Key highlights

• Net sales for Greenply industries for Q3 FY'13, grew by 22% and OPM was up by 144 bps for Q3 FY'13 due to higher capacity utilization and better sale of value added products.

• Exports grew by 37% for the quarter and constituted about 12% of net sales. Forex loss of about Rs 6.3 crore was capitalized during the quarter.

• On segmental basis, sale of Plywood and allied products grew by 14% and stood at about 34% of total revenue. Volume wise the growth was about 6-7%. OPM for the segment was slightly lower to 9.81%.

• As per the management, the focus on Plywood segment will be to use the own facility for manufacturing high value added products and to outsource the low value added products. Also some products are imported from China.

• No new capacity has been planned for Plywood segment, but the intention is to optimize the existing facility with high value added product and to make optimum use of outsourcing. Management expects the segment can see a margin increase of about 100-150 bps in next couple of quarters predominately due to higher value added product sales.

• For laminates segment, sale grew by about 23% and the segment constitutes about 34% of total revenues. On volume wise, the segment grew by about 8% and realization was up by 17%. Capacity utilization was also higher and stood at about 108%.

• Going forward, the management expects the margin for laminates to improve by about 150 bps in coming quarters.

• For MDF segment, which stood about 19% of total sales, the sales grew by about 41% y.o.y. Avg realization was up by 17% and utilization stood at about 90% of the capacity. The EBIDTA margin for the segment stood at around 21%.

• As per the management, MDF margin will gradually rise over next 2-3 quarters, will see, EBIDTA margin up from current 21% to around 24%. Increase in capacity utilization, sale of high value added product and better product mix will contribute the higher margins.

• On demand side, management does not see any issue at all. Growth will come on more high value added products and increase of reach and presence.

• The new facility of MDF is on discussion and final call by the management will be made in next 6 months. Although demand is pretty strong, imports continue to remain a challenge in MDF segment. Also the international prices of MDF segment are under pressure.

• Current debt stands at around Rs 600 crore. Company has plans to spend about Rs 55 crore for FY'13 in form of increase in MDF facility and in some balancing equipment. Management aims to bring down the debt equity ratio of current of about 1.4 to about 1.1 in next 9-12 months.

• Overall for Plywood segment, management aims sale of around Rs 850 crore for FY'13 and about Rs 1000-1050 for FY'14 and about Rs 1200 crore for FY'15.

• For laminate segment, management expects turnover of about Rs 700-720 crore in FY'13 and about Rs 800-820 crore in FY'14.

• For MDF, management expects sales of about Rs 380 crore in FY'13 and about Rs 450 crore in FY'14.