Greenpanel FY26: Volumes rebound, margins hold, FX and new-plant costs weigh on profit

Greenpanel Industries closed FY26 with a clear message in its investor presentation: the company has shifted back to a volume-led play, and it is starting to show up in demand momentum from Q2FY26 onward. The headline numbers reflect that recovery, even as reported profitability stayed under pressure due to currency losses on euro borrowings and the cost structure of the new MDF plant at Andhra Pradesh.

For Q4FY26, Greenpanel reported revenue of Rs 391.4 crore, up 15.5 percent year on year. Gross margin improved sharply to 47.8 percent from 44.6 percent in Q4FY25, supported by a better raw material cost mix and operating leverage as volumes rose. Operating EBITDA came in at Rs 35.4 crore, translating to a 9.1 percent margin. Profit after tax, however, fell to Rs 1.4 crore from Rs 29.4 crore in the year-ago quarter, as the quarter absorbed currency loss and higher depreciation and interest linked to the new capacity.

On a full-year basis, FY26 revenue rose 7.8 percent to Rs 1,502.2 crore. Gross margin expanded to 48.2 percent versus 46.9 percent in FY25. But operating EBITDA declined 10.5 percent to Rs 132.7 crore, with margin at 8.8 percent as the company increased spending to strengthen distribution, trade engagement, branding, and new product launches. Reported EBITDA was lower still at Rs 94.2 crore because FY26 included a large unrealized FX and other exception line item of minus Rs 38.4 crore. Profit before tax moved to minus Rs 29.1 crore for the year.

MDF drives the topline while plywood stays stable

Greenpanel remains fundamentally an MDF-led story. In FY26, MDF segment net sales increased 8.8 percent to Rs 1,369.6 crore. Volume growth was stronger than value growth, with total MDF sales volumes rising 12.9 percent year on year to 495,252 CBM. Domestic MDF volumes increased 16.9 percent to 429,475 CBM, while exports volumes declined 7.6 percent to 65,778 CBM.

Pricing stayed soft. The blended MDF realization for Q4FY26 was Rs 27,119 per CBM, down 9.5 percent year on year. For FY26, blended realization declined 3.6 percent to Rs 27,654 per CBM. Domestic realization for FY26 was Rs 28,522 per CBM, down 5.7 percent, while export realization improved 6.0 percent to Rs 21,984 per CBM. The combination suggests that FY26 growth was led more by improved demand capture and channel activity than by pricing.

The presentation also clarifies a key base effect: commercial grade MDF was discontinued from Q4FY25 onwards. Excluding this discontinued category, management highlighted a much stronger underlying growth profile. FY26 MDF volume growth excluding commercial grade was 38.1 percent year on year, and the quarterly trend from Q2FY26 onwards improved materially. The company attributes this to relative market share gains driven by renewed focus on volumes, upgrades to the sales system, channel expansion, marketing investments, and product additions.

Plywood stayed broadly steady. FY26 plywood net sales were Rs 132.7 crore versus Rs 135.2 crore in FY25, a 1.9 percent decline. Volumes were essentially flat at 5.2 million square meters, down 1.0 percent. Realization softened marginally to Rs 257 per square meter. Margins remained thin: FY26 plywood EBITDA margin was 3.8 percent, essentially unchanged from 3.9 percent in FY25.

Financial summary: growth with a mixed profit outcome

What changed operationally: volume salience and a tighter cost base

Greenpanel’s FY26 narrative is anchored in two parallel tracks: rebuilding volume salience and improving the cost base. On the commercial side, the company detailed a renewed push on sales and marketing. It energized sales teams through an annual sales conference and structured reviews. It also strengthened its distribution linkages through a loyalty program upgrade and a new MITR 2.0 mobile app, alongside more trade engagements.

Management also emphasized higher digital visibility and ground-level activation. The presentation cites strong digital metrics for FY25-26, including 8.1 million impressions, 980,000 reach, and 19.5 million views, with 53,000 clicks and 2,109 leads generated. This is relevant because MDF demand is often fragmented across contractors, carpenters, and local dealers. The company’s engagement programs also scaled meaningfully, with 12 plus sub-dealer meets involving 1,100 plus participants, 600 plus carpenter meets with 12,000 plus attendees, and 78 plus contractor meets with 8,000 plus attendees.

Alongside this, Greenpanel launched products to broaden applications and improve mix. The presentation highlights HDWR Door and Thin MDF in Q2FY26, and FRMDF and India’s strongest, toughest, and heaviest BWP HDF named BoilBlack in Q3FY26. The company supported these launches with POSM deployments across key markets, regional activation drives, and digital campaigns.

On the cost side, Greenpanel pointed to organizational and process strengthening, plus a rationalized raw material mix and improved consumption efficiencies. The impact is visible in gross margin expansion across both Q4 and the full year, despite price pressure in realizations.

Why profits fell: FX on euro borrowing and new plant charges

The sharpest disconnect in FY26 is between better operating metrics and weaker reported profit. The company explicitly attributes this to three items.

First is currency loss on euro-denominated borrowings taken for the new MDF plant at Andhra Pradesh. The presentation states an impact of around Rs 6 crore during Q4FY26 and around Rs 49 crore in FY26.

Second is higher depreciation and interest linked to the new plant, which management quantified at Rs 40 crore in FY26 versus the prior year.

Third is that operating EBITDA margins reflect investments made to build and support volume salience. That means profitability was not managed for maximum near-term margin, but rather to rebuild share and throughput after the company discontinued commercial grade and navigated a softer phase.

The segment table also shows how this translated into MDF profitability. MDF operating EBITDA margin fell to 9.2 percent in Q4FY26 from 16.3 percent in Q4FY25, while FY26 margin declined to 9.3 percent from 11.4 percent. With blended realization down and fixed charges higher, the model becomes more sensitive to volume ramp and product mix.

Capacity, utilization, and the volume ramp challenge

Greenpanel’s annual MDF capacity increased to 891,000 CBM in FY26 from 661,899 CBM in FY25, reflecting the new capacity addition. Production rose 14.5 percent year on year to 496,025 CBM.

But utilization declined because capacity expanded faster than volumes. FY26 utilization was 56 percent versus 65 percent in FY25. Q4FY26 utilization was 60 percent, flat year on year, but below the 63 percent reported in Q3FY26.

This context matters for the next phase. The company’s strategy is clearly designed to lift utilization through channel expansion and new product-led demand creation. If execution sustains, the operating leverage from higher utilization could support margins even if realizations remain under pressure. The presentation frames this as a trajectory change from Q2FY26 onward, with relative market share gains coming through a strengthened sales system.

Working capital and debt: stable profile with a constant currency lens

Working capital metrics show a somewhat higher requirement after the Andhra Pradesh plant went live. As of March 31, 2026, DSO was 38 days, DIO 46 days, and DPO minus 29 days, resulting in a cash conversion cycle of 38 days.

Net debt ended March 31, 2026 at Rs 156 crore, unchanged from December 31, 2025 and down from Rs 233 crore at March 31, 2025. The company added an important qualifier: excluding the impact of FX movement on a constant currency basis, net debt reduction would have been around Rs 60 crore versus March 31, 2025. It also noted that credit ratings for working capital facilities were reaffirmed by ICRA and CARE at A+ with a negative outlook during Q2.

The abridged balance sheet shows borrowings declined to Rs 352.6 crore at March 2026 from Rs 389.8 crore at March 2025, while cash and cash equivalents were Rs 196.9 crore at March 2026 versus Rs 225.7 crore a year earlier. Net worth stood at Rs 1,355.9 crore.

Takeaways for investors: execution is improving, but earnings are still in transition

Greenpanel’s FY26 performance is best understood as a transition year where the operating engine improved faster than reported earnings. The company delivered double-digit MDF volume growth, expanded gross margins, and demonstrated a clear improvement in quarterly momentum from Q2FY26 onwards when measured on a like-for-like basis excluding discontinued commercial grade.

At the same time, the income statement remains weighed down by euro FX losses and higher depreciation and interest from the new MDF plant. Those factors explain why PAT in Q4FY26 was only Rs 1.4 crore despite better gross margin and higher revenues, and why FY26 PBT moved to negative territory.

The investor question for the next phase is straightforward: can Greenpanel sustain volume growth to lift utilization meaningfully while holding the improved cost base? If the sales system upgrades, trade engagement, and new products continue to translate into relative market share gains, the operating leverage embedded in the expanded capacity could become more visible. The presentation suggests management is operating with that objective, prioritizing throughput and channel strength now, while aiming to convert that scale into profitability as the system stabilizes.