Dhabriya Polywood Limited ($538715)

Ladies and gentlemen, good day, and welcome to the Dhabriya Polywood Limited Q4 and FY '26 Earnings Conference Call hosted by X-B4 Advisory. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. [ Gautam Kothari ] from X-B4 Advisory. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and welcome to the Q4 and FY '26 Earnings Conference Call of Dhabriya Polywood Limited. Today on this call, we have with us Mr. Digvijay Dhabriya, Promoter, Chairman and Managing Director of the company; and Mr. Hitesh Agrawal, Chief Financial Officer of the company. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations as of today. Actual results may differ. The statements are not the guarantees of future performance, and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on the second page of the earnings presentation of the company, which has been uploaded on the stock exchange as well as the company's website. With this, I now hand over the call to Mr. Digvijay Dhabriya for his opening remarks. Over to you, sir.

Okay. Thank you, Gautam. Good afternoon, everyone, and thank you for joining us today. On behalf of Dhabriya Polywood Limited, I welcome all investors, analysts and stakeholders to discuss our financial year '26 performance and outlook. Financial year '26 has been a defining year in our journey. We delivered consolidated revenue of INR 264 crores, representing growth of 12.5% year-on-year. More importantly, this growth translated into a significantly stronger profitability, with EBITDA going by 45.6% and PAT growing by 67.2%. Our EBITDA margin expanded from 16% to 20.6%, while PAT margin improved from 7.7% to 11.4%, reflecting a strength of our operating leverage, better product mix, manufacturing efficiencies and disciplined execution across businesses. Q4 was our strongest quarter ever, with EBITDA margin crossing 21% and PAT growth of nearly 55% year-on-year. This gives us strong momentum as we enter financial year '27. Our top line results fell short of our revenue targets. This shortfall was primarily driven by [indiscernible] execution related to the project supply for some of the large project orders. However, our performance this quarter reflects stability, incurred by a strong high-quality order book of more than INR 170 crores, which gives us excellent revenue visibility. Importantly, this is a matter of timing, not a loss of business as was underlying demand remains robust. Our core plastic product segment continued to perform strongly, with a revenue growth of over 13% and segment profitability growth of 63%. At the same time, our modular business also demonstrated improving operating efficiency and profitability. During financial year '26, we also led the foundation for our next phase of growth. The Board has approved INR 100 crores strategic capital expenditure program to be deployed over financial year '26 to complete the -- This is a more significant CapEx program in the company's history. During financial year '26, we have already deployed approximately INR 27 crores of CapEx towards expansion of PVC and WPC profile at [indiscernible] lines, building dedicated manufacturing infrastructure for the aluminum blazing and window division and modernizing and automating our existing lines. The remaining deployment over the year -- financial year '27 and '28 will further strengthen our manufacturing footprint and enable us to scale into new categories. We are excited about the addition of new verticals, including WPC, doors, WPC wall and sealing panels and aluminum windows, doors and glazing system. These categories significantly expand our addressable market and strengthen our position as a comprehensive interior building material solution company. The aluminum window and glazing division under the leadership of Mr. [indiscernible] has already started seeing strong market transactions and projects inquiry. We have already closed the orders worth INR 50 crores plus for this new project vertical. We believe this vertical can become a meaningful growth driver over the medium term. Looking ahead, we remain highly optimistic about the opportunities landscape. With our diversified product portfolio, expanding distribution network, improving brand strength and upcoming capacities, we believe the company is well positioned for sustained growth. Based on our current visibility, we are targeting approximately 30% CAGR revenue growth over the long term while maintaining sustainable EBITDA and PAT margins. Our focus remains on profitability growth, profitable growth, prudent capital allocation and long-term value creation for shareholders. I would like to sincerely thank all our employees, channel partners, customers, lenders and shareholders for their continued trust and support. With that, I now request our CFO to take you through the detailed financial performance, after which, we will open the floor for questions. Thank you again.

Thank you, sir. Very good afternoon to everyone. Let me briefly walk you through the financial highlights of FY '26. For the financial year 2026, consolidated revenue from operations stood at INR [ 264.48 ] crores versus INR 235.11 crores in FY '25, registering growth of 12.5%. EBITDA increased sharply by 45.6% to INR 54.59 crores, while EBITDA margins improved by 460 basis points to 20.6%. Profit before tax grew by 65.3% to INR 40.67 crores, and profit after tax increased by 67.2% to INR 30.14 crores. Earnings per share for the year stood at INR 27.85 compared to INR 16.65 last year. On the balance sheet side, our net worth increased to INR 129.6 crores. In the financial year 2026, approximately INR 27 crores of CapEx were deployed toward different capacity announcement and new line additions, that is profile extrusion expansion, aluminum windows and facade division infrastructure and authorized automation of our existing capacity. Another important point where I would like to address it proactively is around the working capital. During the financial year 2026, we consciously took a strategic decision to strengthen our supply chain and vendor ecosystem amid disruption caused by the West Asia crisis in the Q4. This included faster settlement of our suppliers' dues and strategic stocking of all our extrusion related raw materials, including PVC resin other polymers. This decision has helped us to keep our operations smooth during last 3 months without any shortage of raw materials, which are directly or indirectly linked to crude oil or for those supplies are coming from the Middle East countries. As a result, working capital temporarily increased during the year. We expect this cycle to improve materially during FY '27 as inventories are consumed and supplier payment cycle normalizes. Overall, the company remains financially comfortable and operationally well positioned to support future growth. We can now open the floor for the question and answers. Thank you.

[Operator Instructions] Our first question is from the line of [ Hashit Kadka ] with Robo Capital.

Am I audible?

Yes.

Yes, sir. Sir, the INR 264 crores of revenue that you have logged, just wanted to understand, like can you give the segmental breakup of it? How much has come from PVC, uPVC and modular? And I will be glad if you can also give the EBITDA margin breakup for them?

See, that INR 27 crores CapEx, which we did in last financial year is [indiscernible] related to the upgradation of our existing capacities, the PVC profile capacities increased by 2,600 metric tons. Earlier, our capacity was 24,000 per annum. Now it stood at 27,600 metric ton. Apart from that, WPC door execution, which we announced earlier also, we have a revenue product line. So that also we have done approximately [indiscernible] CapEx in last financial year. And some of the remaining CapEx is going to happen in current financial year. Apart from that, for our Bangalore aluminum windows and for that division, we have made a CapEx. So altogether, we have -- then the CapEx in PVC door, PVC profile [indiscernible] as well as in the -- for the aluminum windows in [indiscernible] division.

Sir, actually, I was looking for the revenue breakup of the products that you have, the PVC, uPVC and modular and the margin breakup of them.

Yes. See, current breakup of the last financial year's revenue, so approximately [ 84% ] revenue came from the -- our polymer-based product, PVC and uPVC, and 16% -- around INR 43 crores came from the modular furniture. So far the margin is concerned, that EBITDA margin for the polymer division that margins were a little higher as compared to the modular furniture, but we are gradually announcing our modular line also. So on that operational efficiency level is increases, so both [indiscernible]. So PVC a level, you can see the modular furniture margins further at somewhere around 9%. And for the plastic extrusion and PVC window, it's about 16.6%.

All right. Understood. And sir, the capacity that you have right now, 27,600, right, what is the peak revenue that you are expecting from this capacity? And what is the time line that we are expecting that -- in what year will we be able to achieve the peak revenue?

Around [ 2% ].

Our last year capacity utilization was -- for around 66% for PVC profile extrusion. Maximum with the capacity considering the numbers of SKUs, 80% is the benchmark. But when we go for the addition of the new profiles or the new product lines, we need to increase the lines also. So the capacity announcement is a continuous activity. It keeps on. But yes, with the existing capacity itself, we can surely achieve more than INR 450 crores of revenue for the profile itself.

And that would be on what capacity utilization?

[ 16 ]...

That will be 85% of the overall capacity utilization.

Right. So sir, the 30% of growth that you have guided, so the INR 450 crores of revenue should come in FY '28. So are we looking at INR 450 crores of top line in FY '28 itself?

No. See, we have added the multiple product verticals digitally, if you see that we are diversifying our activities by adding the new lines, that WPC dose, WPC, wall and ceiling panels, and majorly the aluminum windows and façade division, where we have already, as Chairman had mentioned, that more than INR 50 crores start of orders are already closed in the last 2 quarters. And execution is happening now in the current system. So that revenue -- the financed expected revenue growth will be contributed by all verticals existing as well as new verticals.

Right. Understood. And the consolidated EBITDA that we have of 20% right now, so what this sustain or how do you see the margins going forward for '27 and '28, at least?

See, last year, we have put a lot of efforts in seeing our product mix, basically the product of product mix. In fact, we have upgraded our offerings to cater the upper, middle and high -- higher class of clienteles. So where we have the better margins. The last 4 quarters of our margins have been regularly improving, and we are quite confident that 20% plus our EBITDA margin is sustainable in longer rub also.

Our next question is from the line of [ Vishwin Darsing ] with Prudent Equity.

Yes. Am I audible?

Yes, you are audible.

Sir, I wanted to ask on the growth that we have achieved in FY [ '25 ], we were projecting somewhere around 20% to 25%. So can you comment on the shortfall of the target that you've previously mentioned?

Yes. See, the growth was not up to our expectations, primarily due to the supplies were deferred for a couple of the projects, large projects, especially in Maharashtra and one of the projects in [ Dalian ] also from the buyer side basis, you are having the order book, but somehow that stage where our products are to be supplied, especially the PVC windows and doors, that is still well deferred. So that was the primary cost. There was no other specific reason we are base.

So what other steps are we taking to minimize such as going ahead in FY '27 and '28?

We are widening our reach to multiple builders and developers. As of now, our order book has been standing at INR 174 crores, which is the highest order book in our history. So a number of regular projects are increasing basically. So to overcome this issue, we are focusing, adding more and more new site builds.

Got it. And on the CapEx side, can you bifurcate on the capacity wise and segment-wise, what other capacities will be added from this INR 27 crore CapEx in this year?

Yes, the INR 27 crore CapEx that -- WPC door is the first one, which we have already executed and trial runs are happening. And from the next quarter, we are going to launch this commercially also. And the second one is the WPC wall and ceiling price extrusion. That is also planned for the coming third and fourth quarters. Apart from that, that I move majorly that aluminum windows and the façade division, which we have already implemented for the buyer unit. And for the [indiscernible], currently, we are operating from our existing facilities. And in this financial year, new practices under construction. And for that, also CapEx is planned for current financial year. So capacity in WPC doors are lower in [indiscernible]. As of now, we have not yet finalized. Once we launch the product commercially in the market, so we will share those figures also. But we see huge capacity is really we are riding for this segment.

Okay. And can you share some soft numbers on the contribution on top line this year from this CapEx?

Yes. The current financial year, we are expecting around INR 15 crores of minimum contribution from the WPC door and also wall paneling division, and maybe some around INR 40 crores from this aluminum [indiscernible] division.

Got it. Just last question on the price escalation cost. You mentioned that most of your contracts are fixed price. So being the actuation prices, most of the raw material prices are increased. So how are you planning to sustain the margins like we have with you?

See, the fixed price contracts basically links to our -- around 30% of revenue because our major -- some of revenue comes from our B2B business basis, PVC profile distribution, more than 60% revenue comes from that vertical, where we do revise the prices based on the cost or the prevailing factors. So in fact, after the West Asia crisis, we have already revised our prices 3x, considering the price hikes of all the raw materials and all. Just for the door windows and the modular furniture project revenue, that price escalation clause doesn't exist normally, considering our volumes or procurement. So we do minimize such kind of risk. In fact, in March quarter, we have done a lot of procurements towards such commodities where this price increase was take place. That's the reason our inventories at the end of the year is a bit higher as compared to the regular range.

Okay. So this 20% to 21% margin is comparably extended?

Yes, yes, as [indiscernible] working, and we are quite confident it is surely sustainable.

Our next question is from the line of [ Keshav Garg ] with Countercyclical PMS.

Sir, firstly, I wanted to ask Mr. Dhabriya that what gives you the confidence that we will be able to grow by 30% CAGR going forward, which has almost doubled the CAGR growth that we have done in the past 3 years or even in the past 10 years. So what has changed now that we will be able to achieve double the growth of the past?

No, we are looking for this new product mix, which is our WPC doors and the façade division, which we are going to add. So these are the areas where big demand is there and less competition is there. And these -- these are the sectors from where the tender which comes, they are also in a large quantity. So these are the factors we have entered and have diversified our capacities into these sectors. So we are very sure that we will get all this because we have a vast experience of construction line. So we will get a good CAGR, around 30%, from these sectors, adding these sectors to our existing capacities.

Understood. And sir, now that last year, there was a huge jump in the margin from roughly 16% to 21%. Now due to the Iran war, the raw material prices have jumped up a lot the petrochem. So firstly, what is our starting raw material? And how much has it gone up by? And how much price hikes have we taken recently? And how much do we plan to take going forward?

Yes. Keshav, we answered this because already we have mentioned 3 times, we have increased our prices since the war started as the raw materials are increasing. Now over to Hiteshji, please.

Yes. Thanks, [indiscernible]. See, that's the price hike is directly related to the products which are coming from the crude oil, all those products have a raw material PVC regimes and other equipment and additives. Apart from that, that product, which requires high energy, especially that aluminum and other things. So prices has gone up, I believe. We all know that -- you can say in the range of the 15% to 40% price hike has already happened, depending on the different commodity prices. So as a whole, we concentrate on a per line of business, you can say around 15% to 18% cost of raw materials already increased. And considering all those sectors, we have already revised our prices 3x, in fact, until 30th April itself. But yes, now since we all are seeing that this crisis is being stable or say that some sort of approach into a settlement, so prices have already started cooling down again. We are foreseeing that also. And [ two ], digitalizing all these factors when this eruption happened, we had done a huge procurements of all our raw materials also in the [ 7 ] March month itself, to safeguard our operations continuity to and also to protect our margins going forward.

Sir, so the bottom line is that 21% EBITDA margin -- all-time EBITDA margin, we can maintain going forward and in FY '27 -- including FY '27?

Yes, you see, 20% plus EBITDA margins, you can see the kind of the product mix, which we have already established, and the response that is coming in the order book, what we are adding for different product verticals, so the sort of the margin is surely comfortable.

Understood. Sir, my last question is, sir, that since we have 100% subsidiary, why not merge them into the -- and make a stand-alone entity and save on compliance cost and the complexity? And sir, also, what is the wisdom of having 4 brands when the customer is, by and large, the same and the product is also basically PVC-based? Then sir, why should we not have one brand so that we can really pull that brand rather than divide our marketing buyers into 4 brands?

See, I will just focus on the brand first. See but the main key brand is the polywood. So all the polymer-related products come from the polywood only, that -- whether it is PVC profile, B2B business line or the uPVC windows and doors, even the newly added solutions that WPC doors and aluminum windows and doors, everything is from polywood only. See the other brands, that is a diversified product that is a different product, that is the Dynasty because the polymer [indiscernible] from its wording also, it has some polymer. But modular furniture is not a polymer-based product, it's an agriculture-based board manufacturing basically. That is the MDA particle, SBHR or the -- sometimes it's fly also. So that is ultimately different. So polywood brand doesn't go with that line of business. So where we are having Dynasty and Studio Arezzo. So Dynasty brand, which are for the projects to be and all. And Studio Arezzo, it's an end-to-end solution, where we are interacting with the internal architects, that large clients and providing them a solution from the brand to implementation. So we are a brand and the fourth brand, D-Stona. As the name resembles, stona means stone substitute. As you said, the SPC, WPC kind of product. So it is -- it's stone last composites, D-Stona, where we make the different line of products that the fields are holding. That is not the hollow profile. So that's the reason to [indiscernible] the product, to connect the clients directly with the teacher of the product when we speak about the brands.

Basically, the raw material in each is different, and the execution and the end use is different. That's why we have categorized in 4 different categories, all of them.

Sir, so for example, in polywood, PVC, the...

Sir, we request you to please rejoin the queue if you have any questions. Our next question comes from the line of [ Mahesh Atal ] with Darga Investment Advisors.

Sir, what was the total panel number in the last year's financials?

Yes. CapEx panel, FY '26, it was INR 54 crores.

And FY '25 was?

38.

INR 38 crores. 38 crores [ 54 ] [indiscernible].

And if I see the margin profile -- so the new CapEx that you are doing, the incremental CapEx, is it going to a higher margin thing or lower because this windows, whatever you're talking about, according to your bookings, is it a higher-margin thing or a lower margin product?

This is on the same kind of the margin divested of the lower-margin bracket. But once we launch these products, we go for the market, it will decide whether the scope for the higher margins or not. But surely, the prevailing margin, what we are adding. So we have designed the product, we have selected the product and all those things considering those margin criteria only.

And with this INR 100 crores CapEx, what would be the revenue -- what is the asset turnover?

INR [ 100 ] crore CapEx, once it is implemented fully by '28. So at least in the initial year, 2x, we are accepting going forward, definitely, it will be more.

And also competitive intensity in that particular product?

See, the WPC doors, WPC wall and ceiling panel, definitely, there is no direct competition as of now. [indiscernible] windows and for that division sits a very, very big market in India. And since we are already connected with the large builders and developers. So we have an edge to serve them in that particular line of business. And that's the reason we have already received in fact INR 56 crores of orders related to this new line of business. So based on our past service experience, we'll get what we are expecting.

Is the current requirement coming from the -- if India is consuming today, and you are saying that there is no direct competition. So where is the current requirement of that particular product coming from today in India?

Yes, it is. Some materials are coming up in China. It is a new solution. It's not that altogether a different new product. It's an alternative solution for the existing requirement. So currently, the building -- builders are fixing the WPC doors -- sorry, not WPC doors, maybe some time of the motor panels and all those things. So it's an alternate solution. We are currently having the PVC -- hollow PVC doors, which are primarily for the nonarea what areas or the areas where we don't require any security. But once you talk about the bathrooms or the main doors and all, you must have some security. So the WPC doors serves that purpose.

And the biggest thing is the chaukhat. You know that chaukhat, there is no solution because whenever we are going with the stone chaukhat, the doors are different and the chaukhat is different. When we are going with the general wood chaukhat, then again, the doors are different and the finish of the chaukhat is different. So for the -- you by our houses, there was a big need for the same color and same design chain pattern of chaukhat and door. So now the WPC -- in WPC, we are given the same kind of chaukhat with the same color of doors. So they are a matching one. And that to nowadays, the trend is for the higher sizes of those, 7 to 88 width. So they give the bigger impression of their areas. The same area is looking big. When given the impression of bigger area when the doors are big. So in this WPC, we can give up to the 8 feet or 9 feet or 10 feet doors. That is very easy, very economically. And they are -- they have all the -- termite is a very big issue nowadays. So they give you the termite and the water registrants and fire and entry as well as [indiscernible]. So these are the features. Because of this, we are expecting there will be a very big market. Although the Chinese are doing -- we are the -- polywood is the first company who is introduced in the Indian market now. So we hope that soon, a lot of other companies will also introduce it, and a lot of Chinese imports were also there. So the market will spread a lot. But because we are big enough, we will have batteries over the time.

How much of the sales that you have done from this product in last financial year, sir, FY '26?

No, this product is newly added. In fact, as I mentioned earlier also, in Q2 of this financial year, we are going to launch it commercially. The trend runs already a step.

Okay. So you have already supplied to a few of the builders and you've got a very good word on the product?

Yes, that's something and everything has already happened. That discussion is already happening. We build us articles and all, and response is...

This product after seeing its big success all over the world. It is very popular in UAE, Saudi Arabia, Europe. And after studying it in from different ends, then we have started it. So we are very sure that will...

Just trying to understand, sir, that your existing machinery is capable of doing this product, right?

So no, it's a contractor. It requires the tent line basically.

And then how did you produce it? Because you -- how did you get the capability to produce? Have you...

We have already done the CapEx in last financial year itself on adding this solution. During our last FY '25 con call also, as we mentioned that at that time that INR 50 crores to INR 60 crores CapEx is going to happen in the next 2 years, '26 and '27, which was subsequently increased by the more to the tune of INR 100 crores.

So this line that you have done is not implemented -- not commercialized is what you are saying, and it will be commercialized in this H2 right?

Q2. From Q2.

Q2. Then what would be the revenue that you are expecting out of the INR 56 crores order backlog in this financial year?

No. That order backlog is the current order backlog is INR 174 crores for the project related business.

Not only that 56, the windows thing.

56 is related to aluminum windows and glazing division. Not related to WPC door. WPC door is a new product vertical. This we are going to commercially launch in the next quarter. Aluminum windows and facade division, we have already started from the end of the last -- this Q4. And from this quarter itself, revenue has already started generating. And for that product line, we have revenue order book of INR 56 crores.

Yes, sorry, you were saying some...

Overall order book is INR 174 crores, which have 3 product lines. One is our existing utility windows, second one is the modular furniture and third early a division of aluminum windows and facade division.

Yes, sir. Before I conclude, can you just please give some outlook on the fluid panel industry currently? And what is your outlook in the next couple of years?

The wood panel industry is basically now very well accepted and a lot of new sections, new design, new colors, and it is getting around 5% to 10% of the paint industry market. So all the interior work in buildings, whether it's commercial, whether it is division, is now -- it's very popular. And new designs, a lot of research and development is going on in this field because different, different finishes, different, different materials are coming. So -- and now WPC fluted panels, which are not [indiscernible]. These are the solid one. So they are also now we are coming out with that. So it is just like a fashion industry as well as the replacement of the wood products also in multi. It will -- it's really a part of the building in TS in the coming time. So now it's a very popular, very easily available. And the installation is very easy for this and no [indiscernible] after installation of these matters. So now the market is accepting it in a very big way. A lot of imports are also coming. So the market is increasing and the Indian capacity is increasing day by day, new manufacturers are coming and they're like us, we are increasing our capacity, our design capabilities, our new colors and new sections. These are also -- we are ready to get more and more into this market.

Our next question is from the line of Deepak Verma from [ Axsome ] Capital.

Questions are [ negative ] in some sense. But I have 2 questions. First is, considering your revenue guidance of 30% plus in the future, how does it compare with the real estate sector prospects and trends in the past 2 years and in the future 3 to 5 years? Your thoughts on that question. Second is, could you elaborate particularly on new CapEx by segment, which segment to ROIC, return on invested capital, current CapEx and planned any future, maybe a couple of years on demand. That's it.

See, all the market -- so the CapEx part, which you mentioned that the current projects which we have undertaken, these are mainly the 3 different product verticals recently, apart from the regular CapEx on our extrusion lines. The WPC doors, WPC wall and ceiling and third one is the aluminum windows and facade division. As [indiscernible] mentioned that the aluminum windows and doors that facade division, it's a very huge industry in India. The -- have the commercial building requires for that solution. And here, the -- all the players or the big players, which we can say, it's a branded solution and some particular brand only. Normally in the aluminum windows and those we can see that local players and all. But once we talk about the system in those or the facade division, so it's about deep brand water, and we can provide the time, the execution and all those things. So market is used. And considering that visualization from the real estate sector, since we are already associated with the builders and developers from so many years, while [indiscernible] with the 2 products, uPVC windows and doors and then modular furnitures. So we are catering, one, builders to part of their project material, not all the projects. Once we had this aluminum windows and facade divisions, so we can be one of their vendors for all of their projects, whether it's a commercial or institutional or a residential project.

Sorry. I'll just clarify. What does it clarify?

Yes. See, market is used that real estate is performing well, and that order book is literally standing [indiscernible] so that's the reason we can be that we have ventured into all these new product divisions.

Okay. Understood. I asked this question because last year some -- one of the calls I asked the same question about some financial -- suggested you have told me that it was because real estate was not ready in that time. That question is answered. The outlook is positive. I understand. But on the other question on CapEx, I just wanted to understand the current and planned both and with the ROIC, return on invested capital, that you expect and the figures in terms of gross...

The CapEx, what we have taken basically, that around INR 27 crores is already happened in last financial year, from which one of our product line is already implemented at Bangalore aluminum division and then WPC door vertical is also going to get implemented in the coming quarter. So this financial year also, we are projecting around INR 35 crores to INR 40 crores of CapEx for the Jaipur facility of aluminum windows and doors in WPC wall and ceiling division. And apart from that, modernization and upgrading our existing lines by high output actual facilities. So next financial year also, for some of the projects which are going to take a little bit more time. So maybe INR 20 crores to INR 30 crores will take. So altogether, INR 100 crores of CapEx is planned. And regarding this return on investment, shortly that -- see, we are currently sitting at around 25%, 26% of return on equity and ROCE. So that's sort of the levels we are projecting going forward for this new products also.

So you're seeing all the segments, sir, similar ROICs?

Yes, yes, yes.

Got that. And good results, congratulations on that.

Our next question is from the line of [ Rohit Kapur ] with [indiscernible] Investments.

So my question is, you are anticipating 30% revenue growth for FY '27. So since your realization also would have jumped up because you have passed it on to the customers. So I wanted to understand how much volume growth are you expecting for FY '27 category-wise?

That talks to PVC profile [indiscernible] category, we are last year also about from the level of the 50% for capacity utilization, we reached to the 66%. So similarly, they be around 20% of growth in our regular extrusion line B2B business we are expecting, apart from the new resi product verticals basically, which will be contributing a bit more. So considering all those factors, when we projected for the 30% CAGR growth moving forward.

No, I'm asking specifically about the volume growth, like how much volumes would grow? How much like price would grow in terms of that?

See, the price -- we can remind the price growth because it depends on the market conditions because PVC region, this was in March back to [ 115 ], now again, it has come down [ 80, 85 ]. So raw material price -- our finished goods prices, especially for the extrusion [indiscernible], they keep on changing, sometime plus sometimes minus also. It's not a one-sided price reason always. So price growth is not the factor, especially in our line of product aluminum windows and doors also, currently that LME on the aluminum is on the lifetime high. Once this prices of Middle East war is sorted out, everybody is optimistic that this prices will pull off. So revenue from the price hike is not the criteria. It's on the volumes only. So from the volume side, 20%, we are optimistic that minimum 20% growth in that.

Okay. And secondly, on the modular furniture business, like I think the BIS norms are going to be implemented for that. So the imports will be reducing. So what is the outlook on that business because the growth has been slow from the consideration of very low base and the market is very large. So how do you plan to grow that segment?

Right, right now, the government of India have implemented the BIS standard on the manufacturing or the boards, whether it is MDF or particle board or whether they just apply. So nowadays, all the imports of board will occur, and we are using all the Indian boards for our manufacturing of all our furniture. So it is not increment on the furniture here. This is the standard is of the boards. So we are using all the Indian boards be manufactured in India with the Indian [indiscernible]. So these boards we are using right now. And what will be the next action of government on the furniture for the BAS? We will abide by that only.

No. I was saying that in the near term, we are trying to implement it on furniture also. So I would say, what is the growth outlook are you looking in that division?

Yes. Modular furniture divisions, we are aggressively working on different front in this division, adding the new solution considering the emerging interior requirements because furniture industries relating comes. So we are opting all those things. We have already upgraded our plant to state of our plant sort of thing. So once -- export also, we are focusing more in the last 2 years, we have started it, and we are putting more focus. Some of the discussions are happening on the OEM and tenting also. So -- and project side also, a lot of new builders and developers are connecting there, negotiating a lot of inquiries for modular high-volume project business also. So going forward, the division also, we are optimistic that we should also have a 20% to 25% [indiscernible] growth.

Yes. We have added studio concern which will serve the small customers in common time and give them the furniture fastest available in the fastest mode. So they can save their time. So this is what our plan is.

Yes. Okay. My last question is regarding your CapEx of INR 100 crores. How do you see the borrowings panning out like? Because borrowings also increased drastically because I think these are working capital issues, but how do you see it panning out? Like INR 100 crores, how much will be from borrowings?

See, passively, it will be borrowed, but majorly, it will be through internal accruals also considering the last financial year, around INR 50 crores plus cash generation was there from the office [indiscernible] since we are acquisition. So a little bit borrowings will definitely be there so that we can do the implementation of the project as per the time lines only.

So what would be the level of borrowing this quarter...

In the monetary, I can't say, but yes, that correct level of our debt-to-equity ratio is 0.56 [indiscernible] will not reach 0.75.

Our next question is from the line of Madhur Rati with Counter Cyclical Investments.

I wanted to understand regarding this aluminum windows and facade division. So what is our capacity? And with the [indiscernible] facility that we are commissioning, what would be the revenue potential for this division going forward. And sir, what kind of revenue can we expect from this division for FY '27?

See, as said, there is a defined capacity when we are working on any customer mix solutions is more of fabrication sort of things. We have to do design and fabricate the product as per the customer size and design. But in when it comes by '27, we are expecting a minimum INR 40 crores to INR 50 crores of revenue contribution from this new division.

And sir, what was the revenue in FY '26? And sir, can we expect the 20% to 25% margin on this product?

That's on the same line of business basically that when we talk about the uPVC windows and doors or whether it is a aluminum windows and doors, the extra are similar basically. So we have kept the same kind of the pricing patterns. And so 20% EBITDA margin levels are normal for both the line.

Got it. And sir, should the 15% to 18% raw material costs that have increased, sir, have we taken similar prices over the 3 prices that we have taken the quantum of price is it similar? Or is it lower than the raw material cost increases?

Definitely not lower than the raw material price hike because we have awarded our -- see, this price hike is not related to the polywood only, for the complete industry. So given using this industry, so all has revised their prices as based on the raw material prices. So surely, it is on the same level or on the high side on the whatever near term.

Got it. Sir, if you could help me with what was the inventory gains for FY '26 -- was in FY '25?

We have not quantified this asset because it is a regular ongoing activities. Sometimes the prices go up, sometimes goes low. So at the end of the year, our focus is to maintain the margin trajectory in the improving levels only. So we have not adequately quantified it. But yes, when the prices are increasing, we are always on the gaming front.

Sir, if I were to consider the 4% gross margin improvement that we have seen during this year, sir, how much would be attributed to a better product mix versus inventory gain?

It is more contributed by the better product mix only, better product mix than operational efficiency on all fronts, basically we have improved our -- upgraded our machines also our operations also. So where we have cut our overhead costs and all those things. So from inventory side, it is a negligible things, basically.

Got it. Sir, also, if I were to come to a modular furniture division, sir, last year, we did a revenue of INR 40 crores, and this year, we'll get the revenue of INR 43 crores. So we are very optimistic about this division. So sir, where is -- where are we lagging in terms of growth for this division, if you could help us understand?

Again, basically what we did in our PVC profile division also the last 2 years, we have -- we have been more cautious about the profitability center margin front. So that's the reason that our revenue growth in the last financial year was not that too much what we expected. So if you see that last financial year, modular furniture division, net of our profitability has been improved a lot. In fact, our PAT margins gone up by about 80% plus as compared to FY '25. So the end product mix, again, that also exist in modular furniture division. Now that everything has already implemented, now more focuses on getting new larger orders and executions. So in that race, we have already added key 4 new brands like [indiscernible], Smart Homes, M3M, apart from the -- our existing clienteles of PLA and [indiscernible]. So we are approaching the new builders and getting good response. So going forward, we will see the top line growth also as expected.

Sir, just a final question from my end, sir, how should we look at the working capital cycle with the project business increasing in the aluminum [indiscernible], modular furniture, because, sir, there is a competitor for HRS [indiscernible] sir, even they are into aluminum facade, their working capital versus the margin is similar. So how should we look at our working capital cycle going forward?

The working capital cycle in the current line of business also where we are doing both the vendors or PVC vendors and modular kitchen. So same kind of thing to be [indiscernible] because in project business, scattered payment terms, so that cash flows are regularly maintained from the stage payments and [indiscernible] advance and on delivery and partial execution and full execution, all those things. So we don't foresee any kind of -- because in aluminum, it doesn't require to have the bulk inventory at a time because it's a regular procurement item, and we have to get it quoted or finished at the client specific requirement. It's made to size. So working capital we, well managed between the same levels what we are currently having.

And sir, do we have any price pass-through close in the aluminum division, because the prices are volatile.

Definitely. So see, what happens in this particularly aluminum industry, there is a base price close always as just because the aluminum is driven by the [indiscernible] price. So most of the large projects, every builder, developers, they keep this close in all the orders.

Got it. And sir, the fluted panel division that can just reached INR 100 crores even the next 2 years? And sir, do we also -- so what product of these fluted panels are manufactured now versus bought out for this product?

So nothing is bought out for us. We are a 100% manufacturing company. If you see our financials, like our stable purchases were [indiscernible]. So that manufacturing only. And expecting the level of INR [ 200 ] crores in the next 2 years, definitely, it is in our target because we have already reached INR 54 crores this year. So...

Because of this year...

This can happen in earlier also earlier financial...

No, sir, I was asking about whatever design, the design printing sheet, whatever is required in this division? Is that manufactured in now or that is important?

It's a raw material for everyone. It's a raw material, it is outsourced by everyone. It's not manufactured in-house. But yes, certain fees are done...

Size and tools, we are manufacturing. On the new designs, we are developing our own. And the finishes, we are buying the paper and PVC still from the market, and then manufacturing in our plants only.

Got it. Sir, so is there a possibility of us also manufacturing this in-house going forward? Or once this business scales up to INR 100 crores levels or that will be a bought-out item only?

The traditions and that -- but right now, we do -- no unit in India, and there's one unit is going to be set up near Mumbai. So there is suppliers because that is not a very big quantity. So if we will [indiscernible] INR 1,000 crores, then only we will think about it.

Our next question is from the line of [ Harshit Katkar ] with Robo Capital.

I wanted to understand -- yes, I just wanted to understand the revenue split of only PVC and uPVC for this year, FY [ '26 ]?

PVC and uPVC, altogether, that revenue for the last year, it was INR 220 crores. Out of that, about 70 -- 60 from the uPVC vendor division and remaining from the PVC profile division.

All right, sir. Understood. And we said that the current capacity at 85% utilization can do INR 450 crores of top line revenue, right? Just wanted to understand the INR 27 crores of CapEx that you have done in FY '26 and the INR 30 crores, INR 40 crores of CapEx that we are going to do in FY '27. So what quantum of capacity are we putting? And what kind of revenues can we see in FY '27 itself? It was INR 27 crores is already done, right? So '27, '28, the new capacity, you want to understand the revenue from new capacity only.

It is a new capacity, what we are adding, it is for the different product verticals, one is for the extrusion related WPC doors and WPC profiles. And then second one is the aluminum windows and facade division. So on the revenue generation from this new CapEx is concerned, this current FY '27, we are projecting somewhere around INR 55 crores to INR 60 crores revenue addition.

Right. Understood. And going forward, to achieve the 30% top line growth. So what kind of sales strategy do we have?

We are already testing on different sales strategies starting from the B2B to B2C also within that project is also there and some part of the exports. So to enhance our reach to [indiscernible] markets, we are participating regularly in the executions and all those things, protocol digital media also, adding new med heads to approach more and more builders and architecture, developers and gradually announcing our rooms also. So all center of sales and marketing, we are active.

Right. I was just asking because the facility was around 50% to 60% utilized since last 3 years. So I just wanted to understand, what gives us the confidence that we would be able to utilize the current facility as well as new CapEx that you are doing, we'll be able to sell those products as well. So is the demand so much? Or do you have any new strategy in place?

That is very simple because wood is a scale product and the good products are very costly day by day. Maintenance of wood products and the manufacturing product installation, the manpower is also a big challenge. So everybody is going for all the alternate building materials. So these are the ultimate building my peers. Everybody is now looking for the easy and quick installation because in our material, the installation is very important. If your installation is very easy and sells labor can install it, then at a reasonable price. And then it is a big market. So all over India, all the big builders and all this, they are going for alternate materials. And materials like our -- whether it is a fluted panel or whether it is our doors and windows. So they are now in a big demand.

Our next question is from the line of Deepak Varma from [indiscernible] Capital.

Yes. So first is, I wanted to understand the competitive economics within the segments that you are there, for example, in India [indiscernible]. So how does it work in terms of competition, pressurizing margins and returns? That is the first question.

Okay. See, regarding that some competition in the [indiscernible] division of aluminum windows and facade division, see basically, this is more of the service industries [indiscernible]. Here in India, there are a lot of international brands who supply these systems and they are associated with different local players, aggregators who are serving to the end were customers. So we are already into this land from last 16, 17 years. And in fact, we have already got associated with a couple of international brands also and offering these solutions with their associations. So competitiveness is very well taken care when we are approaching any builders or developers. Once we will see if any builder developer is calling us, that means they are satisfied with our services, with our offerings. So to win that order, definitely pricing has to be competitive. So it is a joint effort from the system of class as well as fabrication effect.

So within aluminum, you're providing systems as well as services or you're also taking from local helper services?

Yes, I think on our own system also. And at the same time, we are associated with the international system and suppliers also, because some of the projects, like the client requires the international brand because the system companies are also being their marketing, they are placing their product to the builders, develop the large projects directly. And since they are not into the execution, they are only the system suppliers. So they do have the partners. So some of the brands, we are also the trusted partner for them.

So primarily, this is a service business, but part of what you're providing within the service you're producing also?

Yes, yes.

And what -- how do you decide which part you're producing?

It's a complete -- complete source of aluminum windows and doors, they are not excluding the aluminum. Other than aluminum, aluminum is the key material for any windows and doors or element. So is the fabrication bit [indiscernible] fabrication require specialized machines and tools and a lot of expertise technicians and technology. So all those are with us, we have established and...

Sir, my question was on this fabrication only, which build up, whatever we are servicing, we are fabricating. How do we decide which ones are fabricated? What factors determine that?

Sorry, can you -- can you just elaborate?

So part -- so basically, we are providing the service on top of some systems, which we also outsourced and we also [indiscernible], right? So I'm just asking, which part of the whole systems do we fabricate? And how is that decision taken?

So no, in the company for many, for example, if it is a system windows and doors, we have to supply for a project, system windows and doors. System means that aluminum part and their hardware accessories. They are provided by a system company. And then when it comes to our factory, then we do fabricate, we source the glasses as per the specifications and a lot of assembly and other things that does happen at our end. When it is our own system, the does get the system profiles to date as well as specification as per our design from companies like [indiscernible], another student companies, who had our own designs of hardwares as we get produced from other companies and some of the hardware we do manufacture and now also through our backward integration. Glass is always outside for everybody. So majorly, these are the 3, 4 components.

Okay. I'm not sure if I got the answer, but this I'll come to my second question.

Just like stitching a short. For the short, you need a cloth. So we are picking from the cloth factory, and then the buttons and the fabrication is taking place. As per the design and because the requirement as to the size. So every building is having a different designs. The facade is having different designs. And the glass is different as per their requirement as per the weather conditions. So we designed for the system as per the requirement of the interior, the architects of these buildings is integrate our team with them. Then we finalize what system is required for this building is 50 floor, the design criteria is different. If it is a 10 floor building, the design criteria is different. So we are doing all the engineering for them. So we are an integral part of the design system, and then we are implementing as per the designs.

However, within this, we are also fabricating our own systems, part of the solution is that, right?

Yes.

Yes. My question was on that part. How do we define which parts? Is that -- that's the only question. I understand some of the systems or large part of systems maybe we are taking from outside from the brand or international players.

So for example, -- for example, if I name some of the system companies [indiscernible] one of the systems or [indiscernible] is one of aluminum system. So they are having their teams and seeing warehousing and all those things. And then they are -- in their social -- with their channel partner, as the fabricator. They are pitching new projects, getting the product approved, getting the orders and then ultimate fabrication happens at the subrogated end. Fabrication as well as the execution. That is the responsibility of this that fabricating partner. So this is one system, which is collected by the builder or the customer, okay? I want the windows of the super make. So super supplier given, but some of the components of that particular windows and doors, which is the aluminum profile on [indiscernible]. So it happens. So we are sincere on our polywood system also. So we are offering both solutions. Yes, [indiscernible] developers directly.

So there must be some coordination happening with the companies like [indiscernible]?

Yes, I just named one name. So whichever brand that -- in terms of brand or the system company they are associated. So we are -- both are acting as a team to the builder.

I'll come to my second question, so it's time. Second is that aluminum prices, as we all know, are close to all-time high right now. Does that impact us in any way, what are the risks we get to manage and why we entered this segment at this time?

Certainly, in aluminum industries, it is basically prevailing practice. See whatever the projects are there, they are linked to the annual base rate from the [indiscernible]. So whatever the order book we are currently are, none of the project is without that base rate model. So -- yes. So that fluctuation is always as well from both sides. Price is going down, we have to pass it on. If it goes higher, then builder will pay to the supplier.

So it's basically long term.

That is well out there in the aluminum business, particularly, the last price doesn't exist because it is a well accepted practice throughout all the real estate sector.

Okay. Got that. Got that. So it will impact us when it goes down also. It won't impact us when it goes down also.

Yes. It would impact in any.

Is the cost plus pricing that we do or what?

Yes, it's a customer strategy, it's a customer strategy.

Your next question comes from [ Aditya Jain ], an Individual Investor.

Congratulations on a good set of numbers. My first question -- my first question is that you've mentioned in the call that INR 174 crores is our current order book. Can you provide the split? And also what was this order book last year? And what are the execution time lines for this order book?

Last year that the order book was in the range of INR 220 crores, INR 240 crores. So the current order book is the highest order book what we are having. So the breakup of this order book is basically the 3 verticals. One is the uPVC windows and doors, which is approximately INR 84 crores of order book; INR 34 crores is related to the modular furniture division. And the remaining, that INR 56 crores, it's sort of a newly added division of aluminum windows and facade. So altogether, INR 174 crores. This execution time line for all these products, depending on the defense, but definitely that 100% of this will be executed in the next 18 to 24 months.

18 to 24 months, okay. So the new line that we are setting up for those, right? When -- and you said that, that will be commissioning in the second half of this year. So what kind of revenues do we expect from that line?

WPC door?

Yes, WPC door.

Yes, we have already commissioned the machines and all. Client runs are under process. So from the next quarter, we are going to commercially launch it. So this year, we are expecting somewhere around INR [ 50 ] crore revenue contribution from this new WPC door.

How much is INR [ 60 ] crores? Sorry. Hello?

Sorry to interrupt. Sir, so the line for the management has been disconnected. Please stay connected while we can reconnect the line for the management. [Technical Difficulty] Ladies and gentlemen, thank you for patiently holding. We have the management line reconnected. Yes, sir, please go ahead.

[ Abiji ], sorry, line got disconnected. Abiji, are you online?

Yes, I'm online. Just wanted to know what kind of revenue will we be generating from WPC doors this year?

INR 15 crore, 1-5 crores because last quarter, we are going to launch it commercially. So effectively, we will be having the revenue contribution for the H2 only.

One question that was asked was that what kind of volume growth are we looking at this year? My question is a little -- is pretty much, what kind of volume growth you had last year? Because we had around 13%, 14% sales growth. So what was the volume growth?

Last year also, it was somewhere around 20% growth in the [indiscernible] division.

Hello? Okay. Hello? So you said 15%, 20% volume growth last year as well?

Last year also, yes. So this year also we are -- that is a minimum 20% growth we are projecting for the current financial year and then further revenue contribution will be from the newly added product verticals.

No, my question is like what you are saying is that our volume growth was in line with -- absolutely in line with our revenue growth. So there was no -- like no pricing-related growth last year. Is that what you were saying, sir?

I think a growth asset in our line of business, that's [indiscernible] because prices doesn't go one-sided. So some couple of times, we have to reduce the price also when the raw material prices goes down. We see the rising trend of the PVC resin, which is the key raw material. Last year, it was moving in the range of the INR 68 to INR 85. So when the material is in the range of 80, 85 for the longer period, the prices are higher, once it comes down to below 70, so market demand even back to sometimes competition also start reducing the prices. So we also have to reduce. So the prices of the finished product, what we have sold in last year also, it was on an average of the same trajectory, you can say, except the indirect overhead cost additionally.

One question that I have is like on this order book, and I would assume that for a lot of projects, we would make custom panels, doors, windows, whatever we do or profile, do we take significant advances from the customers? And if it is so, can you give an idea of what kind of advances do we have from customer?

Yes, it is, again, it is a market practice basically when we are closing any price for a longer reason -- longer period. So from the back side also, there has to be some commitment. So here it is through the modulation advance, which is normally 10% to 20% of the total project that order value. Advance is provided by the builder or developers.

So what are the current -- because last year, I remember in our annual report, our advances was around INR 5 crores. So what kind of advances do we have today on the current order booking? What do...

On the [indiscernible], I think it is more than INR 7 crores worth of advances we have with us.

Okay. Sir, last question, sir, on the working capital side. What has happened is that -- and that has also kind of impacted our debt metric is that our receivables have gone up, our inventory levels have gone up and payables are almost 0. Do you see any reasons for the same? Because last year, at least we had around INR 10 crores of payables.

See, it was a strategic decision taken by the management to have the benefit of the pricing that better pricing and at the center the continued supply. This activity was done in the last 2 months of the financial year, where we have paid off all the suppliers [indiscernible] looking at the middle is to price bar prices, the disruption in the supply chain and all those things. So that was a call we took, and we got benefited from that. We had at the ample inventory for all our raw materials, whereas we have comped that supply is totally disturbed. So none of our activities going forward in April or the current month affected through these issues. So that was the one reason that the we only paid all of our vendors. And regarding the debt, it is in the same level, there is not much hike in that it is in proportionate to the revenue growth only. And inventory, as I mentioned that we had the huge securement, especially with the PVC resin and polymers in the March month itself to maintain our operations continuously. So that's the reason inventories were increased. So going forward, but again, that this working capital cycle for all these 3 factors will be on the previous levels.

Last question, sir, you said that WPC today, nobody manufactures WPC doors in India and all the WPC doors are imported. Is that correct?

See, WPC doors, the kind of the WPC doors we are going to launch is the complete solutions for the [indiscernible] other entity. So we differentiate this with the existing solutions, which is the WPC that form board, solid board doors. It is a totally defense solution what we are coming up.

Ladies and gentlemen, we will take this as a last question for today. I now hand the conference over to Mr. Digvijay Dhabriya for closing comments. Yes. Please. Hello? Yes, sir, please go ahead.

So thank you for all the questions and answer. We have presented all -- I hope that we have answered all your questions properly. And I welcome everyone to please do visit our facilities and see our project closely and what we are doing and what the new areas in which we are concentrating our production facilities and design facilities. So what we are doing for the exports also, they are remarkable achievements at our Dynasty manufacturing facility. Last year, we have exported a big number of furniture to Europe. And this year, we are having ample orders from Europe, although the prices are under pressure, but demand is there. So I hope. Thank you, everyone, for giving your time and asking the valuable questions. Thank you. Thank you.

on behalf of Dhabriya Polywood Limited, that concludes this conference. Thank you, everyone, for joining us, and you may now disconnect your lines.

Thank you.