Greenlam Industries (GREENLAM) Q1 24/25 earnings summary

Executive summary

• Consolidated net revenue for Q1 FY25 grew 17.4% year-over-year to INR 604.7 crore, driven by strong international laminate sales despite logistical and domestic challenges.

• Net profit declined 39.7% year-over-year to INR 19.9 crore due to higher depreciation, interest from new projects, and increased costs.

• Gross margin was 52%, down 30 bps year-over-year, while EBITDA margin fell to 10.6% (down 190 bps YoY) due to higher operating and employee costs.

• Growth was below expectations due to election-related disruptions, heatwave in India, and container availability issues in exports.

• New plants in Tamil Nadu and Andhra Pradesh are ramping up, with the particleboard plant expected to start commercial production in Q3 FY25.

Financial highlights

• Laminate business revenue up 13.2% year-over-year to INR 534 crore; international laminate revenue up 22.1% YoY.

• Domestic revenue grew 11.8% YoY; decorative veneer revenue up 24.1% YoY; engineered wood flooring up 30%; engineered doors up 40.7%.

• EBITDA was flat at INR 64 crore; net profit margin declined to 3.29% from 6.40% YoY.

• Net working capital days improved to 65 from 72 YoY.

• Net debt stood at INR 922 crore, including INR 465 crore for the particleboard project.

Outlook and guidance

• Management maintains 18-20% revenue growth guidance and expects EBITDA margin around 16%, subject to cost movements.

• Particleboard plant in Andhra Pradesh expected to commence commercial production in Q3 FY25, targeting 90%+ utilization by year four and 15-18% ROCE.

• Domestic demand is normalizing post-election and heatwave, with Q2 expected to be a regular quarter.

• Peak debt expected in FY25 at INR 925-950 crore, declining thereafter.

• Continued focus on capacity expansion and integrated solutions to drive future growth.