Greenply Industries Q4 Results Review - MDF To Boost Growth: Yes Securities

Yes Securities Report

Greenply Industries Ltd. registered a volume growth of 6% QoQ and remained flattish YoY at 17 million square metre (two-year volume compound annual growth rate came in at 4%) and average selling price came in at Rs 246/sqm versus Rs 238/Rs 249 in Q4 FY22/Q3 FY23 respectively. gross profit % for the quarter stood at 38% as compared to 38%/39% in Q4 FY22/Q3 FY23 respectively and Ebitda margins came in at 11% versus 10%/10% in Q4 FY22/Q3 FY23 respectively. However, volumes were below growth of peers on account of headwinds witnessed in premium segment which constitute 51% of total volumes.

Management expects a volume growth of 10-12% in FY24 backed by improvement in demand and shift from unorganised to organised segment.

Gabon biz witnessed sequential revival wherein revenue stood at Rs 180 million versus Rs 90 million in previous quarter. Gross profit margins/ Ebitda margins expanded by 372 bps/345 bps QoQ. However, the situation in Gabon continues to remain uncertain and could impact FY24 performance.

MDF plant has commenced production and Greenply has established their sales and marketing team as well. The product will contribute to revenue from Q1 FY24E. For this plant major capex is already done, Rs 450-500 million will be spent in FY24.

Also, the debt repayment of Rs 500 million will be made from October-November 2023. In year-one, Greenply aims to operate MDF plant at 40-45% and initially company will manufacture interior and exterior grade MDF along with HDMR category.

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