Ladies and gentlemen, good day and welcome to the Greenlam Industries Limited Q3 and nine MF five twenty-three conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listener-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star zero on your touch-tone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Saurabh Mittal from Greenlam Industries. Thank you, and over to you, Mr. Mittal. Thank you. Good afternoon, friends, welcome to the Greenlam Industries call. I'll give you a brief update on what's happened on the business, then Ashok will take you through the financial details. I'm sure by this time you've seen the presentations on the website and the investor presentation too. On the business front, as you saw, Q3, we grew the business by about 12% in top line. The domestic business grew about 13.5%, and the export business grew about 10%-11%. The gross margin of the business improved to about 40, 48 odd percent, we had slightly higher operating costs in Q3, mainly on account of manpower on hiring additional teams for the new business. We also had the full cost of the Gujarat plant. I think this all contributed to higher operating costs, thereby not showing a significant improvement on the EBITDA front. The working capital management was well in control. We improved working capital year-on-year by 8-10 days. We also improved working capital on a Q-on-Q basis for by about 1 odd days. We continue to, you know, continue our focus on the domestic and export businesses on driving more market share in both the geographies. The challenges we had in certain markets in the international space is more or less settled now. We are seeing business coming back from those markets. Even from the Western markets of Europe and U.S., while people are talking about a little bit of a slowdown, we think in the coming quarters our numbers should look reasonably good in those markets too. As far as the new projects are concerned, the Gujarat factory's third production line will be operational in Q4 of FY23. The plywood plant at Tamil Nadu should be operational, you know, by the end of Q4 of FY23. The Andhra Pradesh plant, the laminate part should start in Q1 of FY24, the particleboard plant should start by Q4 of FY24. We are having a close watch on the projects. The execution is more or less going, you know, on schedule. The teams at the manufacturing plants are also by and large in place. The teams for sales marketing on the ply piece, you know, is double IP as we talk. By and large, you know, things look to be within our control, and we are driving for successful execution of these projects. We hope the business as we move forward now, you know, each quarter we think there should be improvement in terms of revenues and profitability. So that's it from my side at the moment. Ashok will take you through the financial highlights, post which I'm available, the team is available for any queries of yours. Ashok, over to you. Good evening, friends. I'll take you through the financial performance. For Q3 FY20, on a consolidated basis, net revenue for the quarter grew by 12% on a year-on-year basis and de-grew by 2.8% on a sequential basis and stood at INR 503 crore. The gross margin grew by 400 basis points to 48.3% in Q3 FY23 from 44.3% in Q3 FY22. On a sequential basis, gross margin grew by 370 basis points. Gross margin in absolute terms grew by 22.1% on YOY basis and 5.4% on sequential basis to INR 243 crore this quarter. EBITDA margin was down by 100 basis points to 10.9% this quarter as compared to 11.9% in Q3 FY22. On a sequential basis, EBITDA margin was up by 50 basis points. EBITDA in absolute terms grew by 2.7% on YOY basis and 2% on sequential basis and stood at INR 54.8 crore in Q3 this year. Net profit for the quarter stood at INR 28.2 crore as against INR 26.9 crore in Q3 FY22. Moving on to nine-month performance. Consolidated net revenue for the nine months grew by 20.3% on YOY basis to INR 1,492 crore as against INR 1,240 crore in nine months last year. Gross margin was up by 150 basis points to 46% this year from 44.5% in last year in nine months. Gross margin in absolute terms grew by 24.5% to INR 686 crore as compared to INR 551 crore in nine months last year. EBITDA margin was down by 50 basis points at 10.6% this year from 11.1% in nine months last year. EBITA in absolute terms grew by 15.5% to INR 158.8 crore compared to INR 137.5 crore in nine months last year. Net profit grew by 26% to INR 81.9 crore as against INR 64.9 crore in nine months last year. Now I'll move on to segmental performance. Laminate. Laminate revenue in Q3 FY23 grew by 12.5% on year-on-year basis and de-grew by 2.6% on a sequential basis, and stood at INR 459 crore in this quarter. Volume growth stood at 7.1% on year-on-year basis. Domestic laminate revenue grew by 13.3% on YOY basis and de-grew by 0.8% on a sequential basis. Volume growth stood at 19.1% on a year-on-year basis. International laminate revenue grew by 11.7% on year-on-year and de-grew by 4.4% on sequential basis in value term. Volume de-grew by 6.8% on year-on-year basis. EBITDA margin stood at 12.4%, a de-growth of 90 basis points on year-over-year basis, and a growth of 30 basis points on sequential basis. Production volume were at 4.34 million sheets and utilization level were at 91%. This after taking into account the Transys capacity addition. Sales volume for the quarter stood at 4.26 million sheets, and our average realization for the quarter was at INR 1,030 per sheet. Moving on to nine-month performance for laminate. Revenue grew by 20.2% on year-on-year basis to INR 1,360 crore as compared to INR 1,132 crore in 9 months last year. However, volume de-grew by 1.6% on year-on-year basis. Domestic laminate revenue grew by 30.9% in value terms on year-on-year basis, and volume growth stood at 10.8% for the period. International laminate revenue grew by 11% in value terms but the volume de-grew by 13.5% on year-on-year basis. EBITDA margin stood at 12.2%, a de-growth of 40 basis points in comparison to previous year. Production volume were at 12.85 million sheets and at a utilization level of 99%. Sales volume for nine months stood at 12.38 million sheets, and our average realization for nine months was at 1,048 per sheet. Now I'll move on to veneer and allied segment, which consists of decorative veneer, engineered floors, and engineered doors. In decorative veneer segment, revenue remained flattish on YOY basis and de-grew on sequential basis to INR 24.5 crore this quarter. Volume de-grew by 22% on year-on-year basis. Revenue of decorative veneer business grew by 28.8% on year-on-year basis to INR 79.4 crore in 9 months from INR 61.7 crore in 9 months last year. Volume grew by 10.3% on year-on-year basis. Sales volume for the Q3 FY23 stood at 0.23 million square meter, and for 9 months it stood at 0.92 million square meter. Capacity utilization for the quarter was 26%, and for 9 months it was 29%. Average realization for the quarter was INR 1,042 per square meter, and for 9 months it was INR 862 per square meter. Moving on to engineered wood flooring. Revenue of the flooring business grew by 1.3% on YOY basis and de-grew by 7.6% on sequential basis to INR 10.9 crore this quarter. Revenue in nine months grew by 30.6% on year-on-year basis to INR 34.2 crore as against INR 26.2 crore in nine months last year. Capacity utilization was 11% in the quarter and 12% for the nine months. Moving on to engineered doors. Revenue for the business grew by 37% on year-on-year basis and grew by 68.8% on a sequential basis to INR 9 crore in this quarter. Revenue for the nine months de-grew by 9.9% on year-on-year basis and stood at INR 17.9 crore as against INR 19.8 crore in nine months last year. Capacity utilization for the quarter was 21% and for the nine months stood at 15%. Net debt for the quarter ended 31st December was 147 crore, as against 75 crore at the end of last quarter. Increase in debt is primarily on account of debt raised for our new projects. Net working capital for the quarter stood at 68 days and for the nine months stood at 69 days. That's all from our side. Now I'd like to open the floor for question and answer. Thank you. Thank you very much. We will now begin the question and answer session. If anyone who wishes to ask a question, please press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, to ask a question, you may enter star and one. We'll wait for a moment while the question queue assembles. The first question is from the line of Udit Gajiwala from YES SECURITIES. Please go ahead. Yeah. Hi, sir. Thank you for taking up my question. Two parts. You earlier mentioned today on interview that the growth for FY23 could be close to 22% for the full year. What are the projections for Q4 and can you throw some of the light for FY24 growth and margin? For this whole year, we are expecting the growth in the range of around 20%. You can say that for the Q4, in the range of around INR 550 crore, that's what it looks as of now. Is there any projections for 2024 on top line and margin, sir? Margin will be similar to the current month margin, current quarter margin, which is in the range. This is 2023, right? That was it. You asked for this year? Yeah, 2023. Okay. Sir, I'm asking also for FY24, if we have any internal projections or, you know, any guidance that management wants to give. 24 revenue should be like a 20%-25% growth. Margin will be difficult to say as of now because we are starting two new projects. Okay, sir. Just similarly, can you give volumes for the doors and windows for the quarter? I think that we will. This was overall margins, not specific to laminate or veneer division. This was overall consolidated margins and top line growth. Yeah, that is clear. That's clear. Just volumes and if you can share the wood flooring and the doors for the quarter end. We can share that offline. Sure, sir. I'll come back with this. Thank you. The next question is from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Yeah. Hi, sir. Am I audible? Hello? Yes, you are. Yeah. Hi, sir. Thanks for the opportunity. Sir, just couple of questions. In terms of the export volumes, they seemed a little muted, but all the, you know, freight related costs have eased off and other things have, you know, come down. How should one expect the export volumes from here on, in terms of improvement? Export volume should come back, we think from Q4 onwards, right? If you see export of Q3, we have the volume has gone down by about seven odd%, but value is up by about 13.5%, 14%. I think as we move back, we should kind of get normalized and both volume and value should start looking up. Okay. Sir, this value thing which you spoke about because you rightly mentioned the realization has gone up. Is it that you are now getting a better product mix? How should we look at it going forward for the export market? Yes. Certain export markets, like which have come back now and, you know, maybe towards the second half of the Q3. Those are more volume markets. Because the denominator has changed, realization looking better, while it's a constant endeavor to keep driving improved value mix in certain markets. I think it's more of the denominator. The volumes go up, probably realization will, you know, kind of settle down a bit, you know. I think that's what, that's how you should look at this. Okay. Okay, thanks. Sir, in this quarter, your gross margins have recovered very sharply. You think from here on, there's further scope of this gross margin improvement from here on? We don't think so because of course that some cost increases have happened. Although very minor in chemicals and kraft paper as well, so I don't think a significant change will happen, you know. There could be some basis point movements here and there, but I don't think any significant, you know, movements will happen from here, at least in this quarter. Okay. Okay. Sir, just one last question in terms of the domestic laminates. How is the volume traction there? You've seen a good growth, but there's also will be the Gujarat plant element over there. How should one look at the domestic demand traction? Because in some of the other building material categories, we are seeing a slackness as far as the demand growth is concerned. Just your thoughts on the domestic laminates market. Thanks. The domestic market year on year there's been about 90 odd% volume growth and Q on Q it's been about 10% volume growth. In domestic, as you rightly mentioned, with the Gujarat plant, we've also entered the, you know, commodity segment, the lower end of the market segment where we're not present in. Those volumes are getting added to the, you know, to the revenues and to the volumes. While volume growth is 90 odd%, the realization has dipped by about six odd%. You know, even if you see Q2 sequential basis, volume has grown but realization has come down. I think the volumes will keep inching up, right? The mix although will keep pushing up the other premium segment also. We don't see much improvement on the realization front on the domestic market now. Yeah. I think volume should keep inching up as a notepad. Okay. The competitive intensity in domestic market, any meaningful change or is it stable? It's always been competitive, so I don't know if it's got any worse or better. But laminates, as you know, the installed capacity is more than the demand, which is not unusual in our category. It's always been that way for, you know, ever since I've known. So demand, so supply is always more than demand. Clearly. But just, by just creating capacities, you can't sell good. You need a lot of marketing, distribution, specification work to be done. I think it remains the way it is. Okay. Okay, sir. Thank you so much and wish you all the best. Thank you, sir. Thank you. The next question is from the line of Abhishek Getam from Alpha Invesco. Please go ahead. Thanks for the opportunity. I wanted to know for our particleboard plant and plywood plant, what will be our sort of procurement of timber strategy? Are we planning for our own plantations? For both the plants, the raw materials would be plantation wood and the face veneer, you know, you either import or you buy off traders who stock imported face veneer. For particleboard will again be waste wood, plantation wood, you know, any form of wood chips available, sawmill waste. This will be the format. We are not planning our own plantation as we talk. That is something, you know, we are actively discussing internally, of not having our own plantations, but working with local farmers and encouraging them to plant more of these species, high-yielding species. That's something which we're actively discussing. We are looking at doing our own plantation. It's more working with the farmers, encouraging them to plant. Understood. Understood. Just, one more question. On, smaller categories like, 1.25 mm, laminate or, you know, acrylic sheets. Markets are sort of expanding also there in year-on-year. Do we think we sort of expand in that area or not going to go to that? Can you please repeat your question, please? I didn't follow. Yeah. Are you talking about us getting into acrylic sheets? Yeah, acrylic and 1.25 mm sheets of laminate. Acrylic is something which we are not at the moment considering. 1.25 is just like a brand extension or a category extension. You know, you don't need any investment to do that. It's just more of getting the distribution set up to stock that category. At the moment, there's no plan to do it. If we want to do 1.25 mm, can we repurpose our existing plant, existing lines or is there investment? Yeah. Same line. Same line. Same line. To do 1.5, yeah, it's just a thicker laminate. It can all be done in existing lines. We don't need any fresh investments in terms of equipments or handling materials or raw materials for that matter. Okay. Okay. that's not a big concern. acrylic we don't see a big market right now? acrylic is not. Same distribution channels. It depends, you know. Not necessarily distribution. Maybe the end channel, which is a channel partner dealer probably could be common. It depends on what you mean by acrylic. There are different products with acrylic resins. There are acrylic sheets, there's acrylic solid surface. There are different kinds of products. That's not the space we are looking at. Our expansion right now is more into the plywood, pre-lam, particleboard, you know, in that space. Within laminates, obviously, we're continuously innovating on range and, you know, new launches, et cetera. Acrylic is something we are not considering at the moment. Okay. Thank you, sir. Thank you. Participants, if you wish to ask any questions, please enter star 1. The next question is from the line of Pankaj Agarwal from Equirus Securities. Please go ahead. Yeah, thank you for the opportunity. Sir, I wanted to understand, on your branding strategy for the upcoming plywood segment, sir. We are getting there already. I will not be able to talk much about it at the moment. Yeah, we, the team is actively working on it. Okay. Okay. Just secondly, on the deco veneer business, you know, what are we thinking about the business or how are we, you know, thinking to take it up on in terms of profitability? You know, so we're not too far from profitability, but I think we're not getting the revenues, right. Like in Q3, in flooring we're nearly at EBITDA breakeven. In doors also we're nearly at EBITDA breakeven. The veneer business, we had raw material cost issues in veneer where we were importing the base ply and the veneers, we increased some prices. Realization improved, but volumes fell down. It's more like a, you know, borderline case of just turning around the corner. It's not so far. The EBITDA loss in Q3 cumulatively is like INR 1.6 crores. I think we're just bit around the corner with some RM cost softening and some more sales push, we should be there. this can be expected, in, you know, post second half of 2024, in second half of 2024 to, or maybe FY 2025? I'm not giving a time, and it's just on the product life, you know? It's not happened. Okay. I think we Sure. Sir, lastly, on the pricing action I wanted to understand, you know, for the laminate segment purchase, what was the pricing action that it took in 3Q and, are we expecting anything in current quarter? There were no price increases in Q3 and we are not emphasizing any further price increases. You know, in some categories there could be a slight correction rather, so but no increases clearly. Yeah. Thank you. Thank you for the answer, sir. That will be it from my side. Thank you. The next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead. Hi, sir. Good evening. Thank you for the opportunity. My first question is with respect to volumes. Nine months we've not, nine months Y/Y we've not seen any significant volume growth. In fact, there's a slight decrease. You did mention that the export there was volume decrease. On the domestic side also, are we growing at a pace slower than the industry? Nine months- Alisha, there was a growth of around 11% in domestic, in terms of that. We don't think that market is growing more than that in terms of that. This is coming on top of the previous year, growth in terms of that, which was like last year, the growth was 33% overall. We believe that 11% growth, yeah, this could have been higher, but, it, in our opinion, it is more than the industry growth. 11% you're saying is the domestic volume growth? Yeah. See, 11% volume growth and about 17% realization. Okay. While volume growth for the current year may look slightly limited, but for FY24, because now we have Gujarat, we have the new capacity coming in Q1, also there are other players in the industry adding capacity. How are we seeing the volume growth for us or the industry in the laminate segment for FY24? Are you talking about our potential growth or are you talking about industry growth? Your growth and also with respect to industry. Will it be in line with industry or we are in a better position to outpace the industry growth on the domestic side? I don't have exact details about what others are doing so much or the industry number in cumulative. I think we should be able to, you know, do well over the next year if you're talking about FY24, because this the capacity expansions will kind of debottleneck certain segments of the products we do. We do a bigger size laminate, the 6 feet by 12 feet line, where the capacities have been running choked. With the new capacity on the place, we'll be more than doubling the capacity in that segment. We're also adding one line for the larger size of laminate, which serves certain European and other international markets and some other domestic market. The Gujarat plant will get fully operationalized by this quarter, which is also serving a independent segment of market. I think the way the capacity expansion is happening, it's also serving a certain strategic advantages in segments where we were, you know, choked with capacity. We think we should be able to have a decent quantity growth in the current financial year. Is it possible to give some direction or color on, how much are we expecting this volume growth to be? If you see, versus this year, I think, if we add the full capacity of Gujarat and Andhra Pradesh, the capacity is expanding by nearly 40%-50%. I think probably we should be looking at a 12%-15% kind of a volume growth, I guess, next year. As realizations have gone up sharply, and I do understand that the last part it could have to do with RM inflation, which is now seeing some softening. How much of this will be sticky and how much of it is because of product mix? Hard to give you a number, but I can say it's a mix of both price increases and product mix improvements for both international and the domestic market. For the longest time you were doing about 750, 800 gross kind of realization, or INR 700-800 realization, which now is closer to INR 1,000. All I'm trying to understand is how much of this INR 1,000 is sticky? How much of INR 1,000 is? Sticky. Sticky. Sticky. Okay. Will we go back to INR 750 or is that price now somewhere going to be in between? If you look at the next year or so, both volume and value, both are, you know, we'll be driving both volume and value. One part of the expansion is happening in the volume segment. One part of the expansion is happening more in the value segment. I would like to believe that we should be in a similar range in terms of price realizations. This is what I would like to believe, yeah. There are also product launches in this. Alisha? Yeah, ma'am. Thank you. Thank you. The next question is from the line of Mohit Agrawal from IIFL. Please go ahead. Yeah, thanks. My first question is on, you know, particleboard segment. Have you seen an increase in imports of, you know, bare particleboards? Has that impacted, realizations and margins? At the moment, since we are not into importing particle board, but we do believe, certain imports from Southeast Asia have started coming in, into South India. This is the feedback we have. Netting off currency depreciation and trade reduction, you know, because there was no proper base of particle boards, bare boards in the country, because the plants were very small, so there is no direct comparison between what others were selling and what is coming in right now. We do believe imports have started coming in. Any sort of an approximation how much pricing would have been impacted in the last couple of quarters? I'm not hands-on with that data, but I can say if you are trying to compare, in relation to what we will do, our model is gonna be largely laminated board basis. Although we'll produce, plain boards, but largely it'll be. Nearly all of particle boards get laminated and sold, and they don't get sold as bare board. Yes, if imports do come in at lower costs, there could be some impact on the laminated price, you know, sales in the market. How much%, I do not have an exact sense at the moment, but if they do come in, there will be some correction in the realizations of the product. Sure. My second question is, you know, on the CapEx expansion, could you share how much of CapEx has been incurred so far, and how much is pending? This is Mohit, I believe you are asking in more in terms of the project, new project. Yeah, the new projects. Yes. Yeah. As on 31st December, we have spent close to around INR 325 crore on both the project, which is plywood and this laminate and particle board project. Out of which, as we have mentioned, that plywood is going to start in Q4 of this year, Q4 of FY23, and laminate in Q1 of FY24. INR 325 of the total announcement of around INR 950,000 crore, INR 325 crore is the amount spent so far. Okay. How much do you expect to spend in next year? Uh, I would- Largely the remaining would be spent in next year, right? No, some amount may spill over into the next, into the FY 25 also, but most part of it will be spent by end of next year. Okay. Okay. Thanks a lot. That's all from my side. Thank you. The next question is from the line of Ritesh Shah from Investec Capital. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, you are. Yeah. Yeah. Hi, sir. I had a very generic question. Sir, what do we see, which companies would we classify as our competition when it comes to the global laminates markets? That's the first question. The company has done phenomenally well in the past. What would you attribute this to? Is it distribution, designs, distribution? How should one understand this, sir? Thank you. Global competitors, if you would take, like global competitors would be Wilsonart, which is an American-based company, but now they got split into various regions, that's another point. There would be Formica worldwide. There would be an Italian company called Abet Laminati. There'll be regional players in Southeast Asia, South America, you know, in U.K. and Europe. There'll be then more regional players across various parts of the world. That's on the global competition. Next question was regarding what would you attribute to- Sorry, sir. I think it'd be like. Sorry. Please go ahead. Yes. Sir, you have done pretty well on the export side. What would you attribute that to or what is it that sets us apart versus the peer side? Is it designs, sizes, cost? How should one understand that? Of everything we've still not done very well, but thank you for the compliment. I guess it's a mix of everything, right? From, you know, manufacturing, right product quality, supply chain, you know, sales teams in the market, in the international market, working with channel partners, architects, IDs, design. Every single piece and attention and focus to build up the brand, I think it'll be probably bits and pieces of, you know, lot of small and large things and not just one particular, you know, part of the business. Right. Sir, I'll just rephrase the question. I'll put it the other way around. What would be the entry barrier, say, if one has no, cap on, land, labor, and capital, then, what is it that would be an entry barrier for somebody to make a dent, in those markets? Entry barrier would be the brand, the distribution network, would be specification with architects, interior designers, engagement with the furniture manufacturers. It'd be more on the sales, marketing, distribution, you know, piece as an entry barrier. Sure. Sir, would it be possible for you to detail something on that side, specifically on the distribution side or how we are engaging with the end market, specifically on the exports? If you can indicate which are the key regions, say, which constitute like 60% of our export revenues. That would be great, sir. I think it's gonna be a longish conversation. Maybe you can set up a time with Ashokan. Ashok and Samarth can take you through the geographies and the key markets and distinguishing factor and all that stuff. Ashoke, maybe you can take. Sure. My second question was, sir, how do you see the evolution of the company? We understand that the company is getting into different categories. What is the thought process behind it? Is it more bundling or is it the limitation on growth that we see in laminates as a segment which actually forced us to dive into other wood categories? Sir, how does this fit into your overall vision, say, 5 years, 10 years out? In our next corporate presentation, we have said that besides, you know, along with surfacing products in our category, we also want to get into the substrate products. The international business is gonna be still, like, largely only laminates by and large, right? If you look at the domestic piece, because there's a lot of channel overlap in terms of architects, IDs, homeowners, specifiers, dealers, distributors, so we need to have more products in the same channel. Every category has their own, you know, strategy. If you acquire particle boards because you are able to match the decor papers of particle boards with laminates, with compact laminates, you're able to offer a complete solution to customers via plywood veneers, flooring doors, all those similar potential segment. I think in the domestic space, the strategy is to be across the, you know, wood panel segment, because of the channel overlap and customer being common. In the international market, it's gonna be largely laminates only. The wood products are more of a domestic story rather than exports. Yeah. Your next question was limitation of growth. Really there's no limitation of growth in laminates, but you can't at the scale, price we've reached, you know, the growth cannot be like a 30%-40%. It'll be more like a 12%-15% quantity, 15%-18% value, high quantity growth. It'll be a steady growth. I think, that was the idea behind adding plywood and particle boards. This is not so uncommon if you see globally also. Laminate companies who have done well over several years also have trail and particle boards, trail and MDF. They have flooring in their business, so the whole wood panel segment eventually kind of merges with various products and you go and offer entire solution to customers. eeze in 1 question. You use the word to make good of the channel overlap. Possible to give some numbers over here, if you're looking at a market sizing from a retail touchpoint standpoint, what percentage of our touchpoints would we automatically be fungible for the new product categories that we are in? Because when we visit the marketplace, we see laminates is something which is very, very niche, and everything else it's more commoditized, which has changed in recent years. Like to hear your thoughts and say that basically the perception is wrong and basically, when we get to the marketplace, bundling is something which is actually a proposition which is actually implementable. When you say, when I say channel overlap, the dealers are common for all categories. Dealers in our trade would carry plywood, MDF, particle boards, laminates, adhesives, hardware, maybe timber. I meant by that. Clearly, you know, that's a. They are a common point for the contractors, customers and carpenters. If you talk about what's fungible, mathematically all the channel of laminate probably also sells plywood, particle boards, every category. Whether we will acquire all of the dealers or not is a different matter. We still need to work with those dealers to sort our agreements out and work with those counters to sell our products. Mathematically, the counters to sell laminates also sell ply, also sell MDF, particle boards. They all might sell every kind of. most kind of wood product or wood panel products, along with some adhesive, hardware. That's how it works. As far as question about commoditization and specialization concern, yes. In laminates, certain segment of the market is more, really more design, brand, supply chain oriented. Some part of the laminate market is commoditized. In plywood also, plywood probably is more commodity than, you know, laminates. Particleboard, again, has a design element to it. We have to go to architects to get the specification done, to work with the OEMs, you know. Those OEMs also buy laminates from us. It's all kind of interrelated and, you know, there's a significant amount of overlap through the entire value chain. This is helpful. Sir, can I squeeze in one question, last one? Sure. If it's last one, yeah. Yeah. It's the last one. sir, anything specific that we are doing on the technology side, wherein it comes to, say, if I'm a carpenter and I'm very loyal to you on laminates and you want to push the other products as well. Is there something on the last mile loyalty technology that we are doing which would help us to cross-sell the product categories? Thanks. Yes. That's fine. Yeah. We are. Sure. This is helpful. Thank you so much, sir. Thank you. The next question is from the line of Jenish Karia from Antique Stock Broking. Please go ahead. Yes. Thank you for the opportunity. My first question is with regards to the newer segments that we are entering. What kind of utilization levels are we targeting for the initial levels, target micro market that we want to enter? The pricing strategy, will it be at a discount or at par with the market leaders? That would be my first question. On the pricing, you know, we're still working out on what the strategy will be, so won't be able to answer much on that. Clearly the products will do. Obviously, as you know, it's all in-house manufactured. You know, it'll be, it'll be at the bit more premium end of the market, you know, alongside the other national brands. Right, exact pricing strategy is something we'll, we're working on. What was your first question, please? In terms of capacity utilization? Yeah, in terms of capacity utilization, we are looking at around 50%-60% in the first year of operation for the laminate and plywood both. In 2nd-3rd year, we are looking at nearly around optimum utilization of it. Any specific micro market we'll be entering first or this is pan-India from the beginning? We are not looking at doing a pan-India operation from the Tamil Nadu plant. That we're working on will be limited to a certain region of the country, from a logistics freight point. We'll be more like a circling certain parts of the market and focusing on that with this factory. Understood, sir. sir, second question would be regarding the employee cost. Like we have added certain sales force. At what pace we'll be expanding our sales force. Just to understand at what rate can the employee cost grow going forward and what would be the impact on the margins? Like I said in my opening remarks, we have additional employee cost for the Gujarat plant and parts of it is not yet operationalized, which will happen in this quarter. We've already started building the team for the plywood sales. I believe most of the team members would come on board within this quarter. Post that we think, you know, not significant increase on that front will happen in the coming year on account of plywood. We will start building the teams for particle boards in the next financial year, probably there we'll have people and no sales for a certain period. That's on the how the people story will look like. As far as the costs are concerned, I think with revenues rising, the costs should get, you know, normalized over the next maybe two quarters or something of that sort. Understood. Thanks, sir. Sir, one last question. If you could help with the geographical sales mix, how much of your laminate sales currently would come from east, west, north and south regions? I think maybe we'll touch base this on a one-on-one basis. Yeah, no problem, Sudhir. Thank you so much and all the best for the future. Thank you. The next question is from the line of Nikhil Agrawal from VT Capital. Please go ahead. Good evening, sir, and thank you for the opportunity. Sir, apologies for any repeat questions, since I missed the beginning half. I just wanted to know, like, how has the international demand been and what volume and value contribution was there in Q3 versus what it was in FY22? Demand. Yes. Demand, if you look at the numbers of international business, 9 months on 9 months, our revenues are up by about 9 odd%. Sorry, 9 odd%, that's right, in laminates. Demand has been pretty okay in certain markets. Certain markets we've announced this earlier, we struggled in Q2 and part of Q3, where there were currency problems. As we talk right now, you know, it's more like a mixed bag. Some markets are doing well, some are little bit challenging, but as usual. I think we haven't seen any significant, you know, challenges besides what we saw already earlier in Q2 and part of Q3. To answer your next question in terms of contribution, the international market has contributed around 45% in terms of value and, around 45% in terms of laminate in volume. this was in, Q3, right? For the nine months, it is 45% the value. Okay. What was the number in FY22? Yeah. Interesting. It was about 50 odd%. Okay. Got it, sir. Sir, the drop in realizations quarter-on-quarter, is it largely because of freight costs or is it because of the product mix or anything, any other reason? It's a mix of both. Actually the last year we did increase the prices because of the raw material inflation. In this year we didn't do any price increase. It is a mix of both the price increase which we did last year and improvement in the value mix. Yeah. Answering your question of freight. Freight is not included in the prices. All additional freight which came in the international market was charged as a surcharge to the customers, and with reduction has been passed on to the customer as a benefit. We agreed on a baseline with customers, you know, on a pre-COVID cost, and post that, whatever increases came in was a separate line item as a, as a surcharge. With reduction now, that's a, you know, that's a, that's a right back they're getting. We're not charging them any surcharge or charging them reduced surcharge, basically, agreed baseline. That's what we did. That's not forming part of the price. The price is a function of price increases and value mix. Okay, great. Just one last question. This is on the particleboard market in India. You said earlier that imports are happening in the particleboard segment. What percentage of the market would be that? I believe the market size in India is around INR 3,000 crores currently. What percentage of that the imports are taking place out of that? According to our estimates, the market size is approximately around INR 5,000 crore. Whatever data which is available in the public domain from the government side, it was somewhere around. Last year, it was somewhere around 15%-17% was the import. Even though earlier than that, it used to be higher, but last year it was like 17%-18% the import was there, approximately. Okay. like, you as a company, Greenlam is not much concerned about these imports because these are the lower quality products, right? No, these are not the lower quality product, but these are the bare board which are mostly imported, and our focus will be on the pre-lam particleboard. Okay. Okay. Got it, sir. Thank you so much. That's it from me. Thank you. The next question is from the line of Rahul Picha from Multi-Act PMS. Please go ahead. Yeah. Hi. Thanks for the opportunity. I had a broad question on the export market. Wanted to understand what are the key drivers of demand in that market? Is it cost competitiveness? As a country, we are more competitive right, now, that is why the demand has been there over the last few years? There has been any other country which, you know, used to earlier export a lot and that has kind of vacated the market or any other similar kind of trends that are playing out in the export segment? All it's a mix of, you know, it's a piece of everything. There's no one single element which goes into this. Our sustainability on the export market is not necessarily on cost-efficient manufacturing only. It's also a lot on marketing, distribution, our sales teams in various international markets represented through subsidiaries and few directly are working in the market towards demand creation with architects, IDs, you know, joineries, cabinet companies, OEMs, kitchen producers, et cetera. I think it's a mix of everything. What's happened over the last several years, one could say that international competitors or several laminate companies who are having manufacturing abroad have not necessarily added any meaningful capacity. A lot of growth of the market, you know, probably came to us. That could be one way to put it, but this depends on geography to geography. Yeah. Has someone gone out of business? Yes, you know, maybe one or two companies have gone out of business, but not that they were very significant in the whole, you know, scheme of things. Okay. Sir, within exports, our business is largely on our own brand or are we doing any white labeling kind of? Most of it is on our own brand. We don't do, you know, we don't work for some other brand. We used to do that several decades, like a decade and a half back, now it's all our own Greenlam flagship brand and our sub-brands. It's with our own brands. Okay. Okay. Got it. Thank you. Thank you. The next question is from the line of Udit Gajiwala from YES Securities. Please go ahead. Yeah. Thank you for the opportunity again, sir. Just wanted to check that, you mentioned that we might have to take price correction in few pockets for laminates. Is it only because of the raw material cost which is coming down? Secondly, on the blended prices, do we see further contraction because our new unit of Gujarat is more towards the, you know, mass market product. Would that impact blended realizations and the margin? While Gujarat will be on the mass market, the Naidupeta plant is actually on the opposite spectrum where you have the larger size laminates and more value items are gonna be produced there. I think eventually there'll be a setoff as far as the per sheet, per board realization is concerned. There could be a month or a quarter here and there, but by and large, you know, we are driving both volume and the value mix. I think probably it kind of gets set off. On the prices, I said in certain segments, you know, there could be a minor, you know, correction. I just said that, you know, yes, there could be some correction in certain segments of the market, but nothing very significant as we envisage right now. Okay. just lastly, you know, when we say value-added products, could you quantify that? What would be the revenue mix that are taken, and what are those margins of value-added products? I can't do that right now, Udit. Okay. Individually, it will be difficult, Udit, also in terms of that to exactly pinpoint the what is the margin difference in terms. Sure. Sure. Thank you, sir. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Saurabh Mittal for closing comments. Thank you, friends. Thank you for your time and attention and for your, you know, several intelligent questions. Ashok Sharma and Samarth Agarwal are available for any further queries or questions to be responded. Ashok Sharma will kindly talk to the, you know, participants who, whom we agreed to do an offline conversation. Thank you once again. Have a great evening ahead. Thank you. Thank you very much. Thank you. On behalf of Greenlam Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.