RUSHIL - Rushil Decor Limited Share Price

In their earnings conference call, management expressed a positive outlook for Rushil Decor Limited, projecting consolidated revenues to exceed INR 11,000 million for the financial year 2026. Key forward-looking points include:

1. MDF Business Performance: They reported strong growth in export revenues, with a 52.8% year-over-year increase in Q4 FY25. The full-year MDF business revenue reached INR 6,637 million, a 5.2% growth from the previous year. They anticipate further export expansion, targeting export revenues of about INR 900 million for FY26 with an EBITDA margin of 14%-16%.

2. Laminate Business Growth: The laminate division posted a 4.7% year-over-year revenue growth for FY25, and they expect continued strength in domestic and international markets. Phase 1 of the Jumbo laminate facility commenced commercial production in April 2025, with earnings from exports already received.

3. Profitability: The company's Profit After Tax (PAT) for Q4 FY25 was INR 126 million, marking a 40% year-over-year increase, with a full-year PAT of INR 479 million (11.1% growth). They aim to maintain an EBITDA margin between 12% to 14% across their product lines.

4. Capacity Expansion and New Ventures: Management highlighted the ongoing capacity expansion, including the upcoming Phase 2 of the Jumbo laminate facility expected to begin in October 2025, contributing to increased production capacity and improved market offerings. They are also entering the plywood business through a joint venture, targeting sales of INR 15-18 million this year.

5. Market Adaptations: They indicated that their export strategy would focus on developed markets like the U.S., which can yield higher margins despite existing tariff barriers. This positioning aims to counterbalance domestic market challenges while leveraging strong export demand.

Through these strategic initiatives, management conveyed confidence in navigating both domestic challenges and harnessing international growth opportunities effectively.

Here are some of the major questions and their respective detailed answers from the Q&A section of the earnings transcript:

1. Question: For this new fiscal year, fiscal year '26, can you help us understand the new capacity that is coming online? How much will that enhance your revenues and profitability? What is your outlook for this full year in terms of sales and profits?

   Answer: We are targeting about INR 90 crores of exports this financial year from our new capacities, expected to yield an EBITDA margin of 14% to 16%. Our overall revenue target for this year is INR 1,100 crores. We are focusing on improvements in MDF sales and expect to achieve over 10% revenue growth in our laminate plant.

2. Question: Could you provide more color on the plywood business joint venture?

   Answer: We have been in this business for a while, and the JV aims to provide a complete product range to our loyal distributors and retailers. Our target for this fiscal year is around INR 15 to 18 crores in plywood sales, with expected margins of 5% to 8%.

3. Question: How would you see the prices and margins in the large-sized laminate segment going forward?

   Answer: There are limited manufacturers producing jumbo laminate sizes. The margins for this product are good, and we anticipate an EBITDA margin ranging from 9% to 14%. The introduction of jumbo laminates in our product line will positively impact our margins.

4. Question: What is your outlook for MDF in Q1? Are there plans for a price hike?

   Answer: Demand is stabilizing, with some competitors reducing prices by 2% to 5%. We don't plan a hike in prices shortly but will likely withdraw the current price reductions in the coming days as we anticipate increased demand due to the BIS standards, which should drive value-added offerings.

5. Question: How do you foresee the U.S. tariff environment impacting Jumbo laminate sales?

   Answer: The imposition of tariffs won't significantly affect our sales as India leads in the HPL market. If necessary, we can pivot to export to other markets. We have a robust strategy to meet revenue targets despite potential tariff impacts.

6. Question: What will be the capex for this financial year and FY '27, and how will debt repayment look?

   Answer: For FY '26, operational capex will be around INR 15 to 20 crores, largely funded by internal accruals. We aim to reduce debt by approximately INR 55 crores this year, further improving our net debt-to-equity ratio to around 0.35.

These answers reflect the company's operations and outlook based on the discussed earnings.