Rushil Decor Limited (RUSHIL) Q4 FY23 Earnings Concall Transcript

Rushil Decor Limited (NSE:RUSHIL) Q4 FY23 Earnings Concall dated May. 05, 2023.

Corporate Participants:

Rushil Thakkar — Executive Director

Hiren Padhya — Chief Financial Officer

Keyur Gajjar — Chief Executive Officer

Analysts:

Karan Bhatelia — Asian Market Securities — Analyst

Keshav Lahoti — HDFC Securities — Analyst

Bhavin Rupani — Investec — Analyst

Harsh Shah — Dalal and Broacha — Analyst

Udit Gajiwala — Yes Securities — Analyst

Rishikesh Oza — RoboCapital — Analyst

Unidentified Participant — — Analyst

Rajesh Kumar Ravi — HDFC Securities — Analyst

Arun Baid — ICICI Securities — Analyst

Diwakar — Prudent Equity — Analyst

Parth Bhavsar — Investec — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Rushil Decor Limited Q4 FY23 Earnings Conference Call hosted by Asian Market Securities Private Limited. This conference call 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 the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Actual results may differ from such expectations, projections, etc. whether expressed or implied. Participants are requested to exercise caution when referring to such statements and remarks.

As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhatelia from Asian Market Securities. Thank you and over to you, sir.

Karan Bhatelia — Asian Market Securities — Analyst

Thanks, Nirav. A very warm morning and welcome all to the Rushil Decor fourth quarter and 12 months FY23 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, sir.

Rushil Thakkar — Executive Director

Thank you, Karan. Good morning, ladies and gentlemen, and welcome to Rushil Decor Limited Earning Conference Call for the fourth quarter and the full-year ended on 31st March ’23. I would like to thank Asian Market Securities for arranging this call and all the participants for taking time to join this call. Today, I’m joined by Mr. Keyur Gajjar, Chief Executive Officer; Mr. Hiren Padhya, Chief Financial Officer, along with Adfactors PR, our Investor Relationship Advisor.

We have shared and uploaded the investor presentation on the exchange and hope you all have gone through the same. Let me share with you some of the key highlights for the 4th quarter and the full-year ended on 31st March ’23 during which, we have recorded a revenue growth of 9.6% and 34.3%, respectively. Both our laminate and MDF business have shown a steady growth in this period. Our laminate business registered a growth of 4% in the revenue for the fourth quarter over the same quarter last year and 11% for the full year. During the fourth quarter, our laminate exports grew by 9% year-on-year basis and by 18% for the full-year basis. As on-date, our products are exported to over 51 countries, highlighting the strong demand for our products in the global market. We are strongly working towards enhancing our laminate portfolio by adding new designs and keeping ourselves updated with the needs of the customer.

Coming to the MDF business, our volumes for the quarter increased by 22% year-on-year basis, reaching 66,179 cubic meters compared to 54,179 cubic meters in Q4 FY22. For the full year volume increased by 35%. As evident from the results, the year gone has been very important year in the journey of Ruchil Decor. We established ourselves as a formidable player in fast-growing MDF market. We are able to ramp up our capacity at our Andhra Pradesh facility and increase our market presence by catering to the rising demand of the MDF products across the country. During the year, our strategy was to further build on the valuable value-added portfolio in MDF segment. We are successfully doing it and this is highlighted from the fact that value-added product contributed 36% of the overall revenue of the MDF boards in the term, of the value in the financial year ’23 and 38% during the quarter 4 financial year ’23.

Our dedication for achieving higher utilization and efficiency has been paying off, and we have crossed the set milestones that reflects in this quarter. Our capacity utilization for MDF for the financial year has crossed 75% level and 77% for the fourth quarter in FY23. As guided at the beginning of the financial year and the target is to reach about 90% to 95% utilization levels over the next two financial years with a significantly higher contribution of value-added products. During the year, we have made significant progress in expanding geographical presence by adding 80 new dealers, distributors for both laminate and MDF. This will further assist to cater to a larger customer base and increase the visibility of the brand, Ruchil and Vir.

Our continued collaboration with the local carpenters across the country and conducting workshops to educate them on the benefits of MDF in enhancing their skills on the use of MDF is also a positive step towards delivering effectively to the end, of course, to the end customer. With this branding distribution and Carpenter Connect Initiative, we should be able to achieve strong growth with stable EBITDA margins going ahead.

During the quarter, the realization in the domestic industry for the plain MDF was subdued and we faced some challenge on account of higher imports of plain MDF with marginal increase in the wood prices, which impacted EBITDA margins in the MDF business compared to the previous quarter. However, it is encouraging to see that despite of this, we have seen a significant improvement in our volumes and revenues on year-on-year business. We are confident that with the target of increased contribution from value-added products, expanding our market reach by adding dealers and distributors, etc. we are in a position to mitigate this trend and deliver significant growth in the coming year.

On the debt reduction front, as you are aware that we are raising funds through right issues, which will help us to fully repay the unsecured debt. A part of this, our healthy cash generation from the operation has supported us as well. During the year, we have repaid INR38 crores of secured debt. Going ahead, we estimate generating sizable amount of cash from the operations, which will be utilized to repay our annual long-term debts plan and fund the laminate capex.

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

Hiren Padhya — Chief Financial Officer

Good morning, and thank you, Mr. Rushil. Let me take you through key financial highlights for the quarter and the full-year ended 31st March 2023. For the quarter, we have reported operating revenues of INR213.9 crore which is a growth of about 9.6% compared to INR195.1 crores. This was driven by growth in both of our business of MDF and Laminate. Our MDF business revenue grew by 11% on year-on-year basis contributing to this INR159.1 crores in Q4 FY23 compared to INR143.1 crores in Q4 FY23.

Laminate business contributed INR51.3 crores in Q4 FY23 compared to INR49.4 crores in Q4 FY22. This is a growth of 4%. EBITDA for the quarter 4 FY23 stood at INR28.2 crores as against INR31.6 crores in Q4 FY22, a year-on-year decline of 10.6%. Profit after tax stood at INR13.6 crores as against INR15.4 crores in Q4 FY22. While EBITDA margin for the quarter stood at INR13.2 compared to INR16.2 in Q4 FY22. PAT margin stood at 6.34% in Q4 FY23. During the quarter on MDF upfront, our export volumes stood at 5,645 cbm while our domestic volumes saw a significant growth of 28% compared to the Q4 FY22. On quarter-on-quarter basis, domestic volume increased by 32%.

Coming to full year financials. Revenue from operations stood at INR838.4 crores. That is a growth of INR34.3 crores. This was led by strong growth in MDS and laminates business. While MDF contributed INR620.7 crores in FY23 going by 44% compared to last year. Laminate contributed INR205.9 crores in FY23 which is a growth of 12%. EBITDA for the full year stood at INR149.4 crores as against INR73.9 crores in previous year. This is a growth of almost 102% on year-on-year basis. EBITDA margin for the FY23 stood at 17.82%, profit-after-tax at INR77.7 crores compared to INR22.8 crores in FY22. That is all from my side.

I would like — now request the operator to open the floor for the questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Ladies and gentlemen we will wait for a moment while the question queue assembles. The first question is from the line of Karan Bhatelia from Asian Market Securities. Please go ahead.

Karan Bhatelia — Asian Market Securities — Analyst

Hi, sir, thank you for the opportunity. Sir, just wanted to have some clarity on the possibility of CVD duties on the cheap imports. Any timeline for this and where is this stuck because somewhere I believe the Finance Ministry was to give some verdict in the second week of Jan, but they kept quite. So just your thoughts on that.

Hiren Padhya — Chief Financial Officer

Yeah, hi, Karan. Thank you for the question. As of now, update on the CVD is still with the Finance Ministry. And we have not got any kind of a reply yet from the Finance Ministry. We are also waiting on the same.

Rushil Thakkar — Executive Director

Right. And secondly, on the laminate capex, so when would that be done and how different will be the realization and the margin profile compared to the existing portfolio. I think in last call also, we already indicated that total capex is around INR60 crores and the commercial products which we are accepting in the first quarter of next financial year, that is June 24th and if we just consider 50% percent capital utilization in that financial year the approximate revenue would be around INR100 crores at the rate of 50%, 60% capital utilization. Margin-wise, yes, as informed earlier, this project is purely for the exports and we would like to cater this product, this is Jumbo product mainly to U.S. and Europe and Australia and New Zealand, where the margins would be comparatively higher than the present margins which we are having as of now.

Karan Bhatelia — Asian Market Securities — Analyst

Thank you for the detail.

Operator

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

Keshav Lahoti — HDFC Securities — Analyst

Hi. Thank you for the opportunity.

Operator

Keshav, sorry to interrupt you. May I request you to speak little louder please.

Keshav Lahoti — HDFC Securities — Analyst

Yeah, so what I want to understand, as we are seeing, you know, the export is increasing from the industry. So, possibly I was expecting maybe the export might have increased from Rushil also which is not visible because the export was something like 35000 CBM, 40,000 CBM in Feb month. So why have Rushil not tapped this opportunity. How are the margins in exports and what is, how you see the industry. The import might be increasing, but export is also increasing at pace, so still we can remain our net export in MDF.

Rushil Thakkar — Executive Director

Yeah, thank you for the question. So talking about the realization, our realization from Q3 to Q4 has increased and the volumes which we are targeting is also around 5,000 to 60,000 cubic meters a month. So the export to different country will be constant with this ratio as we said internally decided by the management. And we don’t see a extra capacity which will be exported. The rest of the capacity will be utilized for our domestic purpose as well.

Keshav Lahoti — HDFC Securities — Analyst

Okay. How is your margin in exports. Is it a breakeven or you made some kind of 10%.

Rushil Thakkar — Executive Director

We make some some out of it. It’s not on the breakeven, it’s slightly higher than that.

Keshav Lahoti — HDFC Securities — Analyst

Okay, and what is your value-added mix for Vizag plant in Q4 and FY23.

Hiren Padhya — Chief Financial Officer

Okay, hi. Value added, I want to say that we have taken almost 78% growth from last Q3 to Q4. And if we talk about our entire value addition sale as of now, it’s almost,I would say, almost 20% compared to last Q3, increase.

Keshav Lahoti — HDFC Securities — Analyst

For Vizag, right?

Rushil Thakkar — Executive Director

Yeah, for Vizag, we have taken a growth of 78%. And for the entire operation, we have increased almost 20%. I mean we — our achievement was 20% increase in value addition. And altogether, if we talk about it, it is almost 30% for the financial year which was our target for Q4 and now we are planning 40% in coming days.

Keshav Lahoti — HDFC Securities — Analyst

Okay, how is the pricing for export and domestic product right now in the last quarter currently.

Rushil Thakkar — Executive Director

If we talk about the basic line product, which normally in imported is almost raw product, so I think these last two quarters it’s almost consistent. And the gap is again 10% to 15% depends on the destination.

Keshav Lahoti — HDFC Securities — Analyst

So is it a fair understanding, the value-added product don’t face competition from import, that is isolated from import. It is more towards plain MDF only.

Rushil Thakkar — Executive Director

Mainly. I would say, 90%, 95% business is import is in plain MDF. So for value addition, customers they prefer brands.

Keshav Lahoti — HDFC Securities — Analyst

Okay, got it. And how has been the timber prices in last quarter and currently where it is and how you see the trend.

Rushil Thakkar — Executive Director

There is a slight change in timber price.

Keshav Lahoti — HDFC Securities — Analyst

Okay, okay. Thank you. That’s it from my side.

Operator

Thank you. I request all the participants, please restrict to two questions per participant. The next question is from the line of Bhavin Rupani from Investec. Please go ahead.

Bhavin Rupani — Investec — Analyst

Thanks sir, thanks for the opportunity. First question is related to MDF. So what is the ensured prices of plain MDF versus the domestic prices.

Rushil Thakkar — Executive Director

I think if we talk about specific destination, which are not really nearest to buy [Phonetic] then I think it is between 10% to 15% — 5% to 10%.

Bhavin Rupani — Investec — Analyst

So you are saying import prices are lesser by 5%.

Rushil Thakkar — Executive Director

Yeah, import prices are lesser 5% to 10%.

Bhavin Rupani — Investec — Analyst

Okay and sir are there any increase in the international market prices in the international market recently of the MDF prices, plain MDF prices.

Rushil Thakkar — Executive Director

Can you repeat again?

Bhavin Rupani — Investec — Analyst

Is there any increase in the International prices of MDF recently.

Rushil Thakkar — Executive Director

I actually came across one of the importer and he told me they have increased U.S. dollar 15 per CBM. And that news I got it somewhere in February.

Bhavin Rupani — Investec — Analyst

Okay and post that, you are saying that the difference is still 10%?

Rushil Thakkar — Executive Director

No. I am just comparing it as of 31st March only. So I’m really not sure what price import came in the the month of March. Because you know they have always some pending orders and all these things. New pro-forma invoice, I was told they have increased $15.

Bhavin Rupani — Investec — Analyst

Okay, okay. Sir, can you please provide volumes and margin breakup for old and the new MDF plant. Is it possible.

Hiren Padhya — Chief Financial Officer

Okay. When we’re talking about new plant that is Vishakhapatnam and old plant is Chikmagalur plant. If we compare Q4 then sales volume, it has already increase in both the cases. If you compare with Q3, then Chikmagalur then as against 17,381, the volume has increased to 19,256. And in case of AP plant from almost 40,000 to 46,924, that means almost 47,000. So both ways, sales volume has increased. Similarly, production has also increased in the same manner. And in terms of capacity, again, if we talk about AP plant then for the last three quarters, we were having capacity utilization in the range of 68 to 72, 73. This time. I mean, the last quarter, that is Q4, we have achieved for the whole quarter 77 percentage and in the last month of quarter, that is March, it was almost 80% as of now.

Operator

Thank you. Bhavin, I will request you to join the queue for a follow-up question. [Operator Instructions] The next question is from the line of Harsh Shah from Dalal and Broacha. Please go ahead.

Harsh Shah — Dalal and Broacha — Analyst

Yeah, thanks for the opportunity. My question is related to the laminate segment. So when. I look at the margins, they are relatively very lower even though my realizations are not that low. So when I look at the realization on your, it has been in the range of 690 to 740. Sir, is it the case that there could be some sort of operational efficiencies at your level and would you want to improve on that margins.

Rushil Thakkar — Executive Director

No. I guess it’s not operational inefficiency. It’s just a product mix, number one. And it’s last quarter. So we have a lot of promotional scheme and everything, which we have to pass on. As such, we are quite optimistic about maintaining our margin as like Q3, which was EBITDA was 11%. So we are targeting next financial year, it should be around the same way. That’s what we are planning actually, we are trying.

Harsh Shah — Dalal and Broacha — Analyst

So what is the value-added mix in the quarter.

Rushil Thakkar — Executive Director

Laminates or MDF?

Harsh Shah — Dalal and Broacha — Analyst

Yeah, laminates. Value added as such, there is nothing like value added. Every laminate is a very different product like it has 1 mm, 0.8 mm, it has exports. We have exports in Gulf. We have exports in South East and Far East Asia.

Rushil Thakkar — Executive Director

So it’s just change of product mix. That’s all. And the financials here is we have to pass on certain promotional schemes. And that’s one of the reason.

Harsh Shah — Dalal and Broacha — Analyst

Okay, and the new plant, the margins for the laminates segment would have been double-digit, right?

Rushil Thakkar — Executive Director

In fact, with the old plant only, we are targeting double-digit EBITDA for sure. That’s our prime objective and we are focusing hard on that part. Because now, we see raw material is quite stable since last couple of quarters.

Harsh Shah — Dalal and Broacha — Analyst

Okay, okay, okay. Thank you. That’s it from my side.

Operator

Thank you. Next question is from the line of Udit Gajiwala from Yes Securities. Please go ahead.

Udit Gajiwala — Yes Securities — Analyst

Yeah, hi sir, just one follow-up. What was the value-add portion of MDF in Q4 and for full year overall.

Rushil Thakkar — Executive Director

Hi there. You mean to say total combination of value addition, right?

Udit Gajiwala — Yes Securities — Analyst

Yes, yes.

Rushil Thakkar — Executive Director

It’s almost 30%.

Udit Gajiwala — Yes Securities — Analyst

This is for Q4, right?

Rushil Thakkar — Executive Director

Q4. I would say, value-added was almost 30% If i talk in sales way, almost we have sold 17,700 CBM of value added and 42000 plus plain.

Udit Gajiwala — Yes Securities — Analyst

And secondly for coming fiscal, what kind of growth in each segment and margin guidance, if you could highlight for both MDF and laminates.

Rushil Thakkar — Executive Director

I think for the value addition now this year, our target is to reach at least 40% or more. And I’m sure it’s not a problem for us. I think we are working hard. So we’ll be able to do that part, that’s our focus area. As long as margins are concerned, ideally, we feel that MDF margin, EBITDA is to be around 20%. And for laminate it is should be around 10%, that’s what we have planning. I mean, we are trying.

Udit Gajiwala — Yes Securities — Analyst

And sir, what kind of revenue growth are you expecting for coming fiscal given that largely it should be driven by volumes.

Rushil Thakkar — Executive Director

Yeah, in order to achieve this margin we have mainly three phases. One is we have to increase our Value Addition business and you can see that in Q3, we sold almost 17,000 CBM of value addition, while it was 14,600 in Q3. There was almost 20% growth we took for value addition. So this is one of our strategy, we want to increase our Value Addition business, value-added business. Second part is efficient utilization of our plant capacity. If we talk about Andhra Pradesh plant capacity, we have almost achieved 78% in Q4 and Chikmagalur was almost 85%. So we are quite satisfied and we want to go for that.

Udit Gajiwala — Yes Securities — Analyst

Got it, sir. Thank you.

Operator

Thank you. Next question is from the line of Rishikesh Oza from RoboCapital. Please go ahead.

Rishikesh Oza — RoboCapital — Analyst

Hi sir, thank you for the opportunity. My first question is on our revenue growth for next year. What was your guidance for the revenue growth for next year, is like 14%, 15% percent a fair assumption.

Hiren Padhya — Chief Financial Officer

I think in the last quarter only we had already suggested that we want to increase our capacity. The way we are placed as of now is around 77%, 78% capitalization in AP and 85% in Chikmagalur. So we want to go further in terms of 5% to 10% increase, which will be reflected in the revenue. This will be around I think as you suggested is right in the range of 15% to 20% in terms of value.

Rishikesh Oza — RoboCapital — Analyst

Okay, in terms of volume. And also sir, what is our value-added product MDF value-added product realization for Q4.

Rushil Thakkar — Executive Director

Say it again.

Rishikesh Oza — RoboCapital — Analyst

What is the MDF value-added product realization for Q4.

Rushil Thakkar — Executive Director

Overall, it was 34,424.

Rishikesh Oza — RoboCapital — Analyst

Okay, and sir my last question is how are we deploying the rights issue proceeds.

Rushil Thakkar — Executive Director

Okay. I think the object clause is very clear. Out of this INR107 crores, total value of rights issue, INR56 crores approximately will be directly adjusted in present outstanding of unsecured loan from promoter which will be converted into equity and the balance amount is for the purpose of working capital. And we have a small portion as for the inventory guidelines, it will be for general corporate purposes.

Rishikesh Oza — RoboCapital — Analyst

Okay, okay, thank you very much. Thank you.

Operator

Thank you. The next question is from the line of Aasim [Phonetic] from DAM Capital Advisors. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi, so just wanted clarification on the MDF value-added component. So, in your opening remarks, you mentioned 36% and later you said it was 30% for FY23. So is 36% revenue and 30% volume for value-added products.

Rushil Thakkar — Executive Director

I’m talking about 30% volume

Unidentified Participant — — Analyst

30% is volume. And then do you have, I mean, how much would it be on the revenue basis, value-added for the full year.

Rushil Thakkar — Executive Director

I think we have to find out — 66%, I believe. As of now, if we talk about the last full financial year, I think full financial year, the value in terms of value, it would be around 37%.

Unidentified Participant — — Analyst

Okay, so 37 is value, 30 is volume and would you have figures for FY22, what would these corresponding figures be.

Rushil Thakkar — Executive Director

Just a minute. No. I think it is not available as of now. We’ll just try to give you later on.

Unidentified Participant — — Analyst

Okay sure. And just final question. What all comes in value-added products in MDF.

Rushil Thakkar — Executive Director

Value-added product is something which is not interior basic board. So maybe one part is the laminated MDF, another is exterior grade MDF, HDFWR that is our maxpro product which is again a high-density product with power cool performance. It’s again pre-laminated, HDFWR that is pre-laminated MDF, Maxpro. These are our products for value-added. Then we are also giving some painted board for specific operations. These are all our value-added products.

Unidentified Participant — — Analyst

Okay, so basically we are available in all these special products, which even a green panel or a Century Ply provides to the markets. There are not where they are providing something that you don’t.

Rushil Thakkar — Executive Director

No. We all have more or less the same products.

Unidentified Participant — — Analyst

Got it, okay. Thanks.

Udit Gajiwala — Yes Securities — Analyst

Thank you. [Operator Instructions] The next question is from the line of Rajesh Kumar Ravi from HDFC Securities. Please go ahead.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yeah, hi sir, good afternoon. My question pertains to, first, on the margin compression in the MDF segment, we see that the realization has come off sequentially by around 10%, primarily in the domestic side. But I think last quarter there was one off, this forex losses which adjusted for that, the margins were healthy. Are there any one-offs in this quarter numbers also.

Rushil Thakkar — Executive Director

As you said rightly said, this quarter margin has contracted. The main reason for this is like this is from price also. That is one part, and a small portion, it’s like in terms of increase in raw material price. But on the other side, if you see. I think volume-wise, we have already increased. So we are very confident that the coming quarters. I think we will again regain the same margins which is there in the last. I mean full year. If you compare with the full-year margins which is in this range of 20%, 22%, so that is what our target is, but there is no one-off as of now. Only exception would be as rightly said by you that in case of laminate there are some schemes, etc. Otherwise in MDF there is nothing like any one-off. Last quarter that forex loss. In this quarter, there is no such forex loss.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay and so, when you’re talking about going back to 20%, 21% from 16% in Q4. What is that being driven by because prices have not increased across markets and even timber prices apparently seems to be elevated only. So what are the levers, you’re looking at, which will lead to another 400 to 500 bps margin expansion quarter-on-quarter.

Rushil Thakkar — Executive Director

So you’re talking about MDF, right?

Rajesh Kumar Ravi — HDFC Securities — Analyst

Yeah, MDF.

Rushil Thakkar — Executive Director

MDF, I think it was–

Keyur Gajjar — Chief Executive Office

I would answer this question, Rajesh. What we feel that in last quarter, it was a product mix, and that’s one of the reason why our realization for plain was a bit lower. So we are improving and we are working on improving our product mix. And we understand the margins from 16% to 20%, we have to change our product mix and we are working very hard like we are promoting our products at various places. Now we’ve started entering into the market. As I said, we have quite Increased our value-added business from Q3 to Q4, almost 20%. So now, I’m sure this will help us to increase our EBITDA margin and yes, efficient utilization of capacity will be done, another factor. As previously Hiren bhai said, yes, price pressure is always there because we take price cut in the month of November. By the time price implemented it was end of November or whatever. So entire effect is now in this quarter.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Okay and just a follow-up, if you talk about margins, what is the margins for your value-added products in Q4 and FY ’23 on company level.

Hiren Padhya — Chief Financial Officer

You can just see from these present figures also when we talking about plain product, the realization is in the range of 23,000, 24,000. The value-added product is around 34,000, right? So I think this will continue and then the difference of this will definitely continue.

Rajesh Kumar Ravi — HDFC Securities — Analyst

No, But on margin level how much flows down. At margin level, how do they work out.

Keyur Gajjar — Chief Executive Office

We don’t have the exact figure but we are pretty sure it’s quite better than the plain.

Rajesh Kumar Ravi — HDFC Securities — Analyst

So around 500 bps difference should be there broadly. That much understanding can we get.

Hiren Padhya — Chief Financial Officer

Actually exact, we can’t say as of now, but then some realization I think it is–

Keyur Gajjar — Chief Executive Office

We will revert back to you after checking.

Rajesh Kumar Ravi — HDFC Securities — Analyst

Sure, sir. And lastly, what was the full year numbers guidance for FY24.. Guidance for FY24 for volume and value.

Hiren Padhya — Chief Financial Officer

I think this was covered in the last two questions. See, for one side, the volume-wise, I think Keyur-ji has already covered. So when we are increasing capacity. So that will be reflected in our volume. So we are at as of now at 78, 79. We are targeting at least 85 plus in the coming year–

Keyur Gajjar — Chief Executive Office

We are planning actually 90% to 95% in coming two years. That’s what is our quantity target. In terms of value also. I think as I’ve — and as I said, the last two quarters, the pricing import is not decreased and probably I heard, it’s increased by $15 per CBM. So we don’t see much pressure on realization now onwards. I hope I have answered your question, Rajesh.

Operator

Sure sir, thank you very much. I request all the participants, please restrict to two questions per participant. The next question is from the line of Arun Baid from ICICI Securities. Please go ahead.

Arun Baid — ICICI Securities — Analyst

Hi, sir, just one question. How would the wood cost be for us in the current quarter, which is Q4.

Hiren Padhya — Chief Financial Officer

Per ton it is around 3,500 plus.

Arun Baid — ICICI Securities — Analyst

Okay, and this prices have they started to go up, come down in the current quarter in April. How have they moved?

Hiren Padhya — Chief Financial Officer

No, it has slightly increased in the current quarter compared to — for Q3, Q4, there is a slight increase. Q1–

Keyur Gajjar — Chief Executive Office

Actually it was increased somewhere in middle of the quarter. So we will see the exact effect in, I think by May.

Hiren Padhya — Chief Financial Officer

Okay, the second thing is just to re-check, you mentioned that your realization would be around INR24,000 for plain MDF.

Arun Baid — ICICI Securities — Analyst

No, no. I was just comparing the. I think giving the comparison of value-added versus plain where I had said that–

Keyur Gajjar — Chief Executive Office

Annual realization was 23,284 in financial year ’22 ’23 compared to 33,000, I’m sorry, it was 23257 compared to 36328 for the annual. That was the reason.

Arun Baid — ICICI Securities — Analyst

No, sir just—

Keyur Gajjar — Chief Executive Office

As we said in our Q4 it was 20,400. Only reason for this realization is our product mix. And we are quite sure and optimistic that we are working on change of our product mix in both.

Arun Baid — ICICI Securities — Analyst

No, sir this point was because you mentioned that roughly 30% of your volumes was value-add in this quarter Q4, which is at INR34,000. And then if I look at blended number, the domestic number comes at INR24,508 for the quarter. So that is like, the number should be way lower for your plain MTFs.

Keyur Gajjar — Chief Executive Office

I want to just bring one thing to your notice that when we talk about the ratio of value-added to plain, we only consider domestic sales only.

Arun Baid — ICICI Securities — Analyst

Sir, I’m talking of domestic realization only, sir. The domestic realization was INR24,500 for the quarter.

Keyur Gajjar — Chief Executive Office

No. For Q4, domestic realization in general was INR20,410.

Arun Baid — ICICI Securities — Analyst

Sir, I’m sorry. My numbers were and I’m mistaken somewhere. Your domestic–

Keyur Gajjar — Chief Executive Office

The total realization was INR24000 [Phonetic]. It was for total MDF including exports, domestic, value added, altogether. So if I narrate again local that is plain domestic is INR20,410. I’m talking about Q4 realization. Value-added is INR34424. For exports, plain is INR18,641 and for exports, value-added 230 CBM, so it comes around INR26,320 and if we talk about entire quantity for Q4, it’s around INR66,180. Which is, I would say almost 78% I believe. And the realization is INR24,034.

Arun Baid — ICICI Securities — Analyst

And just one clarification here. You mentioned that realization of plain in this quarter was INR20,404 for domestic MDF. What was this number be in Q3 sir.

Keyur Gajjar — Chief Executive Office

Okay, in Q3, it was INR26,510. And the volume was 57,310.

Arun Baid — ICICI Securities — Analyst

There is a drop even in the plain MDF QoQ.

Keyur Gajjar — Chief Executive Office

Yeah. As I said in Q4, our product mix for the plain MDF was different. That’s one of the reason that we are working hard on certain parts

Arun Baid — ICICI Securities — Analyst

But there has been no price cuts in Q4 from your sector.

Keyur Gajjar — Chief Executive Office

Q4 as such we didn’t take much of the price cut except one or two states or some target oriented scheme to dealers. That’s all.

Arun Baid — ICICI Securities — Analyst

So that would be how much, range wise.

Keyur Gajjar — Chief Executive Office

It’s not in my hand, I can share later. I don’t think it’s a very significant number.

Arun Baid — ICICI Securities — Analyst

So this number will go back to 24,000 from next fiscal.

Keyur Gajjar — Chief Executive Office

Price cut, we take that was on 16th of November 2022.

Arun Baid — ICICI Securities — Analyst

Yeah. So from next quarter onwards Q1 onwards, which are running right now, this number will be back to INR24,000 average.

Keyur Gajjar — Chief Executive Office

Yeah, if we talk about common number 24,000, yes, we are quite optimistic about performance and better performance of our business.

Arun Baid — ICICI Securities — Analyst

No what I am trying to indicate here is this is plain MDF, not including your other VAP value added business.

Keyur Gajjar — Chief Executive Office

I understand what you’re saying is this only plain number can improve the overall realizations. So we are quite optimistic because nowadays export realizations and everything like of course last two quarter to this quarter, we have taken some growth in export realization. But we see those same realization in coming quarter too and value-added realizations, we feel that it will increase over the period and we expect local plain business, local pain that is domestic plain interior rate will also fetch us a good realization as we are working on our mix. That’s what I am telling you.

Operator

Thank you. The next question is from the line of Diwakar from Prudent Equity. Please go ahead.

Diwakar — Prudent Equity — Analyst

Hi sir, good afternoon. Sir, what is the reason behind the a significant decrease in export this quarter.

Keyur Gajjar — Chief Executive Office

Say again.

Diwakar — Prudent Equity — Analyst

Could you please explain the reason behind the significant decrease in export MDF revenue this quarter. Actually the quarter-on-quarter, our realization has improved. Last quarter volume? Yeah. Sir, volumes basically if I compare the volumes are also down on quarter-on-quarter and both on a year-on year basis.

Keyur Gajjar — Chief Executive Office

One reason is quarter 4 is our last quarter financial year. And as you understand, gentlemen, this quarter we have more opportunity to sell our material in domestic market at better realization. And that is one of the reason. So we are targeting Q1 this year at the same pace of 5,000 cbm per month more or less, so we expect the rate will be back in Q1 about 15,000.

Hiren Padhya — Chief Financial Officer

And also I would like to add here something is that the realization on the exports were slightly decreasing and we didn’t wanted to take that dip. So we took a steady growth with a good realization what we wanted to achieve. And that is another reason why we didn’t exported into the much bigger volume than comparing quarters.

Diwakar — Prudent Equity — Analyst

Okay, thank you sir.

Keyur Gajjar — Chief Executive Office

And one more thing. I would like to add. It is now, we feel that that is an increase of $15 in international market price increase. We are quite optimistic about better realization of exports in Q1.

Diwakar — Prudent Equity — Analyst

Okay, okay. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Parth Bhavsar from Investec. India. Please go ahead.

Parth Bhavsar — Investec — Analyst

Yeah, hi sir, thank you for the opportunity. Sir, just in continuation with previous participant’s question. So you mentioned that the timber cost was approximately INR3,500 per CBM in Q4. So what was this number last year and the previous quarter.

Keyur Gajjar — Chief Executive Office

INR3550 was per metric ton.

Parth Bhavsar — Investec — Analyst

Per metric ton and this was, last year it was how much, sir.

Keyur Gajjar — Chief Executive Office

Last quarter, I think it was more or less in the same range, INR3400 or INR3500.

Parth Bhavsar — Investec — Analyst

Okay, and last year?

Keyur Gajjar — Chief Executive Office

Last financial year it was probably around INR3,000 or INR3200 something like that.

Parth Bhavsar — Investec — Analyst

Okay. And how do we see this number going forward, like in Q1.

Keyur Gajjar — Chief Executive Office

Normally, we don’t see much changes, maybe around 3% 4% together, that’s all. And that effect happen only in January end or something. So we don’t see now much effect in coming quarter because normally in South, the effect is always 3% to 4% as on date.

Parth Bhavsar — Investec — Analyst

And then sir, what about the chemical prices, how are they like and then in Q4 and going ahead, what is your view.

Keyur Gajjar — Chief Executive Office

Very honestly, now it’s going stable, quite stable. But that is on and off some fluctuations.

Parth Bhavsar — Investec — Analyst

So for us, what would be the consumption cost for chemicals in Q4.

Hiren Padhya — Chief Financial Officer

You are asking for separate consumption cost? I think that would be in the range–

Keyur Gajjar — Chief Executive Office

I would say 55%, 45% to 50% is wood and chemical together. See, we have always option of making that combination change. You know, if the chemical price is higher, we can increase the wood and and if the chemical prices is down, we can decrease the wood and, so it’s all about recipe. But together it’s 45 to 50 plus.

Parth Bhavsar — Investec — Analyst

And sir, how does this help like in terms of the output, if we increase the chemical, so would the weight increase per MDF.

Keyur Gajjar — Chief Executive Office

That is what I’m telling you. It is a recipe. So end-of-the day we have to maintain our quality, consistency of quality is very important. So whatever the factors for technical checks, we have to maintain in any case.

Parth Bhavsar — Investec — Analyst

Okay, sir. As per my understanding like there’s a particular recipe you have to maintain with quality. There would be a specific input that you also put in and there would be a specific output to maintain that quality. So when you say we can change the recipe, so what do you mean by that.

Keyur Gajjar — Chief Executive Office

Recipe means the ratio of wood and resins. Wood fiber and resins.

Parth Bhavsar — Investec — Analyst

Okay, okay, perfect. sir, thank you so much.

Operator

Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

Karan Bhatelia — Asian Market Securities — Analyst

Thank you once again for your interest and support. We will continue to stay engaged. Please be in touch with Adfactors, our Investor Relation team for any other further details or discussions. Looking forward to interact with you in next quarter. Thank you.

Operator

[Operator Closing Remarks]