Greenlam's new businesses are bleeding, but laminates carry the quarter
Chipboard and plywood losses narrowed sharply in Q4, with both units now targeting break-even in FY27.
What's new
- Q4FY26 consolidated revenue was ₹858 cr, up 26% year-on-year, with EBITDA of ₹107 cr.
- Laminates EBITDA margin hit 17.2% in Q4, up 350 basis points year-on-year, despite 410 bps of input cost inflation.
- Chipboard Q4 EBITDA loss narrowed to ₹2.2 cr as utilization reached 49%; plywood loss narrowed to ₹3.8 cr.
Themes from the call
Margins
Laminates pricing power held through the March chemical inflation shock, with 100% of cost increases passed to the domestic market.
New Businesses
Chipboard and plywood losses are narrowing fast enough for management to target break-even in FY27, but both still need utilization to climb from 45-50% levels.
Capital allocation
Two new laminate lines (2 million sheets) are targeted for commissioning by end-FY27, but no new plant capex is planned for the year.
Guidance watch
- CEO Saurabh Mittal guided for 18-20% consolidated topline growth in FY27, while reiterating an 18% target even with RM costs and demand uncertainty.
- Laminates segment guided for 10-12% revenue growth in FY27.
Risk flags
- PAT declined 18% in FY26 to ₹56 cr due to startup losses, depreciation, and interest on new investments.
- Demand signals are mixed: weak secondary sales, tight customer cash flows, and project postponements despite management seeing no material demand destruction.
- Chipboard and plywood remain loss-making. Break-even at 50% utilization is a target, not a guarantee.
Key quotes
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"We should be able to maintain an 18% kind of topline growth despite the RM costs and maybe some disruption on demand."
— Saurabh Mittal, Managing Director and CEO
The brief
Greenlam's headline numbers are a story of two businesses pulling in opposite directions. The core laminates unit is firing. Q4 EBITDA margin reached 17.2% despite 410 basis points of sequential input cost inflation, a clear sign of pricing power in a market where unorganized competitors are struggling to source materials. CEO Saurabh Mittal is confident enough to guide for 18-20% consolidated topline growth in FY27, and 10-12% in laminates specifically.
The trouble is underneath that strength. The chipboard and plywood units are burning cash. Chipboard lost ₹2.2 cr in Q4; plywood lost ₹3.8 cr. Both are improving, but they need to reach 50% factory utilization just to break even, and both are still far from full capacity. The company's full-year PAT fell 18% to ₹56 cr because of depreciation and interest on these new investments. For now, the market is giving Greenlam credit for the laminates execution. It won't stay patient forever on the losses below the line.
Management is threading a needle: invest in new capacity and new product categories while promising that the core business can absorb the cost. The guidance for 18% topline growth in FY27 is the anchor. If demand stays weak and customer cash flows remain tight, that target will be the first thing to give.
Greenlam's laminates are carrying the P&L; the question is how long management can ask them to.