Rushil Decor Q1 FY27 earnings call

Rushil Decor Limited reported a consolidated revenue from operations of ₹229 crores for Q1 FY27, marking a 27.8% year-over-year growth. Gross profit stood at ₹89.2 crores with a margin of 39%. However, EBITDA was ₹18.2 crores, resulting in an EBITDA margin of 7.9%, which was impacted by elevated chemical and raw material costs and higher freight costs. Profit after tax for the quarter was ₹2 crores.

The MDF business recorded a revenue of ₹145.6 crores, growing 17.2% YoY. India MDF revenue specifically grew 32.9% to ₹144.7 crores, with sales volume increasing 16.1% to 52,162 CBM. The EBITDA for the MDF segment was ₹12.3 crores, with a margin of 8.4%. Capacity utilization in Q1 FY27 was 66% due to a planned annual maintenance shutdown in April. Management expects utilization to improve, aiming for 4,000-5,000 CBM of exports monthly to maintain production capacity, despite current export volumes being low at ~255 CBM due to container shortages.

The overall laminate business was a key growth driver, with revenue increasing 65.3% YoY to ₹73.6 crores. This was supported by a 60.6% growth in India laminate revenue to ₹25.1 crores and a 67.9% growth in export revenue to ₹48.5 crores. Total sales volume increased 27.9% to approximately 8.8 lakh sheets, with blended realization improving 29.3% to ₹836 per sheet. The Jumbo laminate segment showed significant progress, contributing ₹11 crores in revenue (25% increase) with an EBITDA margin of 20.6% on a volume of 1.13 lakh sheets. Current utilization for Jumbo laminates is 29%, with an aspiration to reach 55-60% this year and 70-75% next year, targeting ₹75 crores in revenue this year and ₹140 crores at 90% utilization.

The company faced significant cost pressures during the quarter. Resin prices, a critical raw material, increased substantially by 35% to 40%, while wood prices remained flat. Freight costs were also elevated, and shipping routes experienced disruptions due to geopolitical conflicts in West Asia. These factors contributed to the compression of EBITDA margins across segments. Management indicated that recent price hikes were implemented solely to offset these increased raw material costs and that the market is unlikely to accept further price increases.

Rushil Decor is actively focusing on improving its working capital and reducing debt. The company successfully reduced its debt by ₹18 crores in Q1 FY27. Management reiterated its goal to be a debt-free company by Q2 FY29, based on its scheduled repayment plan. For FY27, there are no major capital expenditure plans beyond maintenance capex, with only a small operational capex of ₹5-10 million planned.

The company continued to strengthen its distribution network, adding 15 direct distributors and 46 retailers and dealers in the domestic market. Internationally, Rushil Decor expanded its presence by entering two new markets: Honduras and Greece. These initiatives are aimed at improving market reach, product availability, and supporting future growth across its businesses.