Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rushil Decor Ltd (BOM:533470, Financial) reported a 19.2% year-over-year increase in MDF segment volume, highlighting strong growth.
- The company achieved a 27.6% year-over-year increase in export volume for MDF, indicating robust international demand.
- Blended realization for laminates increased by 20.8% year-over-year in the domestic market, showcasing improved pricing power.
- The company is expanding its production capacity with the Jumbo Laminate project, expected to contribute an additional 2.8 million sheets annually.
- Rushil Decor Ltd (BOM:533470) has implemented currency hedging strategies to mitigate forex exposure, supporting stable margins.
Negative Points
- There was a 2.8% quarter-over-quarter decline in MDF segment volume, indicating some short-term challenges.
- The laminate segment saw a 2.9% year-over-year decline in total volume, reflecting a challenging market environment.
- The Jumbo Laminate project faced delays due to machinery supply issues and unexpected rainfall, impacting timelines.
- Timber prices have increased, which could pressure margins if not offset by price hikes.
- The company anticipates a planned maintenance shutdown for its CMDO unit, which may temporarily affect production.
Q & A Highlights
Q: Has there been a price hike in the MDF segment, and how has it affected realizations?
A: Krupeshbhai, Managing Director, stated that there was no price hike in the last quarter for the domestic market, but export prices increased by INR 1,000 per CBM. The main growth in realization was due to 54% of the products being value-added, which improved the quarter-over-quarter realization.
Q: Can you provide insights into the current timber pricing in the north and south markets?
A: Hiren Padhya, CFO, explained that timber prices remained constant last quarter due to existing stock. However, prices have increased slightly this quarter, particularly in the north market. A price hike of 2-7% has been implemented depending on the product.
Q: What is the outlook for the laminate segment, especially with the new plant coming online?
A: Krupeshbhai, Managing Director, mentioned that the laminate market is promising, with new contracts in Europe and other regions. The new plant will cater to high-margin products, and the laminate margins are expected to improve, with exports offering better margins than domestic sales.
Q: How is the company managing its debt, and what is the outlook?
A: Hiren Padhya, CFO, highlighted that the company has reduced debt significantly over the past two years and plans to continue reducing it by INR 50-55 Crore annually. No additional debt is required for ongoing projects, indicating a strong financial position.
Q: What is the impact of the planned maintenance shutdown on operations and revenue?
A: Hiren Padhya, CFO, stated that the plant will be shut down for 10-12 days for routine maintenance, which is essential for operational efficiency. The company has prepared inventory in advance to mitigate any significant revenue loss during this period.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
