Century Plyboards (India) Limited — Q1 FY27 earnings call

That was very clear. Thanks, thanks, Nikita. My second question is pertaining to balance sheet. While Century is clicking all the boxes in terms of growth and hopefully margins will also Century Plyboards India Limited August 04, 2026 Page 6 of 14 someday improve like I think Keshav, you mentioned on the interview today. What I wanted to understand is when are we going to see balance sheet improvement? Our ROCEs have been under pressure for quite some time, and we have announced additional capex as well. So, what are our thoughts in terms of deleveraging our balance sheet?

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Basically we have an improving and strengthening balance sheet. I know it looks like the debt is going up, but that is because when you're growing at 33% in an industry which has 60 days debt working capital, that does take an impact. However, having said that, our cash flows remain robust, our ROCE has improved by close to a percentage past quarter itself, and we are looking to increase ROCE further. For the short-term, I think there are no large capex that have been planned. We're talking about a plywood unit which would have a capex of close to INR200 crores, and in Uttar Pradesh as well, right now, the planning is for the plywood unit in itself. So, there are no large capex planned. So, I think the maximum amount of cash flow that we're going to be generating will go towards the repayment of debt. So, you should see the balance sheet strengthening, but when you are growing at 30% plus, at that point in time, working capital requirements will be there, which is why, you have seen a slight increase in the working capital quantum.

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Can we expect this to improve in the second half of the year with MDF margins improving like you've mentioned?

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Hopefully earlier, but yes, there will definitely be improvement in the second half of the year.

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Understood. Thanks. Thanks a lot, team. All the very best. I'll get back in the queue.

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Thank you. We take the next question from the line of Rahul Agarwal from IKIGAI Asset Manager. Please go ahead.

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Hi, sir. Good afternoon.

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Yes, hi, Rahul. Good afternoon.

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Sir, three quick questions. Firstly, on the value-added mix for MDF, now the presentation you disclosed, it talked about, you sold about 1 lakh CBM, of that 20 lakh -- 20,000 CBM was pre- laminated. But I'm sure you do much more value-added share into MDF, right? So, what is the right number to look at in terms of value-added MDF sold on a full year basis?

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Hi, Rahul. We don't share these numbers, Rahul. So, pre-lam, that is the only number that we have shared, and we have done that over the course of the past many years. But as you know, value-added includes our [inaudible 0:18:24] Plus, our premium class category, the DWR category, and other products as well. So, if you combine all of those, the percentage would be much higher, as you have rightly pointed out, but we don't share those numbers. What I can tell Century Plyboards India Limited August 04, 2026 Page 7 of 14 you is that right now, the entire focus of the company is on increasing the value-added percentage.

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Okay, got that. But fair to say upwards of 40%-45%?

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That is an estimate on your part.

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Okay. Okay, no problem. And just last two quick questions. Outlook for MDF in terms of full- year revenue growth and margins after this capacity increase, if you could just give some ballpark for revenue growth and margins for MDF for FY27?

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Currently, we have stopped giving guidance. The reason we have stopped giving guidance is because the situation is very volatile. 1 week there is a war, 1 week there is peace, the next week there is, I don't know what. So, what I can say is that we have guided that we will head towards 15% plus margins. That is our objective. Our objective is to reach towards that as soon as possible, and we are going to be heading towards the same. On the other end, as far as growth is concerned, I think you've seen a strong growth in Q1 as well, and going forward, we are going to try and keep a good growth trajectory for the current year. The reason we are not giving guidance right now is because the situation remains very volatile. Any guidance we would have given you for Q1, we would have overachieved. You know, the situation is a little volatile, hence we are refraining, but maybe once stability returns, we'll give you proper guidance.

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Got it. And just lastly on capex, just the cash outflow capex for fiscal '27, if you could just give me that number. Thank you so much.

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There isn’t a substantial cash outflow capex. Right now, we are investing towards the Hoshiarpur plant completion. There is some brownfield capex, the new press laminate would have cost us about INR25 crores total capex. The first two presses had cost us about INR200 crores, the third press has taken about INR25 crores because the infrastructure, etcetera, everything was ready and we had detailed it out. And incremental brownfield capex in plywood and laminate is not -- is never that high, usually. For MDF and particle board, there is no large capex that is currently being planned.

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Okay. Thank you, so much and best wishes, for the year.

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Thank you.

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

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Hi. Thank you for the opportunity. Firstly, congratulations for a strong set of numbers. I understand war has sort of created a situation how pricing will move. Possibly we might not Century Plyboards India Limited August 04, 2026 Page 8 of 14 have a clue on eventually on the margin side, but possibly surely, we can talk on the volume side, right? Is it possible to give volume guidance for your products?

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Hello.

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Hello. Is it better now?

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Of course.

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Yes. I was saying that I understand because of war cost and prices of the products are quite volatile, but surely the impact on the demand broadly doesn’t look to be much because of war. Is it possible to give volume guidance?

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Yes. It's very difficult to ascertain whether what you have said is correct or not, and whether that is going to last or not. So, at this point in time, I don't think we can give any volume guidance. We are refraining from the same because it remains very fluid. However, the objective will be to grow as we have done in the recent few years, and perhaps to deliver better margins quarter after quarter.

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Got it. And second question on the ply side. We have been seeing a consistent outperformance in ply volume, which is a sort of a sustainable number, because still as you correctly highlighted, you are just 10% market share. So, this business can sort of grow by 10%-15% if we take a next 4-5 years view?

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That is the aim. I believe that if we have to achieve 15% market share over next 5 years, we have to grow by 12% to 15% year-on-year. So, I think that is the aim, and we always look forward to giving little reserved numbers and outperforming those numbers.

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Okay. That is good to hear. One last question from my side. How is the channel inventory at June-end?

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Well, July has been a high sales month till date, so I think it has been okay only.

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Okay, good to hear that. Okay, thank you.

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Thank you. We take the next question from the line of Utkarsh Nopany from Anand Rathi Shares and Stock Brokers Limited. Please go ahead.

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Hi. Good afternoon.

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Good afternoon.

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Sir, my first question is regarding your greenfield project in UP and Odisha. So, like as we are not looking for any large capex in the coming quarters, so whether there has been any change in the project timeline for UP and Odisha project? Century Plyboards India Limited August 04, 2026 Page 9 of 14

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So, with respect to UP, we still do not have the land in our hand. We aim to get the land before this year-end. Post that, we will first start with our plywood plant. We're expecting it to go live if we receive the land on time by April '28, Q1 of '28 is what we are looking at. In terms of Odisha, we are still in the talks with the government. We've still not chosen a land that works for us, etcetera. So, that will take time. Once we have more updates on that, I will provide it.

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Okay. And for the MDF project in UP, by what timeline it is expected to come on stream?

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Currently, we have not finalized. We are still in a waiting watch position as far as the timing of the MDF project in UP is concerned. So, the project will definitely come, but in all likelihood, it'll come with a lag to the plywood unit.

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Okay. And sir, for MDF, we have increased our capacity in Andhra Pradesh by doing some minor capex in this quarter. So, wanted to know is it also possible to increase our particle board capacity from 2,40,000 to around 3 lakhs by doing some minor capex in future?

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No, this was pre-designed prior to the line being purchased. We had actually purchased the line in two parts so that we could ramp up and take advantage later when the demand started picking up. So, this was a single, it was a different form of capex, or a different form of brownfield investment, which I don't think can be replicated. Yes, through efficiencies, we should be able to increase our capacity in particle board, but I don't think a 20% plus quantum will be likely.

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Okay. And sir, lastly, for laminate, like our volume in Q1 has de-grown due to the size adjustment. So, wanted to know whether the same trend of weak volume and higher realization is likely to continue for the next three quarter?

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The objective will be to grow across all segment, whether it is HPL or compact. So, I think that we are looking to grow both in domestics in the HPL format and in exports in the compact format. So, hopefully, you'll see increase in both, but large sizes, we are seeing increasing traction because we are late entrants to the market.

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Okay, so, so just wanted to know whether we are going to see positive volume growth in the coming quarters or not in the laminate, because of the change in the product mix?

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Again, we have stopped giving guidance, so it's very difficult for me to tell you anything further on this. However, like I said, we are looking to grow both in domestic and in exports. Domestic the growth is more from thin laminate, and export, the growth will be more from compact laminates.

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Okay. Thanks a lot, sir.

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Thank you. We take the next question from the line of Hrishikesh from Kotak Mutual Fund. Please go ahead. Century Plyboards India Limited August 04, 2026 Page 10 of 14

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Hi, good afternoon. So, you highlighted about MDF trajectory improvement. Any feedback or guidance in terms of profitability improvement on particle board side? When should we see those margins moving up?

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I think quarter-on-quarter, you will see particle board margins going up as we increase capacity utilization. So, you will see a steady increase in particle board, and I think towards next year, we will see maybe close to 15% particle board margins. That's what we are aiming for.

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Okay. Okay. Thanks.

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Thank you. We take the next question from the line of Ritesh Shah from Investec. Please go ahead.

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Hi Ritesh.

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Hi, Keshav. Namaste, Sanjay-ji.

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Namaste.

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Sir, a few questions. First is, cost of full furniture again -- sir, what is the thought process, is that we are moving away from applicator, carpenter, focusing more on the consumer? What is the thought process sir over here? And you indicated two specific brands, I think Architect Ply and Club Prime. Just wanted to understand if possible, how much do they contribute to revenues right now? What is our aspiration given we have launched this particular nice scheme?

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So, like said in previous all calls, we never share the bifurcation between our premium and our standard brand. So, I am afraid I won't be able to share that. But going into what is exactly Total Cover and what is our focus, so, I believe we have always been a brand which focuses on consumer problems and trying to solve consumer problems. If you see, the first time we became CenturyPly, because we came up with the India's first borer and termite proof plywood. It was a problem the consumer was facing and we solved for it. If you even see during COVID years, we have rapidly done innovation as we did ViroKill, we did Firewall, which is fire resistant plywood, again both were first time in India. So, again, Total Cover is another one initiative which is again focusing on the problem of the consumer. The problem of the consumer is that today when something goes wrong with the plywood, they are not concerned just about the plywood, they are concerned about the furniture, because today if the plywood cost INR3,000, the furniture maybe is costing them INR15,000 to INR20,000. So, for them if anything goes wrong, they are worried about the total costs that has gone into making that furniture. And because we are so confident about our manufacturing excellence and our product quality, that is why we are able to give such a assurance. So, this is another way to even assure the customer that look if anything, with CenturyPly, you can remain Raho Befikar, Century Plyboards India Limited August 04, 2026 Page 11 of 14 that you will always you'll be able to trust us, that the company is always standing with you no matter what, and if anything happens, here there is a online portal where you can raise your claim.

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Sure, that helps. If I have to just flip the question around to better understand the growth on the ply segment, if you can explain broadly at the industry level, how is the market evolving between 303 and 710? Is the market shifting towards 710 and that is where Century is benefiting?

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I wish we had such detail. Very difficult to get such details. I'm afraid not possible to answer.

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Okay, fair. A second question is on, you indicated Aamir Khan, Chatur, would it be possible for you to quantify how much will be the brand investment for the full fiscal, absolute or percentage of revenues, please?

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We usually do 4% to 4.5%, but this includes everything that we spend towards branding and marketing and our schemes and everything, so we do not indicate further bifurcation of it.

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Sure. And third question, probably Keshav can take it, you indicated very limited capex incrementally, but I think earlier we had given an aspiration of INR12,000 crores by 2031. So, just wanted to understand if we had to, say, double the revenues, what is the incremental capex that we are looking at over the next 4-5 years, how do we plan to fund it?

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Yes, I think currently, our total asset pool as of now can give us close to INR8,000 crores worth of revenue, anywhere between INR7,500 to INR8,000. Going forward, what I believe is that we to reach that INR12,000 figure, we need INR4,000 crores additional revenue. That will be add an asset turnover of between 1.5, 1.6 to 2. So, we are taking a figure of INR2,500 crores, but this is ballpark and it depends on which category, which segment requires how much investment. So, I think we will be able to update you on this as and when we come closer to capacity utilization, then we start planning for additional capacities.

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Okay. Just a follow-up, any headline numbers on gearing that we have or any aspiration that we have that we want to reduce our net gearing to so much by the year-end?

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Our target has always been that our long-term debt should be within our EBITDA. So, that is the number that we are moving towards. Working capital debt, yes, when you are growing at 20%, 30%, then working capital debt does tend to increase, but that plays itself out over a year or two. So, I think that long-term debt within one time of EBITDA, that is a number that we are working towards, and we will achieve it.

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Sure. Just last question on the Total Cover thing. I presume this is for the first time in the industry that we are doing it?

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Yes. Century Plyboards India Limited August 04, 2026 Page 12 of 14

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Yes. So, how will this be accounted basically in the P&L? Will there be an claim ratio or some line item? Probably it might be a way for us to understand premium sales via two brands.

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Okay. So, the thing is that we have actually been doing this unofficially for the last 2 years to 2.5 years. So, it started with one complaint and then slowly we started learning and because such a claim cannot be made overnight. It requires a very big infrastructure that needs to be created, because it's very service-oriented as well as we need to have complete detailed understanding of how to handle every complaint. So, it took us almost 2 years to build that infrastructure, and because of which we have just launched this. So, it's already part of our thing, and having said that, we have the lowest claim ratio in the industry. So our claim ratio is actually 0.06% of our thing. So, even if with this ad it increases, it won't be much. The purpose of the ad is actually to give confidence to the consumer that there might be millions of brands which are claiming everything, but we are a brand which will stand by it.

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Sure, this helps. Sanjay-ji, just a last request, sir, is it possible, how should we understand the growth in the ply industry? I can understand we are doing beautifully well, but to appreciate it, if you can help us provide some vectors how to think about that, that would be quite helpful. Thank you.

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I can only give the credit to the manufacturing team to create the best quality possible and the marketing team aggressiveness. And there is some gyan, if you want, of course, theoretical gyan, there is a lot of gyan we can give, but there is no point in giving you that. So, the team, actually, the sales team right now is in a kind of a big, you can say, alignment and motivated, so that really gives a great result for us, actually.

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Sure, sir. All the very best. Thank you. Thank you, Keshav. Thanks.

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Yes, thanks.

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Thank you. We take the next question from the line of Anup Parikh from Anand Rathi Shares and Stock Brokers Limited. Please go ahead.

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Hi, Anup.

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Yes. Hi, sir. Sir, I have a just one question. What would be the sustainable ROCE in our MDF and particle board business? Particle board capex cost per unit is around 24% higher compared to MDF, whereas the realization is 36% lower compared to MDF. So, why do we plan to operate in this segment as it is an ROCE dilutive step for the company? So, I just wanted to understand your view.

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I think that your numbers maybe aren't based on our capacities and the way we have set up capacity, because I don't think they align with the way that we think of capacity. I think for both, Century Plyboards India Limited August 04, 2026 Page 13 of 14 MDF and particle board, the objective will be to move towards a 20% ROCE, which has been the traditional benchmark or the hurdle rate that we use for setting up any new product. It is taking time, but I believe in both segments, we will be moving towards the same, and I think it is possible to hit 20% ROCE in both the segments as well.

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Okay, sir. Thank you so much.

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Thank you. We take the next question from the line of Rahul Agarwal from Ikigai Asset Manager. Please go ahead.

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Yes, hi, Rahul. Welcome back.

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Thank you. Thank you for the follow-up, sir. Just one question on the logistics business. Could you help us for the outlook, exactly what is the business operation there? And in 2 to 3 years down the line, how are we thinking of this business? Will it be part of Century Ply? How is the structure right now, and what is the overall top-down thought process, please? Thank you.

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Rahul, our overall objective is always to give you the best shareholder value. So, I think this business, after a lot of effort, has now stood. It is now something that is generating positive EBITDA, positive cash flow for the company. And going forward, we are going to evaluate, because as this is not our core segment. Having said that, we are looking at maybe if a strategic partner comes in going forward, but it will all have to be at the valuation that is beneficial to Century Plyboards India Limited. So, that is the current guidance that we can give on the business.

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Just in terms of the revenue mix right now, what are we billing for and how does the outlook look like for next 24 months? If you just highlight some business operations?

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I think that currently we are only operating half of phase 1 of the new port project that we have taken up. So, there the growth in revenue, there's a substantial likelihood for growth in revenue. As far as the CFS business is concerned, it has also turned around, and Kolkata now in terms of ports and structures is doing particularly well. So, I think we will be looking at double-digit plus growth in the CFS business as well.

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Okay. Thank you so much.

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

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Hi, Keshav.

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Hello. Hi, sir. I heard this UP plant will come by Q1 FY28 for the ply. Because earlier, I remember the target was more like a Q1 FY29? Century Plyboards India Limited August 04, 2026 Page 14 of 14

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The voice is not clear, Keshav. The voice is not so clear.

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Hello, I hope it would be better now?

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Absolutely.

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Yes. So, the UP ply plant is expected by Q1 FY28, right? Because earlier, I remember the target was more like a Q1 FY29.

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It is April '28 for '28-'29.

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April '28. Got it. Okay. And one last question from my side, what sort of price hike you have taken in ply you highlighted 7%. What about other segments?

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It has been variable across other segments. In MDF, for instance, it was close to 15%, but some of that has already been passed back to the market. In laminate, it was close to 10% for domestic and maybe slightly lower for exports. So, it has been across different segments at different points in time. But what has happened is in certain segments we have had to roll that back also as raw material prices kept on moving. Like I mentioned in MDF, we've already rolled back a large part of the price increase that was taken.

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Got it. I will rephrase my question in other way, let's say how much of the price hike is today, you know, possibly there in the market?

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Again, this is difficult to say from different segments, but from pre-war levels, there is price hike across most segments.

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Got it. That is helpful. Thank you.

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Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Sanjay Agarwal for his closing comments.

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Thanks, everyone, for your insightful questions and continued interest in the company. We are encouraged by the strong performance delivered during FY27 and remain confident about sustaining the growth momentum across our businesses. We sincerely appreciate your continued support, trust, and we look forward to interacting with you again after our next quarterly results. Thank you. Have a great day.

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Thank you, sir. On behalf of SKP Securities Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.

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