Summary
Greenpanel Industries Limited - Q3 FY2026 Earnings Call Summary Friday, January 30, 2026, 4:00 P.M.
Event Participants
Executives 2 Himanshu Jindal (CFO), Shobhan Mittal (MD)
Analysts 6 Anu (Anand Rathi), Balaji Vaidyanath (NAFA Asset Managers), Keshav Lahoti (HDFC Securities), Parth Bhavsar (Investec), Pathanjali Srinivasan (Sundaram Mutual Fund), Praveen Sahay (Prabhudas Lilladher), Utkarsh Nopany (Anand Rathi), Yash Sonthaliya (Edelweiss Public Alternates)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹398.8 crores | +11.4% YoY; driven by strong MDF volume growth despite tepid retail demand post-Diwali. |
| Total MDF Volume | 1,48,824 CBM | +17.1% YoY; supported by 19% growth in domestic volumes and 8.3% in exports. |
| Plywood Revenue | ₹54.3 crores | Flat/Muted; management noted the business is yet to revive meaningfully, with scaling plans underway. |
| Gross Margin | 50.0% | +240 bps QoQ; expansion driven by receding timber and chemical costs through early Q3. |
| Operating EBITDA | ₹44.3 crores | 11.2% margin; includes ₹8.5 crore one-off power subsidy; impacted by higher sales/marketing spend. |
| MDF EBITDA Margin | 11.9% | Includes operational leverage from exports and subsidy recognition; excludes FX impacts. |
| Net Profit (PAT) | ₹10.2 crores | Positive turnaround; impacted by ₹10 crore incremental depreciation/interest from the new AP plant. |
| Net Debt | ₹163 crores | Reduced by ₹40 crores in 9M FY26; leverage remains comfortable despite FX volatility. |
| Working Capital | 32 Days | Core cash conversion cycle maintained despite higher inventory levels for H2 support. |
Geographic & Segment Commentary
MDF (Domestic): Domestic volumes grew 19% YoY, though realizations fell 1.4% sequentially due to post-Diwali discounting pressures from peers. The segment saw an increased shift towards OEM sales (now 25% of domestic mix) which command higher discounts. Management launched “Country’s strongest waterproof MDF” to capture premium demand.
MDF (Exports): Export volumes increased by 8.3% YoY, serving as a capacity “filler” to maintain optimal plant utilization at ~63-64%. While realizations fell 1.4% sequentially, a weaker Rupee improved the attractiveness of export margins. Management continues to leverage EPCG benefits (₹8 crore recognized this quarter) via export volumes.
Plywood: This segment remains a laggard with an EBITDA margin of only 1.4%. Management is currently evaluating structural “next steps” to scale this business, with detailed plans expected in the coming quarters.
Company-Specific & Strategic Commentary
Capacity Utilization & Fungibility: Total capacity utilization stood at 63-64% across three lines. All plants are now “fungible,” allowing management to shift production between North and South plants (Line-2 and Line-3) based on logistics, SKU requirements, and freight economics.
Subsidy Recognition: Recognized ₹62.5 crores in total approved subsidies from the Andhra Pradesh government. This included ₹54 crores adjusted against the carrying cost of fixed assets (reducing future depreciation) and ₹8.5 crores in other operating income as a revenue subsidy.
Market Positioning: Increased investments in sales, marketing, and channel engagement (ATL/BTL) to combat “tepid” retail demand. The company is pivoting towards OEMs to ensure volume throughput while the retail market remains soft.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| MDF Volume Growth | Mid-to-high teens (FY26) | Reiteration of previous guidance despite a weak Q1; implies a very strong Q4 performance. |
| MDF EBITDA Margin | 18% - 20% (Sustainable) | Management believes high-teen margins are achievable with optimal utilization and product mix. |
| Operating EBITDA | High single to early double digits (FY26) | Average for full year excluding FX and one-offs; relies on volume recovery and cost optimization. |
Risks & Constraints
| Risk | Context |
|---|---|
| Pricing & Competition | Peer discounting post-Diwali forced 1.4% sequential realization drop. Management notes they must “behave the way competition allows” in a surplus capacity market. |
| Currency Volatility | MTM loss of ₹43 crores YTD on Euro-denominated borrowings for the new plant. While largely non-cash, it significantly impacts reported PBT/PAT. |
| Raw Material Volatility | Timber costs saw a seasonal spike due to severe North winters and South rains. While easing in January, a 50/50 timber-to-chemical cost mix remains sensitive to macro factors. |
Q&A Highlights
Pricing & Competition
- Question: Is there a foreseeale threat from imports or potential for price hikes? (Balaji Vaidyanath)
- Answer: Imports are muted and domestic pricing is currently so competitive that imports (barring specific thin-panel uses) aren’t a threat. New QCO standards will further restrict non-compliant imports. However, price hikes are unlikely due to domestic surplus capacity (Shobhan Mittal).
Financials & Subsidies
- Question: Can you clarify the ₹8.5 crore and ₹54 crore subsidy accounting? (Utkarsh Nopany)
- Answer: Of the ₹96 crore AP subsidy, ₹54 crore (capital) was adjusted against asset carrying costs to lower future depreciation. ₹8.5 crore (revenue/power) was recognized in P&L under other operating income this quarter (Himanshu Jindal).
Segment Strategy
- Question: Why sell more exports if they have lower margins? (Utkarsh Nopany)
- Answer: Exports are “fillers” used to recover fixed costs and gain operating leverage when domestic retail is soft. Every CBM sold contributes to fixed cost recovery and triggers EPCG benefit recognition (Himanshu Jindal).
Key Takeaway
Greenpanel delivered a resilient Q3 FY26, characterized by 17.1% MDF volume growth and a stabilized gross margin of 50%, supported by receding raw material costs and a strategic pivot toward OEM and export channels to maintain plant utilization at ~64%. While domestic realizations faced a 1.4% sequential headwind due to competitive discounting, the company successfully optimized its balance sheet by reducing net debt to ₹163 crores and accounting for ₹62.5 crores in state subsidies. Strategically, the company is leveraging its new Andhra Pradesh capacity as a fungible asset to optimize freight and production economics. Management maintains its full-year guidance of mid-to-high teen volume growth, banking on a strong Q4 to offset earlier softness. Success in FY27 remains contingent on the revival of the retail trade and the successful scaling of the stagnant plywood division.
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