Dhabriya Polywood Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Record quarter, margin-led beat: Highest-ever EBITDA, PAT and EPS, with EBITDA margin expanding 460 bps YoY to 20.4% on mix shift toward premium products and plant-level efficiency gains.
• Growth deliberate, not stalled: H1 revenue grew 10.6%, below the 20-25% annual target, but management attributes the gap entirely to a conscious choice to walk away from low-margin, high-competition segments rather than any demand weakness or competitive pressure.
• Modular Furniture margin doubled: Studio Arezzo and Dynasty brands saw margins jump from 5.7% to 11.7% as the company pivoted to architect-driven, end-to-end bungalow solutions and capacity utilization improved.
• New product pipeline loading: A dedicated WPC door facility is being built, fluted and soffit panels are on track for a INR50+ crore full year, and two new Studio Arezzo outlets are planned for H2.
• What to watch next quarter: Whether H2 revenue accelerates toward the ~30% growth implied by management's INR150 crore half-year expectation, the commercial launch timeline for WPC doors, and any progress on the NSE listing eligibility.

Margin Story: Mix Shift Over Volume Chase

• 460 bps of structural improvement: The jump to 20.4% EBITDA margin came from a deliberate tilt toward design-led, premium products (extruded PVC profiles, uPVC and aluminum windows/doors, Modular Furniture) and away from commoditized, price-sensitive segments. Higher capacity utilization and stable input costs amplified the effect.
• Q1 vs Q2 drivers differ: Q1 benefited mainly from raw material price favorability; Q2's expansion was driven by product mix strategy and operational efficiencies, making it more repeatable. Raw material prices remain stable with no major hikes foreseen.
• Modular Furniture turnaround: Margins doubled from 5.7% to 11.7% as the company focused Studio Arezzo on interior designers, PMCs and architects for end-to-end solutions to individual bungalow customers, lifting both realizations and capacity utilization.
• Selective growth philosophy: Management explicitly frames the H1 revenue growth shortfall (10.6% vs 20-25% target) as a feature, not a bug: "It's more better in the interest of all stakeholders to go for some productive sales basically where we can have some good margins and good clienteles where you can expect the future repeated business also." The company is not seeing competitive pressure from larger players like Supreme Industries.

Digvijay Dhabriya: "It's more better in the interest of all stakeholders to go for some productive sales basically where we can have some good margins and good clienteles where you can expect the future repeated business also."

• Sustainability call: Management considers the 20% EBITDA margin sustainable given the current market scenario and product mix changes executed over the last 4-6 quarters, and is targeting 20% for the full year.

Hitesh Agrawal: "definitely, the margins are sustainable looking to the current market scenario and the product mix, whatever changes we have done in last 4 to 6 quarters of our working. So margins are definitely sustainable."

Revenue Growth: The Deliberate Slowdown

• H1 at 10.6%, H2 expected much stronger: Management acknowledged H1 was not in line with the 20-25% annual growth target but expects "much better figures at the end of H2," thinking in the same direction as an analyst's suggestion of ~30% growth or INR150 crores for the half. Full-year confidence remains at "at least 20% growth overall."
• All verticals contributed, none slowed: Revenue growth was broad-based across extruded PVC profiles, uPVC/aluminum windows and doors, and Modular Furniture. The PVC profile distribution network remains the largest revenue vertical. No specific slowdown was flagged in any segment.
• Receivables spike is seasonal, not structural: A sharp jump in receivables accompanied 58% YoY revenue growth in the Plastic Products segment, but management characterizes this as an interim mid-year phenomenon, with Q4 typically showing much better realization. Working capital discipline remains a stated focus.
• Order book dip is execution-driven: The slight reduction from INR135 crores to INR127 crores reflects order execution during the quarter, with several orders under pipeline and discussion.

Hitesh Agrawal: "Achieving 20% or 25% is not a challenge, and we are quite confident to have a much better growth by the end of the current financial year."

New Products & Capacity Build-Out

• WPC doors: the next leg: A dedicated WPC door manufacturing facility is being set up, with production lines being implemented in Q3 and commercial launch targeted for Q4 of this financial year. Management declined to share revenue potential until the product launches.
• Fluted and soffit panels scaling: The company was first to manufacture fluted panels in India two years ago and first to start soffit manufacturing. H1 revenue reached INR25+ crores, with a full-year target of INR50+ crores. Demand is driven by residential and commercial customers adopting modern, low-maintenance solutions.
• Embossed profiles added: Recently launched embossed profiles for paneling and interior applications under the D-Stona brand, part of the extrusion business vertical.
• Studio Arezzo retail expansion: Two new outlets planned in H2, one in Bangalore (work already started, completion by H2 end) and a second location yet to be decided.
• Capex envelope: INR15-18 crores projected for the current financial year, with INR50-60 crores planned over the next 2-3 years across multiple product portfolios. New capex is for new product offerings like WPC doors, not directly linked to existing growth.
• Capacity utilization rising: PVC extrusion reached 60%+ in Q2 (better than prior quarters), with a target of 80% by end of next fiscal year. Windows and doors fabrication is at 35-40%, with regular 20-25% growth expected but no timeline given for 80% utilization.

Distribution & Geography

• Network deepening, not just widening: The company is already present in almost all states and is now focused on adding more large distributors and deepening presence in high-potential regions through aggressive trade exhibition participation across metro and Tier 2 cities.
• Southern Belt leads: All five South Indian states are the major revenue contributor. East (Kolkata, West Bengal, Orissa), West, and North India (Rajasthan, Delhi NCR) are also strong.
• Geographic and channel splits reserved: Management declined to provide quarterly geographical sales distribution or B2B/B2C breakup, stating these are shared only in the annual con call. [13-14]

Disclosure & Engagement Shifts

• Order details withdrawn from public domain: The company has stopped sharing regular order details on public platforms because competitors were misusing that information. When pressed on investor transparency, management offered one-to-one meetings but maintained the policy. When asked specifically about DLF orders, management said they are regularly getting orders but would not disclose details.

Hitesh Agrawal: "As a policy of the company, we have stopped sharing the order details on the public platform because what we have seen that certain competitors are misusing that information."

• NSE listing on the horizon: The company plans to list on NSE and may fulfill eligibility criteria by the end of this financial year, after which it will take consultation from merchant bankers.

Hitesh Agrawal: "Maybe by end of this financial year, we will fulfill the criteria set by the NSE. So, once it is done, we will take the proper consultation from the related agencies, merchant banker and all, and we will go for that."

• Backward integration progressing: The company has gradually increased domestic extrusion of uPVC profiles; going forward, PVC extrusion and window/door fabrication revenue will be reported together rather than separately.

Guidance & Commitments

Key Metrics