Rushil decor Limited delivered a mixed performance in Q3 FY26, with consolidated revenue growing 2.3% year-on-year to INR 2,165 million despite facing seasonal demand softness during the festive period. The company's strategic focus on improving product mix and strengthening distribution networks helped drive performance across key business segments.

Financial Performance Overview

The company's financial metrics for Q3 FY26 reflected stable operations with room for improvement in profitability. Gross profit stood at INR 1,011 million with a margin of 46.7%, showing improvement compared to the previous quarter due to some moderation in resin prices, though they remained above normalized levels.

For the nine-month period FY26, revenue from operations was INR 6,313 million, reflecting a 5.4% year-on-year decline primarily attributed to operational disruptions in the first quarter. The company reported EBITDA of INR 434 million with a margin of 6.9% for the period.

Laminate Business Drives Growth

The laminate segment emerged as the standout performer during the quarter, with revenue growing 20.4% year-on-year and 6.9% sequentially to INR 585 million. This growth was supported by strong domestic performance and improved export dynamics.

Blended realization in the laminate business increased by 16% year-on-year, driven by higher export prices and a shift towards premium offerings. Branded realizations improved by 16% year-on-year, while export realization grew by 24% year-on-year, reflecting a higher share of value-added and differentiated products.

Jumbo Laminate Milestone Achievement

A significant development during the quarter was the commencement of commercial production under Jumbo Laminate Phase 2, making the company's fully planned capacity operational. The business generated revenue of INR 6.27 crores in Q3 FY26, operating at approximately 20-25% capacity utilization.

The company has positioned its Jumbo Laminates portfolio under three distinct brands: VIR KLADS for exterior facades, VIR TOPAZ for interior applications such as kitchen tops and countertops, and VIR VAULT for interior partitions including toilet cubicles.

MDF Business Shows Mixed Results

The MDF segment demonstrated resilience in domestic markets while maintaining a strategic approach to exports. Revenue for Q3 FY26 was INR 1,486 million, with domestic India revenue growing 29.4% year-on-year supported by higher volumes, wider dealer network, and improved realizations.

Export revenues declined due to lower volumes, although export realization remained strong. The company continues to focus on increasing the share of value-added products, targeting 50% value-added contribution by volume by the end of the financial year.

Outlook and Strategic Priorities

Management provided guidance for the current financial year, expecting overall turnover of around INR 900 crores with EBITDA margins of 8-9%. For FY27, the company targets revenue exceeding INR 1,000 crores with EBITDA margins in the range of 10-11%, supported by improved Jumbo Laminate utilization.

The company's strategic priorities remain focused on scaling up the laminate and Jumbo Laminate business, strengthening international footprint, and increasing the share of value-added products in MDF. With both phases of the Jumbo Laminate facility now operational and a growing export pipeline, the company is positioned for sustained growth in coming quarters.

Rushil Decor Limited has completed the utilization of proceeds from its preferential issue, with the monitoring agency CARE Ratings Limited confirming full deployment of Rs. 93.04 crores for the quarter ended December 31, 2025. This marks the final monitoring report for the fund raised through preferential allotment of convertible warrants.

Fund Utilization Overview

The company successfully utilized the entire amount received through the preferential issue without any deviations from the objectives stated in the Private Placement Offer Letter. The funds were deployed across multiple strategic initiatives as originally planned.

Shortfall and Alternative Financing

While the company originally planned to raise Rs. 122.66 crores, it received Rs. 93.04 crores due to specific circumstances involving warrant conversions. The shortfall occurred due to two primary reasons:

• Few warrant holders did not exercise conversion options for 3,30,000 warrants amounting to Rs. 7.35 crores by the maturity date of June 22, 2025
• Forfeiture of 10,00,000 warrants worth Rs. 22.28 crores allotted to Vespera Funds Limited on December 12, 2025, following expiry of status quo direction from competent authority

To bridge the funding gap, the company arranged alternative financing through internal accruals and debt financing, ensuring project objectives remained unaffected.

Project Progress and Completion

The monitoring agency report highlighted significant progress across key objectives:

Decorative Laminates Manufacturing Project

The company announced commencement of commercial production for Phase 2 of Jumbo Size Laminate Sheets Project at its newly established manufacturing plant, as per BSE announcement dated December 10, 2025.

Other Strategic Initiatives

The remaining funds were allocated toward:

• MDF Plant & Machinery Enhancement: Rs. 9.67 crores utilized for existing MDF manufacturing plants
• General Corporate Purposes: Rs. 3.37 crores deployed for approved corporate activities
• Working Capital: Planned allocation adjusted based on actual fund receipt

Regulatory Compliance and Monitoring

CARE Ratings Limited, serving as the monitoring agency, confirmed that all utilization aligned with regulatory requirements under SEBI regulations. The report indicated a 24% shortfall in fund receipt compared to planned objectives, but noted that the company successfully completed its stated goals through alternative financing arrangements.

The monitoring agency emphasized that while the company used internal accruals and debt financing to complete certain objectives, these activities fell outside the purview of the monitoring report since they involved alternative funding sources.

Final Monitoring Report

This represents the concluding monitoring agency report for the preferential allotment of convertible warrants. The company has fulfilled all regulatory obligations related to fund utilization disclosure and maintained transparency throughout the process. Despite the funding shortfall, Rushil Decor demonstrated effective project management by ensuring timely completion of strategic initiatives through diversified financing approaches.