Greenply Industries Ltd — Q4 FY26

Greenply Industries Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=-SPkBov4NiE Published: 13 days ago

0:00 Ladies and gentlemen, good day and welcome to Greenly Industries Limited Q4 FI26 earnings conference call hosted by Asian Market Security. 0:11 11 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0:25 25 seconds zero on your touchstone phone. Please note that this conference is being recorded. 0:32 32 seconds I now have the conference ODM current beria from Asian market securities. Thank you and over to you sir. 0:40 40 seconds Morning all participants logging to the call. On behalf of Asian market securities we welcome all to green fourth quarter and FI26 investor call. 0:48 48 seconds From the management side we have Mr. 0:50 50 seconds Manutian joint managing director and CEO Mittal joint managing director and Mr. 0:54 54 seconds Sanjie CFO. I would like to hand over this call to Mano G for his opening remarks post which we can open the floor for Q&A. Thank you and over to you Mano G. 1:06 1 minute, 6 seconds Yeah. Hi this is Sanjit Ki. Uh I would like to uh just uh highlight that Mr. 1:11 1 minute, 11 seconds Manosan is not attending the meeting and Mr. Sanit Mittal the JMD of the company is addressing uh today. Thank you. Hand over to Mr. San M. 1:22 1 minute, 22 seconds Thank you Sanj. Thank you Karan. Good morning everyone. It is a pleasure to have you all on the call today. As we close this year on a strong and positive 1:30 1 minute, 30 seconds note in line with our growth guidance, we are carrying that momentum forward into the current year with even greater 1:37 1 minute, 37 seconds ambition and focus on growth. We have seen a strong start to Q1 FI27 and we remain confident on sustaining this 1:46 1 minute, 46 seconds trajectory supported by an improvement in margins. Before update providing an update on greenly's operating and 1:53 1 minute, 53 seconds financial performance for Q4 and FI26 I would like to address and give few updates. First on our leadership team as 2:01 2 minutes, 1 second recently shared in our regulatory filings Mr. Manoj Tunan has submitted his resignation as JMD and CEO of the 2:08 2 minutes, 8 seconds company. Manoji has decided to step down from his executive responsibilities to prioritize his personal commitments on 2:15 2 minutes, 15 seconds behalf of the board of the management and the company. I want to express our deepest appreciation for his leadership 2:23 2 minutes, 23 seconds over the last 6 years to ensure a seamless transition. We are pleased that Manoji will continue his association with the company in an advisory capacity. 2:33 2 minutes, 33 seconds Second, a search and sea operation conducted by income tax department at certain business premise uh premises of 2:40 2 minutes, 40 seconds the company from 26th February 2026 to 2nd March 26. As on date, no order, no notice of demand or penalty order has 2:50 2 minutes, 50 seconds been received by the company for the fair proceeding. The matter presently at a preliminary stage and the uh to assess 2:57 2 minutes, 57 seconds any possibility impact of the financial on statement of the group is not possible at this moment and there's no such demand. Thirdly, during the 3:05 3 minutes, 5 seconds quarter, we conducted a thorough review of our internal exposure significantly pertaining to our entity in Dubai. In light of the prevailing geopolitical 3:14 3 minutes, 14 seconds environment, which has adversely impacted the recoverability of certain assets, we have chosen to take a conservative approach. We have disclosed 3:22 3 minutes, 22 seconds a total of 15.16 cr as an exceptional item representing impairments to our investment, financial guarantees, and 3:30 3 minutes, 30 seconds advances to GME. This one-time adjustment is a proactive measure to safeguard our financial integrity and does not impact our underlying operating cash flow or long-term growth strategy. 3:42 3 minutes, 42 seconds With this, all or any potential liability on invested equity, corporate guarantees or any types of loan advances 3:50 3 minutes, 50 seconds have all been totally provided for in the books. 3:54 3 minutes, 54 seconds Now, I would like to share some perspective on the ongoing geopolitical crisis and their impact on the company. 4:00 4 minutes As you are aware across both our segments we have certain degree of dependence on imported raw materials particularly timber and chemicals. 4:09 4 minutes, 9 seconds During the early part of the quarter the evolving geopolit uh political situation posed challenges in sourcing chemicals 4:17 4 minutes, 17 seconds leading to a sharp increase in prices by over 50%. Additionally, elevated fuel charges and war risk insurance premiums 4:26 4 minutes, 26 seconds have created a volatile and a high cost environment for logistics. The impact was pronounced in the MDF segment where 4:34 4 minutes, 34 seconds chemicals con constitute nearly 30% of the raw material cost. To mitigate the cost pressure and protect margins, we 4:41 4 minutes, 41 seconds implemented calibrated price increases of 5% and 10% effective from April. in this plywood in this uh in the plywood 4:50 4 minutes, 50 seconds segment the impact was relatively lower and the price revisions were in the range of four to 5% during the same 4:56 4 minutes, 56 seconds period. Having said that at the same time we are actively evaluating opportunities to source chemicals 5:03 5 minutes, 3 seconds domestically with the aim of reducing our reliance on imports. While prices remain elevated, they have stabilized 5:11 5 minutes, 11 seconds and not expected to rise further. We continue to remain proactive in optimizing our sourcing strategies to ensure efficiency and supply continuity. 5:21 5 minutes, 21 seconds Let me now turn our operating and financial performance for Q4 and full year of FY26. I'm happy to share that 5:28 5 minutes, 28 seconds Greenly Industries has successfully delivered on its H2 FY26 guidance achieving doubledigit year-on-year 5:36 5 minutes, 36 seconds growth in both volume and value across its business segments. In Q4 FY26, consolidated core AITA margins improved 5:44 5 minutes, 44 seconds to 12% reflecting a strong expansion of 330 basis points over the previous quarter. We are proud to report our 5:51 5 minutes, 51 seconds highest ever consolidated quarterly revenue of 776.2 crores which which is a growth of 19.6% 6:00 6 minutes on a Y basis. Our consolidated core abita for the quarter was 93.2 2 crores with a core a bit margin of 12% compared 6:08 6 minutes, 8 seconds to 10.5% in Q4 FI25 an increase of 150 dips on 12 month basis our consolidated 6:16 6 minutes, 16 seconds revenue was 2739 crores which is a growth of 10.1% on a Y basis our 6:23 6 minutes, 23 seconds consolidated core AITA was 270.5 crores which is a growth of 13.8% on a Y basis 6:30 6 minutes, 30 seconds the core AITA margin was 9.9 as compared to 9.6 six in 12 month FI25 6:37 6 minutes, 37 seconds PBT before the losses on equity accounted in West foreign exchange gain loss as an adjustment to finance cost 6:45 6 minutes, 45 seconds and exceptional items is at 186 crores for 12 month FI26 which is a 21% YI 6:52 6 minutes, 52 seconds growth as against PBT of 153 crores in 12 month FI25. Let me now share the highlights of our individual business 7:00 7 minutes segments. In the plywood segment, we have achieved volume growth of 15.6% on a Y basis in Q4 FY26 with a revenue of 7:09 7 minutes, 9 seconds 588.5 crores, value growth of 14.6% on a year VIO buy basis in line with the 7:16 7 minutes, 16 seconds growth expectation. On the margin front, our core AITA margin stood at 10.4% for Q4 FI26, an improvement of 120 basis 7:25 7 minutes, 25 seconds points on a YI basis. On 12-month basis, we've achieved a revenue of 21105.7 7:32 7 minutes, 32 seconds crores, which is a growth of 7.5% on a YI basis. Our volume growth on 12 month 7:38 7 minutes, 38 seconds basis is 8.3% on Yi basis. Our core AITA is 11.7% on Yi basis to rupees 185.4 7:48 7 minutes, 48 seconds crores in 12 month FI26. Our AITA margin stood at 8.8 8 as against 8.5 in 12 month FYI25. 7:59 7 minutes, 59 seconds Moving to our MDF business, we have achieved our highest ever quarterly revenue of 189.4 crores with a volume 8:06 8 minutes, 6 seconds reaching to 62,000 CBM. That reflects strong year-on-year growth of 39.6% in value and 45.3% in volume terms. 8:17 8 minutes, 17 seconds Margins for the quarter stood at 17% supported by higher sales and operating leverage. For the full year, we have 8:24 8 minutes, 24 seconds achieved a revenue of 635.6 crores reflecting a yi growth of 19.9% with margin at 13.4%. 8:35 8 minutes, 35 seconds Moving on to our furniture and fittings JV, we have achieved sales of 12.99 crores in Q4 FI26 8:44 8 minutes, 44 seconds and a total revenue of 44.27 27 on 12 month basis. The JV reported a pat loss of 13 crores in Q4 FY26 with our share 8:52 8 minutes, 52 seconds of loss amounting to 6.5 crores and on a 12 month pat loss uh at 50.8 crores with our with our share of loss amounting to 25.4 crores. 9:05 9 minutes, 5 seconds This year marked the brand's initial establishment phase requiring significant investment. However, we are encouraged by the strong ramp up and 9:14 9 minutes, 14 seconds expect the business to grow exponentially. Now, I would like to provide an update on the progress of our capex initiatives undertaken last year. 9:23 9 minutes, 23 seconds We are pleased to share that the commercial production of the PVC and WPC plant has commenced from April 26 with an annual installed capacity of 6 9:32 9 minutes, 32 seconds million kgs for door and 3 million kgs for door stem. With respect to our new MDF facility, civil construction is 9:39 9 minutes, 39 seconds currently underway and orders for key machinery has been placed. We remain on track to operationalize the facility as 9:47 9 minutes, 47 seconds per our planned timelines. Construction of the plywood facility is progressing at full pace with all major orders 9:55 9 minutes, 55 seconds already being placed and the project remains on track. Despite the growth capex undertaken, our consolidated net 10:03 10 minutes, 3 seconds debt stood at 461 crores at the end of the current quarter. Our debt to equity ratio remains at 0.52 in line with our 10:12 10 minutes, 12 seconds guided range of.5 to 6 for the year even after the announcement and execution of the planned capex. The board of 10:19 10 minutes, 19 seconds directors has recommended a dividend at the rate 50%, which means 50 pes per equity share for the year ended 31st 10:27 10 minutes, 27 seconds March 2026 which is subject to the approval of shareholders of the company at the uh annual general meeting. Our 10:35 10 minutes, 35 seconds strategic road map for the remainder year is clear driving volume while protecting our bottom line. We are we 10:43 10 minutes, 43 seconds have set a volume 10% growth target for plywood backed by our strong brand equity in MDF. We are capitalizing on 10:52 10 minutes, 52 seconds rising demand and confident in delivering 25 to 30% volume growth despite the competitive landscape. Our 10:59 10 minutes, 59 seconds focus remains on operational excellence ensuring that our AITA margins remain consistent with our recent performance. 11:06 11 minutes, 6 seconds With this I would like to open the floor for Q&A session. Thank you. 11:11 11 minutes, 11 seconds Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. 11:21 11 minutes, 21 seconds If you wish to remove yourself from the question, you must press R and two. 11:26 11 minutes, 26 seconds Participants are requested to use handsets while asking the question. 11:31 11 minutes, 31 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 11:38 11 minutes, 38 seconds Participants you may press star and one to ask a question. 11:46 11 minutes, 46 seconds The first question is from the line of Pankash Draal from AK asset and managers. Please go ahead. 11:53 11 minutes, 53 seconds Yeah, good morning Sanit and uh team and uh congratulation on excellent set of numbers. Uh just two questions I have. 12:00 12 minutes run on the margins of MTS. Uh compared to what we saw with other players, clearly the delivery has been excellent. 12:10 12 minutes, 10 seconds Uh and this is before the price increases have happened. Uh so can you take us through your thought process on 12:17 12 minutes, 17 seconds how sustainable these margins are? Uh because last year first half uh we kind of struggled from the margin perspective 12:24 12 minutes, 24 seconds across the board. And second also on the plywood side uh after long we have seen a double digit margin trajectory. And 12:32 12 minutes, 32 seconds when we speak to the distribution on the ground u on the lower end uh brand uh 12:40 12 minutes, 40 seconds uhex on the other side uh earlier there were we were hearing about a lot of quality related issues. Now that has 12:48 12 minutes, 48 seconds substantially come down over the last six seven months. Is that also helping you on the volume and the margin side? 12:55 12 minutes, 55 seconds So two questions, one on the MDF margins, how do you see it going forward? And on the plywood side, uh is the double-digit margin sustainable and 13:04 13 minutes, 4 seconds the quality issues on the lower end band behind us and how we are ramping it up. Thank you. 13:10 13 minutes, 10 seconds So on the MDF front, I think these margins are sustainable and you are absolutely right that this margin was achieved before the price rise. I think 13:19 13 minutes, 19 seconds uh the reason we were able to achieve this was purely the uh the incremental volume that we had achieved in terms of 13:27 13 minutes, 27 seconds production and sales. Our fixed cost remained the same post our line uh post the extension while the operating 13:35 13 minutes, 35 seconds message kicked in. That is purely the reason why we were able to achieve this kind of margin. Obviously the timber uh 13:43 13 minutes, 43 seconds the local scenario of the market the proportion of the value added uh sales in the sales mix all of this also helps 13:51 13 minutes, 51 seconds us to achieve that uh the same and going forward we are very confident because the cost increase already passed on to 13:58 13 minutes, 58 seconds the consumers and in spite of the cost pass on we still see a demand so we are very confident in terms of our guidance 14:06 14 minutes, 6 seconds going forward in MDF whether we um on the bottom line in the top line. Fantastic. Fantastic. 14:14 14 minutes, 14 seconds And thank you. 14:16 14 minutes, 16 seconds And the plywood plywood on the plywood I think uh we are doing a lot of uh fundamental changes in our in 14:25 14 minutes, 25 seconds the way we are producing plywood. So in we have four of our existing facilities. 14:30 14 minutes, 30 seconds In two facilities the new change is already implemented and in two facilities the change will be implemented during the current financial 14:38 14 minutes, 38 seconds year. So this not only improves the cost, it also improves the quality in a drastic way. So yes, there has been uh 14:46 14 minutes, 46 seconds changes and improvements further in quality. See, it's a very natural product and you know any plywood can be said that this is very bad quality or 14:54 14 minutes, 54 seconds this is very good quality. It's also the perception. So uh but yes we have made changes which will help us achieve both 15:02 15 minutes, 2 seconds top line and bottom line and with our uh uh you know with the initiatives that the company's undertaken and with the 15:09 15 minutes, 9 seconds strategy if we are able to maintain the growth rate in plywood this margin can easily be insured. So this margin is 15:16 15 minutes, 16 seconds there because of the growth rate and the operating leverage there also. So yes, we have to maintain this growth rate and with this growth rate, this margin is 15:24 15 minutes, 24 seconds absolutely possible and we can further improve the margin in H2 of this uh year after the new process is implemented in 15:32 15 minutes, 32 seconds all our plants because new process will also improve cost to a certain extent. 15:39 15 minutes, 39 seconds So uh is it fair to say that on a console basis the exit quarter March quarter on a overall basis the margins 15:47 15 minutes, 47 seconds should be the new norm for green ply going forward because as you say that plywood margin sustainable MDF margin 15:54 15 minutes, 54 seconds sustainable one of cost is behind that absolutely absolutely right absolutely right that's that's very heartening to know 16:02 16 minutes, 2 seconds and just the last question on the balance sheet u uh I must compliment that after the significant cape debt has 16:09 16 minutes, 9 seconds come uh at 44 450 crores up near about and what you guys did at the start of the year. Uh from here on how should we 16:18 16 minutes, 18 seconds think about from a balance sheet perspective uh uh from a capex and the cash flows which you will generate. Uh 16:24 16 minutes, 24 seconds do we see further deleveraging or or the debt level stay here and you embark on the next level of capex? 16:35 16 minutes, 35 seconds So currently we we anyways have a big capex which is our MDF uh plant which is 16:41 16 minutes, 41 seconds almost 400 425 crores of capex and we also have uh the improvement or the new 16:49 16 minutes, 49 seconds uh the new technology implementation cost of the plywood plant and the Orisa capex. So with all of this given in 16:57 16 minutes, 57 seconds place and our cash flow given in place uh maybe for one year we might peak out to maybe 7 or 72 uh debt equity and then 17:06 17 minutes, 6 seconds again we come back in the range of.5 to 6 the following year itself. So that is our uh outlook because we don't want to increase the debt substantially further. 17:17 17 minutes, 17 seconds So yes, we definitely have a lot of aspirations to invest more and you know grow but yes uh keeping our balance sheet in mind keeping the overall debt 17:26 17 minutes, 26 seconds equity in mind. So 7.7 is the peak we want to go to and then again come back to the 0.5 level and then depending on 17:34 17 minutes, 34 seconds opportunity then decide whether you know we want to continuously delever or continuously invest. 17:40 17 minutes, 40 seconds Fantastic. And last three years we have been seeing one-offs every you know years either be gabon or forex or 17:46 17 minutes, 46 seconds whatever. Is it fair to say all these one-offs are now behind us in terms of government write off and all the 17:54 17 minutes, 54 seconds measures we need to take on the international and the other side. Is it fair to say that all these one-offs are behind or you foresee further challenges on that side? 18:03 18 minutes, 3 seconds I don't see any challenges on that side and uh I had mentioned in my uh opening remark also very clearly with this all 18:12 18 minutes, 12 seconds the potential liability on invested equity, corporate guarantees and other types of loan advances have been totally provided for in the books. 18:22 18 minutes, 22 seconds Okay, that's that's good to know. Wish you all the best and very heartening to see Greenly coming back to its original form. Thank you. 18:29 18 minutes, 29 seconds You thank you. Thank you. Next question is from the line of Quesish Lawi from HTFC Securities. Please go ahead. 18:38 18 minutes, 38 seconds Hi sir, thank you for contact on a great set of numbers. First thing I want to understand in Q4 whether uh you know the 18:46 18 minutes, 46 seconds volume growth was positively impacted because of higher channel inventory because price hikes were came in coming in April. And secondly you highlighted 18:53 18 minutes, 53 seconds you know Q1 FY20 sorry I said Q I mean Q4 the volume group was due to higher channel inventory also. And secondly, you highlighted Q1 FY27 has started on a 19:03 19 minutes, 3 seconds good note. By good note, you mean maybe whatever you did in Q4, the similar rendered continues in Q1 also. 19:12 19 minutes, 12 seconds Yeah. So I think uh I will not totally disagree to your statement. Yes, there might be little bit of the growth 19:20 19 minutes, 20 seconds because of overstocking also and the stocking only happened in the second half of March. So two and a half months of the potter was a regular potter first 19:29 19 minutes, 29 seconds of all. Second of all what we saw fundamentally was a shift from unorganized to organized because what happened when this when the raw material 19:38 19 minutes, 38 seconds started going crazy everyone including importers of chemicals including raisin suppliers wanted payment like today for 19:45 19 minutes, 45 seconds supply of today. So in that entire cycle a lot of unorganized plywood players shut down a lot of the smaller MDF players had issue they were 19:53 19 minutes, 53 seconds hand-to-mouth uh in terms of capital or in terms of cash flow so this disrupted a lot of smaller companies which we see 20:01 20 minutes, 1 second the disruption even today I think that shift that fundamental shift is also a reason why the branded segment or our 20:09 20 minutes, 9 seconds segment got the growth obviously with backed by our strategy also to grow plywood and 20:16 20 minutes, 16 seconds MDF. So yeah, it's a mix of all three reasons. 20:21 20 minutes, 21 seconds Understood. Got it. Can you give some sense about you know what is the MDF industry demand for FY26? How has the 20:28 20 minutes, 28 seconds capacity increased in FY26 and how will you know capacity increase in upcoming years and what sort of utilization we are seeing at industry level. 20:38 20 minutes, 38 seconds Uh I think uh industry level things are changing very fast. It's very difficult to give you the latest update because in 20:47 20 minutes, 47 seconds the last two three months there's a lot changed. I think some of the smaller players have shot import is totally wiped out because of the dollar and the 20:55 20 minutes, 55 seconds freight situation. Uh I think exports have also been very difficult because of the freights. So I think uh to give a 21:04 21 minutes, 4 seconds current industry scenario for me will be very difficult but as far as we are concerned we have a very small capacity compared to the country. I think at full 21:13 21 minutes, 13 seconds capacity if we run our factory we only can gain 8% market share. So as far as our brand is concerned I think the runway is clear for us for next two 21:22 21 minutes, 22 seconds three lines uh to sell and to produce we will not have any challenge. We just have to keep our balance sheet right and keep growing. 21:31 21 minutes, 31 seconds Got it. Last two question from my side. 21:34 21 minutes, 34 seconds One is MDF price total is 15%. I've heard it right. And secondly on income tax so what was the reason for the rate? 21:41 21 minutes, 41 seconds Why did the department have conducted it? Because we hear you know it was at distributed level also and it went on for few days. So what was the 21:49 21 minutes, 49 seconds so I think it was a rain which was conducted on uh green ply green man and green panel. The reason is uh obviously not known to us that why this happened. 22:00 22 minutes We had clearly filed in our disclosure and in the audit report the auditors also clearly mentioned that there is no liability on the company and there was 22:09 22 minutes, 9 seconds nothing seized from our premises in terms of documents or cash or any such thing. So as of now the company and the 22:16 22 minutes, 16 seconds books of accounts are clear. If there is any liability or any such uh update, we will keep the exchange and the investors 22:25 22 minutes, 25 seconds absolutely updated with it and we feel that you know it was a total wrong intel why this happened. 22:35 22 minutes, 35 seconds Understood. Got it. The MDF total price hike is 15% in April. Right. Right. 22:42 22 minutes, 42 seconds Okay. Thank you. That's it. Thank you. Thank you. 22:48 22 minutes, 48 seconds Next question is from the land of Utkash Napani from Anandwati. Please go ahead. 22:54 22 minutes, 54 seconds Uh yeah hi good morning sir sir my first question is regarding on the margin side uh in the March quarter. So for MDF 23:01 23 minutes, 1 second segment if we see our realization fell by 3% on a quarteron quarter basis but still our gross margin has improved by 23:09 23 minutes, 9 seconds roughly 530 bits. Uh so what is the reason for such big spin uh in in the March quarter? 23:16 23 minutes, 16 seconds So if you see if you compare the previous quarter and the March quarter I think the total volume produced has 23:24 23 minutes, 24 seconds drastically jumped up. So in the same factory and the same fixed cost when the volume goes up uh drastically I think 23:32 23 minutes, 32 seconds the operating leverage kicks in. That is why so my question is regarding the gross 23:38 23 minutes, 38 seconds margin not the beta margin. Sir I think Sanjiv you can explain this. Yeah, it's the same thing. Yeah, boss. 23:47 23 minutes, 47 seconds If the beta margin will increase, the growth margin will also increase. That is the operational leverage that the 15.6% increase in the volume in the 23:56 23 minutes, 56 seconds plyode. Uh it's a it's a given a very uh good uh growth margin on that. Uh so for 24:03 24 minutes, 3 seconds MDF segment I was asking so like I will ask in another way like our MDF gross margin uh has been very volatile over 24:10 24 minutes, 10 seconds the last say eight quarters. Sometime it goes up to around 55%, sometime it goes down to 45%. So can you please explain 24:18 24 minutes, 18 seconds the rational that why it is so volatile and whether it is going to continue going forward also the volatility 24:27 24 minutes, 27 seconds I don't think it is going to be volatile going forward in the past see if you see the last financial year uh two quarter 24:36 24 minutes, 36 seconds out of the four quarters a plant were not fully operational Q1 was a normal quarter and Q4 was a normal quarter Q1 was a normal quarter with the line 24:43 24 minutes, 43 seconds unextended and Q4 was a normal quarter with the line extended the quarter 2 and quarter 3 got disrupted because of the uh you know line extension that we did. 24:52 24 minutes, 52 seconds So the reason why there's a fluctuation in margin is also that and plus you know uh another reason why the gross margin 25:01 25 minutes, 1 second changes is also the mix change right so it depends that the same cubic meter that we've sold what mix we've sold so 25:08 25 minutes, 8 seconds if we sell more of the HDMR segment the company definitely makes more margin than we would make selling interior products 25:15 25 minutes, 15 seconds okay will be fixable gross margin uh uh uh considering the current uh uh raw material cost and the realization What should be the sustainable cross mark? 25:26 25 minutes, 26 seconds I think we can consider Q4 FI26 which is the current quarter that we've just finished as the as the base and I think 25:35 25 minutes, 35 seconds we have to uh you know deliver margins at this level. 25:39 25 minutes, 39 seconds Okay. And so now for the plywood segment what we have seen that our growth margin has contracted uh uh by say roughly 89 25:47 25 minutes, 47 seconds bits on a buy basis and it has also gone down on a Q1Q basis. So can you please explain what was the ration for the CA 26:01 26 minutes, 1 second is the reason of the product mix only. 26:05 26 minutes, 5 seconds Okay. And sir like we have seen pretty strong demand for plywood in the March quarter but then also our ad spend has 26:12 26 minutes, 12 seconds gone down substantially on a Y basis. So what was the thought pro process behind curtailing down our ad spend in the March quarter? 26:23 26 minutes, 23 seconds I don't think there was any thought process in curtailing. It must just be the you know the annual cost to maybe you know it varies from quarter to 26:31 26 minutes, 31 seconds quarter and the auditor is very particular that you know whatever spend is there has to be debited in a particular quarter. So maybe the campaign burst happened in previous 26:40 26 minutes, 40 seconds quarters and March was just a spillover regular expense. It wasn't a new campaign or a new uh strength and the 26:48 26 minutes, 48 seconds amount absolute number if you see on an annualized basis in Kors is absolutely the same. There's no change. 26:54 26 minutes, 54 seconds Okay. And sir lastly on the KPEX front sir you have guided that we are planning to spend around 425 K on our plant 27:02 27 minutes, 2 seconds growth kix. So can you please provide a split how much it would be in FI27 and how much it would be in FI28. That's it from my side sir. 27:10 27 minutes, 10 seconds I think 425 cr only on the MDF segment out of which I think almost close to 300 27:19 27 minutes, 19 seconds would be in the current FY and 125 would be in the next FI and apart from MDF any other uh in FI 27:28 27 minutes, 28 seconds 2020 uh we have certain improvement projects taken up in the plywood segment to change the technology of manufacturing 27:36 27 minutes, 36 seconds and also we have uh plywood the new plant. So in the plywood segment on Orisa ply the total 27:44 27 minutes, 44 seconds cost will be around 130 crores for Orisa plywood and all the other uh plywood 27:52 27 minutes, 52 seconds improvements would be around 4550 crores all plants put together. 27:58 27 minutes, 58 seconds Okay. So like uh I if I understand correctly so 300 cr we are going to spend on MDF in FI27 another 130 cr on 28:06 28 minutes, 6 seconds plywood because it is likely to get commissioned in this fiscal year and 45 to 50 cr on maintenance KPEX. So all put 28:13 28 minutes, 13 seconds together roughly 480 capex which is the capex that we're doing to change the technology of plywood production. It was already implemented in the last fiscal 28:22 28 minutes, 22 seconds year in two plants. Two more plants the technology will be implemented this year. So roughly sir 480 cr we are going to spend in FI27. Is that correct sir? 28:32 28 minutes, 32 seconds Almost. Yes. Almost. Yes. Okay. Thanks a lot sir. Thank you. 28:39 28 minutes, 39 seconds Thank you. Next question is from the line of Vesha from Invest India. Please go ahead. 28:46 28 minutes, 46 seconds Yeah. Hi. First congratulations on a good set of numbers. Uh thanks uh to uh Manoji for his guidance and learnings for uh all the years. Uh coming to the 28:55 28 minutes, 55 seconds question uh Sanya for you how should we look at the management transition and uh besides manoji also uh what we see is uh 29:04 29 minutes, 4 seconds there have been a lot of changes be it in HR IT marketing uh uh of late over last 6 months so how should we read into 29:13 29 minutes, 13 seconds this is some change in game plan so that's that's the first question so uh I think uh more uh so see people 29:22 29 minutes, 22 seconds come people go And uh as far as Manoji is concerned you know he's already you know still part of the company in a 29:30 29 minutes, 30 seconds advising capacity you know so he will be an adviser and it was his decision uh because of his uh you know uh personal 29:39 29 minutes, 39 seconds needs that you know he wanted to take some time out and be not in an active day to do a role but as an adviser to the organization. So that is the reason 29:48 29 minutes, 48 seconds uh why he stepped down and uh I think uh going forward uh I every business 29:56 29 minutes, 56 seconds already has its respective you know sales hierarchies in position all the plants have their plant hierarchies in 30:02 30 minutes, 2 seconds position it HR marketing like you know all the support functions have their heads in place so you know whether it 30:10 30 minutes, 10 seconds was Manongji or me or my father the chairman we were guiding people at a strategic level you know we were driving 30:17 30 minutes, 17 seconds things on a daily basis. So, uh as far as the growth going forward is concerned, I think the team is already 30:25 30 minutes, 25 seconds in place. team will run the show and at any level if we feel that you know we need a uh we need a full-time 30:34 30 minutes, 34 seconds replacement because Manoji is moving out of the organization that will also be considered but most importantly for us 30:41 30 minutes, 41 seconds to understand and know is that to get anybody at a critical level or at this level it's not very easy to find. So 30:48 30 minutes, 48 seconds yes, we are open at some point we might bring in uh somebody at his level but not immediately because there's nobody 30:56 30 minutes, 56 seconds that we have in mind at that level today. 30:59 30 minutes, 59 seconds Uh that helps. Uh would you like to highlight specifically on the changes on the marketing level? I understand we have hired somebody uh very senior from 31:07 31 minutes, 7 seconds pedite. Uh what what transpired this hiring or was it somebody moving out and we just replaced him? Uh any any change in thought process on the marketing and 31:15 31 minutes, 15 seconds sales side? So marketing I don't think we have anyone from pedalite I think at sales we have someone who has joined us 31:22 31 minutes, 22 seconds from pedalite but uh the previous gentleman was actually retiring so you know that was the reason of change and we wanted to bring young and we wanted 31:31 31 minutes, 31 seconds to bring somebody from an organization that we look up to we want green play to become like so which other organization 31:38 31 minutes, 38 seconds in our segment could we have hired other than the next employee of pendulite that is the reason 31:45 31 minutes, 45 seconds that's that's great and My second question was was on working capital. If you look at the receivable days, it has actually increased. Uh inventories, I 31:53 31 minutes, 53 seconds presume uh it was year end plus uh because of Iran, I think we could have uh liquidated inventory. Uh but how 32:00 32 minutes should we look at uh the increase in receivables uh on a year-on-year basis? 32:07 32 minutes, 7 seconds So I think a little bit of the increase could have also happened because of the highest level numbers that we met and the balance. One second. Just look at the number and give you exact. 32:17 32 minutes, 17 seconds I'm I'm referring to number of days. 32:21 32 minutes, 21 seconds Okay. You're referring to number of days. Yes, it is an increase. You're absolutely right. From December 25, we've gone up by 3 days. 32:29 32 minutes, 29 seconds So, I think 47 to 54. 32:33 32 minutes, 33 seconds It is a mix you know and our OEM business is also now growing drastically even though the payments are uh 32:40 32 minutes, 40 seconds protected in terms of LC and other uh instruments. But the the the better days are much higher there to achieve growth. 32:49 32 minutes, 49 seconds So you know to achieve growth we also doing certain B2B sale which is OEM and also there's a fundamental shift from uh 32:57 32 minutes, 57 seconds project business and routine trade business to furniture being made in furniture factories and because of MDF the exposure of the organization has 33:05 33 minutes, 5 seconds become very high in that segment. So the same team is pumping in plywood and MDF into the OEMs. So maybe slightly the 33:12 33 minutes, 12 seconds days have gone up because of that but the payments are totally protected in terms of LC. 33:19 33 minutes, 19 seconds Sure this is quite useful. Uh thank you so much and all the very best. Thank you again. Thank you. 33:24 33 minutes, 24 seconds Thank you. Next question is from the line of Maitrica from Sapphire Capital. Please go ahead. 33:31 33 minutes, 31 seconds Yeah. Good morning. Am I audible? Yes please. 33:36 33 minutes, 36 seconds Yeah. Hello. So uh a few questions firstly on the margin side. So for the quarter four we saw a very stagnant 33:43 33 minutes, 43 seconds growth in their beta margins for MDF and plywood. So do you see those mahan sustaining for the next half of the year 33:50 33 minutes, 50 seconds or like the um FI27 to FI 28 with also increasing cost coming in because of the raw material and you did mention you're 33:59 33 minutes, 59 seconds going to pass them on but how do you see them kind of balancing 27? on M on MDF uh we are not worried 34:08 34 minutes, 8 seconds about the margins. I think 17% is something we can sustain because whatever cost has increased we've 34:15 34 minutes, 15 seconds already passed on and uh in the increased uh passed on cost I think we we still able to do the volumes that the 34:23 34 minutes, 23 seconds company requires to do. So in MDF we are confident that you know this margin can sustain and uh on plywood also I think 34:32 34 minutes, 32 seconds this margin can easily sustain provided we are able to achieve the desired volume growth that we have targeted. 34:39 34 minutes, 39 seconds This margin in plywood only kicks in once the volumes are achieved. So whatever uh margins we've been able to deliver is purely on account of volume. 34:48 34 minutes, 48 seconds So if the volume guidance is achieved then we will 100% hit the uh plywood margins as well in H2 slightly we'll get 34:57 34 minutes, 57 seconds a uh tailwind in plywood once the new technologies implemented in all facilities slightly on the cost time 35:04 35 minutes, 4 seconds we'll start getting an advantage which is not there at the moment that advantage might kick in in the H2 and it's very difficult to quantify but 35:12 35 minutes, 12 seconds it'll definitely help us improve the margin for sure okay that is And uh secondly, you mentioned the 25 to 35:20 35 minutes, 20 seconds 30% uh kind of growth in volume for the MDF segment. Um could you quantify what growth will happen on the pre- 35:28 35 minutes, 28 seconds lamination part because I think those gross margins are much lower compared to the MDF. 35:35 35 minutes, 35 seconds I think it's going to be proportionately. So you know today whatever mix we have in prelab and uh plane in that same proportion we're 35:43 35 minutes, 43 seconds going to grow across all segments. So the plane proportion will also grow at the same rate and the tree land will also grow at the same rate and in fact 35:52 35 minutes, 52 seconds in early Q2 our flooring will also be fully operational. So that will start giving us incremental margins and higher 36:01 36 minutes, 1 second realizations in the MDF segment for the same cubic meters sold. 36:05 36 minutes, 5 seconds Uh what sort of capacity do we have on the flooring side? 36:10 36 minutes, 10 seconds almost to our annual topline of about 70 75 cr is the capacity we have 36:17 36 minutes, 17 seconds sorry I'll request to come back for a follow-up question please just one question if that's possible 36:24 36 minutes, 24 seconds go ahead yeah uh and any effective tax rate that you can guide for for the next fiscal year 36:32 36 minutes, 32 seconds I think what is the effective tax rate for the organization for next year so the effective tax rate is around 36:39 36 minutes, 39 seconds 2 22% because we have the uh uh in the green on the standalone the tax rate is 22% and in the our subsidiary companies 36:48 36 minutes, 48 seconds the tax rate is around 17%. So effective it will come to around 22%. Right. Okay. Yeah. Thank you so much. 36:58 36 minutes, 58 seconds Thank you. Next question is from the line of Karan Betalia from Asian market securities. Please go ahead. Hi sir. Thank you for the opportunity. 37:06 37 minutes, 6 seconds Uh Sani you've been referring to this new technology in in production plywood facilities. So can you just give us broad detail what are you referring to? 37:16 37 minutes, 16 seconds Is it to do with the productivity or is it to do with the cost savings or how do we see this technology changing? Uh so 37:23 37 minutes, 23 seconds so this technology cost and all is a outcome but the primary objective of bringing in this technology is improving 37:32 37 minutes, 32 seconds quality and making it to the global standards of plywood production. Number one. Number two, it is also to make 37:39 37 minutes, 39 seconds plywood more ready to be acceptable by machines and not humans. So as you see as the country is maturing or the 37:47 37 minutes, 47 seconds category is maturing the business is moving into the hands of OEMs. So OEMs need a much more precise plywood than a 37:56 37 minutes, 56 seconds carpenter can handle. So given all these uh reasons we've moved into a way of producing plywood which is uh seen in 38:06 38 minutes, 6 seconds other parts of Southeast Asia mainly Vietnam and China. We are calling this internally a quantroll technology where 38:12 38 minutes, 12 seconds there's a quantity uh assembly tables and there are people standing on both sides and they continuously keep assembling and the material keeps 38:20 38 minutes, 20 seconds getting cut and keeps getting stacked and empty the pre-press and thereafter the process is regular but this saves 38:28 38 minutes, 28 seconds overall manpower, cost, material as well as improves the quality drastically. So much so that you you know you can even 38:37 38 minutes, 37 seconds prelam the plywood right after the ply is made directly with paper instead of laminate. So I think the with this 38:45 38 minutes, 45 seconds technology in place the company can really improve sales and uh margin both. 38:54 38 minutes, 54 seconds Right. Right. So are we the first company to go ahead with this technology or it's very acceptable? 38:58 38 minutes, 58 seconds Absolutely. Absolutely. And we are planning a investor uh you know like an analyst meet or a investor day sorts in our sandella facility where we'll be 39:07 39 minutes, 7 seconds displaying to all of you our capability in this and clearly showing you a difference between a plywood from a 39:15 39 minutes, 15 seconds regular plant versus this new technology. 39:18 39 minutes, 18 seconds Perfect. And sir, we've been mentioning of market share gains you know purely because of cost escalation and you know early payment for raw materials but any 39:26 39 minutes, 26 seconds commentary on market share gains because of BIS which was you know implemented in the last year any visible uh I think I don't think there's a 39:35 39 minutes, 35 seconds visible gain because of that yes the visible nuisance because of that has come down so in MDF category there was a 39:42 39 minutes, 42 seconds nuisance of import right so that nuisance of import has gone down significantly because of BIS Even in plywood there were certain 39:50 39 minutes, 50 seconds grades of plywood in the premium segment which is coming in from other countries. 39:54 39 minutes, 54 seconds So all of that is wiped out which is definitely helping the category overall. 39:58 39 minutes, 58 seconds It is very difficult to comment that how much green is gained because of that. 40:01 40 minutes, 1 second But yes the nuisance that the company had to face in certain markets that have gone down. 40:08 40 minutes, 8 seconds You think thank you that is your mind. 40:13 40 minutes, 13 seconds Thank you. I request to all the participants kindly limit yourself to two questions per participant. 40:19 40 minutes, 19 seconds Next question is from the night of Nihhatal RA from Noama. Please go ahead. 40:24 40 minutes, 24 seconds I thanks a lot for the opportunity and congratulations on VHF numbers. Just couple of questions from my end. Uh what would be the industry growth at this 40:32 40 minutes, 32 seconds particular point and your market share both in plywood as well as MDF segment. 40:37 40 minutes, 37 seconds I think industry growth in MDF would be 15 to 20%. Annualized growth and uh I 40:44 40 minutes, 44 seconds think our growth is limited to the capacity we have. So this year more or less we intel to you know use the dire 40:52 40 minutes, 52 seconds capacity that we have to the fullest and in priv. 41:00 41 minutes But yes the industry size is huge. So opportunity for a player like us is not the growth but the industry uh share 41:08 41 minutes, 8 seconds size and your market share approximates I think it's very difficult to say in 41:16 41 minutes, 16 seconds plywood in MDF I had calculated that around 8 8 and a half% of the total industries uh sale would be asked at 41:25 41 minutes, 25 seconds peak understood current level maybe 7% Understood. And how is the competitive 41:33 41 minutes, 33 seconds intensity in the segment? The reason I'm asking is in the month of March and probably even April, we've seen a substantial increase in reason prices. 41:42 41 minutes, 42 seconds Is it fair enough to say that unorganized CLA would have been more harder hit because of this situation? 41:48 41 minutes, 48 seconds Absolutely fair to say. I think uh suppliers have blackmailed organizations for material. Importers said that if you 41:55 41 minutes, 55 seconds don't advance today and lock the price at this minute, you will not get the material. Same with did the raisin suppliers. So yes, for larger companies 42:04 42 minutes, 4 seconds to cope up with this challenge was much easier than smaller companies. So yes, they have got hit in certain areas, we've also seen notifications where uh 42:12 42 minutes, 12 seconds plants were running for 3 days and shut for 4 days in certain states in case of plywood local plants. 42:19 42 minutes, 19 seconds Oh wow. So this has given us a substantial le in terms of market share in the country. I think it's given every organized player a substantial leeway. 42:28 42 minutes, 28 seconds Understood. And lastly, how much would have been the total increase in the raw pricing and could you you of course quantified on MDF front. Could you 42:35 42 minutes, 35 seconds quantify how much price increases you've taken on plywood as well? 42:39 42 minutes, 39 seconds I had uh mentioned that in my 3 to 5% four to 5% is what we've [clears throat] taken in plywood from brand to brand 42:47 42 minutes, 47 seconds market to market product to product. And that takes care of course of the complete cost increases. So far that's why you're considering maintaining margin. 42:56 42 minutes, 56 seconds Right. That's it. Thanks. Thanks a lot. Thanks. Thank you. Thank you. 43:04 43 minutes, 4 seconds Thank you. Next question is from of Anu Parak from Anandrai. Please go ahead. 43:10 43 minutes, 10 seconds Yeah. Hi sir. Thank you for the opportunity. Uh so my first question is uh by when the furniture fittings business is likely to break even. 43:21 43 minutes, 21 seconds I think the year after this somewhere in the middle of the year you should reach a situation where the business starts breaking even. Uh the reason is that you 43:30 43 minutes, 30 seconds know we've already done the capex for both phases and we are only installed machines for one phases. So our 43:38 43 minutes, 38 seconds depreciation our interest loan is actually for a much larger business and a much smaller business in terms of production and also when we import the 43:46 43 minutes, 46 seconds same product which we're not producing here and selling we're making very low gross margins but the expenses and the 43:53 43 minutes, 53 seconds the and the supply chain and all of that remains the same very expensive and imported. So the moment the entire products start getting made here the 44:02 44 minutes, 2 seconds gross margin of the company will improve and we can start making margin. So sometime this year or maybe the year 44:10 44 minutes, 10 seconds after this is when you know we'll do the phase two and after that the margins will drastically improve. But the good 44:18 44 minutes, 18 seconds thing is that yes we are seeing green shoots in term of demand in terms of the domestic sales and export sales. So both 44:25 44 minutes, 25 seconds are uh improving and the products are really accepting. So that's the silver lining. 44:31 44 minutes, 31 seconds Okay. Okay. Uh so the next question is uh how have the timber prices behaved in quarter 4 for plywood and MDF and what is the outlook for FI27? 44:45 44 minutes, 45 seconds I think timber prices have been quite stable for us in the in quarter 4 and the year ahead also looks like that. uh 44:54 44 minutes, 54 seconds there's a wishful thinking deep within me which says the prices should come down and you know we should get some windfall there but uh the real thinking 45:02 45 minutes, 2 seconds says that you know let's plan for a stable year with the same price you know if there's any uh decrease there'll be a 45:09 45 minutes, 9 seconds additional gain but as of now we are considering that it'll be the same it'll be flat okay so and last question is uh what 45:18 45 minutes, 18 seconds would be the revenue contribution of the from the PVC board business in FI27 45:24 45 minutes, 24 seconds you in 27 the revenue contribution uh I can give you the potential revenue of the line you want the potential revenue 45:32 45 minutes, 32 seconds of the capex because it also depends on how much you're being able to sell yeah yes so that works 45:40 45 minutes, 40 seconds okay we'll give you the potential cap uh revenue that we can u what is the potential cap uh revenue we 45:48 45 minutes, 48 seconds can achieve in the given capex you've already done for WPC around 75 to 80 crores. 45:54 45 minutes, 54 seconds Around 75 to 80 crores is the peak uh revenue we can achieve in the given capex. 46:01 46 minutes, 1 second Thank you. Ano to come back for a follow-up question please. 46:07 46 minutes, 7 seconds Thank you. Next question is from the line of Asim from Dan Capital. Please go ahead. 46:15 46 minutes, 15 seconds Yeah. Hi. Uh so uh just just actually I had a question uh actually there was a earlier question on the receivables bit. 46:21 46 minutes, 21 seconds Uh so you said Q1 has started off well and this is despite the price increases. 46:26 46 minutes, 26 seconds Now I think uh if your focus is rising on OEMs that will have an impact on increasing overall receivable days. Uh but just I wanted to understand you know 46:34 46 minutes, 34 seconds given that you want to start off well despite price sides are we also incentivizing the channel by increasing credit days by any way to push growth 46:42 46 minutes, 42 seconds despite [clears throat] the smaller players being on the sidelines? 46:46 46 minutes, 46 seconds Uh no I don't think we're doing any such thing. We are for the channel the only policy we have is our standard credit 46:54 46 minutes, 54 seconds policy in both businesses MDF and plywood and uh the only thing we promote in channel is channel finance which we have like you know four or five partners 47:02 47 minutes, 2 seconds who provide our dealer distributor channel finance to transact with us that's the only thing we promote in the channels and OEM is a strategic focus 47:10 47 minutes, 10 seconds for us because we feel a lot of people at in urban India don't want carpenters to come into the house and work which basically means that their mindset is 47:19 47 minutes, 19 seconds becoming more towards organized uh readym made furniture buying. So we don't want to ride slow in that category. We want to even capture that 47:27 47 minutes, 27 seconds category because that category is ultimately replacing our sales. So as a strategy we are focusing on OEMs. 47:35 47 minutes, 35 seconds Okay. So X of OEMs there is broadly no change in your credit policies to the channel before and after. So it's broadly the same. 47:43 47 minutes, 43 seconds Not at all. Not at all. Not at all. And we are not satisfied with these numbers. 47:47 47 minutes, 47 seconds We not trying to justify internally. We are also not satisfied. We also want to improve this. 47:53 47 minutes, 53 seconds Sure. Good to know. Uh and second just uh on the capex. So uh this year on so on the MDF capex rather this year you 48:02 48 minutes, 2 seconds said you send spent 300 odd crores. Uh if I remember correctly uh the total budget was 450 odd. Uh have you spent 48:09 48 minutes, 9 seconds anything in FI26 so far? 425 sorry. FI20 if any amount has already been spent. 48:17 48 minutes, 17 seconds So we have paid only the advances for the main equipment supplier. It is around 10 crores and rest of everything will be uh around 48:26 48 minutes, 26 seconds 300 crores will be expended this year and balance uh it will be spill over to the 2728. 48:34 48 minutes, 34 seconds Got it. Okay. Those are my questions. Thank you. 48:39 48 minutes, 39 seconds Thank you. Next question is from the line of Aron Ben from ICICI securities. Please go ahead. 48:46 48 minutes, 46 seconds Hi S. Uh just one question here. Uh on the plywood, sorry to interrupt. Can you speak a little louder please? 48:54 48 minutes, 54 seconds This is Vas. Yes. Go ahead. Yes. 48:57 48 minutes, 57 seconds Yeah. Yes. Just on the plywood front do we see uh Mr. Rajeshw coming back in a 49:05 49 minutes, 5 seconds bigger way there? because what I've seen you know when he was there we had better growth uh in the earlier years. So is his involvement going much more than 49:14 49 minutes, 14 seconds what we have seen in last five six years in that category particularly. 49:19 49 minutes, 19 seconds So uh yes I think he's been definitely the driver in every category. So you know whether it was Mano G or me we were going back to him and taking our 49:28 49 minutes, 28 seconds inspiration and guidance and coming back and performing. So I think uh he was anyways involved he will be definitely 49:35 49 minutes, 35 seconds more involved in the current scenario in the plywood side and yes maybe now more 49:42 49 minutes, 42 seconds in the front end also it was more back end uh in uh in the last five six years where he was taking care of the plants 49:50 49 minutes, 50 seconds uh and the outsource business much more than the you know market and marketing but now maybe he'll be involved on that side also. 49:59 49 minutes, 59 seconds That's nice to hear. And second thing is on the MDF front we have done a few new hirings. We have read about that. 50:06 50 minutes, 6 seconds Uh is now more or less that set from a perspective of the team wise with all the new production capacities we got in place now. 50:16 50 minutes, 16 seconds Sorry I didn't get your question. What sorry on the MBA front we have seen you've done a few new hirings there also right? 50:22 50 minutes, 22 seconds So is now the team completely set with the kind of capacity we have in place now? 50:27 50 minutes, 27 seconds Yeah it's absolutely set. uh with the new hiring and the team and uh the new 50:34 50 minutes, 34 seconds construction is also going on full swing and the current plant is running uh the way it's expected to. 50:42 50 minutes, 42 seconds Great. Best of a lot. Thank you S. Thank you. Thank you. 50:47 50 minutes, 47 seconds Thank you. Next question is from the line of part Ber invest. Please go ahead. 50:55 50 minutes, 55 seconds Hi sir. Thank you for the opportunity and congratulations on the good set of numbers. Sir, I just have one question uh which is on uh profitability of MDF. 51:02 51 minutes, 2 seconds Uh our profitability has you know increased by 2,000 rupees per CBM. So just wanted to break that up like what 51:10 51 minutes, 10 seconds sort of contribution came from uh you know gross margin uh where basically your realization has declined and what 51:18 51 minutes, 18 seconds sort of contribution was from operating leverage. 51:22 51 minutes, 22 seconds I think it's mainly on account of operating leverage only. If you see uh the previous uh you know quarter the 51:32 51 minutes, 32 seconds overall volume was you know 42,688 versus 62,000 uh 021 CBM. So 51:40 51 minutes, 40 seconds 45% change in the overall volume and the fixed cost remains the same for the entire factory and the sales team and 51:47 51 minutes, 47 seconds all the overheads loaded of that business. So you know that is what uh has majorly contributed in you know increase of margin even though the sales 51:56 51 minutes, 56 seconds mix has reduced the average realization but the overall margin has gone up because of the operating leverage. 52:02 52 minutes, 2 seconds Sir the only reason why I asked this is because if the gross profit margin number that we've given uh it was 16,000 52:09 52 minutes, 9 seconds uh per CBM in FI basically Q3 and 17,000 CBM in Q4. So even that has improved by a,000 uh rupees per CBM whereas your 52:18 52 minutes, 18 seconds realization has gone down. I understand that uh your product mix would have changed but this is this number is also improved. 52:29 52 minutes, 29 seconds So this gross margin is also uh increased just because of the product mix nothing else. 52:36 52 minutes, 36 seconds Okay. Right. But and also we stopped. Yeah. The reason is also that you know we stopped trading you know initially in quarter two and 52:44 52 minutes, 44 seconds quarter three to just you know service the market. We had to also buy MDF and sell MDF which hardly had any gross margin and which was overall impacting 52:53 52 minutes, 53 seconds the overall margin. So but now in this quarter we hardly had any trading volume. So that is also a reason why you 52:59 52 minutes, 59 seconds see this margin and so so basically your value added product as a percentage of revenue. How 53:06 53 minutes, 6 seconds much said that would would be I think it's uh difficult to comment but 53:14 53 minutes, 14 seconds it's around 5 6% I think right value added products no so are we talking about prelam board 53:22 53 minutes, 22 seconds or we talking about what are we considering value added value added only prelam 53:30 53 minutes, 30 seconds plus HDMR so then that would be higher than 50% but it's not uh we cannot give the exact number for that but that would be higher than 50%. 53:40 53 minutes, 40 seconds Okay. And that would have changed quarter and quarter I believe right increase hopefully. Okay. Right. Perfect. 53:48 53 minutes, 48 seconds Thank you so much for answering my question sir. Thank you. Thank you. 53:52 53 minutes, 52 seconds Thank you. I request to all the participants kindly limit yourself to two questions per participant. Next question is from the line of Nikon Gala 54:01 54 minutes, 1 second from Paratya Capital Management. Please go ahead. 54:05 54 minutes, 5 seconds Yeah. U good afternoon everyone. I have just uh one question on MDF side. Um so at peak u you know utilization of MDF 54:14 54 minutes, 14 seconds capacity what is steady state ROC you aspire to have. 54:20 54 minutes, 20 seconds So I think I've answered this question in the past also. So in today's uh time 54:26 54 minutes, 26 seconds even at 17 18% I beta the ROC's are not uh very attractive but we'll have to see 54:33 54 minutes, 33 seconds these ROC's on a 3 year 5 year 7 year period and I think then it'll start looking justified to us in a short 54:40 54 minutes, 40 seconds period it might not look justified today yeah I understand but what you know I think anything between 18 20% if you 54:49 54 minutes, 49 seconds know if we are in that range I think we are very lucky and we are well placed Okay. Yeah. So 18 to 20 like any MDF 54:57 54 minutes, 57 seconds player or you know um you should be aspiring to have at least that kind of ROC to justify your investment. Right. 55:05 55 minutes, 5 seconds Right. So I think if you see the new capex also that we're doing we've reduced the investment per cubic meter 55:13 55 minutes, 13 seconds on a conte capacity. So what we are trying to do with that change in capex behavior or capex style of investment is 55:23 55 minutes, 23 seconds also only to improve the ROC and to be conscious that yes see for green ply to grow and to remain dominant in the wood 55:30 55 minutes, 30 seconds panel category MDF is an absolute sense but to also maintain the ROC's and make every work worth for every stakeholder 55:37 55 minutes, 37 seconds we've improved the uh capex turnover ratio so that the ROC's can ultimately keep improving in this category going forward. 55:46 55 minutes, 46 seconds Okay. Yeah, that is the reason why we have done 425 crax. Okay. Thank you for your comment, sir. 55:52 55 minutes, 52 seconds Thanks. 55:56 55 minutes, 56 seconds Thank you. Next question is from the line of Vijay Carp from Shiram Life. Please go ahead. 56:04 56 minutes, 4 seconds Yeah, thank you so much for giving me the opportunity. Okay, lots of question has been asked from the trade. 56:10 56 minutes, 10 seconds Sorry to interrupt. Can you please speak through the handset? 56:21 56 minutes, 21 seconds The line for the participant dropped. We move to the next participant. 56:25 56 minutes, 25 seconds Next question is from the line of MASA from KA advisors. Please go ahead. 56:32 56 minutes, 32 seconds Yes sir. Uh congrats on a good set. I just wanted to understand you mentioned that a couple of your facilities on the plywood side um you have uh used a 56:41 56 minutes, 41 seconds different technology and upgraded it. Uh once you implement that in your other facilities as well is is there an 56:48 56 minutes, 48 seconds improvement in in margins or uh what is exactly the benefit or you will get better realizations if you could 56:55 56 minutes, 55 seconds highlight on. I think the benefit is better quality and uh a quality which is 57:02 57 minutes, 2 seconds more internationally acceptable and more acceptable obviously to the retail market as well as furniture makers and in return because we've implemented this 57:11 57 minutes, 11 seconds technology as a outcome we've realized that the cost will also slightly improve at this moment how much cost will improve it's very difficult to quantify 57:20 57 minutes, 20 seconds but definitely there'll be huge improvement in quality and overall perception of the material which will definitely definitely help us achieve 57:27 57 minutes, 27 seconds better numbers, better sales, right? And uh in terms of your uh debt 57:35 57 minutes, 35 seconds level, do you see them remaining at the same levels next year considering the large capex that you have uh u planned? 57:44 57 minutes, 44 seconds I I have mentioned this that the current level is 0.52 right 0.52 debt equity level at peak this might go up to 7 or 57:53 57 minutes, 53 seconds maybe even 72 which might be the next year end or the year after that but then immediately the following year it'll again come back to the 0.55 or 0.52 58:02 58 minutes, 2 seconds level because the company's also the the operating cash flow is also continuously increasing with the given capex plan 58:12 58 minutes, 12 seconds right right and just wanted to understand in terms of the competitive environment. Do you see a lot of new uh um uh do you see a lot of players 58:21 58 minutes, 21 seconds continuing to uh ramp up capacity on the MDF front or do you see that uh we have kind of reached some sort of equilibrium and uh that's not to be seen. 58:32 58 minutes, 32 seconds I think uh there are certain players whose plants are either starting construction or due to end by the year 58:41 58 minutes, 41 seconds end. They have already started. I don't see any new major capacity being announced other than which is already 58:48 58 minutes, 48 seconds announced. So that is a good sign. And as far as Greensp is concerned with our brand, you know, first two to three 58:56 58 minutes, 56 seconds lines, we should have zero complaint of sales. So you know uh so honestly I'm not focusing on that. I'm only focusing 59:04 59 minutes, 4 seconds on our line running, our material getting sold and our new facility getting constructed. We're not focusing on what the outside world is doing because we feel that you know with our 59:13 59 minutes, 13 seconds given brand first three lines should be very easy to solve. Sure. All the best. Thank you. 59:20 59 minutes, 20 seconds Thank you. 59:23 59 minutes, 23 seconds Thank you very much ladies and gentlemen. We will take that as the last question and now hand the conference over to the management for closing comments. 59:34 59 minutes, 34 seconds Thank you all for taking time to participate in this call. In case of any further clarification or queries, please feel free to reach to us. Thank you. 59:44 59 minutes, 44 seconds Thank you very much. On behalf of Asian Market Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you. 59:55 59 minutes, 55 seconds Thank you.