GREENPLY INDUSTRIES Q2 CONCALL: MAINTAINS 10%+ PLYWOOD VOLUME GROWTH TARGET, REVISES MDF GROWTH GUIDANCE TO 20%, ANNOUNCES ₹125 CR PLYWOOD EXPANSION & TARGETS HIGHER MARGINS

FY27 Guidance & Outlook • FY27 Plywood Volume Guidance: Management maintained its target of more than 10% volume growth for FY27, supported by premium products, increased outsourcing and upcoming manufacturing capacity. • FY27 Plywood EBITDA Margin: Management targets double-digit core EBITDA margins, with H2 margins expected above 10% and an aspiration to approach 10% for the full year. • FY28 Plywood Margin Outlook: Management expects sustainable double-digit margins in FY28, with potential improvement toward 11–12% as new facilities contribute. • Plywood Revenue Outlook: Management expects quarterly plywood revenue to remain above ₹600 Cr, supporting operating leverage and margin expansion. • FY27 MDF Volume Guidance Revised: Management revised its full-year MDF volume growth expectation to approximately 20%, following production disruptions during H1. • FY27 MDF EBITDA Margin Guidance: Management maintained its core EBITDA margin guidance of 15–16%. • MDF EBITDA Per CBM: Management expects EBITDA per cubic metre to remain above ₹5,000, supported by value-added products and cost efficiencies. • H2 MDF Volume Target: Management targets approximately 63,000 CBM of quarterly MDF sales during Q3 and Q4 FY27 to achieve its full-year growth objective. • MDF Industry Outlook: Management expects competitive pricing pressure to persist for approximately another 12 months, with potential structural margin improvement thereafter as demand catches up with supply. • Long-Term MDF Returns: Management expressed confidence in achieving ROCE above 18% over a 3–5-year horizon, subject to industry conditions and capacity utilization. Capacity Expansion & Capex • New Plywood Expansion: Company announced a 15 million sq. metre plywood manufacturing capacity expansion at its existing Sandila facility near Lucknow. • Sandila Expansion Capex: The project involves an investment of approximately ₹125 Cr, funded through a combination of debt and equity. • Sandila Commissioning Timeline: Commercial production is expected to commence in Q4 FY28. • Sandila Revenue Potential: Management estimates annual revenue potential of ₹320–340 Cr at full capacity utilization. • Total Plywood Capacity: Following the Sandila expansion, total plywood manufacturing capacity is expected to reach approximately 81.3 million sq. metres. • Odisha Plywood Project: The new Odisha greenfield plywood facility remains on track for commissioning in Q4 FY27. • Vadodara MDF Expansion: Management expects the new MDF manufacturing facility to commence operations in Q2 FY28. • Plywood Capacity Utilization: Existing plywood facilities operated at more than 100% utilization during Q2, constraining volume growth despite healthy demand. • Manufacturing Strategy: Company plans to increase in-house manufacturing and reduce dependence on outsourced production to improve efficiency, product availability and margins. • HDF Flooring Business: Commercial production commenced in July 2026, with management expecting revenue contribution to increase during H2 FY27. • Flooring Revenue Potential: Management expects initial monthly revenue of approximately ₹2–3 Cr from the flooring business as operations scale. • Flooring Realization: Management indicated realizations exceeding ₹75,000 per CBM for flooring products. • Pre-Laminated Plywood: Company expects to begin full-scale commercial production in November 2026 after completing product trials. • Chipboard Expansion: Management is evaluating entry into chipboard manufacturing through smaller multi-daylight production lines integrated with MDF facilities. • Chipboard Capex Outlook: Management expects investment below ₹100 Cr per line, with the first facility potentially established during FY28 or FY29, subject to execution priorities. Plywood Business • Q2 Plywood Revenue: Revenue increased 15.5% YoY to ₹625.7 Cr. • Q2 Plywood Volume: Sales volume increased 6.1% YoY, while realization stood at ₹264 per sq. metre. • Q2 Plywood Core EBITDA Margin: Margin improved to 10.05%, up 180 bps YoY and 160 bps QoQ. • H1 Plywood Revenue: Revenue increased 15.7% YoY to ₹1,152.3 Cr. • H1 Plywood Volume: Sales volume increased 9.2% YoY, while core EBITDA margin stood at approximately 9.31%. • Premium Plywood Strategy: Management continues prioritizing premium and value-added plywood products to improve realizations and profitability. • Termivax Technology: Company introduced a patented nanotechnology-based anti-termite treatment for premium plywood products. • Greenply Gold: Company strengthened its product proposition through an 11-year protection plan complementing the existing 30-year warranty. • Ecotec Growth: Management reported healthy growth in Ecotec products and expects the category to benefit from greater capacity availability. • Ecotec Prime: Company is expanding premium offerings within the Ecotec portfolio to improve the value-added product mix. MDF Business • Q2 MDF Revenue: Revenue increased 18.4% YoY to ₹173.9 Cr. • Q2 MDF Volume: Sales volume increased 16.1% YoY to 54,605 CBM. • Q2 MDF Realization: Average realization stood at ₹31,816 per CBM, reflecting the reversal of earlier price increases. • Q2 MDF EBITDA Margin: Core EBITDA margin stood at 15.2%. • H1 MDF Revenue: Revenue increased 25.6% YoY to ₹369.6 Cr. • H1 MDF Volume: Sales volume increased 20.4% YoY to 1,12,411 CBM. • H1 MDF Margin: Core EBITDA margin stood at 16.3%, up approximately 350 bps YoY. • Production Disruptions: MDF production was affected by monsoon conditions and extended annual maintenance, reducing Q2 output. • MDF Demand: Management indicated that sales exceeded production during Q2, suggesting the volume slowdown was primarily due to production constraints rather than weak demand. • MDF Pricing: Earlier price hikes have been largely reversed due to market competition. • Chemical Cost Inflation: Management indicated that chemical-related input costs remain approximately 7–8% higher, while other major input costs are relatively stable. • MDF Margin Protection: Higher pre-laminated board sales, improved product mix, reduced energy costs and operating efficiencies are supporting profitability. • Timber Price Outlook: Management expects timber prices to remain broadly stable and has not factored price reductions into existing margin guidance. • Industry Competition: Management expects continued pressure from new organized capacity additions but believes smaller unorganized manufacturers may face difficulties sustaining operations at current profitability levels. Samet Furniture Fittings JV • JV Stake Reduction: Management plans to reduce Greenply's stake in the Samet furniture fittings JV from 50% to approximately 19%. • Transaction Timeline: Management indicated January 5, 2027, as the targeted completion date for the ownership restructuring. • JV Loss Reduction: Following the transaction, management expects the JV to stop contributing recurring losses to Greenply's consolidated results under the current accounting structure. • JV Funding: Management stated that Greenply stopped funding the JV's operating losses from Q1 FY27, with the partner providing financial support. • JV Expansion: The partner is considering approximately ₹400 Cr of additional investment in the furniture fittings business. • Future JV Benefits: Greenply expects to retain a minority investment, receive brand-related income and continue distributing furniture fittings through its existing network. • Q2 JV Revenue: Furniture fittings JV sales stood at ₹14.08 Cr. • Q2 JV Loss: The JV reported a PAT loss of ₹12.6 Cr, with Greenply's share of the loss at ₹6.3 Cr. • H1 JV Performance: Revenue stood at ₹27.70 Cr, while Greenply's share of the JV loss was ₹12.1 Cr. Agroforestry & Carbon Credits • Agroforestry Project: Greenply completed the first phase of its plantation initiative across more than 2,300 hectares in Gujarat and Nagaland. • Carbon Credits: Company received an allocation of 2,56,688 carbon credits under the programme. • Future Expansion: Management plans to expand the agroforestry programme to approximately 12,000 hectares across Gujarat and Nagaland. • Carbon Credit Monetization: Management indicated potential total revenue of approximately ₹25–30 Cr from carbon credit sales at indicative prices, with Greenply's share estimated at 10–20%. • Timber Sourcing: Management indicated that the programme supports approximately 50–60% of sourcing for the Vadodara operations and substantially all sourcing in Nagaland. Financial Performance & Balance Sheet • Q2 Consolidated Revenue: Revenue increased 16.1% YoY to ₹799.7 Cr. • Q2 Core EBITDA: Core EBITDA stood at ₹89.2 Cr, with margin at 11.2%, up approximately 300 bps YoY. • H1 Consolidated Revenue: Revenue increased 18.2% YoY to ₹1,524.6 Cr. • H1 Core EBITDA: Core EBITDA stood at ₹167.5 Cr, with margin at 11%, up approximately 180 bps YoY. • Net Debt: Consolidated net debt stood at ₹544 Cr at the end of September 2026. • Debt-to-Equity: Debt-to-equity ratio stood at 0.56x, below management's guided range of 0.70–0.75x. Key Management Q&A • Why Was Plywood Volume Growth Lower in Q2? Management cited limited internal manufacturing capacity and its decision to prioritize higher-value products. • Can Plywood Margins Improve Further? Management expects improvements from stronger revenue scale, a better premium-product mix and higher internal manufacturing. • Why Was MDF Guidance Reduced? Management cited production disruptions from monsoons and longer-than-planned annual maintenance rather than weak customer demand. • Will MDF Competition Affect Margins? Management expects near-term pricing pressure to continue but believes efficiency improvements and value-added products can help sustain its guidance. • Why Reduce the Samet JV Stake? Management wants to avoid committing additional capital to the loss-making JV while focusing investments on plywood and MDF expansion. • Will Greenply Acquire Other Businesses? Management did not indicate any specific acquisition plan, while remaining open to future expansion opportunities.

GREENPLY INDUSTRIES LTD

← Back to feed