Detailed analysis on the business of Rushil Decor πͺ
CMP - βΉ398
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CMP - βΉ398
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1. Company Overview
-Rushil Decor Limited was incorporated in 1993 and has been in this industry for over 30 years and currently having the fourth generation involved in the business. The business is divided into three segments mainly laminates, MDF and PVC. Rushil is one of the
-Rushil Decor Limited was incorporated in 1993 and has been in this industry for over 30 years and currently having the fourth generation involved in the business. The business is divided into three segments mainly laminates, MDF and PVC. Rushil is one of the
largest players in the laminate industry and third largest manufacturer of MDF boards.
-In the laminates segment, they manufacture single sided decorative as well as double sided industrial laminates with a wide range of designs, colours and finishing spread across 3
-In the laminates segment, they manufacture single sided decorative as well as double sided industrial laminates with a wide range of designs, colours and finishing spread across 3
manufacturing plants located at Gujarat with capacity of 34.92 lakh sheets per annum.
-Coming to the MDF boards, they manufacture thin and thick boards and prelam boards with thickness ranging from 2mm to 30mm. Manufacturing facility for MDF board is at Chikmagalur, Karnataka
-Coming to the MDF boards, they manufacture thin and thick boards and prelam boards with thickness ranging from 2mm to 30mm. Manufacturing facility for MDF board is at Chikmagalur, Karnataka
with capacity of 300 cubic metre per day or 90,000 cubic metre per annum. Recently a second and new manufacturing facility for MDF has commenced its operations from March 2021 at Visakhapatnam, Andhra Pradesh. Having installed capacity of 800 cubic metres per day or 2,40,000
cubic metres per annum, this new facility has added a strategic location advantage as it is set up in Southern India which is one of the prominent markets for MDF and closer to southern parts making it easier to facilitate exports. Rushil Decor also produces PVC with a capacity
of 12,480 cubic metres per annum.
2. Industry Overview
The wood panel industry includes plywood sheets, engineered wood panels (MDF [Medium Density Fibreboards] furniture board and particle board) and decorative surface products such as laminates. In 2022, the Indian wood
2. Industry Overview
The wood panel industry includes plywood sheets, engineered wood panels (MDF [Medium Density Fibreboards] furniture board and particle board) and decorative surface products such as laminates. In 2022, the Indian wood
panel industry is estimated to be around INR 40,000 crore and is growing at the rate of 10-12% annually.
-MDF (Medium density fibreboards): The general steps used to produce MDF include mechanical pulping of wood chips to fibres (refining), drying, blending fibres with resin and
-MDF (Medium density fibreboards): The general steps used to produce MDF include mechanical pulping of wood chips to fibres (refining), drying, blending fibres with resin and
sometimes wax, forming the resinated material into a mat, and hot pressing.
-MDF market size is estimated to be around INR 4,000 Crore and is growing at the rate of 12-15% annually.
-Current consumption breakup in India is 80% Plywood and 20% MDF whereas globally this is
-MDF market size is estimated to be around INR 4,000 Crore and is growing at the rate of 12-15% annually.
-Current consumption breakup in India is 80% Plywood and 20% MDF whereas globally this is
reverse. This shows a large opportunity for MDF in India.
-Laminate: Laminate means a finished decorative material which is formed by bonding multiple layers of thin fabric, wood or paper with resins and then compressing it under heat. This process makes the laminate strong.
-Laminate: Laminate means a finished decorative material which is formed by bonding multiple layers of thin fabric, wood or paper with resins and then compressing it under heat. This process makes the laminate strong.
It is an artificial, man-made, decorative and aesthetically pleasing material that is pasted on surfaces to create interesting design.
-Global Decorative Laminates Market is USD 7 billion in 2021. The market is projected to be worth USD 11.59 billion by 2028, at a CAGR of 5.67%
-Global Decorative Laminates Market is USD 7 billion in 2021. The market is projected to be worth USD 11.59 billion by 2028, at a CAGR of 5.67%
during the year 2022 to 2028.
-The Indian market size of Laminates is estimated to be around INR 6,000 Cr in 2021.The market is projected to be INR 11692 Cr in 2028 at a CAGR of 10-12% during the year 2022 to 2028.
-PVC: Polyvinyl Chloride (PVC) is one of the most commonly used
-The Indian market size of Laminates is estimated to be around INR 6,000 Cr in 2021.The market is projected to be INR 11692 Cr in 2028 at a CAGR of 10-12% during the year 2022 to 2028.
-PVC: Polyvinyl Chloride (PVC) is one of the most commonly used
thermoplastic polymers worldwide (next to only a few more widely used plastics like PET and P.P.). It is naturally white and very brittle (before the additions of plasticizers) plastic.
-PVC is produced via the polymerization of vinyl chloride monomers. Producing vinyl chloride
-PVC is produced via the polymerization of vinyl chloride monomers. Producing vinyl chloride
monomer involves creating chlorine through the electrolysis of salt water. The chlorine is then combined with ethylene, creating ethylene dichloride, which converts to vinyl chloride monomer at very high temperatures
-The industry size is estimated to be around INR 2000 Cr in
-The industry size is estimated to be around INR 2000 Cr in
2021.The market is projected to be INR 3897 Cr in 2028 at a CAGR of 10% during the year 2022 to 2028
3. Impact of higher imports
In FY17 and FY18 the imports of Medium density fibre board including thin & thick boards in India were INR 276.95 Cr and INR 397.81 Cr. and exports
3. Impact of higher imports
In FY17 and FY18 the imports of Medium density fibre board including thin & thick boards in India were INR 276.95 Cr and INR 397.81 Cr. and exports
were around INR 18.62 Cr and INR 48.51 Cr. In this chart we can see that historically imports are more than the exports and after FY16 we can see huge imports entering in the Indian MDF market which affected the the domestic organised MDF manufacturers but between 2017 and 2019
the market size for MDF in India went up from INR 2,000 Cr to INR 3,200 Cr at peak utilisation because of increasing market size the organised players somehow managed to maintain their revenues but their margins got affected.
-In this chart we can see the revenue, EBITDA & EBITDA Margin of Rushil Decor. We can clearly see the fall in their margins from FY19 onwards. This happened exactly after the increase in the imports of MDF. Some organised MDF manufacturers were able to maintain the revenue
because of the increase in market size of MDF. Even some players like Greenply, CenturyPly, Action Tesa having capacities of manufacturing MDF but still they also came up with new capacities resulting in an increased competition in the domestic market. Increased capacities
together with increased imports led to a decrease in the realisation of MDF. This resulted in a fall in MDF prices from about INR 25,000 per cubic metres to around INR 19,000 per cubic metres and these factors also impacted the margins of Rushil Decor and some other players.
4. Competitors Current Capacity
Competitors future capex
5. Management
Krupesh Thakkar, is a chairman and Managing Director of Rushil Decor. He has a bachelorβs degree in commerce. He is one of the founders of Rushil Decor Limited. He has over thirty years of vast experience in General Management, Production & Purchase.
Krupesh Thakkar, is a chairman and Managing Director of Rushil Decor. He has a bachelorβs degree in commerce. He is one of the founders of Rushil Decor Limited. He has over thirty years of vast experience in General Management, Production & Purchase.
Rushil Thakkar is a whole time director and holds a Bachelorβs degree in Business Administration And since 9 years, he is associated with the Company, directly or indirectly. Before the date of his appointment as director, he was working in the Company as Sr. Vice
President (General). He was actively involved in the implementation of Andhra Pradesh Thin & Thick MDF project. He has a wide experience of around 9 years in the Laminate Industry, MDF Board Industry, Laminated Flooring Industry etc.
6. Products
-Vir Laminate: Laminates are laminated products primarily used as furniture surface materials or wall panelling. VIR Laminate offers a wide range of designs and textures, a variety of colours. Available in 506 plus designs, 49 textures and finishes, crafted from
-Vir Laminate: Laminates are laminated products primarily used as furniture surface materials or wall panelling. VIR Laminate offers a wide range of designs and textures, a variety of colours. Available in 506 plus designs, 49 textures and finishes, crafted from
distinctively selected decorative papers and kraft paper that can take on the wear and tear of time
-Vir MDF: Medium Density FiberBoard is an Engineered wood, manufactured from hardwood fibres, bonded together under high pressures and temperature up to 240 degrees Celsius, by
-Vir MDF: Medium Density FiberBoard is an Engineered wood, manufactured from hardwood fibres, bonded together under high pressures and temperature up to 240 degrees Celsius, by
synthetic resin and wax. VIR MDF, from the house of Rushil DΓ©cor, is a new age product, a great alternative to solid wood, particle board and plywood. It is a favourite of OEM's, and conventional wood furniture manufacturers across the world.. VIR MDF lends itself to perfect
craftsmanship to bring the most cutting-edge designs to life. The versatile, trendy range opens up exciting creative possibilities for those with a good understanding about quality.
-Vir PVC: PVC (Polyvinyl Chloride) is a strong synthetic plastic polymer. It is used in various
-Vir PVC: PVC (Polyvinyl Chloride) is a strong synthetic plastic polymer. It is used in various
industries like electrical, electronics, Furniture, automotive, construction, medical and packaging. A beautiful fusion of a solid top coat and a cellular core, VIR PVC Boards are water-proof, termite-proof and fire-retardant. They have a range of colours and assurance of
durability promises exclusive designs across applications spanning interiors, direct digital printing, modular furniture and more.
7. Revenue Mix
In the beginning, Rushil Decorβs majority of the revenues came from the laminates segment. Over the period of time the company started operating at higher utilisation and also started increasing their manufacturing capacity of MDF and now the company earns its
In the beginning, Rushil Decorβs majority of the revenues came from the laminates segment. Over the period of time the company started operating at higher utilisation and also started increasing their manufacturing capacity of MDF and now the company earns its
majority of revenue from MDF which is around 69.62% of total revenue and the rest is from the laminates segment.
8. Raw Materials For MDF
-Timber fibres- Lumber, also known as timber, is wood that has been processed into beams and planks, a stage in the process of wood
8. Raw Materials For MDF
-Timber fibres- Lumber, also known as timber, is wood that has been processed into beams and planks, a stage in the process of wood
production. Lumber is mainly used for construction framing, as well as finishing. Lumber has many uses beyond home building.
-Urea- Formaldehyde resin glue- Urea-formaldehyde, also known as urea-methanal, named for its common synthesis pathway and overall structure, is a
-Urea- Formaldehyde resin glue- Urea-formaldehyde, also known as urea-methanal, named for its common synthesis pathway and overall structure, is a
non-transparent thermosetting resin or polymer. It is produced from urea and formaldehyde. These resins are used in adhesives, plywood, particleboard, medium-density fibreboard, and moulded objects
-Petroleum based waxes are naturally hydrophobic and thus offer a cost effective
-Petroleum based waxes are naturally hydrophobic and thus offer a cost effective
way to impart moisture barrier properties in MDF, and other materials. Apart from providing moisture barriers, petroleum based wax products can provide dimensional integrity while facilitating better resin distribution in the boards.
9. Raw Materials For Laminate
-Laminates are generally made of paper that is treated with chemical resins to enhance its strength and stiffness. The main materials used when manufacturing all types of laminates, including kitchen laminates, are:
-Laminates are generally made of paper that is treated with chemical resins to enhance its strength and stiffness. The main materials used when manufacturing all types of laminates, including kitchen laminates, are:
Brown paper (also known as Kraft paper)
Phenolic resins (made from phenol)
Decorative Printed Paper
Melamine resin
Tissue paper (the topmost overlay of the laminated sheet)
Phenolic resins (made from phenol)
Decorative Printed Paper
Melamine resin
Tissue paper (the topmost overlay of the laminated sheet)
10. Manufacturing Plants
-Rushil Decor has a total of 5 manufacturing units. 3 in Gujarat for laminates having a total capacity of 3.5 Mn sheets per annum. And 1 in karnataka for MDF with a capacity of 90,000 cubic metre per annum. And another manufacturing facility for MDF has
-Rushil Decor has a total of 5 manufacturing units. 3 in Gujarat for laminates having a total capacity of 3.5 Mn sheets per annum. And 1 in karnataka for MDF with a capacity of 90,000 cubic metre per annum. And another manufacturing facility for MDF has
commenced its operations from March 2021 at Visakhapatnam, Andhra Pradesh. Having installed capacity of 800 cubic metres per day or 2,40,000 cubic metres per annum.
-Rushil decor also manufactures PVC sheets with an annual capacity of 12,480 CBM in existing units in Karnataka.
-Rushil decor also manufactures PVC sheets with an annual capacity of 12,480 CBM in existing units in Karnataka.
11. Distribution
-Rushil decor has different distribution channels for laminates and MDF.
-For laminates Rushil decor has 80+ distributors and 1600+ Retailers.
-The sales through the distribution channel for MDF, which is dealers and retailers, is about 80% of the volume and
-Rushil decor has different distribution channels for laminates and MDF.
-For laminates Rushil decor has 80+ distributors and 1600+ Retailers.
-The sales through the distribution channel for MDF, which is dealers and retailers, is about 80% of the volume and
the balance 20% is from OEM furniture.
-Rushil decor has 400+ distributors and 4000+ retailers for MDF distribution.
12. Marketing
-Rushil Decor also participated in major exhibitions which happened in 2022 like the Metecia exhibition in Delhi, India wood exhibition in Bangalore
-Rushil decor has 400+ distributors and 4000+ retailers for MDF distribution.
12. Marketing
-Rushil Decor also participated in major exhibitions which happened in 2022 like the Metecia exhibition in Delhi, India wood exhibition in Bangalore
and Nepal wood exhibition in Nepal.
Branding through Vir studio
Unique marketing platform across Country - displays entire product range at one location. Live practical end use demonstration in a very practical and effective manner - helping customers to visualize various
Branding through Vir studio
Unique marketing platform across Country - displays entire product range at one location. Live practical end use demonstration in a very practical and effective manner - helping customers to visualize various
combinations of the entire product range. Signature showrooms/display centres ββVir laminatesβ as well as βVir Boardsβ range of products all under one roof. As of March 2022, the Company has 150+ showrooms.
Branding through advertisements
Rushil decor also does the advertisement and promotion of the brand through TV campaigns like Vir Maxpro tv campaign and Vir laminates- banao apana jahan.
Rushil decor also does the advertisement and promotion of the brand through TV campaigns like Vir Maxpro tv campaign and Vir laminates- banao apana jahan.
13. Companyβs Key Focus Area
-Focusing on increasing the distributors and retailers to increase product reach.
-Developing more value-added products.
-Focusing on increasing the distributors and retailers to increase product reach.
-Developing more value-added products.
14. Future Capex
-Rushil Decor has announced greenfield expansion at a Capex of INR 60 crores in Laminates, which will add an additional manufacturing capacity of 1.2 Mn sheets per annum, raised through the combination of internal accruals and debt. And commercial production of
-Rushil Decor has announced greenfield expansion at a Capex of INR 60 crores in Laminates, which will add an additional manufacturing capacity of 1.2 Mn sheets per annum, raised through the combination of internal accruals and debt. And commercial production of
these manufacturing plant would start from FY25.
-Potential revenue from the capex would be around 100 crores plus as guidance given by the management.
-Potential revenue from the capex would be around 100 crores plus as guidance given by the management.
15. Financials
-Companyβs revenue has increased from INR 123 Cr to INR 624 Cr in the past 12 years . Companyβs EBITDA has grown from INR 14 Cr to INR 74 Cr. But their EBITDA margin is fluctuating because of historical events like higher imports in India of MDF in FY17, FY18,
-Companyβs revenue has increased from INR 123 Cr to INR 624 Cr in the past 12 years . Companyβs EBITDA has grown from INR 14 Cr to INR 74 Cr. But their EBITDA margin is fluctuating because of historical events like higher imports in India of MDF in FY17, FY18,
FY19, and also increases in raw material prices but the company manages to sustain its revenue because of the superior product mix.
-We can see a jump in revenue from INR 335 Cr in FY21 to INR 624 Cr in FY22 this is because the company had commenced the production of a new
-We can see a jump in revenue from INR 335 Cr in FY21 to INR 624 Cr in FY22 this is because the company had commenced the production of a new
manufacturing unit of MDF in Andhra Pradesh which led to increase in their revenue.
MDF SALES VOLUME
In this chart we can see the historical data of MDF sales volume, there is a year-on-year volume growth in sales of MDF from FY13 onwards. In FY 22 we saw higher sales volume
MDF SALES VOLUME
In this chart we can see the historical data of MDF sales volume, there is a year-on-year volume growth in sales of MDF from FY13 onwards. In FY 22 we saw higher sales volume
because of the capex done by the company.
LAMINATES SALES VOLUME
In this chart we can see the historical data of Laminates sales volume, in this we can see that there is some decline in their volumes on a year-on-year basis from FY15 onwards, In Q2 FY23 Rushil Decor announced a
LAMINATES SALES VOLUME
In this chart we can see the historical data of Laminates sales volume, in this we can see that there is some decline in their volumes on a year-on-year basis from FY15 onwards, In Q2 FY23 Rushil Decor announced a
greenfield expansion at a Capex of INR 60 crores in Laminates, which will add an additional manufacturing capacity of 1.2 Mn sheets per annum
This will lead to an increase in the laminate volumes after the company starts commercial production
This will lead to an increase in the laminate volumes after the company starts commercial production
GROSS MARGIN
In this chart we can see the data of gross margins of Rushil Decor. In FY17 & FY18 the company recorded the highest Gross margin because of higher operating profit and lower manufacturing costs.
In this chart we can see the data of gross margins of Rushil Decor. In FY17 & FY18 the company recorded the highest Gross margin because of higher operating profit and lower manufacturing costs.
DEBT TO EQUITY RATIO
From FY19 the company is planning to add a new manufacturing unit of MDF because of that the company had taken debt which can be seen in the given chart. And in Q1FY23 the company had also made an announcement of raising funds through right issue which is
From FY19 the company is planning to add a new manufacturing unit of MDF because of that the company had taken debt which can be seen in the given chart. And in Q1FY23 the company had also made an announcement of raising funds through right issue which is
around INR 200 crores which they will use to repay their debt.
ROCE
In this chart we can see the historical data of ROCE. In FY17 & FY18 the company recorded the highest ROCE because of higher operating profit and lower manufacturing cost. And In FY21 they had started
ROCE
In this chart we can see the historical data of ROCE. In FY17 & FY18 the company recorded the highest ROCE because of higher operating profit and lower manufacturing cost. And In FY21 they had started
production of a new manufacturing unit with a capacity of 800 cubic metre MDF in Andhra Pradesh and the capex is around INR400 crores the management also gave guidance about potential revenue from capex which would be around INR 500 crores.
16. Recent Developments
In Q1FY23, the management mentioned that the board of Rushil Decor has approved the fund raising which is up to INR 200 Crore and the company is planning for the right issue to reduce its debt.
In Q1FY23, the management mentioned that the board of Rushil Decor has approved the fund raising which is up to INR 200 Crore and the company is planning for the right issue to reduce its debt.
But in concall Q2FY23 they revised their decision about the right issue and how to utilise the fund. Also, they had a capex plan on laminates side, but it is yet to be decided if the fund should be used from the rights issue or something else.
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