Rushil Decor Limited (RUSHIL) Q3 FY23 Earnings Concall Transcript

Rushil Decor Limited (NSE:RUSHIL) Q3 FY23 Earnings Concall dated Feb. 14, 2023.

Corporate Participants:

Rushil Thakkar — Executive Director

Hiren Padhya — CFO

Unidentified Speaker —

Analysts:

Karan Bhatelia — Asian Market Securities Limited — Analyst

Vineet Shanker — JM Financial — Analyst

Keshav Lahoti — HDFC Securities — Analyst

Manan Shah — Moneybee Investments — Analyst

Unidentified Participant — — Analyst

Ritesh Shah — Investec — Analyst

Sarvesh Gupta — Maximal Capital — Analyst

Krishna S — Vihas Advisors — Analyst

Anand Soni — — Analyst

Arun Baid — ICICI Securities — Analyst

Rajesh Kumar Ravi — HDFC Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Rushil Decor Limited Q3 FY ’23 Conference Call, hosted by Asian Market Securities Limited. This conference may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of the future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from expectations, projections, et-cetera, whether expressed or implied. Participants are requested to exercise caution while referring to such statements or remarks.

As a reminder, all participant lines will be in the listen-only mode and there’ll be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Karan Bhatelia from Asian Market Securities Limited. Thank you and over to you.

Karan Bhatelia — Asian Market Securities Limited — Analyst

Thanks Mike. Hi, all. Very good morning, and welcome all to the Rushil Decor third quarter and nine months FY ’23 earnings conference call hosted by Asian Markets Securities. From the management side, we have with us Mr. Rushil Thakkar, Executive Director; Keyur Gajjar, CEO; and Hiren Padhya, CFO.

I now hand over the call to Rushil bhai for his opening remarks. Thank you. Over to you.

Rushil Thakkar — Executive Director

Good morning, ladies and gentlemen, and welcome to the Rushil Decor Limited earning conference call for the third quarter and nine months ended on December 31, 22. I would like to thank Asian Market Securities for arranging this call and all the participants for taking the time to join the call. Today, I am joined by Mr. Keyur Gajjar, CEO; Mr. Hiren Padhya, CFO; along with Adfactors PR, our Investor Relationship Advisors. We have shared the — share and uploaded the Investors presentation on the exchange and hope you all have gone through the same.

Let me share with you some of the key highlights of the third quarter and nine months during which we have recorded the growth of 26% and 46%, respectively in our operating revenues. Both our laminate and MDF business has shown steady progress in this period. Our laminate business has registered a growth of 18% during this quarter. Laminates grew by 41% in export compared to last year, highlighting the strong demand of the product manufactured by our company in the global markets.

In the domestic market with the significant steps taken, we are able to improve the price realization which helped us to achieve the EBITDA margin over 10% in the laminate business. We have displayed positive performance in our MDF business during the quarter, and have registered a growth of 27% by the value and 22% by the volume. Realization in the domestic industry for the plain MDF was subdued, as there was — and continued pressure from the higher imports. However, we are confident that with the targets of increased contribution of value added products, we are in position to mitigate this trend and deliver the significant growth in the coming quarter.

During the quarter, we had — we have made substantial progress in our geographical presence by adding 18 new dealers and distributors, both in laminate and MDF segment. They should further enable us in catering the larger customer base and increase the visibility of the brands, Rushil and VIR. We are continuously collaborating with the local carpenters across the country, conducting the workshop to educate them on the benefits of MDF, also enhancing their skill SKUs of the MDF for delivering the effective to the end customer. We are confident that with this branding distribution and channel partner connect initiative, we should be able to achieve strong growth in — with stable EBITDA margins going ahead.

During the quarter, apart from the supply pressure from the imports of plane MDF, there were also a marginal increase in the wood price. The contribution of these factors impacted the EBITDA margins in the MDF business compared to quarter two, even though there has been improvement on a year-on year basis. However, to safeguard ourselves from these headwinds, we are working on various fronts to ensure we deliver the steady expansion in the margins going-forward.

We are constantly engaging the various stakeholders to identify and collect the data in terms of requirements and preferences of customer. Our in house R&D team is continuously working to improve the durability of our products and develop more value added products. We have also identified a few areas where we can efficiently utilize and optimize our resources to boost our margins even further. We are timing our production schedule in a systematic way to the optimum capacity utilization in line with the industry demand. This will help us to stay ahead and deliver our customers with a quality product in a reasonable price. These initiatives should enable us volume expansion, higher realization and greater productivity in both Laminate and MDF segment.

On the debt reduction front, I would like to highlight that we have recently announced the fundraise by the way of right issues, which should help us significantly reduce the debts. Apart from this, our healthy cash generation from the operations will further support our capital requirements and strengthen the balance sheet. Currently, we have a capex plan of INR60 crore for our laminate business. This is to manufacture Jumbo laminate sheets, which we have planned to export to Europe, USA, Australia and other global markets. Work on this initiative, which is in full swing and it’s expected to be operational by quarter one financial year ’25.

That is all from my side. I would like to hand over call to our CFO, Mr. Hiren Padhya, who shall take you through the financial highlights. Thank you very much.

Hiren Padhya — CFO

Good morning, and thank you Rushil bhai. Let me take you through key financial highlights for the quarter and the nine months ended December 31, 2022. Our Q3 FY ’23 performance has been in line with our expectation and gives confidence of purchasing our set target for the financial year and going forward from there. So far as the quarter is concerned, we have reported operating revenues of INR210.3 crores, a growth of about 26% compared to INR166.8 crores. This was driven by the strong growth in both MDF and Laminates segments.

MDF business revenues grew by 27% on year-on-year basis, contributing INR152.8 crores in Q3 FY ’23 compared to INR120.6 crores in Q3 FY ’22. Laminate contributed INR56 crores in Q3 FY ’23 compared to INR47.3 crores in Q3 FY ’22. That is a growth of 18%. EBITDA for the quarter after adjusting for the ForEx loss stood at INR38.1 crores as against INR19 crores in Q3 FY ’22. That is year-over-year growth of 101%. Net profit stood at INR10.2 crores as against INR7.3 crores in Q3 FY ’22. Again, a growth of 40.5% on year-on year business. While EBITDA margin increased by 670 basis-point in Q3 FY23 to 18.1% as against 11.4% during Q3 of previous financial year. PAT margin stood at 4.9% in Q3 FY ’23.

During the third quarter on MDF front, our export volumes increased significantly compared to the quarter last year, while our export volumes of MDF rose by 6% on year-on-year basis. For the nine months ended December 31, 2022, the net revenue from its operations stood at INR624 crores, a year-on-year growth of 45.5%. Here I would like to mention that last year turnover that is INR624 crores has already been achieved in the three quarters of current financial year. While MDF contributed INR462.6 crores in nine months, there is a growth of 59%. Laminate contributed INR156.5 growth in nine months, growth of 12%.

EBITDA for the nine months of financial year stood at INR133.7 crores as against INR42.4 crores in the previous year. Again, a growth of 215% on year-on-year basis. This is again, adjusted for the ForEx loss in the nine-month period, net profit was at INR64.1 crores in nine months with a margin of 10.3%. With the significant improvement in financial performance in nine months FY ’23, we look forward to the financial year, delivering outstanding number. This should also provide robust platform for the next financial year.

This is all from my side. I would like to now request operator to open the floor for questions-and-answers.

Questions and Answers:

Operator

[Operator Instructions] Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Karan Bhatelia. Please go ahead.

Karan Bhatelia — Asian Market Securities Limited — Analyst

Hi, sir, good morning. Thank you for the opportunity. Sir, just wanted to have some clarity on the CVD, which we were expecting somewhere in the second week of January. So what are the new timelines now and what percentage of CVD could protect or achieve the domestic peers? That would be helpful.

Rushil Thakkar — Executive Director

Thank you Karan for the question. First of all, there the judgment from the High Court has already been passed from Delhi High Court, and till now we are not — we have not got the concrete judgment in our hand. So we’ll share the details with you once we have the judgment in our hand. Thank you.

Karan Bhatelia — Asian Market Securities Limited — Analyst

Okay. Thank you.

Operator

[Operator Instructions] We have the next question from the line of Vinit Shanker from JM Financial. Please go ahead.

Vineet Shanker — JM Financial — Analyst

Alright, sir. Thank you for the opportunity. So I just wanted to ask or on price cut you have taken during the quarter, third quarter and any in — during January and Feb?

Rushil Thakkar — Executive Director

Good morning, Mr. Shanker. I think there is no price hike taken place in our first quarter and even in the month of January, February or even in last quarter also. Hope I’m audible?

Vineet Shanker — JM Financial — Analyst

Sir, any price cut have you taken?

Rushil Thakkar — Executive Director

Price?

Vineet Shanker — JM Financial — Analyst

Price cut.

Rushil Thakkar — Executive Director

In last quarter we said that there were some effect of 3% to 5% in some areas, not all areas.

Vineet Shanker — JM Financial — Analyst

Okay. And sir can you highlight which area were they?

Rushil Thakkar — Executive Director

It was mainly South and West.

Vineet Shanker — JM Financial — Analyst

Okay, sir. I’m curious if you can also highlight the breakup of plain and laminated MDF mix?

Rushil Thakkar — Executive Director

No. At present the ratio — overall ratio of MDF is almost 28% is our value and balances are playing great which includes exports too.

Vineet Shanker — JM Financial — Analyst

Okay, sir. Thank you. I have more questions, I’ll come back in the queue.

Rushil Thakkar — Executive Director

Yes, pleasure.

Operator

Thank you. We have the next question from the line of Keshav Lahoti from HDFC Securities. Please go ahead.

Keshav Lahoti — HDFC Securities — Analyst

Hi. Thank you for the opportunity. I just wanted to understand your strategy, because what we are seeing other branded players have not taken price possibly you would have taken some 3% to 5% South and West.

Rushil Thakkar — Executive Director

It’s very difficult to say whether price cut is there or not. If I don’t change my price list, it doesn’t mean I have not taken the price cut. There are ways to pass on the credits.

Keshav Lahoti — HDFC Securities — Analyst

Okay. Sir, got it. So you are paying more or less [Indecipherable] in laminate industry only. Maybe you might play with incentive or some other thing, so you are in-line with industry with [Technical Issues]

Rushil Thakkar — Executive Director

Very simple. If you want to maintain your market share, you can command premium at some level. You cannot do all the things.

Keshav Lahoti — HDFC Securities — Analyst

Understood. Just wanted to understand one more thing. As we are in that [Indecipherable] MDF is selling at 25% discount versus players like you. So 25% is a very big business. So what is the normal level which we can sell because my understanding is 10% is something…

Rushil Thakkar — Executive Director

Let me tell you as on date, the landed cost, if I take about the highest selling product base around 15% to 18%. And if we go further down like — sorry for the central like Hyderabad go into all the places located far from sea areas, then the price difference is only 12%.

Keshav Lahoti — HDFC Securities — Analyst

Okay. But the price difference increased further in quarter three, so will it be the period understand most price store now in quarter four?

Rushil Thakkar — Executive Director

Can you repeat again. I’m sorry, I’m not able to — can repeat your question, I’m not able to hear properly.

Keshav Lahoti — HDFC Securities — Analyst

Hello. Is it better now?

Rushil Thakkar — Executive Director

Yes, quite.

Keshav Lahoti — HDFC Securities — Analyst

Yes. So I was saying, as the price difference with imported MDF is increasing so will it be fair to assume there would be more price cut in store in quarter four or quarter one?

Rushil Thakkar — Executive Director

No. I guess, you can see our volume and our top line. So we really don’t see — because this import prices stable since October, September, October. Because they have reached to probably the bottom price, further price reduction in US — selling price of imports. And yes, there is currency fluctuations like sometime it is 81, 83, so this exposure is something that importers are considering. So we really don’t see any price cuts in —

Keshav Lahoti — HDFC Securities — Analyst

Got it. Okay. And what sort of volume and margin you are looking in quarter four in FY ’24?

Rushil Thakkar — Executive Director

We really want to make sure that we maintain our market share, that’s one of our priorities. So definitely, it will help us to utilize our capacity also. And yes, we want to increase our value added business too because we can see that from our AP plant in quarter two, our value-added business was 9%, now in quarter three it has reached to 13%.

Keshav Lahoti — HDFC Securities — Analyst

Okay. So given a choice you will prioritize volume over margin? Even if it comes at the expense of a lower margin, you will prioritize volume?

Rushil Thakkar — Executive Director

Definitely. It’s not a question of priorities — giving the priority is to volume. It’s all about balancing entirety, but yes, market-share is very important. We have to consider new capacity addition as well. The weekend launched simply — we have to maintain our market share. That’s very important.

Keshav Lahoti — HDFC Securities — Analyst

Okay.

Rushil Thakkar — Executive Director

But you can see that we didn’t take any price cut. There was only one price cut. That’s all. Nothing much.

Keshav Lahoti — HDFC Securities — Analyst

One last question from my side. So earlier we were listening the smaller players are adding various capacity like 200 [Phonetic], very smaller players by importing Chinese machinery. So after this MDF margin has decreased in last couple of quarters, so possibly players entry might not be restricted.

Rushil Thakkar — Executive Director

I think currently, you can see that despite info, despite this new player with unorganized approach, we are still able to maintain our business in a good manner. You can see that whatever the margins affected, one reason is it’s more than this over there have been industry, it’s not only one company. And number two, forex losses on other part. So we are really not sure. I don’t think there will be any problem unorganized player and we really don’t see much of the capacity addition in near future.

Hiren Padhya — CFO

And also I would like to add here that the MDF industry is growing at a CAGR of 20%. So there is — the market is going to expand and everyone is going to get their own share. But the difference here between unorganized player and organized player is about the machineries. We bring the German technologies to make sure that our efficiency is much more better than the second hand Chinese lines.

Keshav Lahoti — HDFC Securities — Analyst

Okay. I’ll just add one more question. So the MDF import which is at INR20,000, INR25,000. So is it at its peak or we should expect further pickup in this?

Hiren Padhya — CFO

So my question is 20,000, 25,000 per month or quarter?

Keshav Lahoti — HDFC Securities — Analyst

Per month.

Unidentified Speaker —

I think it’s between 20,000 to 25,000 and we really don’t see much of increase because this is my personal belief, I think this exporter to India they’re not making much business out of this export. So probably further reduction in prices. Question mark. And with this model one cannot bring imported MDF to northern region, central region or to the extent, North East region. So we see some of the effects and we have already seen that part. Despite cheaper imports, we are still able to maintain our volumes and pricing.

Keshav Lahoti — HDFC Securities — Analyst

Okay. If someone wanted to bring the MDF from South to North, so what would be the additional cost we have to incur in terms of percentage of sales?

Hiren Padhya — CFO

So you are talking about South to North?

Keshav Lahoti — HDFC Securities — Analyst

South to North. Just wanted to understand a bit difference between South and North. [Speech Overlap]

Hiren Padhya — CFO

This question pertaining to imports or for us.

Keshav Lahoti — HDFC Securities — Analyst

You can reply in both ways. Import and for you also?

Hiren Padhya — CFO

I’ll tell if you want to bring it from Malaysia or Vietnam, the ideal spot is Mundra. So it’s from Mundra to North. And ideally, I think it’s causing between 12% to 15% or maybe even 18%.

Keshav Lahoti — HDFC Securities — Analyst

Okay. Understood. Thank you. That’s it from my side.

Hiren Padhya — CFO

Not a problem. Thank you.

Operator

Thank you. We have the next question line of Manan Shah from Moneybee Investments. Please go ahead.

Manan Shah — Moneybee Investments — Analyst

Thank you for the opportunity. My question was on this forex loss of INR11.6 crores for the quarter. If I look at our total exports for the quarter, laminates as well as MDF I think it totals to about INR58.2 crores. And versus this forex loss of INR11.6 crore, when the currency movement has been fairly stable between 82 to 80 and this INR11.6 crores amounts to almost 20% of our total export. So I wanted to understand why did we incur such a big forex loss and is this loss attributable entirely to the MDF segment or it is attributing both the two segments?

Rushil Thakkar — Executive Director

Okay. I think it’s a good question. See, first of all, the total loss, which is INR11.6 crores is mainly attributed to MDF. Now when you are saying export — see when we just taking the exposure in terms of forex, it is because of the data and creditors. And I think major part so far as we are concerned is from the loan which we already having as of now. So the loan which we have taken for the purpose of AP project. I think that has contributed a major in terms of that forex loss because the — if you compare March versus December and even in terms of last quarter versus this quarter, I think in both the cases in USD and euro, both has depreciated, and this has gone against us.

And I think you understand and appreciate also the accounting is required for the purpose of this notional entry, but yes, the two things are there. One is the major part — I would say otherwise we have the natural hedge in terms of export realization versus forex payment, which is generally the import of raw material and other things. So here mainly because of the loan which is outstanding as of now.

Manan Shah — Moneybee Investments — Analyst

Okay, understood. Sir, my second question was that in your opening remarks, you highlighted that there was some increase in the wood prices during the quarter. So if you can just highlight what sort of increase was this? And if there has been any further increase in the wood prices post December?

Rushil Thakkar — Executive Director

The effect of the wood prices is roughly around 8% on an average in all the plants.

Manan Shah — Moneybee Investments — Analyst

This 8% is on a Y-on-Y basis or on a Q-on-Q basis?

Rushil Thakkar — Executive Director

It’s on Q-on-Q basis.

Manan Shah — Moneybee Investments — Analyst

Okay.

Rushil Thakkar — Executive Director

And also we further expect to increase the wood price by 1% or 2% in the coming quarter.

Manan Shah — Moneybee Investments — Analyst

Okay, so what has led to such an increase in the wood prices in our region because I believe there is no other [Technical Issues] at least with 100 kilometers of vicinity, so?

Rushil Thakkar — Executive Director

Sorry, I didn’t get your question. Can you just repeat it.

Manan Shah — Moneybee Investments — Analyst

No, I’m asking if — what could have been the factors for such an increase in the wood prices. Because I don’t believe there’s any other MDF plant in our vicinity.

Rushil Thakkar — Executive Director

Yes. So basically currently Andhra Pradesh is recording the highest number of sales in the rice and because of which the transportation cost has gone up.

Manan Shah — Moneybee Investments — Analyst

Okay. My next question was on the utilization levels of the MDF segment. Sir, now it has been almost two years since we started our new plant, and we’ve only been — we’ve not been able to ramp it up to almost 80%, 85% to which we’ve been guiding that we will reach 85% by the end of this year. However, as it is visible in this quarter as well, we’ve only been able to achieve 70%. So and plus, we have this quantity [Phonetic] booster technology which only we possess in this country. So what have been the reasons why, if you can just highlight a couple of reasons why we are not able to ramp up our utilizations further?

Hiren Padhya — CFO

See, in fact there are one or two reason. Main reason is export. We are consistently I think using around 4,000 cbm per month, that’s our target. And we are putting up good efforts. Like for instance, in this quarter, we have added almost 85 new channel partners. And apart from this capacity utilizations, we are focusing on value added capacity utilization also.

So we are very optimistic of using this capacity by 80%, 85% in coming days for sure. This is one of our priorities. Even in my last call also I have clearly said that value added business, capacity utilizations and cost control, these are the three factors. And now we have added one or two more things like we want to focus on quality and service of product because now you know import quality is very inferior compared to the local player. We want to focus on our quality and services also and we want to maintain our market share. So definitely in coming days I’m sure we’ll be able to part.

Manan Shah — Moneybee Investments — Analyst

Okay, what has been the value added mix of the Vizag plant?

Hiren Padhya — CFO

I think from 9%, we have reached to 13%. There is no point comparing last year.

Manan Shah — Moneybee Investments — Analyst

No, right. Definitely. And what are we targeting by the end of this year?

Hiren Padhya — CFO

It’s very difficult to say, but our overall target is to reach 40% of entire sales. So we are putting our best efforts. At present, we are at the benchmark between 28% to 30%. And yes.

Manan Shah — Moneybee Investments — Analyst

Okay. My next question was on the laminate segment. We have shown a remarkable improvement in the margins and the profitability of the segment. So if you can just highlight what led to such a stark improvement over here?

Hiren Padhya — CFO

There are two, three main. Part one is export, demand was really good. And I think we can fill it, number one. Realizations are better. Raw material price more or less under control or reduced. Rate cost has been — it’s down like anything. We can say it’s pre COVID level now.

Manan Shah — Moneybee Investments — Analyst

Okay. Because if I look at our blended realizations on a quarter-on-quarter basis, our realization per sheet has come down from INR725 to INR720. And even in exports our realizations are down, but despite of this lower lower cost….

Hiren Padhya — CFO

[Indecipherable] there are all of the things. Like, when we talk about realization per sheet, we are selling 0.5 mm sheet which maybe around $7 too. We are selling 3mm sheet, which maybe $30, $40. So we are now taking out this average. So when you have a low thickness volume then possibly your realization is down. These are the reasons.

Manan Shah — Moneybee Investments — Analyst

No, what I’m trying to say is that, what freight be one of the major reasons for this sort of improvement in the profitability of the segment.

Rushil Thakkar — Executive Director

Freight is one of the reason I would say.

Manan Shah — Moneybee Investments — Analyst

Okay.

Rushil Thakkar — Executive Director

There are so many other factors like price and raw-material costs are quite under control. We have increased our export volume, if you see.

Hiren Padhya — CFO

And also I would like to add here is the product mix. As [Indecipherable] mentioned earlier, the product mix plays a big role in calculation of our average price.

Manan Shah — Moneybee Investments — Analyst

Right. My last question will on the MDF segment.

Operator

Mr. Manan Shah, request to kindly come back in the queue for follow-up questions.

Rushil Thakkar — Executive Director

No, problem.

Operator

We have the next question from the line of Mr. Achal [Phonetic] from JM Financial. Please go ahead.

Unidentified Participant — — Analyst

Yes, good morning, sir. Thank you for the opportunity. Sir, can you help us with the number with respect to price difference between us and some of the other brands and also on branded MDF?

Rushil Thakkar — Executive Director

See, frankly, we don’t come across any unbranded competition in the market, but yeah, it could be around 10% to 12%, because that segment is completely different. And I believe it could be around 10% — 8%to 10%.

Unidentified Participant — — Analyst

So we are 10% premium to the unbranded MDF?

Rushil Thakkar — Executive Director

Yes, you can say. Even if we compare import — if we compare import blended price in Hyderabad or Coimbatore or Bangalore, we are almost 10% to 12%. I know it’s a bit technical, but let me explain you, whatever the boats we are offering, it has some specifications it had some parameters for performance. For instance, our densities ranging from 720 to 740 or maybe 750 kg per meter cube. When they are importing in itself in invoice itself, they are mentioning 70 to 690 kg per meter cube. So these are the things which customer is also considering.

Unidentified Participant — — Analyst

Right.

Rushil Thakkar — Executive Director

It’s not the same product what import is coming, even in interior grid, even in plain grid.

Unidentified Participant — — Analyst

Correct. Now — and compared to the other brands, let’s say, green panel. How different we would be compared to green panel similar board?

Rushil Thakkar — Executive Director

Product wise, we all guys are same. More or less technology is more or less same, and we are working on our product mix. We have our own way of marketing approach and they have their ways.

Unidentified Participant — — Analyst

So you saying we are similar priced compared to even the other brands?

Rushil Thakkar — Executive Director

No price is always been in some places, plus or minus. I would not agree on that part, so price list is something printed.

Unidentified Participant — — Analyst

Correct. Got it. And sir, when you say 13% of the volumes in from Vizag plant is value added. How do you define the value add? Is it basis the margin basis, the category as a product? What is it?

Rushil Thakkar — Executive Director

Yes, because if I save my — if we talk about our average realizations. Then it is maybe around INR23,724 per CBM. I’m talking about ATS realizations and when we talk about 13% value added real adjustment, it’s almost like INR35,000 per CBM.

Unidentified Participant — — Analyst

Sorry. I am not very clear. So you’re saying anything above the blended realization is defined as value-added, is that so?

Rushil Thakkar — Executive Director

We have a basic product that is the interior grid. That’s just a plain MDF ball. It’s realization comes around INR23000, INR24,000 per CBM, but when you add some performance like the high density or water resistance capacity or you put a paper and pre lamination on need. There are so many other things. So these are the category, which is around INR35,000 and that’s what around 35,000 is our realization.

Unidentified Participant — — Analyst

Got it. And just one clarification on the timber price, can you help us with the timber price on a rupees per kg basis. For our…

Rushil Thakkar — Executive Director

I’m not sure, but I believe it is around INR3,700 rupees per kg per ton.

Unidentified Participant — — Analyst

And this is for 3Q average? Or the current price?

Rushil Thakkar — Executive Director

I think current price I believe. I’m not sure. I need to check.

Unidentified Participant — — Analyst

And how about it was like in 2Q and 3Q average, sir. I’m just trying to understand because…

Rushil Thakkar — Executive Director

Q2 around INR3400, INR3,500 per ton.

Unidentified Participant — — Analyst

Okay. Got it. Thank you. I’ll come back-in the queue sir. Thank you.

Rushil Thakkar — Executive Director

Thank you very much.

Operator

We have the next question from the line of Ritesh Shah from Investec. Please go ahead.

Ritesh Shah — Investec — Analyst

Yes. Hi, sir. Thanks for the opportunity, sir. One very simple question, how do we differentiate our products in the marketplace? That’s the first question, sir.

Rushil Thakkar — Executive Director

Well, in terms of differentiation, number one, we have a three category. One category we don’t much focus that is unorganized player and all these things. Second is import. Again, you know that their quality and our quality are different. As I said, we focus on two basic para. One is quality, another one is services, number one. Number two, in terms of re eliminated and we have. Today, we have two range one ranges pre-laminated plus catalog which is a very different texture, kind of a pretty eliminated MDF and then another segment is [Indecipherable] where we have a 100 plus new colors.

Every two or three months, we keep adding five, ten and new according to the designs and fresh and currently in the market. So we focus number three. We definitely demonstrate our products to all the end user including carpenters, OEMs, on all these people. So our focus target is we straight away approach our end users and channel partners in terms of sales and marketing. And we demonstrate our product and we informed about our quality.

Ritesh Shah — Investec — Analyst

Sure. Sir, is there any way in which we actually compensate or encourage the carpenter to use more of our products? Do we have the technology in-place, but we are doing some bundling?

Rushil Thakkar — Executive Director

I think all of those organized company probably did have some kind of a loyalty programs.

Ritesh Shah — Investec — Analyst

Okay. Sir, what percentage of sales would that be? What goes to the carpenters?

Rushil Thakkar — Executive Director

Very tough to say because it’s just not in a very large-scale like Laminates but in MDF it’s now picking up.

Ritesh Shah — Investec — Analyst

Okay. Sir, any numbers over here?

Rushil Thakkar — Executive Director

No I don’t think I can give it right now. I don’t have that figures with me.

Ritesh Shah — Investec — Analyst

Sure. Sir, my second question was, what is the difference between VIR MDF and HDFWR? Basically I understand the product proposition, but if one has to look at it from a pricing and a margin standpoint, how different would that be?

Rushil Thakkar — Executive Director

Okay. You know VIR MDF. It’s a plane basic MDF. I’m sorry VIR MDF. Now, when we talk about actually SWR it’s hi density fiberboard water resistance ball. The density of standard to MDF bodies around seven 720 to 740, and this bodies almost 840 to 880. So we are talking about 20% more than city and it’s neono [Phonetic] performance like other parameters, but tremendously great. This product is. You used mainly in kitchen and wardrobes. And in terms of realization is almost went up and more. And if we talk about margins, definitely it has much better margins.

Unidentified Participant — — Analyst

Sir, possible to quantify something on the margin profile, please?

Rushil Thakkar — Executive Director

I think sir, I would definitely say it will add another 15%, 20%, minimum.

Ritesh Shah — Investec — Analyst

Okay and sir, how do you see competition in the market-based supposed to this particular product? Like, is it unique to us or are there other players also similar product?

Rushil Thakkar — Executive Director

Everyone. Mainly, we don’t see much of imports in this category and all organized players are working hard to promote this product, including us and we are very confident about the having our market share incoming.

Ritesh Shah — Investec — Analyst

Sure, and this is very helpful. And sir the last question was more on sourcing of wood. How do we ensure that the wood which has been saw versus ethical in nature. Any policies that we have in place at the company level, how should we understand this?

Rushil Thakkar — Executive Director

Yes. So we have an general criteria of fixing up how the moisture level of the wood should be. And basically, it’s all agro forestry. So we have certain parameters, which has to work. And this is the most ethical practice of purchasing the wood.

Hiren Padhya — CFO

Basically, we are not sourcing product from forest. We are using agro forestry.

Rushil Thakkar — Executive Director

Also I would like to add here that we are carrying out a program for developing more agro forestry like in last couple of years, we have already grown more than 12 crore trees and we have taken an mission to grow 4.5 crore trees this year as well. And we will be keep on doing this. So we make sure that we do a healthy agro forestry which will give us a healthy raw-material.

Ritesh Shah — Investec — Analyst

All right. Sir, is there some numbers over here, which is quantifying or qualifying that whatever wood that the company produces it is from agro forestry. Is there something which is audited. I’m not very sure, I’m still learning the sector. So how should one understand this particular aspect?

Rushil Thakkar — Executive Director

[Speech Overlap] In India the government is not allowing to cut any kind of forest. So the material which has to be used are always from the agro forestry. So we educate the farmers on this for developing their farms and converting their farms into the agro forestry. Just for an example, we take a boundary wall of the farm where a farmer is growing some kind of vegetable, which is ideally not used. Where we teach them to make sure that you can grow agro forestry on your boundary and that can be later our raw-material and which can also help him to protect his farm.

Ritesh Shah — Investec — Analyst

Sure. This was quite helpful. Thank you so much.

Operator

Thank you. We have the next question from the line of Sarvesh Gupta from Maximal Capital. Please go ahead.

Sarvesh Gupta — Maximal Capital — Analyst

Good morning, sir. Most of my questions have been answered. But just on this forex loss. So can you quantify that what was the average loan outstanding in foreign currency during the nine months? And what was the percentage? Because the percentage depreciation in rupee would be much larger. So the impact of INR11 crores and INR12 crores is something that I could not understand. Can you quantify and do the math?

Rushil Thakkar — Executive Director

Okay, see if you see our overall debt, overall debt is in the range of INR350 crores. I’m not including the unsecured loan from the promoters, right.Now, out of that almost INR200 plus crores there are two loans, one is in USD and one is in euro, the amount is around INR200 crores. And I think the difference in terms of forex rate I think you know. If you compare with margin again there is a difference of INR7, INR8.

Again, if you compare dollar and euro, both way I think there is a drastically change. But the overall exposure in terms of rupees, around INR200 plus crores so far as the foreign currency loan is concerned. And that is how this loan has come up.

Sarvesh Gupta — Maximal Capital — Analyst

No sir, that INR11 crores, 12 crores, actually it looks to be lesser than what it should have been if you’re adjusting for it.

Rushil Thakkar — Executive Director

Well I think otherwise, we already have natural rate in terms of normal outstanding. Maybe it is a export maybe I think import. But the net impact after adjusting the natural hedge benefit. So the net impact of this. This is not I think one particular currency. It is both way. One way it is euros and another way, it is USD.

So the combination of both of them will come to this particular figure. In the previous quarter and even last year also, we had positive impact. But for the last one quarter specifically, we have this losses.

Sarvesh Gupta — Maximal Capital — Analyst

So when we have taken this loan, we had not hedged our exposure to this loan by buying forward contracts.

Rushil Thakkar — Executive Director

No, see. We have got this loan so far as the euro loan is concerned, it was like at the rate of 0.85 only. But because of the last I think three-four months RBI initiatives in terms of increase in rate, that has affected. And our cost, which was 0.85 has reached to more than 3% now.

And similarly in terms of USD also.USD, also was again linked with LIBOR. But then so far I think for the last almost one year, we have not seen any major fluctuation. And that is how we had covered, but this was not covered fully because of this [Indecipherable] hedge factor, but recently because of this I think the drastic change, it has affected. But now internally, we have taken it very seriously and we are just taking some action in such a way that at least we should not have a situation in future.

Sarvesh Gupta — Maximal Capital — Analyst

Okay, because otherwise, every quarter depending on how the exchange rate movement is, you will have a forex loss or income going forward. as you hedge it.

Rushil Thakkar — Executive Director

Yes. It is like, as per the India’s guidelines and I think we are just following the guidelines only. So as per the suggestion of auditor. And as a policy, if you compare with other company, they each company has a different policy to disclose in financial differently. So as of now, we are just so far as profit is concerned, we are showing in other income. And if it is a loss, then we are showing in other manufacturing expense. So unlike other companies, we are not showing it in finance cost. And secondly, as of now we don’t have any project which is running or in an intermittent phase. So there is nothing to be capitalized so far as today is concerned.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. And sir, in terms of the now that we are almost through with this financial year. So what will be the kind of revenue guidance and EBITDA margins for the coming year in laminate and MDF?

Rushil Thakkar — Executive Director

See, I think I just want to be able to give you the exact figures. But I can definitely tell you that current quarter has a impact of price and other thing. And because of this forex loss. But I think so far, as I understand, I think this current quarter, that is January to March, I think there wont be so much forex fluctuation. That is what I believe but I may be wrong also.

So far as the overall margin is concerned, I think as we have said, we are already working on couple of things where on one-side, [Indecipherable] products, we are just increasing. Secondly, we are putting our efforts in terms of increasing capacity.And third is like the overall optimization of cost. So we would definitely maintain our margins which is there. If we can see our overall margin in the nine-month figure, I think we will definitely maintain that margin.

Sarvesh Gupta — Maximal Capital — Analyst

I meant for the FY ’24 sir, next year, what kind of growth and margins we are looking at?

Rushil Thakkar — Executive Director

See growth wise I think 15% 20% growth in terms of revenue is definitely there. And margin-wise, we will improve. That is for sure.

Sarvesh Gupta — Maximal Capital — Analyst

Understood. Sir in the rights issue, what kind of…….

Operator

Mr. Gupta, I request you to kindly come back in the queue for follow up questions. Thank you. Participants are requested to kindly restrict your questions to two per participant. We have the next question from the line of Krishna S from Vihas Advisors. Please go ahead.

Krishna S — Vihas Advisors — Analyst

Yes. Thank you very much for the opportunity and I guess, the management is really working hard considering the external factor, because we are living in a world where we are very much dependent on the external factors, global factors and all. So having said that, so and plus most of my questions have already been put up. But one or two questions remain. So one among that is that like if we consider the current quarter gone by, which is the third quarter of the current financial year, adding back the forex losses, so can that be considered, as you know a reasonable figure going-forward for the next two, three quarters. for profitability.

Rushil Thakkar — Executive Director

See I think this quarter is a abnormal quarter so far as the forex loss is concerned. Not for me, for everybody I think across the industry. And I think you can also understand and appreciate that part. So far as our part is concerned, I think as I’ve said in the earlier question, we don’t see much more fluctuation. Just like last quarter, may not be there in the current quarter that is generating [Indecipherable]. And I think way forward I think I’m not able to give any comment on that part so far as forex is concerned. So far as the profitability concerns, I think we are looking forward in terms of very positive so far as the increment in terms of margins it is definitely there in the next one year.

Hiren Padhya — CFO

Yes, so we can see that we can. So in short, to put it very simply. So once we add-back the foreign like if eliminate the impact of the ForEx loss. So whatever profit we are looking at in the current quarter. more less that could form a base for from which we can try to grow through the cost-cutting measures and cost optimization measures. So would that be a fair assumption?

Rushil Thakkar — Executive Director

We can take that base also. And we can tell you that in the future will definitely improve.

Krishna S — Vihas Advisors — Analyst

Understood, Thanks for that. And the second question is that with respect to the rights issue. So, rights issue finally, we have come up with a figure of around INR125 crores roughly here and there. So now, this INR200 crores we have taken an approvals. So any chance of going for a further or will restrict to that figure that we have filed a DRHP.

Rushil Thakkar — Executive Director

Now see, as of now as per the filing, which is done. And as for the First filing the draft filing, we have already put that figure. And as per the SEBI guideline and. We can increase this amount by 20%, or we can decrease this amount that 20%, so from INr124 crores we can go up to one INR149 on the upper side and we can just our issue at around INR99 crores. So within next couple of days, we will just decide internally and with finalized couple of things in terms of rights issue. One is the pricing part and second the timing also. Because, see, we are looking-forward to in terms of the right issue. And as we mentioned in the object. We would like to reduce this promoters loan by existing into equity. That is first part. And that amount is around INR57 crores. The remaining part is like. Working capital, where we are looking at these a couple of opportunity is directly proportional level, not the expansion part.

When we started this project in AP Last year, we had exposure of working capital, it was around INR84 crores in terms of that is fund-based facilities now. Even after this achieving capacity of 70 plus. Percentage. And still we have not increased this working capital facilities and we are managing the same thing within this. Limit on the so. Considering. I think today position. The way we are looking at. These forward. What in terms of either penetration in terms of areas in India also, so. I think we may need some working capital, sir. That is how we have planned.

Since that in case of requirement, we can definitely get that working capital immediately. And that is how we have planned for right issue. So if you. The this. This happens as per our internal timeline. So it should complete. If there is no change in contract benefits decision then. I think this will be able to complete this right issue in March. So that is the case, then. I think. In terms of debt is two seven, 0 will be reduced. So-far as promoter part is concerned. And secondly, as per the normal repayment schedule. We are repaying debt would be around 45 crores. So practically in large balance sheet compared to March continue to minus 23 we’ll have at least 100 crores less in terms of.

And secondly, if you compare the profitability in last March vs. March 23. I think we’ll be in a better position and that is already evident in the last two-three quarters. So our base, equity ratio will decrease. Like anything, so that is what we are planning. And secondly, when. Right. This is already completed in March. I think we’ll be sitting on cash. Comfortably a virus that is a market concern. Great. It seems to be a good like a good calculation, So I think Great. So I think. We should. The way that we are strategizing, we should look at it and then. I think it will be good.

And now to be the last question. So we have so the foreign currency loans. So though it looked in the initial stage, it look delta achieved, but this experience of many companies at later stages because of exchange rate fluctuation that foreign currency loan starts to look a little bit of that benefit is diminished with respect to the rupee loan, so what has been the experience of the company. So in the future like because as it has the company, we can come to the conclusion that ForEx loan which is the rupee loan, the advantage is not much.

And what would be our take for the future expansion. Okay, I see. So-far today is concerned. Just a minute. Yeah, in terms of when we had planned for the loan it was very-very I think lucrative, I’ll just give you example of that is 0.85% and the considering the head things in metal, which we have so-far it was very-very. complexity and in terms of our finance cost. Till last quarter. I think our finance cost in terms of overall, because in the range of 5% to 6% now. Last quarter I think and that has changed by at least 2% to 3%.

Now coming to your question, see. We are already looking at the auction of converting this loan into rupee loan also. However. I think we will have to have a couple of options and then we will decide on the spot, but so-far. I think our experience is very good. So-far we have not find it is having any further cost but then. I think after having this quarter will definitely and look at it and we plan to either hedge. Since our meeting and can also plan for converting some part of the loan into rupee loan also, that is also I think possible.

Krishna S — Vihas Advisors — Analyst

Yes, understood sir. Understood. Fair enough. So that’s all from my side. Thank you very much, sir and good luck for the right.

Rushil Thakkar — Executive Director

Thank you.

Operator

Thank you. We have the next question on the line of Anand Soni from Poland. Please go-ahead. We have the next question from the line of Heena from DAM Capital, please go-ahead.

Anand Soni — — Analyst

Yes, hi, thank you for the opportunity. I just want some understanding on laminate. On the domestic side and you in that organized competition is coming back. So what has that been happening. And the second would be on raw materials. This limo RV passing that onto the channel or really daily, some part of it.

Rushil Thakkar — Executive Director

I think. domestic side, you are talking about demand, am I right.

Anand Soni — — Analyst

Yes, demand. Basically unorganized players are coming back-in a big way into the market, is that would that be true, is that affecting demand.

Rushil Thakkar — Executive Director

No-no it since long. I mean they are not the first one coming now it’s many years, so. Something not. The second thing we are almost, if we talk about our exports mix. Nine months is almost 65% is our exports and 35% is domestic market. And we are focusing our product in a different segment where you know interior and specifiers are working. Sure of. That’s one of the reason as long as raw-material price is concerned. I think it’s quite stable. Yeah, it may go down, it may not increase further.

Anand Soni — — Analyst

Yes. So I think Amazon that there was a…

Rushil Thakkar — Executive Director

Hey. So again, Mr Daniel. The table, it’s not.

Anand Soni — — Analyst

Okay, and is therefore the go down, will we be passing that on to the. Daniel or would be really any. Let’s say, it’s fair to case. Case to case I mean, not necessarily company like company like us, we are working more on we. As specified and all these places. More of promotions and sales promotions scheme and all, so. And on the. Will see any pass-on. Okay, and on the export side we hear any oil knowing now to the mine. So would that be impacting us over the near-to-medium term.

Rushil Thakkar — Executive Director

No, we don’t export a lot in America and Europe. We more or less exports in Asia, Southeast Asia and Gulf countries.

Anand Soni — — Analyst

Okay, so there we don’t see any?

Rushil Thakkar — Executive Director

No we seeing, in fact very good demand.

Anand Soni — — Analyst

Thank you so much. Thank you.

Rushil Thakkar — Executive Director

Thank you very much.

Operator

Thank you. We have the next question from the line of Arun Baid from ICICI Securities. Please go-ahead.

Arun Baid — ICICI Securities — Analyst

Hi, sir. Can you help us is the when you mentioned that the margins the MDF maintained was that with the context of Q3 margins nine months margins.

Rushil Thakkar — Executive Director

Okay. I think I had already mentioned very category, when we are talking about future. I’m just talking about the nine-month 19. So we should have a ballpark 26% yes, exactly, yeah. And, sir, on the export realization. Have they come down further from [Indecipherable] reported numbers of roughly 19,000 in Q3.

Hiren Padhya — CFO

Yes. I think it’s more or less stable now.

Arun Baid — ICICI Securities — Analyst

At 18.5 sustained number as Q3 numbers.

Rushil Thakkar — Executive Director

Because now you know we don’t see much of a change in freight also and selling price are more or less same.

Arun Baid — ICICI Securities — Analyst

Okay and sir, just one more data point, how the margins differ as compared to exports and domestic.

Rushil Thakkar — Executive Director

See but there are — see costing is different definitely. But I just can’t comment exactly in terms of percentage or value. But if you compare last couple of quarters, I think we have improved in terms of volume so far as the export is concerned. And we are just trying to maintain the margin as of now. Way forward compared to last financial year and COVID impact, yes, there was an impact, but then now it has been stabilized. So this margin will continue. That is what I can tell you.

Arun Baid — ICICI Securities — Analyst

Sir, I appreciate your point. Just a ballpark like — if theoretically let’s assume that domestic is times 10[Phonetic]. Export would be what 0.7 times, 1.3 times, how should we look at it.

Rushil Thakkar — Executive Director

See, if you just see our realization in terms of domestic is around in the range of 24,000 right.Now coming to export, it is in the range of 18,000. So I think it is very evident in terms of realization part. So far as the costing part is concerned, there may be a difference in terms of cost component considering the specific cost basis attached to this export.

But realization-wise, it is 24,000 overall versus 18,000 odd. I would like to add, there are some hidden benefits too. Number-one, in exports, normally we have only one or two or three thickness and we done this production for a day or two or something like that. So we save a lot on this part. Second thing, applications of marginal cost. Third thing, utilizations of capacity. Fourth thing, maintaining our market-share in export, because we have decided that we will definitely promote 3,000 to 4,000 cbm per month in region where you know, NBFs we can export. And because we are talking about natural hedge also. These are some of the benefits. And last thing, which we don’t forget is we have obligations also. So we have to export certain quantity.

Arun Baid — ICICI Securities — Analyst

And the last question, sir. Yet you are more or less utilizing your capacity by 50% on a full capacity. This number next year — for the full-year, we should look at what percentage as capacity utilization?

Rushil Thakkar — Executive Director

I think what we are talking about is 80% to 85%, that’s our target minimum. So we are working hard on this part. Not only 85%, but we are also trying to go more if we get an opportunity in export market or anywhere. So we are ready for 90,100 and whatever. But that’s our goal. And as long as our value addition is concerned I think in my previous call also, I have mentioned that we want to reach to 40% to 50%. Though we are doing almost 60% to 65% from Chikmagalur plant.

Arun Baid — ICICI Securities — Analyst

And, sir, assuming we can do 80%, 85% which is your target, the mix would be similar between domestic and exports or would it be much different?

Rushil Thakkar — Executive Director

No, I believe we have a target of 4,000 CBM per [Indecipherable]. That’s what our target is. So we want to go around 48,000 to 50,000 CBM per year.

Arun Baid — ICICI Securities — Analyst

Okay. Great sir. Thank you very much for this.

Rushil Thakkar — Executive Director

Thank you very much.

Operator

Thank you. We have the next question from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yes. Hi sir. Good afternoon. I’m sorry, I joined in late. So I may have missed some of your remarks. First is on the MDF. If I look at export versus domestic, why is there such a sharp difference for the the imports landing in India. And even export margins that we Indian companies make compared to the margins, we understand that there is a sharp difference export margins are really low.

So where do we — is it just the cost of Indian manufacturers — production cost for Indian manufacturers are much higher compared to those coming from Southeast Asia.

Hiren Padhya — CFO

I think if I’m not mistaken, there are I think players like from Thailand and Vietnam, they are exporting in Gulf region. And more or less our price and their price are same. And second part, there is a change in realization could be FOB and CIF part also. Otherwise, whatever the rate difference Thailand or Vietnam is getting, that’s their benefit or loss and whatever the freight benefits we are getting, that’s our loss or profit. Otherwise market is there and I think it’s almost like for example, $200. So probably it’s more or less same for Indian players or Thai player or Vietnam player. It’s always on a safe basis. Maybe in our [Indecipherable]

Basis they had the freight. So this could be the reason.

Rajesh Kumar Ravi — HDFC Securities — Analyst

So what I’m trying to understand southern ports, the imports which are coming in, they are at 10% to 20%, almost 20% cheaper compared to the cost of Indian producers selling price of inventory. Why should there be such a large difference. I am assuming the exporters to India would not be selling at very thin margin, or a loss, is that understanding correct?

Hiren Padhya — CFO

If we talk about their realizations, it’s more or less same. If we consider, whatever the price they get for Dubai, for instance, or Jebel Ali port or Chennai port, more or less the realization is only $4 or $5 plus or minus that so. Now, another thing is very important is they do not have demand for Europe market or American market. So for them selling this capacity is very important. They cannot sell some quantity or 100% quantity to one country. Otherwise their price will fall. So they always balance.Some part they sell it to Gulf, some part they sell it to India.

Rajesh Kumar Ravi — HDFC Securities — Analyst

So is it akin to what the situation we would be looking at for at least next one, two years when India is adding good chunk of capacities?

Hiren Padhya — CFO

I really doubt one, two years is pretty long time.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yes. No, what I’m looking at for next one year and two years India the capacity which are coming up. Because we would also be looking at domestic obviously, there is no contesting that India is looking at strong growth opportunities. And hence all these capacities eventually will get absorbed and more would be required.

Rushil Thakkar — Executive Director

[Indecipherable] which is adding up is not going to be 100% from day one.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Correct. No, where I’m coming in from like India is also exporting at low margins as an opportunistic sales. Is it a similar situation that the imports lending in India at low cost there’s more of an opportunistic sale and not the recurring sale which is meant for Europe and all. So once demand improves in Europe, US market, the supply pressure from exports lending in India that may reduce.

Rushil Thakkar — Executive Director

Definitely, there will be increasing the price. So definitely. And that will also help us Indian player because the indirectly even in other market, country like Gulf and all these places, there will be price increase. So indirectly, it will be a benefit for us also when it comes to the exports, not only competition. And second part is maintaining volume is very important for every company in Indian market. And at present, if you see from Q2 despite import, if we talk about our sales volume. In Q2, it was I would say we did at around 54,000 CBM. Now in Q3, we did it around 57,000 CBM.

Rajesh Kumar Ravi — HDFC Securities — Analyst

And how did export number — how much of this is exported, sorry if I have missed that.

Rushil Thakkar — Executive Director

Total export plain and pre-lam comes around 13,000 something. And last quarter it was around 10,000.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay, so you’re seeing good jump in your export volumes.

Rushil Thakkar — Executive Director

As I say, our target is to maintain 4,000 CBM per month.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Per month, okay. So you’re close to your run rate now. You’re already achieved that run-rate and this will be maintained. [Speech Overlap] Correct, so incrementally your growth will be driven from domestic market penetration, only?

Rushil Thakkar — Executive Director

Yes, domestic market was good too for us. If we talk about last quarter it was I would say around 33,000, 34,000, CBM. Sorry, 44,000, 45,000 CBM. This time it is 45,000. So we can see around 2%, 3% growth in domestic market too. And importantly from value addition point of view from our AP plant, we have grown from 9% to 13%. That’s very important.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. And you said that around 26% margin could be sustainable numbers here on? 25%, 26% range? You don’t see any major risk to that margin numbers for you.

Rushil Thakkar — Executive Director

No.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. And laminates this quarter margins 10% seems to be better-off compared to the preceding many quarters. So do you see this as now a structural improvement?

Rushil Thakkar — Executive Director

Yeah, we believe, it will have a good improvement in coming days.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Is it because more value-added products for you got X, you were able to sell higher in exports market where the value addition requirement is more?

Rushil Thakkar — Executive Director

Yes, you are right. It’s all about product mix. Number-one, it’s all about price decrease in freight also. Number three, we have a quite stable raw-material pricing, even in some places it’s going down to. And demand is really good. I think there are so many factors.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay, last question in the. Can you give the PVC and EBITDA number?

Rushil Thakkar — Executive Director

See I have PVC, if you see, consider the overall volume in terms of value and value volume. It is hardly 1% of total. I think. It is very my numbers say it is in material. So-far as the figures are concerned.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. No, why I’m asking this because…

Rushil Thakkar — Executive Director

Answer to this question, if we talk about nine months from minus 32% minus 6%, so we have a substantial improvement in 7% to 8%. And if we compare from our last quarter from minus 16% to minus 6%, so we have improved almost 10% in terms of EBITDA margin.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Thank you. Healthy. And MDF [Phonetic], how much is the ForEx

Rushil Thakkar — Executive Director

Last year, last quarter it was 7%, now we have reached to minus 2%, so we are very close to the target. And last financial year. I mean. I’m sure, minus 13% to minus 2%. So we are doing quite good. If we, let’s say, just confirm you may talk about. Nine years nine months comparison from minus 16% EBITDA. We have reached to 1% EBITDA. So we are in now positive part. And sir. Forex loss almost is there in the MDF ethanol because what you have reported is net of four ex of ForEx loss. As I mentioned in the earlier call and the question also. The total loss is around INr11.62 crores. It is substantial portion is from MDF only and that basically the outstanding term loan which is there in terms of euro and USD.

Rajesh Kumar Ravi — HDFC Securities — Analyst

But that has to be booked through EBITDA only. That should go through into the interest part right, not in the EBITDA portion.

Rushil Thakkar — Executive Director

No it is, has there are couple of ways to manage this thing. We have followed the accounting policies where we. If there is a profit. We are just showing it in the other income. And so-far, if it is a loss, then we are showing it to other manufacturing cost. No I mean, your question please. When it comes to finance cost. Generally, it is like whenever there is a accounting policy, which it was decided that any differential part in terms of foreign currency loan versus same loan, if it has taken in domestic currency than the differential part we can park in the finance cost, but it is, again, for accounting policy which each compares has to follow. And this has to be. I think consistency followed. So we are following. And as I said profit in other income-loss and other administrative costs.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay. For nine months, how much is…

Rushil Thakkar — Executive Director

Part of the cost which is. Before starting the actual production of an expansion or a CapEx, then definitely we can capitalize that part. As far as we are concerned, we don’t have anything which is being capitalized.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yes. And, sir, for nine months Nordex loss would be how much which has gone in other expenses?

Rushil Thakkar — Executive Director

It is 12 point at INR11.52 crores.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Only, everything is in this quarter when the…

Rushil Thakkar — Executive Director

This well-covered. So-far as nine months is concerned. per quarter it is INR11.52.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Right. So most of the losses incurred in this quarter, which has dented the reported EBITDA margin significant cases. Okay. I think that’s all from my end sir. Thank you. All the best.

Rushil Thakkar — Executive Director

Okay sure.

Operator

Thank you. That was the last question. We would now like to hand it over to the management for closing comments.

Rushil Thakkar — Executive Director

Thank you once again for your interest and support. We’ll continue to stay engaged. Please be in touch with PR agency Adfactors. Our Investor Relation team for any other further details or discussions. Look-forward to interacting with you next quarter. Thank you.

Operator

[Operator Closing Remarks]