Dhabriya Poly. — Q4 FY25 earnings call

We had expected some higher figures in that year, but as we mentioned in our previous earnings call, due to certain factors which were beyond our control like extended rainy season and then certain restrictions on the construction activities, particularly in Delhi NCR region, which went up to around 40-45 days. So these 2-3 factors basically, we have compromised some of the revenue only from the project business related to UPVC Windows and Modular Furniture because during that period, onsite exhibitions were totally stopped. So that was the reason and going forward, we are quite optimistic. In fact, whatever the vision we have taken earlier, the long-term vision which we had shared earlier that going forward for next 4-5 years, we have to grow certain percentage. So we stick to that and looking to the current order book, the market response, other multiple efforts towards penetration in different segments. So going forward, good growth is expected actually.

Management explained the reasons for missing FY25 growth targets and reiterated confidence in achieving >25% growth for FY26 based on current order book and market response.

Asked by Pritesh Chheda

As I said that we can say more return on capital investment will come from the UPVC Window and Modular Furniture because their CAPEX amount is lesser. Lesser CAPEX is required to generate the revenue but... EBITDA side that higher margins are almost same and all three. Yes, currently in our case, the furniture advertised little bit lesser because... Almost 1% or 2% differentiation is there. And then in the furniture it is lesser. And then second one is the UPVC Window and better margin is in this PVC profile segment because here the value added products are there and working capital cycle is bit higher over there. We can protect more.

Analyst probed for specific ROIC differences, and management indicated higher ROIC for UPVC Window and Modular Furniture due to lower capex, while PVC profile has better margins due to value-added products.

Asked by Deepak Verma

At the current capacity, revenue generation of around Rs. 450-Rs. 500 crores is really possible and CAPEX which we have planned for the next 2-3 years, which is related to certain new product additions and at the same time for some capacity enhancement for our South India plant also. So once that is implemented, so that will definitely contribute around Rs. 150-Rs. 200 crores of topline. That would be the additional one after adding all those CAPEX.

Management provided clear figures for potential revenue from existing capacity and the additional revenue expected from the planned capex.

Asked by Madhur Rathi

The product addition of WPC Doors is not based on the higher margin or some other calculation. It is basically the requirement going forward because we are providing a solution for the wood free house. So whatever solutions correctly we are having in that one component is missing, that is the internal Doors for the bedrooms and all. So for that we are coming up with these solutions. Margins since it is from the same segment; same line of business or similar margins we can expect from this... WPC is the kind of solution which we are working on and we are planning to bring in. According to the information, what we have it is the new solutions for the Indian market.

Management clarified that WPC Doors are a strategic product to fill a gap in their wood-free solutions, expecting similar margins, and positioning it as a new solution for the Indian market.

Asked by Madhur Rathi

You can see that in current financial year, we have very good cash flows with us, in fact around Rs. 25 crores plus cash profit is there in the books. So going forward, based on the increased business and all, so this should also increase. So considering the profitability and incremental business, so that CAPEX can be met out mostly with the internal accruals and at the same time, our vision to be debt free in the next 4-5 years can also be easily achieved.

Management outlined how the planned capex will be funded primarily through internal accruals, aligning with their goal of becoming debt-free within 4-5 years.

Asked by Reena Gattani

We had started our manufacturing factory in Bangalore for the fluted and soffit. So that major addition is in that plant only... Rs. 100 crores, just our plan is to do it in within 2 years, next 2 years maybe, or you can take it 2-3 years we will achieve, take this segment to Rs. 100 crores level.

Management explained the reason for the increase in employee count (new Bangalore factory) and provided a specific revenue target for the fast-growing fluted panel segment.

Asked by Manan Madlani

South is the major contributor because being a coastal world that acceptance for the good substitute solution, particularly the polymer-based product is more from the South India. So we can say around 40% revenue is coming from the South India itself. And then the major market after South India is the Eastern part that West Bengal, Odisha region... Yes, West is lesser penetrated. In fact, we mentioned earlier also that Mumbai region earlier we used to do very good business over there. But last year itself, we have opened our depot and showroom in Mumbai to cover up, get more revenue from the Maharashtra regions.

Management provided a breakdown of revenue contribution by region, highlighting South India as the largest contributor and outlining efforts to increase penetration in the Western region.

Asked by Ajay Shantaram Kale