Key highlights:

• India Plywood industry size – Rs. 19,000 crore, with the organised plywood industry is pegged at Rs. 4,500 crore and Greenply Industries has a market share of 26 percent in the organized sector. The organised plywood industry likely to get benefit from shift of unorganized market to organized market in the coming years after strict implementation of the E-way bill system. The industry is growing at a CAGR of 5-6% percent backed by surge in demand of interior infrastructure. Steady growth of Indian real estate coupled with increased disposable income of the consumers and high lifestyle aspirations will contribute to the growth of the industry. The policy reform – housing for all and affordable housing has been a growth driver for plywood industry. Greenply Industries expects strong customer relationships, far-reaching distribution network, expertise, experience and ability to innovate helped in consolidating leadership position in the sector.

• Greenply Industries, India's largest interior infrastructure company, consolidated profit after tax surged 82% to Rs 21 crore on 13% growth in revenue from operation to Rs 349.45 crore in the June 2019 quarter over a year ago. Plywood revenues grew 6.2% to Rs 310 crore (plywood volume growth at 4.1%) and Gabon face veneer operations rose 110% to Rs 44 crore. Gabon saw a growth surge due to better utilisation of the capacities commissioned in FY19.

• Consolidated Gross margins grew by 380 bps to 41.9% and EBITDA margins increased by 500 bps to 11.9% in quarter ended June 2019.

• Consolidated Working capital cycle declined by ~7 days to 60 days in quarter ended June 2019.

• Consolidated Debt to equity ratio at 0.73 as on 30th June 2019 as compared to 0.92 as on 30th June 2018.

• Continued investments in increasing brand visibility pan-India and maintains Ad spends at around 4% of Net Sales.

• Company has 3 state–of-the-art manufacturing facilities for Plywood in India. Plywood manufacturing facilities capacity utilization stood at 139% in Q1FY20) and further demand being catered through outsourcing.

• Revenues are projected to grow 8-10% with ~11% operating margins in plywood operations and ~Rs 215 crore revenues with ~18% margins from Gabon face veneer operations. ROCE is projected to improve as the company will focus on outsourcing of plywood manufacturing operations. Also, higher utilisation at the Gabon subsidiary should aid better profitability and return ratios ahead.

• For raw material sustainability, the company focuses on plantation of fast growing and improved species of clonal plantations to improve quality of wood availability and plywood manufactured. Significant expansion in face veneers at Gabon plant with expansion in peeling capacity from 36000 CBM to 96000 CBM.