Greenlam Industries (GREENLAM) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 consolidated revenue grew 17.4% year-over-year to ₹604.7 crore, driven by strong international laminate sales, but net profit declined 39.7% to ₹19.9 crore due to higher depreciation and interest from new projects.

• Growth was below expectations due to election disruptions, heatwave, and container shortages impacting both domestic and export businesses.

• Gross margin was 52%, slightly lower year-over-year, while EBITDA margin fell to 10.6% due to higher operating and employee costs.

• New plants in Tamil Nadu and Andhra Pradesh are ramping up, with improved utilization expected through the year.

• Management remains positive on market share gains and expects normalization in domestic demand in Q2.

Financial highlights

• Q1 consolidated net revenue: ₹604.7 crore, up 17.4% YoY; gross margin: 52% (down 30 bps YoY); EBITDA margin: 10.6% (down 190 bps YoY); net profit: ₹19.9 crore, down 39.7% YoY.

• International laminate revenue reached a record ₹285.6 crore, up 22.1% YoY; domestic revenue grew 11.8%.

• Net working capital days improved to 65 from 72 YoY; net debt increased to ₹922 crore, including ₹465 crore for the particleboard project.

• PAT margin dropped to 3.3% from 6.4% YoY; consolidated net debt-equity ratio increased to 0.84 from 0.54 YoY.

• Earnings per share (consolidated) was ₹1.56, down from ₹2.59 YoY.

Outlook and guidance

• Revenue growth guidance maintained at 18-20% for FY25; laminate EBITDA margin guidance at 16%.

• Particleboard plant in Andhra Pradesh expected to commence commercial production in Q3 FY25, with full utilization and 15-18% ROCE targeted in 3-4 years.

• Management remains focused on capacity creation ahead of demand and maintaining leadership in international laminates.

• Domestic demand expected to normalize in Q2; export growth to continue with focus on value mix and market share.