Synopsis: Greenpanel is witnessing improving demand, rising volumes and better margins in its MDF business, while brokerage believes industry recovery, utilisation growth and pricing power could support stronger earnings ahead.
The shares of this small cap company majorly engaged in the manufacturing of plywood, medium density fibre boards (MDF) and allied products were in focus after brokerage sees upto 64 percent upside potential.
With the market capitalization of Rs. 2387 Crores, the shares of Greenpanel Industries Ltd were trading at around Rs. 195 per share which is 71 percent discount from its 52 weeks high of Rs. 335 per share and is trading at D/E of 0.27
Brokerage View:
Anand Rathi has maintained a BUY rating on Greenpanel Industries with a target price of Rs 320, implying nearly 64 percent upside from the current market price of Rs 195. The brokerage believes the company has likely crossed the bottom of the cycle as MDF demand improves and utilisation levels gradually rise across the industry. It expects Greenpanel’s earnings growth to accelerate over the next two years, supported by better operating leverage, higher capacity utilisation and margin recovery.
Q4 FY26 Results:
Year on Year analysis: Revenue from operations has increased from Rs. 374.51 Crores to Rs. 398.93 Crores, up 6.5 percent. Operating profit has decreased from Rs. 47.95 Crores to Rs. 29.95 Crores, down 37.5 percent and net profit has decreased from Rs. 29.39 Crores to Rs. 1.37 Crores, down 95 percent
Quarter on Quarter analysis: Revenue from operations has decreased from Rs. 416.27 Crores to Rs. 398.93 Crores, down 4.16 percent. Operating profit has decreased from Rs. 40.84 Crores to Rs. 29.95 Crores, down 26 percent and net profit has decreased from Rs. 10.24 Crores to Rs. 1.37 Crores, down 86 percent
MDF Business Driving Recovery
Greenpanel reported strong traction in its MDF business during Q4FY26, with sales volume rising 27.8 percent year-on-year to 1,30,197 CBM. Domestic MDF volumes grew 29.5 percent , helping the company deliver its third consecutive quarter of strong double-digit growth. MDF revenue increased 5.8 percent year-on-year to Rs 3,606 million despite a 9.5 percent decline in realisations on a yearly basis. Sequentially, realisations remained almost stable with only a marginal 0.5 percent decline, indicating that pricing pressure may be stabilising.
The company’s MDF EBITDA margin improved to 8.9 percent in Q4FY26 from 3.5 percent a year ago, while adjusted margin excluding EPCG benefits reached a six-quarter high of 7.2 percent . Management highlighted that the focus from Q1FY26 shifted towards improving market share, which helped utilisation levels and operating performance improve steadily.
Plywood Segment Shows Early Signs of Revival
The plywood business also delivered encouraging numbers after several weak quarters. Segment revenue rose 13.4 percent year-on-year to Rs383 million, while sales volume increased 20 percent year-on-year. This marked the first positive volume growth for the plywood division in the last 15 quarters.
Plywood EBITDA margin improved sharply by 610 basis points sequentially to 7.5 percent in Q4FY26. Management stated that the current priority is to improve utilisation of the existing plywood capacity before considering any expansion plans. This indicates a more cautious and efficiency-focused approach rather than aggressive capacity addition.
Industry Demand Outlook Remains Positive
Management expects MDF industry demand to grow at an early double-digit to mid-teen rate in FY27. Industry capacity is expected to rise from nearly 4-4.5 million CBM in FY26 to around 4.4-4.9 million CBM in FY27. Despite fresh capacity additions, industry operating rates are projected to improve from 71.5 percent in FY26 to 76.7 percent in FY27, suggesting healthier demand absorption.
Anand Rathi believes this improvement in utilisation levels could eventually bring back pricing power to the MDF industry from FY28 onwards. The brokerage expects Greenpanel’s existing MDF capacity utilisation to rise from 56 percent in FY26 to nearly 79 percent by FY28, which can significantly improve profitability.
Price Hikes Taken to Offset Raw Material Inflation
The company increased MDF prices by 15 percent and plywood prices by 6 percent in April 2026 to offset the sharp rise in chemical costs. Management said chemical prices increased by nearly 40–45 percent following the Iran war, while timber prices remained stable during the quarter.
However, the company indicated that the complete benefit of the price hike may not reflect immediately in Q1FY27 because of phased implementation, dispatches at older prices and some early signs of discounting in the market. Even so, the pricing action shows Greenpanel’s attempt to protect margins during a period of elevated input costs.
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