GREENPLYNSEFebruary 07, 2025

Greenply Industries Limited

7,186words
124turns
8analyst exchanges
4executives
Management on call
Manoj Tulsian
JOINT MANAGING DIRECTOR
Sanidhya Mittal
JOINT MANAGING DIRECTOR – GREENPLY INDUSTRIES LIMITED
Nitin Kalani
CHIEF FINANCIAL OFFICER – GREENPLY INDUSTRIES LIMITED
Karan Bhatelia
ASIAN MARKETS SECURITIES LIMITED
Key numbers — 40 extracted
INR614 crore
9 months FY 2025. I would like to share with you that we have achieved a consolidated revenue of INR614 crores during the quarter, which is a growth of 5.6% on a Y-o-Y basis. Our consolidated core EBITDA for
5.6%
we have achieved a consolidated revenue of INR614 crores during the quarter, which is a growth of 5.6% on a Y-o-Y basis. Our consolidated core EBITDA for the quarter was at INR54 crores, a growth of 7
INR54 crore
, which is a growth of 5.6% on a Y-o-Y basis. Our consolidated core EBITDA for the quarter was at INR54 crores, a growth of 7.2% on a Y-o-Y basis. The core EBITDA margin for the quarter was at 8.8% as compar
7.2%
% on a Y-o-Y basis. Our consolidated core EBITDA for the quarter was at INR54 crores, a growth of 7.2% on a Y-o-Y basis. The core EBITDA margin for the quarter was at 8.8% as compared to 8.7% in quart
8.8%
at INR54 crores, a growth of 7.2% on a Y-o-Y basis. The core EBITDA margin for the quarter was at 8.8% as compared to 8.7% in quarter 3 FY '24. Our PAT for the quarter was at INR24 crores. Quarterly P
8.7%
rowth of 7.2% on a Y-o-Y basis. The core EBITDA margin for the quarter was at 8.8% as compared to 8.7% in quarter 3 FY '24. Our PAT for the quarter was at INR24 crores. Quarterly PAT had an impact of,
INR24 crore
r the quarter was at 8.8% as compared to 8.7% in quarter 3 FY '24. Our PAT for the quarter was at INR24 crores. Quarterly PAT had an impact of, A, MTM gain of INR4.62 crore on our forex currency loan taken f
, MT
n quarter 3 FY '24. Our PAT for the quarter was at INR24 crores. Quarterly PAT had an impact of, A, MTM gain of INR4.62 crore on our forex currency loan taken for our MDF business; and B, share of los
INR4.62 crore
24. Our PAT for the quarter was at INR24 crores. Quarterly PAT had an impact of, A, MTM gain of INR4.62 crore on our forex currency loan taken for our MDF business; and B, share of loss from our furniture an
INR4.72 crore
taken for our MDF business; and B, share of loss from our furniture and fittings JV amounting to INR4.72 crores. So it almost nullified, both the items together. On a 9-month basis, our consolidated revenue
INR1,839 crore
almost nullified, both the items together. On a 9-month basis, our consolidated revenue was at INR1,839 crores, which is a growth of 16.4% on a Y-o-Y basis. Our consolidated core EBITDA was at INR170 crores,
16.4%
gether. On a 9-month basis, our consolidated revenue was at INR1,839 crores, which is a growth of 16.4% on a Y-o-Y basis. Our consolidated core EBITDA was at INR170 crores, which is a growth of 33% o
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Guidance — 20 items
Manoj Tulsian
opening
“I will be updating you on Greenply's operating and financial performance for quarter 3 and 9 months FY 2025.”
Manoj Tulsian
opening
“More details on the MDF business will be shared by Sanidhya later.”
Manoj Tulsian
opening
“We expect to see some sales in quarter 4 where we launched the business and showcased the abilities to our dealers.”
Manoj Tulsian
opening
“Next year, we see this dropping further despite announcing the new investments in Odisha for our plywood expansion.”
Sanidhya Mittal
opening
“As a result, we are reducing our full year margin guidance to 13-14% as against earlier of 16% plus.”
Sanidhya Mittal
opening
“However, in the fourth quarter, we believe that the revenue will substantially be better and margins will be stronger.”
Sanidhya Mittal
opening
“Construction of our HDF flooring line has been delayed by 6 months due to the late arrival of major equipment, which is likely to arrive in the month of March and will be fully functional in the month Greenply Industries Limited February 07, 2025 of May '25.”
Manoj Tulsian
qa
“But for sure, I see now going forward, things will be very, very positive for panel business and for plywood business.”
Manoj Tulsian
qa
“But I think all in all, the situation for people like us, for businesses like us, the scenario is going to be very, very good going forward.”
Manoj Tulsian
qa
“I can definitely see that this quarter will be much better than the previous quarter, no doubt about it.”
Risks & concerns — 15 flagged
Quarterly PAT had an impact of, A, MTM gain of INR4.62 crore on our forex currency loan taken for our MDF business; and B, share of loss from our furniture and fittings JV amounting to INR4.72 crores.
— Manoj Tulsian
At the year-end, our debt on a cautious approach would be around INR450 crores as guided earlier, which means our net debt-to- equity ratio at the year-end would be around 0.55 despite expansion and setting up of 2 new line of businesses.
— Manoj Tulsian
The first question is, I just wanted to know the impact of the shutdown on the volumes or the revenues of the MDF division.
— Sneha Talreja
You wanted to know the impact of the shutdown on the MDF revenue.
— Sanidhya Mittal
But added to that, the major problem, what we saw that, even if the demand was there in pockets, liquidity was a serious challenge.
— Manoj Tulsian
So that was a concern where -- and mostly, everybody was only saying, sir, we are not getting our payments, though there are orders, but we are also trying to hold back.
— Manoj Tulsian
Any pre-dumping that you're seeing would be a concern, which would take like 4 to 6 months to ease out or something on that sort, which was happening last year?
— Sneha Talreja
It's difficult to mention in terms of percentage and this.
— Manoj Tulsian
And at the moment, we are not in a position to take that risk given that we only have one plant and now we have a good OEM as well as a distributor dealer network base who somehow left competition and is with us.
— Manoj Tulsian
But do you think if timber prices decline, maybe unorganized players will choose to pass it on to the customers and hence, forcing us to bring down our selling price as well.
— Bhavin Rupani
What are the lead indicators which makes you believe that timber prices are expected to decline after 9 to 12 months?
— Bhavin Rupani
Players with too much capacity or maybe too much pressure related to import.
— Sanidhya Mittal
But I think overall, as an industry, there's a huge raw material pressure and there's a demand pressure.
— Sanidhya Mittal
Companies with larger capacity, I guess it was getting difficult for them to implement.
— Sanidhya Mittal
But all these things is -- because we have been under this pressure for the last good 4 years post COVID continuously, right?
— Manoj Tulsian
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Q&A — 8 exchanges
Q
Congratulations on resilient MDF performance despite the shutdown. The first question is, I just wanted to know the impact of the shutdown on the volumes or the revenues of the MDF division.
Sanidhya Mittal
Can you just repeat your question? You wanted to know the impact of the shutdown on the MDF revenue. Yes. I think it would be -- INR10 crores… About INR10 crores, I think. About INR10-odd crores. Yes. And what would be the exports of MDF in this particular quarter? Export numbers are negligible in our case because the revenues in exports are much lower than in the domestic segment. And since we have a very limited capacity, only one line to sell, our focus is only the domestic market. Understood. And could you also quantify average timber prices? Just want to see the increase in prices for tim
Q
Sir, firstly, since you mentioned that there was more pain because of receivables, have you seen any loss of market share or that demand must have shifted to some other player? Could that be the case?
Manoj Tulsian
Well, it can be. Look, I mean, it all depends because as I said, that maybe we have, to some extent, lost some amount of opportunities because we wanted to be stringent on our receivables, okay? But Greenply Industries Limited February 07, 2025 I think it was -- we all felt that it's a prudent decision at this point of time because with a lot of semblance, we brought this stringency in our own receivable policy over the years. So -- and I said that there would be tailwinds, which will give us a lot of opportunity now. And as we have worked a lot on automation in the last 2, 3 years, we are pre
Q
Sir, my question is regarding the industry's situation right now in the MDF and in the plywood as well. First, I'll start with MDF. My question is to you that there's been a lot of dumping from China and Vietnam on the different styles and different MDF. And because of that, the industry share of our Indian organized players is getting divided, because of which the revenues which used to come in are not coming in. And -- because the certification have been in talks, but I mean, there's no confirmation yet. And if it does come in, how much percentage of -- how is it going to help organized play
Manoj Tulsian
So Aishwarya your voice was not clear. I think what you are trying to mean is that, there is a lot of imports which is happening on MDF and which is hurting the domestic industry. And in case you are saying since there is no final date for the QCO implementation, but if that happens, how is it going to help the domestic industry, right? That's what you're asking. Absolutely, sir. Yes, sir. Sanidhya, would you like to answer this? Yes, I'll answer this. So I feel that you are absolutely right, there is a huge quantity of import coming in. And the fact that QCO is coming in February and February
Q
Yes, Sanidhya, with respect to the MDF capex, any thought process now? Greenply Industries Limited February 07, 2025
Sanidhya Mittal
Sorry, come again. I wanted to have some clarity on the MDF capex. Any thought process on that? I think it's still too soon for us to think of another capex. Obviously, when we strategize our business or when we discuss, we are quite excited about thinking of growth or thinking of new lines, etcetera. But looking at our balance sheet, looking at this line further stabilizing, I think this moment will still be an early moment to comment when we are going to do the next capex. Depending on how the profits are, how quickly we are able to pay back this and looking at our balance sheet, we will dec
Q
Sir, we had a few quarters before talked about getting into laminate segment, though initially on trading model. So what is the status right now over there?
Manoj Tulsian
Not much, Bhavin. We thought about it, but then we thought that we have too many things on the platter. We have done it in a very small way, but I don't think it is at this point of time worth mentioning. Maybe we look at it how it pans out in the next 1 or 2 quarters. And then if it becomes meaningful, we'll come back to all of you with our business plan on the same. Also, maybe the next 2 quarters will give us the clarity whether our approach is right and what should we do about it. Sir, any kind of revenues that we are generating as of now or is it very small? No, no, not worth mentioning,
Q
Just firstly, can you provide us the current mix for timber? As in how much are we importing vis-a- vis how much are we sourcing locally? And what would be the price differential that we are getting as of now? And whether is it that we are doing it only for plywood or also for MDF?
Manoj Tulsian
Nikhil, I don't have the numbers readily. Maybe I'll ask my team to provide you the same subsequently. We are doing this for plywood, but we are not doing this for MDF. And sir, the price differential, if by any chance you have it handy? Well, it will range in the difference of around INR2 type per kg. But again, not all timbers and of the same this can be imported. And the species are different. So it is not a one-to-one comparison. And you can also not use it across. So there are lots of challenges in that also. But yes, to some extent, in certain plywood category we can use that in some min
Q
I just wanted to ask the volume growth guidance of plywood and MDF for FY '25.
Manoj Tulsian
For the coming year? Greenply Industries Limited February 07, 2025 Yes, yes. For FY '25, yes. So we're just doing our budgeting. We just started the process. Give us a couple of months. In the next meeting, we will share that in detail. No, no, sir, for FY '25 only this year? FY '25. So FY '25, the volume, I think we are at around 5.7% right now. And with quarter 4, we will try to be anywhere around 7% plus. Not easy, but definitely, we have plans. Let's see how it pans out. And for MDF, we had initially targeted almost a 50% growth over last year. We should be around that number for the full
Q
Thank you all for taking time to participate in this call. In case of any further clarifications or queries, please feel free to reach us. Thank you.
Management
Speaking time
Manoj Tulsian
43
Sanidhya Mittal
18
Sneha Talreja
14
Bhavin Rupani
11
Moderator
10
Karan Bhatelia
7
Nikhil Gada
7
Udit
6
Aishwarya
5
Ashutosh Khetan
3
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Opening remarks
Karan Bhatelia
Thanks, Rico. Hi, everyone. A very good morning. On behalf of Asian Markets Securities, we thank you for joining us on Greenply Industries' 3Q and 9 months FY '25 conference call. In the panel today, we have Mr. Manoj Tulsian, Joint Managing Director and CEO; Mr. Sanidhya Mittal, Joint Managing Director; and Nitin Kalani, CFO. May I now invite Manojji to begin the proceedings of the call. Thank you, and over to you, sir.
Manoj Tulsian
Thank you, Karan, and good morning, everyone. It is a pleasure to have you all on this call. I will be updating you on Greenply's operating and financial performance for quarter 3 and 9 months FY 2025. I would like to share with you that we have achieved a consolidated revenue of INR614 crores during the quarter, which is a growth of 5.6% on a Y-o-Y basis. Our consolidated core EBITDA for the quarter was at INR54 crores, a growth of 7.2% on a Y-o-Y basis. The core EBITDA margin for the quarter was at 8.8% as compared to 8.7% in quarter 3 FY '24. Our PAT for the quarter was at INR24 crores. Quarterly PAT had an impact of, A, MTM gain of INR4.62 crore on our forex currency loan taken for our MDF business; and B, share of loss from our furniture and fittings JV amounting to INR4.72 crores. So it almost nullified, both the items together. On a 9-month basis, our consolidated revenue was at INR1,839 crores, which is a growth of 16.4% on a Y-o-Y basis. Our consolidated core EBITDA was at INR
Sanidhya Mittal
Thank you, Manojji, and good morning to everyone on the call. In our MDF business, we are progressing steadily. Our sales in the quarter was negatively impacted due to an unforeseen plant shutdown in the quarter due to equipment failure. The Siemens motor developed a technical snag and had to be sent to Mumbai for repairs. During the quarter, our EBITDA margins were lower due to higher raw material costs and plant shutdown. As a result, we are reducing our full year margin guidance to 13-14% as against earlier of 16% plus. However, in the fourth quarter, we believe that the revenue will substantially be better and margins will be stronger. Construction of our HDF flooring line has been delayed by 6 months due to the late arrival of major equipment, which is likely to arrive in the month of March and will be fully functional in the month Greenply Industries Limited February 07, 2025 of May '25. Construction of our glue plant is also likely to be completed in this quarter. With this, I w
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