Duroply Industries Ltd (NSE: DUROPLY) Q3 2025 Earnings Call dated Feb. 11, 2025
Corporate Participants:
Akhilesh Chitlangia — Managing Director and Chief Executive Officer
Analysts:
Naveen — Analyst
Sarnik Sarka — Analyst
Mujay Surya Banshi — Anlayst
Presentation:
Naveen — Analyst
Good morning, ladies and gentlemen. I’m pleased to welcome you on behalf of Duroply Industries Limited and SKP Securities to Industries Q3 FY ’25 results webinar. We have with us Mr, MD and CEO. This webinar is being recorded for compliance reason. And during the course of the conversation, there may be certain forward-looking statements. These must be viewed in conjunction with the risks that the company faces. We’ll have the opening remarks from Mr followed by a Q&A session. Thank you, and over to you, Aklesh.
Akhilesh Chitlangia — Managing Director and Chief Executive Officer
Thank you, Naveen. Good morning to everyone and thank you for attending our earnings webinar for 3rd-quarter and nine months ended FY ’25. Our was founded in 1957 and over the years, we have built a strong brand in the industry. We recognized across the country for a high standard of quality products, which we have maintained over the years. This is our 68th year of operation and we feel proud to have played a small but meaningful part in India’s growth story over the last six decades. On the business front, the 3rd-quarter is always a tough quarter due to festive seasons across India and this year, we also saw some economic headwinds. Despite these challenges during Q3 FY ’25, reported a revenue of INR89.82 crores, which is an increase of 12.5% from the same-period last year, though we are down 1.1% from Q2 FY ’25. The business reported a profit before-tax of INR1.2 crores, a 127% increase on a year-on-year basis and a 5% increase on a quarter-on-quarter basis. For the quarter, revenue from our in-house manufacturing plant in Rajkur stood at INR54.4 crores, up by 16% year-on-year. However, down by 3% quarter-on-quarter basis. Revenue from our contract manufacturing stood at INR35.5 crores, a growth of 7.5% for the year and up by 2.5% quarter-on-quarter. Our gross margin saw a drop from the second-quarter. We ended at 34.2% for Q3 FY ’25 as compared to 35.6% in Q2 FY ’25. Gross margin in Q3 last year stood at 33.9%. This was largely due to increased timber cost and some product mix-shift that we saw in our product portfolio. Despite the lower gross profit margins, we saw an improvement in our EBITDA margins for Q3 FY ’25. EBITDA stood at INR4.37 crores, up by 32% year-on-year and 6.3% quarter-on-quarter basis. EBITDA as a percentage stood at 4.9% of sales as compared to 4.1% in the same-period last financial year, up from 4.5% in Q2 FY ’25. The company employee expense stood at 11.3% for the quarter as we continue to hire aggressively to build our sales and operations team. Our marketing spend for the quarter stood at a moderated 3.7%. For the nine-month revenue we closed the nine-month period at INR265.5 crores, up by 11.1% from the same-period last year. Profit before-tax stood at INR3.61 crores for the period ended, up by 10.4% on a year-on-year basis. Revenue from in-house manufacturing stood at INR160.3 crores, a growth of 11.5% and revenue from our contract manufacturing stood at INR105.2 crores, growth of 10.4%. Our gross margin saw an improvement for the year ending at 34.7% as compared to 33.9% in the Nine-Month FY ’24. EBITDA stood at INR12.5 crores, up by 9.4%. However, EBITDA margin as a percentage of sales is at 4.7% of sales, down from 4.8% for the same-period last year. Our segment — the segment for Q3 FY ’25 saw a growth of only 5% on year-on-year basis, but a decline of 7% on quarter-on-quarter basis. Our economical offering segment under the brand-name showed a robust growth of 50% on a year-on-year basis for this quarter and a 30% growth on a quarter-on-quarter basis. For the nine-month period, the brand segment grew by 9% and Tower by 22%. The reduced growth of Duro segment in 3rd-quarter in addition to the higher timber costs had an impact on the margins at the gross level. The slowdown in the premium segment is largely consistent with the challenges that we normally face in the 3rd-quarter, which is driven by work disruptions related to festivities and also the construction ban across NCR area due to the high pollution levels post-Diwali. This quarter, we also witnessed some macroeconomic headwinds, but despite that, we posted a robust growth of 12.5% for the quarter and maintained our profitability. We are rapidly increasing our sales team and investing in our infrastructure across the countries and we expect our stronger growth numbers in the coming future. With that, Naveen, I’d like — I think it’s — let’s ask for the floor to be open for any questions that they may have.
Questions and Answers:
Naveen
Thank you. Thank you,. Can we now open the floor for the Q&A session. Anyone wishing to ask a question please raise your hand and we’ll take laugh friends anyone with a question request you to raise your hand for a couple of minutes while your questions slide down we take the first question from Sarnik Sarka. Savnik, please go-ahead.
Sarnik Sarka
Yeah, hello, sir. Thanks for the opportunity and congrats on a great set of numbers. So just wanted to know about the raw-material cost for the segment. So any guidance that you could give on the timber costs for this segment going ahead?
Akhilesh Chitlangia
Thank you, Mr, for your question. The timber cost this year, we have seen a significant jump of about 8% to 10% on the raw-material side in the last eight to nine months, we’ve been able to pass-on some of it to our customers, but not the entire part of it. Going-forward, I do not see a slowdown in the inflationary pressure on the raw-material coming anytime soon. The capacity in India has increased substantially for production and the plantations have not kept in pace with the required demand for raw-material in our country. So I think this for the next two more years or at least another year at the very minimum, there will be a lot of challenges on the raw-material price perspective.
Sarnik Sarka
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Akhilesh Chitlangia
I hope that answers your question thank you.
Sarnik Sarka
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Naveen
Here’s friends anyone with a question request you to raise your hand and we’ll take it this hand and friends anyone with a question just wait for a minute otherwise we can write-up friends anyone wishing to ask a question please go-ahead.
Akhilesh Chitlangia
There’s a question in the question
Naveen
Congratulations for a good set of numbers compared with top two players. Please can you share each product segment data and growth projections? This is from Tarun Rathi.
Akhilesh Chitlangia
So thank you for that, Mr Rathi. As I’ve given the growth projects — the growth percentage that we’re doing from these segments. But I would like to keep the revenues that we’re doing from both the segments a little confidential for the simple reason that we are growing very aggressively in the tower segment and the competition, we would not like this data to get a hand-on that. So we’d like to not disclose that at this point of
Naveen
In case you have a follow-up question request you to raise your hand so that I can take it up on the floor of the house friends okay we have a question from Mujay Surya Banshi., please go-ahead.
Mujay Surya Banshi
Hello, sir. Congratulations on your behalf. But I just wanted to ask that I miss this financials that you explained earlier. I joined a bit late. Can you please provide me the financials.
Akhilesh Chitlangia
Largely, Vijay, I’ll just keep it quick. We are at 12.5% top-line growth for the quarter as compared to same-period last year and profit before-tax stood at about 1.2 crores, significantly up from Q3 last year and marginally improved from the second-quarter this year. Our EBITDA margin stood at 4.9% for the quarter, which is slightly improved from a significantly improved from 4.1% same-period last year. And yeah. And it’s up and it was about 4.5% or 4.4% for Q2 in the same financial year. So I hope that helps you
Mujay Surya Banshi
Yeah, sir, thank you.
Naveen
Thank you,. Friends anyone else with the question request you to go-ahead we have a follow-up question from., please go-ahead.
Sarnik Sarka
Yes, sir, just a follow-up question on the demand-side, like do you see any pickup on the real-estate side like following the rate cuts and I mean on a real-estate demand front, how do you see demand shaping up in the next quarter or maybe next financial year?,
Akhilesh Chitlangia
I’ll give my understanding of this. See, if you see last three, four years, the sizes of cities in India have substantially increased. So there’s a lot of construction activity that is going on. The muted demand has been because of challenges, not so much on the demand-side, but I think there’s been a restriction on the liquidity in the market, which has muted the demand. I think with the measures that the government is putting in-place as soon as the liquidity improves, the demand should pick-up, but our industry, especially the plywood and the wood panel industry is a laggard industry in the sense that any initiative that happens, it percolates down to our industry much later. So I think another — at least another five to six months and I think the demand should start moving in the right direction again. So that would be my estimation. I think for next couple of quarters it’s going to be a little challenging but that’s my take on this.
Sarnik Sarka
Thanks sir that’s very helpful yeah
Naveen
Thank you friends anyone with a question, please go-ahead. Since there are no further questions, I’d like to hand over the webinar back to for his closing remarks.
Akhilesh Chitlangia
Thank you, everyone. Thank you, ladies and gentlemen, for joining us for the Q3 FY ’25 earnings call. There’s a long way to go for us and we’ve just started on this journey and I look-forward to seeing you again at the next earnings call. Thank you.
Naveen
Thank you very much, Mr for your time to interact with the investors. Thank you, ladies and gentlemen and we look-forward to hosting you again for the next quarterly result. Thank you and have a wonderful day