• The Company has completed the demerger of the decorative business (comprising of laminates and allied products and accounting for 37.2% of FY14 consolidated sales) with all its assets and liabilities into Greenlam Industries on 27 November 2014. Greenlam Industries has issued and allotted to the shareholders of Greenply Industries one equity share of Rs. 5 each in Greenlam Industries for every one equity share of Rs. 5 each held by them in Greenply Industries.

• The completion of the demerger of the Decorative Business during Q3 will enable Greenply to greater focus on its core business and leverage its strengths towards improving market reach and better cash management and utilisation to drive growth.

• The company holds largest pan-India player with 32% share of organised plywood market and 30% share of domestic MDF market.

• Plywood:(A)Plywood production fell 4.6% to 8.1 million square meters (million sqm) in Q3FY15. (B) Average capacity utilisations were at 100%. Sales volumes registered a growth of 7.6% to 11.1 million sqm. (C)Average net realisation of Plywood improved by 7% to Rs 245 in Q3FY15. (D)EBITDA Margin registered adecrease of 370 basis points to 8.1%.

• Medium Density Fibreboards (MDF): (A) MDF production surged sharply 35.8% to 44808 Cubic Meters (CBM) in Q3FY15. Sales volumes rose by 40.2% to 44379 CBM. (B) Average Capacity Utilisation was 100% compared to 73% in Q3FY14. (C) Average realisations of MDF reduced by 1.4% to Rs 25172 per CBM. (D) EBITDA Margin rose by 220 basis points at 24.1%.

Financial performance

• The Company net revenue grew by up 19% YoY to Rs. 390.52 crores for Q3FY15. Plywood division recorded a growth of 12.6% YoY to Rs. 278.70 crores and accounted for 71% of total revenues. MDF division recorded a growth of 38.4% YoY to Rs. 111.96 crores and accounted for 29% of total revenues. Gross margins expand 60 bps YoY to 42.4%, driven by higher volumes in MDF. EBITDA was up 6% YoY to Rs. 9.68 crores; EBITDA margins stood at 12.72%, down 155 bpsYoY due to rise in advertisement expenditure. Advertisement expenditure to sales at 2.7% in Q3 FY15 as compared to 1.3% in Q3 FY14 PAT was up 33% YoY to Rs. 26.14 crores.

• Working capital cycle improved by 4 days YoY to 48 days in Q3FY15, led by 16 days improvement in inventory days to 45 days.

• Net debt to equity at 0.77x as on December 31, 2014 as compared to 1.05 as on December 31, 2013.

• For 9MFY15- Revenues were up 11.74% YoY to Rs. 1132.16 crores. Plywood division recorded a growth of 12.11% YoY to Rs. 842.22 crores and accounted for 74% of total revenues. MDF division recorded a growth of 10.88% YoY to Rs. 290.43 crores and accounted for 26% of total revenues. EBITDA was up 8.75% YoY to Rs. 147.12 crores; EBITDA margins stood at 13%, down 35 bps YoY. PAT was up 39.32% YoY to Rs. 76.25 crores.

• The Growth during Q3 & 9M FY2015 has been achieved mainly through gaining market share from the unorganised segment and the company expects this trend will continue and is a reflection of proven quality, strong brand portfolio and well developed distribution infrastructure.

• The MDF business has made good strides during the year on the back of increasing customer preference. The company expects given leadership position and capabilities will be a key growth driver going forward.

• With Plywood industry size of around Rs 160 billion and MDF industry size of around Rs 18 billion, the Company expects rising demand from the real estate sector, increasing urbanisation, higher disposable incomes and growing middle classand Government Announcement regarding construction of 100 smart cities would be key industry driver going forward. Also, rollout of GST helps the industry to facilitate faster shift from unorganised to organised players.

• The company plans to increase the number of distributors and retailers going forward. Presently, the company has around 1100 plywood and 450 MDF distributors/stockist and 6000 plywood and 4000 MDF retailers.

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

• On expansion side- With Plywood utilization of 103% in 9MFY15, the company plansto optimise utilisation of plywood plants in existing facilities and increase outsourcing proportion to 30% from 18% presently over the next 3 years. Also, with MDF 83% utilization in 9MFY15, company plans to undertake greenfield expansion of new MDF plant in Andhra Pradesh over FY16-19 to cater to future demand.

• For raw material sustainability, the company focus on plantation of fast growing and improved species of clonal plantations to improve quality of wood availability and plywood manufactured. Also with backward integration through 50% JV in Myanmar for production of face veneers; to start manufacture of plywood in FY17

• The company upgrades IT infrastructure for implementing SAP Hana to strengthen overall supply chain.

• The company expects a 10-12% growth in FY16 trough volume utilization and better product mix realisation. Margins expected to improve by 50-70 bps in FY16 driven by better product mix and cost control.