DUROPLY - DUROPLY INDUSTRIES LIMITED Share Price

The management of Duroply Industries provided a cautiously optimistic outlook, balancing near-term challenges with strategic growth initiatives. Key points include:

1. Financial Performance: Q3 FY25 revenue grew 12.5% YoY to Rs.89.82 crores, with PBT up 127% YoY to Rs.1.2 crores. EBITDA margins improved to 4.9% (vs. 4.1% YoY) despite gross margin pressures (34.2% vs. 35.6% QoQ) from higher timber costs and product mix shifts.

2. Segment Performance: The premium "Duro" segment grew 5% YoY but declined 7% QoQ due to festive disruptions and NCR construction bans. The economy "Tower" brand surged 50% YoY and 30% QoQ, driving overall growth.

3. Raw Material Costs: Timber costs rose 8"“10% YoY, with inflationary pressures expected to persist for at least another year due to supply-demand imbalances. Partial cost pass-through to customers was achieved.

4. Demand Outlook: Near-term demand remains muted due to liquidity constraints, but recovery in real estate/construction activity is anticipated in 5"“6 months, lagging broader economic improvements.

5. Growth Strategy: Aggressive hiring for sales/operations and infrastructure investments aim to capitalize on future demand. Focus on expanding the economy segment (Tower) to offset premium segment volatility.

6. Challenges: Q4 may face continued margin pressures and macroeconomic headwinds, but management remains confident in long-term growth driven by urbanization and strategic investments.

Question 1:
"Hello Sir. Thanks for the opportunity and congrats on a great set of numbers. So, I just wanted to know about the raw material cost for the client segment. So, any guidance that you would give on the timber costs for this segment going ahead?"
Answer Summary: Timber costs rose 8"“10% over the past 8"“9 months, with partial pass-through to customers. Inflationary pressures are expected to persist for at least another year due to inadequate timber plantation growth relative to demand.

Question 2:
"Congratulations for a good set of numbers compared with top two players. Please, can you share each product segment data and growth projections?"
Answer Summary: The company declined to disclose specific revenue figures for product segments (Duro and Tower) due to competitive concerns. However, Duro grew 5% YoY (declined 7% QoQ) in Q3, while Tower surged 50% YoY (30% QoQ).

Question 3:
"Hello Sir. Congratulations on your behalf, but I just wanted to ask that I missed these financials that you explained earlier. I joined a bit late, can you please provide me the financials?"
Answer Summary: Q3 FY25 revenue grew 12.5% YoY to Rs.89.82 crore, with PBT at Rs.1.2 crore (up 127% YoY). EBITDA margin improved to 4.9% vs. 4.1% YoY. Nine-month revenue stood at Rs.265.5 crore (up 11.1% YoY).

Question 4:
"Just a follow-up question on the demand side. Like do you see any pickup on the real estate side like following the rate cuts and I mean on a real estate demand front, how do you see demand shaping up in the next quarter or maybe next financial year?"
Answer Summary: Demand is muted due to liquidity constraints, not lack of construction activity. Real estate recovery is expected in 5"“6 months post-liquidity improvements, though plywood demand lags broader economic shifts. Near-term quarters remain challenging.