Ladies and gentlemen, good day, and welcome to Greenply Industries Limited Q4 FY23 post-results earnings conference call, hosted by SMIFS Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Saurabh Ginodia from SMIFS Limited. Thank you, and over to you, sir. Yeah. Thank you, Aman. Good afternoon, everyone, and thank you for joining us today on the Greenply Industries Q4 FY 23 post-results earnings conference call. In the panel today, we have Mr. Manoj Tulsian, Joint Managing Director and CEO, Mr. Sanidhya Mittal, Joint Managing Director, Mr. Nitin Kalani, Chief Financial Officer, and Mr. Gautam Jain, AVP, Strategy and Investor Relations. Before we begin the call, I would like to state that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in the results presentation that was sent to you earlier. May I now invite Mr. Manoj Tulsian to begin the proceedings of the call. Thank you, and over to you, sir. Thank you, Saurabh. Good afternoon, and a very warm welcome to everyone, and thank you very much for joining us today to discuss Greenply's operating and financial performance for Q4 FY 2023 and full year FY 2023. We began the year on a very positive trajectory in our plywood business, with a slightly subdued performance in the second half. However, concluded the year on a satisfying note. We have surpassed our original estimate of 15% value growth discussed during the beginning of the year by achieving overall sales growth of 21% and a volume growth of 15% in FY 2023 versus the previous full year. On the margin front, we achieved an adjusted core EBITDA margin of 10.4% in FY 2023, a slight improvement from the previous year. This has been achieved despite ongoing raw material cost escalation, particularly in timber. Our working capital days stood at 36 days for the year. At the end of the financial year, our consolidated net debt amounted to INR 632 crore. We were able to maintain our overall guidance on net debt equity ratio to remain within one, with large part of our investments completed and projects commissioned, commissioning completed. The recent expansion of our plywood capacity at Sandila, commissioned at the beginning of FY 2023, is now operating at almost 60% utilization level in Q4 FY 2023. As the utilization of this unit improves further, it will support our overall growth. Looking ahead, we maintain a positive outlook for the plywood industry, driven by the ongoing recovery in the real estate sector and consumer shift towards the branded products. While the upward trajectory of timber price is a concern, we remain confident in achieving double-digit volume growth in our plywood business, which we have been giving as a guidance in the last couple of years. Furthermore, we anticipate some improvement in our margin profile also. We are committed to capitalizing on market opportunities and sustaining growth in the face of these challenges. Our Gabon business has continued to face challenges, although we saw some recovery in demand in the last quarter. In Q4 FY 2023, we achieved the sales of around INR 42 crore. At Greenply, we continue to be optimistic, supported by resilient demand in the residential sector, our strong presence in the premium category, significant investments in high-growth areas, and the continuous enhancement of our brand value. With the commissioning of our MDF segment, a major growth driver, we expect much higher growth trajectory for the company in the next few years. With this statement, I would like to hand it over to Sanidhya to update in larger details on the MDF business. Thank you, Manojji, and good afternoon to everyone on the call. We are proud to announce a significant milestone achieved at Greenply with the successful commencement of commercial production of our MDF unit at Vadodara, Gujarat, on May 5, 2023. The achievement was accomplished with a record time of 15 months, making it the fastest launch in the entire wood panel industry ever. The initial dispatches received positive responses to our products from all the customer segments. The MDF unit will cater to all product categories and subcategories within the Indian market to meet the diverse needs of our customers. Currently, the production is focused on interior grade, exterior grade, and HDMR, but as the unit stabilizes, we'll gradually expand production into other categories as well. We have completed all our brand building exercises, and our sales team is strategically positioned across different regions. Additionally, we are actively building our dealer distribution network in various locations to ensure efficient product availability and customer satisfaction. This achievement underscores our commitment to technological advancement, operational excellence, and meeting the evolving demands of the market. We are confident that the MDF unit will play a pivotal role in driving our growth, expanding our product range, and solidifying our position as a leading player in the wood panel industry. With this perspective, I would like to open the floor for Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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 a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who wish to ask a question may please press star and one at this time... The first question is from the line of Pranav from Equirus Securities. Please go ahead. Yeah, good afternoon, management. I just wanted to understand on your EBITDA margins for FY24 and FY25. Now with the MDF also becoming operational, so are you expecting any initial losses in that business? And what kind of consolidated margins we can work with for next two years? That was my first question. Hi, Pranav. See, in the plywood segment, you know, I think we will be on a similar margin trajectory. We, of course, try to improve further, but I think our focus at this point of time, and that's how we have discussed even at our board level, is that we must try and achieve a double-digit volume growth for the next few years, which is also backed on, you know, which I always maintain, is that there is a shift which is happening from the unbranded to the branded segment. So, volume growth is important, and at the same point of time, we are also looking at can we further improve our margin at this point of time on the plywood business. As far as MDF business is concerned, as we maintained in the last call, this is our first year. But despite being first year, where I think our utilization may be to the extent of 40%-45%, you know, the margins cannot be in the range of what the established players are today earning, but it is definitely much better than 10%. In which case, the blended margin will slightly look better during this year, and this will further improve when the utilization of MDF business goes up to the level of 75%-80% in the next year. So we see a margin improvement, you know, taking place for the next 2-3 years for sure, at the blended level. Okay, sir. And, sir, my next question was, can you throw some light and discuss the strategy on your JV in the furniture fitting segment? So, what is your thought process in the same, and how do you want to take this forward, let's say, over next four to five years? See, it's very early days. You know, as an organization and also our board, we have been discussing that we must look at you know, a few products which completes you know, our overall basket, and which gives us the leverage in terms of you know, the brand value what Greenply has created, and the distribution network, which is the next strength of Greenply, that how do we leverage this, right? And we were always looking at some opportunity outside the panel industry, where we get a very strong partner. So fortunately, you know, this hardware business, where we see that there is a larger opportunity, the way the market is also shifting to the high-end product category, we got a good partner. We felt that, you know, this partner is serious because, you know, they also want to set up a manufacturing facility in India, along with the Indian strong partner. A lot of these things looked good from both sides. Very early days, but I think in 2-3 years' time, this business will start doing and showing good results. It will help us in overall, you know, leveraging our, the brand strength in this country and the distribution network, which we already have. Okay, sir. Sure, sir. Sir, any numbers you will want to share on this segment, any margins and everything? Too, too, you know, too early, Pranav. I think first things first, we are looking at, you know, now that we, we are still yet to find the, I think the, the final, JV papers. Maybe today, tomorrow, or maybe in a week, Nitin will be able to tell you. And, once that is done, then our whole focus again would be to see that, you know, how fast, one, we are able to create a team jointly, and second, you know, again, establishing this manufacturing facility. These are the two tasks, first thing, and, you know, then in between, of course, as time goes by, in the next 6-8 months, we start looking at, the sales plan and other things. But I would say that, you know, first two years, we should not be looking at anything very great coming from this business. But from year three, you know, looks like once we have a full manufacturing facility set up here, and also that, you know, the, the team is well-trained, we will be able to see some good traction from this business also. It's a high EBITDA business, much better than, you know, what we are earning in plywood. And for sure, overall, this will help us going forward. This will also be a good learning for Greenply as a company, because this is a very high engineering precision product. And you know, this, this is a Turkey-based company, very systematic in their approach. And you know, they, they have a great R&D center. I think there will be a lot of cross-learning also, which also we are looking at, as one of the objectives going forward for our organization to, you know, look at our future growth, prospects. Okay, sir. That's it from my side. Thank you. Thank you. Thank you. The next question is from the line of Udit Gajiwala from Axis Securities. Please go ahead. Yeah. Thank you for taking up my question, sir. So firstly, you said that volume growth would be in double digits. Could you highlight some numbers that what kind of volume growth you are looking at for 2024 and 2025? See, I would maintain that we are looking at a double-digit growth. 10%-12% volume growth is what, for sure, we are trying to achieve, you know, in our plywood business, and it's consistently we are able to do that. I think it will be good numbers. Looking at the type of challenges in plywood business overall, where the growth is, you know, is sub-optimal. It's mainly, I would say, you know, distribution and again, the shift of consumer preferences from the unorganized to organized. So we are banking on these two things. Of course, we are building up our internal organization also, you know, and, so looking at these two, three factors, we assume that we should grow at 10%-12% for the next two, three years on the volume front. Got it. And sir, could you throw some light more on, you know, the timber cost escalation? What has been the same in Q4, and how do you foresee it in next fiscal? Well, very difficult, you know, because since I've joined, the timber cost is today, if you really look at in the three years time, the timber cost is more than a 100% increase. And every few quarters I get to hear that: yes, you know, now the timber production will improve, the new crop will come and the prices will drop down. But it has not happened in the last four or eight quarters. So and now I hear that this year also this challenge will continue possibly next year. The prices will again come down when the crop is better. So that's what we are assuming, that for this fiscal year, you know, it will possibly continue at these levels. It's going to be challenging. Got it. So, sir, on EBITDA margin front, like you said, you'll be able to maintain at these levels. So is it possible that you could change some product mix that you are forcing in the market with the shift happening towards organized? So could that EBITDA margin improve or because of the RM pressure, you are assuming it to be at similar level? No. So two things, I think, you know, very, very good question, but on the RM side, for sure, you know, I'm not seeing that we will get much benefit. That is point number one. Second, we are already a very strong player in the premium segment. And, you know, whatever we may say, but there is today a pressure on the premium segment. So I am not seeing a big growth, you know, within my own distribution, which goes in favor of the premium segment. So, when I don't see that, I don't even get that leverage. The third leverage, of course, is growth. So, you know, once I have the growth, I get some advantage of operating leverage. That's what I'm trying to see, if, if that is able to mitigate my, you know, if, if there is some increase in cost on the raw material side. Market is slightly subdued, so we are not even talking about the price increase also at this point of time in the market. Got it. And so just last question, if I may squeeze on the net debt trend that is INR 632 crore. How does it move in coming fiscal and any CapEx due for this year, or that all is done? No. So, I think we still have a committed cost of around INR 50-60 crores, which is on the MDF side, where the cash flow has still not taken place, but they are committed costs. So, the cash flows will go during this year. On that front, maybe even the capitalization to that extent will also happen maybe during the year. It might be showing as a CWIP part of it. Second, on our regular plywood business, we would be looking at the, you know, maintenance CapEx of around INR 20-25 crores. These are the two plans which is there from the CapEx front. In terms of debt, I think, you know, keeping these two also in mind, this looks to be our peak debt. Okay. So repayment we may assume from 2025, if not 2024? No, there are repayments in 2024 also. Maybe Nitin can, you know, exactly share the number afterwards, but I think there are repayments to the extent of INR 40-50 crore during the year. Yeah, yeah. So, we'll start repaying the MDF loan starting October, November. Okay, sir, this is helpful. Thank you so much. Thank you. Thank you. The next question is on the line of Nikhil Agarwal from VT Capital. Please go ahead. Yeah, good afternoon, sir, and thank you for the opportunity. Sir, just a clarification... Hello? Yeah, Nikhil, good afternoon. Yeah. Yes. So, just a clarification. You had said that you'll be maintaining about 10% margin from the MDF segment this year, right? No, no, no, no. 10% margin is for the plywood business. The MDF business today operates on a margin which is in upward of 20% for the established players. Okay. Ours in first year, where the utilization will only be around, let's say, 40%-45%, we might end up doing a 14%-15% margin. I'm just giving a, you know, a ballpark number. Mm-hmm, mm-hmm. It depends on how the market will remain and it is how the prices will remain. But we still see that, you know, we will be in that profile, if the present situation is being maintained for the full year. Okay. Got it. The blended margin will be slightly better. Okay. The blended, you mean, MDF as well as plywood? True. Okay. And, sir, you in the last call, you had mentioned that, you'll be targeting INR 300 crore of revenue from the MDF segment, so in FY 2024. So you still maintain that? Look, you know, as I said, price for sure is something which we'll have to see how it pans out. How we are looking at is a volume of around 100,000 CBM during this first year. Okay. Because it's a ramp-up period, like the way Sanidhya mentioned, that first thing first, we were able to, you know, do the commissioning of the plant in the record time. And now the next challenge, which as an organization we have taken, is how fast we can ramp up, and how fast we can bring all the product lines, you know, which is there in the market. Okay. Those are the things which we are looking at. Keeping that in mind, you know, our internal estimates are that, if we do around 100,000 CBM in the full year, it will be a great sample. Okay. If we do 100,000 CBM, then the numbers can range between, you know, anything around INR 275-300, Sanidhya? Yeah, I think it depends on the product mix. You know, since we are a new player and, you know, we will be supplying all the types of products, and we'll slowly start focusing on the value added, and we'll try to increase our value-added mix. I think the top line will be judged on what value-added products we are able to sell. Because, you know, products today are ranging in the Indian market right from almost approximately INR 27,000 a CBM to INR 30,000. You know, so it really depends that what volume are we able to sell in which category, so that will define our top line. I think we should, we are committed to producing 100,000 CBM this year, and we're committed to making sure that, that sells. Yeah. Obviously, in line with the competition at the realization levels they have. Yes, and within this 100,000, you know, what we are also looking at, the value-added products, how fast we are able to produce and stabilize that. So the more we are able to do it, the better can be the turnover, the better can be the margin. Okay. Got any light on the realizations currently? I mean, average realizations, any roundabout figure? I think it's too early for us to comment. Okay. We are trying to make sure that, you know, we are priced because, you know, Greenply are a premium brand. We are trying to price ourselves at par with the competition, and we're trying to make sure that we're doing everything right to get the sales network. Obviously, you know, we are located in that, so we want to capture the west market. We've, you know, positioned our team also in that fashion that we are able to capture the closer markets to maintain our profitability. Okay. Sir, little bit on what you said just now, like, what is the scenario in the western market? In the West, like, are imports flooding the market out there as well as we've heard in the South? Imports are affecting West and South, primarily. In other parts of the country, imports are not there. But every grade is not being imported in India and every size are not coming in India. And also, if you see the density of the imported product, it is slightly inferior. So, you know, a lot of things are not possible in the imported product. So, you know, we are trying to focus more on exterior, more on HDMR, which is not imported. Mm. We're trying to leverage our brand name in a big way, and we're trying to create more and more customers who can keep buying our product sustainably from us. Times ahead when, you know, when imports have opened up, it is difficult, but we are confident of the volume we are committing. Okay. Got it. Sir, just one last question. Sir, your cost of raw materials, quarter-on-quarter, they've fallen down. So if you could, help in explaining that, how is that possible? Cost of? Materials consumed, as a percentage of top line, and even in absolute numbers, it's fallen down, on a quarterly basis. No. Are you looking at the plywood business or- No, I'm looking at the consolidated numbers. Consolidated numbers also have today, you know, Gabon and other businesses. Mm-hmm. I would say that, you know, we should look at the Gabon business separately, because that is another very different RNC and very different business. Okay. Got it, sir. That's it from me. Thank you. Thank you. Thank you. The next question is from the line of Achal Lohade from JM Financial. Please go ahead. Yeah. Good afternoon. Am I audible, sir? Yes. Yes, Achal, you are, you are. Yeah. Yes, yeah. Thank you. Sir, a couple of questions. One is, you know, first on the plywood business. Yes, I mean, we have double-digit growth for FY 2023 as a full year, but if I look at four-year CAGR, you know, prior to COVID and where we are, our CAGR is substantially lower than the peer. Now, what I'm trying to understand, A, you know, have we gained market share? Have we just maintained market share? Or is there any marginal market share loss we have seen over the last four years? I'm trying to figure out. See, Achal, you know, I'll tell you two things. One, how we have to look at is that, where do we stand as an organization today? So every organization have their own, you know, challenges, capacities, where are those capacities? You know, and where is the demand coming, the product lines. So, within that same industry, also, different companies have a different way of dealing. Our thinking process and our business plans are different than maybe many of the other companies which is there in the same business. So what we have to see is whether we are able to deliver basis, you know, the business plan, what we make. That is point number one, which we have been able to do in the last few years. Second, when it comes to market share, I will presumably say that, you know, all the branded goods players are gaining market share of the overall market. Because if you really see whatever we as an organization have also grown in the last 2, 3, 2 years, I would say mostly, is not the type of growth which has happened in the overall plywood industry. So the branded goods players are gaining this market share of the total pie, and it is a very healthy sign. ...Okay. Can you elaborate a bit with respect to the premium and non-premium mix for us, for the industry, and how it has changed over the last three years for us? I don't have the number for the industry, but, you know, I would say that, in the premium segment, just one second. Nitin, can you tell me exactly the numbers? Where we stand, Nitin, for the last year? One second, please. We are almost at around 60%. Yeah. Okay, and also it is between 50/50- Premium, premium would be 51% of our overall volumes, as against 54% in the prior year. Yeah. So we are also growing in the mid segment, okay, because that is where the mass volume increase is taking place. But, we are also committed to make sure that, you know, Greenply maintains its brand leadership through its, through continuously launching, products in the premium segment. That's what Greenply is always known for. Got it. Sir, you talked about volume mix, can you just give some sense about the value mix as well for FY23 and 22? Value wise, we are at, I mean, last year we were 64%, premium brand. This year we are at 61.3%. Understood. Thanks for that clarification. The second question I had, can you help us understand what is the A&P spend in forward to FY 2022 and forward to FY 2023 in absolute numbers, sir? A&P spend? Yeah, advertisement spend. A&P spend, we have done in FY22, we were close to around, if I'm not wrong, 3.8%, and this year we were at around 3.1%. Possible to give for the fourth quarter as well, sir? Fourth quarter numbers, I don't have, I believe. It's 1.6% for this quarter, and, corresponding quarter is at 4%. 5.6%. 5.6%, right? Yes. Now, the other question I had with respect to MDF business, is that can you give us some sense in terms of, you know, what are the imports? Like, you mentioned that, you know, not all grades are imported. What's the typical import mix you are seeing, and, you know, how do you see this evolving given the freight rates have come off, global MDF prices are down, and, what's the expectation on the ADD front? You know, how soon, what quantum can we, the industry store possibly look at? So I think, you know, at Greenply, we are just looking at the challenges as the challenges. If ADD comes, obviously, we'll try all our efforts and, you know, we'll put all our representations in place, and we'll try to make sure as a company that ADD comes, and it's going to be a very beneficial scenario. But for now, for our planning, we are considering that there will be no ADD. The scenario will be as is, and we need to tough, sail through in the tough time. So in the tough time, the major challenge is in the low-density interior E2 which comes into the country, and mainly in West and South. So we are trying to build a market in the West, we're trying to build a market in the South, we're trying to build a market in NCR, which is the largest consuming market for MDF, and obviously in the other parts of the country also. And, you know, we are trying to focus that we produce more of exterior and more of HDMR, where the challenges in import is very, very low. Because that product is like if import is 100, my estimation is that 90% is interior E2, 10% is all other categories put together. So, you know, we are trying to grow in the value-added segment where we can make better top line, where we can make better realization, and we can leverage the word Greenply and the brand Greenply, which is our strength, and, you know, sail through these tough times. Once ADD is in place and, you know, the government realizes that it needs to protect the Indian manufacturers who are investing on facilities in India, once that happens, you know, we'll definitely see great numbers like how we were seeing in COVID times with all the competition. Got it. We are also in our business without, without the ADD thing, okay? That's what we are plainly looking at, at this point of time. ADD will definitely, the industry, whole industry, I understand, is working on that. Whenever it happens, it can be definitely beneficial. And as Sanidhya is saying, ultimately the imports today is only the interior grade. And that's what we maintain, that we will try to see how fast we can ramp up, you know, beyond the interior grade into our exterior and HDMR and the other value-added products. That's, that's a winning statement for us, that how fast we can ramp up and stabilize this, production. Also one more thing, as a company, we do not have any export liabilities on this plant. So, you know, we are not bound to keep exporting at a lower realization. So, that gives us an advantage that, you know, we have no export liability. So, you know, we will want to focus only on the Indian market and grow that. However, we might export 3%-4% of our production just to have an alternate backup for our business. Got it. Just at PBT level, what, at the current price, what utilization do we break even? Sorry, come again. At what utilization does this MDF plant break even, assuming the current price of current realization level? I think it should be the cash breakeven can happen around 45%-50% utilization. So, you know, it will just be as, as Sanidhya said, it will depend on the product mix, which we are able to sell within this 100,000 CBM. But there is a possibility that, if the product mix is slightly better, we'll be able to, for sure, cash, cash breakeven, by selling 100,000 CBM. Got it. And just one last clarification, if you could, sir. In terms of the total market size for the West and South markets, where we would be far more competitive, given the freight advantage, can you give us some sense, you know, A, the size, and B, how it is growing? Have you seen some flatness out there as well, or it's growing pretty well? Sorry, can you please repeat the question? South and West, he's saying. South and West- Sorry, could you please repeat the question? Yeah. So South and West will be far more competitive given our location, right? Or West and Central rather, instead of South. So maybe you could elaborate which pockets we will be far more competitive because of the location, the current manufacturing location, and what the size of that particular catchment area. So, I mean, our plant is very strategically located. Obviously, the West and Central will be my primary focus. But in South, Greenply has its own set of loyal dealers, and South is a huge consuming market, so we are also very well placed, and we have already launched our product in markets in Karnataka, in Andhra and Telangana. In other south states, we're not focusing, and entire West we are focusing, and NCR is one of the largest markets of MDF. So for us, NCR is also a very, very viable market when we look at the freight. Obviously, the market competition in NCR is huge because almost all the top players have a facility in and around NCR. But Greenply has a strong set of loyal dealers and distributors, and that is almost 30% of the network. 70%, even in the MDF category when Greenply has come, I think we've received an overwhelming response from the dealer-distributor network, and we are already transacting with a lot of customers. So I think, I don't see sales as a challenge. We'll be able to sell through. Obviously, time that import is open, so the realization might come under pressure because more and more capacities will come in. But we will be absolutely in line with the competition in terms of the prices. We don't want to sell cheap. Understood. Thank you so much, I will come back to you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. If time permits, you may join the queue for any follow-ups. Thank you. The next question is from the line of Parth Bhavsar from Investec India. Please go ahead. Hello. Hi, Parth. How are you? Yeah. Hi. Hi, sir. So thank you for the opportunity. So my first question pertains to the EBITDA margins. So we see that your EBITDA margin improvement was somewhat led by lower A&P spends during the quarter. You are not audible, sir, Parth. Can you please come closer to the mic? Hello. Am I audible now? Yeah, yeah. Yeah. So in terms of your EBITDA margins, sir, we believe that the improvement during the quarter was partially led by lower A&P spends, which was 1.6%, as you earlier guided. So just wanted to know, like, sir, what would be the quarterly, you know, run rate? Is this a normalized level, or will it go back to 3%? You are saying for the A&P spend, right? Yeah, A&P spend, yeah. The A&P spend for the full year should be in this range. But what happens is that you can always see a quarterly fluctuation that, as per the accounting standard now, you have to book the expenditure in the quarter only when you are actually incurring the expenditure. Okay. So the earlier accounting standard system was that if we know that, let's say, we are going to spend a good amount of money in quarter four, we used to keep a consistent provision throughout the year. But now the accounting standard does not allow it. So they say that only you have to, whenever you spend, you book it. Okay. But for the full year, we should be in similar lines. You may always see the fluctuations happening between quarter to quarter. Right. So the Q4 FY 2022 number, the 5.6% spend, this was related to the LSG thing that we sponsored? No, this, this year, yes, mostly it was related to that only, this year. Okay. Okay. Sir, my second question- Previous year, previous year, we had LSG also, and we also had done a TV commercial in the last quarter. Okay. The previous year spend was high in quarter four. Okay, got it. And so I just wanted to know about the MDF capacity in FY 2024 for domestic players, and also, like, how much... What is the capacity, you know, other players are adding over FY 2024 and 2025, if you could help? I think we can share that data with you. We don't have it on our fingertips. Yeah. For the listed entities and the larger players, yes, we do understand that Century is coming with a large capacity. Greenply is adding another line. Action is due to start its new line, I think, in another two months. So we understand these players because, you know, their data is publicly available. The smaller players are coming in also very fast. I think their data is collated. We can share with you the data we have, and also learn from your community. You know, you guys- Right ... usually have better data than us. Yes. Our data also flows through you all well. Fair enough. And sir, just wanted to know, like, I guess you guided that Sandila plant had operated at 60% utilization, right? ...Yeah, yeah. So sir, here on if, you know, this one, this plant, it operates at 100% utilization. Do we expect that, you know, since we are moving to our own manufacturing products versus trading, I, I believe that, you know, your share of trading and outsourced volumes would go down. Do we expect any margin expansion? Can we see that? See, Sandila plant, definitely the margins will be slightly better than, you know, the other plants which we are operating. Some of the other plants, not all the plants. Okay. So, yes, there can be advantage, but, you know, this is not about trading our own manufacturing because if I am talking of a 10%-12% volume growth, there is a sizable overall turnover growth which will happen. Mm-hmm. So, you know, partially, it will come out of the Sandila plant by higher utilization, and partially, maybe, you know, we'll be depending on some of these new facility like, Hapur and, and few more facilities which we are looking at, even in South, in terms of, the tie-ups what we have. So it will be a mix. The growth will get, you know, catered to through both our Sandila additional utilization, as well as, these trading platforms, what we have. Okay. Okay. Okay, perfect, sir. Those are my questions. I'll come back with you. Thank you. Thank you. Thank you. The next question is from the line of Rupesh Tatia from Intelsense Capital. Please go ahead. Hello, sir. Thank you. Thank you for the opportunity, and congratulations on, on for listing of the MDF plant. Rupesh, your voice is not very clear, Rupesh. Hello, sir, can you hear me now? Yes, we can hear you. Yeah, we can. Okay. Yes, better. Yeah, sir. I was saying, sir, congratulations on successful commissioning of MDF plant. Waiting. I am... Just a minute. Are you using the handset, Rupesh? Come in and- Yes, yes, I am using the handset. Yeah, it's better now. Little better. How about now? This is a better reception area? Yes- Hello? Slightly better. Yes. Okay. Okay. I was saying, sir, congratulations on MDF plant commissioning. Thank you. Yeah. My question, sir, is based on raw material supply in the western region. Is there a possibility for a second plant, either by you or a competitor in the western region? This is my question number one. So I'll answer this question. You know, in the region where we are, our closest competition, not in terms of the end product, but our closest competition in terms of buying raw material will be Merino. The good thing is that we could start our plant five months ahead of them. We were able to establish a buying relationship with the farmers and with the local community before they could establish. That was a big advantage for us. Plus, there's also JK Paper mill, which is about 300 kilometers from our location, which also is a major consumer. Given three of us, in the short run, I really don't see a space for another large MDF capacity coming there. But we are working very, very hard to ensure that our raw material is available sustainably. In the last 2 fiscal years, from the time we had purchased the land till we actually established our plant, we already started the plantation drive with the farmers. Very proudly, I can tell you that we've done over 2 crore saplings only in the last 2 financial years in that region. At full capacity, when we run our plant, we need about 80 lakh trees a year. So, you know, more than what we need is what we are planting in that area, and we are working with the local community and trying to make sure that, you know, with the industry they also thrive. It's a win-win for everyone. Started to ensure- Our raw material cost to invest is more or less aligned with all the manufacturers in the north. Yeah. Thank you. Mr. Tatya, to ensure that all the participants are addressed, may I request you to join back the queue for any follow-ups? Thank you. The next question is from the line of. Please go ahead. Yeah, good afternoon, sir. Thanks for the opportunity. Sir, I just have two questions. Sir, on the JV side, are we not able to, you know, address the issue? Because if I look at the volume on JV on a YY basis, it is still on the declining mode. Which JV are you talking about? Sir, the existing JV at Bareilly, which we have two JVs. So on a YoY basis, there is a dip, you know, in the volume. Yes, yes. So, you know, there we have faced some challenges in terms of, you know, ramping up part of that one facility, and that has continued. So we are trying to resolve it. Okay? We have not been able to get the best of the traction from these Bareilly units, if you, if you truly see. Thank you. Dhiral, please join the queue for any follow-ups. Also, participants are requested to limit their question to one per participant. If time permits, you may join the queue. Thank you. The next question is from the line of Aasim from DAM Capital. Please go ahead. Hi, good afternoon. So just, sorry if this was addressed earlier, but I just wanted to understand that if your volume growth expectation for plywood is, say, double-digit, 10%-12%, would revenue growth still be lower than this since premium segment is under pressure, plus you don't have leeway to take price hike? And also, if you could just talk about what would be the ESOP cost component in FY 2024. Would it be same as FY 2023? So, you know, in terms of the ESOP thing, I think Nitin can tell you. It should be in the range of maybe for the full year, INR 4.5 crores or INR 5 crores for this year. Nitin? Yeah, yeah, yeah. That's right, number, approximately INR 4 crore. ... INR 4 crore. For this year, you know, as of whatever has been granted, right? This is the grant which is given, right? Yes, yes, yes. Any fresh grants, if it is given, then, that may bring in additional cost. Your first question? Was basically revenue growth would be lower than volume growth. So at this point of time, I'm, I'm assuming that it should be similar, because in quarter four, we had taken a price increase, but, you know, we could not actually pass on the same. This year, we will try to see that if we are able to, you know, pass on the same, though still we have not been able to do it till the month of May. So the additional, you know, schemes which we are going on. So that is one protection, you know, if we are able to do that. And second, of course, we -- as I said, that we are, we are quite determined that we should be maintaining our premium segment, share of business within our overall pie. So these two factors are there. At this point of time, I would say that best assumption is, you know, similar volume growth and, value growth. Thank you. The next question is from Rajesh Ravi from HDFC Securities. Please go ahead. Hello, am I audible? Yes, Rajesh. Yeah. Hi, sir. My question pertains to first on the Gabon subsidiary. Could you throw some light on what is the outlook for the same, revenue and margins? But probably, if you look at Gabon, you know, last quarter was better. We had some good order book, and the real worry of Europe also slightly subsided in terms of, you know, their manufacturing facilities in this post the Ukraine war. So we got some better traction. If you really look at this quarter, I think this business is now we are actually measuring on a quarter-to-quarter basis. This quarter, we have a decent amount of orders, which will be helping us to do a similar number as of Q4. We have capacities in place. If things stabilizes, things improves, then for sure, you know, we can even do better numbers there. We have tried to see wherever we are able to cut down on costs and other things, rationalize those areas, which we have already done. So, but, you know, giving you outlook for the full year or something, I can at best, at this point of time, say that maybe we will replicate our quarter four performance during this year, for sure. It's much, visibility is there. Thank you. The next question is from the line of Govind Lal Gilada, as an additional investor. Please go ahead. Good afternoon, sir. Thanks for the opportunity. So regarding this. Hello? Yeah, yeah, yeah. Go ahead. Are you able to hear me? Yes, please. Yes, we can. I want to look at the longer term outlook, sir, on MDF. So the margins, there are a lot of volatility is there. So what kind of margin is sustainable for, let us say, 2, 3, 4 years? What kind of margin band it will be, MDF? I think there are a lot of external scenarios which are actually defining the margin, you know. It totally depends on, I think, somebody asked about the ADD, you know. So, you know, if ADD comes in, the scenario totally changes. If ADD is not there, and import, you know, the sea freights remain low, the scenario is different. If the sea freight increases again, the scenario changes. So I think, it's very, very difficult to predict that where the margins will be next four years. But we are very confident that, you know, the organized segment, you know, the Greenp anel or Century, you know, we in our, in our margin, in, in everything, in our realizations, in everything. So the... It's very difficult. I don't think it will be right for me to comment on what will be the margin in the next four years. We'll be in line with the competition, and we are very confident that we will be able to sell our production as ramped up at the scenario of the market. We will be matching the industry level. You know, we have similar facilities, the best of the line, all the product lines, which is there with any of the established player today. So, that the derivative would be that where is the industry heading to? The outlook can always be given as a very positive outlook, but I would say the best way to look at it is that, you know, we have to go with the flow. And, wherever the industry, the top three, four players are heading to, including us, we all will be, possibly in the same range. Thank you. The next question is from Arun Baid from ICICI Securities. Please go ahead. Hi, sir. Just one clarification here. We have already started our MDF business. We already have a dealer network in place. What is the kind of working capital or the debtor days you're working there, and what should we model from our perspective for this business? And number two, correct me if I'm wrong, when I spoke to dealers in north and even in west, they told me your pricing is a bit cheaper compared to your competition. So please, can you just throw light? Hi, Arun. I'll throw light on your first question first. Sure. So, I don't think we are, like, you know, we are selling cheaper than the competition. We are absolutely in line with the competition. Obviously, you know, when you start up the line or, you know, we are ramping up, so maybe, you know, your A2 grade is low, more produced than your A grade. So the realization on the short term for a quarter or two might look slightly subdued compared to competition. That on a full year, on a long term, 2-3-year basis, prices will not be lower, for sure, number one. And what was your first question again, sorry? On the working capital. On working capital, we are not offering anything extraordinary as a company that, you know, the working capital days are free, and, you know, we're going to replicate the plywood model there or anything like that. We're absolutely in line with the industry, and our, CD terms, our APB terms are very, very strict, exactly the way other companies are doing. Almost, I think, our internal target is 30%-35% business in advance, balance on a 7-day, CD, on a 14- and on a 21-day. You know, just the way others are operating. So, you know, we are operating in the very similar fashion. Okay. You know, and on a short run, since our volumes will be lower for the first two years, you know, 45-60%, then 70-75%, and then 100%. So on a short run, in a shorter, in a smaller turnover, our days might look... Once our capacity is completely achieved, and, you know, we are selling the entire capacity, I don't think we will be anywhere, we will be absolutely comparable with the competition, you know. Our days won't be higher than theirs. Just one follow-up here, was that, you know, when we planned this plant, we would have ballpark or, you know, some estimate about EBITDA, right? You know, what you think from this business is. So we are, you know, a participant asked that question about EBITDA, you know, a sustainable one. So what would that number be in your mind? I know it changes because of various situations you've mentioned very correctly, but, you know, when I'm putting a plant, I would have a ballpark number in mind, that this is my sustainable margins or EBITDA per CBM, whatever you want to look at. What would that number be in your estimation? Absolutely. On the lower side, we were targeting anything between 20%-22% EBITDA. This is what we feel is sustainable on a long-term basis. Even if you take out a 5-6-year average, we feel that, you know, we'll be at least there, 20-22%. And for our cash flow purpose and for our payback and for, you know, for our banking, et cetera, we designed everything at 17% because we want it to be very, very clear and conservative as far as cash flow is concerned. Thank you. The next question is from Niraj Vijay Kamtekar, from Prospero Tree. Please go ahead. Hello? Hello, am I audible? Yes. Yes, yes. Thank you for the opportunity. Sir, what is the sales value of own manufacturing plywood at standalone level? What is the sales value? Of own manufacturing plywood at standalone level. Let me get the number. Not looking at the number like this. Maybe Nitin or Gautam can give you this number afterwards, Neeraj. Sorry? Nitin or Gautam, maybe you can get in touch with Gautam. He might be able to give you this number afterwards. I don't think we have this number readily available at this point of time. Okay, okay, fine. Thank you. Yeah. Yeah, yeah. Thank you. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Mr. Saurabh Ginodia from SMIFS Limited, for closing remarks. Thank you, and over to you, sir. Yeah, thank you, Aman. I would now request Mr. Sanidhya Mittal to add any closing comments. Thank you all for taking time to participate in this call. In case of any further clarifications or queries, please feel free to reach to Mr. Gautam Jain. Thanks again, and goodbye. Thank you. Thank you. Ladies and gentlemen, on behalf of Greenply Industries Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.