Greenply Industries

Q1FY25 Concall Summary

Business Updates

• In plywood business volume growth was around 8.6% yoy in Q1
• The net debt level is at Rs 431 crores which has reduced by around Rs 70 crores

Participants

Kotak

HDFC Securities

Yes Securities

Investec

Asian Market Securities

QnA

• The product mix in MDF was better in Q1 and that has led to better realisations and better profitability as well
• The focus on MDF too remains the same as in plywood is to sell more of value added products
• There was a price hike in June and looks like another price hike needs to be planned in the coming quarter as well
• Pricing power is also a function of how the industry operates and if other players too start hiking it will become easier to pass on cost pressures
• There has not been any additional incentive or discount given in Q1 compared to Q4 while a lot of players in industry have done the same
• Entire Q1 including the month of July most of the players in the industry have been cutting prices
• There has been delays in the Samet project due to delay in receipt of machinery and also not being able to hire enough sales team staff and expecting to start sales from 1st Sept. The plant is ready to produce but some key machinery is still held up
• The investment into value added products is an ongoing process and the idea is to add 1-2 new products in the value added segment every year
• Most of the material that is imported is rubber wood while what is manufactured in India is different. In the commercial/industrial grade the company is not even competing with the peers
• There is a good 30% of industry in plywood where an organized manufacturer would not want to operate because of the lower grade margins and the product grade
• The next large capex will happen only for MDF and for plywood the additional capex to give growth for a 2-3 year perspective is only Rs 100-120 crores
• The business under Samet looks to be very good and the revenue potential post completion of the capex over three phases is Rs 750 crores with EBITDA margins of 25%. However this will be a tough market as there are entrenched players in the industry
• The total investments in Samet over three phases will be Rs 250 crores