Sylvan Plyboard (India) Ltd Management Discussions

1. Industry Structure and Developments:

The Indian plywood industry plays a pivotal role in the countrys building materials and construction value chain, catering to key sectors such as housing, commercial real estate, retail interiors, infrastructure, and furniture manufacturing.

In FY 2024-25, the Indian plywood market was valued at approximately ?235.1 billion, and is projected to reach around ?387.9 billion by FY 2033-34, reflecting a CAGR of 5.44% over the forecast period (FY 2025-26 to FY 2033-34).

Key Growth Drivers

• Urbanization & Housing Initiatives: Over 35% of Indias population is expected to live in urban areas by 2035. Government schemes like PMAY, targeting the construction of 29.5 million urban homes, are driving demand for plywood across doors, ceilings, partitions, and modular furnishings.

• Infrastructure Investments: Allocations exceeding ?10 lakh crore under the National Infrastructure Pipeline (NIP) are catalyzing demand in public buildings, transit hubs, and smart city projects.

• Commercial Real Estate & Tier II/III Growth: The expansion of more than 100 emerging cities into commercial hubs is spurring plywood usage in retail fit-outs and office furniture.

• Regulatory Support: Implementation of Quality Control Orders (QCOs) is formalizing the industry and encouraging adoption of standardized, eco-compliant products.

• Policy Backing & Economic Growth: Indias expected GDP growth of 6.5-7% and initiatives under Make in India, combined with import quality restrictions and trade promotion by the Ministry of Commerce & Industry, are supporting domestic plywood manufacturers.

Shift Toward Organized Segment

While the unorganized sector still accounts for nearly two-thirds of the market, structural reforms are rapidly shifting market dynamics:

• GST Implementation has narrowed the price gap between branded and unbranded plywood from 25-30% to 10-15%, making branded options more accessible.

• Growth Disparity: While the total market has grown at a historical CAGR of 5-7%, the organized segment has surged ahead with 10-15% CAGR in recent years.

• Consumer Preferences: Increasing awareness, quality expectations, and access to formal retail and digital platforms have enhanced the competitiveness of top-tier plywood brands.

• Industry Consolidation: The growing dominance of organized players is leading to market consolidation, higher compliance, and stronger brand penetration across India.

Outlook Summary

The Indian plywood industry is well-aligned with long-term macroeconomic and policy trends, offering sustained growth opportunities across mass-market housing to premium interiors. The future of the industry will be shaped by:

• Rising demand for quality-certified and sustainable products

• Expansion of organized distribution networks

• Strategic policy alignment with infrastructure and housing missions

• Increasing consumer confidence in formal, branded plywood offerings

The industrys transition toward formalization and global quality standards marks a significant evolution — offering promising prospects for companies committed to innovation, sustainability, and excellence in product delivery.

2. Opportunities and Threats:

Opportunities -

Opportunity	Strategic Response
Shift toward the organized plywood sector	Position Sylvan as a reliable, BIS-certified brand by leveraging regulatory compliance, consistent quality, and trust.
Availability of good quality timber/raw material	Leverage consistent access to high-quality timber to maintain superior product standards and build dealer confidence.
In-house resin manufacturing	Improve cost control, ensure adhesive quality consistency, and reduce dependency on external chemical suppliers.
Growth in housing and infrastructure projects	Target institutional buyers and developers with customized project solutions and compliant offerings.
Modular and engineered furniture growth	Align product specifications to modular industry standards, offer calibrated and moisture-resistant boards.
Emerging Tier II & III market potential	Expand channel footprint with local distributor tie-ups, territory-specific SKUs, and grassroots branding.
Rise of digital & influencer-led buying behaviour	Engage with architects, designers, and content creators to position Sylvan as a preferred brand in buying journeys.

Threats -

Threat	Strategic Mitigation
Rising dominance of large national brands	Strengthen regional leadership through deeper dealer relationships, targeted marketing, and superior service responsiveness.
Influencer-led perception gaps	Actively engage architects, interior designers, and carpenters with product education and co-branded content initiatives.
Price sensitivity in value-conscious markets	Offer cost-competitive SKUs with core specifications and promote longterm value over low-cost alternatives.
Unorganized sector undercutting prices	Leverage compliance, consistency, and certification to win in B2B, export, and institutional segments.
Regulatory tightening (BIS, EPR, emission norms)	Adopt early compliance strategy with in-house testing, certification roadmap, and ESG-aligned product innovation.
Volatility in imported raw materials	Diversify sourcing, establish local supply chains, and maintain buffer stock of key inputs.

3. Outlook:

The plywood and allied wood-products sector is expected to witness steady growth, supported by sustained urbanization, rising demand in housing and infrastructure, and increasing consumer preference for branded and quality-certified products. The recent tightening of BIS licensing norms is likely to constrain supply from unorganized and unlicensed players, creating opportunities for established manufacturers like Sylvan Plyboard (India) Limited. With enhanced installed capacity of 22.41 lakh m 2 and a projected ramp-up to 31.95 lakh m 2 in FY 2025-26, alongside investments in advanced technology and process efficiencies, the Company is well positioned to capitalize on these opportunities. The successful IPO has further strengthened the capital base, enabling continued investments in capacity expansion, product development, and distribution reach. While near-term challenges such as raw material volatility and competitive intensity may persist, the Company remains confident of sustaining growth and delivering long-term value to its stakeholders.

4. Risk and Concerns:

Risks and Concerns

Risk	Description	Mitigation Strategy
Intense Competition & Price Pressure	The plywood industry is intensely competitive with aggressive pricing from unorganized players and rising visibility of larger brands using influencer and digital marketing.	Continued brand investments, regional influencer engagement, dealer loyalty programs, and focus on differentiated product value.
Brand Risk	As Sylvan strengthens its branding and promotional efforts, any gap between brand promise and customer experience (e.g. quality, service) can quickly impact market trust, especially in the digital era.	Strong quality controls, consistent brand messaging, proactive customer support, dealer engagement protocols, and periodic brand monitoring & evaluation.
Raw Material Price & Policy Risk	Timber and face veneer are natural resources influenced by seasonal cycles, forestry laws, and trade policies in exporting countries.	multi-country sourcing, advance procurement planning, sustainable alternatives, and close monitoring of trade regulations.
Regulatory & BIS Compliance	Evolving norms require ongoing compliance for continued market access, particularly in institutional sales where certifications are mandatory.	Early certification planning, in-house testing, compliance checklist, and product design aligned with upcoming standards.
Supply Chain Disruption	Logistical challenges such as port delays, container shortages, or disruptions in exporting countries can impact raw material flow and delivery timelines.	Strategic inventory buffers, vendor diversification, and digital tracking of inbound/Outbound shipments.
Foreign Exchange Exposure	Imports of raw and semi-finished materials expose the Company to currency volatility and tariff- related unpredictability.	Forward contracts, and dynamic vendor base aligned to currency movement.
Labor and Workforce Availability	Availability of skilled labour and retention across shifts impacts productivity, especially with new capacity additions.	Worker skilling programs, mechanization, shift incentives, and strong welfare practices for engagement and retention.
Technology Upgradation Risk	Technological lag may affect product consistency, operational efficiency, or energy use, limiting competitiveness.	Phased investments in modern machinery, continuous improvement culture, and benchmarking with global best practices.

5. Internal Control and their adequacy:

At Sylvan, internal controls are viewed not only as compliance tools but also as enablers of efficiency and accountability. Our framework is built on system-driven checks within ERP modules, clear delegation of authority, and well-documented operating procedures. Key areas such as procurement, production, sales, and finance are continuously monitored through data analytics and exception reporting, reducing manual intervention and improving response time.

The Internal Audit function is managed entirely in-house, ensuring better understanding of business processes and closer alignment with management objectives. Periodic reviews are undertaken to test both design and effectiveness of controls. Observations are discussed with functional heads, and action points are tracked until closure. Audit findings, along with risk-mitigation measures, are presented to the Audit Committee, which provides oversight and direction.

During the year, special emphasis was placed on monitoring utilisation of IPO proceeds, large capital expenditure projects, and adherence to revised BIS compliance norms. These focus areas ensured financial prudence, transparent reporting, and operational readiness for future growth.

The Board believes that the existing internal control system is adequate and evolving in step with the Companys growth and complexity.

6. Financial Performance:

During FY 2024-25, the Company achieved revenue from operations of ?2,435.10 million, marking a growth of 8.3% over FY 2023-24 (?2,248.75 million). EBITDA improved by 9.6% to ?216.02 million with margins at 8.42%, while Profit After Tax rose 13.2% to ?68.99 million. Gross Margin strengthened to 17.57% (FY 2023-24: 15.07%), supported by operational efficiency and cost controls.

Capital expenditure during the year amounted to ?947.8 million, primarily directed towards capacity expansion and technology upgradation. A 30-Delight Hot Press was commissioned in March 2025, increasing installed capacity to 22.41 lakh sq. mtrs. from 20.54 lakh sq. mtrs. in the previous year. The full impact will be visible in FY 2025-26, with installed capacity projected at 31.95 lakh sq. mtrs.

Return on Capital Employed (ROCE) moderated to 11.65% (FY 2023-24: 15.77%) due to the infusion of IPO proceeds and capital expansion. With stronger capacities and improved financial flexibility, returns are expected to strengthen in the coming years.

7. Human Resource:

During FY 2024-25, the Companys Employee Value rose by nearly 20% compared to the previous year, reflecting the contribution of its workforce across permanent employees, labour, and contractual staff. Focused training, skill enhancement, and career development programs supported capability building at all levels. Employee engagement initiatives and welfare measures for labour and contractual workers helped strengthen retention and improve workplace satisfaction. Industrial relations remained stable and cooperative, ensuring smooth operations and contributing to higher productivity.

Particulars	2024-25	2023-24	Change in Ratios %	Reason for Movements (if movement is more than 25%)
a) Current Ratio	1.72	1.69	1.43	NA
b) Debt-Equity Ratio	0.51	0.57	(10.92)	NA
c) Debt Service Coverage Ratio	2.36	1.83	37.21	Decrease in Long Term Borrowings
d) Return on Equity Ratio	6.23	6.61	(5.75)	NA
e) Inventory turnover ratio	1.59	1.65	(3.70)	NA
f) Trade Receivables turnover ratio	5.28	5.68	(7.00)	NA
g) T rade payables turnover ratio	2.76	2.58	7.05	NA
h) Net capital turnover ratio	2.20	2.44	(9.84)	NA
i) Net Profit Ratio	2.83	2.71	4.53	NA.
j) Return on Capital employed	11.65	15.77	(26.15)	Increase in Earnings has resulted in increase in ratio.

9. Corporate Governance

The Company continues to uphold high standards of corporate governance. With a well-structured Board and rigorous governance practices in place, we ensure full compliance with all legal and regulatory requirements. Our Boards dedication to transparency and accountability is evident in its regular reviews and steadfast adherence to best governance practices, reinforcing our companys integrity and trustworthiness in all our dealings.

10. Cautionary Statement

Statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, plans or industry conditions or events are forward-looking statements within the meaning of applicable securities laws and regulations. Actual results, performance or achievements could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include global and Indian demand- supply conditions, competitors pricing, changes in government regulations, tax regimes, and economic conditions within India. The Company assumes no responsibility to publicly update, amend, modify or revise any forward-looking statements, based on any subsequent development, new information or future events or otherwise except as required by applicable law. Unless the context otherwise requires, references in this document to the Company, we, us or our refers to Sylvan Plyboard (India) Limited

11. Conclusion

The financial year 2024-25 marked a period of strategic advancement and operational strengthening for Sylvan Plyboard (India) Limited. The Company not only delivered robust revenue and profit growth but also enhanced its operational efficiency through timely capital investments and geographic expansion.

Despite sectoral challenges such as raw material volatility, rising competition, and regulatory compliance, Sylvan Ply remains focused on building long-term value through innovation, product quality, and sustainable practices. Backed by an experienced leadership team, integrated manufacturing capabilities, and a growing network of dealers, the Company is well-positioned to capitalize on emerging opportunities in both domestic and international markets.

As the demand for eco-friendly, branded, and value-added wood-based products continues to grow, Sylvan Plyboard aims to deepen its market penetration, strengthen customer relationships, and maintain financial prudence. The Company remains committed to driving profitable growth, enhancing shareholder value, and adhering to high standards of corporate governance as it enters the next phase of expansion.

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CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS

(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015)

To

The Members of

Sylvan Plyboard (India) Limited

NH-2, Delhi Road Champsara, Chinnamore,

Baidyabati, Hooghly, West Bengal-712222

We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of SYLVAN PLYBOARD (INDIA) LIMITED having CIN-L51431WB2002PLC095027 and having registered office at NH-2, Delhi Road Champsara, Chinnamore, Baidyabati, Hooghly, West Bengal-712222 (hereinafter referred to as the Company), produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In our opinion and to the best of our information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company & its officers, we hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31 st March, 2025 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, Reserve Bank of India or any such other Statutory Authority

SL NO NAME OF THE DIRECTORS	DIN	DATE OF APPOINTMENT IN THE COMPANY
1. ANAND KUMAR SINGH	00651384	05/05/2018
2. JAI PRAKASH SINGH	00655886	20/08/2002
3. SHAKUNTALA SINGH	00656073	20/08/2002
4. RATHIN KUMAR RAY	08139761	16/06/2018
5. PALLAB SAMAJDAR	08157892	16/06/2018
6. AMIT SINGHANIA	07205621	26/08/2024

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For Shubham Sinha & Associates

Sd/-

Shubham Ranjan Sinha ACS: A69409 C.P. No.: 26884 Peer Review No-4929/2023 UDIN- A069409G000919940 Place: Kolkata Date: 02 nd August 2025