Greenpanel Industries Ltd. (Demerged Entity of Greenply)

Greenpanel is India’s largest manufacturer of wood panels. Our state-of-the-art manufacturing plants in Uttarakhand and Andhra Pradesh produce Medium Density Fibre Boards (MDF), Plywood, Block Boards, Veneers, Wood Floors and Doors. Greenpanel, previously known as Green Panelmax, is the largest producer of MDF in the country. Our manufacturing plants have a combined annual capacity of more than 500,000 cubic meters of MDF. This is complemented by our robust distribution network of 3,000-plus outlets spread across the country.

Greenpanel Products:

  1. Medium Density Fireboard
  2. Wood Floors
  3. Plywood & Blockboard
  4. Veeners
  5. Doors
    Manufacturing Facilities:
  6. Rudrapur, Uttarakhand
  7. Chittoor, Andhra Pradesh (MDF Plant)
    For ore info:

Greenpanel Q2 Results!


  • Greenpanel is a focused MDF entity with some presence in the plywood space. We have 3 world-class plants; two for MDF and one for plywood. A plant in Uttarakhand has both plywood and MDF and we have another MDF plant in Andhra Pradesh. We are targeting increased capacity utilization in future quarters to increase revenues and improve margins in MDF.
  • As you are aware, the sector is constrained by overcapacity and imports have a significant share. We are hopeful that the government takes cognizance of this and ensures a level playing field. We also expect that there will be sustained efforts by the government on improving GST compliance which in turn will help reduce the price gap between organized MDF and non-organized plywood.
  • Dispatches for plywood stood at 2.23 million square meters with capacity utilization at 84%. MDF sales volumes were 62,561 cubic meters with blended capacity utilization of both plants at 52%. For the quarter for MDF, export sales were 16,490 cubic meters with a realization of 12,285 per cubic meter and domestic sales were 46,071 cubic meters with a realization of Rs. 23,147 per cubic meter.
  • Anti-Dumping Duty request: We had provided all the data to the government to initiate the investigation into anti-dumping. The government vide a notification issued on 5th November has notified commencement of the investigation and concerned parties will be requested to provide any data in support that anti-dumping should not be imposed within a period of 45 days. I think, probably the government will complete the investigations and take a final decision on the matter within the current financial year.

Q1: With this kind of utilization also, we were able to end the quarter with a positive EBITDA and also even at PBT level. At least, MDF segment also reported profit. So, just wanted to understand that this increased realization in domestic market – because I think export realization which you gave Rs. 12,000 still remains very low – Rs. 23,000 domestic realization has it helped, or has it increased significantly. I just wanted to understand how this EBIT positive number in MDF is coming at 56% and 50% utilization?

A1: When we look at the fact that domestic realizations have fallen substantially over a period of 1 year, yes, we have undertaken a lot of activities to reduce the raw material cost and power cost and those activities are continuing. We are taking further steps to ensure optimization of resin consumption, and as capacity utilization scales up, we should also see further reduction in power cost. I think once capacity utilizations ramp.

  • Uttarakhand plant should achieve 80% utilization from Q4 FY20 or Q1 FY21. To achieve the above, we have clarity on one point that we will not be taking any price cuts to increase the volumes. We are targeting to increase the distribution network which will provide access to more markets than we are present in currently. The second part is, we have also strengthened the team and also some new members have been brought on-board to ensure coverage of a larger area than we are doing presently. I think that will help us to achieve increased volumes in the next few quarters.
  • Our target for Andhra plant is 60% this year. We would aim to reach 70% by the end of Q4.

Q2. Sir, my first question is, could you also please spell out what your plans are for the plywood segment? After the demerger, how do we plan to take this business forward in the plywood segment?

A2. After the demerger, we saw a substantial fall in plywood sales last year primarily because we did not have the infrastructure, we did not have a separate sales team for plywood, and also as per the terms of demerger, we were required to sell our plywood under a new brand. So, we started building up the infrastructure and also the brand from around November last year, and over a period of now almost 1 year, we have been able to make substantial progress in plywood. We have had a capacity utilization of around 80% in 6 months of the current year and we are targeting 100% capacity utilization in the next financial year.

  • Overview of MDF industry: We have about 13 lakh cubic meters of domestic MDF capacity, and over and above that, imports would be in the range of about 2,50,000 to about 3,00,000 cubic meters per annum. So, including imports, the total capacity is about 15.5 to 16 lakh cubic meters and the domestic market currently would be of around about 9 lakh cubic meters.
  • We are doing exports. I would not say it is nonviable, but it is a low-margin business. We are currently doing exports to have a higher capacity utilisation which enables us to reduce our fixed overheads and secondly, we also have some pending export obligations for project imports. So, exports is helping us to fulfill those obligations. If you look at the current half year, out of our total MDF volumes, about 35% comes from exports.
  • Competition Landscape: As I mentioned, India has surplus MDF capacities currently because of three big capacity additions in the recent past; Century’s 2,00,000 cubic meter capacity, Action’s 2,25,000 cubic meter capacity, and our Andhra Pradesh capacity of 3,60,000 cubic meters came on board within a period of about 9 months. So, capacities in the country went up by about 2-1/2 times. That has created surplus capacity in India and it will probably take about 2-1/2 to 3 years before we see a normal demand-supply ratio. The major manufacturers are Greenpanel, Action, Century, and Rushil. Rushil has a small capacity currently of 90,000 cubic meters but they have been projecting to start their new plant in Q1 FY21 which would probably be another 2,00,000 cubic meters capacity. That’s the broad competition landscape.

Q3. What would you expect the top line growth going forward over the next 3 years let’s say? And range of EBITDA margin if you can.

A3. Like I mentioned, we are targeting about 62% to 63% capacity utilization in the current year and we would be targeting a capacity utilization of about 80% in FY21 and full capacity utilization in FY22, although in the MDF space, it would be a mix of both domestic and exports as far as the mix is concerned. For the capacities we are targeting, we would be expecting EBITDA margin of about 16% in the current year, about 18.5% in the next financial year, and about 21% in FY22. This is for the MDF space.

Q4. What domestic-international mix you are comfortable with? 50:50, 40:60?

A4. We are targeting about 65% domestic and about 35% exports.

  • Raw Materials: The major raw materials are wood and chemical resins for both plywood and MDF. The only difference is in the ratio of wood and chemicals for both these product segments. In plywood, the ratio of wood and chemicals would be in the range of about 80% wood and 20% chemical resins, and in MDF, it would be 65% wood and about 35% chemical resins.
  • The government has started the process with e-way bill which definitely has helped some improvement. Earlier, a lot of unorganized plywood sales used to happen without any invoices. I think that has come to an almost complete stop, although a lot of invoicing is still happening in the range of about 30% to 50% of the actual material value. We are hoping that with the government concentrating on revenues from GST, there would be cracking down on the unorganized plywood segment so that they improve their invoicing levels and consequently provide a more level playing field for the organized manufacturers both in MDF and plywood.
  • Export Markets: Currently, our major volumes of exports are going to the Middle East which would be Dubai, Oman, countries like that, and we are also doing a fairly substantial volume to Sri Lanka as well considering its own market size and then we have a certain amount of exports going to the Southeast Asian markets. These would be the primary focus areas for us.

Disclosure: Holding in Greenpanel as I was holding Greenply


Looks interesting. It is a good proxy to ride the real estate sector. Significant upside possible from higher capacity utilisation (op lev benefits), shift from export to domestic where prices are higher and overall stabilisation of MDF prices in India (dependant upon demand pick up though).
I had one concern here - south India market will always have threat of imports, and in addition there is additional capacity coming up in south. North market is relatively insulated from imports risk. In such a scenario, is Centuryply a better bet than Greenpanel?

1 Like

As the South markets have threat of imports due to coast line, they have advantage for exports too. Location is advantageous for RM imports too. So Plant in Chittor makes sense in this context. Their export target seems to be around 30 per cent.

But exports are said to decline due to ADD and CVD.

Disc: Tracking, not holding.


Good results from Greenpanel.

Sales up by 32% YoY: 218 vs 179
PBT up by 100% YoY: 16 Cr vs 8 cr

Plywood Sales down by 5% YoY: 53 cr vs 55 cr
MDF Sales up by 33% YoY: 165 cr vs 124 cr
MDF EBIDTA Margins YoY: 21.8 % vs 19.6%
MDF Production Cap: 540000 cm
Production YoY: 79854 vs 69822 cm
Realization: 200030 vs 20284
Capacity utilization YoY: 59% vs 52%
D/E (YoY) : 0.74 vs 0.82
Pre Tax RoCE: 9.5% vs 4.3%

Sales promotion/Net sales: 1.1%

It will be interesting to see next quarter results to see if the growth is due to pent up demand or it is structural growth.

Disc: Invested

Interesting to see that they are able to sweat assets better during trying times, if Q2 trend continues this will give management enough cushion to pay down some debt and improve the quality of the balance sheet. The big question is whether Q2 was just a normalization of the deferred demand from Q1.

Once the utilization for the MDF plants in total crosses 65%, operating leverage can move the margins disproportionately. Domestic realizations haven’t changed much yet and industry continues to suffer from over capacity, higher export sales % will keep a lid on realizations closer to the 19,000 - 20,000 per CBM range but will continue to improve margins for the company.

Balance sheet continues to remain vulnerable to sudden FX fluctuations which cannot be predicted. There still are many factors left to chance, all the business can do is to keep increasing utilization levels through higher exports and hope for the domestic industry to grow out of the oversupply situation in MDF over the next couple of years.

In my opinion it is futile to spend too much time tracking when domestic MDF pricing could improve, as long as the utilization % keeps trending up one can see an increase in EBITDA margin, reduction in debt, increase in PAT and improvement in balance sheet quality. Let’s see what the management commentary is tomorrow.

Disclosure: Invested, no transactions in the past 30 days. I am a SEBI registered IA


If anyone can please share the transcript of the concall? Would be of great help!

FF MDF NCV English_0001.pdf (1.8 MB)

DGTR final findings and recommendation for continuation of MDF anti dumping duty for thickness above 6 mm

1 Like

Great going by Greenpanel Industries.

I’ve just started analyzing Greenlam and was looking at product profiles of both Greenlam and Greenpanel. There seems to be an overlap of products - veneers, wood floors and doors.

In related party transactions; both the companies seem to engage in purchase and sale products. Just wanted to understand the rationale behind it. Are the 2 companies from same promoter group competing for business or some sort of accounting diversion ( red flag). Maybe long term investors like @zygo23554 can please share thr views on this.

Till some years ago all the three businesses were under Greenply Industries, similar to how Centuryply operates today.

Greenlam demerged from Greenply first, leaving behind Plywood and MDF with Greenply Industries.
Next came the Greenpanel demerger, leaving behind a small part of the plywood business and entire MDF piece with Greenpanel.

The assets were divided based on family interests and few other considerations which may not make sense to investors, but made perfect sense to the promoters. The understanding is that each of the businesses will focus on it’s area of specialization - Greenply on Plywood, Greenlam on laminates and Greenpanel on MDF. Each business has a small segment into other areas like veneer, wood floor, decorative coatings etc but this was because they could not precisely divide the portfolio since the production was distributed across locations and some plants were doing a bit of all products.

One can always evaluate whether the demerger was required but the long term track record has been that these corporate actions haven’t diluted value. Hence, not a red flag in my qualitative opinion. Context and sequence of events become very important in such stories. In terms of operations they have invested into the best technology, that is the reason Greenpanel makes the highest gross margin though Century Ply and Action Tesa have large investments into MDF too.

The one thing I would watch out for is the balance sheet quality in the case of Greenpanel, they did bite off much more than should have when they took on 500 Cr of unhedged non INR debt to put up large MDF capacity. This hit them hard during the 2018 and 2019 MDF supply glut, which still continues to be an overhang. Since utilization has improved drastically in Q2 and Q3 of FY2021, both P&L and balance sheet quality have improved significantly. That said the balance sheet will be vulnerable to INR depreciation till they bring down debt to a level of 250 Cr and below (expected to happen by March 2022 as per the latest investor presentation).

Disclosure: Invested for self and customers, part sell transactions in the last 30 days


Thanks @zygo23554;

VP community veterans have always provided me with valuable insights and I’m grateful to the forum for this :slight_smile:

I have just one more follow-up question : -

Considering the 3 sister companies and keeping aside valuation and Inter-party risks, why is Greenpanel a better bet than Greenlam or Greenply?

Plz DM the reply, in case u feel a hijack of this discussion is happening more w.r.t to Greenply cos.

P.S : - I have a bias towards Greenlam so far due to its better balance sheet with recent debt reduction, economies of scale and laminates being a more customised product than plyboards/MDF

You can have a look at the commentary on MDF from Century Ply concall transcript in VP forum.

Cant find the same currently on DGTR website but considering the level of detail, should be true. Should come on website in a few days i think.

It has been recommended by Commerce Ministry. It will have to be approved by the Finance Ministry and notified by DGFT before it becomes effective. Finance Ministry can accept or reject within 90 days

1 Like

Terrific quarter for Greenpanel…MDF story going strong…Guiding for the Debt to be further reduced this financial year(FY22) by Rs 150 Crores.


Investor Presentation:

1 Like