Summary
Greenlam Industries Limited - Q3 FY 2026 Earnings Call Summary Friday, January 30, 2026, 4:00 PM
Event Participants
Executives 3 Ashok Sharma (CFO), Samarth Agarwal (VP Finance), Saurabh Mittal (MD & CEO)
Analysts 3 Bhavin Rupani (Investec), Keshav Vijay Ratan Lahoti (HDFC Securities), Sneha Talreja (Nuvama), Utkarsh Nopany (Anand Rathi)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹706 crores | +17.3% YoY; Sequentially down by ~₹100 crores due to holiday seasonality and export shipment postponements. |
| Gross Margin | 55.6% | +60 bps YoY; Supported by pricing discipline, raw material stability, and value addition. |
| EBITDA (pre-forex/extraordinary) | ₹65 crores | Flat YoY; Margins declined 170 bps to 9.2% due to higher operating costs at Naidupeta chipboard unit. |
| Net Profit (PAT) | (₹0.6 crores) | Loss reported vs ₹28.3 crores profit YoY; Impacted by wage code provisions (₹6.2 Cr), finance costs, and depreciation. |
| Laminate Revenue | ₹562 crores | +8.1% YoY; Production utilization at 83% with realizations improving to ₹1,143/sheet due to currency factors. |
| Plywood & Allied Revenue | ₹90 crores | +9.5% YoY; Segment saw an EBITDA loss of ₹13.3 crores; utilization remained low at 35%. |
| Chipboard Revenue | ₹54.2 crores | +13.3% QoQ; EBITDA loss of ₹3.2 crores; capacity utilization reached 41%. |
| Net Debt | ₹1,010 crores | As of Dec 31, 2025; reflective of intensive capex cycles over the last three years. |
| Working Capital Cycle | 58 days | Improved by 9 days YoY from 67 days in Q3 last year. |
Geographic & Segment Commentary
- Laminates: International shipments faced delays in late December (Europe/UK), leading to higher inventory-in-transit which is expected to realize in Q4. Domestic pricing remains stable, while export realizations benefited from Rupee depreciation.
- Plywood & Allied: Performance was slower than management expectations with utilization at 35%. Strategic introduction of a “BWP+” variant (5-6% lower price point) and rebranding under the Mikasa name aim to capture missing market segments.
- Chipboard (Panel): Gradual improvement in performance with narrowing losses. Management is focusing on high-moisture resistant (HMR) grades and melamine-faced chipboards to improve realization per cubic meter over plain boards.
Company-Specific & Strategic Commentary
- Brand Architecture Streamlining: Rebranded the portfolio into two main pillars: ‘Greenlam’ (Laminates, Facades, Melamine Chipboard) and ‘Mikasa’ (Laminates, Plywood, Veneer, Flooring, and Doors) to optimize marketing spend and operational clarity.
- Capacity Expansion: The brownfield expansion at Naidupeta for two additional laminate lines is on track for commissioning in Q4 FY27.
- Wage Code Impact: The company recognized an exceptional loss of ₹6.2 crores during the quarter related to wage code matters.
- Product Innovation: Launched high-moisture resistant chipboard variants to differentiate from unorganized players and improve value mix.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 18% - 20% for FY26 | Management maintains guidance despite slow Q3; Q4 is historically a strong quarter. |
| Profitability | EBITDA Breakeven in FY27 | Targeted for Plywood and Chipboard segments as utilization improves. |
| Utilization | 55% - 60% for FY27 | Targeted for both Chipboard and Plywood units to achieve operational leverage. |
| Capex | ~₹50 - ₹75 crores | Remaining spend for current projects to be completed by Q1 FY27. |
Risks & Constraints
| Risk | Context |
|---|---|
| Currency Volatility | Rupee depreciation has increased input costs for imported decorative paper and chemicals, though partially offset by higher export realizations. |
| US Tariffs | Ongoing tariffs on Indian laminates in the US market are being shared between the company and customers, impacting net margins. |
| Demand Headwinds | Management noted general cash flow challenges in the domestic market and seasonality-led work disruptions. |
| Competitive Intensity | Significant pricing pressure from unorganized bagasse-based chipboard players (15-20% lower pricing), though Greenlam targets the premium organized segment. |
Q&A Highlights
Laminate Pricing & Exports
- Question: Is the US tariff hit being shared, and how are realizations trending? (Keshav Lahoti)
- Answer: Tariffs are being shared between customers, the US subsidiary, and the India office; some impact is offset by INR depreciation. Realizations improved to ₹1,143/sheet mainly due to currency tailwinds and value mix. (Ashok Sharma & Saurabh Mittal)
Segmental Breakeven
- Question: When will the new Plywood and Chipboard plants break even? (Keshav Lahoti)
- Answer: Both segments are expected to achieve EBITDA breakeven in FY27 as utilization moves toward the 55-60% range. (Ashok Sharma)
Demand & Seasonality
- Question: Was the Q3 slowdown purely seasonal or a demand issue? (Sneha Talreja)
- Answer: Q3 is traditionally weaker due to holidays and work disruptions in India. However, there are visible cash flow challenges on the ground and demand has been “modest” rather than robust. (Saurabh Mittal)
Brand Strategy
- Question: What is the rationale behind rebranding NewMika to Mikasa? (Sneha Talreja)
- Answer: It consolidates Plywood, Veneer, Flooring, and specialized Laminates under one ₹1,000-crore potential brand (Mikasa), streamlining the sales network and branding push. (Saurabh Mittal)
Key Takeaway
Greenlam Industries reported a 17.3% YoY revenue growth in Q3 FY26, reaching ₹706 crores, though performance was tempered by seasonal holiday disruptions and export shipment postponements. While gross margins remained healthy at 55.6% due to pricing discipline, the bottom line was pressured by a ₹6.2 crore wage code provision and higher operating costs from newly capitalized plants, resulting in a marginal net loss of ₹0.6 crores. Strategically, the company has consolidated its brand architecture into ‘Greenlam’ and ‘Mikasa’ to drive operational efficiency and market clarity. Management remains committed to an 18-20% top-line growth target for FY26, anticipating a strong Q4 recovery. The focus for FY27 shifts toward achieving EBITDA breakeven in the Plywood and Chipboard segments by scaling capacity utilization to 55-60%, while monitoring risks associated with currency volatility and global trade tariffs.
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