Greenlane Renewables Inc.

Ladies and gentlemen, good day and welcome to the GreenLamb Industries Limited Q2 NHY FY26 results. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Saurav Mittal, Managing Director and CEO of Greenland Industries Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, friends, and a very, very warm welcome to the quarterly calls of Greenland Mid-Assets Limited. And I'm pleased to have Ashok, our CFO, Samad from the finance team and SGA on this call. And I will discuss, take you through the performance and updates for the quarter. As you probably have seen, we've done about, we've crossed 800 crores of revenue in Q2 of 526. And the business has grown by about 18.7% on a year-on-year basis. And even at the gross margin levels, we've done about 54.6%. It's one of the highest we've done in terms of gross margins. EBITDA also, we crossed 100 crores. And obviously EBITDA was impacted due to Forex losses and still small losses in the chipboard and the plywood business. And PAC was impacted also due to the Forex and higher depreciation interest, considering the fact that we have plants capitalized in FY25 and FY24 and FY23. If you go segment-wise, in the laminates business, revenue, gross margins, EBITDA, I think across all the categories, we did very well in Q2. And both domestic and international markets have done well. I think international has done slightly better than domestic for us in Q2. So on the laminates business, we've also announced a brownfield expansion of 2 million sheets and boards. This is two lines of laminates we're expanding at our facility at Andhra Pradesh, Nidopeta. And these two lines of 2 million sheets and boards will generate about, in the range of 375 to 400 crores of revenue. We're expecting commercial production in Q4 of 527. So that's on the laminates business. In the chipboard business, like we said previously, the products are being very well received in the market. So from a product quality, performance, decor range, I think there's very good feedback from the market. The plant side is quite well settled and we continue to build this chipboard business. So we are focusing on completing the channel apartment wherever there are gaps, focusing on secondary sales specifications, you know, streamlining or expanding business with the furniture makers and the Williams. And we are hopeful that the business will keep improving in the time to come. On the plywood business too, I think we said this earlier, the product feedback is very well. And we've added a few more markets in F526 in Eastern India and Western India. And gradually we are seeing traction. The growth in plywood business in Q2 has been pretty decent also. I think we're in about 45-50%. The business of, in the flooring business has also become a bit positive. The dog business also has grown in Q2. The vineyard business also has become a bit positive. So by and large, if you see in Q2, I think across the three large categories and even the smaller categories, I think there's improvement in revenues, volumes, realization, gross margins. product side, things have also gone well with the various launches we've done in Q2 and in H1. The working capital days have also, you know, we've done reasonably well there. We had about 47 days in Q2, despite the fact that in plywood and chipboard, we still have, you know, slightly disproportionate working capital days because sales are yet to settle in. We've managed to reduce about 50-odd crores of debt. Cash flow from operations have also been healthy. So by and large, I think across the business, number i think we've moved ahead like we said earlier this year's a year of execution for us because we are free from all the expansion which we did over the last three years and this complete focus on uh execution and i think things are going in a decent direction uh On the market side, too, I think while there will always be challenges and still are challenges on both exports and domestic, I think the teams are continuing to strive well and we hope to keep winning market share and keep growing the business in a profitable manner. So that's it from my side. I will hand over the call to Ashok. Ashok will take you through all the financial details and numbers, those which will have an open house question. Ashok, over to you.

Thank you, sir. Good afternoon everyone. Let me take you through the financial performance for the quarter and for the half year. First, to the quarterly performance on a consolidated basis, net revenue grew by 18.7% on year-on-year basis and grew by 20% on sequential basis to Rs. 808 crore in this quarter as compared to Rs. 681 crore in Q2 last year. Gross margin grew by basis point to 54.6% in this quarter from 51.6% in Q2 last year and grew by 150 basis point on a sequential basis. Gross profit in absolute term grew by 25.5% on year-on-year basis to 441 crore as compared to 351 crore in Q2 last year. EBITDA margin before forex fluctuation was up by 130 basis points and stood at 13.2% in this quarter as compared to 12% in Q2 last year. On a sequential basis EBITDA margin grew by 510 basis points. EBITDA before forex fluctuation in absolute term grew by 32% to 107 crore in this quarter as compared to 81 crore in the Q2 last year. Net profit for the quarter stood at 31.8 crore as against 34.4 crore in Q2 last year. Moving on to half yearly performance, on a consolidated basis net revenue grew by 15.3% on year on year basis to 1482 crore as compared to 1285 crore last year. Gross margin was up by 210 basis point to 53.9% in this H1 from 51.8 in last year. Gross profit in absolute term grew by 20% to 799 crore as compared to 666 crore in H1 last year. EBITDA margin before forex fluctuation was down by 40 basis point at 10.9% in this H1 from 11.3% in last year. EBITDA before forex fluctuation in absolute term grew by 11% to 161 crore as compared to 145 crore in last year. Net profit was down to 16 crore in this in this half year as against 54 crore in the last year due to higher interest and depreciation and foreign currency losses on new project which was commissioned in the q4 of the last year moving on to segmental performance first laminate analyte which continues to be our biggest segment For the quarter, the revenue grew by 10.2% on year-on-year basis and grew by 18.6% on sequentially to 658 crores from 597 crores in Q2 last year. Volumes saw growth of 7.4% on year-on-year basis and 17.2% on a sequential basis. EBITDA margin before forex fluctuation After forex fluctuation stood at 18.7%, a growth of 400 basis point on year-on-year basis and a growth of 450 basis point on quarter-on-quarter basis. Products and volume were the highest in this quarter and stood at 5.9 million sheets and bolts with a utilization level of 96%. Sales volume for the quarter stood at 5.79 million sheets and bolts. and with an average realization of 1104 in this quarter for the half yearly laminate for the half year laminate revenue grew by 7.2 percent on year-on-year basis to 1213 crore from 1131 crore in last year volume grew by 6.7 percent habitat margin stood at 16.6%, a growth of 240 basis points on year-on-year basis. Production volume were at 11.06 million sheets with a utilization level of 90%. Sales volume in this half year stood at 10.73 million sheets with an average realization of 1,098 per sheets and board. Moving on to another segment, plywood and alloys. This segment consists of plywood, decorative veneer, engineered doors and engineered floors. Revenue of this vertical grew by 22.2% on year-on-year basis and grew by 16.4% on a sequential basis to 102 crore from 83.9 crore in Q2 last year. Habitat loss for this quarter before quarets reduced to 3.9 crore in comparison to 6.2 crore loss in Q2 last year. Revenue for the half year grew by 23.5% to 190 crore from 154 crore last year. Habitat loss for the quarter reduced to 12.5 crore as compared to 14.9 crore in H1 last year. moving on to another segment final analyze with which is having chipboard as of now for the quarter revenue grew by 54.2 percent on quarter on quarter basis to 47.8 crore in this quarter from 31 crore in quarter one last quarter one 26 volumes of growth of around 80 percent average realization stood at 18 000 The production volume were at 26,571 m3 and at a utilization level of 36%. Sales volume for the quarter stood at 26,287 m3. In this quarter, working capital improved by 12 days and stood at 47 days as compared to 59 days in Q2 last year. Net debt as on 30th September stood at 995 crores as against 1040 crores in the June quarter with a reduction of 45 crores in this quarter. That's all from my side. Thank you. We will now open the floor for the questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Keshav Lahuti from HTFC Security. Please go ahead.

Hi, thank you for the opportunity. Firstly, congratulations for a strong set of numbers. Just want to get a sense on laminates margin, which is 18-19% for this quarter. So how we see this, you know, in upcoming quarter and what is the guidance?

Yeah. Thank you.

So laminate margin in this quarter is around 18 percent before the forex fluctuation. We have given a guidance of around 16 percent on a longer tenure basis. This quarter we apart from the volume if you saw there is an increase and this quarter we had a launch of our flagship brand of green lamb also. So as of now we will continue with the around 16 percent growth 16 it can go up also depending upon the volume but let's say we continue with the 16 percent guidance on a on a yearly basis kind of a thing so for the h1 the margin remains at 15 as of now margin is 15.7 percent before forex uh uh fluctuation and then laminates laminates prices and raw material prices are stable that is of your understanding Yeah, for the domestic, yes, the laminate prices for both. But in the export side, because of the currency movement, there is like some bit of realization there is a... And raw materials remains on the table.

Got it. And particle board plans, that to possibly break even next year on a bit different and plywood possibly would break even by the end of this year.

So chipboard, clearly I think the way things are moving, we think we should be able to break even EBITDA and FI 27. And Ply also, again, we're very close. You see a little bit of more push on the number than it should happen. So yes, it should be around there.

So Ply, when you talk about, particularly when you talk about And last question, what has been the ply loss for this quarter?

Obviously, we can't say anything with certainty, but I think the revenues are going up each quarter more or less for plywood. And we are quite close to a breakeven point at EBITDA level in Plymouth. But also, the endeavor will be to do it quicker. So we just have to see how the business progresses. And versus Q1, EBITDA loss has reduced in Q2, which are both good. So I think at about 45% to 50% utilization, we do EBITDA breakeven. We're now at about 36% utilization. You can run the numbers.

Yeah, got it. And what is the ply loss for this quarter?

It is 5.8 crore.

5.8 crore. And sir, what is the reason not to report ply loss in presentation which earlier you used to report?

Actually, too many things are coming in terms of that. There is nothing such not to put kind of a thing.

But having said that, even for competition, they also report decorative veneers in the plywood segment itself. So yes, our addition is pouring indoors and most of the competition also, you know, discloses their flushtoe business or laminate flushtoe business in the plywood segment. So it's not very anything. The difference we are doing, maybe just the flooring gets added on, but otherwise the plywood reporting segment is all kinds of plywood, decorative plywood, you know, flashtrows, laminate flashtrows. We are more or less in the same.

Instead of product level, we are giving at the segment level because the number of products are increasing. So we are putting on a segment level, which is like three segments mainly. So we are doing at the segment level kind of thing.

Got it. Thank you, sir. That's it from my side.

Thank you. A reminder to all participants, you may press star and 1 to ask a question. The next question is from the line of Rudraksh Raheja from iThought Financial Consulting. Please go ahead.

Yeah, thanks for the opportunity, sir. Am I audible?

Yes, please.

So my question pertains to the laminate segment. Last quarter also we have seen some revenue growth coming back and this quarter also some 10-11% growth in revenues. So could you give us an outlook on both domestic and international markets? Like what is generating this kind of a growth? Which segment?

So laminates... We're not anything very special. Actually, H1, the growth in laminates is 7.2% only. Revenue was about 7.2%. Yeah, and volume is also 6.7%. So I think it's more like a routine growth in laminates.

And sir, how do you see this going forward for the rest of the year or maybe next four quarters?

I think we should be able to, our endeavor is to keep growing the business the way it's done. So I can't say much certainty, but at the overall level, we've said we should be able to grow 80-20% at an organization consolidated level basis. And I think we've maintained that. I think laminates growth should also continue at the same or slightly maybe better pace versus what we did in H1.

Got it, sir. And so one thing on the U.S. tariffs front, the cost benefit that laminates had before tariffs, and if I compare it to that, to the current situation when U.S. has imposed the tariffs, Could you help us understand like India still has that cost advantage that it used to have?

The way to look at it is that of the increase as far as we are concerned, our business in US is about I think 4-5% of our export business, maybe 6%. So that's just the number you should know. In terms of the increase of tariff, if you take the entire tariff increase, clearly the cost benefit will not be there unless it's a specified item by an architect ID. So what we have done of the increase, which is impacted to us because we ship to a subsidiary, which then does custom clearance and ships to the customers. Of the increase of 40% is something we are passing on to the market and we are resolving about 60% of the cost. And we are obviously all hopeful that something gets resolved on the tariff issue. So if you take an entire 50%, then the cost competitiveness is not there.

Understood. So have we seen some capacities coming back in the US? Have they started doing more production in-house or maybe outsourcing to some other countries?

So I don't know the certainty, but like if I talk about ourselves, in Q2, our sales in the US has been maintained, but I do hear in the market that local production has increased, and there are other countries, you know, who have been imposed with lower tariffs, like Turkey and, you know, maybe Italy and some other markets. So I don't know with much certainty, but But clearly, you know, other countries where tariff percentage are lower, you know, do get an opportunity to kind of win some more customers or get some market share.

Understood, sir. Thank you. Thanks.

Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Solvik from Nuwama, West. Please go ahead.

Hi, sir. Congratulations on a great set of numbers. Continuing with the question about export volumes, I was just looking at the magnets' export volume. They've increased sharply for both and sequential basis. And continuing with what you said, do we think we should see a little bit of cooling off coming up first?

When you say sharply, like the value of exports has long gone up sharply. I don't know which data are you referring to?

Okay, I'm just referring to volume. Volume? Q2 will be something like a...

12, 13% volume growth, but in Q1, we didn't do so well. So are you referring Q1Q? Are you referring year on year? So I think it's a routine. If you look at a six-month basis, we had about 6.5%, 7% kind of a volume growth, which is more like normal course of doing business. So I don't think it has gone up sharply, unless I'm not able to understand what you are trying to ask.

No, that's volume, right? Yes. Yeah, that's the volume. Volume, year-on-year is, on an actual basis, 6.8%.

In Q2, it's about 13%, 13.2%, yeah.

Yes, yes. Okay, fair enough. So this is on the nominal cost of business, and we should probably just continue with the same run rate, and not look at it at a quarterly basis.

Yeah, you can believe so. Because on a quarter on quarter, there can be some ups and downs can happen. But if you see more on a longer term, like H1 basis, it is 6-7%. So it is, I believe it's a normal as of now.

Okay, understood. So second point would be in terms of realization. We've seen a drop in images for both plywood and our particle put division. Is there any particular reason for it or not?

Sorry, your voice is not for realization of particle board and plywood. I'll explain that to you. So in particle boards, there is no reduction in pricing because we still, this was our second quarter of operations of business. It's just a mix of orders between melamine chipboard and plain boards. So I think it's still in settling period. While melamine chipboard, uh in absolute volume the numbers have been better than quarter one but because you see there's been a significant volume growth you know so we've had more plane board sales also in quarter two so just the value mix you know which is kind of uh got a bit altered in in percent all the volumes both the numbers have gone up so i think it will still take some time to settle this mix of melody chipboard and plain chipboard So I think for maybe a few more months or quarters, this might be a bit here and there, and then we'll kind of settle in. So that's on the chipboard. Even plywood, the relation has been down by, if I can see, it's a small, again, some mix of orders, because volume has gone up. Q1Q by nearly 50 odd percent. So it's again a mix of orders. I think with pricing, and I think I see relations gone down by 1.3% precisely. But it's more routine actually. Yeah.

Okay. Thank you, sir. Thank you so much.

Thank you. A reminder to all participants, you may press star and run to ask a question. The next question is from the line of Payal Shah from Billion Securities. Please go ahead.

Thank you so much for the opportunity. Am I audible? Yes. I have a few questions. First, I just wanted to understand how do you see our engineered wooden floor and door business going forward and how is the demand scenario?

The business is growing.

Obviously, we wanted to grow at a faster pace and You know, like the door business has grown, you know, like okay in terms of volume. Flooring has been a bit flattish in this quarter. So I think it's like, you know, we're trying to do better each time. So like, yeah, like, but typically with hospitality, you know, business is taking off and multiple hotels, housing coming up in the country. We hope this gets better.

Okay, so my next question is with respect to our chipboard segment. So how do you see chipboard demand going forward? Like do we have a good demand for chipboard in international market? And how is our pricing in chipboard business as compared to peers?

So, but again, like it's a very open-ended question.

So clearly there is a market opportunity which exists in chipboard and market opportunity exists to win more market share from the unorganized market and from both manufacturers and also win some business from the other panel products. because at the price point, the quality, the physical performance, the dimensions, you know, with the Chippo product offers brings in more value for the customer. So in general, you know, it's not as if demand is more and the supply is less. I think we are winning market share, you know, from different segments and also with the large market uh furniture manufacturing hopefully coming into india and furniture plays expanding capacities in india the demand for chipboard should go up because chipboard is a number one raw material as far as the parent product is concerned for furniture making especially commercial furniture which is offices and shop fit outs etc yes you know so that a demand a market exists but we have to still make our own place you know for our product for our offering uh as far as international market is concerned Few markets will have some opportunity where there is a level playing field where other players also export it to the market. So there will be some opportunity there. As you probably are aware, freight is a very important factor in the chipboard business because it's voluminous and low value. So yes, it will not be as widespread as we've done in the language business. It will be very specific to fewer geographies.

Sure, sir. Thank you so much for the elaborate answer. My last question is, how much revenue contribution do you see from Laminates?

So Laminates, H1, like Q2, H1 will run about 1200 rows, you know, and like when you say revenue, I don't know, like Q2 will run about 650, 658. And so I think of our revenue, about 80% is Laminates. So it depends on how the other businesses scale up. So I think Amish will still be a core part of the business.

Okay, that's quite confirmed.

Thanks so much. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of

Bhawan Rupani from Investec. Please go ahead.

Hi, sir. Bhawan this side. So first question on laminates. So you had mentioned about the brownfield option that we had. So currently we are at 24 million sheets right now and we are adding another 10 million sheets. So what is the additional total capacity that we can add at our existing locations?

so space wise you know we can add multiple lines in Andhra Pradesh and in a factory in Gujarat but for these two lines we don't need to do any civil construction also because we've already built a larger space when we set up the factory so you can assume you know but then the expansion forces might involve civil construction in both the factory but from a land space we can comfortably add another three lines you know, in Andhra Pradesh factory and maybe three to four lines in the Gujarat factory also. So after these two lines, another, you know, nearly, you know, six, seven lines can also get added.

All right. And the picks will be somewhere around 45 to 40 crores per line.

So if you do civil might go up because for this line, we don't need civil. We don't need the energy plant. We don't need to construct a resin plant because we already built that, you know, in the phase one. So while it's looking attractive now, but those investments have already had been done earlier. So it might, let's say, be in the range of, you know, depending on what we do, about 45, 50 crores, you know, going ahead. Yeah.

Alright, and sir, since we are running at almost 96% utilization at our laminates plant, so do we see our volume growth limited in near term as we peak near utilization or we have any plans for outsourcing?

No, so there's no plan for outsourcing because the product spec and the quality standards we need we've tried in the past doesn't work out. But since we have already announced expansion and in the past also we've been able to utilize plants at a higher level. So our sense is that we should be, you know, we should not, we should be okay with our volume. There could be a tightness for a few months maybe, but by and large we should be under control.

And what is the peak utilization that we can collect, sir?

It depends on the line. So let's say off the line number of lines we have, you know, in the past, we've gone up 110% inflation also. And 15 also, I'll be corrected.

All right, sir. Got it. Thank you so much.

Thank you. A reminder to all participants, you may press star and one to ask a question. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Thank you, friends. Thank you for taking up the time and attending the conference. If you have any other query, you can reach out to us or SGA or Investor Relations Advisor. Thank you once again. Thank you, everyone. Thank you, everyone.

On behalf of Green Lamb Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.