Greenply Industries Limited

Greenply Industries Limited reported a strong Q4 FY26, with consolidated revenue growing 19.6% YoY to ₹776.2 crores, marking its highest ever quarterly revenue. Core EBITDA margin expanded by 150 bps YoY to 12%. For the full year FY26, consolidated revenue was ₹2,739 crores (+10.1% YoY) and core EBITDA was ₹270.5 crores (+13.8% YoY), with margins at 9.9%. PBT, before exceptional items^📎, grew 21% YoY to ₹186 crores for FY26.

The company faced challenges due to the evolving geopolitical environment, which led to a sharp increase in chemical prices (over 50%) and elevated logistics costs, particularly impacting the MDF segment where chemicals constitute nearly 30% of raw material costs. To mitigate these pressures, Greenply implemented calibrated price increases of 5-10% for MDF and 4-5% for plywood, effective from April. The company is also evaluating domestic sourcing opportunities for chemicals to reduce import reliance.

Greenply recognized an exceptional item^📎 of ₹15.16 crores for impairments related to its investment, financial guarantees, and advances to its Dubai entity (GMEL). This one-time^📎 adjustment was a proactive measure taken after a thorough review of international exposure, aimed at safeguarding financial integrity. Management confirmed that all potential liabilities related to this exposure have been fully provided for in the books, with no impact on underlying operating cash flow or long-term growth strategy.

The MDF segment delivered its highest ever quarterly revenue of ₹189.4 crores in Q4 FY26, with volume and value growing 45.3% and 39.6% YoY respectively. Margins for the quarter stood at 17%, supported by strong sales and operating leverage. Management expressed confidence in sustaining these margins, attributing them to incremental volumes and operating leverage achieved before the recent price hikes. The company targets 25-30% volume growth for MDF.

The plywood segment recorded 15.6% YoY volume growth in Q4 FY26, with revenue of ₹588.5 crores. Greenply is undertaking significant 'fundamental changes' in plywood production technology, with new processes already implemented in two facilities and planned for two more during the current financial year. This initiative aims to improve product quality, reduce costs, and enhance market acceptance, particularly to meet the precise requirements of OEM clients who are increasingly driving demand for ready-made furniture.

Greenply is pursuing substantial capex, including approximately ₹425 crores for a new MDF facility (₹300 crores in FY27, ₹125 crores in FY28), ₹130 crores for an Odisha plywood plant, and ₹45-50 crores for plywood technology upgrades. Despite these investments, consolidated net debt stood at ₹461 crores, maintaining a debt-to-equity ratio of 0.52, within the guided range of 0.5 to 0.6. The company anticipates debt-to-equity to peak at 0.7-0.72 for about one year before returning to the 0.5-0.6 range, supported by continuously increasing operating cash flows.

Mr. Manoj Tulsian has resigned as Joint Managing Director and CEO due to personal commitments but will continue his association with Greenply in an advisory capacity, ensuring a seamless transition. Separately, an income tax search and seizure operation was conducted at certain business premises from February 26 to March 2, 2026. As of the call date, no order, notice of demand, or penalty has been received, and the company's books of accounts are clear, with management believing the action was based on 'wrong Intel'.

The Furniture & Fittings JV generated ₹12.99 crores in Q4 FY26 sales but reported a PAT loss of ₹13 crores (Greenply's share: ₹6.5 crores), reflecting its initial establishment phase requiring significant investment. Management expects the JV to break even by mid-FY28, driven by strong ramp-up and demand. Additionally, the new PVC and WPC plant commenced commercial production in April '26, with an annual installed capacity of 6 million kgs for doors and 3 million kgs for door frames, projected to contribute ₹75-80 crores in peak annual revenue.