Ladies and gentlemen, good afternoon and a very warm welcome to the Investor and Analyst Meet 2022 of Greenlam Industries Limited. Today, we have with us on the dais Mr. Saurabh Mittal, Managing Director and Chief Executive Officer, Mr. Ashok Sharma, Chief Financial Officer from Greenlam Industries Limited. Through the presentation to discuss our business model, key strategic initiatives and growth drivers. Apart from the audience in the room, we also have our phone lines connected to investors and analysts who were unable to join the meet today. The management would first start with an overview of their business, post which we would take questions from the audience. I would now request Mr. Saurabh Mittal to kindly address the audience. Thank you, and over to you, sir. Thank you, everyone, and a very good afternoon. Thank you for joining us. As mentioned, I'll take you through the mission of the company, and post which we'll be happy to answer your queries and questions. Big five, the big messages of this presentation are Greenlam 2.0 has embarked on decisive investments of about INR 1,000 crores across three manufacturing facilities. Company is expanding its market opportunity in both domestic and international markets. Greenlam will emerge larger, stronger, more profitable, and we're graduating from one orbit into another. This is part one of Greenlam Industries. The background has a snapshot. We commenced operations in 1993. We have two manufacturing plants at the moment at Rajasthan and Himachal Pradesh. We have experienced team, you know, management bandwidth is there to implement the projects. The products are marketed through nine distribution centers, 21 offices, five warehouses, 14 odd dealer distributors, retailers in the country. Nationally, we are present across 100 countries, supported by four international distribution centers, plus 15 offices, eight subsidiaries and over 100 team members working in various parts of the world. Currently, we are a strength of about 5,000 team members across the world. We have various certifications across our manufacturing for products, which are both domestically and globally. We're listed on the BSE and NSE. The market capitalization as on 31st March was INR 4,386 crores. The discipline that got us here has been a focus on the portfolio. Ever since we became an independent company, we've deepened our focus on decorative products and related solutions across the wood panel industry. We focus on brand premiumization and working on superior terms of trade with the channel. We've created capacities ahead of the demand curve. We've enhanced manufacturing capacities at relatively low infrastructure costs. We've strengthened the capital costs. We've invested through prudent mix of debt and internal accruals, and we've moderated debt by using cash flows and enhancing shareholder value. The values by which the Greenlam is by trust, performance, learning, speed, agility, and team. The current manufacturing capacity is about 15.62 million sheets across Behror and Nalagarh, which is in Himachal. 4.2 million square meters of decorative veneer capacity, 1 million square meters of engineered wood flooring capacity, and about 120,000 doors and door sets capacity. Just a quick on the product portfolio once again. We have laminates, here, where we do commodity to specialty products. There are compact panels which are also called compact laminates used for bathroom partitions, medical furniture, which is the Lab Guardian, restroom and locker solutions. Clad facade panels are used on exteriors. Stilus kitchen solutions are compact components for kitchen, for kitchen slabs and backsplashes, et cetera, mostly for the international market. We have melamine faced chipboard, laminated particle boards matching with the laminate color. On the veneer category, we have decorative veneer, which is with the brand Decowood. We do natural, engineered. In the engineered wood flooring category, we have the product called Mikasa Real Wood Floors, which are engineered wood flooring products with matching accessories. In the door category, we have the brand Mikasa Doors and Frames, which are engineered doors and door sets, basically with the frames. These are the product categories we are currently. Product and service categories we are present. The business, which is a core business, we have installed capacity at the moment of 15.62 million sheets. FY 2022, the revenues from this business was about INR 1,556 crores. These are the number of products, number of SKUs, colors, species of which we do. Products are done across various dimensions, starting from 3 feet by 7 feet up to 5 feet by 12 feet. Thicknesses across 0.5- 1.5 millimeter. Several specialty products are there, like high gloss, anti-fingerprint, Unicore, which are one color, chalk grade products, marker grade products, et cetera. Products extensively used across hospitality, health, education, creative spaces. On the compact laminate, again, a reasonably large range of designs, species, dimensions, thicknesses and usage. Because again, mostly, the facade laminates, most of the compact laminates are used mostly in commercial spaces. In facade laminates, 42 decors, in interior facade, interior clad laminates, about 100 decors. We have all these samples, you know, placed out, and our teams are here to, you know, show you, explain you how the products are used, how they look and feel, because, you know, customer engagement is still low in our category. We have restroom cubicles, which are basically bathroom partition products, locker room solutions. You probably have seen it in airports and public spaces. Most of the toilet partitions are now made with compact laminates. We have melamine board, which matches the laminates. Projects use laminates and pre-lam particle boards, you know, in combination. Here, we have a 2 million square meter capacity. Overview of the laminates market. It's about a INR 9,000 crore industry. 2,500 crores comes in from export. 6,500 crores is from the domestic market. Of the 6,500 crores, approximately 4,000 is organized market and 2,500 crores is unorganized market. This is in value, not in quantities. The unorganized market share is larger in percent. On the veneer side, this is our capacity, 4.2 million square meters. Last year, we did INR 83 crore. You know, again, a vast variety of items available with 360 species. In teak engineered, we have 13% and 49% each. Again, mostly residential and commercial spaces. Products come in natural, engineered, teak, various textures, various treatments, you know, various dimensions. The next product is the engineered wood flooring, 1 million square meter capacity. Last year's revenue was about INR 36.7 crore. We have two products here, Atmos and Pristine, with 72 and 10 SKUs in each collections. Again, various kinds of flooring with long planks, chevron, herringbone, you know, weather collections. All those samples are there for y'all to just kind of glance through. The next product is the engineered wooden doors. 120,000 doors capacity per annum, but last year's revenue was INR 26.7 crore. We do fire-rated, non-fire-rated, specialty doors for hospitals, acoustic doors. The idea here is to produce doors in the factory and install them on the site, you know, versus the conventional method of door fabrication on the site. Just a little bit of the technology integration we are trying to do across the business. With visualizer, certifications, videos, product details, product grading details. The visualizer we built for the flooring business. Just to give you a glimpse of what we're doing on the technology side for the interface with customers. Our credentials across products are green credentials actually, with GREENGUARD for indoor air quality, with green label, FSC certifications. NSF is for the food certification in U.S. ISO certifications. IGBC. You know, in our laminates processes, we don't use any urea, while most unorganized and other players also use urea in the production. Just the domestic footprint of the company. Two plants, Behror, Nalagarh, and we've marked three, one in Gujarat, Andhra Pradesh, and Tamil Nadu. These three sites are upcoming, and they'll be coming up at various times, which we'll explain later. Behror plant does laminates, veneers, flooring, doors. Andhra Pradesh plant will do laminates and particle boards. Himachal is doing laminates and compact laminates. The Gujarat plant will do only laminates, and the Tamil Nadu do only plywoods. These are the capacities, you know, which we have and which we are installing. The blue dot shows all the branch offices across the country. Sales teams are present across 150 towns. Corporate office is in Delhi. Red, red dot shows all the distribution points, and we have one experience center in Calcutta, and we're building one in Delhi. The Prantij facility, the Gujarat facility, will be operational in quarter two of this financial year, which is within September. The Andhra Pradesh plant for laminates will be operational in quarter four, FY 2023. Particle boards will be operational quarter four, FY 2024. Plywood plant at Tamil Nadu will be operational quarter four, FY 2023. Just internationally, you know, all the areas you marked is where we have subsidiary offices, warehouses or, you know, branch offices, in these countries. Otherwise, the products are available across 100 countries worldwide. We have teams in various other parts of the world. U.S., Miami is the office. We have a warehouse in Philadelphia. U.K., there's a subsidiary company. Italy, there's a warehouse. Switzerland, there's a subsidiary company. Dubai is a branch. Poland, Russia are subsidiary companies. Nepal is a subsidiary company. Hong Kong, Thailand, Philippines, all those places are branch offices, and Singapore is the operating subsidiary company there, including, sorry, even here there's a warehouse there. Present across 100 countries worldwide. What has Greenlam achieved as a result? The value we've created until March 31, 2022 is INR 4,300 crore. We're counted amongst the world's plants. We've built a distribution set up across 100 countries globally. We comprise India's first engineered wood flooring and door manufacturers. The first ones to pioneer actually, we are the only producers in flooring right now, and we're the first organized producers in the door segment. We turned the business into cash flow positive. We ran a tight ship with strong working capital hygiene across the market cycles with various disruptions across the last couple of years. We still managed an improved capital cycle, and we're sitting on cash as of March 31 of INR 176 crore. We became an independent company in financial year 2015. Yeah. Just a few numbers here on how revenues moved, ever since we became an independent company, how the EBITDA moved, profitability, net working capital cycle, ROC, equity, ROE, net debt to equity with net debt to EBITDA. If you see ever since we became an independent company, on the receivable side, we've improved from 65 days to 28 days. Interest cover has improved. Ratings have improved. Net debt to equity has improved. Average cost of interest in FY 2022 was 3.4% for the company. Short-term rating has also improved. Across most financial parameters, despite the challenges, you know, we have kind of inched up ever since we became an independent company. We successfully countered in FY 2022. FY 2022 at revenues of INR 1,700 crores despite the loss of production and sales at the Behror plant, where the plant lost operational days and had restricted working hours for you know in the month of December and January, a little bit of February also. We had extremely volatile and high raw material increases which the industry has never seen before across raw materials, all chemicals, paper, input costs, base ply, veneers. Every cost was at the peak which we have never experienced in the past. There were significant logistical challenges in both inward movement of containers and outward movement of containers. We ended up importing nearly 80% of raw materials, and 50% of revenues get exported, so with significantly large amount of containers moving in and out. On both sides, there were challenges on inventory and supply chain. Despite the challenges, you know, what did we achieve in FY 2022? You know, we believe we did a decent performance despite all the challenges. We overcame two COVID closures in FY 2022. We kind of embarked on the next journey of growth and we announced two new projects. We overcame disruption at Behror plant, you know, last year. If you look at the FY 2022 performance, revenues were at INR 1,700 crores, grew 42%. About INR 1,200 crores worth of revenue in FY 2021. EBITDA grew 7.9%. Grew in value, but reduced in percent because of the high raw material costs. We could only pass on the costs to the market, and there was a time lag for it. PAT grew in value 22.9% after exceptional losses. Net working capital cycle improved despite the logistical challenges. On the laminate door business, revenues grew 46% to INR 1,556 crore. The veneer business grew 6.5% to INR 83 crore. Flooring doors also grew, although the base was smaller, but still we didn't grow much. 36.7 was the revenues in the flooring and 26.8 in the door business. What's Greenlam next part of Greenlam as part two. What's the macro as we see in our population urbanization, demographic dividend, replacement demand, rise in home demand, online retail sector, mechanized furniture manufacture is growing. Basically, a lot of OEM culture, you know, is expanding in the country with ready-to-fit kitchenwares, wardrobes, doors, panels, shop fit outs. The GST and the e-way bill is favoring growth in cost price, clearly putting more pressure on the unorganized industry. Widening market for new homes. The trend towards formalization, you know, organized players we believe will win. On the customer side, looks for organized sector products. Consumer price sensitivity is declining, we believe. Consumer seeking a single brand solution. Increased online furniture uptake and preference for environmentally friendly products. The unprecedented opportunity which we see, organized and branded businesses to take off and grow faster. Wider opportunity in branded and substrate. Our goals in the next chapter of our journey is to emerge as India's leading wood panel player. To graduate from only doing surfacing products to also doing substrate products, and so we have a full solution of surface and substrate. To secure sustainable access. While we build these wood-based industries, we also want to focus on building a sustainable raw material supply chain with plantation, you know, being driven by the company in coordination with the farmers. Create a platform of sustainable outperformance. To deepen financial environment, financial, environmental, certification and compliance discipline. To position ourselves as a comprehensive substrate and decorative player. These are the segments we are currently present in, laminates, flooring, doors, veneers. With the expansions, we'll add the particle boards and the plywood to it, and laminates continuing to remain our core business. The initiatives, the six initiatives in Greenlam 2.0, expansion, acquisition, balance sheet right sizing, prudent debt mobilization, portfolio widening, and resource security, especially in the wood-based industry. From a market opportunity perspective, currently the businesses we are present in have a market opportunity of INR 11,000 crore. With the addition of plywood and particle boards, overall pie goes to INR 46,000 crore. Although not all plywood market is addressable with our new production. We'll only be in the mid to premium category, but just generally the category is far larger. That's about how the market size in our industry is. Clearly, MDF is an industry we are not present in right at the moment. It's MDF, plywood at INR 30,000 crore, laminates at INR 9,000 crore, veneer segment, and particleboard industry size at INR 5,000 crore. Just generally, you know, how things are gonna move. From INR 11,000 crore market opportunity, we move to INR 46,000 crore. It took us nearly 29, 30 years to get to INR 1,700 crore, and we believe the next five years with the base of FY 2021, we should more than triple our revenues with the investments, you know, we are doing right now. Outcomes of second part of our journey as an independent be more than tripling our revenues from the base of FY 2021 by FY 2027. Cross-selling products across because there's a lot of channel overlap between between all the cross distribution network, retail networks, architects, IDs, OEMs, developers, builders, so we can cross-sell various products. We become a one-stop solution across all wood panel industry requirements. We build a strong platform. We broaden our portfolio, and we strengthen the Greenlam brand. On the greenfield expansion, investment in greenfield manufacturing facility is for laminates, plywood, and. Two greenfield plants are coming up, as I said earlier. One is in Andhra Pradesh, one is in Tamil Nadu. Andhra Pradesh is 231,000 cubic meter of particle board capacity. It's a European line which we are building to be operational by FY 2024 Q4. The laminates capacity is laminates and boards, which is laminated boards to be operational by Q4 FY 2023. Tamil Nadu's for plywood, 8,000 square meters of plywood to be operational by Q4 FY 2023. Total investments and CapEx is about INR 950 crore. On the acquisitions, we just acquired a Gujarat-based laminate plant. Cost of acquisition was about INR 36 crore. We'll be spending approximately another INR 15 crore to upgrade the plant, and this plant should be operational within this quarter. Current installed capacity is 3.4 million sheets a year, and we'll upgrade the plant to 5.4 million sheets. This plant largely will be focused on servicing the commodity market of laminates, which is nearly 50% of India's market in terms of volume terms, which we cannot service efficiently because of capacity restriction and the way the plant has been designed in our existing two plants. Including Naidupeta, we'll not be able to do it. The idea is to build focus on that category and gain market share there, which helps us kind of cross-sell other Greenlam products and also our reach across many markets in the country. On the acquisition, funded from internal accruals, the annual revenue potential at 5.4 million sheets will be INR 250 crores. Revenue generation will be quick, so because currently we are already running at 110% utilization. I think the moment we start the plant, we should be up and running, you know, immediately actually speaking. SKUs will be fewer. Working capital requirements will be smaller than existing because the range is smaller. Advantages of the location is Gujarat is a hub for most raw materials with ports being close by. Availability of paper, chemicals is all quite easy. Clearly the idea will be to ramp up fairly quickly from this plant. Now post the expansion and acquisition, we're adding 8.9 million sheets of laminates capacity, sheets and boards. 18.9 million square meters of plywood capacity. 231,000 cubic meters of particle board capacity. Total investment across these three plants estimated to be about INR 1,000 crores within some investments already happen in FY 2022. FY 2022, FY 2023 and FY 2024. Three financial years. Projected revenues from these investments is about INR 1,750 crores. 65% is to be funded by debt, 35% is to be funded by internal accruals. Repayment of debt, because majority of the debt will come in from the European bank which funds the European exports of capital machines. It'll be repayments are between 7-12 years. On the balance sheet side, we raised proportional on proportional basis INR 195 crores of equity. This was issued at INR 309, which, with a dilution of 4.97% post-issue of capital. Clearly the idea of raising capital was, you know, to support the balance sheet. That's on the balance sheet side. On the resource side, you know, we talked about focusing on sustainable raw material supply for the wood-based industry. That's an initiative, you know, we have begun. Really, I think that's something we wanna focus on from a long-term perspective. It helps us bring raw material at an efficient price. There will be no mismatch in terms of where the raw material comes in from, where the markets are. That's something, you know, we are hoping to pay more attention to. How we strengthened our marketing and sales over the years, we've plugged category gaps, widened portfolio, provided solutions from adjusted product offering. We've leveraged digital platforms that others still aren't leveraging digital platforms to engage customers to increase customer engagements, introduce latest designs and trends across product portfolio. We believe the Greenlam brand can enter new segments and come into larger capacities in the existing segments, and it's time has come for us to kind of move out from just being a niche decorative player to a decorative and a substrate player. Clearly, I think we believe that, you know, this whole initiative of adding more capacities, moving quicker into particleboards will help us build leadership in the woodpanel industry. This is just value creation opportunity, significant business growth within a compressed timeframe. Mobilizing funds through prudent mix of debt and internal accruals and equity. Delivery of higher margins through synergies, and positive cash flows from the existing business will drive sustainable growth. The existing business really doesn't need any more cash. You know, it just needs routine maintenance capital expenditure. For me, you know, we're entering a new orbit which will make us larger, more profitable, more sustainable, and we are laying the foundation of a more valuable Greenlam. This is just a snapshot of where the capacities are coming up, you know, what capacities, what investment, what sort of revenue potential, and the expected date of commercial production. I'll move on this. This is a table which shows all the capacities of laminates, and other products. Laminates will move from 15.62- 24.52 across four locations. Veneer, flooring, doors will remain at the Meerut plant with no capacity expansion. Plywood will come at Tamil Nadu. Particleboard will come at Andhra Pradesh. That's part three. Just a quick run on the FY 2022 and Q1 FY 2023 numbers. FY 2022 revenues, you know, one which I already told you. You probably know that. EBITDA at INR 187 crores, PAT at INR 90.6 crores. Q1 was INR 470 crores of revenue. Revenues could have been higher, but despite the logistical challenges in exports, you know, we still have high inventory. Our production was at 110% utilization. The gross margin by and large remained flattish versus Q4. It was by and large flattish. That's on the laminate side. As capacity utilization, realizations have improved from INR 782 to INR 1,002. Multiple price hikes have been taken last year as well as value additions happened. On the wood sector, wood segment, last year we did INR 47 crores. Q1 was 14.4. EBITDA losses have come down in the wood segment. Here too we had challenges on raw material cost, plywood cost, veneer cost, timber cost. I think we're still a bit off from what we should be. Decorative veneer was at INR 25.3 crores in Q1. Flooring did far better this quarter at INR 11.5 crores. I think the core business is struggling with the numbers. Capital employed has come down in the wood veneer segment as inventories have reduced. That's just on the decorative veneer panel business. That's on the working capital side. For FY 2022 we were on 81 days, improved versus FY 2021. Q1 we were at 77 days. Inventory number of days seems to be a bit elevated. You know, it's also because of the export challenges of containers and goods still in the transit not reaching the ports of the destinations and like import side. Otherwise, debtors, payables, by and large, everything's, you know, moving quite well. The value's gone up of the inventory because of raw material costs going up. In quantity terms, it's absolutely under control, but because most of the RM costs have gone up, so that shows elevated value. From the debt side. The net debt FY 2022 was INR 168 crores. Q1 was INR 222 crores. On the return ratio side. The ROCs are largely on the veneer side. The laminates ROCs are nearly touching 30%-31%. I'm sure this will also improve, but at the moment, this is what it is. 15%. CapEx projects is 13.9%. ROE is 14.4%. That is it from my side. We'll be happy to Thank you, sir. We would now like to take the Q&A session. We would first give an opportunity to the members on the call to ask, after which we will take questions from the audience in the room. We will wait for a moment while the online question queue assembles. As the online question queue assembles, we would start the Q&A with the participants present here. Anyone willing to ask a question can please raise their hand and mention their name and their company name for starting the question. This is Pritesh Shora from Mission Street India. My question is, our asset turnover ratio is close to 2.5x-3 x if you consider the existing plant. Now you are showing INR 1,000 crore investment and INR 1,750 crore revenue potential. Why there is a decrease in asset turnover or we are investing into another plywood or something else which requires higher asset? The new investment from the particle board side, the asset turnover is lower, but operating margins will be higher. In the plywood laminate side, the asset turnovers we've been doing, the same will be maintained. Rather than plywood asset turnover is slightly higher, but in particle boards it'll be lower. It's more like a 1:1 kind. Operating profits will be in the range of 25%-28%. This is Bhavin from Enam Holdings. Thanks, Saurabh Mittal, for the presentation. Always exciting like to see next growth plans from the company. Looks to be a good one. A few questions. First on the current plans, what you're planning, and you also gave the guidance of tripling revenues, FY 2021 revenues by FY 2027. How do you include both domestic market and global markets? Will these new expansion plans, including our existing laminate expansion also support the global market and to increase the global market business? Are they in the plans or you think still domestic market opportunities is large enough and this expansion plans you will be able to sell more in domestic market itself? That would be my first question. On the new investments, the plywood and particle board business will be largely or nearly all domestic market. On the laminate expansion at Naidupeta and the Gujarat factory, you could presume we'll have the same ratio, 50% domestic, 50% export market. The laminate mix as we see things now, we see opportunity in export market. I think that probably can, you know, work with the same trajectory of both the markets growing. Wood-based industry will be largely domestic market. My second question is, leaving out MDF, and if I see that industry's number looks very exciting. The companies are growing at very high growth. I think that segment in overall wood panel is growing high and EBITDA margins high. I have left that out because it looks to be capital intensive. Is that the reason you left out MDF from this growth phase? Or there were apprehensions that you have not considered MDF when you want to project yourself as a leading wood panel player? Right. The idea was first to invest into particle boards line because we clearly see there is a gap in that segment. You know, it's like what I think MDF was 10, 12 years ago. There is no organized producer of particle boards. Most of the factories are subscale, revenues of INR 50-100 crores, inefficient equipments, higher cost of operation. Particle boards is largely sold as pre-laminated products. They're not sold as bare boards, unlike MDF. Alignment with the laminate business, which is also decorative business, was far higher. We believe, seeing learnings from our understanding of the international market, that having laminates, compact laminates, pre-lam particle board or like melamine chipboard, you know, which are all decorative in nature, was the first step for us to kind of move into that space, you know, rather than moving into an MDF space. Clearly, particle board, I feel that there's more opportunity in terms of the gap there and alignment with the existing laminate plant. You can probably give a better solution to the customers. You can go to architects with laminates, compact laminates, pre-lam boards, edge band, all matching colors for various applications, which you cannot do with MDF. Also, I think in MDF, with whatever we understand with a limited, you know, understanding on that space, there's a lot of new capacities coming up, you know, and which is not the case in particle boards. I think that was the second consideration. Clearly, we are open to that segment, but at the moment, you know, we don't have a plan on that. Sir, one more continuation to that question would be, understanding is that MDF, in fact, is cannibalizing the plywood industry, and the growth in the plywood industry would be less than the MDF industry. That's one of why the competitors are not adding capacity in plywood, but you have chosen to invest in plywood. Can you counter that when others are fearing volumes declining to be replaced by MDF, and you will be making new investments in plywoods? If you look at where the volumes are declining of plywood, it's mostly in the lower end of the plywood market, which is the unorganized, cheaper plywood market, commercial side of the market. The plywood we will be producing will not be in that segment. It'll be in the mid to premium segment. Clearly, we will not be competing in that space with the MDF. Lower end of the plywood market is being replaced by MDF, which is absolutely correct. The plywood production and the positioning we are doing is not in that segment. That's the idea. Also, we have a large customer base of residential customers which use laminates, veneers, flooring, you know, in their homes. Our plywood production, our plywood model is 100% sale of production, in-house production and mid- to premium quality, but aimed at the residential market and not at the commercial market. MDF is replacing plywood in the commercial market for ease of usage. People don't want too much of durability. They are okay with an acceptable quality, fine with a limited durability, which MDF does offer. That was the rationale of, you know, having a plywood plant, you know, for us. Yeah, that's logical. The last one, any tax incentives on this INR 950 crore CapEx? The unit which is in Naidupeta, that will have the lower tax of 75% against 25% for the company as a whole. Thanks. Jeetu Panjabi from EM Capital. Sir, three questions. High level one, how do you define your core competitive advantage? Because you talk of tripling turnover in three years. What gives you the right to get there and the advantage to scale up over three years? We've talked about more than tripling the turnover on the basis of FY 2021 revenues, which is INR 100 crores over till FY 2027. Like last year, we already added INR 150 crores, you know, into the turnover. If you ask me what gives us the confidence, I think the network which we've created both in domestic and international market, you know, gives us the confidence that we can get the materials to the market. With the credibility of high quality product, you know, clean approach, solid relationship with channel partners, architects, IDs, we think that. In the laminate space, clearly, we are running short of capacity. We're actually running nearly one year behind in capacity creation. You know, we had gone to some other state. There were some challenges. When COVID came, there were some delays. Laminates, as we talked right now, even like last quarter, we were at 110% utilization. On the laminate side, for both domestic and export market, I think we've steered in the market share, and markets want more material from us. That's on the laminates side. On the particle board and plywood side, again, if you see our business model in the last few years, you know, we've been a decorative-based industry because of other compulsions we could move out to the core category. A lot of heavy lifting has gone in terms of expanding the category, creating the category. In all our existing laminates for that matter. You know, we've added new products. We've focused on category expansion, whether it's facade laminates, bathroom partition, specialty products. We were the first company to really go and brand, you know, laminates in the international market. Really, it's been hard for us to kind of scale up the business. We never had a, you know, bulk moving product like a particle board or a, or a plywood in our, you know, category. Clearly, there's a gap in plywood. We believe there's no third player in the market. You know, customers and our, you know, dealers want another player in the market who's focused and who's reliable in terms of quality production. Particle boards is already a INR 5,000 crore market, so we don't need to go and create a market. Unlike other parts of our laminate business or veneer or flooring doors, we were also challenged to kind of expand the category. At least in plywood particle boards, I think the market exists. We have to, you know, go out and execute correctly and take market share and take the growth. I think our competitive advantage on the front end is where we think, you know, we can kind of do this one. The second question reasonably linked is, I looked at your 16 quarter numbers and saw that EBITDA has structurally come up by a couple of hundred basis points. The profit pool has not expanded internally for you commensurate to revenue growth. What gives you the confidence that triple the revenues or INR 3,500-INR 3,700 crore revenues, you see a defined profit pool where you think you'd be safe and you'll be comfortable getting there? Can you put that again? What did you notice in the 16 quarters? It went from 12- 10 or ballpark INR 38-40 crore EBITDA per quarter, gone to INR 48-50 crore EBITDA for 16 quarters. Right. That's the broad take. Right. Clearly, if you see, capacity of laminates unfortunately has not grown over the last two odd years, and we've been faced with significant raw material cost creep and market have already been ceded and we don't have enough capacity at the moment to go and sell. To move ahead, I think more capacity will help us sell more and our fixed costs will not increase, costs will go up at the contribution level and RM costs, you know, will also have already started softening at least on the chemical side. Clearly, I think as we scale revenues, you know, we feel margins will also improve in value and percent where we see things, you know, at the moment. You feel comfortable about the new segments you're getting into? You feel comfortable about the profit pool there as well? Let's put it this way. In particle boards, you know, every other company is a, you know, a not so significant player, and the people who report numbers, their EBITDA margins are in the range of 28%-30%, you know, with a smaller production base, with a, you know, lower capacity, with lower efficiency of machines. I think with the right efficiencies, with the right operating costs, we believe can be achieved. The last question, I mean, you know, we wish you well, but if for whatever those targets don't get achieved, where do you see the source of, you know, potential risk to get to those numbers? Where do I see the source of risk, is it? I'm saying, God forbid, we're sitting three or four years from now. Sure. Those numbers aren't there, right? Sure. What do you think could be the reason for that? As we see things now, we're expanding into three categories, laminates, plywood and particle boards. Laminates has been our core business. We're not really going out and doing something new in terms of newer products or newer markets. It's already operating at a certain parameter. We've done that at that parameter. Really, obviously, there are risks in anything, in everything you do. Nothing is completely risk-free ever. But we feel confident that we can, you know, get there. Plywood too, market size is large. There is no meaningful third player, you know, in the country. We're setting our factory in South India. South India is the number one market for branded plywood and for waterproof plywood, and that's a segment we want to enter. Our understanding of the market network is fairly, you know, decent, I would say that. Particle board also, again, it's not a new category. We're not going to invent a category. The market already exists, right? We have to go and take market share. Increasing furniture manufacturing is, you know, kind of, going up in India. We have more and more OEMs. We've seen numbers of machinery sales to the, you know, furniture fabricators of kitchen wardrobe doors, shop fit outs. I think they are on the rise. There's a huge, you know, push being given by the government also to expand furniture manufacturing. Really, you know, the machines we are getting are, again, top quality. Really, we are not innovating with technology. I don't know why we shouldn't get there. You know, it could be just bad luck or poor execution. I think that's what I could blame it to. Thank you. Yeah. Hello. Hi, good evening. This is Keshav from HDFC Securities. Sir, I want to understand whatever your new expansions are coming, so what kind of ROC and what kind of ramp up you have in your mind? Yeah. In terms of ramp up, we have third year as in the all the three category will reach the fair amount of utilization, near to 100% of utilization. For the laminate and plywood, we are budgeting by the 2026 because the production will start in Q4. For the particle board, we are budgeting in 2027. What was the next? ROC. ROC for laminate will have the same ROC as it is as the current currently we have. For particle board, we will have in the range of around. As of now, we are budgeting based upon the, as sir has said, the 25%-28% within that. It will be in the range of 20%-24%. For the plywood also, it will be in the range of this range only, around 20, 22%. One of your competitor is also expanding in particle board. What we have heard is they will have some like 2x turnover. What is the difference between your and his capacity? I haven't heard that, and I can't say much on that one. Because our math doesn't say it's 2x unless one kind of forward integration into making furniture components or kitchen components, and then the value can go up. But if you, for the investments we are doing of particle boards and lamination of particle boards, and if you were to take a reasonable mix of pre-lamination and bare boards for us to reach this. I'm not sure where you got those numbers from. Okay. I will take this on one-on-one. Please. Your veneer capacity is very, you know, subpar, you think? Right. Which is also dragging the ROC. Right. The same is the case for the door business. Right. What has went wrong for you and how you plan for this business in the future? On the veneer plant, any which ways, the model is not a 24-hour capacity like laminates. Clearly, I think we can do better on the veneer flooring and if you combine all these segments. I think last few years have just been hard with COVID and with residential sales dropping in between GST, demonetization. Because all these products are, you know, mostly residential or home market products. We had a little bit of a difficult time there. If you look at Q1, the numbers of flooring have kind of inched up. Realizations have improved, revenues have improved, losses have come down. Veneers too, we had challenges on the raw material side and some competitive pressures. We believe that the numbers can come up. At the peak, we've gone up to 17%-18% operating margin in the only veneer panel business. I think it'll take some more time to kind of come to that segment. On the door side, we're still struggling with the model, you know, just to put the whole program in place. There's a lot of interest, a lot of demand. Clearly, on the execution side of pricing, installation, measurement, finishing, I think it's still something we haven't been able to completely get a hand, a handle on. We are working on that to, you know, put that up. These three segments don't need any more capital. As you can see, capital employed has actually reduced in these three segments. We don't need more capacities. We don't need more working capital. We just need to focus on, you know, executing and that's what we're trying to do. Okay. Thank you. That's it from my side. Thanks for the detailed presentation. Thank you. Hi, good evening, Suresh, and thanks for the opportunity. Sneha here from Edelweiss. Just a couple of questions from my end. You definitely have mentioned your three-year plan and tripling the revenue, something that you guided for in recent years, 20%-25% revenue growth. Just wanted to understand what will be your realization as well as volume break up, given that you have mentioned in your presentation that you are running at optimum utilization in the current plant. Right. Your new facility required one which will start only by Q2. Right. Just want to get some of the volume as well as the realization break up. 20-25% we mentioned for FY 2023. In terms of volume growth from last year's production, last year we did about 16.7 million sheets approximately. We will have the Gujarat plant's production up and running within this quarter. We'll get about six months of H2 and maybe some part of this quarter. Last year, we had the shutdown of the Behror plant where we lost literally one month of production. If all goes well, I think on the laminate side, quantity growth should be like a 12%-15% types this year. That's an equal mix that you're targeting. As in? I mean, volume as well as realization all will increase. Realization will also go up versus last year because prices increased, you know, at different stages. Q1, too, we raised some prices. Although that's not reflected on the realization because the mix, you know, got a bit changed in Q1. Yeah. I think there'll be the value growth also of about a similar percent. Yeah. The next question was. Realization growth, sorry. Quantity 12%, 15%, and realization will also be similar. The next question was on your margins. I think you already answered with respect to raw material prices cooling off, and that could aid somewhat of margin. I was just observing your employee cost that's been increasing steadily, and I believe in last time's detailed presentation, again, you introduced us to the entire new team. Sure. which you've hired for other divisions. Sure. Is that too something which is, you know, taking a hit on margins and when your new segment operating, which is your particle board, plywood that will, you know, inch up the margins? Sure. Is that one of the reasons? I just want to understand that. Clearly, the cost structure currently, you know, because we are into an expansion phase, you know, across categories, we've built in certain new team, you know, last year itself for the laminates. There have been some hiring internationally to reopen a subsidiary in Poland and Russia back. We do have a structure which can sell more in terms of quantity and value. Clearly, with capacities getting aligned, you know, and I said that our fixed costs, we believe, you know, will not go up in a proportion, and it'll only be the contribution costs ex-factory or up to the freight to the market which will go up. Clearly, I think, the structure, the sales marketing setup has been created a little bit in advance. I think as we get the, you know, Gujarat capacity and the Andhra capacity later this year, I think we should see some sort of percentage normalizing for certain costs. Yeah. Sure. Last particle board unit which you are adding, a lot of things have actually changed. Your competitors have started reporting much, much higher margins on a much lower base. Is there anything changing on that front? Do you think it's changing for positive? Also one more concerning fact in the MDF segment which has started emerging is imports slightly coming back according to our checks. Where do you think this industry is going and any changes in the margins that you are observing for your new unit? What was your second question? One was the margin of particle. Particle board margin itself, and the scenario changing in terms of whether imports are coming back or you think it is only changing for the better? What is coming back? Imports. Imports. On the particle board side, you know, we said 25, 26, 27% of operating margin. At the moment, with, you know, because every month we are updating our cost sheets and our sales prices and all, it looks in the same range. Competition is reporting higher margin on a lower base. Whether that is really relevant because you don't have enough capacity in the market right now. There is a shortage of particle boards. There is no one who can really produce boards. Maybe it is probably a temporary, you know, blip in the market. The margins kind of come down to some extent, I guess so. Really, I am not so sure, you know, when we enter the market, where is the raw material cost. What is up with the sales prices. As we see things now, you know, with the math we have, it probably will be in that band. You know, 1%-2% here, though, that depends on cost of relative value add, which might take some time to reach a certain, you know, stage of value addition. That's on the margin front. On the imports, I haven't heard much with imports coming back. Although I have heard that some of the larger laminators have tried to import MDF and particle boards in break bulk, which we believe is not sustainable. The feedback I have is that it's not something which is sustainable at the moment. If tomorrow freight costs, you know, come down, say, at one point, shipping from Thailand, Malaysia into, you know, India was $50, $100. If that happens, clearly, imports do get some more competitiveness, you know, on, in terms of the freight costs, right? As we talk right now, I don't see much changes. With this whole war situation also, wood costs have gone up in Europe. You know, a lot of wood was coming in from Russia and from Ukraine. That's also stopped. I'm not able to clearly say, you know, what's gonna happen. As we see things now, not much has changed on the import situation. Even if imports happen, you know, and you have raw materials, you know. All the wood we are using is all plantation-based wood. In particle boards, unlike MDF, to pitch it against them, but just as a product, understanding, you can use mixed wood species. You don't need to use only one species. You can use all kind of wood waste, sawmill waste. Mixed woods can be used. Clearly, your ability to arrange raw material at a reasonable cost, you know, is quite high. Thanks. Thanks a lot, sir. That's okay. Hello, sir. This is Adesh from Motilal Oswal AMC. Thanks for a very elaborate presentation. Sir, just wanted to understand in laminates, especially in exports, you know, how is the competitive landscape, especially after the Ukraine situation in, with Europe? What right to win you have over there? Competitive in exports, if you talk vis-à-vis Indian exporters, you know, if you talk vis-à-vis the local producers in those geographies, so is it a specific question or it's both? Both Indian as well as the local producers. Right. Clearly, you know, there is, you know, high competition, especially in the commodity segment of the market, which is the commodity white liners, as I say, which are just used as backing products inside, furniture or cabinet production. In the branded segment, which is more, you know, specification-led, distribution, you know, range-led, there the competition is not so much from the Indian producers. There we end up competing with the, international producers based on the geographies. As far as export demand is concerned, the demand seems to be, quite, robust right now. Now the consumption of laminates has gone up. We believe production in Europe has kind of, reduced or there are temporary challenges with the European producers in terms of raw material availability, gas, people availability, water availability. There is a situation right now where we believe the export demand is quite decent, which also means the European exporters can't export to other markets. Certainly, European exporters were shipping throughout Western Europe, Eastern Europe, Russia, you know, North Africa, you know, Israel, Middle East. I think the exports to these countries have also kind of come under pressure, which gives us an opportunity to take some market share from there. As to winning is concerned, clearly for the last 15-17 years, we've our model in exports have been more based on a long-term business model rather than a contract or price-based or dispatch-based model. We've worked towards building distribution, demand generation with architects, designers, OEM, furniture producers. I think in terms of, customer base, distribution, people on ground, you know, specifications across various parts of the market, we believe in a good position to kind of capitalize on the export business. Right. Sir, how big is, sir, in terms of global laminates trade? I don't have that right away, but clearly, Europe, if you would take Western and Eastern Europe, it'll be the largest market worldwide for actually all wood panel industry. Even for us, if I were to combine U.K., Eastern Europe, Western Europe, will be our largest market now. Okay. Thank you, sir. Ivan here from Niveshaay. I had two questions. One is that if there is a trend of pre-lam, you know, in MDF and other segments, how does that change our demand for it? Because we might not be supplying the laminates where there is a pre-lam facility, right? Second is that the gap, you know, which is there in the particle board industry is, you know, known since long. Why aren't other players or the, you know, bigger players also thinking of a particle board? Or is it that people might be planning for particleboard facilities, the larger MDF guys, and they might be, you know, charting for their expansion in particleboards also, if you could clarify. Answering your first question, will pre-lam particleboard MDF take away market share from laminates? Is that what you're trying to say? Yes. Clearly, all laminated products compete with each other for certain surfaces, certain categories or certain applications. Those decisions are taken basis the requirement of the product, depending on the physical properties, the performance. Lastly, we've seen prelam MDF particleboard gain more traction on the OEM side of the business, which is organized furniture manufacturing. On the carpentry side, we believe laminates is still the core, you know, product to be used by customers, either on plywood or on MDF. The range of particleboards, prelam and MDF is always gonna be limited because it works in a 30-40 SKU. Just because, when you say pre-laminated, you have a deco paper on a board, right? The board could be 12 mm, 18 mm, 25 mm. Options of color range, texture product, and the whole logistics of manufacturing, inventory management, stocking on the market is nearly impossible with particleboards MDF for the day-to-day retail home improvement distribution business. Laminates are 1 millimeter thick. You know, one can stock 10,000 sheets, 20,000 sheets in a small space and move it very quickly. Stocking 10,000 boards of 18 millimeter and moving it is extremely hard. Our learning has been OEMs which are buying directly from the factory or OEMs who are located in the outskirts, mostly fabricators buying from stockists in a limited color pattern. That market is gonna be particleboards and prelam MDF. Mostly prelams particleboard because 85%-90% of boards of the particleboard is sold as prelam boards. You know, the distribution model, retail model going to a lot of carpenters, dealers, distributors, color options, you know, is gonna be a laminate market. That's our understanding. On the other companies doing what they're doing, one of our nearest competitor in laminates is also putting up a particleboard capacity, so that we are aware of. What are the other players doing? Like Action is a competitor. They have a certain particleboard capacity, so does Century Ply have. Their capacities are smaller with a different model of, you know, production and machinery. I'm not aware of what exactly they are doing on the particleboards. As you see things now, we see that most companies are focused on expanding and creating capacities on the MDF side. You know, larger players, midsize plywood players. You know, they could have different formats. Some could do continuous lines, some could do multi-thread lines, some could even have, you know, smaller lines. But that's our understanding. Why have they not expanded? You know, I'm not sure on that, but really somebody has to do it. Somebody does it at one point and other people follow it, right? Because Action TESA, I guess, would be hitting the markets. They are also, I guess, coming to the capital markets next year. They might, I don't know, whether they're raising money for the particleboard or what. I'm not so aware of it. I do know they have a particleboard plant, but the capacities are smaller, like I said earlier, and the machines they have are. Their operating costs will be higher than the new age continuous lines. Got it. Sir, also, there's a plant in South, I guess, which is, you know, not, I mean, operational right now. What are the chances that it might get operational or can take that facility? Because there's a huge gap between the demand and supply. That's why, you know, our facility also makes more sense. Correct. Any understanding why that is not being taken up? There are several issues in that plant, and I believe you're referring to the plant in Bangalore, right? Near Bangalore, in Bangalore. Yes. There are several issues with the plant, with ownerships and, you know, bankruptcies and NCLTs and all that. I don't know why that's not getting, you know, sorted out, but I believe it's more complicated than we think it is. I'm not sure, you know, how, when, if that gets ever resolved or not. Thank you so much. Welcome. Hi, sir. This is Abhishek Vora from Ambit Asset. My first question was on the domestic and export volume breakup, if you could give during the quarter and how it panned out and how do you see that going ahead? You wanted the data for Q1? Yes. Sure. For the domestic and export, both eventually in this quarter are nearly the same, and that is 2.06 million sheets. You wanted the growth, sir. Growth? Yeah. Growth for the domestic was 41% in volume, and export was down 13% in volume. Right, sir. Sorry, because you just mentioned about good tailwinds with exports, but how do you see that going ahead? Is this bump in the quarter or do you expect Q2 exports to be better than the Q1? Oh, see, no, as far as exports are not doing well. Right. We've had a higher inventory in transit of exports. Right. Production side, factories run 110% utilization. Sure. Right? There's only so much we can produce, right? You can't produce beyond that. Approximately INR 18-20 crores worth of exports, which is in transit, which is not in the factory, which is dispatched from the factory, is between plant and seaport. It's between plant and the inland port and inland port to the client's customer destination port. Right. March also was elevated. Got it. Clearly, I think the logistical challenges, you know, are showing up in terms of the numbers of exports. In Q1 last year, there was COVID, right? Right. Domestic market was by and large, you know, at a very subdued level. We had the whole export market, so largely all production was pushed to exports. Our downfall in Q1 last year was very, very small versus, you know, every other player in our industry. Right. From a trajectory of exports, backlog of exports, you know, there is no problem on that. Right. Is there a sequential volume growth number handy with you, with regards to both domestic- I'll share with you. Sure. At a later stage. Sure. One more question I had on the capacity utilization, if you can share for the wooden floors and doors and your plans ahead, on that part? Wooden floor and doors did about INR 40 crores in Q1. Clearly, utilizations in all the three categories are far from any satisfactory level. Obviously the numbers for this year, we said about 20%-25% growth of the overall revenues of the company. Wood veneer, flooring, door business will also, you know, hopefully grow well this year. Right. Is there a utilization number that you would like to share? Because you shared the veneer. No, we can. No, we can. No, there's no Utilization. We can share the numbers. Yeah. The veneer is 26%. Yeah. Floors are 13% and doors are 8.5%-9%. Sure, sir. Sir, if just one last question, if I may squeeze in with regards to if you can give some risks that you see with regards to the imports of the wood panels, if the other countries would like to, you know, venture into the Indian markets where they see some dry space, and these companies that may take time to ramp up their CapEx. In the meanwhile, is there anything that you'd like to mention on that front? When you say wood panels, I'm assuming you mean particle boards and MDFs. Yes. If you see the last, you know, maybe decade or so, the international companies have used India as a dumping ground. Wherever there's been additional production or capacity, they've kind of pushed goods into India. They haven't really marketed the product or created a brand or a setup here. Whenever this happens, if this does happen, it's mostly limited on the port side, right? Till the port, you know, let's say Chennai or, you know, mostly Chennai or some other ports, there is viability. The moment goods start moving inward, the freight cost kind of eats up the competitive advantage. Do we see that as a risk? Obviously, you know, anything can happen tomorrow. If the sea freights again collapse or oil collapses, the world can change, right? Can't say much on that. Even if that does happen, it's more, you know, from a commodity, on a commodity pricing limited to certain markets and geographies. If you have to laminate the product, you know, create a brand, go to customers, create specification, then you don't face these pressures so much. Got it. Thank you so much, sir. We have one question from the online participant. This is from Mr. Kumawat. The question is, what price hikes were taken during the quarter across products? How did it come? Online? Yeah, it's online. In the domestic laminate market, we increased prices by about 3%, and exports were raised by about 5%, which got implemented through the quarter. On the wood veneer flooring side, there was no price increases implemented in quarter one. Okay. Yeah. Hi, this is Tanush from JM Financial. The capacities that are coming up, post that, I wanted to understand, you know, the customers or the clients we are catering in terms of pyramid. If we can say plywood, we are coming into, you can say the premium and maybe the mass category. Got it. The mid-level ones or the lower category is not our foray. In plywood, right? Yeah. Yeah, correct. At the same, we're also doing particle boards. Right. Right. Particle boards would cater to the economy segment. Is that understanding correct or no? Particle board, the plywood will be more residential market. Particle board will be more the OEM market. You know, basically the whole furniture fabricator segment, which also uses laminates. Mm. Your kitchen producers, door producers, wardrobe producers, shop fit outs, you know. These fabricators, organized carpentry or mechanized furniture manufacturers will be customer base for the particle boards. Plywood will be more residential, while particle boards will be largely more commercial. Certain fabricators will also focus on home furniture, which is kitchens and some of the loose items of particle boards, which will be catered through the OEMs. Okay. Basically, could you throw some light. What kind of furniture IKEA makes? I mean, they are more into particle boards, if I'm not wrong, or. IKEA, what we understand about 80% of the raw materials is based on particle boards. Got it. Okay. That's it from my side. Do we have any further questions? No further questions. I would hand over the call to Mr. Saurabh Mittal for closing remarks. Thank all of you all for your time and for your, you know, questions. If there are more questions to be responded to, Ashok can take it offline. Thank you, everyone. Thank you, everyone. Thank you. Now, I would request everyone to please join us for the high tea.