Century Plyboards (India) Ltd (CENTURYPLY) Q2 FY23 Earnings Concall Transcript

Century Plyboards (India) Ltd (NSE:CENTURYPLY) Q2 FY23 earnings concall dated Nov. 11, 2022

Corporate Participants:

Keshav Bhajanka — Executive Director

Nikita Bansal — Executive Director

Nehal Shah — CSO

Analysts:

Aasim Bharde — DAM Capital Advisors Limited — Analyst

Rahul Agarwal — InCred Capital. — Analyst

Venkatesh Balasubramaniam — Axis Capital — Analyst

Achal Lohade — JM Financial. — Analyst

Sneha Talreja — Edelweiss — Analyst

Shubham Agarwal — Axis Capital — Analyst

Hitesh Agarwal — India Insight Value Fund — Analyst

Parth Bhavsar — Investec India — Analyst

Nikhil Agrawal — VT Capital — Analyst

Udit Gajiwala — Yes Securities — Analyst

Pranav Mehta — Equirus Securities — Analyst

Ashish Kumar — Infinity Alternatives — Analyst

Shrenik Bachhawat — LIC Mutual Fund — Analyst

Rajesh Kumar — HDFC Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q2 FY ’23 Earnings Conference Call of Century Ply hosted by DAM Capital Advisors Limited. Before the call, I would like to give a disclaimer that this call is just to discuss the company’s historical numbers and future perspectives and in no way this should be constitute as an invitation to invest in the shares of the company. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors Limited. Thank you, and over to you, sir.

Aasim Bharde — DAM Capital Advisors Limited — Analyst

Thanks, Vivian, and good evening, everyone. On behalf of DAM Capital Advisors, I welcome you all to Century Plyboards’ Q2 FY ’23 Earnings Call. We have the senior management from the company with us on the line. I will now hand over the floor to Mr. Keshav Bhajanka, Executive Director. Thank you, and over to you, Keshav.

Keshav Bhajanka — Executive Director

Thank you, everyone, for taking your valuable time out for attending the Q2 FY ’23 Century Plyboards Investor Conference Call. I am Keshav Bhajanka, Executive Director of Centre Plyboards. I have alongside me, Ms. Nikita Bansal, Executive Director; Mr. Arun Julasaria, CFO; and Mr. Nehal Shah, CSO. I presume that every one of you would have gone through our numbers in detail. Let me still brief you on the key highlights of Q2. At the onset, it gives me immense pleasure to share that we have done very strong cash flow generation of INR223 crores for the first half of the fiscal, despite huge inflationary pressure that the industry has seen in the recent past.

After delivering record sales in Q2, Q3 and Q4 of last year, we have achieved another record sales of over INR900 crores revenue in the second quarter.

Our plywood and laminate segment revenue recorded 9% and 8% growth Y-o-Y, while MDF and particle board segment revenue grew 23% and 24% Y-o-Y for the quarter. With the sustained input cost pressure in most of the wood panel segment, our overall gross margins were impacted by 90 basis points on a sequential basis to 33.15%. The company, however, was able to improve its overall adjusted EBITDA margin marginally by 20 basis points to 17.3% on a sequential basis. While our plywood and laminate EBITDA margin improved, we saw a considerable drop in EBITDA margin on a sequential basis in our MDF and particle board segments.

This has been driven by steadily rising timber and select chemical prices and operating delevers. The reported margins in these segments were, however, are still higher than our guided EBITDA margins of 25% from both the sectors.

It may be noted that the input cost inflation has softened a bit post Q2, while core Veneer prices have come off slightly over the past few days, chemical prices, particularly ethanol, melamine have softened a bit in Q2 and are likely to further soften in the next couple of months.

For MDF in particular, the timber prices, however, continue to remain slightly elevated. We have taken no price increases in any of our segments over the course of this quarter.

Our MDF brownfield expansion at Hoshiarpur is as per schedule and is expected to come on stream by November 2022. Our South MDF capex has received all the acquisitive approvals and the machinery has been ordered. We expect this facility to come on stream in H2 FY ’24.

Our greenfield laminate manufacturing unit in AP will come up in two phases. The first phase is expected to become operational in Q2 FY ’24. Our greenfield particle board project in Chennai, the Board has approved investing in a large article mode project with a capacity of 1,200 cubic meter with an investment outlay of INR550 crores. We expect the plant to commission in Q4 FY ’25. Our working capital expense reduced by 3 more days to 55 days in Q2.

We remain a net cash positive company with net cash position of INR176 crores as of 30th of September. Our Q2 ROCE stood at 22.22%, but adjusted for one-offs, the impairment loss in Myanmar and the entry tax reversal, the ROCE for the quarter stands at 29% plus.

We have taken an impairment on our investments in Myanmar subsidiary to the extent of INR47 crores in Q2. This would reduce losses to the extent of INR5 crores to INR6 crores per annum on the consolidated books year-on-year as it has become nearly impossible to conduct business in Myanmar due to the change in regime.

We are written back our earlier provided entry tax was INR14.25 crores relating to prior years after favorable verdict from the [Indecipherable]. Despite the challenging business environment, we continue to maintain our FY ’23 revenue growth guidance of 20% plus for the company.

The segment-wise growth guidance is plywood 15% volume and 20% value growth; laminate 15% volume and value growth; MDF, 20% volume and value growth; particle board 10% volume and 20% value growth. We also maintained our margin guidance for our business segments, plywood 13% to 15%, Laminate 14% to 16%; and MDF and Particle Board 25% plus. Thank you.

Operator

Sir, would you like to begin the question-and-answer session?

Keshav Bhajanka — Executive Director

Yes, we can.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Rahul Agarwal from InCred Capital. Kindly proceed.

Rahul Agarwal — InCred Capital. — Analyst

Hey, good evening. Thank you so much. Keshav, just three questions. Firstly, company is getting into a very high capex mode. It’s obviously positive as you see sustained demand and opportunities there, but the execution risks are increasing in terms of land acquisition delays, cost overrun, labor requirement deployment, stuff like that. Any thoughts in terms of how do you basically manage this risk going into next 3 years because we’re going to be into high capex mode for almost 2 years from now? That’s my first question.

Keshav Bhajanka — Executive Director

So Rahul, you are absolutely right. We are going into a high capex mode. And you see we are taking a number of initiatives, for instance, the particle board plant that you have just heard. We already have acquired the land. We’ve got the land from [Indecipherable] in Tamil Nadu and that is a big release because, as you know, acquisitional land becomes a substantial challenge. As for delays and cost overruns, you’re completely correct that there is a cost overrun environment today because of the high steel prices and high cement prices and so on and so forth. But I think we are able to provision for that to whatever extent possible. The ROCs on the unit even considering the higher capex costs are still fairly healthy. And one would be that we are managing the risk by creating a very strong execution. I think this has helped us in the past as well and even today, it is helping us in set up the most economical and viable unit possible.

Rahul Agarwal — InCred Capital. — Analyst

So in terms of manpower deployment, both at senior leadership plus middle management because you have so many plants coming up, how is that really going on right now?

Keshav Bhajanka — Executive Director

That is actually our first and top most parity, and we have expanded the team substantially over the course of the past few months. And this is the first test thought that in domain as to who is going to execute. But thankfully, we have been able to onboard senior management and very, very good resources out there. This has given us a lot of confidence that we’ll be able to deliver on our capex projects on time.

Rahul Agarwal — InCred Capital. — Analyst

Got that. Secondly, you mentioned MDF particle board margins 25% plus. That is for the current year. But if you could just share what is really happening from an industry perspective going into next 12 months? And what do you think about margins going into ’24 and fiscal ’25, like sustainable? I know the range is 2025, but if you could give any indication, please? That’s my second question.

Keshav Bhajanka — Executive Director

It is the reason we say 25%, even though the previous quarter may have been 30% plus something that sort because there will be ups and downs. Right now, there is pressure because import prices have come down due to shipping rates reducing. But despite that, we have been able to maintain a decent margin. Going forward, again, there is going to be a scenario in the industry, say, 12 or 18 months down the line, where there’s going to be overcapacity. And at that point in time, margins might get squeezed temporarily. But going forward long term, I think sustainable margins for us would be 25% or thereabout. Because I believe that with our brand, with our supply chain excellence, we’ll be able to generate substantially higher margins compared to the rest of the industry. And I think 20% is somewhat requirement somewhat of a requirement if you want to set up a very high capex plant is need of these two products.

Rahul Agarwal — InCred Capital. — Analyst

But 25% is applicant both to MDF and particle board going into like long term, right? Sustainable.

Keshav Bhajanka — Executive Director

Yes. There could see phases where margins were slightly lower, and there will be phases where margins are definitely higher. But long-term sustainable margins are looking at 25%.

Rahul Agarwal — InCred Capital. — Analyst

I understand that. And lastly, if I may, just on the overall EBITDA margin, obviously, there’s a lot of moving parts now given your new capacities largely coming out in fiscal ’24. And a lot of that are also value added. Next 3 years, I would imagine purely because assuming that MDF particle would also normalize between this 25% band, the company should make about 15% to 16% at a company level. Is that fair to assume? I know there is no perfect answer to this. But just as a range in next 3 years, is that okay?

Keshav Bhajanka — Executive Director

You have very good question. You are making me think. But see we have always stated that our objective is that we will return for 13% to 15% EBITDA margin in ply, 14% to 15% in laminates, and we will attempt for 25% plus in both MDF and particle board. That is going to be our endeavor. That is what we are targeting. If we achieve all of these, then definitely, we should have 16%, 17% margin for the company.

Rahul Agarwal — InCred Capital. — Analyst

Cool. I’ll come back in the queue. Thank you so much. All the best.

Keshav Bhajanka — Executive Director

Thank you.

Operator

Thank you. The next question is from the line of Venkatesh Balasubramaniam from Axis Capital. Kindly proceed.

Venkatesh Balasubramaniam — Axis Capital — Analyst

One simple bookkeeping question. The Myanmar subsidiary write-off of INR47 crores, that is very clear in the stand-alone numbers, right? It’s put out an exceptional or an extraordinary item. Now where does — is the adjustment — where is the adjustment in the consolidated numbers for this onetime write-off? Is it actually, first of all, is the write-off for INR47 crores in the consolidated numbers or it is INR29.8 crores? If you could clarify where has this actually been booked in the consolidated numbers?

Unidentified Speaker —

No. In case of consolidation of accounts, we have to add line by line items. So in case of consolidation, our investment value is adjusted with the loss on in that subsidiary. So it will not appear in write-off or impairment account in consolidation because loss has already been factored in line — line by line consolidation.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Okay. So line by line consolidation. So you’re basically saying it is in all items, raw material and?

Unidentified Speaker —

Because the net worth of that company is now reduced to INR12 crore only, so INR47 crores plus INR12 crores, INR59 crores was the total capital invested. So in line-by-line consolidation, I have taken care of that INR47 crore loss.

Venkatesh Balasubramaniam — Axis Capital — Analyst

So there is INR47 crores of loss across various line items right from raw metical cost, employee cost, other expenses, depreciation everything?

Unidentified Speaker —

Yes, yes. That is line-by-level consolidation. So there it will not appear, it’s the impairment loss.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Okay, fine. Understood. Now is it possible for you to repeat your FY ’23 guidance in terms of value, volume, and margins for each of those segments? And also request you to repeat it a little slowly, so that we can take it down.

Keshav Bhajanka — Executive Director

The guidance is 15% volume and 20% value growth for plywood, 15% volume and value growth for laminates, 20% volume and value growth for MDF, 10% volume and 20% value growth for particle board.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Yeah. What about margins?

Keshav Bhajanka — Executive Director

The margin guidance in plywood, we will attend for EBITDA margin, 13% to 15%, for laminates between 14% and 16%. And MDF and particle board 25% plus.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Okay. Now I guess for the first time I heard a 20% number for MDF. I guess, during the last number, last quarter, what was being communicated was you will definitely do 25% or more longer term, that is a sustainable margin. But I don’t know on the previous participant’s question, it said that short term, it could go to 20% to 25%. Have you communicated anything like that?

Keshav Bhajanka — Executive Director

No. I don’t think we have communicated anything like that. I was talking about 20% volume and value growth in terms of margin guidance still is 25%.

Venkatesh Balasubramaniam — Axis Capital — Analyst

So you believe even if there is overcapacity in, let’s say, FY ’24, you can still do 25%?

Keshav Bhajanka — Executive Director

In the short term there could be an impact but we did not anticipate doing 25% in Q1 either. So long-term guidance is 25%.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Okay. And where does — see, this is the reason I am again delivering on this point is this is a question which keeps coming up when we discuss Century Plyboards with the buy side is where do you get this confidence that it will not go below 25% because the imports have already reached the ports and in port city MDF prices for imports are around 8% to 10% below the prices of that of the domestic market. So why 25%? What is the — what is so sacrosanct about 25%? Why can’t it go to 20% or 18% if there is an oversupply is something which we are, and we don’t really know how to answer it. So if you could claw some light on it, it will be very helpful?

Keshav Bhajanka — Executive Director

Definitely. So you see today, our capacity right now is based in the north. Our capacity in the south is going to come on board only end of next year. In the north, the freight cost gives us a major advantage because from the south to the North transporting from a port location to say Delhi is not a very cheap affair. And in the case of MDF, you know that is not a very high cost per kg for transportation, and freight cost is a large growth. So that is one. Secondly, the capacity that we are commissioning right now in the north is being commissioned, taking into account a lot of synergies that we will get from our existing unit.

A lot of synergies in sales and marketing, and we will benefit from operating levels. And you’ve seen in the past, when the operating leverage is coming to play, margins are tended to rise. So this is for the north. As far as South is concerned, we are setting up our capacity in the hub of timber. We are setting up in a market where the timber price today is INR3.15 as compared to INR5.5 to INR6 in the north. This is going to be a substantial benefit that we have. And with this, we believe that we’ll be able to do good EBITDA margins in the South.

Venkatesh Balasubramaniam — Axis Capital — Analyst

Okay. Okay. Okay. Thanks a lot for that. All the very best.

Keshav Bhajanka — Executive Director

Thank you.

Operator

Thank you. The next question — the next question is from the line of Achal Lohade from JM Financial. Kindly proceed.

Achal Lohade — JM Financial. — Analyst

Yeah. Congratulations for great numbers. My first question was, if you could just clarify on this MDF margin. Q-o-Q, they are down almost 10% points. I see the realizations are fairly same. If you can give clarity as to what has driven this margin impact in terms of each of the items in terms of raw material or chemicals, etc?

Keshav Bhajanka — Executive Director

Hi. Thank you, Achal. So there are two factors are coming to play for MDF. First, gross margins are down because of raw material cost pressure. And secondly, we have had operating deleverage in this quarter because of a breakdown in the plant. It was a scheduled maintenance that took longer than expected hence it was a breakdown. But in the current quarter, we are expecting both the benefit of operating leverage as well as a slight easing out of raw material prices. Hence I think that our EBITDA margin should improve from this quarter onwards.

Achal Lohade — JM Financial. — Analyst

But if I see your 25% margin guidance, actually, it appears that it will be less than that in the second half. How do we explain that then?

Keshav Bhajanka — Executive Director

So we had given 25% guidance even prior to the beginning of the year. So we did 35% in Q1 with 25% guidance. 25% is the long-term margin guidance. The reason that we don’t want to comment on short term is because there are lot of fluctuations that can take place as we have already in book.

Unidentified Speaker —

And Achal, even if you look at these current Q2 margins in MDF, if you adjust for Forex loss, which is around INR2.45 crores, which is relating to capex for buyers credit with respect to MDF. Your margins adjusted for it comes to around 26.7%. So that is one. And secondly, on the operating EBIT side, our capacity utilization was 80% for Q2 compared to 89% in the first quarter. So these two things will help us at least maintain our 25% plus margins. That is what we are saying.

Achal Lohade — JM Financial. — Analyst

Understood. Understood. Can you help us understand what is — how are the current prices of MDF in South? And what is the import parity price? And also, in terms of import quantum, if you could — if you can give some clarity as to how the imports have been in terms of quantity in the last 2, 3 months?

Keshav Bhajanka — Executive Director

And so imports have increased. The reason behind that is lower cost of freight. Exact numbers, I can get back to you. I don’t have the exact numbers only right now. But definitely, there has been an increase in imports with lower shipping and freight costs. This is affected South India to a certain extent. But as of now, it does not put meaningful pressure on the domestic market.

Achal Lohade — JM Financial. — Analyst

Understood. Understood. And in terms of the particle board, can you help us understand what is the market size? How much is organized? How much is imports, what is the import parity there? I know you have given a bottom line in terms of the margin expectation, but if you can give some color on the industry dynamics as well?

Keshav Bhajanka — Executive Director

Definitely. In particle board, the total capacity will be 1.5 billion cubic meters plus. Most of the market is unorganized. There are virtually no organized players out there and perhaps an associated decor. Most of the lines that are operating today are multi delight line. So even our line is a multi-delight line. Now the number of disadvantages that a multi-delight have is. For instance, firstly, we have higher glue consumption. We have a higher density than we could operate our multi-delight at [Indecipherable]. And we have a higher funding loss. So taking all of these into account, there are various advantages that having a 20 plus will bring to the table hence it assume to go for a 1,200 cubic meter continuous strapline.

Particle board is a far lower-priced product compared to even MDF. So trade becomes a major issue. South India is the largest hub because South India has the largest OEMs in the country, and these OEMs have accepted particle board. If you look at the acceptance of MDF is higher in the north, whereas the acceptance of particle mode is higher in South. So as such, we believe that the market is going to do very well long term. We have over 2.5 years that we will set up a new capacity. And I think by the time the capacity operates, considering all the advantages that we will be having, it is going to be a highly lucrative product for us.

Achal Lohade — JM Financial. — Analyst

If I recall earlier, you were talking about flexi capacity in terms of MDF and particle board. So this particle board capacity, there is no such flexibility. Is that understanding right?

Keshav Bhajanka — Executive Director

Yes. Absolutely correct. This is a pure particle board capacity. One point that I forgot to mention sorry was that now in this capacity, because today, we are limited by virtue being a multi delight, we will only manufacture either 9 by 6, or 8 by 6 sizes and that’s too we can only manufacture [Indecipherable] and above. Once we have a continuous spread, we will have a much wider range. So that is going to be another media advantage going forward.

Achal Lohade — JM Financial. — Analyst

Understood. And in terms of the cost — the A&P spend in this quarter and the PCG cost if any?

Keshav Bhajanka — Executive Director

Yes, we have BCG costs. So BCG has started working on they were working on laminates and they have started working or particle board. In particle board, we have already identified substantial savings, which could lead to a 2%, 2.5% bump in EBITDA going forward. A&P spend has come down because in quarter 1, we had the IPL and that is a substantial part of our overall marketing budget. So that kind of front-loaded.

Achal Lohade — JM Financial. — Analyst

So would you be able to quantify how much is the A&P in the second quarter?

Keshav Bhajanka — Executive Director

Nikita?

Nikita Bansal — Executive Director

It’s 2% lower than what it was in Q1.

Unidentified Speaker —

So if you look at the overall company, it’s 1% lower as far as company as a whole is concerned. And for plywood division, it’s almost like 2% as Nikita said.

Achal Lohade — JM Financial. — Analyst

As a percentage of revenue you’re talking about, right?

Keshav Bhajanka — Executive Director

Yes.

Achal Lohade — JM Financial. — Analyst

Okay. Understood. And one more question I had. In terms of the plywood segment, obviously, given the high base, the Y-o-Y numbers appear muted, but can you help us understand how is the demand scenario out there for the plywood segment? And can we expect a similar run rate in terms of volumes in coming quarters?

Keshav Bhajanka — Executive Director

Nikita, would you like to take that?

Nikita Bansal — Executive Director

Yeah, yeah. So in terms of expectation, we expect a single-digit growth in H2 over last H2. See, demand has definitely the demand that WE were seeing during Covid, definitely, the growth run rate is not the same as that this year. But we’ve been able to set same numbers, and we are growing. We had a high base like you said. So because of that Q2 number growth is seeming a little low. But overall, I think we are quite happy with our performance, and we expect to grow over in H2 as well. And Q3 definitely being a festive quarter will be lesser growth and Q4 will be where we will have a higher growth.

Achal Lohade — JM Financial. — Analyst

So when you’re talking about growth, are you meaning from a Y-o-Y perspective because you will have festivals even in the base quarter, right?

Nikita Bansal — Executive Director

Yeah. Y-o-Y perspective, we will definitely have single-digit growth, as I mentioned, in H2.

Achal Lohade — JM Financial. — Analyst

Right. And can you also give some sense about how the premium segment is going, how nonpremium is doing in terms of the growth and the outlook?

Nikita Bansal — Executive Director

So let me start with the —

Keshav Bhajanka — Executive Director

We don’t specifically give numbers. But yeah, Nikita, you can say that.

Nikita Bansal — Executive Director

Yeah. So yeah, I don’t want to. Yeah, like Keshav mentioned, we don’t give specific numbers between [Indecipherable] and our Century brand. But just to give an idea, overall fee tariff operates in a much more larger base because majority of the market today in plywood lies at that INR80 to INR100, that is where Fenix [Phonetic] operates because Fenix is supposed to convert local into branded. So definitely, the growth rate of Fenix is going to be higher because it started from a very low base. We started the product only 3 to 4 years that. So hence the growth rate will always be higher in Fenix for the next few years. And having said that, we do have growth even in our premium segment, and that is purely because of the innovation that we are doing and the brand awareness and the brand campaigns that we are doing is really helping us grow in our medium segment as well.

Achal Lohade — JM Financial. — Analyst

Understood. Thank you. I’ll come back in the queue.

Operator

Thank you very much. Participants are requested to kindly restrict your questions to two per participant. The next question is from the line of Sneha Talreja from Edelweiss. Kindly proceed.

Sneha Talreja — Edelweiss — Analyst

Good evening, sir, and congrats on great set of numbers. Just a couple of questions from my end. Firstly, relating to demand actually. What has suddenly led to this kind of a slow movement in demand in your sense? And extending to that question, is that the reason we are not able to take any increase in MDF, although the raw material prices are on an increasing trend? Or is it the fear of imports due to which the entire industry is unable to take any price hikes?

Keshav Bhajanka — Executive Director

Hi, Sneha. Thank you. So you see regarding MDF, definitely, we have taken substantial price increase over the course of the past 1.5 years. And in MDF there is not just the fear of imports, but if you increase prices disproportionately, you would come closer to the lowest end of plywood. There I think the entire equation of ply or MDF will move a little bit towards plywood, even though that plywood is of lower quality. So that was one point. And your first question was?

Sneha Talreja — Edelweiss — Analyst

It was just regarding the in-general slowdown in demand that we are right now seeing across the building material. What’s your sense there? And where do you get the optimism that that’s going to increase? I mean, that’s going to get better?

Keshav Bhajanka — Executive Director

So I think that in the last quarter, you saw the impact of all the inflation pressure that was created in the system. Because prices of a lot of commodities have skyrocketed. And I think this had an impact on the homebuilding space as well. Going forward, I think we’re all very bullish, especially considering the registration number and the property sales numbers that are coming in that the market is going to do well. There could be minor hiccups in the short term but we remain very optimistic and very bullish. And I’m expecting a good recovery in H2 itself.

Unidentified Speaker —

May I just add on to this. A couple of things here. So if you look at the base also base for entire building material industry, going into Q2 and Q3 was very, very significantly higher because post-COVID, the numbers were very, very strong. So that’s again a reason why people are looking this or realizing this as a very, very muted moderate growth. So I think that is one. And second is the inflationary environment, which is also lead to the situation. And now if you look at the inflationary environment, that’s been almost likely to probably move down a bit. So this will again help regain the growth momentum going forward.

Nikita Bansal — Executive Director

One more thing I would like to add. The reason we are so optimistic is because as a brand, we are continuously investing in building our brand. I think we are amongst the only brand who continuously throughout the year spend money on branding as well as on improvement in terms of technological improvements. So I think an innovation. So because of that, I think we are extremely positive that we will see — even if the market is muted, we will grow the way we are expecting to grow. And having said that, I think we are also working continuously on improving our cost structure and improving our market GTM etc. So I think that is where our optimism comes from.

Sneha Talreja — Edelweiss — Analyst

That was pretty helpful, team. Thanks a lot. The last question was actually related to your margins. We’ve seen a good amount of improvement in your plywood and laminates margins and this laminates despite the BCG expenses coming in. And in fact, both these places, you are higher than your guidance. So what has led to this higher margins? Is there any exceptional item here? Or these are like now sustainable levels? Although I understand that your guidance is 13% to 15% and 14% to 16%?

Keshav Bhajanka — Executive Director

Nikita, would you like to add?

Nikita Bansal — Executive Director

Yeah. So I will take on the plywood part. So actually, we are within the 13% to 15%. Q1, we been actually our EBITDA margin was below because of the IPL. Like Keshav said at the beginning, IPL cost was taken in Q1. And because of that, the loading came in Q1 and that floating wasn’t there in Q2, number one. Number two, we took a lot of price increases consecutively in Q1. So there was a price increase in April, there was a price increase in May end. There was some part even in June. So Q2 was a pure quarter where all the price increases have come into full effect because of that our EBITDA is actually come back to what we expected, which is 14%.

Keshav Bhajanka — Executive Director

With regards to laminates, I think the current EBITDA margin, yes, we have worked very hard to ensure our product mix in domestic as well as export improves. And going forward, like have we will attempt to do 14% to 15%. But yes, we may be doing slightly better.

Sneha Talreja — Edelweiss — Analyst

That’s great to hear. Thanks, Keshav, and thanks, Nikita. And all the very best.

Keshav Bhajanka — Executive Director

Thank you.

Nikita Bansal — Executive Director

Thank you. Thank you.

Operator

Thank you. The next question is from the line of Shubham Agarwal from Axis Capital. Kindly proceed.

Shubham Agarwal — Axis Capital — Analyst

Thank you for the opportunity to ask this question. Just on following on the comment of MDF and freight, which you would have already emphasized much on. I just wanted to understand what is the realization per truckload for Ply and MDF, how different is it? And let’s say, what is the freight cost, if you would apply the vehicle from, say, Hoshiarpur to Amritsar? Can you give a sense there?

Keshav Bhajanka — Executive Director

Amritsar would not be a very needed cost. I think the freight cost would be to say, maybe INR1,000. But I don’t have data with me. Maybe Nehal can give you a detail. Plywood in general, our plywood would be at least 2 times the cost of our MDF. So I think that is the thump rule that we follow, but Nehal can get back to you with the exact number.

Shubham Agarwal — Axis Capital — Analyst

So just okay. Okay. I’ll get that separately. Secondly, what is the price difference in imports and domestic realizations right now? Price difference in imports and domestic MDF, yeah.

Keshav Bhajanka — Executive Director

It actually depends on the location because if you look at the norm, the landed cost of imports goes up substantially. In the South, I think that MBF is currently being exported at about $220 per CBM. But on top of that, you need to add the cost of freight, you need to add the cost. It varies from location to location.

Shubham Agarwal — Axis Capital — Analyst

Yeah. Sorry, I was actually asking imports. Price of imports and domestic in South. How different is it?

Keshav Bhajanka — Executive Director

So imports $220 is FOB after that there could be a lot of loading, etc. I think the difference between domestic and aborted prices, ballpark because South is not really our focus area, but it would be stays at 10%, 15%.

Shubham Agarwal — Axis Capital — Analyst

Imports. Thank you. Yeah. That’s all I wanted to ask. Thank you.

Operator

Thank you. The next question is from the line of Hitesh Agarwal from India Insight Value Fund. Kindly proceed.

Hitesh Agarwal — India Insight Value Fund — Analyst

Yeah. Hello. Thanks for the opportunity. In Particle board, I wanted to ask what will be the asset turnover for a capex of INR550 crores for the new plant?

Keshav Bhajanka — Executive Director

The turnover for the new capacity will be in excess of INR600 crores.

Hitesh Agarwal — India Insight Value Fund — Analyst

Excess of INR600 crores. And what will be the kind of time gap between the commencement of the plant and its full utilization?

Keshav Bhajanka — Executive Director

I think it will take about 2.5 to 3 years to utilize the plant.

Hitesh Agarwal — India Insight Value Fund — Analyst

Okay. Okay. One question like in the particle board segment, could you tell me of the industry assets, what will be the percentage of imports as such? And how is the price difference between the imports and the domestic prices?

Keshav Bhajanka — Executive Director

Again, it’s a very good scenario right now. Today, imports FOB would be at about $120. I think at about $150 probes. And domestic prices, that is landed then we need to take into account all the other costs. But I would say that we would be at least 10% to 15% higher, the domestic prices will be 10% to 15% higher than inputs. But domestic OEMs was a lot more facility from us because they can procure material virtually overnight. Whereas if you look at these imported competition, the lease time is substantially higher. Also for units it does not have a plant facility. For them to rely on import becomes next to impossible because you cannot really select a design for once in advance. It is a very difficult proposition. Here the domestic manufacture gives them that flexibility.

Hitesh Agarwal — India Insight Value Fund — Analyst

Okay. Coming to the MDF segment as such, could you give color on the rise in the timber and the chemical prices sequentially?

Keshav Bhajanka — Executive Director

Sequentially in MDF.

Unidentified Speaker —

Yeah, Hitesh. So if you look at the raw material price movement in MDF segment, timber per se has gone up by almost, say, 10%, 12% since the start of the year. So that is one which has impacted the gross margin. And secondly, chemical, again, has gone up substantially, particularly on the — so one of the chemicals that we use has gone up almost by 20%, 25%. So that is what has led to almost 650, 700 bps gross margin deterioration.

Hitesh Agarwal — India Insight Value Fund — Analyst

Okay. And like should we consider kind of softening of the chemical prices going forward as such?

Unidentified Speaker —

So timber prices are still elevated, but as far as chemical prices are concerned, which had actually seen a very drastic move they have started coming off a bit. So that is what will help us give a cushion to our margins.

Hitesh Agarwal — India Insight Value Fund — Analyst

Okay. Thank you. That’s all.

Operator

Thank you. The next question is from the line of Parth Bhavsar from Investec India. Kindly proceed.

Parth Bhavsar — Investec India — Analyst

Thank you for the opportunity. Sir, I had this question. So you guys are setting up a laminate plant in West Bengal. And then there’s an upcoming plant in South. So what is the downfield optionality at both these cases, like over and above the capacity that you are setting up, is there any option to increase your capacity beyond this?

Keshav Bhajanka — Executive Director

Further increases in Kolkatta would be different because we are now a space constraint. And existing premises, I don’t think we’ll be set up any more units. In Andhra, in phase 1, we are coming up with two hot presses and in phase 2 will be coming up with a further two. And we have created enough provision to come up with 4 units in phase 2. But that’s as of now is something that we have not thought too much about. Right now, it is about phase 1 and phase 2. But definitely, we can set up up to 8 lines in Andhra comfortably.

Parth Bhavsar — Investec India — Analyst

Okay. So on phase 1 and phase 2 you’ll be adding 4?

Keshav Bhajanka — Executive Director

Yes.

Parth Bhavsar — Investec India — Analyst

Okay. And sir, one other thing is that what is the rationale to go after particle board and not plywood? Could you just elaborate a little bit on that?

Keshav Bhajanka — Executive Director

We have always go out to plywood. We are definitely looking to grow in plywood. And we have taken up a lot of balancing investment in balancing equipment across plywood so as to increase our capacity. So it is not that particle board is coming at the expense of plywood.

Nikita Bansal — Executive Director

And I’ll add to that, that we had announced that we will set up a unit in Hoshiarpur for plywood. So we are now search for land right now. So we have some land options. So I think hopefully, soon we will be to close something.

Parth Bhavsar — Investec India — Analyst

Okay. Perfect. Thank you.

Operator

Thank you. The next question is from the line of Nikhil Agrawal from VT Capital. Kindly proceed.

Nikhil Agrawal — VT Capital — Analyst

Good evening, sir. And thank you for the opportunity. Sir, I wanted to know like what is the per tonne timber consumption for one CVM production of particle boards?

Keshav Bhajanka — Executive Director

It would be close to 1,100 Kgs.

Nikhil Agrawal — VT Capital — Analyst

1100 kgs?

Keshav Bhajanka — Executive Director

Yes, 1.1.

Nikhil Agrawal — VT Capital — Analyst

Okay. And sir, coming to your MDF segment, I missed the — what you said about — to the earlier participant’s call, the rise in timber, what was the right sequential rise in timber costs and chemical price?

Keshav Bhajanka — Executive Director

Timber cost has gone up by 10% to 12% over the course of the current year for MDF in particular, in the North of India, and chemical prices had increased by in excess of 25%, but now they have shown signs of correction.

Nikhil Agrawal — VT Capital — Analyst

This is in 2022 or in this fiscal?

Keshav Bhajanka — Executive Director

In this fiscal.

Nikhil Agrawal — VT Capital — Analyst

Okay. And sir, about your greenfield expansion for MDF, you said that it will commence production from H2 FY ’24? Okay. So that means there has been a delay of about two quarters?

Keshav Bhajanka — Executive Director

No. We have always guided for H2 FY ’24. There’s zero delay in the project work.

Nikhil Agrawal — VT Capital — Analyst

Okay. It must have been something my mistake. That’s it from me. Thank you so much.

Keshav Bhajanka — Executive Director

Thank you.

Operator

Thank you. The next question is from the line of Udit from Yes Securities. Kindly Proceed.

Udit Gajiwala — Yes Securities — Analyst

Yes. Thank you for taking up my question. Just two parts. One is that when we mentioned about 15% overall growth for ’23. So just basic what we have done in H1 and the balance in H2, what would be expected. So are we looking at a decline year-on-year for H2?

Keshav Bhajanka — Executive Director

No, we are definitely not looking at any decline. But having said that, we are not getting overly excited by good performance in H1.

Udit Gajiwala — Yes Securities — Analyst

Understood. And sir, just fundamentally on the product side, like you mentioned that and how the OEMs have accepted the particle board. So do you see any threat to MDF, like we are coming up with capex in both is understandable in South, we are coming up with MDF as well. So what explains that part like particle board can take market share of MDF structurally just wanting to know on the category?

Keshav Bhajanka — Executive Director

You see, I think you need to look at it from a little more holistic point of view. If you look at particle board, the usability in OEMs is excellent, it’s a highly valuable product. And for office furniture, it is a product that is durable because it is not as heavy usage as domestic furniture would be. For domestic furniture, MDF usage is still very strong. In the south, the acceptance of particle board has been there for quite some time now, whereas in the North particle board has really not been accepted as a very strong or very good product because MDF penetrated much earlier. So I think both are going to grow substantially. As we have mentioned earlier, the particle board capacity in India would be about 1.5 million cubic meters, whereas the particle board capacity in China is 50 million cubic meters. So we’re still 150th of their size. There is a lot of room for growth. And in MBF as well, our capacity will be 2 million, whereas China is, I think, could be around 55 million to 60 million. So again, there is substantial room for growth in both. I don’t think growth in either category will come at the cost of the other. But definitely, both are going to be high-growth categories going forward.

Udit Gajiwala — Yes Securities — Analyst

Got it, sir. And just lastly, following up on particle boards, what kind of industry growth are you expecting? And like you mentioned, it is a highly fragmented unorganized industry. Will we be able to get any pricing power or will it be this industry dynamics on this one?

Keshav Bhajanka — Executive Director

I think more than pricing power, we will be able to give a range of products that only a few limited number of players will be able to offer. So the unorganized players would actually not be able to compete considering certain products, they cannot manufacture. So for instance, less than 9 mm could not be manufactured in any multi [Indecipherable]. Today, even we cannot manufacture less than 9 mm. But going forward, only 3 or I think 4 players, who will have continuous press line, will be able to offer these products. So that gives us a substantial advantage in the market. And once these products come into play, once they’re accepted, then we’ll have pricing power, because the threat of competition is going to be far lower.

Udit Gajiwala — Yes Securities — Analyst

Understood. Thank you. Thank you for answering.

Keshav Bhajanka — Executive Director

Thank you.

Operator

Thank you. The next question is from the line of Pranav from Equirus Securities. Kindly proceed.

Pranav Mehta — Equirus Securities — Analyst

Yeah. Thank you for taking my questions. Sir, I wanted to understand on — if you can throw some light on how the MDF prices are moving globally? That was my first question. And the second question was, how long do you think the timber availability issue is going to be a major problem for the industry? Because as per my understanding, at least for next 2 years, things are going to be tight on the timber availability issue in India?

Keshav Bhajanka — Executive Director

I’ll answer the second part first. Definitely, there is crunch of timber, and that is something that we all facing. But the result of this is a much higher timber price, which has lead to tremendous amount of plantation. Now if you drive from Chandigarh to Hoshiarpur or from Amritsar to Hoshiarpur, you will see the quantum of agroforestry that is taking place. So you’re right that for a couple of years, we might be under pressure. But after that, the quantum of timber that will be available in Punjab itself will be a net surplus stage. And I’m sure that this is happening in practically all of the parts also because with this higher timber price for farmers it becomes a very liquidate proposition, especially considering that they don’t need to give as much time to eucalyptus as you could give to wheat or to rice. And the cycle with these higher prices really moving in that favor. Particularly for lands that are not very edible, lands that are not very fertile, this becomes a very viable option. Secondly, internationally, yes, prices have softened for MDF. But what has also happened is that the rupee has depreciated from 70 to 73 levels to 80 level. So that is takes a 10% increase in cost, right? So overall, the softness has been cushioned by this impact of the rupee depreciating.

Pranav Mehta — Equirus Securities — Analyst

Okay, sir. And sir, how is the laminate exports for us are shaping up? Because the industry seems to be doing quite well on the export front. So are we aggressively targeting exports as a growth opportunity for us because we have also a lot of room to catch up in the domestic market? Or you’re going to focus on domestic only?

Keshav Bhajanka — Executive Director

No, we are going to be focusing on both. You see in exports, higher prices are required. Till now laminates, we only operate at 8 by 4 sizes for exports. We have requirement for 10 by 4 size and 14 by 6 or 12 by 6. In Andhra, we are coming up with 1one 14 by 6 pack and one 10 by 2 pack. Post this, a lot of international markets, a lot of export markets will be open to us, that till now has not been. So definitely, we are in exports, you’re absolutely right. There’s a lot of headroom there, and we are focusing on the same.

Pranav Mehta — Equirus Securities — Analyst

Sure, sir. Thank you very much.

Operator

Thank you. The next question is from the line of Ashish Kumar from Infinity Alternatives. Kindly proceed.

Ashish Kumar — Infinity Alternatives — Analyst

Thank you and congratulations for a good steady set of numbers. So a couple of questions. One, a near-term kind of question and the second is a longer term. On the near term, from the way we stand in terms of the EBITDA margins and the revenues, do you see any sequential pressure point over the next 2, 3, 4 quarters? Or should we assume this to be a base number with the new revenues being added from new capacity expansion. Is that a fair way to look at it?

Keshav Bhajanka — Executive Director

Nehal?

Nehal Shah — CSO

Yes. Hi. So yeah, so basically, if you look at the raw material costs, as I said earlier, some of the raw material prices are definitely on the way down, at least over the next couple of months, which you can see at the moment. So to that extent, the pressure would be easing out, particularly with respect to those chemicals. Even as far as plywood is concerned, our core veneer prices have dropped a bit, possibly around 2.5% to 3%. So finally, there’s a respite of that because those were the prices which were consistently increasing gradually over the last 4 to 6 quarters. So to that extent, yes, we should get benefited to that extent. And yeah, so — and as far as growth is concerned, obviously, with the new capacity is coming up on scheme, we should be able to take advantage of those coming on time.

Ashish Kumar — Infinity Alternatives — Analyst

Sure. And second one was from a slightly longer term. We’ve announced massive capex in businesses which are 25% EBITDA margin, let’s say, based on longer-term guidance. So from a company perspective, today, if you look at it, particle broad plus MDF is roughly around 21%, 22% of revenues. But let’s say, 3 years out, would it be fair to assume that, that number proportion could be more like 40%? And if I assume, let’s say, 15% for your plywood plus laminate business and 25% for this business, would that mean that from a company perspective, we could be starting to hit margins, which are closer to the 20% mark rather than the 15% mark?

Keshav Bhajanka — Executive Director

Yeah. I think you cited the nail on the head. Definitely, that is the reason why we’re investing so substantially in these areas. Having said that, because of the fact that MBF and particle board are part of our industry, we have the opportunity to reinvest our cash flows in high ROCE businesses. So this is a very, very, I would say, good time and a good opportunity for us. Going forward, yes, we are looking at a higher percentage of the mix coming from MDF and particle board despite a good growth in plywood and laminate. So this should push the margins like [Indecipherable]. One more point that you need to understand is, the working capital requirements in both particle board and MDF are substantially lower. So again, this is our quest for higher ROCs.

Ashish Kumar — Infinity Alternatives — Analyst

Sure. Only one thing, Keshav, that, if you’re guiding for a 25% EBITDA margin and that’s your revenue to capex of 1.3 times, then you could be — one could be looking at, let’s say, mid-20s kind of an ROC as compared to, let’s say, significantly higher for ply business. Is that a fair way to look at it?

Keshav Bhajanka — Executive Director

At this point in time, what we have seen is that the asset turnover ratio has actually been far better than the numbers that you suggested. So I think what we are targeting is 20% plus ROC that has been the objective from Day 1. And both these businesses should be able to give us that. But yes, I am hopeful that the number should be slightly better than that.

Ashish Kumar — Infinity Alternatives — Analyst

Sure. Okay. Given the fact that you’re closer to currently, the 30% mark, that’s a huge wind-down?

Keshav Bhajanka — Executive Director

And today, we are very lucky that we have been able to deliver on a sustained basis. But going forward, you see you need avenues for growth. And these two products represent avenues for growth. So I think that long-term margins will be good. Long term, they will generate good ROCE, maybe not as high as plywood or laminate. Yes, you could be correct.

Ashish Kumar — Infinity Alternatives — Analyst

Sure. Okay. Thanks a lot and wish you all the best. Thanks.

Keshav Bhajanka — Executive Director

Thank you.

Operator

Thank you. The next question is from the line of Shrenik Bachhawat from LIC. Kindly proceed.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

Hi. Thanks for the opportunity. So my first question is I wanted to understand that we are doing a planning of INR550 crores capex for particle board and also Greenland and Marina are planning a similar capex. So as all the 3, 4 players are increasing the capacities in particle board, the pricing, how is the pricing scenario for us? Like are the organized players selling at a premium versus unorganized or at the same pricing?

Keshav Bhajanka — Executive Director

[Indecipherable] the premium over the unorganized players. And going forward, like I mentioned, in a [Indecipherable] there are a lot of advantages that you will get. So definitely, product quality will improve, which should get you a further pricing premium. But beyond the same, it would also get us a benefit of substantially lower operating costs. So going forward, I think the online players will have a substantial benefit over the unorganized sector, particularly in the particular board segment.

Okay. And in particle wood, how much of the savings in B2B and B2C? Sorry. Could you repeat that? The majority of the sale is in B2B. For particle board, the majority of the sale is B2B.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

Okay. And sir, I wanted to understand that the readymade furniture that is sold on Internet, normally, we say that MDF, the rationale for MDF is the growth in the ready-made financial markets, but most of the online furniture that is being sold is made of particle board. I was just going through the online website. So what is your take? — like? What is the proportion of MDF versus particle board for the online furniture that is sold?

Keshav Bhajanka — Executive Director

% of It is very difficult to club online furniture into one category because there are some options. But see for instance, Ikea business, more than 80% of particle board and a very small is part of MDF. But in India for residential furniture, MDF is the preferred third-generation wood panel product, whereas for office furniture, particle wood continues the preferred product. On price, particle board would be one-third of the price of plywood, whereas MDF would be half the price. So particle board has a distinct advantage. Hence, when you look at lower price furniture, you will have more often not see particle board. Right. For residential furniture, most of the readymade residential furniture is showing a trend of being leaning towards MDF rather than particle board.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

Got it. And just last question. I wanted to understand that, as we highlighted that the second half of this year, we’ll see single-digit growth in plywood. So what gives you the confidence for FY ’24 to deliver 15% volume growth and 20% revenue growth?

Keshav Bhajanka — Executive Director

I think we have done a lot of things, as Nikita has mentioned, we have implemented our sales for automation to, which I think is the first the industry to do. We have changed the entire GPM. We have invested substantially in timing. So I think all of these initiatives put together have put us in a very good space. Now slowly, we will see the benefits of these initiatives coming because it does not happen overnight. Hence, we are confident that going forward, we will be able to deliver good sustained numbers.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

So 15% volume growth in plywood, you’re telling on a sustainable basis you can deliver?

Keshav Bhajanka — Executive Director

Sorry, could you repeat? Your voice is low?

Shrenik Bachhawat — LIC Mutual Fund — Analyst

15% volume growth in plywood is sustainable for next 3, 4 years, is it?

Nikita Bansal — Executive Director

That is what we would want to achieve, yes.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

So what I want to address is the industry is far lower than that, right? So there is already a [Indecipherable] we’ll know everything. So can we deliver so much as per industry growth rate in [Indecipherable]?

Keshav Bhajanka — Executive Director

So I’ll tell you where and — Hello? Just wanting — what we also must factor in. In fact, there is a change from the unorganized to the organized that’s solely taking place. And that is really leading our call. You must realize that in plywood, only 30% of the market is organized. Now if this changes, say, even by 1% or 2%, that gives a substantial boost to aversion the organized players and we as market leader fully intend to cash in on the same.

Nikita Bansal — Executive Director

So just to add to that, we are currently 5% to 6% of the entire plywood industry. So the reason why we have launched Fenix and the amount of money we are spending behind Fenix is because we see the opportunity lies in converting this unbranded to branded. So even if the industry is growing at a certain pace, we want to grow more than the industry because we want to capture more market share. So hence, that is where the 15% comes from.

Shrenik Bachhawat — LIC Mutual Fund — Analyst

Got it. Thank you so much.

Operator

Thank you. The next question is from the line of Rajesh Kumar from HDFC Securities. Kindly proceed.

Rajesh Kumar — HDFC Securities — Analyst

Yeah. Hi, sir. My question is, first, on this particle board project. Is it the existing location or a greenfield one nearby?

Keshav Bhajanka — Executive Director

It is a greenfield location nearby.

Rajesh Kumar — HDFC Securities — Analyst

Okay. And this capex, which we are incurring, does it have an optionality of increasing the capacity 2 to 3 years hence?

Keshav Bhajanka — Executive Director

No. This we got to finish capacity [Indecipherable].

Rajesh Kumar — HDFC Securities — Analyst

Sorry, I missed it. This is the existing capacity, which you are in putting up 3.6 lakhs. Can it be increased further? Is the land and other availability?

Keshav Bhajanka — Executive Director

Yes. The land is there, but the current line and the current shed etc. everything that has been designed, has been designed for this 3.6 lakhs. Going forward, of course, in the same location, we can set up another unit.

Rajesh Kumar — HDFC Securities — Analyst

Okay. And sir, you don’t have a laminate facility nearby. So will that have an impact on your prelam sales from this plant?

Keshav Bhajanka — Executive Director

No, we didn’t have a laminate facility in Chennai earlier Plant. So prelam, the paper inventory management is not as difficult as [Indecipherable] because it’s [Indecipherable]. That is not a challenge anyway, whether it’s Hoshiarpur, whether it is Chennai, whether it’s any other location, with the particle board facility people will be coming up with a prelam facility.

Rajesh Kumar — HDFC Securities — Analyst

Okay. And second, in the MDF, you mentioned that the import and domestic price difference is 15%. So historically, maybe pre-Covid what has been the sustainable pricing difference between imports and domestic prices?

Keshav Bhajanka — Executive Director

I don’t have numbers with me at this point. I will get back to you on the same.

Rajesh Kumar — HDFC Securities — Analyst

Okay. I just wanting to assess that when you’re looking at from 30% to 25%, what more pressure can on a sustainable basis, it led to because domestic capacity [Indecipherable]?

Keshav Bhajanka — Executive Director

Okay. There is a lot of disturbance at your end. Could you repeat the question?

Rajesh Kumar — HDFC Securities — Analyst

Okay. No, the purpose of — is it okay now?

Keshav Bhajanka — Executive Director

Better.

Rajesh Kumar — HDFC Securities — Analyst

Yeah. So the purpose of me asking this question I was to assess that when you’re factoring in the margins to pull up to 25%, if the margins have to sustain at say 10%, 15% level. So can it lead to higher compression on a sustainable basis say 20% so this is what I want I wanted to assess. We will talk on this later. Again I couldn’t find to get your question. There is some disturbance. No issues.

Operator

Mr. Rajesh, there is some background sound from your line.

Rajesh Kumar — HDFC Securities — Analyst

No issues. I’ll get back on this later.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Keshav Bhajanka — Executive Director

So thank you so much to all of you for taking out your valuable time to attend this call. The one point I’d like to make is, as always, your management is going to try to their level best to deliver as good a performance as we can. And hopefully, with all your support, we’ll be able to achieve it. Thank you.

Operator

Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.