You can do panelling in layered material depending on what space is this for. First you need to think thoroughly about the use of this wall in your space. Then only you should opt for options like panelling, wall paint, wallpaper or texture paint. As per the picture it seem to be damp affected area so first you need to do water proofing or else check if any pipe leakage is happening. If it is damp affected area you can uses HdHMR for base panelling or 9mm thick waterproof ply.
prabhsimran bhutani
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