Duroply Q4 FY26: Revenue rose, EBITDA improved, but profits stayed under pressure

Duroply Industries Limited ended FY26 with a familiar mix for building-material companies: steady topline growth, better operating profitability, and persistent pressure below the EBITDA line. The company reported FY26 revenue from operations of Rs 402.67 crore, up 8.31 percent year on year. EBITDA rose faster, up 25.35 percent to Rs 22.43 crore, taking EBITDA margin to 5.57 percent from 4.81 percent in FY25.

But the translation from EBITDA to net profit weakened. FY26 PAT came in at Rs 2.94 crore versus Rs 7.77 crore in FY25. The March quarter was particularly soft on the bottom line, with Q4 FY26 revenue of Rs 111.59 crore but a reported loss of Rs 2.45 crore.

Management described FY26 as a year focused on strengthening brand presence and operating efficiencies. The second half, however, was described as “very challenging”, with growth slowing and inflationary pressures affecting costs.

Q4: Strong sequential revenue, weaker margins

The quarter showed momentum in sales. Q4 FY26 revenue grew 4.93 percent year on year and 19.92 percent quarter on quarter. However, the gross margin percentage dropped to 34.26 percent from 37.09 percent in Q3, and EBITDA fell sequentially to Rs 5.18 crore with EBITDA margin at 4.64 percent.

The investor presentation also showed higher depreciation in Q4 FY26 compared to Q4 FY25, and interest costs remained meaningful. The result was a weak reported PAT for the quarter.

Financial snapshot

Revenue mix: in-house and contract manufacturing

A useful disclosure in the earnings webinar was the split between in-house manufactured goods and contract manufacturing. For FY26, management stated in-house manufactured goods revenue at Rs 224.9 crore, up 2.3 percent year on year. Contract manufacturing revenue was stated at Rs 177.7 crore, up 17 percent year on year.

This indicates that incremental growth is increasingly supported by contract manufacturing, while in-house growth was modest. For Q4 FY26, management stated revenue from in-house manufactured goods at Rs 61.9 crore and contract manufacturing at Rs 49.7 crore.

Cost pressures and pass-through: limited but present

In the webinar, management highlighted the industry’s sensitivity to geopolitics and energy-linked inputs. Key chemicals used in resin are petrochemical derivatives, and a large part of India’s requirement for some of these chemicals was described as import-linked. Management also discussed rising freight and labor costs as second-order effects of higher fuel costs.

On pricing, the company said it had been able to pass on cost increases incurred over March and April, partially for May. However, it also noted that the market is showing resistance to further price increases, implying that additional cost inflation could compress margins if demand does not allow pass-through.

Working capital: better discipline, but a longer cash cycle

Duroply highlighted improvements in debtors and inventory management. As per the working capital slide, debtor days improved to 42 from 47, and inventory days reduced to 145 from 165.

However, payable days dropped sharply to 72 from 117. The net effect was a higher cash conversion cycle, which rose to 115 days in FY25-26 from 94 days in FY24-25. The balance sheet presented in the deck also reflected higher short-term borrowings at Mar-26 compared to Mar-25.

This combination matters because a longer cash cycle typically increases dependence on working capital funding, especially in a business where inventory and receivables can be large.

What management says it is doing next

The investor presentation laid out broad levers for future growth across go-to-market, product, digital, and people. In the Q&A, management gave a few clearer actions:

It said the company has expanded its frontline sales force to reach more customers across India. It also said loyalty policy programs with stakeholders are under review and changes are in process. A third focus for the coming financial year is B2B customers and project sales, which management described as not having been a focus area earlier.

In terms of the market structure, management stated that about 70 percent of the plywood industry is unorganized and 30 percent organized, with organized growing faster. Management also said it expects a shift from unorganized to organized players due to supply chain disruptions, which could benefit branded companies.

Guidance: conservative on growth, optimistic on EBITDA improvement

Management avoided very specific public targets for segment growth, but it did provide a quantitative view on growth. It said the company is looking at about 10 to 12 percent volumetric growth for the next two years, with price changes on top.

On margins, management said it expects margin expansion at the EBITDA level to continue, while acknowledging uncertainty around raw material inflation and the ability to pass costs to customers without hurting demand.

Takeaways for investors

Duroply’s FY26 results show improving operating performance, but profits and cash conversion remain the sensitive points. Revenue and EBITDA improved, and management emphasized brand building and operating efficiency. At the same time, Q4 volatility, a sharp year-on-year decline in PAT, and a longer cash conversion cycle suggest execution will need to remain tight.

The near-term setup is also shaped by external variables management itself emphasized: petrochemical-linked input costs, import dependence for certain inputs, and the limits of passing inflation through to customers. If the company can grow volumes while keeping working capital contained and protecting gross margin, the EBITDA improvement seen in FY26 could become more durable in the next few years.