Greenlam plywood utilisation reaches 46%, loss narrows

Greenlam Industries Limited raised annualised plywood capacity utilisation to 46% in the second quarter of financial year 2027 (Q2FY27), from 35% a year earlier, while its Plywood & Allied earnings before interest, tax, depreciation and amortisation (EBITDA) loss without foreign-exchange impact narrowed to Rs 1.4 crore from Rs 3.9 crore. The segment nevertheless remained EBITDA-loss-making.

How did Greenlam perform in Plywood & Allied in Q2FY27?

Greenlam’s Plywood & Allied Segment reported net revenue of Rs 110.2 crore in Q2FY27, up 7.5% from Rs 102.5 crore in Q2FY26 and 3.9% from Rs 106 crore in Q1FY27. The segment comprises plywood, decorative veneers, engineered floors and engineered doors, while the presentation’s operating data separately cover plywood.

Gross margin increased 4.2% year on year to Rs 55.1 crore from Rs 52.9 crore, although gross margin as a percentage of revenue fell by 150 basis points to 50.1% from 51.6%. A basis point is one-hundredth of a percentage point. Compared with Q1FY27, gross margin increased 8.7% from Rs 50.7 crore and the margin rose by 220 basis points from 47.9%.

Greenlam’s EBITDA loss without foreign-exchange impact narrowed by Rs 2.5 crore year on year and by Rs 3.8 crore sequentially to Rs 1.4 crore. The associated EBITDA margin improved to negative 1.3%, from negative 3.8% in Q2FY26 and negative 4.9% in Q1FY27. Including foreign-exchange impact, EBITDA was a Rs 1.7 crore loss, compared with losses of Rs 4.4 crore and Rs 5.1 crore in the respective comparison quarters.

What drove Greenlam’s higher plywood utilisation?

Greenlam produced 2.15 million square metres of plywood in Q2FY27, 28.6% more than 1.67 million square metres in Q2FY26 and 17.7% above 1.83 million square metres in Q1FY27. Annual installed capacity was unchanged at 18.90 million square metres across all three periods, lifting annualised utilisation to 46% from 35% a year earlier and 39% in the preceding quarter.

Plywood sales rose to 1.94 million square metres in Q2FY27 from 1.58 million square metres in Q2FY26, a 22.8% increase. Sales were also 16.6% above 1.66 million square metres in Q1FY27. Production grew faster than sales in the year-on-year comparison, at 28.6% against 22.8%, and also marginally faster sequentially, at 17.7% against 16.6%.

Average plywood realisation was Rs 257 per square metre in Q2FY27, up 4.2% from Rs 247 in Q2FY26. It was 6.7% below Rs 276 in Q1FY27. The presentation therefore shows that higher utilisation was accompanied by higher output and sales volumes, while average realisation declined sequentially.

Has Greenlam reached operating profitability in plywood and allied products?

Greenlam had not reached operating profitability in Plywood & Allied in Q2FY27 because EBITDA without foreign-exchange impact remained a Rs 1.4 crore loss. The result was narrower than the Rs 3.9 crore loss in Q2FY26 and the Rs 5.2 crore loss in Q1FY27, but it was still below zero.

For the first half of financial year 2027 (H1FY27), Greenlam reported Plywood & Allied revenue of Rs 216.2 crore, up 13.5% from Rs 190.5 crore in H1FY26. Gross margin rose 13.3% to Rs 105.9 crore from Rs 93.5 crore, while the gross-margin percentage was nearly unchanged at 49.0%, compared with 49.1% a year earlier.

The H1FY27 EBITDA loss without foreign-exchange impact narrowed to Rs 6.6 crore from Rs 12.5 crore in H1FY26, and the margin improved to negative 3.1% from negative 6.6%. Including foreign-exchange impact, the half-year EBITDA loss narrowed to Rs 6.8 crore from Rs 13.4 crore, with the margin improving to negative 3.2% from negative 7.0%.

Q1FY27 accounted for Rs 5.2 crore of the Rs 6.6 crore H1FY27 EBITDA loss without foreign-exchange impact, compared with Rs 1.4 crore in Q2FY27. The presentation does not disclose standalone plywood revenue or EBITDA, so the reported profitability figures cover all four Plywood & Allied product categories rather than plywood alone.

How did Greenlam’s first-half plywood volumes compare with last year?

Greenlam produced 3.98 million square metres of plywood in H1FY27, up 32.0% from 3.02 million square metres in H1FY26. Annualised capacity utilisation increased by 10 percentage points to 42% from 32%, against unchanged annual installed capacity of 18.90 million square metres.

Plywood sales reached 3.60 million square metres in H1FY27, a 21.6% increase from 2.96 million square metres in H1FY26. Average realisation rose 3.6% to Rs 264 per square metre from Rs 255. First-half production growth of 32.0% again exceeded sales growth of 21.6%.

Capital employed in Greenlam’s Plywood & Allied Segment was Rs 324.3 crore in Q2FY27, down Rs 30 crore from Rs 354.3 crore in Q2FY26 and up Rs 3.9 crore from Rs 320.4 crore in Q1FY27. The presentation does not state a return-on-capital measure, a break-even target or a timetable for segment profitability.

Conclusion

Greenlam’s Q2FY27 data show improving operating activity and a materially smaller Plywood & Allied loss: plywood output reached 2.15 million square metres, sales reached 1.94 million square metres, and the segment’s EBITDA margin without foreign-exchange impact improved to negative 1.3%. First-half revenue increased 13.5%, but EBITDA remained negative for the period.

The next issue to watch is whether Greenlam can convert higher utilisation and volume growth into positive Plywood & Allied EBITDA, as management’s presentation provides no break-even target or profitability timetable. Average plywood realisation also bears watching after falling to Rs 257 per square metre in Q2FY27 from Rs 276 in Q1FY27.