🧠 At a Glance
Once the fastest-growing MDF player in India with best-in-class margins, Greenpanel Industries is now caught in a margin death spiral. Despite dominant market share and efficient operations, FY25 saw a 46% profit collapse, record-low ROCE, and inventory drag. Is the wood panel prince losing its shine?
🧱 1. Business Overview: MDF. MDF. MDF.
Greenpanel is the largest MDF (Medium-Density Fibreboard) manufacturer in India. The business model is straightforward:
- 🪵 Core Product: MDF boards for furniture, interiors, etc.
- 🪚 Also manufactures plywood and allied products
- 🇮🇳 Holds ~27% share in India’s organized MDF market
- 🌿 Has the only ecolabelled MDF product in India (green bonus 🟢)
- 🏭 Manufacturing Plants in Uttarakhand and Andhra Pradesh
Basically, this is Greenply’s cooler cousin, spun off in 2015 and listed in 2019. At its peak? Margin machine. Today? Profit pickpocket.
📉 2. Financial Performance (5-Year): From Beast to Burden
🧾 Revenue
| FY | Revenue (₹ Cr) | Growth |
|---|---|---|
| FY21 | ₹1,020 | — |
| FY22 | ₹1,624 | +59% 🚀 |
| FY23 | ₹1,783 | +10% |
| FY24 | ₹1,567 | -12% 😬 |
| FY25 | ₹1,436 | -8% 📉 |
From 59% growth to back-to-back degrowth years.
💸 Net Profit
| FY | Net Profit (₹ Cr) | YoY Growth |
|---|---|---|
| FY21 | ₹76 | — |
| FY22 | ₹233 | +206% 🔥 |
| FY23 | ₹230 | Flat |
| FY24 | ₹135 | -41% |
| FY25 | ₹72 | -46% 🧨 |
⚰️ Net profit cut nearly 70% in two years. Operating profit halved too. This isn’t just cyclical. It’s a margin murder mystery.
📉 3. Margin Mayhem: What Happened?
| Year | OPM % | ROCE % | EPS |
|---|---|---|---|
| FY21 | 20% | 12% | ₹6.21 |
| FY22 | 26% | 29% | ₹19.0 |
| FY23 | 23% | 27% | ₹18.8 |
| FY24 | 16% | 13% | ₹11.0 |
| FY25 | 9% | 4% | ₹5.9 |
- 🧯 Raw material costs up (resin, wood)
- 📦 Inventory days rising (from 75 → 98)
- 🧻 Weak demand from furniture & real estate slowdown
- 🏋️♂️ Fixed cost heavy model = volumes drop → profits vanish
Basically, it went from being Kajaria Tiles in 2022 to struggling like a plywood SME in 2025.
🧮 4. Valuation: Cheap-Looking, But Not Actually Cheap
| Metric | Value |
|---|---|
| CMP | ₹264 |
| EPS (FY25) | ₹5.88 |
| P/E | 45x (Yes, still.) |
| Book Value | ₹113 |
| P/B | 2.3x |
| Market Cap | ₹3,237 Cr |
| Dividend Yield | 0.57% |
🔍 You’d think after 2 years of profit collapse the P/E would correct. But nope — market still remembers FY22 glory days.
🏗️ 5. Balance Sheet: Not Bad, But Not Sweet Either
- Borrowings have risen from ₹228 Cr (FY23) → ₹413 Cr (FY25)
- Capex in FY24 was over ₹300 Cr (massive MDF expansion in AP)
- ROCE at 4% is unacceptable in a high-capex, low-pricing-power business
💡 Reminder: No pricing power means every cost increase is a P&L attack.
📉 6. Fair Value Range: Depends on Profitability Reset
| Scenario | EPS (FY26E) | P/E | Fair Value |
|---|---|---|---|
| 🐻 Bear | ₹6 | 20–25x | ₹120–₹150 |
| 😐 Base | ₹8 | 25–30x | ₹200–₹240 |
| 🚀 Bull | ₹10 | 30–35x | ₹300–₹350 |
At ₹264, market is betting on a bull case turnaround. But with margins still stuck in single digits, this feels… optimistic.
📊 7. Shareholding Trends: DII Love, FII Divorce
| Category | Mar 2022 | Mar 2025 |
|---|---|---|
| Promoter | 53.1% | 53.1% (Stable) |
| FII | 6.3% | 2.9% 📉 |
| DII | 21.5% | 28.6% 🧡 |
| Public | 19.1% | 15.3% |
FIIs have dumped nearly half their holding. DIIs have lapped it up. Smart move or classic mutual fund Nikal Ja Bhaiya strategy?
🔍 8. Edu Take: MDF Meh Dala?
Greenpanel was once the darling of efficiency, margins, and manufacturing edge. But now…
- 📉 Topline shrinking
- 😵💫 Margins tanking
- 🧾 Profits halved
- 🧊 ROCE frozen
This isn’t a scam. It’s just a good business caught in a bad cycle — and possibly, bad capex timing.
If MDF demand revives and input costs ease, it could bounce. But at 45x earnings, this is not a no-brainer bargain.
🏷️ Tags:
Greenpanel Industries, MDF Stocks India, Plywood and Laminates, Furniture Stocks, Indian Interior Materials, Capex-Heavy Stocks, Low ROCE Companies, EduInvesting 5-Year Recap
✍️ Written by Prashant | 📅 June 21, 2025
