Greenpanel Industries Reports Strong Operational Recovery in Q2 FY26
Greenpanel Industries Limited achieved a significant operational turnaround in Q2 FY26. The company reported a 30.5% year-on-year growth in domestic MDF volumes and a 17.1% increase in consolidated revenue to INR 389.40 crore. Operational EBITDA reached INR 39.70 crore, representing 10.2% of revenues. Strategic initiatives included pricing realignment, product innovation, and cost optimization. The company reduced net debt by INR 60.00 crore and improved its working capital cycle by 17 days. Management revised FY26 guidance, expecting high-teens domestic MDF volume growth and high single-digit to early double-digit operating EBITDA margins.
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Greenpanel Industries Limited , a leading manufacturer of wood panels, has reported a significant operational turnaround in the second quarter of fiscal year 2026, following a challenging first quarter. The company's strategic focus on volume growth and cost optimization has yielded positive results, as evidenced by its latest financial performance.
Robust Volume Growth
The company achieved a 30.5% year-on-year growth in domestic Medium Density Fiberboard (MDF) volumes, coupled with a 26.8% sequential growth. This surge in domestic demand was a key driver of the company's performance improvement. Export volumes, however, remained flat during the quarter.
Financial Highlights
Greenpanel's consolidated revenue grew by 17.1% year-on-year to INR 389.40 crore in Q2 FY26. The company's operational EBITDA, excluding forex impact, reached INR 39.70 crore, representing 10.2% of revenues. However, the reported EBITDA stood at INR 27.80 crore due to an adverse forex impact of INR 12.50 crore on Euro borrowings.
Strategic Initiatives
The company implemented several strategic measures to drive growth and efficiency:
- Pricing Realignment: Greenpanel strategically realigned its pricing with peers to remain competitive in the market.
- Product Innovation: New products were launched, including HCW Outdoors, Thin MDF, and Fire Retardant MDF, expanding the company's product portfolio.
- Cost Optimization: The company focused on improving operational efficiencies and optimizing raw material usage, resulting in significant cost savings.
Market Dynamics
The MDF market showed positive signs, with imports dropping significantly to less than 1,000 cubic meters monthly, compared to an average of 20,000 cubic meters in the previous year's second half. This reduction is attributed to stricter implementation of Bureau of Indian Standards (BIS) norms.
Financial Management
Greenpanel demonstrated strong financial management during the quarter:
- Net debt reduction of INR 60.00 crore
- Improvement in working capital cycle by 17 days
- Utilization of EPCG (Export Promotion Capital Goods) benefits amounting to INR 6.00 crore
Outlook
Management has revised its guidance for FY26:
- Expecting domestic MDF volume growth in high teens
- Projecting operating EBITDA margins in the high single-digit to early double-digit range
Challenges and Opportunities
While the company has shown strong recovery, it faces some challenges:
- Elevated chemical prices, although expected to moderate by the end of Q3 FY26
- Ongoing need to optimize capacity utilization, currently at about 50%
Opportunities include:
- Potential for further margin improvement through increased value-added product sales
- Expanding market share in the growing domestic MDF market
Greenpanel Industries' Q2 FY26 results demonstrate a robust recovery and effective implementation of strategic initiatives. The company's focus on volume growth, cost optimization, and product innovation positions it well for sustained performance in the coming quarters, despite ongoing market challenges.
Historical Stock Returns for Greenpanel Industries
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -2.41% | -6.48% | -13.72% | -5.72% | -32.50% | +170.30% |
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