Ladies and gentlemen, good day and welcome to the Greenply Industries Q4FY25 earnings conference call, hosted by Asian Market Securities. As a reminder, all participant 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 and 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 Market Securities. Thank you, and over to you, sir. Thanks, Sejal. Hi everyone, a very good morning. On behalf of Asian Market Securities, we thank you for joining us on the Greenply Industries fourth quarter and FY25 conference call. In the panel today, we have Mr. Manoj Tulsian, Joint Managing Director and CEO, Mr. Sanidhya Mittal, Joint Managing Director, and Mr. Nitin Kalani, CFO. May I now invite Manoj to begin the proceedings of the call? Thank you, and over to you, sir. Hello, just a moment. Ladies and gentlemen, we have lost the management connection. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, we have the management connection back on call, so please continue. Yeah. Thank you, Karan, and good morning, everyone. It's such a pleasure to have you all on this call. I'll be updating you on Greenply's operating and financial performance for quarter four and full year, FY2025. I'd like to share with you that we have achieved the highest-ever consolidated quarterly revenue of ₹ 649 crores, which is a growth of 8.2% on a YOY basis. Our consolidated core EBITDA for the quarter was at ₹ 68 crores, a growth of 18.1% on a YOY basis. The core EBITDA margin for the quarter was at 10.5% as compared to 9.6% in quarter four, FY24. PBT before the losses on equity-accounted investees is at ₹ 46 crores for quarter four, FY25, which is a 22% YOY growth as against PBT of ₹ 38 crores, excluding the exceptional gain in quarter four, FY24. Our PAT for the quarter was at ₹ 17 crores. The quarterly PAT had an impact of A, share of loss of equity-accounted investees amounting to INR 22 crores, which included one-off impairment loss of INR 6 crore of our Singapore operations, share of loss of INR 7 crores for the minority investment in Middle East business, and share of loss of INR 9 crores in Greenply Samet JV. B, MTM loss of 3.1 crores on forex loan taken for MDF business. On a full-year basis, our consolidated revenue was at INR 2488 crores, which is a growth of 14.1% on a YOY basis. Our consolidated core EBITDA was at INR 238 crores, which is a growth of 27.2% on a YOY basis. The core EBITDA margin was at 9.6% as compared to 8.6% in FY24. PBT before the losses on equity-accounted investors stood at INR 151 crore for FY25, which is a 47% YOY growth as against PBT of INR 103 crores, excluding the exceptional gain in FY24, which means we are just talking about the operating profits for our two lines of business, plywood and MDF. The profit after tax was INR 92 crores post-considering the losses on equity-accounted investors of INR 34 crores. Now, I'll share highlights of the individual businesses. In the plywood business, our volume growth for the quarter was 4.9% YOY, and value growth for the quarter was around 9.8%. On the margin front, our core EBITDA margin for quarter four, FY25, was 9.2% as against 8.7% in quarter four of FY24. The margin improved on a YOY basis by 50 basis points. On a full-year basis, we have achieved a revenue of INR 1,959 crores, a growth of 8.1% on a YOY basis. Our core EBITDA grew by 13.3% on a YOY basis to ₹166 crores. The EBITDA margin stood at 8.5%. On the product innovation front, we are happy to share that we have launched a new product, which is named as Water Repellent Plywood during this quarter. Moving on to MDF business, our revenue in quarter four, FY25, was ₹135.6 crores and volume at 42,688 CBM. While our realizations improved to 31,759 per CBM, which is an increase of 10% on a YOY basis, our EBITDA margins improved to 15% as against 10.4% in the previous quarter. More details on the same will be shared by Sanidhya later. Moving on to our furniture and fittings JV, the phase one product range manufacturing is in full swing. However, sales have not picked up as expected during quarter four, quarter four being the first quarter where at least we had the range of products to go to the market. We are quite confident in scaling up the same in the current financial year. Our net debt is at ₹464 crores in line with our guided range, and our debt-equity ratio is 0.57. We are confident of improving this further during FY26. I'm also happy to announce that we are in the process to reduce the $5.8 million funding granted to Greenply Middle East Limited by almost ₹2 million, and hence the contingent liability will also get reduced by a similar amount. In FY26, we aim to achieve a double-digit revenue growth on a consolidated basis, contributed equally by both the businesses, an EBITDA margin of 10% plus in plywood business and 16% plus in MDF business. With this statement, I'd like to hand it over to Sanidhya to provide more insights on the MDF business. Thank you, Manoj, and good morning to everyone on the call. In our MDF business, we are progressing steadily. Our sales in the quarter showed an improvement over the last quarter, both in volume and value terms. We have also started to increase our finished goods inventory to prepare ourselves to enhance our capacity by 25% in the coming year. During the quarter, our EBITDA margins improved to 15%, and this was achieved as we optimized our operating overheads and improved our production. The production was disturbed in the prior two quarters due to breakdown and other issues. Construction of our HDF flooring line is likely to be completed in this quarter, and the equipment is already in transit. Construction of glue plant is completed. Going forward, our focus will be on sale of more value-added products and improving operating efficiencies further. With this, 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use the handset 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 Praveen Sahay from PL Capital. Please go ahead. Thank you for giving me the opportunity. So, a couple of questions from my side. The first is related to the MDF. So, in the MDF, you reached a utilization of around 70% plus, and the margin profile for a full year has been around 13.5%, or I can say in terms of the rupees per CBM, around INR 4,200, INR 300. And the way forward, you are also giving guidance to improve margin to 16% plus. So, what kind of a utilization you are expecting in this capacity, or is it only because of a value-added mix improvement in the MDF you are looking at and to improve the margin profile? If you can give some detailed color on that. I think it is to do with both. We will obviously improve our utilization levels, and we will further improve on our product mix as well. So, a combination of the two will help us achieve 16% margin. So, at what level of utilization you can reach to a maximum in this unit? What are the current, what are the full-year numbers? 74%. So, currently, we are at 74%, and. 800 crore we can reach. Ha. So, I think almost INR 800 crores of revenue, annualized revenue, we can easily reach in this plant. With the flooring line being there and then the 25% capacity addition would take it to, say, INR 950,000 crore. Exactly. Yeah, that sounds good. That is post-extension. Yes. Okay. So, the capacity expansion with the utilization improvement will reach to a certain level. Second question is related to the timber pricing. If you can give the numbers for the plywood and MDF timber pricing, how has it been, and currently, at what level or improvement increase you are seeing or stability there you are expecting? Any color on that? Hi. So, on plywood side, timber prices in quarter four, it actually went up compared to quarter three. Ladies and gentlemen, we have lost the connection for the management. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, thank you for patiently holding. The management is back on call. So, please continue. Yeah. Sorry, they are getting disconnected. I don't know. So, on the plywood front, we normally benchmark the Yamunanagar price. The Yamunanagar price actually went up in quarter four by almost 60 to 70 basis points. But as we talked today, it has almost come back to the same level. And in terms of MDF also, it went up almost from INR 6 to around INR 6.26, INR 30. But when we are talking as of today, it is slightly less than INR 6. So, both the places, it went up in quarter four, but slightly has come down. Normally, that is the trend in quarter one, and then again, the price picks up in quarter two as a normal cycle trend. Okay. Okay. Got it. And any color on the new crop coming in, which will destabilize or reduce the prices? Is there any? I know. What we mentioned, still getting the same feedback from my plantation team that come quarter three, the new crop supplies should start, which means that the prices should either come down or at least it will remain stable because the demands have also gone up in the last three, four years significantly, and with a lot of restrictions which will be there because of BIS. But for sure, yes, quarter three is what my team is telling us. Okay, sir. And the last question, sir, clarification on the plywood segment because there the inventory level has gone up from 54 days to 79 days. So, is that a room for a further reduction from here, or we are going to see such kind of inventory level to continue? No, no. So, I think in last quarter, Concall, I clearly mentioned that we are building up inventory, okay, because we were also not very sure about how things will pan out post-QC implementation. So, we have built up a large inventory, and most of this will get liquidated by September. So, there would be a significant reduction in the inventory in these next six months. Maybe again during the year-end, we might plan because year-end quarter, normally the sales is always very high. So, there can be. But compared to the inventory what we are carrying today on 31st March, the next year number will be a much lower number. Okay. Okay. Thank you, and all the best, sir. I'll come back. I mean, almost INR 70-INR 80 crore of additional inventory is there on the raw material front, which will come down in the next six months. Thank you. The next question is from the line of Karan Bhatelia from Asian Market Securities. Please go ahead. Hi, sir. Just a follow-up on Praveen's question. While you mentioned the Yamunanagar prices, but if you can give some flavor on the south prices for timber for plywood and MDF, that will be helpful. So, actually, we are not a big buyer from South for plywood. Okay. In MDF, at times, we get some material from South, but I think last quarter, predominantly, we have bought the material from West only, right? Yes. At this point in time, we are buying most of our material for MDF also from West only. Is it correct to assume the pattern we saw for Yamunanagar prices, the similar pattern could be replicated for the South, or is it altogether a different ball game? There can be some different ball game also because both these markets slightly operate in a different way. Right. Yes. And just to continue with your BIS comment, so how stringent are the norms both for plywood, MDF, and how are we seeing imports now? That's from. At this point of time, we have not seen any imports. Okay. Only thing what has happened, first of all, so clearly, it looks like that the government is very serious about implementation of this. They have been visiting many factories to test the product in their lab, and they have been taking action also, which we have come to know. Then imports, in any case, at this point of time, has almost become zilch. What has happened is, because of this QCO, there is a lot of imports and holding which has happened by the end of quarter three. That is something which is temporarily putting some pressure on the numbers also in quarter four, as well as maybe I think that inventory will get liquidated within quarter one. I don't think that will last anything beyond quarter one. So that has happened temporarily, that there is excess inventory in the system. But I think government will do a good job the way they are right now working on the same. So, like last time I said, we are ourselves very bullish now that for all branded goods players, this will really be a great tailwind. Right. Right. For the questions, I'll follow up in the Q&A. And just to add on the same, because for the MSME, since the timelines allowed is up to the month of August, so you will start seeing quarter-on-quarter improvements going forward. Right. Thanks for the clarification. I'll join back the Q. Thank you. Thank you. Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead. Yeah, hi, sir. Thanks for the opportunity and congratulations on the good set of numbers. A couple of questions. Versus on MDF, if you look at the quarterly numbers, we see volume decline. However, realization has increased, and margins are also very healthy. We have given some bifurcation on MDF and pre-lam. But would it be possible to refine MDF boards segment further? Just wanted to appreciate the margin profile because realizations have also moved up. So, is it a commodity MDF, or is it more value-added part which has increased? And if it is value-added part, what exactly does this value-added part mean? I think, obviously, the product mix is better because of which, in spite of the volume going down, the realization is higher. As far as pre-lam and the plain board breakout is concerned, I think we are already providing the same, but within the plain board, as of now, we don't have the numbers. And honestly, we don't want to even share those numbers because our focus is really only on the premium, so we really don't want to share our data as to how much premium material we could sell, but definitely, product mix seems to keep improving, and I think there's a huge scope going further as well. Right. So, if not for quantification, is it possible to explain qualitatively, basically, what exactly helped improve realizations as well as margins? Is it like thinner grades or higher grades? We are producing every grade of MDF which is required in the country. So, starting with the commodity which is interior grade, and then moving up to exterior grade, then moving up to HDHMR 710. That is what our brand is called in the HDF category. And then we have another higher category HDF called Boil Pro 500, where the realizations are substantially higher. And it's a true, true value-added product. The density of the product is more than one. Yeah. Okay. Even though the segment is much smaller, in those segments, we don't have the fight with other players. There are very limited players in the value-added segment focusing on it. Great. Sir, would you like to qualify any guidance for next fiscal along with volume growth? And basically, if you could bifurcate the margin profile into what is the underlying assumption on MDF price increases and what could be attributed to the value-added part of it? I don't think there's any price increase planned in MDF. I hope that the industry does not further reduce the price. But as far as we are concerned, that mentioned this in the past as well. Since we have only one line to sell, we are not that worried compared to others. The day we have maybe the second, third line, the scenario will be more challenging. Till then, we are not worried. The growth guidance is already given in the opening speech. And so, we are looking at a double-digit growth for this year and the margins also for the full year to improve to somewhere around 16%. That's helpful. And sir, any plans on shutdown and basically de-bottlenecking the capacity? I think there is an inventory build. Is it a clear indicator for that? I think, yes, we really want to do that. So, if you see, we've really increased that inventory as well. And even in the current month, we're trying to. Hello. Ladies and gentlemen, we have lost the connection for the management. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, we have the management connection back on call. So, please continue. Hello. Apology for the connection. Yeah, please continue. Yeah, sir. We missed you somewhere in between. Right. I will continue with that question. I think you were talking about the volume growth in MDF, the guidance. I think it was part of our opening speech where we are looking at a double-digit kind of a volume growth in MDF as well as plywood. And sir, the plant shutdown and the incremental de-bottlenecking, any timelines? It's very difficult to give a timeline, but typically, monsoon is a time when there's a slight lull in the market where MDF movement is slightly slower. So, ideally, we would like to catch the monsoon. And monsoon in Gujarat for us is typically slightly late. So, between June and September, the monsoon. So, sometime during that period, somewhere in the middle would be ideal. Sure. And last question on the balance sheet. Do we have any further corporate guarantees that one needs to be worried about? Because we see exceptions like there are three, one of which are there. So, if you could provide some color over here, I think that would be good, like corporate guarantees or anything else that we have. So, I understand for Dubai and that. Yeah. Yeah. Yeah, so I think Manoj, you want to speak on this? No. So, see, the major guarantee, corporate guarantee, is with respect to the Gabon facility, which we had mentioned earlier also. While we had done the transaction at that point of time, that was a precondition of doing the transaction. The guarantee value at that point of time stood at $6.3 million. And that was a precondition with the buyers mentioning that they will, of course, try and help to reduce that guarantee, but we, at any point of time, just cannot withdraw the guarantee. Over the period of time, like around in the last year only, they reduced first by $500,000. And now it is getting further reduced by $2 million, which means the revised guarantee from $6.3 million from the time of transaction will now come down to $3.8 million. And other than that, I think. There is one more corporate guarantee, which is for Greenply Samet JV, and that is INR 55 crores. The other guarantee which is there is we have taken recently only for the Greenply Samet JV, which is INR 55 crores. And the equal amount of guarantee was also extended by our JV partner for the same. Basically, there is a guarantee in the Singapore entity also. But given that the business is now reduced and the outstanding value of equity is only INR 1 crore, we don't see incremental risks on that. How much is the value of that guarantee? That will be about three million. That should get reduced now. It's closing. Yeah. See, Singapore is, I think, probably in this quarter, whatever was any level of liability where we felt that possibly there will be a difficulty in realizing the same, we have provided for the same. And that is why the one-off hit has come. Though we will still try to realize that. But there is now nothing left in the Singapore books also in terms of any future liability. Borrowing will also be locked. So, this CG also will get cleared now. $3 million, right? Yes. Yeah, and sir, with respect to the 6.3. Hello? Hello? Yeah, yeah, yeah, please. Yeah. Sir, with respect to the 6.3 reducing by 0.5, which will reduce further by 2 and is going to 3.8, was this anticipated? What is the thought process? Right? It's a stiff number, actually, if one looks at. Anticipated in the means? Sir, technically, this number is big, right? Basically, we are taking from 6.3 to 3.8. So, what were the underlying variables that were considered? No. See, as I said, it was a prerequisite for the transaction because at that point of time, the buyer said that this is like the oxygen. And if you withdraw this, then we will not be able to even sustain the business. But they said that, "Okay, we'll try to see how we can help you to reduce this." So, as they are reducing the utilization, the limit gets free. And to that extent, they are allowing us to further surrender the corporate guarantee value also. Okay. Sir, just last one for the. Otherwise, this was a given liability on our head at that point. Okay. Perfect. Sir, what part of this INR 21 crores is cash and non-cash? If you could just help on that. Last question from my side. Thank you. The Samet JV portion is cash in the JV books, you can say, and none other things are in cash, you can say. Okay. This was helpful. Thank you so much for the very question. Thank you so much for the very question. Yeah. Pleasure. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Akash from UTI Mutual Fund. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Sir, I just wanted to check on discount front. I mean, if we compare our product's pricing with our peers, is the discounting at steady-state level or it has I mean, has it increased, decreased, whatever is the on-ground feedback? Will you please share? Which line of business? You're talking about which line of business? Plywood? I'm referring specifically to MDF, sir. Okay. I think the prices of the realizations, product to product, are pretty much the same. However, starting 15th April, there has been some sort of incremental price cuts taken by competition. Even we have taken some revision there, but not to the tune others have taken, simply because our focus on the commodity segment is lower compared to others. Sir, if you can also quantify, please, that will help me. Sir, for markets in the commodity segment, post 15th April, it's done a 5% scheme increase or a price cut, whatever you want to call it. But Greenply is operating within the 1.5%-2% range. We are not operating in the full 5%. Sir, I mean, it's a bit surprising. I mean, so, sir, in terms of industry overall capacity, still, I mean, you believe even after the imports reducing drastically in MDF, still, you believe there is overcapacity situation continuing and people are undercutting each other to push volumes in the market? Yes. But see, if you talk, I think, yes, there is an overcapacity still, even after import has reduced. And honestly, the import reduction, none of us have tested it yet. Because see, till February 12th, import of MDF happened. And every importer tried to import three months, four months of extra inventory. So, by end of April, early May is when we will start feeling the import disappearing from the market, even though it has already disappeared, but the products are still in the market. So, A, we'll start understanding that, and we'll have a better picture in one or two months. But I still feel that the Indian capacity itself is not less. Obviously, it will make the scenario easier with import being out. But the capacity in India is also very high, especially the smaller unorganized people, unorganized who put up a country line. They can be a threat in the long run. The unorganized with multi-ply, I mean, their capacities are too small and their technology is too outdated. Sure. Sure, sir. Sure. Thank you. Thank you. The next question is from the line of Sneha Talreja from Nuvama Wealth Management. Please go ahead. Thanks a lot for the opportunity, team. Just a couple of questions. While you have answered half of it, I just wanted to understand reasons for working capital increase. Inventory, I understood. With receivables also, there is a considerable increase. There is payables also, considerable increase. What I understand is moving towards MDF would have meant lower working capital requirements. In case you can elaborate the same. No. So, okay, let's take business-wise. On the MDF side, as we said, that since we are desperately trying to see how we can fix that increased capacity, and for that, we need to take a shutdown. So, we are consciously trying to build up inventory. Okay? And that inventory build-up can still continue for the next two, three, or four months till we are able to get the extension line done. That is one side on the strategy. On the plywood side, last quarter only, we mentioned that in quarter four, we are building up inventories because we were also not very clear about how things will pan out after QCO. So, a lot of inventory on the raw material side also got added. Okay? And that inventory, we will be able to liquidate in the next six months. Same level payables have gone up because, again, just not to put the pressure on the cash flows, most of it has been taken against LC. So, by the time we liquidate the inventory, at the same point of time, the payment obligations will also come. So, actually, typically, it will not hit the cash flows. Receivables, yes, I maintained this even in the last call that there is a challenge in the market in terms of collection. In quarter four also, just to share the perspective with all of you, some of the dealers where they were always on a discipline in terms of paying within a certain time frame, they also delayed their payments. So, there is an iota of delay, which we have seen even from cases which were always very disciplined. So, we assume that this will be temporary, and we are very careful and conscious. I mean, we could have always done higher growth also, but we respect that we need to maintain this discipline on the receivable side. So, we compromised with a few percent of growth while keeping the receivables in mind. Despite of that, as I said, there are certain cases where we would not have assumed that the money will not come on time. They got delayed. That is some amount of pressure which we are seeing. Also, when we do institutional business, with this QCO coming in, you will see more and more institutional OEM business also going up. There, the payment cycle is always slightly higher than the trade payment cycle. So, you may see a few days of receivables going up and then stabilizing at certain level. Understood, sir. So, secondly, on the one-off expenses, while you have given certain clarity on the Dubai-related one-off expenses, what I wanted to understand is what portion of these one-off expenses will be recurring in nature? Especially, what I want to understand is what could be the losses Samet could incur, let's say, in FY26, and at what utilization can we see breakeven there? Sneha, two things on the Samet side. First, I would say that a lot will depend on how the mix of the selling goes through. Okay? It's very early days. If you really see, we have hardly done any sales in quarter four. And quarter one, we will get to understand maybe some amount of discipline on the mix side. Quarter two, possibly, we'll get a better comfort. Then, we will be able to tell you the breakeven. But for sure, I think the numbers what we are taking at this point of time, we, of course, have a detailed budget meeting in the coming week again on the same. The best what is visible right now this year is that maybe we will be very near to the cash breakeven, which means my interest and depreciation cost will still reflect as a loss. Next year, for sure, we will be able to do a PBT level of breakeven. The year subsequent, it will start showing good profitability. That's what we're hoping. On the one-off expenses, can you specifically ask which one you're talking about? Recording. No, it's not recurring in nature. Singapore, as I said, this was the last few liabilities on the asset side which we felt is not coming. And on the insistence of the auditors, we said, "Let's provide this." We will continue to chase it. So, the only thing is there can only be an upside on the same from the Singapore subsidiary side. And on the Gabon side, again, now I think the equity pickup which is there. 3.6 crore on a consolidated basis. That is the total equity pickup which is left now in the books for Gabon, INR 3.6 or 4 crores, let's say. So, that can be possibly the maximum damage that can happen on account of Gabon going forward. That was helpful. That was really helpful. Lastly, on the MDF segment, if I may, generally, Q4 is assumed for the entire building sector to be the strongest quarter. But this particular quarter, we have not seen a very sharp increase in terms of their volumes. We understand the market was weak. But coming on the low base of this year, what is the, I know you've given a double-digit volume growth for next year, but that's too broad of a range given that MDF is still a newer business for us compared to the other established players there. What sort of a range can we assume, if not an absolute number there? Or if at all, you can let us know what's the utilization that you can achieve without expansion in this particular segment? So, basically, I'll answer your first question first. So, yeah, her first question was on. Growth in quarter four, volume growth in quarter four. Growth in quarter. Okay. Yeah. So, if you see our volume, it was kind of a de-growth in quarter four, mainly a couple of reasons. A, there was too much import. So, if you look at the interior-grade segment, practically the entire market was flooded with imports. So, obviously, selling in quarter four was very, very difficult. Also, in spite of the market being flooded and there being overcapacity, all of that, we had many problems in Q2 and Q3 as far as our line was concerned. And for us, as we mentioned, it was very important for us to build our inventory. So, for us, it was very important to ensure that even 31st March, usually, we will try to reduce inventory. But this year, as per our strategy, we wanted to keep our inventories high on 31st March as well. So that in the coming monsoon, we are in a situation where we have one month of inventory and we can take a 20-day shutdown. So, that is what we are trying to achieve. That's one. The second question was on the growth percentage for the current year. So, I think we are looking at a double-digit growth percentage in MDF. Absolute number is very difficult. And I think the growth will be really dependent on whether we are able to do this extension or not. So, if we are able to do this extension, obviously, then the number will be very, very high. If we are not able to do the extension, then it will be just a double-digit range of a number. But what's the maximum utilization of the current capacity that we can run this plant for? Given the experience and getting the first question. I think 74% is the utilization for this year, which for sure can go up to 87%-88% in the coming year. I mean, the current year now. On the top of it, there is a value-added product which will give additional revenue. Yeah. So, product mix, Sneha, that is one. Second, in terms of capacity utilization, 13%-14% incremental utilization. Third, we'll definitely try to see that this extension is being done. If this is done, then we are sorted out for the next two years also in terms of meeting our growth obligations. Understood. Understood. Thanks a lot, team, and all the very best. Yeah. Thank you. The next question is from the line of Udit Gajiwala from YES Securities. Please go ahead. Yeah. Hi, sir. Thank you for taking my time. Firstly, sir, great work on the plywood segment. And overall, sir, if you can guide what kind of a CAPEX will we incur for this fiscal, and if you can break it up into your MDF and what investment will go into the Samet? You are talking about FY 26? Yes, sir. Okay. In FY26, we are looking at a total CAPEX, again, of around INR 60-65 crores, which will be very similar to our depreciation, consolidated depreciation. In MDF, it will be around INR 25-30 crores. And similar would be in plywood also because we are working on some process improvements, and that will call for, again, a change in a few of the machines. So, around 30-odd crores or 35-odd crores in plywood and 25-odd crores in MDF. That adds up to INR 60 crores. In terms of our investments in Samet, we are looking at around INR 25 crores for the current year. Got it. And, sir, the plywood that you were planning to set up a separate line or some expansion, so is that on the drawing board? Because I guess we'll require the CAPEX by H2 of FY 2027, if not earlier, by the growth rate. So, any further CAPEX that we were planning? Oh, so you're talking about Odisha? Yeah. Okay. So, there are certain delays which are happening in terms of getting certain approvals, right? So, once we get those approvals, then we will again let you know in terms of what would be our CapEx cycle for the Odisha project. Got it. Got it. And, sir, if I assume that this year from Samet, we can see a creation of a loss of around, say, INR 15-odd crore in our books for 26, since you are aiming to be EBIT positive, I mean, you are aiming to be cash positive for this fiscal. I think we'll be able to give you a slightly better picture by the end of quarter one because the first thing first, now we are looking at in terms of ramping up the sales. The initial feedback in quarter four, when we had a very large dealer meet at our factory and showcasing all our products, was very, very healthy. But normally, what happens is most of the dealers also mentioned that being the year-end, and they had obligations and other things for other brands, they didn't want to sign up for a new product range. So, that's how now we are working from April to see how we are able to create and enhance the dealer base. And by the end of quarter one, we'll also get some sense on mix, as I said, that the different products have different margin profile also. A lot of clarity will come by the next quarter. Understood. That is helpful. All the best. Thank you. The next question is from the line of Rishab Bothra from Anand Rathi Institutional Equities. Please go ahead. Hello, sir. Congratulations on the set of numbers. I wanted to understand what will be our capacity for FY26 and FY27 for plywood. Will be the? Capacity. The expansion which we are increasing into what level? Okay, so in the MDF, right now, we say that it's an 800 CBM plant. That will go to 1,000 CBM, so a 25% increase in capacity. For plywood, since currently also we have a large portion of trading activity, so how are we planning to scale up there? Plywood for sure. Last year also, we did a lot of line balancing. That way, we are adequately covered for the growth for this particular year. Of course, we have that trading platform also. The growth is also happening equally on the trading platform. The dependence only on in-house manufacturing is like 50%-60%. The balance all comes, in any case, from the trading side also. On the trading side, we have enough arrangements. That side will not be a challenge at all. In the meanwhile, to meet the obligation of our manufactured products in-house, I think easily this year, for sure, we don't see any challenge. Maybe part of the next year also, we don't see a challenge to meet our growth. So, 52.8 will remain 52.8, more or less? Well. 53.5. 53.5 million MSM. And so, as I said, we announced Odisha project. We were very hopeful that all the approvals will come. And if they come, we had given another capacity expansion of 13.5 million there. But we are seeing delays. So, once the delays are there, we're not very sure whether the capacity gets operational now in quarter one of next year or whether it takes more time. So, as and when we get more clarity, we will come back to you. Got it. And on input cost, sir, what is the price difference for plywood input cost and MDF input cost? And what is the timber in both cases, timber or it's based also in MDF case? No, no. In both cases, it is timber only. The only thing is, for plywood, you need a better grade, better dia of material. So, that is more pricey. And in MDF, I mean, a lower dia also works. So, that is where is the difference in the prices of both. Plywood is okay, I mean. Yes. Sir, he got disconnected. Okay. You okay? The next question is from the line of Patanjali Srinivasan from Sundaram Mutual Fund. Please go ahead. Hi, sir. Thank you for the opportunity. Am I audible? Yes, yes, Patanjali. Yeah. Sir, I have a couple of questions. One is on the industry profitability. Now, if we look at Greenply also, I think last couple of years, if we look at where the industry has gone, profitability has kind of come off meaningfully. So, can you tell me, in your sense, have we kind of reached a scenario where there is a possibility that a cycle could improve and there could be much better profitability in 26 and 27? Do you get any sense of this, how things stand today? So, one of the biggest tailwinds which I see from the standpoint of view of industry discipline is the QCO implementation. As we all know, that in plywood, the unorganized sector is humongous. While we speak, we may still say that maybe 75%-80% is unorganized. And controlling price as well as quality aspects there is not so easy. So, with the QCO implementation, there would be a lot of discipline which will come in terms of sanity, in terms of the products which will be available in the market. The products will conform to what is written on the face of the ply, which means for the unorganized, many of the players, the cost of their production will go up if they have to meet the standards. And if that happens, then automatically, you will see that many of those players will not be able to sustain because then for them, selling it to the market or for a dealer, buying a brand versus not buying an unbranded thing, they will always prefer to buy a brand and sell a brand. So, if that happens, which means a level of rationalization can happen in the industry and a consolidation can happen. That can lead to better price on the selling side. Second, if you will see the trend in the last four years has been increasing input prices continuously. So, now we are saying that possibly we'll get better crop cycle from this year. So, once that happens, the input prices will reduce. And once the input prices reduce, definitely, there would be incremental margins for the good players. So, we see all the reasons now for the margins again to inch up. Sure, sir. Just related to that, when you say input prices will reduce, any timeline where you see that you will start seeing this benefit from? So, we have been maintaining since last quarter that we have a large plantation team which also works on helping the farmers to plant the eucalyptus. From their side, their view is that by quarter three, we should start seeing that movement. So, the new crops should start hitting the market from quarter three. Let's say, I mean, quarter three can be even November or December or plus or minus one or two months. But that is what is the visibility at this point of time. Sure, sir. And just a couple of questions. One is this imports and MDF import BIS implementation, you said that it's kind of come to zero. Is there a possibility of a price increase in the industry? Do you see that happening in the near term? don't think we see a price increase scenario because, as I mentioned, that there is a significant unorganized other than the four or five large players. There is a significant unorganized also. We are not worried about the multi-dealer unorganized, but maybe two or three smaller players who manage to put a second-hand Chinese line. On the long run, there will definitely be an irritant, and till then, any kind of abnormal price increase is not possible, I think. So, here, when do we expect again, what is our general expectation here? Because today, we are at top line of almost INR 500 crore, but our profitability is very weak there. So, it is kind of not doing well for us in terms of our P&L or even on our balance sheet. So, what is our expectation here going forward? I think if you look at the panel industry and for Greenply to remain dominant, we have to be present in the MDF space, and as of now, if you look at the returns or if you look at the profitability, obviously, it's not idealistic, but in our experience, when we've seen a 10-year, 15-year period, if you see that kind of a period, in that period, I don't think MDF will do bad in the long run, so I can really look at the ROCE of 18%-20% in that range on the long term in the MDF business. So, directionally, I'm not worried about the MDF business. Obviously, the debt being so high and the interest cost being so high, depreciation being so high, and the PBT almost being nothing for the year bothers us as well. But I think it's part of the long-term strategy, and we are quite aligned on it. Sure, sir. This year's growth, I mean, so the break-even for the business is near around the numbers what we have reached. There's always a gestation period in MDF because it's a large investment. This year, incrementally, whatever additional growth will come, will come with that profitability. That will then start showing up this year and the year to follow. So, you're saying that there'll be some bit of operating leverage that will be visible in the current year, as in 26? Yeah, of course. Yes, yes, yes. Yes. Sure, sir. Sir, just last question. Is Samet market size an opportunity for us? Could you help me with that? See, the market size. The market size that we have for this, for the next couple of years in terms of sales or anything like that? Yeah, yeah. Please go ahead. Sorry. The market size is almost close to around $2 billion. There also, the organized market is again 20%, right? The product line, what we have, we compete with the best of the players like Hettich and Hafele and other players who are the best in the market in terms of precision engineering products. One, we are there in the premium segment along with these players. Second, in terms of ramp-up, we have just implemented phase one. The products in phase two and phase three, right now, we are importing from our JV partner. We have a plan also to implement phase two and phase three in terms of the CAPEX. The basic utility and other things, everything has been done while we did our phase one, including all civil construction and this. For phase two and three, we'll only have to get the machine at the right point of time. Our own expectation is that in year one itself, we should be doing anything around INR 70 crore-INR 80 crore first year. And then we built up around another INR 80 crore-INR 100 crore every year in this business. But this is too early to say. Maybe if this year we are able to do INR 70 crore-INR 80 crore, maybe next year itself, we might cross INR 200 crore. We'll not preempt too many things. One thing at a time. This year, first thing, we'll try to see how we are able to cross this number of around INR 80 crore. Thank you. Sorry to interrupt, sir. I would request you to rejoin the queue for a follow-up question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to one per participant. If you have a follow-up question, I would request you to rejoin the queue. The next question is from the line of Utkarsh from BOB Capital Markets Limited. Please go ahead. Yeah. Hi. Good morning, sir. My first question is regarding the MDF segment gross margin. So, we have seen a sharp improvement in MDF gross margin from 45% to 55% on a QoQ basis. So, can you please explain what is the reason for the same? And what would be your gross margin guidance for FY26 for MDF segment? I think let us stick to the EBITDA margin guidance we've already provided. And the sharp increase, I think, is mainly on operational efficiencies. And even within the raw material, we've used a better mix to ensure right cost and optimum cost. Thank you. The next question is from the line of Parth Prabhakar from Investec. Please go ahead. Hi, sir. Thank you for the opportunity and congratulations on a good set of numbers. Sir, I just had one question about the competition in the MDF space. So, basically, I wanted to understand what sort of demand are we looking at, did we have in FY25, and what sort of capacity do we have in India, domestic supply. The capacity overall. 6,400. INR 6,400 crores is the full capacity. Around INR 7,000 crores. The number is annualized capacity for the country. Thank you. The next question is from the line of Rahul Agarwal from Ikigai Asset Management. Please go ahead. Yeah. Hi, sir. Very good morning. Sir, just a couple of questions. Good morning, Rahul. couple of questions on balance sheet and cash flows. This working capital cycle, both for MDF and plywood, largely on inventory and debtors, especially, where should it settle down once this QCO and the higher raw materials and finished goods are liquidated? That's question number one. And second is on your balance sheet debt, the INR 500 crore peak debt which we see right now, how is the repayment plan in your mind given what kind of cash flows and higher margins you expect over the next two years? Those are my questions, sir. Thank you. In terms of inventory, Rahul, I already mentioned that we'll have a reduction of inventory on the plywood business almost by around INR 80-INR 100 crore. And if you see even payables, there would be a corresponding payable of maybe around INR 50-INR 60 crore again the same, which means a net reduction of INR 40-INR 45 crore on the plywood side for sure. And I believe that the receivable cycle, one, will improve, which is on the trade side. But at the same point of time, as I said, that on the growth, because of this QCO, we also see that there would be chances that the OEM and the KA business will also grow, the key accounts business, the large institutional businesses, where the receivable cycle is slightly higher. So, give us a quarter or two, we'll be able to tell you, and we'll all get a much clearer picture. But looking at the cash flows and the growth, what we are looking at for sure, by the end of this year, the debt will get reduced by around INR 100-INR 120 crores. And the year subsequent also, for sure, the debt can reduce by INR 100-INR 150 crores. So, in the next two years, the debt will reduce by around INR 250 crores. Any new investments which comes for that, we'll have to see that that might be the incremental debt which will get added on. Right now, at this point of time, we only have in mind the Odisha project which we have declared. So, for that, whatever would be the incremental debt if you have to take, that will be additional. On the debt repayment side, every year, I think next two years, our repayments will be in the range of INR 50-INR 55 crore each year. And on the MDF side also, right now, we are building up extra inventory. So, once the line extension is done, even on MDF side, there will be a reduction of inventory partially going forward. So, all in all, you will see that we'll be able to generate by the year-end at least INR 60 crore-70 crore or 75 crore of free cash flow again from the working capital side. Thank you. The next follow-up question is from the line of Rishab Bothra from Anand Rathi Institutional Equities. Please go ahead. Sir, wanting to understand on the MDF side, who are our major clients? Is it institutional clients, or is it through dealers network? Large OEMs. I think it's a fair mix, but obviously, the trade component for us will be slightly higher because Greenply enjoys a very strong brand in the trade. So, in MDF, we are trying to clearly use our advantage and use the advantage the brand or the word Greenply has. So, that play or that advantage comes in trade business, not in OEM business. Thank you. The next follow-up question is from the line of Utkarsh from BOB Capital Markets Limited. Please go ahead. Yeah. Hi, sir. Sir, my question is again on the MDF segment margin. So, we see that whatever the margin improvement for MDF has happened in this quarter, it was largely driven by better gross margin. And we could not understand the rationale for that. And a connecting question to that is that you are guiding the margin to improve in FY26 further. And you have also mentioned that the industry has taken some price cut in April month. So, how are you so confident the margin is going to improve further in FY26 when the industry has taken a price cut of around 5% in April month? If you look at our guidance for the year, which has just got over, that year also, our guidance was around 16%. But because of two unplanned shutdowns, we are at about 13, 13 and a half% annualized margins. So, A, we're not looking at that type of a challenge this coming year. So, we do not see that margin coming down because of some unplanned shutdowns, number one. Number two, we look at further getting in efficiencies, whether it is production efficiency, whether it is selling better product mix efficiency. So, on account of all of this, we feel that for us. And the benefit of operating leverage also. Yeah. So, if we are able to grow in double digit this year, we'll get a significant operating leverage benefit also. It's a combination of all these points where we are quite confident that we'll be able to touch around 16% margin for the full year. Thank you. The next follow-up question is from the line of Ritesh Shah from Investec. Please go ahead. Yeah. Hi. Quick question for Sanidhya here. Sir, we had this ESOP policy last in 2020. Are there further plans to roll something similar to ensure that the attrition is less or basically critical employees stick with us for longer duration? So, one is the quantum, and second is the spread of ESOPs amongst key management personnel. I think the major bit is kind of done. Obviously, people were promised ESOP over a period. So, some people are yet to vest what they've already been given. So, because of that, a small cost will continue. But there's no major new plan coming in with some major new quantity. Obviously, whenever the management or the operating team feels that all of us feel that we need to get in more talent or we need to grow the organization, in that time, if we have to offer, we'll take a call then. But as of now, there's no further commitment to the existing people other than what we've already given them, and they have not vested. Thank you. The next question is from the line of Mohammad Shan from IDBI Capital Markets & Securities Limited. Please go ahead. Hi, sir. Congratulations on the good set of numbers. I just had a quick question on the debt side. So, what led to the jump of our finance cost during this quarter? During the quarter? Yes, sir. During the quarter, the utilization of our working capital lines was high because of the inventory which we had ordered, basically. So, that was the only reason, and that's the only reason. Yeah. Working capital. Mainly the working capital built up, what we have done in quarter four. Thank you. The next question is from the line of Tania from Anand Rathi Institutional Equities. Please go ahead. Hello. Hello, sir. Yes. Hello. My question for the plan is how much do we depend on real estate? Sorry to interrupt, ma'am. I would request you to please use your handset. Your audio is not clear. Is it clear now? Yes, ma'am. Yeah, so for the plywood business, how much do we depend on the real estate inventory handover? Does it have an impact on the sales of plywood per se? Yeah. Yeah. Of course. I mean, new houses, of course, brings an opportunity for the fit-outs, which means a substantial amount of plywood will go into those in the fit-outs and doing the interiors. At the same point of time, there is, again, refurbishment also which happens. So, these are the two major drivers for sale of plywood. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you all for taking time to participate in this call. In case of any further clarification or queries, please feel free to reach us. Thank you. Thank you. On behalf of Asian Market Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.