Rushil Decor Limited

Rushil Decor reported a consolidated revenue from operations of INR 2,356 million for Q2 FY26, marking a 2.3% year-over-year growth and a significant 31.5% sequential increase. This strong sequential recovery was attributed to the normalization of operations across manufacturing facilities, particularly after the fire incident at the Andhra Pradesh MDF plant in Q1 FY26. The company achieved a gross profit of INR 1,059 million (44.9% margin) and an EBITDA of INR 225 million (9.5% margin), with a PAT of INR 51 million (2.2% margin).

The MDF segment's revenue for Q2 FY26 was INR 1,695 million, experiencing a marginal 1.3% year-over-year decline but a robust 36.4% sequential growth. Domestic revenue grew 5.2% YoY, driven by healthy demand in housing and furniture. However, export revenue declined 22.9% YoY due to U.S. tariff-related uncertainty and logistics issues. The segment's blended realization improved 7.7% YoY, with value-added MDF products contributing 45% by quantity and 56% by value. EBITDA for the segment stood at INR 183 million, achieving a 10.8% margin, with capacity utilization at 79%.

The laminate business demonstrated strong growth, with Q2 FY26 revenue increasing 8.9% year-over-year and 22.9% sequentially to INR 562 million. Export revenue grew 8.9% YoY, supported by improved realization in premium products and expansion into new international markets. A significant development was the initial contribution from the Jumbo Laminate facility, and trial production for Phase 2, which adds 1.6 million sheets per annum, has commenced. The company also expanded its market reach by adding 10 new direct distributors and over 40 retailers/dealers, while maintaining 90% capacity utilization.

Despite revenue growth, profitability faced headwinds. The MDF segment's performance was impacted by higher resin prices and raw material sourcing issues, which led to a temporary plant shutdown. The laminate segment's EBITDA margin for Q2 FY26 was 7.7%, a decrease from previous quarters, primarily due to upfront expenses associated with the Jumbo Laminate facility and arrears of increment. For the first half of FY26, the company reported a net loss of INR 89 million, largely attributable to the production loss in Q1 FY26 due to the fire incident.

The Jumbo Laminate facility, a key growth driver, has started contributing to revenues. Management expects Q3 FY26 utilization for Jumbo Laminate to be 30-40%, increasing to 50-55% in Q4 FY26, with optimal utilization of 85%+ in the long term. The total capital expenditure for both Phase 1 and Phase 2 of Jumbo Laminate was approximately INR 100 crores, with a projected peak revenue generation of INR 150-175 crores by the end of FY27. The company also received INR 114 million from the Andhra Pradesh government under its Industrial Development policy.

Rushil Decor has revised its overall revenue guidance for FY26 to INR 970 crores, down from the earlier INR 1,000 crores, but still incorporating contributions from Jumbo Laminate and new Singapore operations. For FY27, the company projects an overall revenue exceeding INR 1,100 crores, driven by the full ramp-up of Jumbo and expanded international presence. The overall EBITDA margin is expected to be in the range of 10-12% for FY26 and around 11% for FY27, with Jumbo Laminate targeting 14-16% EBITDA margins. The company continues its plantation and agroforestry initiatives for raw material availability and plans solar rooftop installations to reduce energy costs.