Greenlam Industries Limited: Q2 & H1 FY26 - A Quarter of Record Revenues and Strategic Traction

Greenlam Industries Limited, a prominent player in surface and substrate solutions, has delivered a robust performance for the second quarter and first half of the financial year 2026. The company reported its highest-ever quarterly revenue, signaling strong operational momentum and effective strategic execution across its diverse portfolio. This period underscores Greenlam's commitment to sustainable growth and market leadership, even as it navigates the complexities of expanding into new product categories.

For Q2 FY26, Greenlam's consolidated net revenue soared to INR 808.3 crores, marking an impressive 18.7% year-on-year growth and a 20% sequential increase. This top-line expansion was broad-based, with significant contributions from both domestic and international markets. Despite this strong revenue growth, net profit for the quarter stood at INR 31.8 crores, a 7.7% decline year-on-year. This dip in profitability was primarily attributed to foreign exchange fluctuations, higher depreciation, and increased interest expenses associated with new projects that commenced operations in the previous fiscal years. Similarly, for the first half of FY26, consolidated net revenue grew by 15.3% year-on-year to INR 1,482 crores, but net profit was INR 16.1 crores, down from INR 54.3 crores in H1 FY25, reflecting the continued impact of these factors.

Segmental Performance: Laminates Lead, New Ventures Gain Ground

The Laminates & Allied segment, Greenlam's largest business, continued to be the primary growth driver. For Q2 FY26, this segment recorded a net revenue of INR 658.0 crores, growing by 10.2% year-on-year. This growth was underpinned by the highest-ever production and sales volumes, with volumes increasing by 7.4% year-on-year and 17.2% sequentially. The laminate business's value growth was largely propelled by robust international demand. The segment's EBITDA margin, post-forex fluctuation, stood at a healthy 18.7%, a 400 basis point improvement year-on-year, reflecting superior product mix, stable raw material costs, and disciplined cost management.

The Plywood & Allied segment also demonstrated significant progress, with net revenue growing by 22.2% year-on-year to INR 102.5 crores in Q2 FY26. While this segment still reported an EBITDA loss of INR 4.4 crores (after forex), it was a reduction compared to INR 6.2 crores in the prior year, indicating a positive trend towards profitability. Management noted that the Flooring and Veneer businesses within this segment have become EBITDA positive, showcasing improved operational efficiency. The company is actively expanding its plywood market presence in Eastern and Western India, aiming for EBITDA break-even by the end of FY26.

Greenlam's newest venture, the Panel & Allied segment, primarily comprising the Chipboard product, is rapidly gaining traction. For Q2 FY26, this segment posted a net revenue of INR 47.8 crores, a remarkable 54.2% quarter-on-quarter increase. The facility, which commenced commercial production in January 2025, is seeing positive market feedback on product quality and decor range. The company is strategically focusing on channel appointments and expanding its business with furniture makers and OEMs. Although the segment reported an EBITDA loss of INR 14.1 crores (after forex), the management anticipates achieving EBITDA break-even for the Chipboard business in FY27, driven by increasing utilization levels.

Here is a financial summary of Greenlam Industries Limited's performance:

Strategic Initiatives and Financial Prudence

Greenlam is not resting on its laurels and has announced a brownfield expansion for its Laminates business. This involves adding two new lines for laminates and boards at its Naidupeta facility, which is expected to generate an additional INR 375-400 crores in revenue, with commercial production targeted for Q4 FY27. This expansion leverages existing infrastructure, including civil construction and energy plants, making it a capital-efficient move.

On the financial front, the company demonstrated prudent management by reducing its net debt by INR 45 crores in Q2 FY26, bringing the total net debt to INR 995.0 crores as of September 2025. Furthermore, working capital management saw significant improvement, with working capital days reducing by 12 days to 47 days in the current quarter. This efficiency is particularly noteworthy given the initial working capital requirements of the newer Plywood and Chipboard businesses.

Here is a segment comparison for Q2 FY26:

Outlook and Management Commentary

Management expressed confidence in maintaining an overall consolidated revenue growth of 18%-20% for the current financial year. The Laminates segment is expected to sustain its margin around 16% on a longer-term basis. While acknowledging the impact of US tariffs on export competitiveness, the company is strategically absorbing a portion of the cost to maintain market presence. The focus remains on execution, driving growth in existing segments, and achieving profitability in newer ventures.

Greenlam Industries Limited's Q2 and H1 FY26 results reflect a company in a phase of strategic expansion and operational refinement. Despite short-term pressures on net profit from new project-related expenses and forex, the underlying business health, characterized by record revenues, strong gross margin expansion, and improved working capital, points towards sustained growth. The management's clear guidance and focus on execution provide a confident outlook for the coming quarters, reinforcing investor trust in Greenlam's long-term vision.