Greenply Industries: Navigating Growth Amidst Market Dynamics in Q2 FY26

Greenply Industries Limited, a prominent player in India's wood panel industry, has released its financial results for the second quarter and first half of fiscal year 2026. The company reported a consolidated revenue of INR 688.6 crore for Q2 FY26, marking a 7.5% year-on-year growth. For the first half of the fiscal year, consolidated revenue stood at INR 1,289.4 crore, reflecting a 5.3% increase compared to the previous year. While the top-line performance showed resilience, the consolidated core EBITDA margin for Q2 FY26 was 8.2%, a slight decline from 9.0% in the corresponding quarter last year. This indicates a period of strategic adjustments and investments aimed at long-term gains.

The company's performance was a tale of two segments. The plywood business, encompassing standalone operations and subsidiaries, recorded a revenue of INR 541.7 crore in Q2 FY26, growing 5.4% year-on-year. Volume growth was robust at 7.2% year-on-year, demonstrating strong market traction despite broader challenges in the residential real estate sector. However, plywood realizations per square meter saw a modest decrease, settling at INR 242, down 3.5% year-on-year. The core EBITDA margin for the plywood segment stood at 8.2%. Management noted a significant demand from mid-value segments, which influenced the average realization.

In contrast, the MDF (Medium Density Fibreboard) business delivered an impressive top-line performance, with revenue soaring 16.1% year-on-year to INR 146.8 crore, and volumes increasing by 15.9%. This growth was significantly bolstered by the successful expansion of Greenply's manufacturing capacity from 800 CBM (Cubic Meters) per day to 1,000 CBM per day during the quarter. Despite this strong revenue growth, the MDF segment's core EBITDA margin experienced a temporary dip to 8.3% from 11.8% in the previous year. This decline was primarily attributed to one-off factors such as the reduction of finished goods inventory, liquidation of old and non-moving stock at higher discounts, and the consumption of outsourced material to meet market needs during the expansion-related shutdown. With operations now normalized, management is confident of a strong rebound to double-digit margins in the second half of the fiscal year.

Strategic Initiatives and Future Outlook

Greenply is actively pursuing several strategic initiatives to drive future growth and enhance profitability. The implementation of BIS (Bureau of Indian Standards) norms has emerged as a significant tailwind, leading to a substantial reduction in imports for both MDF and plywood. This development creates a more level playing field and a favorable environment for organized and branded players like Greenply. The company is also intensifying its marketing efforts, with campaigns for its premium Greenply range and the value-focused Ecotec brand, aiming to capture a broader consumer base.

Capital expenditure plans are robust, with an estimated INR 100-110 crore allocated for H2 FY26. These investments include process improvements and new line installations in the plywood business, ongoing construction of an Odisha plant, and investments in a PVC plant. Furthermore, Greenply is venturing into new product categories, with trials underway for HDF flooring, expected to commence commercial sales by early December. The Furniture Hardware Joint Venture (Greenply Samet), while currently in a loss-making phase due to initial investments and brand building, is showing incremental progress in dealer additions and sales team expansion. The JV aims for an INR 100 crore turnover next fiscal year, with future plans for localized manufacturing to improve its margin profile.

Management Commentary and Investor Confidence

Management expressed confidence in maintaining the growth momentum in the second half of FY26. For the MDF business, the guidance includes a strong rebound to double-digit margin levels and double-digit volume growth. The plywood segment is targeted for 10% plus volume growth in H2, with a potential for 10% plus EBITDA margin if volume growth exceeds 15%. The company's consolidated net debt stood at INR 510 crore at the end of Q2 FY26, and management is confident of maintaining a debt-equity ratio in the range of 0.5x, even with planned capex. This disciplined approach to capital allocation and strategic expansions underscores Greenply's commitment to sustainable growth and value creation for its stakeholders.

Greenply's Q2 FY26 performance reflects a company in transition, strategically investing in capacity, brand, and new product lines while navigating market dynamics. The focus on operational efficiencies, coupled with favorable regulatory changes, positions Greenply for a stronger second half and continued leadership in the Indian wood panel industry.