Greenply Industr

Greenply Industries reported a consolidated revenue of INR 614 crores in Q3 FY25, marking a 5.6% year-on-year growth. Core EBITDA for the quarter stood at INR 54 crores, increasing by 7.2% YoY, with the core EBITDA margin improving slightly to 8.8% from 8.7% in Q3 FY24. The company's PAT for the quarter was INR 24 crores, which was influenced by a one-time^📎 MTM gain of INR 4.62 crore on forex currency loans and a share of loss from the furniture and fittings JV amounting to INR 4.72 crores. For the nine months of FY25, consolidated revenue grew 16.4% YoY to INR 1,839 crores, with core EBITDA at INR 170 crores (+33% YoY) and margins of 9.2%.

The plywood business demonstrated resilience in Q3 FY25, achieving a volume growth of 2.8% YoY and a value growth of 5.6% YoY. The core EBITDA margin for the segment improved by 40 basis points YoY to 8.4%. On a 9-month basis, plywood revenue was INR 1,445 crores, growing 7.5% YoY, with core EBITDA at INR 119 crores (+11.3% YoY) and an 8.2% margin. Management expects plywood margins to reach 10% plus by Q4 FY25, driven by cost actions and a 1.5% price hike effective February. The company also announced a new plywood investment of INR 134 crores to add 13.5 million square meters of capacity, representing a 25% increase, with commercial production targeted for FY27.

The MDF business recorded a revenue of INR 134.6 crores in Q3 FY25 with a volume of 42,259 CBM. Realizations improved by 2.2% QoQ to INR 31,850 per CBM. However, the EBITDA margin for MDF declined to 10.4% from 11.8% in the previous quarter, primarily due to higher raw material costs and an unforeseen plant shutdown in December caused by equipment failure. Consequently, the full-year MDF margin guidance has been revised downwards to 13-14% from the earlier 16% plus. The construction of the HDF flooring line has been delayed by 6 months, now expected to be fully functional by May 2025.

Greenply's furniture and fittings JV began manufacturing its Phase 1 product range in November, with initial sales expected in Q4 FY25. The company participated in two flagship exhibitions, receiving encouraging responses. The Samet JV is projected to achieve INR 80-100 crores in revenue in the coming year (FY26), though its production was delayed by 5-6 months due to machinery arrival and installation. On the financial front, consolidated net debt stood at INR 413 crores, with the net debt-to-equity ratio expected to be around 0.55 by year-end, despite ongoing expansion and new business line setups.

Management expressed strong optimism regarding the upcoming implementation of BIS regulations, effective February 25, 2025, which are expected to curb imports and significantly benefit organized players by differentiating product quality. While acknowledging pre-dumping activities by importers, the company anticipates improved domestic demand and pricing post-May, once these inventories clear. The shift in real estate sales towards luxury and ultra-luxury segments (from 10% to 30% of total volume sales units in the last 3 years) is also seen as a positive sign for organized players. Timber prices, a key raw material, are expected to start declining in 9-12 months as availability improves in India.

For FY25, Greenply is targeting a plywood volume growth of around 7% plus, up from the current 5.7%. For the MDF segment, the company aims for almost a 50% growth over the last year, expecting to be around that number for the full year. These targets reflect the company's plans to leverage improved market conditions and new capacities, despite the challenges faced in Q3.