Greenlam Industries stock price jumped 14% after Q2FY24 results were announced. The company delivered robust September Quarter 2023 numbers. Greenlam is among the world’s top 3, Asia’s largest and India’s No. 1 surfacing solutions brand. With its presence in over 100 countries, Greenlam offers end to end surfacing solutions spread across decorative laminates, compact laminates, interior and exterior clads, restroom cubicles & locker solutions, decorative veneers, engineered wooden floors and doors and plywood. Greenlam Group has five state-of-the-art manufacturing facilities in India located at Behror (Rajasthan), Nalagarh (Himachal Pradesh), Prantij (Gujarat), Tindivanam (Tamil Nadu), and Naidupeta (Andhra Pradesh).
Consolidated net revenues from operations witnessed a growth of 16.5%, at Rs. 604 crore in second quarter ended on September 30, 2023, as compared to Rs 518 crore in the corresponding quarter of the previous financial year. The laminate business witnessed a volume growth of 15.7% YoY, contributed by both domestic and international business. The operating profit grew by 40.8% to Rs. 76 crore as compared to Rs. 55 crore in the corresponding quarter last year. The company reported a net profit of Rs. 42 crore for the current quarter, growth of 42% over same quarter of the previous financial year.
Speaking on Q2FY24 results, Saurabh Mittal, Managing Director and Chief Executive Officer, Greenlam Industries Ltd. said, “The second quarter of FY 2023-24 witnessed consistent growth across all verticals with overall revenue growing by 16.5% to Rs. 604 crore. The laminate business continues to thrive, showing robust growth in both domestic and international markets, with YoY volume growth of 20.5% and 10%, respectively, and a capacity utilization rate of 94% during the quarter on 21 million sheets.” Operating margins for the quarter came in at 12.52% improved by 216 basis points (bps) YoY, in September Quarter 2023. According to the management, margin expansion was supported by improvements in the laminate business.
According to the management, the company’s efficient inventory management led to a significant improvement in net working capital days, reducing to 60 days, even after considering the impact of inventory related to new plywood and laminate projects. Greenlam net debt stood at to Rs 670 crore, which includes project debt of Rs 549 crore. During the quarter, the company successfully commenced commercial production at the greenfield laminate project at Naidupeta, Andhra Pradesh. Commercial production at Naidupeta began on September 29, 2023. According to the management, the state-of-the-art manufacturing facility at Naidupeta is expected to revolutionize their production capabilities, featuring the new laminate size of 6’x14′ (1830 mm x 4320 mm). This new larger laminate size has generated considerable market interest, and the management expects it to positively impact Greenlam’s market share. The plant’s total capacity is 3.50 million laminate sheets and compact boards, increasing the consolidated capacity for laminates and compact boards to an industry-leading 24.52 million sheets and compact board per annum. But during the quarter there were no production and sales pertaining to the laminate unit at Naidupeta plant. Speaking on Naidupeta plant, Mittal said, “The company’s greenfield particle board project at Naidupeta, Andhra Pradesh is progressing as per schedule and is expected to commence production in Q4FY24.”
