Greenpanel Industries Limited

Greenpanel Industries reported Q4 FY25 net sales of Rs. 338.94 crore, a decrease from Rs. 396.08 crore in the prior year. Post-tax profits for the quarter were Rs. 29.39 crore, a marginal 1% decline from Rs. 29.81 crore. For the full year FY25, post-tax profits were Rs. 72.11 crore, a 49% reduction, primarily due to a 3.7% fall in domestic realizations and a 23% increase in wood prices, which led to a 615 basis point drop in EBITDA margins to 10.9%.

The MDF segment saw domestic sales volumes fall by 25% YoY in Q4 FY25, largely due to the discontinuation of commercial grade MDF, which was nil in the quarter compared to 40,924 cubic meters in Q4 FY24. Despite this, domestic realizations increased by 7.4% YoY to Rs. 31,214 per cubic meter, driven by a higher mix of value-added products (50% vs 44%). Export volumes, however, grew by 34% to 14,458 cubic meters. MDF EBITDA margins stood at 16.3% in Q4, benefiting from EPCG scheme incentives.

Plywood volumes in Q4 FY25 were lower by 12% YoY, with sales de-growth of 5.3% to Rs. 33.77 crore. The unit operated at 42% capacity utilization. Plywood realizations increased by 8% YoY to Rs. 270 per square meter. EBITDA margins for the plywood segment were 12.1%, positively impacted by a write-back of provisions for turnover discounts amounting to Rs. 1.25 crore.

Commercial production has commenced at the expansion project, with the company targeting a 35% capacity utilization for the new line in FY26, contributing approximately 72,000 cubic meters. Overall, Greenpanel expects about 30% volume growth in FY26, including an 11-12% growth from existing lines and an additional 80,000 cubic meters from the export business. The new line, being technologically advanced, is in an optimization phase, with substantial output expected from Q2 FY26.

The company recognized Rs. 35 crore from EPCG incentives in Q4 FY25, contributing to the higher MDF EBITDA margins. The total EPCG incentive expected is Rs. 86 crore, with the remaining balance of Rs. 51 crore anticipated to be recognized over FY26 and FY27. This incentive is a customs duty waiver on imported machinery, which was accounted for after the plant's commissioning and commercial production began.

The market for MDF is seeing strong demand growth of 15-20%, with import-concentrated segments shifting towards domestic supply. The upcoming implementation of BIS QCOs from February 2026 is expected to boost demand for domestically manufactured furniture and raw materials like MDF and plywood. This regulation will also minimize the threat from the unorganized segment by increasing their costs and reducing their price-cutting power, thereby benefiting organized players like Greenpanel.

Net debt as of March 31, 2025, stood at Rs. 165 crore, which includes Rs. 336 crore allocated for the expansion project. For FY26, the company anticipates a modest capex of approximately Rs. 25 crore for the balance of the new line and an additional Rs. 10-15 crore for existing business, totaling Rs. 30-45 crore. The company also expects depreciation to be around Rs. 100-102 crore for FY26.