Rushil Decor - Focus On Growth, Margin, Balance Sheet: HDFC Securities

HDFC Securities Institutional Equities

We recently interacted with Rushil Decor Ltd.'s management during our visit to its Visakhapatnam-based MDF plant. This is a large (800 cubic metre/day capacity) and modern MDF plant that utilises continuous press technology and is now in its third operational year.

During FY18-23, Rushil delivered strong 20/21/20% revenue/Ebitda/adjusted profit after tax compound annual growth rates.

Going ahead, the company expects to enhance the Vizag MDF plant utilisation and increase the share of value added products to drive a rebound in margins.

It is also setting up a jumbo-sized laminates plant in Gujarat by Q2 FY25. Upon its full ramp-up, Rushil expects that exports will contribute to ~80% of its segmental revenues (a notable increase from ~64% in H1 FY24).

Two rounds of equity infusion (Rs 2.3 billion during FY24-25E) will help the company reduce the gearing ratio.

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