The company has conducted a conference call on 28th October2015 to discuss the financial performance for the second quarter ended September 2015 and way forward. Mr. Shobhan Mittal, Executive Director, and Mr. V. Venkatramani, CFO, of the Company addressed the conference call.

Operational performance

• Greenply Industries hasdelivered a stable financial and operating performance in Q2FY16, despite a largely sluggish macro environment, chiefly driven by two pronged strategy of gaining market share from theunorganised segment and enhancing operational efficiencies through animproved product mix.

• The company has registered net revenues of Rs 400.77 crore in Q2FY16, down by 2.4%from Rs 410.71 crore incorresponding quarter.Plywood revenue was down by 7.8% YoY to Rs 287.72 crore, contributing 72% of net sales.MDF revenue grew by 14.5% YoY to Rs 113.05 crore, contributing 28% of net sales. The Company plywood plants utilization stood at 102% and MDF plants utilization at 91% in Q2FY16.Gross margins expanded by 360 bps YoY to 45.1%, led by better product mix. EBITDA margin wasup 130 bps YoY to 14.1%. EBITDA was up by 7.5% at Rs 56.50 crore compared to Rs 52.56 crore. Ad expenditure to sales stood at 3.9% in Q2FY16. PBT rose by 12.9% at Rs 36.42 crore. PAT gained by 1.5% at Rs 27.24 crore.

• The Company working capital cycle improved 8 days QoQ to 49 days in Q2FY16, led by better inventory and debtor management. Net debt to equity stood at 0.54x as on September, 2015 as compared to 0.79x as onSeptember 2014.

• Plywood: (A) Plywood production declined by 9.8% to 8.25 million square meters (million sqm). (B) Average capacity utilisations wereat 102% as compared 113% corresponding previous quarter. Sales volumes de-grew by 2.1% to 12.03 million sqm. (C) Average net realisation of Plywood decreased by 2.5% to Rs 235per sqm. (D) EBITDA Margin decreased to 9% from 9.5% corresponding previous quarter.

• Medium Density Fibreboards (MDF): (A) MDF production grew15.1% to 41032 Cubic Meters (CBM). Sales volumes stood at 42067 CBM, up by 11.7% from 37667 CBM in Q2FY15. (B) Average Capacity Utilisation was at 91% compared to 79% corresponding previous quarter.(C) Average realisations of MDF increased by 2.5% to Rs 26818 per CBM. (D) EBITDA Margin rose to 27.9% from 23.2% corresponding previous quarter.

• The company holds largest pan-India player with 26% share of organised plywood market and 30% share of domestic MDF market. The company have 4 state–of-the-art manufacturing facilities for Plywood and 1 facility for MDF –largest in the country. With Plywood industry size of ~ Rs. 180 billion and MDF industry size of ~Rs. 14 billion, the company expects industry likely to benefit from rising residential/ commercial construction, increasing urbanization, high disposable incomes and Government Announcement regarding construction of 100 smart cities.

• The Company hopes rising demand from the real estate sector, increasing urbanization, higher disposable incomes and growing middle class will be key industry driver going forward. Meanwhile government announcement regarding construction of 100 smart cities would facilitate further to boost to the industry. The Company expects rollout of GST helps the industry to facilitate faster shift from unorganised to organised players.

• The company guides to increase the number of distributors and retailers going forward. Presently, the company has around 1170 plywood and 600 MDF distributors/stockist and 6000 plywood and 4000 MDF retailers. Also, serviced by 33 branches for ply and 15 branches for MDF pan-India.

• The company plans to continued its investments in advertisement and promotional spends to increase brand visibility pan-India, with Ad spends stood at around 3% of net sales.

• On expansionplans- The Company plansto optimise utilisation of plywood plants in existing facilities and increase outsourcing proportion to 30% from 20% presently over the next 3 years. Also, with plans to setting up new MDF plant in Andhra Pradesh over FY16-19 to cater to future demand.

• The Company revised down its topline growth target to ~6-8% in FY16 from previous guidance of 10-12%. The Company expects a topline growth of ~5-6% in H2FY16. Margins expected to improve by 50-70 bps inFY16 driven by better product mix and costcontrol.

• The Company guides a maintenance capex of ~Rs 30 crore for FY16.

• The Company expects to rise by 100 bps on the margins front in current fiscal year. Also, guides to maintain MDF operating margin of ~27-28%.

• The Company guides an effective tax rate of ~23-25% for FY16.