Rushil Decor Limited Q3 FY26 Earnings Call Summary

Summary

Rushil Decor Limited - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026 4:00 PM

Event Participants

Executives 2 Hiren Padhya (CFO), Rushil Thakkar (MD)

Analysts 5 Deep Gandhi (ithought Portfolio Management), Gunit Singh (Countercyclical Portfolio Management), Karan Bhatelia (Asian Market Securities), Sanchita Sood (RoboCapital), Souvik Mohanty (Nuvama), Yash Sonthaliya (Edelweiss)

Financials & KPIs

Geographic & Segment Commentary

• MDF Segment: Domestic demand remained stable with substantial YoY volume growth and a 29.4% revenue increase in India. The segment focused on “Value-Added” products, which contributed 43% of volumes and 54% of value for the 9-month period. Management is utilizing a calibrated approach to exports, prioritizing domestic margins over volume-led Gulf exports.
• Laminates Segment: Operated at over 93% capacity utilization. Growth was fueled by a stronger domestic presence and a shift toward premium offerings, resulting in a 16% YoY increase in blended realizations. Export realizations grew 24% YoY due to differentiated product sales in Far East and European markets.
• Jumbo Laminates: Commercial production for Phase 2 has commenced, making the full planned capacity operational. The segment contributed ₹6.27 crores this quarter at 20-25% utilization. Key export markets now include Russia, Portugal, Slovakia, Israel, and Romania, with expansions underway into Uzbekistan and Poland.

Company-Specific & Strategic Commentary

• Value-Added Strategy: Management aims to reach a 50% volume contribution from value-added MDF by the end of FY26 to counter pricing pressure in the commodity MDF market.
• Jumbo Laminates Branding: Products are now positioned under three distinct brands: VIR KLADS (exterior), VIR TOPAZ (countertops), and VIR VAULT (interior partitions/toilet cubicles).
• Distribution Expansion: The company added 11 new direct distributors and over 26 retailers/dealers during the quarter to strengthen its domestic PVC and MDF reach.
• Strategic Exit: Management indicated they are diluting their plywood subsidiary into an associate company to focus core resources on MDF and Laminates.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Jumbo Laminate Performance

• Question: Why was Jumbo revenue (₹6.27 Cr) below the earlier guidance of ₹25-30 Cr? (Deep Gandhi)
• Answer: Delays were caused by R&D requirements and sea-freight congestion. Repeated orders are now flowing, and Q4 is targeted at ₹20-25 crores (Rushil Thakkar).
• Answer: Break-even for Jumbo is estimated at 35-40% capacity utilization depending on product mix (Rushil Thakkar).

MDF Margins and Competition

• Question: What is driving the margin drop in MDF from 15% to 11%? (Gunit Singh)
• Answer: High resin costs and intense competition in plain MDF due to many new plants starting simultaneously. The strategy is to move to 50% value-added volume to protect margins (Rushil Thakkar).

MDF Industry Dynamics

• Question: Does MDF enjoy the same brand pull as Plywood? (Gunit Singh)
• Answer: No, MDF is more of a B2B/OEM-driven product compared to Plywood’s B2C dominance. While organized players get a premium, it is not as high as in the plywood sector (Rushil Thakkar).

Future Capacity

• Question: What is the outlook for industry-wide MDF capacity? (Karan Bhatelia)
• Answer: Expecting 4-5 large plants (800 CBM/day average) to come online by FY28, potentially taking industry capacity over 6 million CBM (Rushil Thakkar).

Key Takeaway

Rushil Decor reported a stable Q3 FY26 with revenues of ₹216.5 crores, navigating a challenging environment marked by high resin costs and intensifying MDF competition. The Laminates segment emerged as a standout, with realizations increasing 16% YoY and domestic revenue growing 55.6% YoY. Strategically, the company reached a milestone with the full operationalization of its Jumbo Laminate Phase 2 facility, though Q3 contributions were limited to ₹6.27 crores due to shipping delays. Management is aggressively pivoting toward a 50% value-added mix in MDF to insulate the bottom line from the commodity “price war” caused by a projected 15% industry capacity CAGR through FY28. With a net debt-to-equity ratio of 0.41x and a target to exceed ₹1,000 crores in revenue for FY27, the company’s growth remains tethered to the successful scaling of its export-oriented Jumbo Laminate business and the normalization of chemical input costs.