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Greenply Industries: Strong growth on benign base

News: Greenply Industries reported robust growth, on a benign base (Q2FY21 had ~ 22% YoY decline in topline). The topline at Rs.432.4 crore, was up by 46.3% YoY driven by 57.8% growth in Plywood revenues at Rs376.2 crore with volumes, up 43%). The EBITDA margins expanded by 60 bps YoY to 11.5%, owing to operating leverage benefits. The PAT came in at Rs.31.9 crore, up 72% YoY.

Views: Greenply continues to lag behind Century in plywood segment where the latter recorded 48% volumes growth despite higher base. The improved working capital and lean balance sheet is only silver lining. Furthermore, foray into MDF, wherein risk of supply glut is likely in FY23/24 onwards, needs to be monitored.