Greenpanel Industries Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

Greenpanel Industries reported a strong Q2 FY26 with consolidated revenues of ₹389.4 crores, up 17.1% YoY, driven by a 30.5% YoY growth in domestic MDF volumes. The company achieved an operational turnaround and improved cost base, leading to an operating EBITDA of ₹39.7 crores (10.2% margin) excluding one-offs. However, reported profitability was impacted by significant forex losses and new plant-related expenses, resulting in negative PBT and PAT. Net debt reduced by ₹60 crores, and management expects high-teen domestic MDF volume growth and high single-digit to early double-digit operating EBITDA margins for FY26.

Highlights

  • Consolidated revenues grew to ₹389.4 crores, up 17.1% YoY and 20.7% QoQ.

  • Domestic MDF volumes grew by 30.5% YoY and 26.8% sequentially, indicating strong market traction.

  • Operational and financial parameters showed a turnaround in Q2 FY26 due to strategic changes.

  • Operating cost of production significantly reduced by 5.5% impact on margins due to raw material optimization and improved consumption efficiencies.

  • Net debt reduced by ₹60 crores to ₹173 crores, with actual net reduction of ₹71 crores excluding non-cash FX changes.

Concerns

  • Plywood volumes were still lower by 5% YoY.

  • Reported EBITDA was lower at ₹27.8 crores (7.1%) due to adverse exchange rate movement (₹12.5 crores this quarter, ₹40 crores H1 cumulative) and incremental interest/depreciation (₹20 crores H1) from the new plant.

  • PBT was negative ₹8.9 crores and PAT was negative ₹6.1 crores.

  • Overall realization was lower by 4% YoY, with a net 2% reduction due to price realignment after accounting for product mix changes.

  • Chemical prices remain elevated, though expected to moderate from end Q3 FY26.

Key financials

  1. Consolidated Revenue ₹389.4 Cr +17.1%YoY
  2. Operating EBITDA (excl. FX/one-offs) ₹39.7 Cr
  3. Operating EBITDA Margin (excl. FX/one-offs) 10.2%
  4. Reported EBITDA ₹27.8 Cr
  5. Reported EBITDA Margin 7.1%
  6. PBT ₹-8.9 Cr
  7. PAT ₹-6.1 Cr

What they filed

Q1 FY27: revenue up 6.6%, net profit up 103.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue337 359 375 328 396 +18%416 +16%399 +7%350 +7%
EBITDA30 17 48 -16 25 −17%41 +135%30 −38%30 +289%
Net profit19 9 29 -35 -6 −133%10 +20%1 −95%1 +104%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Domestic MDF Volumes
    30.5% Volume Growth26.8% Volume Growth
  • Plywood Volumes
    -5% Volume Growth18% Volume Growth

Capital allocation

high confidence
  • Capex ₹40 Cr
    On a steady state basis, I count all my lines in. I think we should be doing anything between 20 to 30, Yes? That is, steady state, you can say, replacement sustenance capex that we do every year. Steady state is 20-30, and for this year, it will be a little higher. It is around 40, you are saying?
  • Debt Net ₹173 Cr Cost 2%
    • Forex hedge Adverse exchange rate movement on Euro-denominated borrowings, impacting EBITDA by ₹12.5 crores this quarter (₹40 crores cumulative H1). ₹12.5 Cr
    • Repayment Net debt reduced by ₹60 crores versus June 30, with an actual net reduction of ₹71 crores excluding non-cash FX changes. ₹60 Cr
    As a result, the net debt has reduced by INR60 crore versus where we were on 30th June to INR173 crore. If we count out the non-cash FX change, which is largely mark-to-market at this point in time, the actual net reduction was INR71 crore during quarter 2.
  • Liquidity Liquidity disclosed Comfortable cash net debt position, zero utilization of funded working capital lines, and a healthy balance sheet to support future scale-up.
    With a comfortable cash net debt position, zero utilization of our funded working capital lines, our balance sheet remains healthy to be able to support scale-up going forward.

Guidance & targets

Volume

  • Domestic MDF Volumes Growth Volume · FY26 · High confidence high teens
    On the revised guidance for the year, counting the developments so far in Q1, we now expect domestic MDF volumes to grow in the high teens this year

    — Shobhan Mittal

Profitability

  • Operating EBITDA Margin (excl. FX/one-offs) Profitability · FY26 · High confidence high single-digit to early double-digit average
    and operating EBITDA, excluding FX and one-offs, of high single-digit to early double-digit average for the full year FY26.

    — Shobhan Mittal

  • Operating EBITDA Margin (core) Profitability · Q4 · High confidence early double digit
    we were targeting that we will try and achieve, at least the guided early double digit margins by quarter 4. What we need to appreciate, we are already there, right, on the operating margins, the core operating EBITDA margins are 10% plus. We will try to build it up this way throughout the next two quarters.

    — Himanshu Jindal

Pricing

  • MDF Price Hikes Pricing · immediate term · High confidence no price increases coming in
    on an immediate basis, honestly, I do not foresee any price increases coming in, in the near-term, to be honest with you.

    — Shobhan Mittal

Raw Material Costs

  • Timber Prices Raw Material Costs · going forward · Medium confidence stable or slight correction
    And in timber prices, what we are seeing is that they seem to remain, they will seem to remain stable for, going forward. There will not be any major price hikes.

    — Shobhan Mittal

Capacity Utilization

  • South Plant Utilization Capacity Utilization · Q4 · Medium confidence 60%
    In terms of exit quarter, do you think we can reach to about 60% capacity utilization, exit quarter, fourth quarter? Yes, I think that should be possible.

    — Bhargav

Tax Rate

  • Effective Tax Rate Tax Rate · going forward · High confidence 25%
    We are on the new tax regime, so we will be at 25%. But please do remember, we have a depreciation tax shield available this year because of the new plant, which is significant.

    — Himanshu Jindal

Market context

  • Chemical Prices Moderation Raw Material Costs · end quarter 3FY26 · Medium confidence moderate
    This is expected to moderate from end quarter 3FY26.

    — Himanshu Jindal

What to watch in Q3 FY26

South Plant Capacity Utilization

Q4 FY26
Current 40% in Q2 FY26
Target 60% by Q4 FY26

Why it matters

Indicates the ramp-up and efficiency of the new plant, crucial for overall volume growth and profitability.

In terms of exit quarter, do you think we can reach to about 60% capacity utilization, exit quarter, fourth quarter? Yes, I think that should be possible.

Risks & concerns

  • Adverse exchange rate movement on Euro-denominated borrowings

    medium

    Resulted in ₹12.5 crores impact this quarter and ₹40 crores cumulative for H1 FY26, mostly unrealized MTM non-cash loss.

    Management acknowledged

  • Elevated chemical prices

    low

    Chemical prices remain elevated but are considered a temporary phenomenon and are expected to moderate from end Q3 FY26.

    Management downplayed

  • Geopolitical disturbances in the Middle East

    low

    Impacted export business, which is already opportunistic and has slimmer margins compared to domestic business.

    Management acknowledged

  • Incremental interest and depreciation from new plant capitalization

    low

    Contributed ₹20 crores impact in H1 FY26, which is an expected cost associated with new capacity.

    Management acknowledged

Q&A highlights

6 direct
MDF volume guidance and margin outlook Direct
As mentioned in my comments, we revised the guidance to say that our domestic business growth will be in the high teens compared to last year's volumes. Export business, of course, has been quite opportunistic for us, primarily on account of it being a commoditized business and margins, being much slimmer than the domestic business. So as of now, the export business, we have not satisfied the requirements purely due to pricing pressure and due to the geopolitical disturbances in the Middle East, which is our primary market.

Clarifies the revised guidance for domestic MDF volume growth and margin, and the opportunistic nature of export business.

Asked by Praveen Sahay

New capacity ramp-up and utilization in South Direct
Yes, it is around 40. It is picking up. And, you know, I think, Praveen, what we need to understand, today, all the three lines are capable to produce everything that I need for the markets. So, we try and optimize wherever we can based on economics. This is the way we should look at. I think 40 is the number where we were in this quarter. And let us see how things shape up.

Provides current utilization of the new South plant and explains the strategy of optimizing production across all three lines.

Asked by Praveen Sahay

Expectation for future forex losses Partial
What we saw was kind of unprecedented. See, I think we have been hit more on euro, Yes, euro-dollar exposure. Dollar-rupee actually works in our favor. So, dollar going up is actually helping me do more exports and insulates us from imports, I think the euro-dollar, euro appreciating by 15%, 16% in six, seven months due to whatever was happening in the US is primarily contributing to all of this. At this point in time, for us to take a position on how euro is going to move is going to be very speculative, right?

Management acknowledges the unprecedented nature of recent forex movements and expresses difficulty in predicting future trends, highlighting the speculative nature.

Asked by Praveen Sahay

Sustainability of realization correction Direct
Well, Yes, the current market condition, you know, we are not foreseeing any major corrections. And as we mentioned that the company's focus now is on volume growth and these corrections are end of the day targeted on a customer to customer basis. It is not a pan India or a product pan across the entire product range. So, where we see opportunity for some correction, but in a much higher contribution, overall contributing to better margins, we may take such calls. But as such, there is no plans per se to have any, price correction per se in the immediate term.

Clarifies that major price corrections are not foreseen and any adjustments are customer-specific for margin optimization, not a broad-based price cut.

Asked by Praveen Sahay

Impact of BIS norms on imports and market Direct
And when it comes to the current price points, with the current foreign currency rates, the dollar rates, the current domestic price points, and BIS implementation, we are not foreseeing this to come back in a very sort of strong manner, going on an immediate basis. Because the QC has been in place for quite a few months now. A handful of the manufacturers have been able to obtain the BIS certification. And then now the standards are going to become even more stringent when the new BIS standards comes in. So, it is not an easy barrier to cross. So, we foresee the imports to continue to remain muted in the coming quarters, you know.

Explains how BIS norms, along with currency and domestic pricing, are expected to keep imports muted, reducing competitive pressure.

Asked by Balaji Vaidyanath

EBITDA margin after adjusting for one-offs Direct
No, we have already given that bridge out in our investor presentation where we have adjusted the FX and other one-offs impacting results How is my operational EBITDA? That is INR40 crore, Yes, which is 10.2%.

Confirms the adjusted operational EBITDA and margin, providing a clearer picture of core business performance.

Asked by Shivkumar Prajapati

Raw material mix and consumption efficiencies Partial
It is a little challenging, specifically in this quarter, Ritesh and there are multiple reasons you will appreciate. I think we spoke about inventory changes already. So there is some portion of that cost because of a decrease in inventory, which is impacting my overall results. So this was, raw material or finished goods that we are digesting in this quarter, which was perhaps purchased or procured at a higher cost.

Highlights that cost reduction is partly due to digesting higher-cost inventory from previous periods, implying further improvements are possible as this inventory clears.

Asked by Ritesh Shah

When will the company shift focus from volume to pricing for margin improvement? Direct
Ritesh, see at the moment, even though we have a higher, even if we are at a certain level optimization, utilization, at the same time, we are still catering to certain segments of the market which are not as profitable, right? So, we are catering to OEMs which are catering to the export market. At the moment, the idea is to focus on margin improvement by bringing in the more lucrative segments and getting more market share as opposed to price hikes. Because that is going to affect us adversely at the moment.

Management clarifies that the current focus remains on volume growth and market share in more lucrative segments, rather than broad price hikes, to improve margins.

Asked by Ritesh Shah

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance Overview and Turnaround

Greenpanel Industries reported a significant turnaround in Q2 FY26, with consolidated revenues reaching ₹389.4 crores, marking a 17.1% year-on-year and 20.7% sequential growth. This improvement was driven by a change in strategies focusing on volume growth and cost base optimization. The company's operating EBITDA, excluding the impact of currency movement and other one-offs, stood at ₹39.7 crores, representing 10.2% of revenues, indicating a strong operational recovery from the previous quarter.

MDF Business Growth and Product Strategy

Domestic MDF volumes demonstrated robust growth, increasing by 30.5% year-on-year and 26.8% sequentially. This was supported by increased outreach, ground activation, and new product launches like HCW Outdoors, ThinMDF, and Fire Retardant MDF. The company realigned its MDF pricing premium with peers, leading to a 4% year-on-year reduction in overall realization, though half of this was attributable to product mix changes post new plant addition, implying a net 2% price realignment.

Operational Efficiency and Cost Management

Concerted efforts on the operational front led to a significant reduction in the operating cost of production, impacting margins positively by 5.5% compared to Q1. This was achieved through raw material optimization, improved consumption efficiencies, and better power and fuel management across all three plants. Management expects further improvements in operational efficiency as capacity utilization increases.

Financial Impact of External Factors and Debt Reduction

Despite operational improvements, reported EBITDA was ₹27.8 crores (7.1%) due to external factors. The company incurred an adverse exchange rate movement impact of ₹12.5 crores this quarter (₹40 crores cumulative for H1) on Euro-denominated borrowings. Additionally, incremental interest and depreciation from the new plant contributed ₹20 crores to H1 expenses. However, net debt reduced by ₹60 crores to ₹173 crores, with an actual reduction of ₹71 crores excluding non-cash FX changes, indicating strong cash generation.

Market Dynamics and Import Scenario

The operating environment continues to evolve with stable realizations and softening timber costs. MDF imports slowed significantly to less than 1,000 cubic meters per month in Q2 FY26, down from an average of 20,000 cubic meters in H2 FY25. This reduction is attributed to BIS norms implementation, current price points, and foreign currency rates, with management expecting imports to remain muted in coming quarters.

Guidance and Future Outlook

For FY26, Greenpanel expects domestic MDF volumes to grow in the high teens and operating EBITDA (excluding FX and one-offs) to average high single-digit to early double-digit. The new South plant's utilization was 40% in Q2 and is expected to reach 60% by Q4. Management does not foresee major price increases in the immediate term, focusing instead on volume growth and market share in more lucrative segments to improve margins.

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