutes, 58 seconds how they little better and uh on MDF sir on MDF 21:06 21 minutes, 6 seconds MDF should I go yeah Yeah on on MDF uh look for some pricing 21:14 21 minutes, 14 seconds we haven't taken any structural price increases nor have we taken any structural price uh decrease you know the the Q trends on realization that you 21:22 21 minutes, 22 seconds see is is mostly on account of product mix uh and and and thickness uh mix uh and and and we expect going forward as 21:30 21 minutes, 30 seconds well sizes to remain hopefully stable uh on cost pressures like I mentioned uh there have been temporary pressures uh 21:37 21 minutes, 37 seconds this quarter both on timber on account of uh monsoon floods especially in north and also temporary pressure on account 21:45 21 minutes, 45 seconds of global cues uh include a natural uh gas as well as stripping uh on the chemical side. Uh however these are 21:54 21 minutes, 54 seconds temporary blips uh we take things to stabilize this water. 21:58 21 minutes, 58 seconds Okay. And generally sir on the demand environment uh uh many of the companies have talked about uh that there has been 22:06 22 minutes, 6 seconds extended uh monsoon which had an impact on uh the consumption general uh but when I see our numbers we don't see 22:13 22 minutes, 13 seconds anything uh uh any impact in fact uh uh there has been a bit of an improvement only sequentially if I look at even 22:20 22 minutes, 20 seconds plywood volumes or even uh for that matter uh MDF volumes uh so what what would you ascribe it to is it uh I I 22:29 22 minutes, 29 seconds mean the uh the the thing that uh earlier was talked about that u after 2 3 years of real estate cycle or u the 22:37 22 minutes, 37 seconds plywood or the uh decorative segment uh starts to do well. Is that the benefit or uh this is something to do with 22:45 22 minutes, 45 seconds internally initiatives that we have taken on uh with distribution as well as on the intermediary side focus that is 22:53 22 minutes, 53 seconds helping us to gain what is the market environment. Now I don't think that uh uh there is much 23:01 23 minutes, 1 second change in the market and you see you have to see that we are in an industry it is in plywood we hardly have any 23:10 23 minutes, 10 seconds market share it is below 10%. So there is a huge possibility. 23:14 23 minutes, 14 seconds So in in such situation where you are below 10% even if the total growth is 23:21 23 minutes, 21 seconds not very good still we have lot of uh space headroom to actually achieve but we see that there is a good demand in 23:29 23 minutes, 29 seconds the market and you have to again remember that the quality assurance order has stopped all the imports of 23:37 23 minutes, 37 seconds whether it is MDF or whether plywood by 80% and 20% is still getting imported so 23:44 23 minutes, 44 seconds that is helping MDF also and that is helping plywood also. So I don't see 23:50 23 minutes, 50 seconds that for us because we are doing uh everything possible under the sun whether it is branding or you know 23:57 23 minutes, 57 seconds expansion of people uh new new measures to gain market share always we are there 24:05 24 minutes, 5 seconds in the market totally. So and it has worked earlier, it is working now also and we certainly hope that it will work in the future also. 24:15 24 minutes, 15 seconds Sure. Thanks a lot and all the best. Thank you. Thank you. Thank you. 24:21 24 minutes, 21 seconds Before we take the next question, would like to remind participants to ask a question, please press star and one on your phone. 24:28 24 minutes, 28 seconds Next question is from the line of Rishi from Kotak Mutual Fund. Please go ahead. Hi uh good afternoon. Thank you. Hi. 24:37 24 minutes, 37 seconds Hello sir. 24:39 24 minutes, 39 seconds So just uh if I look at your MDF margin or probably uh this 39 and a half% is at 24:45 24 minutes, 45 seconds a reasonable utilization of 70% plus. So obviously we can't take a call on the pricing but how much is the scope on the 24:55 24 minutes, 55 seconds product mix side do we have to improve because utilization if I look at it there's very little runway considering we are now almost close to high density 25:03 25 minutes, 3 seconds MDF also we are selling. So how much on the product mix side or customer mix side we have uh in terms of to get the margin up further? 25:13 25 minutes, 13 seconds Thanks thanks for your question. Uh I think there's uh you know while we have a healthy baseline on on value added products uh I think there's a lot more 25:22 25 minutes, 22 seconds scope and and as a company we endeavor to to really push the umbrella on on high margin value added products. So I think there's significant way to go 25:30 25 minutes, 30 seconds there in terms of uh both you know geography mix and product mix uh from from our perspective. Uh if you look at 25:38 25 minutes, 38 seconds the current margin number you also have to factor in a little bit of uh temporary blip on account of uh RM that 25:46 25 minutes, 46 seconds I spoke about. uh so I think going forward we at least uh endeavor to really up our game further on value ad 25:53 25 minutes, 53 seconds and also therefore see uh improvement in margins but that but this takes time you know this is this is a this is a long-term game uh and we have to invest 26:02 26 minutes, 2 seconds behind behind marketing behind R&D and lot of other focused programs uh on the influencer side as well uh but but we 26:09 26 minutes, 9 seconds believe there's sufficient room to grow there uh do you feel that potentially 20% margin is possible assuming the current 26:17 26 minutes, 17 seconds realization without much price hikes uh based on the improvement in product mix or whatever you spoke about let's say at 26:24 26 minutes, 24 seconds the exit of March or probably next year look it's hard to put put timelines to when we'll hit those margin levels but 26:31 26 minutes, 31 seconds if you're asking at steady state with value added max out and all temporary RM pressures uh you know going away I think 26:39 26 minutes, 39 seconds high teams uh is is a possibility sure thank you thank Thank you 26:48 26 minutes, 48 seconds ladies and gentlemen to ask a question please press star one on your phone. 26:52 26 minutes, 52 seconds Next question is from the line of ret invest please go ahead. 26:58 26 minutes, 58 seconds Yeah hi hello. Yes Resh we can hear you. Go ahead. 27:07 27 minutes, 7 seconds Hi check if your line is Yeah. Hi. 27:10 27 minutes, 10 seconds Hi. Uh hi sir. So congratulations on a good set of numbers. Thanks for the opportunity. 27:15 27 minutes, 15 seconds Thank you. Uh sir, I had a simple question. Uh sir, how do you look at uh uh the machine make uh say something 27:24 27 minutes, 24 seconds Chinese versus something European? uh specifically with our experience probably on particle board uh on the 27:31 27 minutes, 31 seconds quality on output uh the differential that it could uh help us on capex intensity and hence on pricing and 27:38 27 minutes, 38 seconds profitability and something similar hypothetically if you had to add another line on MDF uh say 6 months 12 months 18 27:47 27 minutes, 47 seconds months out uh would would you go for a Chinese make based on your experience of particle board question for some new new venture error. 27:58 27 minutes, 58 seconds No sir, I just should I should I respond with Yes, you should respond. 28:07 28 minutes, 7 seconds No sir, so I see look I don't think we'll hide our opinion here on on what is better Chinese etc. I think uh 28:15 28 minutes, 15 seconds essentially what we can tell you is that uh you know we we we keep a very close eye on all technology developments and our OEM partners uh you know be Chinese 28:23 28 minutes, 23 seconds or or European have been associated with us uh since very long. Uh whatever machine we we put up uh in in future protection uh you know we we totally 28:32 28 minutes, 32 seconds understand and scrutinize and and put up the best wishing we possible. uh so so I don't think it's it's a fair you know it won't be fair from our side to to to 28:40 28 minutes, 40 seconds take a comment on on on the country of origin in terms of robustness of technology I think it's immaterial 28:48 28 minutes, 48 seconds right uh let let me put it other way sir uh particle board uh stabilization quality of products are you something 28:55 28 minutes, 55 seconds happy with yeah yeah like like we previously mentioned uh look we commenced commercial uh production in in this 29:02 29 minutes, 2 seconds quarter so commercial production started June 26th which is almost Q2 uh for us and and the machines are stabilized. We are very happy with the with the quality 29:11 29 minutes, 11 seconds of the product uh and uh you know we'll be looking at a at a more robust ramp up. 29:19 29 minutes, 19 seconds Sure. And just last data point if you can uh sir hypothetically for same uh capacity standards uh if if one has to 29:28 29 minutes, 28 seconds uh what will be the capex uh differentials between uh the two regions say 20% 30% 40%. 29:38 29 minutes, 38 seconds Look honestly I I'll maybe have to come back to you on that because it depends a lot on on spec specific specifications right so let's say for a particle board 29:47 29 minutes, 47 seconds uh you know our particle board is a super particle board we we've added a few pieces of equipment uh that enhances the product quality much beyond what P's 29:54 29 minutes, 54 seconds offering uh so so it's it's not appletole comparison okay sure uh just last question given uh 30:03 30 minutes, 3 seconds you didn't comment on the MDF potential extension uh expansion next year or year after. Uh sir, how should we look at uh the balance sheet numbers specifically 30:12 30 minutes, 12 seconds on the absolute net debt number if you could help us with that? Uh and the capeex number that we should look for 26 27 28 would you like to take that? 30:25 30 minutes, 25 seconds You do it. 30:27 30 minutes, 27 seconds He's asking for the whole specifically for MDF. So I think you are the person. Uh are you asking specifically for MDF? 30:34 30 minutes, 34 seconds Uh no sir at company level sir uh sir given we didn't get answer on MDF I'm trying to just bridge the gap somehow. 30:41 30 minutes, 41 seconds Yeah he's asking for the company so you see as far as you know you have seen that all the investments we have 30:49 30 minutes, 49 seconds done uh particle board MDF and plywood board so all the investments are now into full have been ramped up fully all 30:58 30 minutes, 58 seconds the initial problems have been covered so these are the time now when we will be reaping the benefits. So this year maybe still some hiccups with the 31:06 31 minutes, 6 seconds particle board plant. So what I see that uh this year and the next year are absolutely there to get the benefits of 31:14 31 minutes, 14 seconds whatever we have planted and I see this growth whatever we are doing right now. 31:21 31 minutes, 21 seconds Uh this growth will continue. We always give a you know indications of uh every item MDF separately, plywood separately, 31:30 31 minutes, 30 seconds laminate separately and we expect we will be able to achieve that without any problem. 31:38 31 minutes, 38 seconds That is what was your question. 31:40 31 minutes, 40 seconds Uh sir I was uh referring to how should we look at the net debt profile uh say currently uh should we expect say 300? 31:48 31 minutes, 48 seconds So you you see you have to calculate because I have we have given the guidance of you know growth and we have given the guidance of AITA also. 31:59 31 minutes, 59 seconds So it we do not like to give you a figure that yes this is the profit or this is the expected profit but we have 32:07 32 minutes, 7 seconds given a guidance on both the things and it's very easy for you to calculate actually now isn't it correct? 32:14 32 minutes, 14 seconds Yeah. Uh yes sir but it all positive all all positive actually yes sir it is positive sir it can be 32:22 32 minutes, 22 seconds more positive sir that's that's the reason we are trying to figure it out sir uh sir cex number 26 and 27 sir 32:30 32 minutes, 30 seconds capex so we have undertaken one plywood factory inpur which is now 32:37 32 minutes, 37 seconds under construction and other capex I think we are still planning so MDF for particle 32:45 32 minutes, 45 seconds No more particle board right now but MDF and plywood we are planning I think first we will get it uh approved from 32:53 32 minutes, 53 seconds the board and then we'll be able to declare. 32:58 32 minutes, 58 seconds Sure sir. The only way the only the only way to grow is to put up more investment into this manufacturing capacities because there is no other possibility. 33:08 33 minutes, 8 seconds There is no trading. So there is no other possibility of growing. So we will have to invest. Correct. 33:17 33 minutes, 17 seconds Perfect sir. Uh thank you so much for the answers. All the very best. Thank you. Thank you. Yeah. Thank you. 33:22 33 minutes, 22 seconds Thank you. Ladies and gentlemen, to ask a question, please press star N1 on your phone. 33:35 33 minutes, 35 seconds Participants who wish to ask a question are requested to press star N1. 33:40 33 minutes, 40 seconds We'll take our next question from the line of Udit from Yes Security. Please go ahead. 33:47 33 minutes, 47 seconds Hello sir. Uh congratulations number. 33:50 33 minutes, 50 seconds Hello sir. uh so that I want to understand uh uh a bit deep into you know the plywood space uh I'm sure yall 33:57 33 minutes, 57 seconds have been delivering some superior numbers versus everybody else and what is leading to such kind of a growth we understand that there might be 34:05 34 minutes, 5 seconds some kind of you know shift in demand happening from unorganized to organized as well uh but if you can throw some light into uh product segment or you 34:14 34 minutes, 14 seconds know the kind of market share that you're gaining that would be helpful uh 34:22 34 minutes, 22 seconds very frankly there is no very specific reason at the moment. Yes, the import ban because of the quality insurance has certainly helped otherwise lot of 34:30 34 minutes, 30 seconds plywood was coming in from Vietnam and Nepal etc. So that has certainly been 34:37 34 minutes, 37 seconds stopped or reduced to a great extent. Uh the rest of it is actually all the 34:44 34 minutes, 44 seconds market is open to all every company some companies at some times. So it is right now the moment of century ply. So 34:52 34 minutes, 52 seconds probably whatever we are doing is working in the market and we are able to gain the market share for the moment and 34:59 34 minutes, 59 seconds we are working very very hard on many new things. We are learning while we are progressing. So many things we are doing which nobody else is doing actually. 35:08 35 minutes, 8 seconds So yes and the quality of course the quality is still the best. Nobody else comes near and the customer who has 35:17 35 minutes, 17 seconds tested the fruits once he again comes back for plywood century play only. 35:27 35 minutes, 27 seconds I hope I answer your question very well. Yeah, for sure. Yeah, that was helpful. Thank you sir. 35:34 35 minutes, 34 seconds Thank you. Next question is from the line of Mayul from NMV Securities. Please go ahead. 35:42 35 minutes, 42 seconds Hello. Hi Mah. Hi Mah. May please use your handset mode. 35:50 35 minutes, 50 seconds Hello. I'm audible now. Yes. Yes. Go ahead. 35:54 35 minutes, 54 seconds Yeah. I would like to know the utilization for H2 for all the four segments. 36:02 36 minutes, 2 seconds Utilization for H2 for all the four segments. 36:07 36 minutes, 7 seconds So maybe I can start with MDS. uh on on MDS uh maybe the utilization for for for H2 36:17 36 minutes, 17 seconds uh you know we will will continue to to grant about 80% plus utilization uh and and so far 85%. 36:25 36 minutes, 25 seconds uh for particle board you know currently we're at about uh 35 such in utilization uh we hope to go up to about 55 to 60% 36:33 36 minutes, 33 seconds uh in initial plywood and lamb I over to Vishu 36:40 36 minutes, 40 seconds yeah yeah so vishu this side on the laminate side you know uh right now since we have kind of two plants out 36:48 36 minutes, 48 seconds there okay we have an older plant in joa and there's a new facility in budwell so joka we are about 80 82% utilization and 36:58 36 minutes, 58 seconds for Budwe plant we have ramped up to almost about 55% as we speak. So as we move forward we are looking yeah as we 37:05 37 minutes, 5 seconds move forward we are looking at uh the capacity utilization for both and for both Joker as well as budwell to go up 37:13 37 minutes, 13 seconds uh about 10 to 15 percentage points for bud specifically okay and for 37:21 37 minutes, 21 seconds plywood we are intern increasing the capacities in all our plants like in 2425 the capacity was about 39,600 37:30 37 minutes, 30 seconds in 2526 Q1 it was 3 lakhs 82,800 in Q2 it has increased to 3 lakh 94,800 37:38 37 minutes, 38 seconds and already certain internal progresses are happening in Kandla and in Chennai so this capacity will further increase 37:46 37 minutes, 46 seconds so presently what we are doing is we are able to supply and achieve through our internal developments within the 37:54 37 minutes, 54 seconds existing plants the new plant will still take about a year it is delayed little bit it will take about a year to come 38:03 38 minutes, 3 seconds Okay. And all the plants accepting particle board capacity all the plants are above 80 85% practically. 38:14 38 minutes, 14 seconds Okay. Okay. And what is the what is the utilization we are expecting for 26 and 27 38:22 38 minutes, 22 seconds for 26 27 I think we the way we look at it it should go above 100% utilization 38:28 38 minutes, 28 seconds actually we're joking but yes we are whatever we are doing we will be able to achieve I think 90% plus in most places 38:38 38 minutes, 38 seconds but I don't have the actual numbers right now in front of me so I'm just giving you a reply which is is off the 38:44 38 minutes, 44 seconds hook. If you really need more detail, uh this investor relations will certainly update you. 38:53 38 minutes, 53 seconds Okay. I will note down your name. Sure. Sure. Yeah. They will get in touch with you. 39:00 39 minutes You are from which company? Secities. 39:12 39 minutes, 12 seconds Okay. 39:14 39 minutes, 14 seconds Yeah. Ah, you're through with your questions? Yeah. Yeah. 39:19 39 minutes, 19 seconds Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone. 39:36 39 minutes, 36 seconds As there are no further questions, I would now like to hand the conference over to Mr. Sanjay Garbal for closing remarks. Over to you, sir. 39:44 39 minutes, 44 seconds Yeah, thank you. 39:47 39 minutes, 47 seconds Thank you everyone for your insightful questions and continued interest in our company. 39:54 39 minutes, 54 seconds We are encouraged by the strong performance across all our business segments and remain confident about sustaining this growth momentum in the 40:02 40 minutes, 2 seconds coming quarters. We appreciate your trust and support and we look forward to engaging with you again after our next 40:10 40 minutes, 10 seconds quarter's results. Thank you and have a great day ahead. 40:14 40 minutes, 14 seconds Thank you members of the management team. On behalf of SKP Securities Limited, that concludes the conference. 40:21 40 minutes, 21 seconds Thank you for joining us ladies and gentlemen. You may now disconnect your lines. Thank you once again.