Greenpanel FY26: Volumes Rebound, But Forex and Chemicals Cloud the Margin Story

Greenpanel Industries closed FY26 with a clear operational pivot: push volumes harder, invest behind distribution and marketing, and tighten the cost base. That shift showed up in volumes and revenue, even as reported profitability was weighed down by foreign exchange losses on euro borrowings and higher depreciation and interest linked to the new MDF line at Andhra Pradesh.

For FY26, total revenue was INR 1,502.2 crore, up 7.8% year-on-year. Operating EBITDA (excluding unrealized FX and certain one-offs) was INR 132.7 crore, or 8.8% of sales. In Q4FY26, revenue was INR 391.4 crore and operating EBITDA was INR 35.4 crore, or 9.1% of sales.

The year’s key tension was visible across the numbers. Gross margins improved, helped by raw material efficiencies and operating leverage, but operating margins compressed versus last year as the company stepped up spends to build volume salience. Reported earnings were further impacted by currency movement on euro debt, which management quantified at about INR 49 crore for FY26 and about INR 6 crore in Q4.

MDF drove growth as the sales trajectory improved from Q2

MDF remained the dominant segment and the main driver of FY26 growth. MDF segment net sales were INR 1,369.6 crore for FY26, up 8.8% over FY25. Volumes grew faster than revenue as realizations moderated. Total MDF volumes were 495 thousand CBM in FY26 versus 439 thousand CBM in FY25, a 12.9% increase. Domestic MDF volumes rose 16.9% to 429 thousand CBM.

Management repeatedly pointed to the change in trajectory from Q2FY26 onwards, attributing it to renewed emphasis on volumes, channel expansion, trade engagement, and marketing investments. The company also highlighted that commercial grade MDF was discontinued after Q3FY25, and therefore presented an alternate growth view excluding commercial grade. Under that lens, the presentation stated MDF volume growth for FY26 was significantly higher.

Realizations, however, softened. The MDF blended realization for FY26 was INR 27,654 per CBM compared to INR 28,701 in FY25. Domestic realization fell to INR 28,522 per CBM. Management attributed part of the decline to higher OEM sales and product mix changes following the AP plant addition.

Plywood remained a smaller part of the portfolio. FY26 plywood net sales were INR 132.7 crore, down 1.9% year-on-year, with FY26 EBITDA margin at 3.8%.

Marketing and channel actions were central to the FY26 plan

The investor presentation spent meaningful space on the commercial engine built through FY26. It highlighted initiatives to energize sales teams via annual sales conferences and reviews, deepen dealer and distributor engagement through trade programs, and strengthen digital outreach.

A notable theme was loyalty and partner engagement. The company relaunched the MITR 2.0 mobile app and stated it crossed 18,000 downloads and registrations. Management also stated that more than 21,000 participants, including carpenters, contractors, and sub-dealers, were engaged through trade activations during the year.

The product portfolio expansion was another pillar. Management cited launches such as HDWR Door, Thin MDF and Fire Retardant MDF in the first half, and the launch of BoilBlack (a boiling water proof HDF) in the second half, with a nationwide plan. In the conference call, the company stated that high-value MDF products formed 43% of FY26 volume and 55% of value.

Costs, forex, and geopolitics shaped the profit narrative

While the company improved gross margin to 48.2% in FY26, operating profitability was pressured. Operating EBITDA margin fell to 8.8% from 10.6% in FY25, as the company invested behind volume growth and absorbed some inefficiencies during the stabilization phase of the new AP line.

The larger swing factor was currency. Management stated euro-denominated borrowings for the AP plant led to unrealized FX losses, with an impact of about INR 49 crore in FY26 and about INR 6 crore in Q4FY26. Higher depreciation and interest expense related to the new line also impacted FY26 versus the prior year.

External conditions also changed sharply towards the end of the year. Management cited the onset of war in the Middle East as disrupting exports in March and pushing up supply chain costs. Chemicals were flagged as the most sensitive line item, with management stating chemicals form about 40% to 45% of raw material cost and had seen sharp escalation. Timber costs were described as stable.

To respond, the company implemented a 15% price increase in MDF in two phases (5% plus 10%). Management said the increase, if implemented fully, would cover the cost inflation seen so far, but also acknowledged discounting pressure in the market which could dilute the realized benefit.

On capital allocation, management indicated no significant capex plan in FY27 and guided only sustenance capex of about INR 20 crore to INR 30 crore. With Q4FY26 capacity utilization around 60%, they emphasized headroom for organic growth without immediate large investments.

Working capital stayed controlled, net debt was stable in reported terms

The company highlighted a FY26 cash conversion cycle of 38 days. Working capital days in the presentation showed DSO rising to 38 days at March 2026 on their computation basis, while the CFO on the call referred to DSOs at 21 days and positioned it as industry leading.

Reported net debt at March 2026 was INR 156 crore. The presentation and management commentary both emphasized that currency movement distorted the headline, and at constant currency, the net debt reduction versus March 2025 would have been about INR 60 crore.

What to watch in FY27

Greenpanel’s FY27 posture was described as optimistically cautious. Management avoided giving a precise numeric volume or margin guidance due to multiple moving parts, including chemical volatility, pricing uncertainty, and exports being constrained by freight. However, management expects domestic MDF demand to remain healthy, describing growth expectations for the market as early double digits to mid-teens, and stated the company intends to be with the market or better.

The core questions for investors therefore sit around execution under a volatile cost and pricing environment. If the price hikes sustain with limited discounting and chemical costs stabilize, the operational gains from higher utilization could improve margins. If discounting intensifies or chemical costs remain elevated, the trade-off between market share and profitability could stay under pressure.

Greenpanel’s FY26 results show the company rebuilt volume momentum and strengthened its commercial engine. But the year also highlighted how quickly forex and supply chain shocks can dominate the reported profit story, especially when leverage is partly in foreign currency. The company’s stated focus on utilization, cost efficiency, and balance sheet strength sets the frame for FY27, with a strong emphasis on execution rather than expansion.