Greenpanel Industries Ltd (NSE: GREENPANEL) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Shobhan Mittal — Managing Director & Chief Executive Officer
Vishwanathan Venkatramani — Chief Financial Officer
Analysts:
Rishab Barar — Analyst
Keshav Lahoti — Analyst
Parth Bhavsar — Analyst
Pankaj Parab — Analyst
Yash Sonthalia — Analyst
Tanmaiy Mohta — Analyst
Rishab Bothra — Analyst
Udit Gajiwala — Analyst
Bhargav Buddhadev — Analyst
Utkarsh Nopany — Analyst
Karan Bhatelia — Analyst
Arun Baid — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Green Panel Industries Limited Q4 FY ’25 Earnings Conference Call. 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. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Rishab Bhara from CDR India. Thank you, and over to you, sir.
Rishab Barar — Analyst
Good day, everyone, and thank you for joining us on Green Panel Industries Limited’s Q4 and FY ’25 earnings call. We have with us today Mr Shoban Mittal, the Managing Director; Mr Vi Venkatramani, the CFO. Before we begin, I would like to state that some statements made in today’s discussion may be forward-looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in the results presentation that was sent to you earlier. I would now like to invite Mr Shoban Mittal to begin the proceedings of the call. Over to you, sir.
Shobhan Mittal — Managing Director & Chief Executive Officer
Thank you, Visha. Good evening, everyone, and thank you for joining us to discuss Green Panel’s operating and financial performance for quarter-four FY ’25. MDF domestic sales volumes fell by 25% year-on-year. This was on account of discontinuing sales of commercial-grade MDF in anticipation of implementation of BIS UCOs. Commercial-grade in-quarter four FY ’25 was nil as opposed to 40,924 cubic meters in-quarter four FY ’24. Export volumes were higher by 34% at 14,458 on a low-base of 10,804 cubic meters. MDF domestic realizations were higher by 7.4% year-on-year at INR31.214 cubic meters. Domestic realizations increased due to increase in mix of value-added products to 50% as compared to 44% in-quarter four FY ’24 and also due to the discontinuation of lower-price commercial-grade MDS. Export realizations were higher by 9.6% year-on-year at INR22,389 per cubic meter. MDS EBITDA margins at 16.3% were higher quarter-on-quarter due to EPCG scheme incentives. Plywood volumes were lower by 12% year-on-year. EBITDA margins at 12.1% were higher due to write-back of provisions for turnover discounts. Plywood realizations at INR270 per square meter were higher by 8% year-on-year due to reasons mentioned earlier.
Post-tax profits for the quarter were lower by 1% at INR29.39 crores as compared to INR29.81 crores in the corresponding quarter. Net working capital at 36 days has shown an increase of eight days year-on-year due to lower turnover and high inventory levels. Net-debt stands at INR165 crores as on 31st March 2025, inclusive of INR336 crores for the expansion project. I’d now like to provide a summary for the financial performance for FY 2025. MDF domestic volumes fell by 6%, of which commercial-grade MDF contributed 3%. Domestic MDS revenue fell by 9.7% due to lower volumes and a 3.7% fall in realizations. MDS EBITDA margins at 11.7% fell due to a 3.7% fall in domestic realizations and a 23% price increase in wood — in wood prices year-on-year, which impacted EBITDA margins by 6.7%. Gross margins of the company fell by 900 basis-points to 46.9%, EBITDA margins at 10.9% were lower by 615 basis-points and post-tax profits at INR72.11 crores were lower by 49%. Commercial production has started in the expansion project and we expect capacity utilization to ramp-up over the next three to four quarters. We expect an improved performance in FY ’26 with the addition of thin MDF in our product portfolio. Domestic furniture manufacturing industry prospects will receive a boost with the expected implementation of BIS QCO from February 2026. This should also lead to increased demand for furniture manufacturing and raw materials like MDS and plywood. MR. Will now run you through financials in greater details, post which we will have a Q&A session. Thank you.
Vishwanathan Venkatramani — Chief Financial Officer
Good evening and thank you for joining us to discuss the Q4 FY ’25 financial performance of Green Panel. Net sales during the quarter were INR338.94 crores compared to INR396.08 crores during the corresponding period. MDF sales in value terms fell by 15.3% at INR305.17 crores and contributed 90% of the top-line. MDF domestic volumes fell by 25%, while export volumes were up by 34%. MDF domestic revenues were INR272.80 crores, while exports contributed INR32.37 crores. Domestic realizations were higher by 7.4% year-on-year at INR31,214 per cubic meter, while export realizations were higher by 9.6% at INR22,389 per cubic meter. Blended MDF realizations were higher by 5.8% at INR29,961 per cubic meter. The MDF unit operated at 80% and Andhra Pradesh plant operated at 50% with blended capacity utilization at 60% on proportionately increased capacity of 6,61,899 cubic meters. Plywood sales showed de-growth of 5.3% at INR33.77 crores. Plywood sales volumes were lower by 12% at 1.25 million square meters and the unit operated at 42% during the quarter. Plywood sales realizations were higher by 8% at INR270 per square meter due to reason mentioned earlier. In Q4 FY ’25, gross margins were lower by 911 basis-points year-on-year at 44.6%. EBITDA margins were up by 189 basis-points at 15.9%. EBITDA value stood at INR53.85 crores and post-tax profits at INR29.39 crores. That concludes my presentation. Please start the Q&A session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Keshav Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, thank you for the opportunity. So as you have highlighted in calls, your AP plant is running at 50% capacity utilization. Now possibly you have increased the capacity also by brownfield expansion. So how are the plans on ramp-up? I understand you will possibly add a new product portfolio thing MDF, but possibly this utilization will go down further and by adding up this unit, what sort of your cost will increase be it on employe depreciation and interest in other expensive.
Shobhan Mittal
So on account of volumes, we are expecting about from the existing lines, line 1 and line two, we’re expecting about a 11%, 12% growth in terms of volumes in the coming year. And because the — you know, the first-quarter is quite muted for the new line. So we’re expecting about 72,000 cubic meter capacity utilization over the year from the new line. So combined as a company, this would give us about a 30% volume growth, including the production considered for the new line. So this is where we would stand — is what we expect to stand it for the current year.
Keshav Lahoti
Until you said something 72% utilization, what was that? I understand.
Shobhan Mittal
No, I said the volume expected from the new line would be 72,000 cubic meters. And so that is what we are expecting. Yeah. Got it, got it. And then the numbers that I mentioned, the numbers that I’ve mentioned to you are the domestic numbers and we are expecting about 80,000 cubic meter additional volume coming from the export business. So resulting in a total volume of about 550,000 cubic meters.
Keshav Lahoti
Yeah. Got it. So there are sort of one-off income in both and MDF unit this time. Can you please quantify it?
Vishwanathan Venkatramani
Yeah. In MDF, it has come from EPCG incentives and so that’s contributed INR35 crores during the quarter. And on the plywood side, we have written-off turnover discount provisions to the extent of INR1.25 crores. 1.25 crores
Keshav Lahoti
Understood. Can you please give me more idea about EPCG incentive, like how is it? Will it be coming in upcoming quarters or upcoming year?
Vishwanathan Venkatramani
Yeah. So the total incentive expected from EPCG scheme is about INR86 crores. We have accounted for INR35 crores in the — in FY ’25. So the balance of about INR51 crores is expected over FY ’26 and FY ’27.
Keshav Lahoti
Okay. So you will be recognized in each quarter proportionately kind of a thing.
Vishwanathan Venkatramani
Yeah, proportionate to the sales executed against those, you know? Yes. And domestically.
Keshav Lahoti
Got it. And what is the status of the import in India?
Vishwanathan Venkatramani
No imports have come down significantly. So I think April was about 1,100 cubic meters.
Keshav Lahoti
And how you see the trend going-forward?
Vishwanathan Venkatramani
We don’t expect to see any significant increase in imports..
Keshav Lahoti
Understood. Thank you. I’ll come back-in queue. Thank you.
Operator
Thank you. The next question is from the line of Pad from Investec. Please go-ahead.
Parth Bhavsar
Hi, sir. Thank you for the opportunity. I had a few questions on exports business. We are targeting around INR80,000 crores. I wanted to get an idea on what sort of margins did we make like indicative margins did we make in Q4?
Vishwanathan Venkatramani
So it was not INR80,000 crores. Actually said 80,000 cubic meters.
Parth Bhavsar
Yes, okay. Volumes would be 80,000 cubic meters for FY ’26.
Vishwanathan Venkatramani
Yeah, approximately about 84,000 cubic meters. And the margins in Q4 were approximately about 1.75%.
Parth Bhavsar
Okay. Okay. Got it. Got it. So sir, like if we adjust for this EPCG business, so like quarter-on-quarter our profitability in MDF was almost flattish. Is that is the right way to look at it?
Vishwanathan Venkatramani
That’s correct.
Parth Bhavsar
For MDF?
Vishwanathan Venkatramani
That’s correct.
Parth Bhavsar
Okay. Okay. Okay. Thank you, sir. Those are my questions for now. Thank you.
Operator
Thank you. The next question is from the line of Pankaj Para from Molecule Ventures. Please go-ahead.
Pankaj Parab
Hello, am I audible? Hello?
Operator
Yeah. Please go-ahead.
Pankaj Parab
Yes. Thank you for the opportunity. Sir, my first question is regarding the realization trend. So imports are now out-of-the way and I think the 29% should be the lowest we have ever seen. So can we assume some improvement going further as well in the realizations?
Vishwanathan Venkatramani
See, as far as FY ’26 is concerned, we don’t expect to see any significant improvement in the realizations. There could be some small improvement in realizations. But our primary focus would be on expanding volumes both in the existing plants as well as the new plant.
Pankaj Parab
Okay. And my next question is regarding the RM cost, particularly in Southern India. So how is the RM cost behaving there and have you seen any increase and expected to reduction in RM cost?
Vishwanathan Venkatramani
Yeah, we have started seeing some reductions from April, you know. So I think we would probably expect to see around a 5% to 7% fall in timber prices during FY ’26. Okay. Okay. So this is a very preliminary estimate. I’ll probably be able to give you a better estimate post-quarter one.
Pankaj Parab
Okay, that’s fine. And sir, any commentary on the underlying demand-side for the MDF segment.
Vishwanathan Venkatramani
Yeah., can you please take that question?
Shobhan Mittal
Yes. So what we are noticing is, of course that the import concentrated segments are, of course, shifting towards the domestic side. Market demand for using the general growth of the MDF industry continues to remain strong as opposed to other industries at 15% to 20%. And what we foresee is that there are no major additional capacities also coming — coming in. So with the fact that imports are going to be quite muted and the market is on a growing trend and the fact that no new large additional capacities are coming online in the next financial year, the benefit of this should shift towards the existing producers.
Pankaj Parab
Yeah, that’s it from my side. Thank you, sir.
Shobhan Mittal
Thank you.
Operator
Thank you. The next question is from the line of Yash from Edelweiss Public Alternatives. Please go-ahead.
Yash Sonthalia
Hi, team. Thank you for taking my questions. So I have three questions. Hello, am I audible?
Operator
Yeah, you are. Please go-ahead.
Yash Sonthalia
Yeah. So my first question is, like you said, our new capacity is coming for thin MDF, which will be replacing some of the imports or which will cater to the demand, which is currently getting imports. So can you give me some — what’s your perspective like what will drive this switch of market-share from imports to ours? Will it be cost, will it be a efficiency for the domestic manufacturers to take from us or quality, what will drive it?
Shobhan Mittal
No, I would say it’s not primarily imports, it is also some of the competing companies are already prevailing in the thin MDF segment, of course, being in the South of India and being highly focused on imports being a price-sensitive segment and the fact that imports are getting restricted. So that would definitely result in, you know, opening up a certain percentage of the market-share for — for our industry. And we already have a fairly a large and a strong network of distribution who are currently focused on the thick panels. And at the moment, they are obviously satisfying the requirement of thin panels from other sources. But the fact that now the green — the green panel as a company is in a position to offer the entire product portfolio, the fact that we’re located in the south of India having a competitive advantage in terms of freight also with respect to serviceability and resulting in working capital reduction — inventory reduction for — for our — for our dealers and channel partners. But there would be a preference shift towards us, which would result in us gaining market-share in this segment for?
Yash Sonthalia
Understood. Very clear. And second question to Venker Jee, like if you can help me with supply-demand specific to South, like what is the supply scenario and demand? And broadly, how much demand is in South and supply? Very broad numbers are okay, if possible.
Vishwanathan Venkatramani
Okay. There are only about three or four MDF manufacturers present in South India so we have green panel Century Decor and one unorganised company so the total supply would be about 1.1 once again. Sure, about 1.3 million cubic meters. And approximately 35% to 40% of the demand is generated from South India.
Yash Sonthalia
Of the total domestic demand, right?
Vishwanathan Venkatramani
Of the total domestic, correct.
Yash Sonthalia
And like you already alluded, there is no capacity coming for next year, but any news from your side, anyone who just announced the capacity, which maybe will come two, three years after. Any announcement which may you know from unorganized? I
Shobhan Mittal
Think — well, not on the unorganized, but we know that the action is in and in talks with regards to installing a line in the South of India.
Yash Sonthalia
Okay. A new greenfield capex or just a line in the existing
Shobhan Mittal
— no, the action doesn’t exist in the South of India from a production aspect. So it would be a greenfield capex.
Yash Sonthalia
Understood. Understood. And one last question from my side. Like for last one year, our realization in MDF has not increased with regards to the increase in raw-material prices. So what would be the current differentiation between the prices of MDF compared to low-end plywood or imports and what it used to be in ’23 or ’22, a normalized year.
Shobhan Mittal
Secondly, you’ll get that? Yeah, I got the question, but I don’t really have the numbers for plywood. And from a — we can tell you from an import aspect where it would stand and you know, domestic manufacturing generally, I mean, you know, ends up being about 8% and depending on the thickness and the product category, anywhere between 8% to 12% more expensive than the imports coming into the country. But that is at the pork level. The moment you start transporting imported material for the inland with local freight incurring, that it start reducing the difference.
Vishwanathan Venkatramani
Local freight and transportation costs.
Yash Sonthalia
Yeah. Got it. Got it. Local freight and warehousing costs. Understood. So currently it is miniscule, but earlier before this timber price increase and our price being flat, earlier the difference used to be same or it should — it used to be higher?
Vishwanathan Venkatramani
See, the peak difference used to be around 18% to 20%.
Yash Sonthalia
Right. Understood. Understood. Thank you. That’s all from my side. Best of luck for the upcoming year. Thank you.
Vishwanathan Venkatramani
Thank you.
Operator
Thank you. The next question is from the line of from Investment Group. Please go-ahead.
Tanmaiy Mohta
Thank you
Operator
We can’t hear you. Sorry, you are not audible.
Tanmaiy Mohta
Okay, very low hello yeah hi, can you hear me now? Am I audible? I’m at max if you can hear me.
Operator
Sir, can you connect on the handset mode? I believe you are connected on the hands-free mode.
Tanmaiy Mohta
Yeah, hi. Can you hear me now?
Operator
Yeah, it’s better. Please go-ahead.
Tanmaiy Mohta
Yeah, sorry, sorry for the confusion. Thanks for the opportunity. Actually, I’ve had a few bookkeeping questions. One was your value-added mix for the quarter and the year and your OEM mix for the quarter and the year. And second was in-line — on lines of the realizations. Do you expect — I mean, do you expect realization from the export front to sort of increase going-forward? And if — and if you could just basically tell me any reason why you feel that exports will be better going-forward?
Vishwanathan Venkatramani
Okay. As far as the value mix is concerned, for the quarter, it was 50% in volume terms and 62% in value terms and the figure was similar for the full-year also.
Tanmaiy Mohta
Got it. Got it.
Vishwanathan Venkatramani
And regarding as, do you expect any improvement in the export realization?
Shobhan Mittal
No. So as a company, now that we have the thin panel in our product portfolio and this generally tends to be about, I would say, anywhere about 25% to 30% higher-priced in the export side. So on a sort of average basis, our export realizations will improve. And this is not factoring in any price increases in the existing product segment that we are catering to. And of course, any — any dollar movement against the rupee would result in better realizations in rupee terms as well. And you know, with an improved mix of thin and thick panels, overall realizations for cubic meter and export are expected to improve for us?.
Tanmaiy Mohta
Thank you. And just one last question on when you expect the capacity to sort of start shaping in and when it can start contributing to the overall volumes?
Vishwanathan Venkatramani
So we are targeting a capacity utilization of 35% for FY ’26.
Tanmaiy Mohta
Okay. Okay.
Shobhan Mittal
But the only — yeah, but I think we should stop getting a substantial contribution of the capacity from quarter two of this year because at the moment, the line is still under the control of the plant supplier and it is still under the optimization phase because it’s a — it’s, let’s say, a very technologically advanced line and it’s a very high-speed line, hence it takes it’s a longer period of optimization, right? So we — we foresee that by quarter two, we should have the line handed over to us and we should start seeing a fair amount of output coming out of it.
Tanmaiy Mohta
Thank you. Thank you. All the best. I’ll come back to the queue. Thank you.
Shobhan Mittal
Thank you.
Operator
Thank you. The next question is from the line of Rishabh Bodra from Anand Rathi Share and Stock Brokers. Please go-ahead.
Rishab Bothra
Hello, sir. Yeah, good evening.
Operator
Please go-ahead.
Rishab Bothra
Yeah. Just wanted to understand a few things on the P&L front. Has there been a reduction in employee cost and other operating expenses for the quarter as compared to last year?
Vishwanathan Venkatramani
Yeah. Like we have mentioned in earlier quarters, you know, we have been reducing the admin expenses, especially as far as the branch operations are concerned. So if you look at it, I think admin expenses and employee expenses put together have come down by approximately INR15 crores this year and employee costs in-spite of 8% increment last year have remained almost fixed year-on-year.
Rishab Bothra
Got it. And with respect to EBIT margin, I think improvement in plywood is far better than MDF. So is there a raw-material proportion or is something else to it?
Vishwanathan Venkatramani
Yeah, like I mentioned, it’s primarily come from reduction in OED expense correct.
Rishab Bothra
Okay. Okay. And lastly, sir, if you could explain the tax impact indication, there is no tax or tax expense for the quarter. So what is this pertaining to?
Vishwanathan Venkatramani
Yeah. So we had received income tax refund, which was shared by GreenPly I think it probably came in October. So that’s why tax expense is almost negative for the full-year and very low for the quarter. And the second factor is the new plant started commercial production in the last quarter. So in income tax, if a plant has been operational for less than six months, we get income tax depreciation for six months. So while we are charging only three days or four days depreciation in the books of account, we are getting 6% depreciation reduction in — sorry, six months depreciation, reduction in income tax. So both those factors have contributed to keeping the tax impact very low in FY ’25. But for FY ’26, I would probably expect a tax-rate of around 20%.
Rishab Bothra
Got it. And lastly, sir, what would be the normalized depreciation and interest for next year onwards and in next quarter onwards?
Vishwanathan Venkatramani
I would say approximately about INR100 crores to INR102 crores.
Rishab Bothra
Wonderful. I’ll back-in. Sure. Come back-in the queue.
Vishwanathan Venkatramani
Thank you.
Operator
Thank you. The next question is from the line of Urug from YES Securities. Please go-ahead.
Udit Gajiwala
Yeah. Hi, sir. Thank you for taking my question. Sir, in the opening remarks, when you stated that you are looking at around INR50,000 kind of a sales volume number for this year and domestic should grow by 30%. So basically, what gives us the confidence that we’ll be able to expand our market-share with this quantum given that there are a lot of players who are bit aggressive now with the new capacities?
Vishwanathan Venkatramani
Okay. So have to break-up that figure, you know. So what we are saying is on the existing two lines, one at Utrakhand and one at Tandra, we are targeting 10% to 12% volume growth this year. And we are targeting a 35% capacity utilization in the new plant. So here if you look at it we primarily be producing the thin MDF and until very recently know, almost 60% of the thin MDF was being imported into India. Now imports have come down substantially. So during March and April, it has been approximately about 1,100 cubic meters per month. So we think a large part of that market-share can be captured by us.
Udit Gajiwala
Got it. And sir, secondly, I mean on margin front, right so if we eliminate the benefit of EPC that we are getting. So on a steady-state, what kind of operating margins can we see for MDF in FY ’26 and also for plywood?
Vishwanathan Venkatramani
So I think I would be looking at approximately a 12% margin in MDS and 7% to 8% margin in plywood.
Udit Gajiwala
Okay. Okay.
Vishwanathan Venkatramani
So for excluding the EPCG incentive.
Udit Gajiwala
Right, right. Okay, sir. Understood. Okay. And sir, this EPS, I’m sorry to again come back to this one, this EPCG benefit, so you’ll be taking that impact quarterly as per the sales. So the balance INR50 crore? Okay.
Vishwanathan Venkatramani
That’s correct.
Udit Gajiwala
So for seven, eight quarters, for two years like you mentioned, so for eight quarters
Vishwanathan Venkatramani
We mentioned. It could be — yeah, it could be anywhere between six to eight quarters
Udit Gajiwala
. Eight quarters. All right. All right, that’s helpful. So I’ll fall-back in the queue.
Vishwanathan Venkatramani
Thank you.
Operator
Thank you. The next question is from the line of Bhagar from Ambit Asset Management. Please go-ahead.
Bhargav Buddhadev
Yeah, good evening, team and thank you for the opportunity. Sir, just to understand this EPCG think in more detail, is it fair to say that it is actually a waiver on the import of — it’s a custom-duty waiver which we would have paid on plant and machinery for MDF capex?
Vishwanathan Venkatramani
That’s correct.
Bhargav Buddhadev
Okay. So as such, if we continue to incur more-and-more the capex, this actually can be a sort of a recurring income, right, for us.
Vishwanathan Venkatramani
No, we won’t be incurring any recurring capex, you know. So our capex has been completed as far as the new line is concerned. So that’s why I could put a fixed figure to it that the total is INR86 crores. We have accounted for INR35 crores in FY ’25 and the balance INR51 crores is expected to accrue over the next six quarters.
Bhargav Buddhadev
And the INR35 crores has been also received cash for in FY ’25, right?
Vishwanathan Venkatramani
See, it has been accounted for in-quarter four, although it was for the full-year because we could account for that incentive only after the plant was commissioned.
Bhargav Buddhadev
Okay. Okay. And in terms of cash-flow although the export,
Vishwanathan Venkatramani
Although the — although the export obligations were completed earlier, we could only account for it in-quarter four after the installed — installation was completed and commercial production commenced.
Shobhan Mittal
Because your obligation — sorry, just to clarify, EPCG obligations can be discharged at a company-level. It is not specific to the plant that had that you have saved duty on. So because we had an ongoing export business from our previous lines, we were able to discharge the obligation even before this line had gotten commissioned. The new line had gotten commissioned.
Bhargav Buddhadev
Understood. Understood. And secondly, sir, if you look at the last one year, Greenfly has been making a lot of inroads into MDF led by sort of disruptive pricing. But now that they have reached optimum utilization level, is it fair to say that there will be a lot more price discipline now going-forward?
Shobhan Mittal
Yes, you can — you can say that. Yes, we’re already noticing that.
Bhargav Buddhadev
Okay. So from here on, I mean the — at least that irrational pricing may not hold now that there is BIS also and optimum utilization has been received, right?
Shobhan Mittal
Correct.
Bhargav Buddhadev
Okay. So great sir,
Shobhan Mittal
But due to the — due to the BIS you know implementation, so we also see the threat from the unorganized segment minimizing coming — going-forward because when the new standards are declared and got into notification. For compliance, there will definitely be a cost increase on account of the unorganized players. And that would, you know, result in lesser price cutting power on their part or even to the extent of passing on some of that cost in the market, minimizing the difference between the organized segment?
Bhargav Buddhadev
Sure. And just last clarification, this balance INR50 crores that is spending on the export grant or which you’ll be accruing over the next two years, we can assume that the cash-flow will also be commensurate, right? Hello.,
Vishwanathan Venkatramani
Yeah. No. There is no cash-flow impact as such, you know. Basically by importing the machinery under EPCG scheme, we have awarded a cash outflow. No, no, I’m saying. So now we are discharging the export obligations against that custom duty saved.
Bhargav Buddhadev
I’m sorry, you haven’t paid the custom duty and hence there is no cash-flow impact.
Shobhan Mittal
Correct. Yes. In the way we already saved this cash-flow at the time of capital expenditure.
Bhargav Buddhadev
Okay. So to that extent, there was an increase in capex, which is now getting reversed. That’s — that’s the right way to look at it hello no I couldn’t get that what did you say me, sir, what I’m trying to say is,, on the import Kia, we would not have paid custom duty, but still we would have accounted as a payable, which we are reversing.
Vishwanathan Venkatramani
Correct. Correct. That’s correct. That’s right.
Bhargav Buddhadev
Understood. Okay, sir. Thank you very much. Thank you very much.
Vishwanathan Venkatramani
Thank you very.
Operator
Thank you. The next question is from the line of Utkash Nopani from BOB Capital Markets. Please go-ahead.
Utkarsh Nopany
Yeah, hi, good evening, sir. Sir, my first question is on your NBF volume growth side. So if we see for March quarter, we have — our domestic MDF volume has degrown by 25%. So can you please explain the rationale why we have registered such kind of a sharp degrowth in our volume?
Shobhan Mittal
Yeah. So okay. As mentioned in the comments, in-quarter four last year because of the BIS compliance, we had zero sales of — of commercial-grade MDF, which we had discontinued consciously as opposed to almost 40,000 cubic meters of of commercial grid sales in the corresponding quarter last year.
Utkarsh Nopany
Okay. Sir, like if we have discontinued the commercial-grade sales, is it not likely that our domestic volume is also likely to get impacted in the coming quarters time and we are expecting our domestic volume to grow or the existing line volume to grow by 11% to 12%. So wanted to understand that how we are confident of growing our existing line volume by 11% to 12%?
Shobhan Mittal
Yes. Because you know the consumption, whichever segments or customers were consuming the commercial-grade MDF, now we’ll have to satisfy the requirements with BIS compliant MDF. So demand has not gone anywhere. It is just a matter — the case is that it will now get replaced by BIS compliant MDF, which was earlier being satisfied by commercial-grade NDI because no one now can offer non-BIS compliant MDF anymore. So the demand continues to remain there, right? And even if they choose to fulfill this by way of imports, it would also again have to be BIS compliant NDI. That’s the whole point of the QCO being in-place.
Utkarsh Nopany
Okay. And sir, like in the current June quarter, do we expect our volume to grow at around 11% 12% rate on a Y-o-Y basis?
Shobhan Mittal
Well, we are seeing the — even at the moment, the unorganized segment is not fully compliant because there is a, let’s say, a grace period for the BIS compliance. So of course, the first-quarter although it’s too premature to say, but it’s — the first-quarter is still a bit muted. Okay. But we expect this to grow over the — over the full financial year, the numbers that we are talking about.
Utkarsh Nopany
Yeah, fine. Got it, sir. And second thing, sir, on margin, like if we exclude the benefit of EPCG, then our margin has come pressure on a quarter-on-quarter basis and it has gone below 5% level. And we are guiding that our margins to go up to around 12% level in FY ’26. So wanted to understand that why we are so also hopeful that our margin should recover to such a good level in FY ’26 when we are seeing a margin pressure even on a Q-on-Q basis.
Vishwanathan Venkatramani
Okay. There are two reasons why we are expecting an improvement in the margins. You know, one is we are focusing 10% — 10% to 12% growth in domestic volumes from the existing plants, you know. So improving capacity utilization at the older parts will have a positive impact on the margin. We are expecting wood prices to come down this year compared to what they were last year, you know. And the third point is, you know, there will be very small increase in fixed-cost with the new plant. So I’m expecting an annual increase in fixed-cost of only about INR5 crore to INR6 crores for the new plant. So it will basically have a much higher operating margin as compared to the existing plants.
Utkarsh Nopany
Okay. And sir, like if you can just provide the data of timber price for the March quarter, what it was for North, South and blended basis and what it is right now in the current June quarter.
Vishwanathan Venkatramani
I won’t be able to give you for the June quarter right now, so we will discuss that you know post the Q1 numbers. So at the moment I’ll just give you for the March quarter for the North plant timber prices were 7 per kg and for the south plant it was INR623 per se a kg. Sorry. Sorry, sorry, sorry. That was for quarter three. For quarter-four, North was 6.44 and South was 6.22. Okay. So these are the purchase rates and the consumption rates were 6.67 per north and 6.38 per South.
Utkarsh Nopany
Okay, got it, sir. Thanks a lot, sir. Thank you.
Operator
Thank you. The next question is from the line of Potra from Anand Rathi Share Stock Brokers. Please go-ahead.
Rishab Barar
Sir, big question. With respect to consumption pattern, how has been the sales mix with respect to retail level and B2B level? I mean, who are our main buyers? Is it contracted or is it the OEM manufacturers?
Vishwanathan Venkatramani
Okay. So if you look at it in terms of sales network, it’s primarily B2C because almost 85% of our sales happens through the channel and only about 15% is to the OEM manufacturers. But if you look at it in terms of consumption, you know, majority of the MDF the raw-material in producing ready-made furniture. And since consumption terms, it’s more B2B?
Rishab Barar
Got it. And sir, with respect to procurement of raw materials, is it the auctioning happens and the timber procurement sites or how do we make sure that we are adequately placed with raw materials so that capacity doesn’t remain added.
Vishwanathan Venkatramani
See, depending upon requirements, you know, we decide how much volumes to be purchased from which area. So if the requirement is small, we purchase from a local area which may be within a radius of 30 to 50 kilometers from the factory. And if we require larger volumes, we go over a larger area, which could be say 150 to 200 kilometers or in extreme case, even up to 400 per 150 kilometers from the plant.
Rishab Barar
Okay. Okay. But do we have contract arrangements with farmers or because these are now not sold from fresh and these are all plantation great timber. So how does things
Vishwanathan Venkatramani
So yeah, we have a network of contractors who procure most of the material enough for us. Apart from that, we have a few farmers who come directly to the plant and supply the material, but that would be a small proportion of the total.
Rishab Barar
Okay. Thank you, sir. Thank you for answering my question.
Vishwanathan Venkatramani
Thank you
Operator
Thank you the next question is from the line of Karan Batelia from Asian Market Securities. Please go-ahead.
Karan Bhatelia
Hi, sir. Am I audible?
Vishwanathan Venkatramani
Yes. Yes.
Karan Bhatelia
Sir, just wanted your clarification and thought process on the margins for the MDF. Now if you see in the 4th-quarter, we are zero commercial-grade, like we are selling zero of the low-margin product assuming that the value-added portfolio percentage remains the same, what will give us the confidence of a double-digit margins?
Vishwanathan Venkatramani
So when I said earlier, there are three factors. One is the improved capacity utilization in the existing lines, right? The second is the fall in wood prices. And the third is, I mentioned that fixed costs will be very low at the new plants. We will be adding only approximately INR5 crores to INR6 crores of fixed overheads for the new plant. So these are the three reasons why we are expecting a better operating margin compared to quarter-four.
Karan Bhatelia
And the Q4 export margins were at 1.75% and at 80,000, what could be this margin profile assuming that majority is thin MDF exports?
Vishwanathan Venkatramani
No, majority may not be thin MDF import. So I won’t comment on that. See at least two quarters of export performance from the new line. So basically, depending upon how wood prices behave, no margins are expected to be slightly better as compared to quarter-four. But you know, since I don’t know-how raw-material prices will behave exactly. At the point, what I’m estimating is about a 6% to 8% reduction in oat prices next year. Right. So as each quarter goes, we will get a better idea. So I’ll probably have a better estimate in-quarter one.
Karan Bhatelia
Okay. Okay. And what is the sales and marketing expense for the year gone by?
Vishwanathan Venkatramani
I think we would be spending approximately about INR20 crores.
Karan Bhatelia
Okay. Thank you. That’s it from.
Operator
Thank you. Participants to ask a question, you may press start and one. The next question is from the line of Udit Gajivala from AS Securities. Please go-ahead.
Udit Gajiwala
Yeah. Thank you for follow-up, sir. Sir, if you can just illustrate what will be the capex cost for the coming fiscal?
Vishwanathan Venkatramani
So we’re not expecting any major capex. So I would say approximately INR25 crores of, you know, the balanced capex for the new line and maybe if we decide to do some small capex for the existing business, I would put that at a maximum of about INR10 crores to INR15 crores.
Udit Gajiwala
So not more than INR40 crore INR45 odd crores for the full-year.
Vishwanathan Venkatramani
No, I would say not more than INR30 crores INR35 crores, yeah.
Udit Gajiwala
Got it, sir. Thank you for taking thank you.
Vishwanathan Venkatramani
Thank you.
Operator
Thank you. The next question is from the line of Arun from ICICI Securities. Please go-ahead.
Arun Baid
Yeah., if you can just tell us what’s the ballpark expected realization for the new thin MDF line in India? New thin MDF line in India?
Shobhan Mittal
Yeah. The ballpark expectation of realization there. So on — Arun, you see, today our realizations are close to about 30,000 cubic meters, which is a combination of pre-laminated value-added products, etc. But so if I talk about the thin MDF line on a per cubic meter basis, this would be about 15% to 20% higher.
Vishwanathan Venkatramani
But you know, you shouldn’t put that 15% to 20% on that 30,000 figure. Yeah, because initially a majority of the sales will be of the industrial product. And also for the MDF, industrial MDF sales is approximately about 25,000 to 26,000 per cubic meter.
Arun Baid
So would it be fair to say that the blended basis it would have similar thin grid MDF with your value mix there also see,
Vishwanathan Venkatramani
It will — it may take some time for the value mix because even for the existing lines, it’s possibly taken us about 15 years to build-up a 50% mix of value-added products. So I wouldn’t say it would take such a long-time, but for the new plant to have the same mix of value-added products, it’s possibly a three-year exercise.
Arun Baid
And just one clarification. I’m not clear. So we were saying that we expect about 11% 12% growth in our India business on the volume front, right, this year whatever you have done.
Vishwanathan Venkatramani
Pertaining to the older plants,
Arun Baid
Pertaining to the older plants. Yes, yes. And plus 84,000 from the new line in India. Am I correct?
Vishwanathan Venkatramani
No, 72,000 from the new line in India,
Arun Baid
Okay. And from export and 11% growth on the India business on the new existing lines, right? And sir, exports, you mentioned 80,000 CVM. So we bid roughly around 70,000 CVM this year. So basically, we are not expecting the major thing from exports from new line.
Shobhan Mittal
So we’ve around at the moment, we’ve taken a very muted number for the — from the new line for the exports. I mean, this is of course a conservative number for the time-being. And it should be — we are focusing on opening up the markets and exploring the markets on this as well. But at this point of time, because the line is not yet fully settled and timber prices are also not, you know, very clear to us. Hence, at the moment from the new line, we’ve not allocated a very large capacity for the export market.
Arun Baid
Okay, okay. Thank you. Thank you,. Thank you much.
Shobhan Mittal
Thank you.
Operator
Thank you the next question is from the line of Keshav Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
So what was the commercial-grade non-BIS compliant sale-in FY ’25? And secondly, this sale possibly will be now BIS compliant. So it is quite possible whatever the sale you might be doing, that might be now split between all the players.
Vishwanathan Venkatramani
See if like I mentioned for the commercial grid MDF, sales was nil in-quarter four okay but if you compare FY ’25 with FY ’24, it was almost similar. The two years were almost similar, approximately 70,000 cubic meters each year. Now post-implementation of BIS, neither domestic players nor importers can sell non-compliant BS material in India. So you know, nobody can manufacture or sell commercial-grade MDF in future.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Shobhan Mittal
We thank everyone for joining this call and we look-forward to speaking to everyone after the next quarter. And if anyone has any further questions, please feel free-to reach-out to us. Thank you and good evening.
Vishwanathan Venkatramani
Thank you, everyone, and good evening to you.
Operator
Thank you very much. On behalf of Green Panel Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines