Hi @punitm306,
Currently analyzing greenply and overall forest theme. Please share your findings on the questions you’ve mentioned if any and would like to work on supporting the analysis here.
Century vs. Greenply — Century is making great margin in plywood where Greenply is making in MDF but not in plywood. Any idea on the same.
-Muthu
The writer is a very level minded value investor
something relevant
http://www.joshuakennon.com/why-i-avoid-mdf-and-furniture-built-with-mdf-and-think-you-should-too/
as value investors … we seek value in our investments and rationality in our expenditures. try this as we are on topic of wood work anyway
http://www.joshuakennon.com/buying-quality-furniture-can-save-you-money-in-the-long-run/
personal note: i am pure nnt in this regard … visited my grandmothers house in village few months ago… old furniture remains gold… last long and get better with time. I think some of us have seen ads in news papers about sale of old ship furniture.
discloser: i am interested in this counter … but felt like sharing this aspect like somebody mentioning health effect of tobacco company… labor policy of a manufacturer … health aspects of Maggi for Nestle.
Newton inverted: if something can’t go on forever… it will eventually stop.
… sometimes we find ideas from related reading. if it violates some vp policy i sincerely apologize.
1- 12-15% growth is going to be achieved within 9 months itself going by current trend of Q1.
2- ROIC will improve going forward as the company changes its strategy to a more asset light model.
3- This MDF segment is going to be the star division in coming 3-5 years. They are setting up a big new plant for this.
4- MDF growth has gone through the roof despite a weak demand scenario which means there is great acceptance of this product in the market. (Basically this MDF is a cheap product which is used in Italian furniture. And in India, CHEAP works).
5- GST should again be an obvious good thing.
6- Even Ply segment has grown but margins fell thanks to huge increase in traded ply. But this has improved the cash position hugely and this should convert greenply into a higher roic company soon. Its a good strategy I feel.
7- They are tripling MDF capacity by 2018 and that will really take Greenply to the next level! Just an incredible company.
Read Mr. Joshua kennon’s blog and the associated comments, and my immediate reaction was very negative about MDF.
When it comes to consumer buying trends and the strength of the Marketing in educating the Masses, I still feel that MDF is going to rule. Rationally, the investment in MDF as consumer is foolish but as an investor it is a gold mine. Speaking ethically will be the other way around.
Personally, I am going to inform to my close circle to be careful when purchasing wood. Not to go for MDF.
world wide furniture manufacturing have replaced plywood with MDF at least 10 years ago. MDF is much easier to work with, better finish product, cheaper and longer lasting. India furniture industry (organised and unorganized) will adopt this trend sooner rather than later. thank to this thread i have been able to differentiate between Century Plywood & Greeenply.
needs to see what will be average price to enter. as the company has expressed its desire to expand rapidly its production capacity, any uptake in the RE sentiment will be a boon.
haque
(20 years experience in furniture manufacturing)
Anybody tracking Greenlam industries which is another emerged entity? The 2015 AR looks very interactive and interesting.
Shobhan Mittal, ED & V. Venkatramani, CFO, add the call.HighlightsCapital Mkt
Operational performance
Greenply Industries hasdelivered a stable financial and operating performance in Q2FY16, despite a largely sluggish macro environment, chiefly driven by two pronged strategy of gaining market share from theunorganised segment and enhancing operational efficiencies through animproved product mix.The company has registered net revenues of Rs 400.77 crore in Q2FY16, down by 2.4%from Rs 410.71 crore incorresponding quarter.Plywood revenue was down by 7.8% YoY to Rs 287.72 crore, contributing 72% of net sales.MDF revenue grew by 14.5% YoY to Rs 113.05 crore, contributing 28% of net sales. The Company plywood plants utilization stood at 102% and MDF plants utilization at 91% in Q2FY16.Gross margins expanded by 360 bps YoY to 45.1%, led by better product mix. EBITDA margin wasup 130 bps YoY to 14.1%. EBITDA was up by 7.5% at Rs 56.50 crore compared to Rs 52.56 crore. Ad expenditure to sales stood at 3.9% in Q2FY16. PBT rose by 12.9% at Rs 36.42 crore. PAT gained by 1.5% at Rs 27.24 crore.
The Company working capital cycle improved 8 days QoQ to 49 days in Q2FY16, led by better inventory and debtor management. Net debt to equity stood at 0.54x as on September, 2015 as compared to 0.79x as onSeptember 2014.
Plywood: (A) Plywood production declined by 9.8% to 8.25 million square meters (million sqm). (B) Average capacity utilisations wereat 102% as compared 113% corresponding previous quarter. Sales volumes de-grew by 2.1% to 12.03 million sqm. © Average net realisation of Plywood decreased by 2.5% to Rs 235per sqm. (D) EBITDA Margin decreased to 9% from 9.5% corresponding previous quarter.
Medium Density Fibreboards (MDF): (A) MDF production grew15.1% to 41032 Cubic Meters (CBM). Sales volumes stood at 42067 CBM, up by 11.7% from 37667 CBM in Q2FY15. (B) Average Capacity Utilisation was at 91% compared to 79% corresponding previous quarter.© Average realisations of MDF increased by 2.5% to Rs 26818 per CBM. (D) EBITDA Margin rose to 27.9% from 23.2% corresponding previous quarter.The company holds largest pan-India player with 26% share of organised plywood market and 30% share of domestic MDF market. The company have 4 state–of-the-art manufacturing facilities for Plywood and 1 facility for MDF –largest in the country. With Plywood industry size of ~ Rs. 180 billion and MDF industry size of ~Rs. 14 billion, the company expects industry likely to benefit from rising residential/ commercial construction, increasing urbanization, high disposable incomes and Government Announcement regarding construction of 100 smart cities.The Company hopes rising demand from the real estate sector, increasing urbanization, higher disposable incomes and growing middle class will be key industry driver going forward. Meanwhile government announcement regarding construction of 100 smart cities would facilitate further to boost to the industry. The Company expects rollout of GST helps the industry to facilitate faster shift from unorganised to organised players.The company guides to increase the number of distributors and retailers going forward. Presently, the company has around 1170 plywood and 600 MDF distributors/stockist and 6000 plywood and 4000 MDF retailers. Also, serviced by 33 branches for ply and 15 branches for MDF pan-India.The company plans to continued its investments in advertisement and promotional spends to increase brand visibility pan-India, with Ad spends stood at around 3% of net sales.
On expansion plans- The Company plans to optimise utilisation of plywood plants in existing facilities and increase outsourcing proportion to 30% from 20% presently over the next 3 years. Also, with plans to setting up new MDF plant in Andhra Pradesh over FY16-19 to cater to future demand.The Company revised down its topline growth target to ~6-8% in FY16 from previous guidance of 10-12%. The Company expects a topline growth of ~5-6% in H2FY16. Margins expected to improve by 50-70 bps inFY16 driven by better product mix and costcontrol.
The Company guides a maintenance capex of ~Rs 30 crore for FY16.The Company expects to rise by 100 bps on the margins front in current fiscal year. Also, guides to maintain MDF operating margin of ~27-28%.The Company guides an effective tax rate of ~23-25% for FY16.
Hello ,
Again good results posted by the Greeply. Strong MDF results
FINANCIAL HIGHLIGHTS – 9MFY16
• Net Sales up by 6.3% YoY to Rs. 1,203.27 crores
– Plywood revenues up by 1.2% YoY to Rs. 851.83 crores, contributing 71% of net sales
– MDF revenues grew by 20.4% YoY to Rs 349.47 crores, contributing 29% to net sales
– New product Wallpaper contributed Rs ??? crores
• Gross margins expand 270 bps YoY to 44.7%
– Led by better product mix
• EBITDA margins up 170 bps YoY to 14.7%
– Ad expenditure to sales at 3.4% in Q3FY16
• PBT growth of 33.5% YoY to Rs. 118.89 crores
• PAT growth of 17.1% YoY to Rs. 89.29 crores
– EPS of Rs. 36.99 in 9MFY16 compared to Rs. 31.59 in 9MFY15
• Working capital cycle increased by 8 days yoy and 7 days qoq to 56days.
• Net debt to equity at 0.47x as on 31st December, 2015 as compared to 0.77x as on 31st December, 2014
Disclosure: Recently added postions
who owns this company. i am unable to get any information on the promoters or their share holding pattern
Hello,
You can get complete details of share holding pattern in BSEINDIA.COM, and also please go through this topic from starting to ending you will get better picture of this business and also its history
CONFERENCE CALL - from Capital Markets
Greenply Industries
Margins to improve by 150-180 bps in FY16
The company has conducted a conference call on 19th January 2016 to discuss the financial performance for the third quarter and nine months ended December 2015 and way forward. Mr. Shobhan Mittal, Executive Director, and Mr. V. Venkatramani, CFO, of the Company addressed the conference call.
Key highlights
Operational performance
Greenply Industries has continued to deliver a stable financial and operating performance in Q3FY16, in a sluggish macro environment, chiefly driven by two pronged strategy of gaining market share from the unorganised segment and enhancing operational efficiencies through an improved product mix.
The Companyis optimistic that MDF business will be a key growth driver going forward. However, the increase in working capital investments remains a matter of concern and the company plans to strive for better cash management in the coming quarters"
The company has registered net revenues of Rs 421.74 crore in Q3FY16, up8% from Rs 390.50 crore in corresponding quarter. Plywood revenues were up by 4.4% YoY to Rs. 290.70 crores, contributing 69% of net sales. MDF revenues grew by 15.3% YoY to Rs 129.07 crores, contributing 31% to net sales. New product Wallpaper contributed Rs 1.97 crores. The Company plywood plants utilization stood at 97% and further demand catered through outsourcing. MDF plants utilization was at 98%. Gross margins expanded by 190 bps YoY to 44.3%, led by better product mix. EBITDA margin was up 260 bps YoY to 15.3%. EBITDA was up by 29.9% at Rs 64.51 crore compared to Rs 49.68 crore. PBT rose by 47.1% at Rs 46.27 crore. PAT gained by 35.2% at Rs 35.34 crore.
The Company working capital cycle increased by 8 days yoy and 7 days qoq to 56 days in Q3FY16, led by better inventory and debtor management. Net debt to equity stood at 0.47x as on 31st December, 2015 as compared to 0.77x as on 31st December, 2014
The Company Ad expenditure to sales stood at 3.7% in Q3FY16. The Company plans to continue investments in increasing brand visibility pan-India, with Ad spends at around 3% of Net Sales.
.Plywood: (A) Plywood production declined by 2.8% to 7.86 million square meters (million sqm). (B) Average capacity utilisations wereat 97% as compared 100% corresponding previous quarter. Sales volumes grew by 6.8% to 11.80 million sqm. © Average net realisation of Plywood decreased by 1.2% to Rs 242per sqm. (D) EBITDA Marginrose to 9.4% from 8.1% corresponding previous quarter.
The company holds largest pan-India player with 26% share of organised plywood market and 30% share of domestic MDF market. The company has 4 state–of-the-art manufacturing facilities for Plywood and 1 facility for MDF –largest in the country. With Plywood industry size of ~ Rs. 180 billion and MDF industry size of ~Rs. 14 billion, the company expects industry likely to benefit from rising residential/ commercial construction, increasing urbanization, high disposable incomes and Government Announcement regarding construction of 100 smart cities.
The Company hopes rising demand from the real estate sector, increasing urbanization, higher disposable incomes and growing middle class will be key industry driver going forward. Meanwhile government announcement regarding construction of 100 smart cities would facilitate further to boost to the industry. The Company expects rollout of GST helps the industry to facilitate faster shift from unorganised to organised players.
The company guides to increase the number of distributors and retailers going forward. Presently, the company has around 1170 plywood and 600 MDF distributors/stockist and 6000 plywood and 4000 MDF retailers. Also, serviced by 33 branches for ply and 15 branches for MDF pan-India.
On expansionplans- The Company plansto optimise utilisation of plywood plants in existing facilities and increase outsourcing proportion to 30% from 20% presently over the next 3 years. Also, with plans to setting up new MDF plant in Andhra Pradesh over FY16-19 to cater to future demand.
The Company has continued upgrading IT infrastructure – implemented SAP Hana to strengthen overall supply chain and implemented Microsoft CRM Module.
The Company plans to undertake greenfield expansion of MDF in Andhra Pradesh over FY16-19 to cater to future demand.
The Company guides a capex of ~Rs 100-150 crore for FY17 and maintenancecapex of ~10-15 crore for FY17-18.
For raw material sustainability, the Company has continued focused on plantation of fast growing and improved species of clonal plantations to improve quality of wood availability and plywood manufactured. Also, concentrated on backward integration through 50% JV in Myanmar for production of face veneers.
The Company expects plywood EBIDTA margin to improve to ~10.5-11% from 9.4% in Q3FY16. Also, guides to maintain MDF operating margin of ~27-28%.
The Company expects a ~5-7% growth in FY16. Margins expected to improve by 150-180 bps in FY16 driven by better product mix and cost control.
Does one need to subscribe to Capital Markets website (Paid subscription I mean) to get the concall updates and transcripts? Thanks in advance
Yes. normally one needs to subscribe.
Having said that, i myself have not subscribed to Capital Markets.
I get the details through old fashioned google search with specific terms.
Which is why i do not want to share the actual link and be held liable, as one can figure out the other proprietary sections such as Analyst Meets or Special Reports with a little bit of effort.
Moreover, con-calls are anyways now available through researchbytes.
I reiterate, you can also get it through Google Search.
Know researchbytes, was wondering about this capital market. Thanks for your reply 
if we look at their sales growth
march 12- 35%
march13 - 21%
march 14 -7%
march 15- negative 25%
greenply is standing only because of sudhir valia investment in the company.otherwise it would be quoting in double digits today.
CONFERENCE CALL - from Capital Markets
Expect a 6-8% growth in FY17
The company has conducted a conference call on 24thMay 2016 to discuss the financial performance for the fourth quarter and FY 2016 and way forward. Mr. Shobhan Mittal, Executive Director, and Mr. V. Venkatramani, CFO, of the Company addressed the conference call.
Net Sales up by 9.3% YoY to Rs. 414.91 crores
PAT growth of 26.4% YoY to Rs. 34.11 crores
Net Sales up by 8.5% YoY to Rs. 434.63 crores
PAT growth of 28.29% YoY to Rs. 35.09 crores
Growth attributed to volume increase with pricing remaining flattish.
Company Presentation
http://www.moneycontrol.com/stocks/reports/greenply-ind-result-presentation-for-september-30-2016-5220021.html
