Greenlam Industries growth outlook supported by particleboard ramp-up and deleveraging

Investment View and Business Positioning

In its August 11, 2026 result update, ICICI Direct Research retained a BUY view on Greenlam Industries, supported by improving growth momentum in particleboard and plywood, recovery in profitability and an expected reduction in leverage. The revised target price is Rs 300, valuing the company at 30 times FY28E EPS.

Greenlam Industries manufactures laminates, particleboard, plywood, decorative veneers, engineered wooden floors and doors, serving customers in more than 120 countries. The company has a 17.8 per cent share of the organised laminate market and over 29 per cent share of laminate exports.

Q1FY27 Financial Performance

Greenlam Industries reported consolidated Q1FY27 revenue of Rs 796.7 crore, up 18.2 per cent year on year. Reported PAT turned positive at Rs 21.2 crore, compared with a loss of Rs 15.7 crore in Q1FY26. Consolidated pre-forex EBITDA increased 48.2 per cent year on year to Rs 81.1 crore, while the pre-forex EBITDA margin improved 210 basis points to 10.2 per cent.

Gross margin remained resilient at 52.9 per cent versus 53.1 per cent a year earlier, aided by price increases, expenditure control, higher realisations and operating leverage in particleboards, veneers and flooring.

Segment Performance and Operating Momentum

Laminates

Laminates revenue rose 7.4 per cent year on year to Rs 596.1 crore. Sales volume declined 6.4 per cent to around 4.62 million sheets, but a 13.6 per cent increase in realisation to Rs 1,240 per sheet supported revenue growth.

Management attributed the volume weakness primarily to deferred export shipments of around Rs 27 crore caused by container shortages, vessel delays and higher freight costs amid West Asia conflict-related disruptions. Management considers the deferral a timing issue rather than lost demand and expects laminate revenue growth of 10 per cent to 12 per cent in FY27. Persistent vessel constraints in Q2FY27 could, however, extend export delivery timelines. Middle East markets account for around 6 per cent to 7 per cent of total revenue.

Panel and Allied Segment

The panel and allied segment was a key positive in Q1FY27. Revenue rose 205.2 per cent year on year to Rs 94.6 crore, while particleboard sales volume increased 167.4 per cent to 41,418 CBM. Realisation rose 14.6 per cent to Rs 22,764 per CBM.

Capacity utilisation reached 61 per cent from 30 per cent in Q1FY26. The segment turned EBITDA-positive before forex, reporting Rs 3.4 crore of EBITDA compared with a Rs 10 crore loss a year earlier. Management targets average particleboard utilisation of around 70 per cent in FY27 and long-term EBITDA margins of 18 per cent to 20 per cent by FY29 as utilisation improves.

Plywood and Allied Products

Plywood and allied revenue rose 20.4 per cent year on year to Rs 106 crore, while its EBITDA loss narrowed to Rs 5.2 crore from Rs 8.6 crore. Management guides for around 50 per cent plywood utilisation and quarterly EBITDA breakeven by the end of FY27.

FY27-FY28E Growth and Earnings Outlook

Management retained an overall FY27 revenue-growth target of around 18 per cent. ICICI Direct forecasts revenue to grow at a 14.9 per cent CAGR over FY26-FY28E to Rs 4,030 crore, with EBITDA margins of 12.3 per cent in FY27E and 13.7 per cent in FY28E.

The broker reduced its FY27E revenue, EBITDA and PAT estimates by 0.5 per cent, 2.2 per cent and 2.8 per cent, respectively. FY28E revenue, EBITDA and PAT estimates were reduced by 1.0 per cent, 3.8 per cent and 4.2 per cent, respectively.

Capital Expenditure and Deleveraging

FY27 capital expenditure is budgeted at Rs 130 crore to Rs 135 crore, including Rs 70 crore for two laminate press lines scheduled to begin commercial production in Q4FY27.

Total debt was Rs 1,012.2 crore as of June 30, 2026, while net debt was Rs 933.7 crore. Despite the planned capital expenditure, management aims to reduce net debt by around Rs 100 crore in FY27. With no major capacity expansions planned beyond FY27, management expects future free cash flow to support deleveraging.

Valuation and Key Risks

ICICI Direct’s revised target price of Rs 300 values Greenlam Industries at 30 times FY28E EPS. The brokerage’s BUY view is supported by the ramp-up in particleboard, narrowing plywood losses, improving profitability and expected deleveraging.

• A slower-than-expected ramp-up in new segments could affect margins.
• Geopolitical disruption could affect laminate exports, while persistent vessel constraints in Q2FY27 may extend export delivery timelines.