Greenply Industr

Greenply Industries reported a consolidated quarterly revenue of INR688.6 crores in Q2 FY26, marking a 7.5% year-on-year growth. The consolidated core EBITDA for the quarter stood at INR56.8 crores, with a margin of 8.2%, an 80 basis point decline from the previous year. For the first half of FY26, consolidated revenue reached INR1,289.4 crores, growing 5.3% year-on-year, while EBITDA grew 2.5% to INR118.4 crores, with a margin of 9.2%. Profit after tax for H1 FY26 was INR44.4 crores.

The MDF business saw robust growth in Q2 FY26, with revenue at INR146.8 crores (up 16.1% Y-o-Y) and volume at 47,018 CBM (up 15.9% Y-o-Y). The Q2 EBITDA margin for MDF was 8.3%, impacted by a temporary shutdown for capacity expansion from 800 CBM to 1,000 CBM per day, inventory liquidation, and outsourced material. Management is confident of a strong rebound in H2 FY26, targeting double-digit volume growth and a 16% EBITDA margin, with full-year FY26 margin expected to be 14.5%-15%.

The plywood segment achieved INR995.5 crores in revenue for H1 FY26, a 3.1% Y-o-Y growth, with volume growth of 2.5%. Core EBITDA for H1 FY26 was INR80.6 crores, with an 8.1% margin. Management is optimistic about H2 FY26, projecting over 10% volume growth due to BIS implementation, reduced imports, stable raw material prices, and internal process improvements. They aim for a 10% plus EBITDA margin in H2 if volume growth exceeds 15%, with a full-year FY26 margin target of 8.5%-8.7% and volume growth of 6.5%-7%.

The implementation of BIS norms has significantly reduced imports, with both MDF and plywood imports being only 3% to 4% of last year's numbers, directly benefiting organized players like Greenply. This regulatory change, coupled with steady timber prices, creates a favorable environment. The company has also expanded its marketing strategy to include the value-focused Ecotec range and the growing MDF category, enhancing product visibility across key market segments.

The furniture and fitting JV reported sales of INR11.4 crores in Q2 FY26 and INR17.9 crores for H1 FY26, incurring a PAT loss of INR11.8 crores and INR22.6 crores, respectively. Greenply's share of the loss was INR5.9 crores in Q2 and INR11.3 crores in H1. Management views these losses as initial investments for brand building and targets H2 FY26 revenue of INR25-30 crores, with a monthly run rate of INR5 crores. An aggressive target of INR100 crores turnover is set for FY27, with plans for Phase 2/3 expansion to reduce reliance on imports and improve margins.

Greenply's consolidated net debt stood at INR510 crores at the end of Q2 FY26, with confidence in maintaining a debt-equity ratio around 0.5x despite further capex. The company plans to invest INR100-110 crores in H2 FY26, covering plywood process improvements, line balancing, the Odisha plant construction, and the PVC plant. The total capex for FY26, including JV investment, is projected to be INR155-160 crores. A new MDF capacity expansion is deemed necessary by FY28, with location and partners to be finalized in the next 5-6 months.