Greenply Industries (NSE:GREENPLY) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Greenply Industries Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen mode only, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister from Asian Markets. Over to you. Hello. Who is an everyone present out here? Please welcome to 1Q FY twenty seventeen investor call of Greenply Industries. From the management, have Mr. Sanjay Gupta, JMD and Mr. Sandeep, CFO.

0:49 I now hand over the call to Sanjay Gupta for his opening remarks. Postgres, you can open the call for Q and Over to you, Sameer. Thank you. Thank you, Karan, and good evening, everyone. It is a pleasure to welcome you all to Greenply Industries' earnings call earnings conference call to discuss our performance for the first quarter of financial year twenty seven. As highlighted during our previous earnings call, we were witnessing encouraging demand momentum across our businesses, and I'm pleased to share that this trend continued through the first quarter. In Q1 FY 'twenty seven, we delivered double digit volume growth in both segments, in line with our guidance. On the marketing front, we continued to strengthen our brand presence and reinforce our commitment to sustainability during the quarter. We launched our One Sheet, One Tree campaign, a long term sustainability commitment under which we plant One Tree for every plywood sheet supplied for infrastructure and interior projects across India. This is not a time bound campaign, but a continuing promise that reflects our vision of contributing to a greener India alongside our business growth.

1:57 The ongoing geopolitical tensions and the recent conflict in The Middle East resulted in elevated imported chemical prices, extending the sharp cost pressures observed towards the end of Q4 FY 'twenty six. This price increase across the industry as this situation gradually improved and supply chains normalized during the second half of first quarter FY twenty twenty seven, input costs began to moderate. Consequently, the effective price increase currently stands at approximately 7% to 9% in the MDF business and 3% to 5% in the plywood business. We are regularly monitoring the situation and will take corrective measures as required. Now I would like to update you on Greenply Q1 FY 'twenty seven financial and operational performance.

2:45 Consolidated revenue for Q1 FY 'twenty seven stood at INR724.9 crores, registering a robust 20.7% Y o Y increase. Our consolidated core EBITDA was INR78.3 crores with the core EBITDA margin of 10.8% representing an expansion of 50 basis points year on year. Let me share the highlights of our individual business segments. In our plywood business segment, we've achieved a volume growth of 13.8% on a Y o Y basis in Q1 FY 'twenty seven with a revenue of INR 526.6 crores, value growth of about 16% on a Y o Y basis. The realization stood at $265 per square meter, a growth of 4.3% on a Q on Q basis. On the margin front, our core EBITDA margin stood at 8.4% for Q1 FY 'twenty seven, a growth of 50 basis points Y o Y.

3:41 Moving to MBS business, we've achieved a quarterly revenue of INR195.7 crores with volumes reaching approximately 58,000 cubic meters. This reflects a strong Y o Y growth of 32.8% in value and 24.7% in volume terms. This realization improvement the realization improved from $33,005.25 dollars per CBM, a growth of 9.9% on a Q on Q basis. Margins for the quarter stood at 17.3%, supported by higher sales and operating leverage. Moving on to the Furniture and Fittings JV. We achieved a sale of INR 13.61 crores in Q1 FY 'twenty seven. The JV reported a past loss of INR 11.48 crores in Q1 FY 'twenty seven, with our share of loss amounting to INR 5.74 crores.

4:32 I'm pleased to announce that the MDF segment commercial production of new flooring manufacturing line commenced successfully on 07/20/2026. This is marking another significant milestone in our growth journey. Our expansion projects, including the new MDF facility at Vadodara and the new greenfield plywood manufacturing facility in Odisha are progressing as planned and remain on track for commissioning within the committed time lines. On the balance sheet front, we continue to maintain a prudent financial position while investing for future growth. As of the end of the quarter, our consolidated net debt stood at INR $5.33 crores with a debt equity of 0.57x. This remains well within our guidance for the range of 0.7 to 0.75, reflecting our strong disciplined capital allocation and healthy financial position even as we continue to execute our planned capital expenditure program.

5:30 Overall, we remain optimistic about the demand outlook and the momentum across our businesses with our expanding manufacturing footprint, strengthened brand portfolio and unwavering focus on operational excellence, we are confident of sustaining our growth trajectory. We are confident to achieve the target of 10% volume growth in plywood and 25% to 30% volume growth in MDF segment for the full year and remain committed to delivering consistent profitable growth while creating a long term value for all stakeholders. With this, I would like to open the floor for Q and A session. Thank you. Thank you very much. We will now begin with the question and answer session. Star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait a moment while the question queue assembles.

6:39 The first question is from the line of Sneha from Nuwama. Hi. Good evening, team, and thanks a lot for the opportunity. Just a couple of questions from my end. Firstly, just wanted to, you know, understand on the plywood margins front, while your gross margins have improved on a quarter on quarter basis, what would be the reason for, drop in your EBITDA margins? That's first. I think the major reason for a drop is even though the volume growth we've been able to achieve, but I think the absolute number was very low. And the base in Q1 FY 'twenty six was kind of low. So even though we achieved the volume, but the absolute number is far away from the number we did in Q4.

7:25 So the moment we start reaching the Q4 number, which is anywhere close to six hundred and six hundred plus every quarter, I think 10% plus is very easily achievable. So we aim that from coming quarter or for annual number, are you comfortable giving 10% as a margin guidance? I think we still are very confident on the 10% margin guidance that we've given. The only challenge that we had in Q1 was that we lost out on sales. If you look at our utilization level in the capacity of the plants also, it was only at 9293%, which last quarter was about 98%, 99%. So yes, sorry, we were answering Sneha's question that the line got disconnected.

8:14 So the absolute number in this quarter was much lower than Q4. And I'm quite confident that once we do the numbers, much higher numbers in coming quarter, I think we'll easily be able to achieve the 10 guidance. Also typically April, May, there's always plywood being a very manual business. I think the labor cost availability in April, May is lower. And there was election this time. That's the reason our plant availability was utilization was lower and even outsourced utilization were lower. So that kind of did not help us achieve the ideal turnover. We could have done much better number. Going forward, I think we will get this 10%. Similarly, your MDS business, while your volumes now have again dropped on a quarter on quarter basis, definitely doesn't increase, your gross margins have actually improved and your EBITDA margins...

9:11 Actually, your gross margin has fallen, and your EBITDA margins have improved. Can I just get the connection here also in the MDF side? I think, Sanjeev, Sanjeev, I think if you compare from the previous quarter last year, we were sitting at about 46,000. So against that, I think we've done 57,805 cubic meters, right? Yes. So our volume is kind of gone up by 24.7% Y o Y. Sir, I will again trying to compare quarter on quarter. Quarter on quarter, definitely, there's a dip in MBS, which is seasonality, I understand. But if I look at your gross margins, they have gone up. And you have bit of of... So, basically, let me just put it other way. In case of your EBITDA, you know, EBITDA percentage margins of MDS, with whatever value added share that you're doing, what could be the, you know, EBITDA margin movement that could... That we can see even from these levels?

10:08 It is very difficult to tell you, but I think Sanjeev will come back to you that what will be the range. Sure. The capacity right now we have, the EBITDA margin will be around 16% to 17% on a sustainable basis. Once the other line will come up, where we are doing around 70% extra capacity we are adding, so there will be get some operating leverage on that time, the EBITDA margin may increase by 1% further. Understood. So that time it can actually reach up to even 18% is what you're trying to say? Yes, because one manufacturing location, people are not going to double with the capacity doubling.

10:54 So the cost won't double in that tube. Understood. I'll get back in the queue. Thanks, team. All the best. Thank you. The next question is from the line of Jeevil Shah from VVD Asset Managers. Please go ahead. Hi. Thank you for the opportunity. Could you could you please provide us an update on the trend in both prices, particularly for the timber from South India? Can you please repeat? Can you provide us an update on the trending wood prices, particularly from the timber from South India? So Greenply is honestly not very heavy in South.

11:45 And we are hardly procuring anything from South India. So it's very difficult for me to comment about the South Indian timber prices. But very soon, once we have the Odisha facility up and ready, we are very physically close to Rybranc. So there'll be some amount of influence of the South Indian pricing on the pricing in Odisha also, that part of Odisha where we are going. But today, we have no connection to the INR1000 crores timber prices because we are not treating that as an attachment to source timber. Thank you. The next question is from the line of from Asset Managers. Please go ahead. Hello. Yes, please.

12:34 Yeah. Thank you for the opportunity. My question was about of this, much was the general decline recovery versus how much was actually from the market share gain from the allowance price? Sir, I think if you look at the overall plywood number, I think 13.8 was a volume growth and value growth was about 16%. I think this is whatever green shoots we are seeing as a category post COVID, I think definitely we are eating the share of the unorganized. That's why we are seeing these green shoots. And our numbers could have been much better than this. As I mentioned earlier in Sneha's question that, a, there was a lot of disruption because of elections in manpower across all plants. So April, May, the utilization levels were lower than expected.

13:27 And also the outsourcing didn't work very well for us in Q1. So honestly, if these two things work, the number could have been even better. So to be very honest, I think we've lost sales in Q1. So if we are very seriously building Odessa and probably even after that, we won't stop. We'll yet again build another plywood facility. Okay. And another was on the plant. You said the commissioning would be starting from July 28. Am I right? Yes. July 20, we did the first production for the flooring for the HDF flooring. And from this month end itself, I think it will be in the market. So there should be some revenues in the MDF number starting this month for the Flooring segment.

14:20 Okay. And if I can get the utilization level that you see for the next quarter or maybe h two FY twenty seven? How do you see this going on? You're talking about the plywood business or the MDF business utilization levels? I think in plywood, honestly, we've even gone up to 98, 99 or 100. So obviously, target will be to max out our available capacity. And in MDF, I don't think it's practical to go above 80%, 82%. So that will be the kind of target that this year, we want to operate our plant at full capacity, assuming that next year will be the new capacity addition, and we should be already ready to kind of sell the new capacity we're going to bring in.

15:15 Okay. So the demand is really strong. We met a bit of the demand in this year this quarter. And the same, the team will utilize in the next one. Am I trying to see your pricing? Sorry. You are not very clear. Your voice is a little muffled. Can you please repeat? Yeah. I want it clear now. Yes yes yes, please. Yeah. So my question was that this year, we... Like, I mean, this quarter, we kind of missed the demand and from the next quarter with the coming up upcoming capacity, we will also cater to the demand that we make there and utilization will pan according however you said by this year.

16:07 Right. Right. Right. Right. Okay. Thank you, sir. That's all. I'll come back to the team. Thank you. Thank you. The next question is from the line of from GreenEdge Wealth. Please go ahead. Yes, thank you. So first, just a clarification. I think you called out some numbers, FLY 3% to 5% and MDF from 7% to 9%. So what was that being referred to, the price hikes taken? Effective price rise taken. So in MDF industry, the industry has taken about a 15% price rise. And in Q1, I think we've enjoyed about 7% to 9% rise and the balance got passed on in the form of schemes. So that was the reference to MDF and in plywood category about 3% to 5% was the price hike from different product categories and brands.

17:02 Understood. And then what is the reason for decline in gross margins in MDS? If I look at it Q on Q, there's a 300 bps decline. I think there's a rise in the timber cost. Typically, when the monsoon and the timber, you start getting wet and the cutting stops happening, there's also a slight price rise that happens during this period. So that's the Please go ahead with your question. Yeah. The other bit was, you know, on the ROCs for MDS. So, you know, I think last year, FY '26, we were at around 8% kind of ROC based on the capital employed numbers and the margins that you gave, right? So how do we go to 17%, 18% targeted ROCs for the MDF segment?

18:00 I think there are multiple approach that we are trying to take at Greenply. So we are trying to be very cautious of the CapEx that we're doing in for the Line two. So over there, we are working on improving the asset turn ratio. So the CapEx that we've announced for the second plant is much lower CapEx per cubic meter compared to the CapEx we've done for line one. So that on a long term basis will help us achieve better numbers. Also, first two, three years, were kind of setting up our business. So the numbers are very bad. And right when we started, I think there's a lot of competition. But I think Greenply is a very strong player. We've been one out for four decades and ready for the next four. And I think on a long term and a medium term basis, I'm very confident that we'll do 1718%.

18:53 Also, when Greenply was one entity, we've seen MDF business perform between 2008 and 'eighteen till Greenply demurrage. And on a long term period, we've seen great ROCEs in this business. So there will be times when people will be putting too much capacity, then everybody will get demotivated, industry the market is going to catch up to the capacity, everybody will make money. When again, bad times, good times. But every five year, seven year period, if we see it, I'm very confident that we will be at that 17%, 18% level. And honestly, that's not like the best level. It's a basic acceptable level. So at what margins at what utilization, what are the three, four milestones which we're going to hit will lead to the 17%, 18% ROC?

19:42 I think we'll have to sell 100% of our capacity profitably. And then only we can get closer to that number. And we have to be very careful in all the CapEx initiatives that we are doing in the future So that was the scale in this business today, this business is very small for us. Eventually, when the scale of this business, it should make sense. Right. And I think you did mention that you all are being cautious in your capital outlays for future CapEx in MDF. So... And I think for this newer plan, we are, you know... We've gone ahead with the Chinese machinery. So if Chinese machinery were cheaper and, you know, probably it had lesser downtime, then why wouldn't we have gone ahead with the Chinese machinery back in the day when we actually set up our Greenfield MDF facility?

20:32 I think it is honestly being very honest to the learning curve for the organization, number one. And number two, also the first time around, we didn't want to take a chance. We were announcing Greenply entry into this category. The day we were investing into the MDF line, our network and the investment was the same. So we wanted to be very, very careful. We wanted to go for a short, short thing. And honestly, technology is changing every day. So in the last two, three years, honestly, there's been a better development on the Chinese machine side. And even the new line is a combination of Chinese and European. So where the heart of the plant is where we manufacture the fiber, that's still 100% European. The breast is converted from German to Chinese because honestly, we found better merits in this Chinese breast.

21:18 Understood. Yes, specifically on the four feet line, which we are investing in currently. Right. On the fly side, right, so just a legacy question here. So if I look back at your last three years, fly growth average fly growth for us has been around 8%. And for Century, that's been at around 13% CAGR. Right? So what have been the reasons for this gap? And have we tried and fixed those? Because I see that, of course, since the last two, three quarters, our FLY volumes are up with our focus on EcoTech. But historically, like, what are the reasons for lower revenue growth in Fly versus, let's say, the leader here?

22:04 So honestly, I think we were busy implementing and setting up an MDF business. We were getting into furniture, JV, and we were expanding categories and trying to make a big change from Calcutta to Mumbai. And when we were doing all of this, I think they were busy in planning their hyper growth in plywood. Our growth stage planning or the hyper growth planning, I think we missed that out by two years. Honestly, we paid that price in the last three years. But I'm quite confident that going forward, we're not going to pay that price. Right. And lastly, on the prime margins, again, if I compare our margins at Century, right, we have been at around eight and a half percent average EBITDA margin over the last three years and versus Century at 13 and a half, 14%.

22:53 So now we are guiding for around 10% margins. But do we think that with scale, with the kind of INR600 crore quarterly revenue run rate that we are targeting, can we also reach 13%, 14% kind of EBITDA margin? Honestly, I mean, if I do century type of number, I would do probably higher than even 13%, 14%. But anything INR600 crores plus, if I'm doing it today's cost base, I will be in double digit for sure, 10 plus. So if I start doing a crores number in plywood for the quarter, even I would do about 13, fourteen fifteen is not a challenge. So beyond the point, I think they're getting the advantage of scale. Also, for us, the businesses got demerged long ago. So all the cost gets loaded onto our largest business, plywood, on turnover basis. So once the scale in the MDM business and we enter newer categories, there's enough scale there, automatically, the apportionment of cost would improve on the side, and one or 2% should improve from there as well.

23:55 Got it. Thank you so much. Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two to three questions per participant. The next question is from the line of from Investec. Please go ahead. Hi, sir. So thank you for the opportunity. So I had a couple of questions. The first one related to employee cost. If we look at our employee cost on quarter on quarter basis, both in terms absolute number as well as percentage of sales has gone up substantially. So what has can you throw some color on this, like what has led to this? I think I don't think there's substantial increase.

24:43 I think the main that will the provision for increment that will be given from April 1 onwards. So that's the provision and a lower sales. So I think these are the reasons why percentage term, the cost is looking out. And absolute terms, the cost is higher because we've taken the provision for increment already. So sir, what would be the normalized number? Again, it would be INR 89 crores sort of a number? Or what would be the provision that you've made on that, if that is available? So this quarter we have given around INR98.88 crores. So this INR100 crores will be the, I think, for the year is the quarterly number would be. Okay. So it will be in this range only.

25:30 Yes. Got it. Got it. And sir, the second question that you've commissioned this Flooring MDF, right? So wanted to get some sense on what is the capacity like or you can give us a sense on what could what is the potential peak revenue basically for this business for the second The potential peak revenue from this would be at about INR75 INR80 crores, I think, somewhere between INR 75 crores and 80 crores of potential peak revenue. However, when we start achieving potential peak revenue, we'll miss some of the plane board sales because today, that same panel is getting sold in the plane board. I'd say about INR 20,000 or INR 25,000 realization and that would get sold after getting converted into flooring at about INR 60,000, INR 70,000 per cubic meter. So definitely value terms overall, we are going to grow. And in cubic meters, the plane board will get replaced by flooring.

26:27 Got it. Got it. Perfect, sir. And in terms of CapEx hello? Yeah. So just... I I wanted to get a sense on your CapEx for for '27 and '28. Please go ahead with your question. Yes. So you were talking about the CapEx for this financial year. Right? Yes. Yes. Yes. So for the current financial year, I think in the present stand alone GIL, we would have about 47 crores of total CapEx, including loss funding for Samit. In GS PL, we would have at around INR 100 crores. And in GS PPL, we would have around INR 300 crores of CapEx. So approximately INR 500 crores of total CapEx for this financial year.

27:18 Got it. So that is very helpful. Thank you for answering my questions. Thank you. The next question is from the line of Utkash Nopani from Anandrati. Please go ahead. Good evening, Sir, my first question is regarding the timber price movement. So if you can just help us out, what has been the change in the timber price for plywood and MDA in this June quarter on both Y o Y and g o q basis? And what is the outlook for the next two to three quarters,? I think it's going to be quite stable. And, you know, currently, also, there's not a big change. I think whatever changes happened is because of the seasonality. So it is it is kind of understood that in this season, because when it's monsoon and peak monsoon across India, even if the farmer cuts the timber, they can't drag it out. It's very difficult for them to load onto a truck. So, typically, in this season, both moisture increases, which means you're paying more for the same material, and also slightly the price goes up. So it's a very standard kind of increase which has happened with the cyclic.

28:25 And honestly, we are not assuming that there will be any price, you know, fall. We are assuming that it will remain stable at these levels. If there's any fall of price, then that should be a windfall game that the organization should enjoy. So whatever comments we are making or projections we are giving, we are assuming that timber price will remain stable, and based on that, we are giving our projections. Okay. And sir, on the chemical side, like, as the crude oil price has gone up sharply over the past one month, are we seeing any cost inflation pressure on chemical side? I'll be very honest, April... May, June, we had kind of started stabilizing in June. And, again, this month, things are going crazy. So, yes, you are absolutely right. Crude is going up, and chemicals also seeing a new high every day. But availability challenge is not there. And then the rest of the shop all broke out that time, people were scared that we won't get material. Now at least that we are not there. Prices have gone up, but we will get raw material. Okay.

29:23 So, like, is there any possibility of price hike in plywood and MDF because of pricing chemical prices in near future? Maybe. It's very difficult to comment today. Maybe. Maybe. Maybe that... Maybe we stop discounting the way we are discounting in MDF. We pull back those schemes and in plywood, if it continues this way, maybe we take another small increase. Oh, okay. That's it from me, sir. Thanks, sir. Thank you. The next question is from the line of. Please go ahead. Hi, Sameer. I just wanted to update just wanted some update on the benefits we're getting from this... From technology we've done in the plywood units.

30:10 So, you know, any color you want to to dig out there? Yeah. Sure. So in plywood, I think we've moved to a new technology, which we are calling as the Conti Roll Tech. Unfortunately, you know, we had planned meet also at our factory we could... Which we could not do, but we're very keen to do that meet for all the investors and analysts where we will show the new technology. So today in India, plywood is pressed on a low moisture. The new plywood that we are trying to press will be a global standard where we'll be pressing the plywood at a much higher moisture level, which basically means that the material will look much better and will have a much better surface finish. And in this process, we also get a byproduct, which is material saving and human resource saving.

30:56 So these two savings will also help us achieve a much better margin. So as of now, four factories in India, two factories processed fully implemented, two factories during h one of this year, the implementation will happen. Major implementation plan in the... This month and the next and the next. And the quarter four onwards, you should start seeing some gain on the P and L because of that as well. Right. Right. Right. And can you revise hardware for the hardware business for this year and maybe fund? And sorry. Sorry. Please come again. In fact, on the hardware business, I'm already doing this. Sorry. Karan, could you please come closer to the mic?

31:43 There's a lot of disturbance. Are you using a handset? Yeah. Is it better now? Yes. Yes. Much better. Please go ahead. Yeah. Yeah. Yeah. Sunny, any any changes in guidance for the hardware business? We tell you what we spoke for the... Over the q four call. So I think hardware business, we... I mentioned it earlier. I think somewhere around next year, mid, is when we'll... You know, the losses will become zero. And going forward from there, I think it will be positive. Today, the biggest challenge is because of the currency, all the traded goods, which is about 60% of the turnover, we make negative gross margins on it. Or, you know, we make zero gross margin on it. So basically, we lose money every time we achieve higher sales on the traded goods because of the euro and the dollar and the way the costs have gone up for importing.

32:36 While the two products that we're producing in India, the interest depreciation for the entire business is loaded on those two products because for the factory, we build the entire in front day zero. So now this year and next year as, you know, phase two CapEx happens, I think there'll be huge drop in prices for the imported products, which will give us better sales. And in spite of a huge drop in prices, we'll make a much higher substantial gross margin. So Right. I think things should start improving from there. And also, I think there are green shoots if you see... Even if we compare, you know, the last year same period to this year, I think we've almost doubled our domestic number. So, yes, there are green shoots, but I think long way to go. But we are very confident that we'll zero our losses for sure.

33:22 Alright. Thanks. And and then the debt repayment part for next two years, that's in the mind. Sorry? Come again? Any clarity on the debt repayment once we are done with all our CapEx? Yes. So I think that... I think we've given a very clear guidance that in spite of all the CapExes that we've taken, at the end of this fiscal year, which is 03/31/2027, we will hit peak debt around an absolute value, anything between seven ten to seven twenty five thirty, something like that. And if you talk about debt equity, that day, we'll be at point seven five x. So I think immediately six months after that, we should come below point seven. And the year ending, we should be at point seven, point six five, something like that.

34:12 Yeah. Thank you. Thank you. That's it. Mhmm. Thank you. The next question is from the line of from Android Share and Stock Brokers. Please go ahead. Hi. Thank you for the opportunity. Am I audible? Yes. Okay. So my question is regarding the NPS segment. Can you throw some clarity on what geography you have seen this NPS volume growth? I think we are trying to focus pretty much pan India. So we've seen this growth across India, whether it is South, East, West, North. I think almost every area we've done decently well, and we've grown across.

35:03 Yeah. Thank you. Thank you. Thank you. The next question is from the line of Guru Dashandeep from Kitara Capital. Please go ahead. Hi. Am I audible? Yes. Am I audible? Hello? Yes. You are audible. I can hear you. Hello? Yes. Thanks for the opportunity. My question was on the furniture business. What revenue you're targeting for FY '27 and FY '28? I think we'll share that with you. I think should be around INR 120 crores to INR 150 crores, that range.

35:56 But I think a major shift in the losses will come only once, you know, the imported with the zeroed and product... The finished goods and all of that converted to domestic manufacturing. That's when the business, you know, will be firstly zero loss and then eventually positive. Okay. And how do you expect the business more towards, you know, manufacturing? Currently, we produce only two products. Right? Injured and one more product. When you start manufacturing, you know, products which are being imported currently? I think somewhere at the end of this financial year and beginning of next is when this CapEx will be done. And once this CapEx is done, I think we can easily start producing everything here. Because the larger infra, whether it is the plating line, the polishing line, the civil building, the office, the workers' accommodation, the engineers' accommodation, everything is built to full scale. And the interest appreciation for that only loaded on the two products that they're producing today. So, you know, both ways are getting hit. And plus dollar and euro has been so against us that import on a daily basis for this JV from the day this JV started, it kept getting expensive as the day passed.

37:11 So each quarter, our gross margin kept shrinking. Mhmm. And that is the reason, you know, why the losses are so big for the size of the business. Mhmm. Got it. Just one last question. Let's say in FY '28, we start manufacturing all the products. Do you see any export opportunities beeping the, you know, cost efficient manufacturer? Do you see any opportunities for this business? So even today, this JV was always formed to sell the material to India. It was never meant to export. But, honestly, looking at the Indian expertise of manufacturing, the availability of steel, the quality of steel available, and overall Indian cost and scheme of things, our partner is very motivated to take the products back to their home market. So they are actually not utilizing certain capacity of their own and supplying material back to their home market from here simply because of the cost that they are enjoying here compared to Europe where they're producing the rest of the goods.

38:14 So, yes, it, I think, makes a lot of sense in the future also to continue to export. Alright. Thank you so much, and all the best. Thank you. Thank you. Ladies and gentlemen, this is a reminder for all participants. Please press star and 1 to ask a question. The next question is from the line of Varun Julsaria from three sixty one Capital. Sir, I just wanted to understand on the finance cost. I mean, this quarter, against last quarter, we saw a drop. I mean, I know there's some bit of foreign gain that we booked. But other than that, like, did we repay a substantial amount this quarter? So see, if you see the finance cost, the it is equivalent to the last quarter mostly because in the last quarter, there is a ForEx loss was there.

39:14 And second, that the debt has increased, but we have taken the disbursement on the second half of the June. So that's the reason it is not impacting on the finance cost. Okay. But otherwise, what is our blended, like, interest cost that we have on our debt? I'll see. On the term loan side, it is around the seven seven and seven point two five in... On a quarterly basis, and on the working capital side, it is around seven. Okay. Okay. And next on this, our furniture fitting business. So last three quarters, we've been doing similar kind of revenue.

40:00 Just wanted to check, like, you know, even though we have added a lot of new dealers and... But still our revenue is almost, like, flat for last two, three quarters. So just want to understand, is it a, you know, a deliberate attempt because we are making gross margin loss, or is it we're still not finding the right kind of demand there for our product? It's not about the right type of demand. I think, you know, some of the imported products, the prices also need to be slashed once they're produced to India. And also on the BIS side, the implementation is very poor. So even today, Chinese engines are available from China. But if you look at our other business, plywood or MDF, I think BIS has a phenomenal control and, you know, it's really given us a tailwind. But in furniture fittings, the BIS implementation has been very poor, and I don't think we're getting much of attraction due to lack of import because import continues and anybody and everybody continues to import.

41:03 Okay. So... But, I mean, are we seeing it being short there? I mean, in terms of... I mean, like, obviously, our product is premium and, like, in in plywood, you know, our competitor is more of the branded segment. So here also, we are competing since we are only branded. So, I mean, see, even if the... So even we would like we would like to compete with the headache half way, but, for example, a Golden Ridge is a 100% Chinese hardware, which is imported from China. So I'm... Like, we end up competing with them also even though we would want to only compete with Hetech But by default, we would end up competing with others as well. And the the China imports are really helping them. Okay. Sir, and how is that pricing versus, say, Hetech or or Hapley? Like So, typically, if you see our MRP levels, we're very, very close to Hetech. But if you see a dealer landing, we would typically be eight to 10% more beneficial than Hetix landing. So the dealer here enjoys a better margin.

42:03 So, hence, the... It becomes a preferred brand for the dealer to push in terms of margin. Okay. Okay, sir. That's it. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing remarks. Over to you. Thank you all for taking time to participate in this call. In case of any further clarification or queries, please feel free to reach to us. Thank you so much. Thank you. On behalf of Greenply, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.