Ladies and gentlemen, good day, and welcome to Greenply Industries' Q4 FY 2024 earnings conference call, hosted by Asian Markets Securities Private Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectation 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. Actual results may differ from such expectations, projections, et cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements and remarks. As a reminder, all participants' lines will be in 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. Karan Bhatelia from Asian Markets Securities Limited. Thank you, and over to you, Mr. Karan. Thanks, Manuja. Hi, everyone. On behalf of Asian Markets Securities, we thank you for joining us to the Greenply Industries fourth quarter and 20 months FY 2024 conference call. In the panel today, we have Mr. Manoj Tulsian, Joint Managing Director and CEO, Mr. Sanidhya Mittal, Joint Managing Director, and Nitin Kalani, CFO. May I now invite Manoj ji to begin the proceedings of the call. Thank you, and over to you. Thanks, Karan, and good morning, everyone. It's a pleasure to have you all in this call. I'll be updating you on Greenply's operating and financial performance for quarter four and FY 2024. First of all, I am very happy to share with you all that we have achieved a consolidated revenue of INR 600 crore during the quarter, excluding revenue from discontinued operations, a growth of 40.4%. The discontinued operations refer to our Africa business operations, controlled by our Middle East entity, GMEL, in which we have given up majority control during the last quarter. We have received the purchase consideration and effectively deconsolidated the operations as we move into the new year. We are referring to all the numbers, whether for this year or the comparable numbers for last year, in this communication without GMEL, unless specifically called out. Our revenue CAGR in FY 2024 over the financial year 2022 is almost 26% on a comparable basis, much ahead of our earlier guided revenue CAGR number of 22% for this period. During the quarter, our consolidated EBITDA has also grown by 22.8% on a YOY basis to INR 59 crore, and the margin during the quarter was at 9.9%. The full year consolidated EBITDA, excluding the discontinued operations, is at INR 191 crore, an increase of 12.6% YOY on a comparable basis. Now, I'll share some highlights of business-wide performances. In our plywood business, our growth for the quarter was 9.4% YOY. We have achieved our annual guided target growth rate with a YOY volume growth rate of 8.6% for FY 2024. We guided a volume growth rate of anything between 8%-10%. On the margin front, our adjusted core EBITDA margin for the plywood business for quarter four was at 8.6%, as against 11.5% in quarter four of FY 2023. The margin declined on a YOY basis by almost 290 basis points due to increase in raw material prices by almost around 1% and higher advertisement expenses by around 1.8%. The EBITDA margin, however, improved by 60 basis points on a QOQ basis. Our profit after tax for the quarter was at INR 92.29 crores, which includes the impact of gain on sale of 51% investment in GMEL to the extent of INR 4.5 crore. Moving on to MDF business, our revenue in quarter four was at INR 131 crore and volume at 45,764 CBM. I'm happy to share with you all that we have also improved our EBITDA margins during the quarter to 14.1%, as against 13.5% in the previous quarter, and we have delivered a PAT positive performance during the quarter. This, this is practically the third full operating quarter. So, you know, we are very much on our guidance and, and our hard work that within the first year of operations, we will make this PAT positive. Of course, more details on the MDF business will be shared by Sanidhya. On a consolidated basis, our net debt level are at INR 502 crore, against previous quarter debt level of INR 497 crore, excluding the GMEL, which is well within our guided peak net debt level of INR 540 crore, as mentioned earlier. During the year, we have also made investments in our hardware JV amounting to INR 25 crore, and the commercial operation of the JV started in the month of March. The JV is likely to commence full phase one operations by end of June, mid-July, and is expected to benefit from upcoming BIS implementation of certain furniture hardware products. With this statement, I would like to hand it over to Sanidhya to provide more insight on our MDF business. Thank you, Manoj ji, and good, good morning to everyone on the call. In our MDF business, we are progressing well. I'm happy to share that we have achieved a revenue of INR 131 crore and also having a PAT, positive PAT in this quarter. ... ahead of our original plans. It is the result of our meticulous planning, team effort, brand strength, and commercial discipline. During the quarter, we've installed a few short cycle presses, as well as ramped up production of our prelam MDF boards. Being a premium player, we'll be introducing other innovative value engineered products to serve all categories of customer segments going forward. We are also confident of achieving better margin profile in the business as we enter the new financial year. The full year volume of approximately 125,000 CBM was 25% more than what we guided for volume targets of, as we had guided, of 100,000 CBM for FY 2024. In the last quarter, we have sold 45,764, with a blended realization of INR 28,640 per CBM. On a year-to-date basis, our sales realization per CBM is INR 29,279. As we progress in the new year, we'll be focusing on capacity building for value-added products, working on operational efficiencies, and improving yields. With this perspective, I would like to open the floor for Q&A session. Thank you. 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. The first question is from the line of Ritesh Shah from Indus Tech. Please go ahead. Yeah. Hi, sir. Congratulations for a good set of numbers. Sir, my first question is more data keeping. If you could please help on the volume split on the ply side between premium and others on volume as well as value basis for Q4 this year, last year, and if you can help with full year number also, that would be great. Hi, Ritesh. Good morning. Nitin, do you have the numbers? Whatever. Huh? Volume and value numbers. See, the mix has not changed. You know, I was looking at the mix between Q3 and Q4. The mix, I think, is almost same. We'll just give you the volume value numbers. You can speak out. Sir, meanwhile, can I just have a few other questions till Nitinji has the data? Sorry? Meanwhile, can I ask two other questions until we have the data points? Yeah, yeah, yeah. I think we'll get back on this volume value data. It is very similar to quarter three, which I had seen. I don't carry... I am not carrying the numbers right now. We'll get back to you on the same. Please, go ahead with other questions. Right. Right. So the reason to ask this question, basically, if you look at the Q3 data, we see a steep jump on edge premium, as a category. I think it was upwards of 23-24%. Whereas for premium, there was a decline. So just wanted to ascertain, is this trend something which is the new normal that we are looking at, whether we have tweaked our strategy on placement on economy side to actually drive more volumes? So, that was the question that I was coming to. Okay, okay. So I think Ritesh, you know, if you clearly see the trend is the growth has come on the mid segment, okay? This year, the volume growth, whatever has come, is purely because of the growth in the mid segment. The premium segment has hardly grown. I mean, you know, if you truly ask me, I think it is around a 1% growth what we have registered there. That is correct. Slightly. So going forward, you know, we, we might see a similar trend. So, you know, we have a team, a separate team, which works on the premium side of the product. There is a separate team which works on the mid side of the products. So, growth is something for in any case, we are going to taper it. We are, I mean, we are going to work on the growth. We are not going to, leave any of these segments. We have product lines. Yes, as a company, of course, you know, anyone would desire that the premium segment should grow because, that clearly helps the margin profile also to improve. There is a team which is working. We have been increasing our ad spend. We have been doing a lot of things strategically also to see how we are able to get more into the market with our good set of products in the premium category. But yes, last year we didn't see any success. Maybe, you know, the silver lining is at least we have not de-grown on the premium segment in absolute terms. Can I handle that question on volume? And the data on value volume is now there with Nitin. He will just, So, Ritesh, good morning. The volume for premium brands was flat year-on-year, sorry, year-over-year, basically for the quarter. And for our economic segment, it was +13% in terms of volume, and value was +12%. This is only for ply and other segments grew more than, I would say, high teens, basically. Sure, this is helpful. My second question is on MDF. Sir, would you like to put some volume guidance number for the next fiscal, along with some color on value-added products, along with something on the margin profile, and how do you see the macro evolving over, say, next six to nine months? That's the second question. And third question is more pertaining to furniture fittings. I'll sometimes come to that. So, Ritesh, see, in terms of overall volume growth, you know, we have taken an internal target of trying to achieve 200,000 CBM volume for the full year. Okay? And but the rest of the thing I'll request Sanidhya actually to ask in terms of you know, between value-added products and how he's looking at the market. So these questions, Sanidhya. I think, market, as far as the realizations or the competition is, it is challenging. But our advantage at Greenply is that, you know, our capacity is very limited compared to other players in the market. So we have the power to say no, and we are trying to focus more on trade and less on OEM. So we've kind of restricted our overall OEM business at about 13-14% of our top line, and the balance, 85-86% is now coming from, or maybe close to 87%, is coming from trade. So I think this will really help us for as a strategy for the first line, you know, till we have only one line up and running. And this way, we can ensure that even in tough times, we can maintain our margins and we can maintain our paybacks, et cetera. The market overall looks good in MDF. You know, we continue to assume that the market will grow at a pace of around 15%. So that surely gives us a lot of tailwind in the MDF business. And for us, what we need to concentrate is that, one, we are able to consistently produce and deliver. Second, as we have said earlier in our call, that we continue to build up on the internal efficiencies, because that is the key, and we have always maintained that that takes time, but I think we are on the right path. And that's how you will see that, you know, almost every quarter, you will see our margins improving. This is helpful. And sir, last question on furniture fittings. In the last call, you had indicated a revenue of INR 300 crore in 3-4 years with margins of around 20%. Would you want to revisit those numbers, or if you can give some specific color for the fiscal ahead, what we look to target, along with margin profile, ROC profile? Thank you so much. No, there is nothing actually revisiting those numbers, okay? First year, we actually first thing, we have set up the plant at a very rapid speed in six months. Yes, when you do so many things in such a rapid pace, there are a few machines or other things which we were expecting to come by March or April because of sea shipment and other things, you know, a few of them has got delayed. That's why, we are assuming that, you know, come July, we should be in a position to start manufacturing the products what we had put in our business plan. And, in terms of the other preparation, like, getting the team in place, we have most of the teams in place. I mean, at least the head of functions. The team below them are getting recruited. Most of it are in line, you know, they will get completed within June. So, from quarter two of this year, our sales will start on that business. First year, we are not expecting any big numbers. You know, the first year, maybe we will slightly be incurring some loss also, because initially we'll have to invest also on the marketing side to showcase this product to the whole of the market and trade. So first year, in any case, in our business plan, there is a minuscule loss possibly, which will be there. Next year, we can see major ramp-up in terms of numbers, and next year we will also try to see those slightly early, but we'll try to see that at least next year we are not at all, at pack level. We are at least at quits or if we are able to generate some profits. Year third, which will be actually after 18 months, we definitely expect this business to get ramped up to anything beyond INR 200 crore as an annualized revenue with a healthy EBITDA. What I've also said is, you know, this business, the type of capacity what we are going to set up in phases, which will be, with a total investment of close to around INR 250 crore, can give us a revenue of almost INR 800 crore. As and when we are able to reach to a level of, you know, INR 500 crore+, the margin profile can even further improve to 25% and above, because these are, you know, purely high-end engineered products. This is very helpful. Sir, I'll just squeeze in last one. You can take it in the fourth round of questions. So the CapEx guidance for next two years, and do we have any balance sheet targets in place, how would we look to leverage? I request you to please join the queue. Thank you. The next question is from the line of Uday Rajiwala from Yes Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity, and congratulations on a good set of numbers. Thank you. So, firstly, on the MDF front, I mean, you have displayed a good resilience, but we have seen your ASP coming down with the industry. So how do you see this price movement panning out with, you know, imports likely to go up again from this month, and of course, the capacities are coming up? I think, you know, we mentioned earlier also, the fact that we have only one line which is up and running. We have the power to say no, because we have limited capacity, and we want to focus being a premium player and a branded player. We want to focus on the value-added segment and the trade distribution network, which is pretty set, and, you know, month-on-month, we're getting progress there. We are kind of restricting our plain board sales and our OEM sales to ensure that our bottom line is not impacted. ... and we can grow healthily, sell our production into the market. As far as our capacity is there, we are not worried to sell it. Understood. Understood. And just secondly, like, Ritesh was asking previously, what will be the CapEx plan and the debt reduction that you'll have in mind for next two years? So this, you know, I think this year, in terms of whatever visibility right now what we have created, we might look at a CapEx of anything around INR 70 crore-INR 80 crore as a company. And, the subsequent years, you know, we have still not chalked out our plan, so maybe we'll get back to you in, in quarter two or quarter three. And, in terms of debt profile, I think this year, you know, from INR 500 crores, we might look at a reduction of 50 odd crores, so maybe a net debt of INR 450 crores by the year end is what we are targeting. Which clearly will, further strengthen our, you know, debt equity to maybe around 0.55 or, you know, between 0.55 to 0.6. Understood. And so this, just a follow-up, the INR 70-80 crores of CapEx includes your any further investment that will be required into this SAMET JV? SAMET JV, yes, you know, our total capital commitment is close to around 40-odd crore. We have invested 25 till 31st March. While we speak, we have put another 5 or 6-odd crore. And, so the balance, you know, 9 or 10 crore will come during this year only. If there are any other cost overruns or something, a few cost overruns we have envisaged, as per the first project, first phase, not big numbers. So that might be incremental, because initially what is happening is a lot of money is also going into GST credits, another thing which we'll be able to recover over a period of time. So we might have to put maybe, you know, extra 4, 5 crore, every JV partner. So 15-20 crore is, you know, what we are going to put. More and above the INR 70 crores. Of course, that is investment right now. So INR 15 crore-INR 20 crore is something what we are assuming that, you know, we'll be funding this year further. Got it. And lastly, sir, on the plywood front, if you would like to give any, you know, guidance for 25, what kind of a growth in volume terms are you looking at, with the margin profile? So, you know, as I've been maintaining previously also, 8%-10% is what, now we have taken as an internal target. You know, given the situation, right now, yes, last few quarters have not been so great in terms of any tailwinds. Even, you know, when you look at quarter one, quarter one, might remain subdued. Like last year also, quarter one was subdued. This year, quarter one is, might remain subdued, not only from a demand perspective, but also from, you know, this, general elections which is going on, which will slightly maybe dampen the spirit at this point of time. But, you know, my assumption is from quarter two, and, and if we are able to see a stable government, there will be a big tailwind which, you know, I'm envisaging from quarter two. If that happens, then 8%-10% volume growth for us as a company should not be difficult. The margins, will you be able to maintain? If at 8%-10% volume comes up, then, the current margins, do you see any improvement with the product mix changes or something like that? So, you know, I'll not commit at this point of time, but we are taking again a lot of internal initiatives to see, you know, every INR what we are spending. There was a challenge in the previous year in terms of truly taking up pricing fees from the market. But this year, in phases, in markets, we would be looking at doing some corrections, which can help our margin to improve. As I said, there is a significant surge on the premium end also, to improve the volumes there. So if that happens, that also will help us to slightly improve our margins. Our ad spend last year was high by 1.1% on an annualized basis. So that is another factor also, which, you know, brought down the margins. But if we need to invest in the business and we want to create this business for future, then I think, you know, those type of, initiatives and strategic calls we'll have to live with. So, that was the type of investment which went, last year. This year also, we have, planned that in absolute, value, our marketing spend is only going to go up. But maybe as a percentage of the total business, it might, be at the same level or it might slightly come down. So with, with, these initiatives, with these initiatives, for sure, you know, I'm very hopeful that our margins on the plywood business only should improve by, you know, 50-75 basis points, if not more. Got it, sir. Got it. And just, to clarify, this 1.1% of advertisement that was up, so what was the total percentage as to revenue, your ad spends for the year? One second. It's there in our presentation. Four point- Total spend was 3 point... 3.7, Kaavya? It's there in the presentation, Sudhir. Okay, I noted, sir. Thank you so much for your elaborate answers, sir. Thanks. 3.4. 3.4. Thank you. The next question is from the line of Achal Lohade from JM Financial. Please go ahead. Yeah, good morning. Thank you for the opportunity. Sir, can you help us with the timber prices for the fourth quarter, FY 2024? What was it for the plywood business, I'm asking first. And what was it like in same time last year? Achal, I don't have the numbers right now, but. It was around INR 9,500 for plywood. ... and for- No, previous year he's asking. Previous year was 8,000- I think, Achal, you know, this year so it was around INR 9.5 in that range. But look, you know, we buy this material at different places in this. Uh-huh. So on an average, this was the price. If I recall, I think last year, similar time, it was somewhere around maybe 7.7-INR 8. Okay, okay. And how has it moved in this quarter, first quarter FY 2025? Has it further gone up, stabilized? And how do you- No, no, no, it has not, it has not really gone up further. It is in the same range and... But, but I also don't see any chance of this coming down during this financial year. Okay. And if I see from, let's say, three- or four-year perspective, because we are seeing this timber shortage or scarcity for last few years now. Yeah. Yes. You know, how do you see this, you know, has that been passed on by the peers, especially the unorganized, you know, what has been the price increase, given the mix? Obviously, we are unable to figure out, but like to like product, how much have we taken price increase, over the last, let's say, three years? Would you have that number? Ballpark, I can tell you, if I remember, I had seen some data. So, maybe if you really see the realizations, have almost gone up by around 10%-odd in the last 3-4 years. Okay, so that is the type of increase which I can say has happened, more or less, broadly. But the last year was, I think, a difficult year in terms of pass-on, and even unorganized faced a lot of challenge because of the increasing prices. So these are good signs, if you truly see, for, you know, the large branded players, national players. Second, you asked about the trend. I think in terms of the trend, I am extremely hopeful that we are nearing this end of this cycle in next 12-15 months, in terms of this higher price. We'll see good amount of volumes coming back into the market, and when that will happen, we'll see the prices to drop. So next year, means FY 2026, somewhere in the second half, we'll definitely come across a reduction in these prices of raw material. Understood. Nitin, if you could help with the mix of the premium. You have talked about the YOY change, but would it be possible to get that number, how much was the mix of premium plywood in terms of volume and value for F- 43, 57, if I recall. Nitin, you can just check. Forty-three, fifty-seven. 43, 57. Yeah. It is 43, 57, Q4. Q3 was almost, Volume, volume. Ah. Forty-three, fifty-seven. Sorry, 43% is premium volume, and how much is value? No, no, 43% is the economy brand, basically, 40, 43%. Okay. 57% is our own brand, which is the premium brand. This is volume. How much would be economy as a percentage of value? Value would be 35% economy, 35%-36%, and 64% premium. Correct. And this is for, fourth quarter or for the full year, Nitin? It's only for the fourth quarter. Would you have that for the full year? Full year, I'll get back to you. Sure. One more question I had was with respect to ESOP charge. Would you be able to quantify how much was that for fourth quarter FY 2024, and, Full year was around INR 3.5 crore. You know, I was reading it somewhere, and quarter four was very, very minuscule. Thirty lakhs. 30 lakh, yeah. Okay. It will remain kind of this for coming quarters, or is there a change? At this point of time, I think it will have this trend rate only. Okay. Okay, understood. You know, I wanted to check on the MDF, you know, with respect to... While, while obviously you are focusing on the retail part of it, but, you know, the pricing part, how do you, how do you see that evolving? You know, do you see a good 5, 7, 10% kind of a drop likely? And in that case, because you've talked about improvement in margins, would that still remain? And what will drive that margin improvement? I think, if you see, you know, if you see our realization quarter-on-quarter, I think, our realization dropped from quarter three to quarter four. And, in spite of the realization drop, there's an improvement in margin. I think it's mainly because of improving a lot of operational efficiencies at the plant level. That is one reason why the profitability has improved and will continue to improve, I think, number one. Number two, going forward, one has to really focus on the value-added products and the right mix. So if we are focusing on the right mix, on the average, our realization for CBM should not be further affected. At least that's what, you know, we're wanting. And another reason why we feel that there won't be further price drops is because the entire industry, the raw material prices are going up. In this kind of a scenario, I don't think any of us have room to actually take a price cut further. Right. Sanidhya, if you could elaborate a bit with respect to the RM price for the MDF. How much was that for us? QOQ, what has changed, how much has it changed, and how do you see it? ... Oh, QOQ, you know, it's slightly come down, but you know, it's kind of flattish only. I would say it's around INR 6,000 per ton. I think it was slightly higher in- Prior quarter. in the prior quarter. Okay. And, with respect to value-added mix, you know, would you be able to share what is the current number? What is, like, medium-term target? I think, the current number is mentioned in the presentation, right, Sanjeev? What is the number? Prelam number, how much are we doing? Prelam woods are about 12%. 12% of the overall sales is in Prelam. Within the plain boards, you know, even today, I think almost 65%-70% of plain boards is still interior grade. We need to work more on the HDF side. We are already working and trying to sell more of that, so we feel that in the years to come, we'll really improve in that segment. Understood. This is very- I will, Thank you. Just to give you those numbers on the volume and value. The volume for this year, twelve months, premium is 43, and you know, mid is 57, and value is reverse, 57 and 43. For the previous year, it was 48 and 52, volume mix, and value mix was 61 and 38. Understood. This is very helpful, sir. Thank you so much. Yeah, thanks. Thank you. The next question is from the line of Sneha from Nuvama Wealth Management. Please go ahead. Good morning, sir, and thanks a lot for the opportunity. Just a couple of questions from my end. When I look at your inventory days, it's up YOY. Also, your payables is slightly up. May I know the reason for the change in trend, both on inventory and the payable side? Yeah, yeah. So, Sneha, clearly, you know, our raw material inventories, both for timber and core, we have increased that inventory in the month of February and March, assuming that there will be a pressure in first quarter in terms of on the pricing side and availability. So this was a strategic call which we had taken, and because of that, you see those numbers being spiked. Understood. And the same way for payables, so like you're getting it again? Yeah. So similarly, there will be some impact on the payables also. It is the result of the same only. Understood. Understood. Secondly, what I wanted to check is, while you mentioned that, you know, you don't expect further drop in MDF realization, from the quarter, which has been ended already, March 31st till now, have you seen any price cuts by any of the players, if not you, I mean, your competition? I don't think we have seen any further price cuts. Sanjeev, have you? I don't think so, any further price- We have not seen any further price cut. Okay. So you expect that quarters one versus quarter four, at least realizations are likely to remain stable, on a like-to-like products, not you know, playing around with the mix here? It should. It should, yeah. It should remain flat. It should remain flat, yes. Understood. Just one update, any other entry of new players that you're seeing in the MDF market, or, can you actually, you know, specify which other players are likely to, you know, come up with capacity this particular year, just to get some demand-supply trend here? I think, you know, the listed players are having the large capacity. So Century Plyboards' inaugurated a large capacity in South, and Greenpanel also at the end of the year, is planning another capacity in South. These are the ones we know about, the large ones. And Action TESA also, I think Q3 or Q3 last FY, they have also, they have also inaugurated another line. So yes, I think these are the major capacities I feel. FY is the new year. Majorly in the South. Majorly in South. Yes, majorly in South, yes, you are right. So that way, Greenply will always have the advantage of being the only player in West, at least as on date. And, you know, even if a- What's your regional sales mix in that sense? Sorry. We try to concentrate most of our sales to West and North. Obviously, we do some sales in South and East as well, but that is very limited, and majority sales comes from West and North. Could you quantify that for FY 2024, if possible, like, your sales mix regionally? I think almost 70%-75% sales is going to come from- West. North and West. Yeah. East is very minuscule. Yeah, 75% almost would be West and North itself. Understood. Understood. Thanks, thanks a lot, team, and all the very best. Yeah, yeah, pleasure. Thank you. The next question is from the line of Praveen Sahay from PL India. Please go ahead. Yeah, hi. Thank you for taking my question. The first question- Hi, Praveen. Yeah, hi, sir. So, first question is related to the plywood. In the plywood segment, on the yearly basis, you had increased your advertisement as a percentage of sales. So, with these, I can see also the realization is almost flat for a year. So you are more focused on the, you know, the economy side of the business, because there also there is a good, you know, improvement, I can say, with the trading volume. So, what exactly to read to these numbers? Because advertisement, you are increasing, your economic segment is improving, your realization is almost the same. So, it's a lot more for the volume push, are you doing this in this segment? ... No, you know, Praveen, look, as a branded goods player, and especially when we are adding new categories, okay, like we've added MDF, now we are also looking at adding hardware fittings, maybe a few other things going forward. So the investment on brand has to be continuous. There was a period when we were not investing so much, you know, on the brand advertising and marketing, and, as the balance sheet strength is improving, as our capability overall to spend is going up, this investment will continue. You see, we may say that, you know, first of all, the logic of what the investment is only towards premium segment is not right. It's an overall investment on the brand. So even if you are selling a mid-segment product or we are selling today MDF, what do you see largely as a success, what we have got in MDF in year one? Of course, you know, I think production is something which internally is a success, which the team has driven. But when you look at the sales side traction, it's clearly, you know, the, the brand. If it was. Had it not been with Greenply, MDF, I'm not very sure whether you would have been able to deliver these type of numbers in year one. So that shows the strength of the brand. So our investment in the brand has to continue. It will always have a effect on the premium products as well as, the value products. The strategy is very clear that, you know, with deep pockets, this investment has to be consistent and in the range of 3%-4% of our annual revenues. Okay, 3%-4% of your annual revenue, because I am looking at your plywood business only, and they are, that are the increase in- Right now, right now, what was happening is, since we only had, you know, one segment, which was plywood, okay, the entire cost seemed to be very, very high, and our capability to invest was also limited to the extent of plywood volumes and business. As we are able to grow and we have added MDF, now MDF will be sizable by the end of this year. So, our capability to invest goes up, and in terms of, as I mentioned at the beginning, in terms of percentage to sales for the overall consolidated numbers, maybe, you know, even if you are in that range of 3%, it will be a good enough number to, as an investment on the brand side. Got it. Got it. Sir, next question is related to the MDF. As you had mentioned that 200 thousand cubic and target for 25 on the basis of, you know, 125. So, from where you are seeing a majority of your volume to come in, already, you know, Sanjay has already mentioned that you maintain 13% OEM, 87% of the trade. So is that a geographical expansion you will go with? How to, you know, bring such kind of a growth? So, Praveen, I'll maybe say, and then Sanjay can add also on the same. First thing, last year, if you really see, we had around a 10-month working. If you truly see, we had a 10-month period. So we get extra 2 months. The brand is already established, right? The network is already established. And our strength is by virtue of the plant being in West, our strength is West, followed by North and then by, you know, South and East. So we'll continue to concentrate there. And wherever we are now able to do regular business and cater to their monthly requirements, that automatically adds 2 months of sales. And then there is a growth over and above the same for which the team is working. We are looking at a mix where predominantly 65%-75% has to be sold within West and North. And we also maintain that slowly we will see more traction in West. When you will see that now that we are established player there, we will see more OEMs, we'll try to work with the OEMs also, to come and set up their shop, in that region, so that for them, they also get economies of scale. So these are all things on which, you know, we have started working, upon. You are looking only for the domestic demand, not for the export? The exports, in terms of realization is not something which is very, very interesting at this point of time. We can always do that. You know, if we really feel that we are not able to sell our volumes in the country, then we have that option, and we have that advantage and disadvantage both being very near to the port. So at that point of time, we will look at it as an advantage, being very near to the port, and we can do that. But prima facie, you know, in our strategy map at this point of time, we are not looking at exports. Also, as a company, we have no export obligations as far as the MDF business is concerned. Thank you, sir, and all the best. Thank you. The next question is from the line of Nikhil Agarwal from VT Capital. Please go ahead. Good morning, sir, and thank you for the opportunity. Sir, what would be margin, MDF margin guidance for FY 25? MDF margin. I think, we should be in the range of 15%-16%, because I think this year there's a huge pressure on the realization. So I don't think there'll be any improvement going forward on the realization. But we should definitely improve from the existing level of this quarter's 14.1%, right? 14.1. Yeah. So from 14.1, we should definitely improve to anything, anything between 15%-16%. For the full year. For the full year, annualized this. Okay. See, every quarter we'll be able to improve on our efficiencies, and that will surely help our margins to improve further. Okay. And also, sir, don't you think, like, the realization would have an uptick after the BIS norms are imposed? Like, do you not think that can increase the realization on the second half of the year, during the second half of the year? ... I think, it's delayed to February, the implementation. Yeah. Post February, maybe in quarter four, maybe half of quarter four, we can get slightly higher realization. Definitely, there will be a- I think, you know, it is all everyone's guess. Once those things are being implemented, the overall realization should start moving up. If not during the year, but, you know, that impact can start from Q4. Okay. Got it. And so any price cuts taken in Q4 for plywood and MDF? Any? Price cut. Price cut? Yes, sir. No, no, plywood, nothing. In fact, as I mentioned that, you know, in plywood too, we are looking at in different pockets to correct our prices, and, MDF? No, truly, not a price cut. I think, the lower realization is basically on the product mix, not on price cut. Okay, got it. Sir, your realizations in plywood segment, it has gone down considerably for the manufacturing partner segment. It has gone down significantly quarter-over-quarter. Could you explain what happened on this? Look, so, I'll give you one reason for that, is, the mix itself because, we had partnered with, you know, with, with two entities where—which we're reflecting those as, manufacturing operations. What was... Nitin, how do we say that? Business with manufacturing partners, right? Yes. That business, if you really see, has just come down to now around 2% of the total. Which was- So some of the products which we thought we will be able to get it manufactured from them and take it to the market, we started manufacturing those which are in the value segment, within the factories. So when you will see that, then you will automatically see that, yes, the realizations will show some amount of pressure. But the overall realizations as a company has not dropped. Okay. Got it. And also, lastly, on, with regards to the MDF segment, have you given any schemes also as such, or was it primarily because of the, value of product mix that the realization have got? Have you given any discounts to the dealers or something? I don't think we've introduced any new discount in quarter four. Whatever was our ongoing scheme is what is continued. Okay. Okay, got it. That, that's all from me. Thank Thank you so much. Thank you. The next question is from the line of Karan Bhatelia from Asian Markets Securities. Please go ahead. Hi. Thank you for the opportunity. I just wanted to get some sense on the retail and B2B mix for plywood and how has been the growth in FY 2024 to see? Karan, I don't have the numbers right now, but yes, B2B business has done well. It has for sure grown over maybe 20% in the last one year. That's what I, at this point in time, I can tell you. Right. Right. And I was trying to- Opportunity, clearly, but, you know, when you grow the B2B business, yes, there will be some pressure on the realization also because it's very, very competitive. So it is an opportunity, of course, to grow, but at the same point of time, you know, there is always be a pressure on the margin also. Right. I was trying to find the data distributor count as on 2024. So possibly to highlight the net dealer addition for plywood and MDF separately for FY 2024? I don't have that number, but I think this year we didn't concentrate on adding many new dealers. Okay, we have a good dealer base, and what we have only tried to do during the year, especially in plywood, is wherever there were any opportunities, there were some issues or concerns for which, you know, the business was not doing well, we spoke with them, and we felt that, you know, let's first of all, the dealers who have done business with us in the past or who have been doing business but they are not consistent, to work on them to see that how they can become more consistent with us. Because, see, in plywood, one of the challenges always is that, you know, there are no exclusive brand outlets. All of them are multi-brand. They keep not only the brands, they also keep Yamuna Nagar material. So the scope is quite a bit, okay? It's all about penetration, you know, with the right products. Right. Right. Right. Right. And, sir, don't you think the volume guidance looks slightly on the cautious side? We've seen timber cost move 50% in last 3 years, a lot of pain at Yamuna Nagar. So don't you see you're slightly cautious on the volume guidance from next year? Karan, the issue remains that, you know, there are no industry structure data which talks about, you know, plywood as a whole, how is it doing? How is it growing? We keep getting this data, information, everything in bits and pieces. We keep talking to you people to get some market intelligence. I'm just putting this number at 8%-10% as a growth number, assuming that, you know, there is hardly any growth in the overall plywood business. Some of the people, the industry experts or maybe, you know, who are very much close to the market and all those, well, they say maybe the plywood growth as an industry is only 2%-3%. But I cannot actually vouch for any of these numbers. So the only way to look at it is that, in, you know, internally, we set up a target, and we make sure that we are minimum on those numbers, if not more. Right. Right, right. Last question from my side, sir, what's wrong with these equity partnerships, sir? They are good, 17-18 million square meters, and we are not getting the desired results from there. So how do we want to continue this business going ahead? You are talking of the two JVs which we have done, right? Through equity partnerships with the other side. Yeah, yeah. I think so, you know, that didn't go well.... Okay, and I think I mentioned this around three or four quarters back also. We tried to work with them, but, it's at times, we find that it is not so easy to develop this as a model, and that's where we then again started concentrating back on our, on our own manufacturing strength and pure to pure, you know, trading arrangements. So that has not gone well. Fine. Thanks for these inputs, sir. Thank you. Thank you for them. Thank you. The next question is from the line of Utkarsh Nokni from BOB Capital. Please go ahead. Yeah, hi. Good morning, sir. Hi. So my first question is for MDF segment. Assuming we operate at full capacity, then also our ROC would be hardly high single digit at the current EBITDA per unit of INR 4,000 per CBM, which we have plugged in the March quarter. Wanted to understand, what would be the sustainable EBITDA per unit for the MDF segment, and by when it is likely to be reached in your viewpoint? I think, 5,500-INR 6,000 is a, a healthy margin where we'll be able to make a decent ROC, and, I think EBITDA number will be close to 18-20. Yeah. Or in the range of 20 to- 18 to 20, 21, yeah. 18-21. Around 20%, yeah. Around 20%, and I think this is a, this is a cycle, you know, the industry is putting capacity, and then the capacities will get utilized, and then again, people will put capacities. So I think every 2-3 years there will be a cycle. And, you know, in the history also, you know, until 2018, Greenply operated an MDF business also before we demerged. So we've seen a 10-year average of about 18%-20% EBITDA. So on an average, if you see on a longer term period, I think that is what the industry should make to maintain a healthy margin. If we don't maintain that margin, there's no point putting more capacities. And you will see, look, you know, it is like if the margins come below that, you will see less of new capacities coming into the market, and then you will see an upward price correction, and the margins of the existing players will go up. But as Anit is saying, over a steady state, we always maintain this. In fact, when we had gone to the drawing board also, while we planned for getting into MDF, we always assumed 18%+ healthy margins, you know, to a sustainable margin of 18%-20%. Okay. If you are able to do that, then I think this business is good enough. But you will get spikes in between when, you know, the 20 can become 24, 25, and then it can again come back to the same 17, 18 levels. Sir, like, we were planning to debottleneck our MDF capacity from 240,000 to 300,000. So by when it is likely to be completed, and how much cost we are going to incur for that? So, we had given an overall cost estimate in the MDF side of about INR 50 crore. This included the line extension. However, we have imported the line extension, but we are not able to decide when we are going to extend the line, because we'll have to take a shutdown for that. And at this moment, we are not in a situation to disrupt our market. So, you know, there was a timeline in which we had to buy the extension, so, you know, we ended up buying the extension within that timeline from the OEM. But, you know, I think the market scenario and will tell us whether we'll be able to do it this year or whenever we get an opportunity or window. That time we're gonna do it, or we are gonna do it whenever we install the second line- Okay. -which might be 2, 3 years from now. Okay. So my second question is on for plywood segment. Our plant operated at 97%, rate in this March quarter. So what would be our peak capacity utilization for plywood segment? And what would be our sustainable EBITDA margin for this segment over the next three... two, three years point of view? Look, one, you know, we have done some more line balancing at all our plants, okay? Which has helped us, in terms of improving the capacities. I don't have the exact numbers, but clearly it shows that, for this year's growth, we'll be able to cater to, our requirements by these, you know, additional capacities which we have been able to create, and that has not come at a huge cost, okay? Also, we'll continue to invest in bits and pieces, on the plywood side. Maybe next year, you know, sometime we might even look at either additional capacities, by virtue of investments or maybe look at a new location also. And, and in terms of margin profile, I think this is one business which should be giving us around 10% margin on a steady state. You know, anything less than 10%, really does not excite us at all. So, that is the number, the first number which we are trying to now target, to reach to 10%, and then to, for sure, to see that, you know, we are able to sustain that and if we are able to go beyond the same. That looks very much possible, because what has happened, if you realize in the last three years, the prices of raw material have gone up significantly, but that is not the pass-on which has happened in the market. So there is for sure a pressure on the pricing side in the market. And, as I mentioned, I think the first call which was happening with Ritesh or Buddhist, they asked this. I can clearly see, and, you know, that is what we have been talking to our, you know, the plantation team and this. The new crop should start hitting sometimes, you know, in H2 of the next financial year. Once that happens, you know, we all might be surprised with the incremental margins, which will be because of the tailwinds. Whatever I am saying you right now is on a steady state, assuming the same pricing trend and other things to go. Also, if you see last year, you know, the price increase, no one had been able to pass on any price increase to the market. So, the acceptability of the market now to take certain amount of price increase is better than what it was previous year. We are looking at multiple factors, you know, positive factors, and that gives me a belief clearly that the margin profiles will improve. Yeah. Okay, thanks a lot, sir. Thank you. Thank you. Due to time constraints, that will be the last question for the day. I now hand the conference over to the management for closing comments. Over to you, sir. Thank you all for taking time to participate in this call. In case of any further clarifications or queries, please feel free to reach us. Thank you. Thank you. On behalf of Asian Markets Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.