Duroply Industries Limited (516003) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm pleased to welcome you on behalf of Duroply Industries Limited and SKP Securities to Duroply Industries Q1 FY '27 Results Webinar. We have with us Mr. Akhilesh Chitlangia, MD and CEO. This webinar is being recorded for compliance reasons. And during the discussion, there may be certain forward-looking statements. These must be viewed in conjunction with the risks that the company faces. We'll have the opening remarks by Mr. Chitlangia followed by Q&A session. Thank you, and over to you, Akhilesh.

Thank you, Navin. Good morning to everyone, and thank you for attending our earnings webinar for the first quarter FY '27. On the 26th June 2026, Duroply began its 70th year in business. It's a true hallmark of our longevity and durability in the trade. I take this moment to thank all our shareholders, investors, trade partners and team members for their association with Duroply. Such a long journey would not have been possible but for the strength of brand Duroply, which is recognized pan-India for its high standard of quality. On the business front, Duroply closed its first quarter revenue at INR 99.6 crores, a 6.5% growth over the same period last year and down 10.7% from the previous quarter. The business reported a profit before tax of INR 1.04 crores as against INR 1.88 crores same period last year and INR 1.31 crores in Q4 FY '26. For the quarter, revenue from in-house manufactured goods stood at INR 51.3 crores, a growth of 3.7% over the same period last year and down by 17% from Q4 FY '26. Revenue from contract manufacturing stood at INR 48.3 crores, a 9.6% growth on a year-on-year basis and down by 2.9% on quarter-on-quarter basis. Gross margin this quarter stood at 35.5%, up from 34.1% in Q1 FY '26 and 34.3% in Q4 FY '26. This is a direct result of better product mix and the company now reaping benefits of efficiency built in over the last 18 months in its manufacturing strategies and stronger relationship with its contract manufacturers. Our EBITDA for the quarter stood at INR 4.82 crores, down 3.5% from Q1 FY '26 and down 7% from Q4 FY '26. In margin terms, the EBITDA margin stood at 4.8% of sales as compared to 5.8% in the same period last year and 4.6% in Q4 FY '26. This was driven by a larger brand spend, a conscious decision taken to increase brand visibility that will, in turn, help in the medium to long term. Our brand spend for this quarter stood at close to 4% of sales as compared to 2.2% in the same quarter last year. Our debtor days for the quarter decreased to 38 days of sales as compared to 42 days last year. Inventory days were slightly elevated to 164 days as against 145 days last year, and creditor days were also elevated to 93 days as against 72 days last year. Overall, the West Asia war created significant cost pressures, which the company has mitigated through various measures, including better usage of material, passing on the cost increase and negotiating better terms with its vendors. At the unit economic level, the margin improvement reflects the strength of the brand. However, our growth numbers in Q1 are below expectation. We expect growth to improve into double digits in Q2, supported by the increased brand spend. I would like to now open the floor to any questions that you may have.

Thank you, Akhilesh. [Operator Instructions] There are no questions. I'll hand over the webinar back to Akhilesh for his closing remarks.

Thank you, everyone, for joining our call. It is truly a proud moment for us to have entered our 70th year of business. I once again thank all our shareholders, partners and team members for the commitment to the business. I look forward to seeing you at the next earnings call. Thank you.

Thank you, Akhilesh. Thank you, ladies and gentlemen. And we'll see you again in the next quarterly webinar. Thank you, and have a wonderful day.