Rushil Decor Q3 FY26 earnings call

Rushil Decor reported a consolidated revenue from operations of INR 2,165 million for Q3 FY26, marking a 2.3% year-on-year growth. The company achieved a gross profit of INR 1,011 million, translating to a margin of 46.7%. Consolidated EBITDA stood at INR 231 million with a margin of 10.7%, while Profit After Tax (PAT) was INR 52 million, representing a 2.4% margin. For the 9M FY26 period, revenue was INR 6,313 million, a decline of 5.4% YoY, and the company reported a marginal loss at PBT and PAT levels.

The Laminate business was the primary growth engine in Q3 FY26, with revenues increasing by 20.4% year-on-year and 6.9% sequentially to INR 585 million. Domestic laminate revenues saw a strong 55.6% year-on-year growth, complemented by a 6.8% increase in export revenues. Blended realization improved by 16% year-on-year, driven by a higher contribution from premium products and a stronger domestic presence, with capacity utilization remaining robust at over 90%.

The MDF business generated INR 1,486 million in revenue for Q3 FY26, with domestic revenue growing 29.4% year-on-year. However, the segment's EBITDA was INR 174 million, resulting in a margin of 11.7%, which is lower than previous quarters. This compression is attributed to intense competition and a pricing war in the commodity MDF market, alongside elevated resin prices. The company is strategically focusing on increasing the share of value-added products, targeting 50% of volumes by the end of FY26, to improve realizations.

The Jumbo Laminates business achieved a significant milestone with the commencement of commercial production under Phase 2, making its fully planned capacity operational. In Q3 FY26, this segment contributed approximately INR 6 crores in revenue, operating at a low capacity utilization of 20-25%. Management expects utilization to improve to 60-65% in the next financial year, with projected quarterly revenues of INR 30-35 crores and anticipated EBITDA margins of 14-16%.

For the full financial year FY26, Rushil Decor anticipates an overall turnover of around INR 900 crores with an EBITDA margin of 8-9%. Looking ahead to FY27, the company projects revenue to exceed INR 1,000 crores and overall EBITDA margins in the range of 10-11%. The management also noted that industry-level capacity is expected to cross 6 million CBM by FY28, representing a 15% CAGR, which could intensify competitive pressures.

Resin prices, while easing marginally during the quarter, remained above normalized levels, contributing to cost pressure. However, management expects resin prices to normalize soon. Demand from the real estate sector, a crucial driver for MDF, has shown improvement, with order books filling up. The company sees a positive outlook for FY27, driven by India's growth story and events like the Commonwealth Games, expecting increased inquiries and orders.

Despite seasonally softer demand and competitive pressures, Rushil Decor's strategic priorities remain clear: scaling up the Laminate and Jumbo Laminate businesses, strengthening its international footprint, and increasing the share of value-added products in MDF. The company expanded its distribution network by adding 11 new direct distributors and over 26 retailers/dealers during the quarter, enhancing its domestic presence and market reach.