Greenlam Q2 profit falls 24% as costs rise faster than sales

Greenlam Industries Limited reported consolidated profit of Rs 24.48 crore for the quarter ended September 30, 2026, down 24% from the profit attributable to owners a year earlier, even as revenue from operations increased 8% to Rs 875.18 crore. Total expenses rose Rs 82.44 crore, exceeding the Rs 66.92 crore increase in revenue.

Why did Greenlam’s Q2 profit fall despite revenue growth?

Higher expenses outweighed Greenlam’s revenue growth, reducing consolidated profit before tax to Rs 36.25 crore in the September 2026 quarter from Rs 46.12 crore a year earlier. Profit attributable to owners declined to Rs 24.48 crore from Rs 32.33 crore, while reported profit for the period fell from Rs 31.77 crore to Rs 24.48 crore.

Revenue from operations increased to Rs 875.18 crore from Rs 808.26 crore, and other income rose to Rs 6.87 crore from Rs 1.22 crore. Total income therefore grew Rs 72.57 crore to Rs 882.05 crore, but total expenses increased Rs 82.44 crore to Rs 845.80 crore from Rs 763.36 crore, resulting in a Rs 9.87 crore fall in profit before tax.

Which costs increased in Greenlam’s Q2 results?

Materials, employee benefits and other expenses all increased in Greenlam’s September 2026 quarter. Cost of materials consumed rose to Rs 404.27 crore from Rs 390.06 crore, employee benefits expense rose to Rs 163.14 crore from Rs 153.72 crore, and other expenses increased to Rs 202.72 crore from Rs 183.25 crore.

The change in inventory accounting also differed sharply between the two periods. Greenlam recorded an expense of Rs 14.31 crore for changes in inventories of finished goods, stock-in-trade and work-in-progress in Q2 2026, against a Rs 27.04 crore reduction in expenses in Q2 2025, a Rs 41.35 crore swing. Purchases of stock-in-trade increased to Rs 6.08 crore from Rs 3.88 crore.

Finance costs provided a partial offset, falling to Rs 19.67 crore from Rs 23.99 crore, while depreciation and amortisation was broadly unchanged at Rs 35.61 crore compared with Rs 35.50 crore. Current tax expense declined to Rs 13.80 crore from Rs 18.40 crore, and deferred tax credit was Rs 2.03 crore compared with Rs 4.05 crore in the prior-year quarter.

How did Greenlam’s segments perform in Q2?

Laminates & Allied Products remained Greenlam’s largest business by revenue but recorded a lower segment result in Q2. Its revenue was Rs 658.01 crore, nearly unchanged from Rs 657.96 crore a year earlier, while its profit before interest and tax fell to Rs 100.05 crore from Rs 139.83 crore.

Panel & Allied Products delivered the largest revenue increase among the reported segments, with sales rising to Rs 106.99 crore from Rs 47.79 crore. Its segment loss narrowed to Rs 1.98 crore from Rs 22.48 crore. Plywood & Allied Products revenue increased to Rs 110.18 crore from Rs 102.51 crore, and its loss narrowed to Rs 5 lakh from Rs 4.84 crore.

The combined segment result was Rs 98.02 crore, down from Rs 112.51 crore in the September 2025 quarter. Interest costs of Rs 19.67 crore and other unallocable expenditure, net of unallocable income, of Rs 42.10 crore reduced this amount to reported profit before tax of Rs 36.25 crore.

What do Greenlam’s half-year results show?

Greenlam’s consolidated revenue from operations for the half year ended September 30, 2026 rose to Rs 1,671.88 crore from Rs 1,482.05 crore in the corresponding half of 2025. Profit for the period increased to Rs 45.72 crore from Rs 16.06 crore, while profit attributable to owners rose to Rs 45.79 crore from Rs 16.97 crore.

The half-year comparison differs from the Q2 year-on-year decline because profit before tax increased to Rs 67.18 crore from Rs 31.64 crore. Total expenses rose to Rs 1,617.52 crore from Rs 1,454.08 crore, but total income rose to Rs 1,684.70 crore from Rs 1,485.72 crore, leaving a higher pre-tax profit over the six-month period.

Materials consumed in the half year rose to Rs 807.97 crore from Rs 731.89 crore, employee benefits expense increased to Rs 331.49 crore from Rs 306.40 crore, and other expenses rose to Rs 375.88 crore from Rs 343.99 crore. Finance costs fell to Rs 39.15 crore from Rs 49.88 crore, while the inventory-change line was an expense reduction of Rs 18.06 crore compared with a Rs 57.81 crore reduction a year earlier.

What changed in Greenlam’s cash flow and borrowings?

Greenlam generated consolidated net operating cash flow of Rs 111.81 crore in the half year ended September 30, 2026, compared with Rs 152.87 crore in the prior-year half. Cash generated from operations declined to Rs 132.94 crore from Rs 173.96 crore after working-capital adjustments of Rs 49.97 crore, including a Rs 36.98 crore increase in inventories.

Consolidated capital expenditure on property, plant and equipment, including capital work-in-progress, was Rs 37.86 crore in the six months, down from Rs 62.60 crore a year earlier. Net cash used in investing activities was Rs 16.61 crore, compared with Rs 44.59 crore, while net cash used in financing activities was Rs 112.31 crore against Rs 124.50 crore.

Non-current borrowings decreased to Rs 595.33 crore at September 30, 2026 from Rs 707.24 crore at March 31, 2026. Current borrowings increased to Rs 397.00 crore from Rs 339.36 crore, and the group repaid Rs 96.85 crore of long-term borrowings during the half year. Cash and cash equivalents were Rs 46.75 crore at September 30, compared with Rs 63.86 crore at the beginning of the financial year.

Conclusion

Greenlam’s September-quarter revenue increase did not translate into higher profit because expense growth outpaced income growth. Laminates & Allied Products retained the largest revenue contribution at Rs 658.01 crore but reported a lower segment result, while Panel & Allied Products more than doubled revenue to Rs 106.99 crore and materially narrowed its loss.

The next set of results will show whether the Rs 41.35 crore year-on-year change in the inventory-cost line and the rise in other expenses to Rs 202.72 crore persist. The filing also leaves the effect of the shift between non-current borrowings, down Rs 111.91 crore since March 31, 2026, and current borrowings, up Rs 57.64 crore, as a matter to monitor.