Greenply Industries Ltd (NSE: GREENPLY) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Sanidhya Mittal — Joint Managing Director
Analysts:
Unidentified Participant
Karan Bhatelia — Analyst
Pranav Mehta — Analyst
Praveen Sahay — Analyst
Sneha Talreja — Analyst
Guru Darshan — Analyst
Ritesh Shah — Analyst
Utkarsh Nopany — Analyst
Mithun Aswath — Analyst
Keshav Lahoti — Analyst
Udit Gajiwala — Analyst
Vandit Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Green Ply Industries Q1 FY26 earnings 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 this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhattelia. In Time India. Thank you. And over to you.
Karan Bhatelia — Analyst
Hi everyone. Good morning. On behalf of Asian Market securities we thank you for joining us on the Virintla Industries 1QFY26 conference call. In the panel today we have Vishw Mano Tulsian, Joint managing director and CEO Mr. Sanya Mittal, joint managing director and new CFO Sanjeev Keshri. We now invite Manuji to begin the proceedings of the call. Thank you. And over to you sir.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Thank you Karan. And good morning everyone. It is a pleasure to have you all on this call. I will be updating you on Greenply’s operating and financial performance for Q1 FY 2026 this quarter. We continue to face some liquidity challenges which also somehow resulted into a delay of commencement of few new projects while our performance in April and May aligned with our expectations. But June was relatively subdued compared to even historical trends of last four or five years. Even some of our regular channel partners faced challenges and could not pay us on time in the month of June.
Having said that, we have seen a recent recovery in the month of July and we are confident that Q2FY26 will definitely outperform Q1FY26. I would like to share with you that we have achieved a consolidated quarterly revenue of Rupees 601 crores with a growth of 2.9% on a YoY basis. Our consolidated core EBITDA for the quarter was at 62 crores a growth of 6.4% on a yoy basis. The core EBITDA margin for the quarter was at 10.3% as compared to 9.9% in Q1FY25 PVD before the losses on equity accounted investees foreign exchange gain loss as an adjustment to finance cost and exceptional item is at 50 crores for Q1FY26 which is a 33% YoY growth added against PBT of 38 crore in Q1FY25.
Remember last year in Q1 we also had a one off income on account of income tax refund to the extent of 12 crore. Hence we just thought we will also educate on the numbers at PVT level removing that exceptional item. Let me now share the highlights of our individual business segments. As mentioned earlier, June was a relatively subdued month which resulted in a marginal volume degrowth of 3.1% year on year in our private segment. However, we remain optimistic towards the later part of the year supported by favorable industry tailwinds such as the implementation of BIS norms and softening in timber prices.
Going forward, the realization for the Plywood segment grew by 4.1% on yy basis reaching Rupees 255 per MSM. On the margin front, our core EBITDA margin for Q1FY26 was 7.9% as again 7.8%. In Q1FY25 the margin improved on yyy basis by 10bps. I’m pleased to announce the rollout of our first ever television commercial campaign on Ecotech Kaam Sahih Dam Sahi where our objective is to drive deeper brand preference in the flywheel segment by connecting with the budget conscious yet quality seeking Indian consumers. With this campaign our aim is to build stronger awareness for Ecotech as a reliable value for money Plywood solution.
Especially in markets where prices play a major role, we want to reinforce that good quality doesn’t have to come at a high cost and Ecotech delivers the right balance of performance and affordability that today’s customers expect. It’s a strategic approach to grow penetration in tier 2 tier 3 markets and drive demand at the regional level. Moving on to MDR business, our revenue in Q1FY26 was rupees 147.3 crores and volume at 46,350 cbm while our realizations improved to Rs. 31,763 per cvm which is an increase of 3.1% on a yoy basis. Our EBITDA margins also improved to 17.4% as against 15% in the previous quarter and we are confident of achieving double digit volume growth and 16% plus margin guidance in FY26.
More details on the MDR business will be shared by Sanad. Moving on to our furniture and fittings jv, we have started making sales from this quarter achieving a minimalistic revenue of 6.5 crore. The JB reported a PAT loss of 10.8 crore for the quarter with our share of loss amounting to rupees 5.4 crores. Our net debt stood at 538 crore during the quarter, primarily elevated due to inventory buildup, mainly in the plywood segment in response to import restriction and in MDF ahead of a plant shutdown. Both inventories are expected to be liquidated by the end of H1FY26 and hence we remain confident that our net debt will decline and return to the guided level of 0.5 by the end of the year.
With respect to our operations at Green ply Middle List Limited we have successfully reduced our stake from 49% to 19% now reducing the exposure from USD 5.8 million to USD 3.8 million on the guarantee front. As a result, our contingent liability has in rupee term reduced from 50 crores to 32 crores. With this statement, I would like to hand it over to Sanidya to provide more insights on the MDF business.
Sanidhya Mittal — Joint Managing Director
Thank you Manoji. And good morning to everyone on the call. In our MDF business, we have done exceptionally well in this quarter. Our sales in the quarter has shown an 11.7% year on year improvement over the last quarter. In terms of values, our EBITDA margins improved to 17.4% from 15 in the previous quarter which was mainly achieved due to an increase in sales and optimizing operating overheads efficiently. Our Vadodara plant is operating at full capacity and hence we plan to expand our capacity in the month of August 2025. Construction of the HDF flooring line is completed and trials are ongoing.
Will be starting production of the same in September 2025. Going forward, our focus will be on sales of more value added products and improving operating efficiencies further. With this, I would like to open the floor for Q and A session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one or via Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets 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 Pranav Mehta from Aquiris Securities. Please go ahead.
Pranav Mehta
Yeah, Good morning. Thank you for taking your question. I wanted to understand on the private. Business a bit more. So basically if you see you have built up inventory.
operator
Mr. Pranav, give me a moment. Actually the management line has got disconnected. Let me reconnect them again then you can ask the same question. Ladies and gentlemen, thank you for being on the hold the line for the Management is now reconnected. Also a reminder to all participants you may press star and one to ask a question. Sorry for the inconvenience. The next question is from the line of Pranav Sahai from PI Capital. Please go ahead.
Praveen Sahay
Hello. Am I audible?
Manoj Tulsian
Yes. Yes sir.
Praveen Sahay
Yeah Praveen this side from PL Capital. So my question is related to the mdf. As you had said you are taking an expansion in the capacity. So if I look at your utilization which is last year nearly around 70% or even for this quarter it’s around 75 77% of utilization. So in that utilization and you know in the last year we had a scene that quite a lot of capacity came in in that juncture why is a decision to expand the capacity, why not improve the utilization to a more or at what level you can reach to.
Sanidhya Mittal
So I think when you look at the utilization you are directly going to the capacity of MDF versus what we are producing. Actually the capacity keeps changing depending on what product mix you’re producing. So with the current product mix that we are producing we are almost utilizing 90% capacity. That’s one. Secondly when we are expanding or going for capacity expansion we are not doing capex to build another line. So our existing line in a very small capex will be able to churn 25% more. So that was already planned from day one. And all the balancing equipment in the factory other than the press is already planned for thousand cubic meters.
So we’ll have a two, two and a half, three week shutdown where quickly we’ll ramp up the production by 25% by expanding the press.
Praveen Sahay
How much of the capex you are doing for this around?
Sanidhya Mittal
If I’m not wrong it will be the range of 10 to 12 crores. Not more than that.
Praveen Sahay
Okay. Okay, next question. Sir, related to the timber pricing if you can you know give a color on the plywood timber and the MDF timber prices how has been and what your expectation for the rest of the year?
Manoj Tulsian
Plywood timber prices are almost stable. You know whether we see it from last year, quarter one or actually last year most of the time the plywood timber prices was more or less stable. Except I remember in quarter three it bumped up again and then in quarter four it slightly softened. It’s in the same range. MDF the timber prices have slightly reduced in quarter one I think by around 2 to 3% approximately.
Praveen Sahay
So plywood price is nearly around 9 and a half rupees per kilogram and the MDF prices reduced to sort some 6 rupees per kilogram around and any guidance for the rest of the quarter, sir?
Manoj Tulsian
See guidance we have given annual guidance and you know, going forward it looks like now that with the new supply coming in, the prices as we mentioned either will stabilize or will start coming down. But I think, you know, my team is saying that we can only expect that around quarter three and quarter four of this year. Quarter three and probably again, you know. Like in quarter two because of the rainy season and other issues it slightly goes up but then you know, within the quarter only it also comes back. So there is a movement which happens within the quarter but by the end of the quarter it is back to like the same levels.
Praveen Sahay
And if I may last question related to the mdf I would volume because on the point we had seen growth there and even if I compare the last year, you are a single digit of a growth versus PR of a double digit of a growth. What your expectation for the next, you know, three quarters it is expected to improve from here or the guidance what you had given. So that double digit of a growth, it’s going to matter. And what’s your take on that?
Manoj Tulsian
I think guidance will make more sense after quarter two because quarter one, which I mentioned in our opening speech, June was a big surprise. We have not seen this type of a poor June in almost last four, five years. So otherwise we were well on track even for a growth of 6. But yet having said that, July is definitely looking better. July has picked up. We had a lot of challenge in the month of June in terms of even collecting our receivables from our channel partner that also has improved quite a bit. So I think for the full year double digit looks difficult now in terms of volume growth in plywood.
But I still feel that we will be able to give you better guidance because I am very hopeful that maybe we’ll really bounce back very well one in H2 for this year and even quarter two will be much better than quarter one. I’m just holding my guidance for a quarter because at this point if I say that, you know, yes, we will do 10% volume growth, it will look very irrational. Okay. And on the margin front for sure, even if we are going to miss on 10% but sorry, for the full year if you are able to do a decent volume growth, we’ll still be able to do a double digit margin in plywood because of the operating efficiencies in MDF for sure we are on track.
We are on track for a double digit growth and on the margin front for the Full year we have given a guidance of 16% plus. This quarter we were at 17.5. So I’m very sure that, you know, we’ll be able to meet our guidance for mdf.
Praveen Sahay
Thank you sir, and all the best.
Manoj Tulsian
Thank you.
operator
Thank you very much. The next question is from the line of Neha Talreja from Nuama Health. Please go ahead.
Sneha Talreja
Good morning team and congratulations on good set of numbers. Couple of questions from my end. Firstly just speaking about, you know, you mentioned about raw material prices going down. Is it getting passed on in the domestic market? Are you seeing, you know, players passing that on or are the prices being reserved and you know, everyone is trying to gain on margins. That one topic, if you talk about.
Sanidhya Mittal
Quarter one, I think prices were quite in control. People were not passing on. But if you talk about the current quarter, yes, people are passing on. There is a lot of fight for price in the market. But you know, I think we have the smallest capacity compared to anybody else, compared to our peers to sell. So I believe the desperation at our end should be lower than at anybody else’s end. So hence in spite of a fight and in spite of the price going down and the timber benefit getting passed on, we still feel that we’ll maintain our guidance.
Sneha Talreja
Understood. But when the. So the question is more broader. Now we were assuming that this time when governmental prices fall, there will be some retention which will be happening, which is probably not being seen in case of even our Channel six. So the idea was to understand when do we see this coming up, that you know, finally there is less of competition and you know, pricing coming into play because these margins for sure in the long run for everyone is not sustainable. So some thoughts here from you would be helpful that you know, when can you actually see that bottom getting hit and you know, margins improving? Probably not for us, but the question has been from the industry lens, I.
Sanidhya Mittal
Don’T know, maybe the unorganized needs to shut shop, some of the smaller players need to die and the larger players need to be satisfied with their capacity getting sold in the market. I think that’s when the industry can come to a conclusion and everybody starts making better margins. Till then, honestly, everybody is equally affectable. Everybody is getting affected as far as margins are concerned.
Sneha Talreja
Any of these things happening.
Manoj Tulsian
Just to add to that, I think when you look at the overall capacity today versus utilization for the industry, there is a gap. And see in this business it will always. Because when the margins start shooting up. You will see suddenly too many capacities.
operator
Ms. Sneha, give me a Moment the line for the management has got disconnected. Let me reconnect them. It. Sam. Yeah. Hello ladies and gentlemen, thank you for being on hold. The line for the management is now reconnected. Ms. Neha, you can ask your question now.
Sneha Talreja
Yes, Mano sir was answering. Mano sir, you were answering on the energy part of it.
Manoj Tulsian
Yeah so what I was saying Sriha that you know in this business it will always happen that when the margins actually starts going up slightly goes on the irrational side you will see new capacity commitments coming in which is exactly what happened around you know one and a half two years back. So when you see most of the capacity now in place there will remain a pressure on the margin. But I think this margin pressure because of possibly reduction in the raw material prices will be able to get absorbed. Yes, it doesn’t look like that in the immediate future.
Like you know we are talking about 16% plus today we are not in the capacity to talk about 19 or 20% plus seems by next year you know when because the growth is there in this business in MDF for sure a 15 to 20% growth. So by the time we enter the next year you will see a lot of semblance in terms of capacity versus demand and then according to me the prices should start moving up and then again you will see a cycle after two, three years that you know, new capacity again starts hitting the market maybe after three years.
So there will be a good period of 24 to 30 months again after a year when you will see margins will be much better in this business. That is what our take on the whole thing.
Sneha Talreja
I absolutely agree. Thanks a lot for this answer. One last bit on the hardware front in case, I mean how has progress been in that particular business? Of course we are seeing losses at this level but where do we see this breakthrough in happening in the hardware part of it? And how’s your entrenchment been with respect to you know, OEMs versus retail? Some you know color would be helpful.
Manoj Tulsian
So you know too early we just did around you know six odd crores only in quarter one less than six crores. Okay so for this year we had in any case as per the business plan also there is a level of loss would be there in this business but by next year you know there will be a sizable growth which will happen while we speak we have already onboarded more than 200 plus dealers with whom we have started interacting. Then again there is a phase one and phase two. Phase one manufacturing has started and then there is a phase two and phase three, which you know, we’ll set up the machine and everything.
So those things will also happen in the next, you know, mostly 12 months those things will also happen. So one, once that happens the margins will look much better because right now we are also dependent on lot of imports which is happening. That is one second by next year, you know, the business will also get strengthened because possibly the dealer will, dealer base will cross 500 or 600 numbers. So the numbers will also start looking good. Yes, I can clearly say that the product acceptability in the market is very good. The report on the quality on the life cycle and everything has been very, very encouraging from the dealer, even from some of the OEMs that respond on time.
I think we are on track. But yes, we’ll have to give this business another four to six quarters for it to really start showing some good, decent numbers. Understood?
Sneha Talreja
Understood. Sorry sir, one last one. Since you just spoke about this new hardware business, you have all again, you know, initiated one more new business which is the wooden, which is the doors and the profile part of it. Just couple of things here. What is the logic of getting into this particular business? That’s one, how big is the opportunity size according to you? What’s our right to win here? A couple of these aspects would be helpful, I think.
Manoj Tulsian
I’ll answer that question. So in WPC and in pvc, firstly we’re not entering this category newly as far as production is concerned. Yes, we’re trying to enter. If you look at our existing volume, we’re almost selling annually about 65 crores of PVC products. So the idea is to have our own manufacturing and give our entire dealer distributor network the confidence of the quality manufacturing that we do in house. That is one number two, with in house manufacturing and quality focus we’ll also be able to increase sales. So and also all the products that we’re trying to manufacture in pvc, whether it is foam board, whether it is WPC doors or WPC door frames, I think all these products are products which are eating into our core products.
So our PVC foam board today is replacing a plyboard in the market to a small extent. So Green Ply wants to innovate and ensure that any conversion that’s happening in plywood or in the flush door segment comes back to green ply. So I think this is always our focus. We’ve been in this category for five years now. We finally understand how the sales works. I think now we want to learn the manufacturing as well. And if you look at the Asset turn. And if you look at the total capex, I think it’s very, very small, minuscule.
So we don’t look at that as a challenge. We look at that as an opportunity that we can really create a segment of PVP products and further help our client board business keep growing.
Sneha Talreja
Thank you. Thanks. Thanks. Thanks a lot. Thank you so much.
operator
Thank you. I request each participants to ask two questions only. The next question is from the line of Guru Darshan from Kitara Capital. Please go ahead.
Guru Darshan
Thank you. Sir, just wanted to understand. Is there any specific reason for revitalization group in.
Manoj Tulsian
Sorry, your voice. Your voice is breaking. We are not able to get your question properly.
Guru Darshan
No, no, it’s audible now you are audible.
Manoj Tulsian
But you know your. The voice is not clear. So we are not able to pick up your question.
Guru Darshan
Is it better?
Manoj Tulsian
Yes. Slightly better.
Guru Darshan
Yes, yes. I just wanted to understand. Is there a specific reason for realization growth in plywood? You have the plywood volumes declining the current quarter. No.
Manoj Tulsian
So you know we had taken price increase even in quarter four which we had mentioned. Okay, so this is when you are looking at the realization. The realization with respect to Q1 of last year. And last year we had taken maybe 2 or 3 price increase. So now that the entire thing is factored in that is to some extent visible in the overall numbers.
Guru Darshan
Okay. Okay. Sir, in the current quarter you have recorded around 4 crore loss from the GM yield. What would be the further impact for the rest of the quarter from this one?
Manoj Tulsian
So you know the good part is that during the quarter we were able to reduce our stake further. We were able to sell another 30%. While those 30% was being sold, you know it was at a price which was slightly lower than the book value carrying value. So there is a loss which has got booked on account of the same. Also since the transaction took place during the quarter we had to pick up till the date of the transaction the losses, our proportionate losses in that business. But now that we are at 19% equity we don’t need to pick up any further losses from that business.
So we are now fully away from that business. Except the value of 19% of our equity which is like I think close to around 2.5 to 3 crores. And the other thing which I mentioned in my opening call that you know we had a corporate guarantee which was at the time of our first deal when we had actually sold 49%. Sorry 51%. We were at a counter guarantee liability of $5.08 million. 6.56. 6.1 so we had given a corporate guarantee of $6.1 million. That which is now also reduced to $3.8 million.
Guru Darshan
Okay. Okay, got it. Sir, just one last question. Is there any other one off gain apart from 4 crore stake sales in other income. Sorry, is there any one off gains I’ve recorded in the other income apart from, you know, 4 crore stake sale of GM?
Manoj Tulsian
I think there is something more also on this one minute. Maybe our team can explain to that because so, so I, you know, I think there is a reconciliation which can be shared separately because of these transactions at standalone level and at console level there are three or four different treatments which has happened.
So I would say that, you know, maybe our team can reach out to you and they can share the reconciliation with you for your understanding. Yes, just one quick last question. Net debt, I’m sorry, graphic has already increased like 11% in the current quarter. What is the use, you know, what is it used for? Is it for funding, working capital? Yes, you know, mostly it has gone for working capital. Two, three reasons. One, you know, we had built up inventories in plywood also, okay. That we had a plan that most of it will get, you know, liquidated by Q2.
So there will be a level of liquidation which will happen. That is one second. We also mentioned that, you know, we have planned a shutdown in MDF in the month of August, September. So for that, so that we are not out of market, we have already created an inventory, a decent inventory that will also get liquidated mostly by end of September 3rd as I mentioned that, you know, liquidity in terms of collection side from our channel partner was also slightly tough. So you will see that our number of days on receivables both in MDF and plywood has gone up.
I believe that there is enough liquidity which is even, you know, which is where RBI is also taken a lot of measures to put back the liquidity into the market. So that also will improve in quarter two and I’m sure by quarter three we will be, you know, we’ll be reducing our number of days on receivables. So mainly payables have gone down. Yes, you are right. Because some of this imported purchase, you know, which was being done in the month of around December, January, February, all of them, the money became due to be paid in the month of, you know, April, May, June.
So that was against lc. So we had to pay off, you know, those LC payments. These are all planned. This was all planned, I think somewhere in the month of March itself in that call I had mentioned also that, you know, the debt will go up but by end of September it will come down significantly. All right, you got it?
Guru Darshan
Got it. Thank you so much. And all the way. Thanks. Thanks.
operator
Thank you. The next question is from the line. Of Ritesha from Investec. Please go ahead.
Ritesh Shah
Yeah. Hi sir, A couple of questions. The first is I’m a bit confused on corporate guarantee. I think there are three parts to it. One was Gavin, I think, which you explained in brief. I think the second we have something again Summit jv and third is we. Have something at the Singapore entity. So can you please highlight, I think specifically with respect to Gavin, you indicated that the residual is 19% equity and it’s close to 2 and a half to 3 crores. Did I pick it right, sir?
Sanidhya Mittal
Yeah, yeah. So whatever I said was only on account of our gap on entity. Okay. The other corporate guarantees, which you are right, which is extended for loans even for our MBA business as well as for cement business, those corporate guarantees are separate. But this was a liability. This was a source which was hanging on us, you know, because when even we signed off this deal with the, you know, with the, with the buyer, they were very clear that if in case we withdraw these guarantees, the bank loan which was, this was a collateral to that bank loan.
And the bank loan was around 240, 250 crores in that business, Gabon business. So if you would have withdrawn that at that point of time, the deal, one, the deal would have never happened. Second, in that case, you know, this was a liability. The whole liability was on us which was like 50 odd crores at that point of time. So one of the clause which we mentioned and which we agreed with the buyers was they will take all the endeavor to help us to reduce this corporate guarantee going forward. So in the last one year we have been able to reduce this from a level of 6.1 crore to now 3.8 crore.
So to that extent also it is, it is a gain to us. And now for the 19%.
Ritesh Shah
Excuse me. 6.1, 6.3 to $3.8 million.
Manoj Tulsian
Yes, yes, 6.12, $3.8 million. And this 19 now has a equity carrying value in our books to the extent of around 2.8 crore or something. So at worst scenario, if we are not able to sell this off and this remains, then maybe at some point of time we might have to take this hit of 2.8 crore in our books. But no more operating losses will now get, you know, you will be able to see in from quarter two. So that sword is over. That, that risk is over now from, from us.
Ritesh Shah
That’s helpful. Sir, the corporate guarantee versus summit, is it same 65 crores or has that number changed?
Manoj Tulsian
No, it’s not 65, it’s 55 crores and that remains same.
Ritesh Shah
And so specifically with Singapore entity.
Manoj Tulsian
I don’t think for Singapore entity. We had an outstanding of around two and a half $3 million. So. There is one minute. I think there is a guarantee. But if you want this, you know the details again the team can share with you the details on the corporate guarantees. What my team is saying that there is a guarantee still but there is no outstanding, you know, against that guarantee now. So. So in a way that guarantee will also get released which is how much now? $3 million. There is a guarantee of $3 million but I think it’s a banking process and everything because there is no, you know, utilization of the same. It will get released.
Ritesh Shah
And sir, what was the end use for this particular guarantee with respect to. The Singapore entity Working capital. Okay, so this was one bookkeeping. Sir, my question specifically on MDF is, and also to some extent on ply. How are we looking at the implementation of BIS and QCO based on our checks on ground, what we understand. I think the norms under BIS has actually got diluted. Does it put a risk on our product offerings in the marketplace and will it necessarily force us to downtrade further?
Manoj Tulsian
I don’t know, you know, I mean about your information. But see there are two legs. I mean I don’t know the basis of your statement. So if you can identify the the basis of your statement, then maybe I will be in a better position. I look at this as a very positive thing. Okay. Wherever I am talking in the industry, in even other categories, there’s a lot of effort which is being taken by the government. Already there are rates which is being conducted in the market, in the factories. So things are moving in a positive direction.
And that’s why I still maintain that, you know, I am quite bullish on RH2 and even going forward because this is a big change which will, which is taking place in the country. Even imagine if BIS doesn’t get implemented properly, why would the government go ahead and even declare BIS on furniture from February 26 the intent of the government is absolutely clear. They want India as a making India have for furniture for export purpose. The confidence will only come in the importers worldwide when they will see that India has significantly improved both from the governance perspective.
Which means there is a Pressure from the government also and then the companies also follow that as a discipline. So I don’t see, you know, any reason that these things are getting diluted or will get diluted at least I’m not aware of it. Can you be more specific on why? Why are you getting that as a feeding?
Ritesh Shah
Sir, I’ll call you separately for that. We have a published question on qco. In the prior quarter you had indicated with respect to MDF there’s a lot of inventory in the system and the hopes were basically it will get trade off by Q1. Sir, any commentary over here and any hopes on price increases given this inventory. Will be done over inventories for sure. My understanding is that it is mostly done away with sanitary can add color to that and sanitate pricing. You want to comment anything on pricing also?
Manoj Tulsian
So you are talking about the import. Inventory getting over and then the pricing is moving.
Ritesh Shah
Yes, yes.
Manoj Tulsian
Yeah. So I think the import inventory is obviously come to an end but still, you know, domestic oversupply continues. I honestly don’t see any price increase going further. But neither do I see the existing scenario as a challenge for Green Plan. We have only one line of capacity to sell it. You know, we are such a huge brand name and such a large network of dealer distributors. I think we need to spend our wings further and further penetrate the market and ensure that, you know, our numbers in terms of capacity utilization as well as margins are at least fair.
If not, you know, great. So you know, that’s what our target is in the current scenario.
Ritesh Shah
Perfect. Just two last quick questions sir. How should we look at the impact of lira versus inr specifically with respect to the Summit jv, does it change the underlying economics? And I think we had plans wherein we will cater to certain global orders with summit had from the rebase facility. That is one. And second question is for sanity, you indicated PVC, it’s around 55 crores. How should we see this business three years out? Like do we have big plans over here? How should we understand the scope of this business? Thank you so much.
Manoj Tulsian
I think for PVC I’ll answer first at least you know we would look at the top line of anything between 200, 225 crores in the next three years. That should be our internal target. And honestly the machines that we are investing in at peak should give us around 170 odd crores and we’ll obviously continue a little bit of outsource that we’re doing currently. So at peak, hopefully you know, three years from today, the business should give us 225 crores of top line. That’s one. Secondly you asked what is our discussion? So on the. On the Turkish thing, you know, lira, depreciation or appreciation is not really going to make much difference to us. Because one, you know this business is in India. We have manufacturing facility in India. We have some imports from them. Where also of course they are also extending all their support to make sure that you know, we remain competitive in this country. Basis the price which operates in the market. So we are not worried on the same. And third, in terms of export opportunity. Yes. We have already got a trial order from them.
Because they are still finding that the manufacturing cost in India is much cheaper compared to their country. So they have already placed one order. And I am sure that you know the export side of the business will grow significantly. Sure.
Ritesh Shah
Thank you so much for the answers. Wish you all the very best. Thank you.
Manoj Tulsian
Thank you. Thank you.
operator
Thank you. I request each participants to ask two questions as there are several more participants in the queue. The next question is from the line of Utkarsh no Pani from Bob Capital. Please go ahead.
Utkarsh Nopany
Yeah. Hi. Good morning sir. So my first question is for your plywood segment. So wanted to know. Our plywood inventory has almost doubled to 400 crore now at the end of June. And we are saying that we are expecting the inventory to go down in September quarter. So how much reduction in our inventory we are envisaging at the end of September. And do we see our plywood inventory again going back to the previous level of 200 to 25 crore say by the end of March 26 quarter.
Manoj Tulsian
So you know, I won’t be able to comment on 200 or 225.
That will depend a lot in terms of how we are able to balance everything. Okay. We are making a few changes in our business model also. You know, I may not be able to share all the details at this point of time on the same because of which there will be a natural increase in inventory in our system. You know. Now whether that will be around 40, 50 odd crores the way it looks like. Okay, so that is one second. The inventory will come down in quarter two. It also depends in terms of the demand supply.
If by chance the demand is still slightly tapered then maybe the reduction may not be that much more. But if the demand normally Q2’s are always very good. Okay. In which case because somewhere we’ll have to see then the inventory which they are carrying versus our plant production also. So a lot will depend on how the month of. You know, how these three months fare.
Utkarsh Nopany
Okay. And sir, like despite steep increase in our plywood inventory our own manufactured plywood volume was down by 10% in this June quarter. Whereas our outsourced sales volume was up 10%.
So can you please explain the rationale why we are witnessing a steep decline in our own manufactured plywood volume versus trading volume.
Manoj Tulsian
So you know what is happening is that there are certain products which actually we are still as a model. It’s a. It’s. It’s an outsourced model. So if my sales on those categories will go up then you know, suddenly overnight I will not change it from a trading source material to manufactured source material. Okay? So definitely all our premium products and everything is what we make in our plant. And the premium product sales was not so exciting in quarter one.
Though the real estate data is very, very encouraging on that front at least. I mean otherwise the real estate has shown a 20% decline in volume across the metros if you compare on a yoy basis. But the premium housing sales is showing a very upward trend. But that is not reflected at least in our numbers in quarter one. So because of that if my demand on products which we are sourcing from the market is high you will still see that, you know, the trading volumes are higher. That is primarily the reason.
Utkarsh Nopany
Okay. And sir, lastly like if you can get some idea like what would be our estimated revenue and loss for the furniture Hardware business for FY26 and what would be our CapEx guidance for FY26 for the hardware business?
Manoj Tulsian
See you know I think this run rate at first quarter we lost around 5 and a half crore.
Our share looks like it can be anything between you know, 15 to 18 crore for the full year. It’s a very early guidance because you know, look, we are also now pushing. Our range is complete. Everything is done. Now the team is also in place. We are adding more people to the sales side also because we had started with a very minuscule sales team initially. Because the entire product range was also not there. So on one side certain level of cost will get added. On the other side we’ll continue to invest on the branding side.
Last year also we invested. This year also there will be a decent investment on the branding side. I can only give you this as a ballpark number. I might still go wrong on these numbers. But I think 18 to 20 crore is something which still might be there for this year as a loss max and on your capex. Apex side. So we will have Odisha this year. Right. We have the plywood upgradation so that is there. Okay. We have also have this wpc right. So yeah, I think, I think you know our total capex during the year including Odisha plant can be in the range of 150, around 150 odd crores. See. So there will be some spillover of Oritha plant. You know I don’t know the the cash flow but for sure anything between 100 to 140 would be the number.
Utkarsh Nopany
Okay. Thanks a lot sir. Yeah.
operator
Thank you. The next question is from the line of Mitun Avasti from Kiva Advisors. Please go ahead.
Mithun Aswath
Just wanted to understand any other areas that you’re looking for where it could be, you know, adjacencies where you want to enter like laminate or any other higher growth category. Since you know plywood and mbf there’s quite a lot of competition. So just wanted to understand like you’ve got into the fun chan fittings area. Any other categories like laminates that you would want to embark upon.
Manoj Tulsian
I think currently we have a lot to chew already on our plate. So I think we’ll focus on really streamlining the hardware business and directionally setting it the way we had drew it on the canvas on day one in our head. So I think we’ll take another two years to get the business there. MDF is also a very new business. We need to keep building capacity, keeping our balance sheet and our debt in check. So plywood business also the brand is very, very strong. There’s no reason why we’ll not get into a growth trajectory or a higher margin.
So I think currently on our plate we have a lot. But obviously the brand green ply is very strong. So maybe three years, four years later we can start thinking of other things. But today I think our focus has to be what we already doing and we have to just keep doing that in a better way.
Mithun Aswath
Sure.
operator
Thank you. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go ahead.
Keshav Lahoti
Hi. Thank you for the opportunity. So firstly if we see about MDF industry growth which you are talking about 15, 20% but while guiding the growth for this year you are guiding a double digits. How should we rate? Possibly how will you grow in line with the industry and how are the things on the capacity expansion side Mainly you know, possibly apart like action. What action and possibly the smaller players are doing.
Manoj Tulsian
So let me answer this and then sanitary can add on this. So when, when we gave the guidance, first thing we were conservative. We said 10% plus for the full year. Okay, yes, I mean 10% plus 15, 18, there is a lot, lot of gap. But we wanted to be slightly, you know, cautious on the same this quarter also though we have grown at seven and a half percent. But you know, June was again somewhere not so great even for mdf. Otherwise for sure we were in, we were well on target to grow at maybe around 13% or plus in MDF.
When we are saying 15, 20% we are saying mostly we are able to see that level of a growth in MDF business. But I can for sure tell you that yes, we will mostly be because now once we add the capacity we, we will mostly be in line with the industry growth for sure. You want to add something on this.
Sanidhya Mittal
I think the industry will grow and maybe this is another quarter where we’ll have a plant shut down. And again it might be slightly lower double digit kind of a number. But going forward, especially next two, we will target a higher double digit number for the full year. We still maintain our guidance, we are going to do double digit but obviously the internal target is to do the higher double digit than the lower double digit. So maybe closer to 15, closer to 20, 15 and 20. That’s the internal target. But we’ll still maintain our guidance at double digit.
Keshav Lahoti
Sir, on this. Which capacities are possibly will be added in the industry in FY26 and FY27? What sort of industry capacity will be added including the unorganized?
Manoj Tulsian
Honestly we are not competing with the unorganized in the segment so we’re not tracking them at all. But as far as you know, the four large players are concerned or the five large players including us are concerned, obviously action is the only one who’s announced the capacity in South India. And at some point when our balance sheet allows us to go for the next extent new line, we would also like to come up but at the moment it doesn’t look like, you know, in the next six, eight months it doesn’t look like, you know, we’ll be able to announce another line.
Once our existing line, the debt is slightly lower and we are prepared then we’ll definitely put up the next result.
Keshav Lahoti
One last question from my side. So normally we used to talk in a sort of 25% normalized margin for MDF industry. So how you see the path when the industry are possibly, I would say Greenfield will reach the 20% number and when you expect whether 25% number is achievable, what is the sense as of now?
Sanidhya Mittal
I think that 25% retire history, it was a seller’s market for a very long time when there were not too many players, there were only two or three large lines in the country. So it was a very different scenario. I think all of us have got too used to those numbers.
But I think anything between 20, 21% EBITDA will give us a very healthy ROCE of about 20%. So I think if we can make 20% ROCE in the MBA business over a 10 year average where there’ll be certain years where the margins will be low because of overcapacity, et cetera and then when the capacity gets absorbed, certain years will make slightly higher margins. But we have to ensure that on a 10 year average the ROC has to be more than 20%. So if we can ensure that, I think we’ll fail through see These type. Of 25% margin and this is again a possibility because now you will not see anybody announcing any new capacity in mdf. Hardly anybody will announce. So what happens is because there is a level of growth when this capacity starts getting absorbed, you will see definitely the margins again started going up. Yeah, it can go up maybe for, for a period of one year, even to 23, 24, 25. But then again that once the new capacities, you know, gets operational, you will again see the margin coming back to 15, 16. So it will straddle between these two numbers in a cycle of four to five years always.
And the average, and the average average over this period you will see will be between 18 to 20% over a five year period.
Keshav Lahoti
Understood.
operator
Thank you. The next question is from the line of Udit Gajeewala from yes, securities. Please go ahead.
Udit Gajiwala
Yeah, hi sir, just one thing on MDF and the new line that you are setting up. So from next year CFY 27 when we’ll have the full capacity, how can we see the share of value added products moving in terms of volume? If you can give some light on that please.
Manoj Tulsian
I think it will be difficult to give you a value added product mix but definitely going to substantially increase because next year our flooring business will be fully operational. Obviously the pre lab and HMR is quite a high proportion even today, but we are further trying to grow that. I think all our efforts are in the right direction but it’s very difficult to give you a number. But it’s fair to say that next year will be substantially higher from this year because the flooring will be in full swing and we’ll get a full year turnover of the flooring business.
Udit Gajiwala
And currently sir, when you mentioned that the Pricing is being passed on into the markets. So are you seeing substantial price discounting that has been done in this quarter or average? Have you seen 3,4% kind of decline?
Manoj Tulsian
I would say maybe a 3,4% type of a decline for players like us, but obviously players where the desperation is very high and the capacity to sell is very high, I think there’s even 5 and 7% drop. So. But again, you know, it keeps changing month to month, so, you know, you can’t consider this for the quarter. So that’s how July looks like. I don’t know how August and September will be.
Udit Gajiwala
All right, all right. Best have been answered. Thank you. And all the best. Thank you. Thank you.
operator
Thank you. The next question is from the line of Bandit Shah from Abacus Asset Management. Please go ahead. The participant has got disconnected. Should we end the call here?
Manoj Tulsian
Yes.
Sanidhya Mittal
Yes.
operator
Okay, ladies and gentlemen, we will take this as our last question. I now hand over the conference to Mr. Karan for closing remarks.
Karan Bhatelia
Just one question from my end. How is the split between retail and B2B for us and how has been the growth? If I have to look at from last six to nine months.
Manoj Tulsian
I’ll answer this question. I think, you know, we had a B2B Focus, but it was very small as a company. Now the fact that, you know, we’re getting into hardware and you know, we’ve got into MDF in a big way, so the OEM segment is growing for us. So I think in times to come the B2B growth can be much higher. Our focus on retail was very, very high and the B2B focus was much smaller than retail. I think in the years to come, the B2B proportion overall on the console greenply business will increase substantially.
And also if you see as a market share, I think slowly the business, certain business from retail will also move to B2B because the way the trend is changing and people are moving towards readymade. So ultimately the material will move through OEMs to the end consumer instead of shops to the end consumer. So we are gearing up for that.
Karan Bhatelia
Right, and last question of mine. Are you satisfied with the MDF reach in terms of channel partners, what you were expecting before the commissioning of the project and how you stand now, or you think there’s much more that you can do in terms of adding deep channel partners, adding new SKUs, mostly on the value added side.
Manoj Tulsian
So I think at our end the problem is we are never satisfied. So even though the set of numbers are quite decent, but you know, if I’m Satisfied. My entire team will be satisfied. So I’m never satisfied. We’re always trying to push more and market and marketing is such that you know, no matter how much number you do, your goal post keeps moving. So I think long way to go. Our MDF business is very, very small and you know it’s only three years now. Two and a half years. Two years. So I think long way to go in terms of penetration, appointing dealers and you know, setting up many lines.
Karan Bhatelia
Sure, sure. Got it. Thanks. Thanks.
Sanidhya Mittal
Just to add to this Karan, what happens is you know that our strategy in terms of moving from one product line which was plywood to MDF and hardware gives us a lot of leeway, you know, in the entire channel. Whether it is OEM or whether it is our CAD business, you know, the, the project business or whether it is retail. Because today now the brand being so strong, you know, the channel partners also starts looking at, you know, reducing the transaction cost. So where they also believe that if they have to deal with lesser number of companies to cater to all their product segments, they are also happy.
So that gives us a lot of leeway in terms of cross selling, you know. So our plywood dealers have now the opportunity to also start selling mdf, stroke hardware and the same for our MDF as well as hardware dealers. So this opens up the opportunity for us, you know, when we have this line of product basket. Yes, it takes time but you know once it matures you will definitely see much better traction as green ply as a company overall.
Karan Bhatelia
Understood. Since there are no further questions, any closing remarks that the team want to make?
Manoj Tulsian
Yes. Thank you all for taking time to. Participate in this call. In case of any further clarifications or queries, please feel free to reach us. Thank you.
operator
Thank you. On behalf of Asian Market Securities Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.