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ICRA reaffirms ratings of Greenpanel Industries at 'A+' with 'negative' outlook

08-Jul-26   17:33 Hrs IST

ICRA stated that the rating reaffirmation reflects Greenpanel Industries' (GIL) sustained strong liquidity profile, established market position in the medium density fibreboard (MDF) industry, aided by a strong brand and wide distribution network, along with ramp-up in operating performance of its new MDF plant (started in March 2025) in FY2026, which is expected to continue in FY2027.

With a total installed MDF capacity 8,91,000 cubic metre (CBM) per annum, GIL is the largest domestic MDF manufacturing company in the country with an estimated market share of 21% as of March 2026.

The company is expected to report 9-11% growth in operating income (OI) to around Rs. 1,700-1,725 crore with likely improvement in operating margins to 9-10% in FY2027, led by volumetric growth and ramp-up of new MDF plant started in March 2025.

The ratings consider the long-standing experience of its promoters in the wood-based interior infrastructure and decorative products segment and GIL's sustained strong liquidity profile, characterised by unencumbered cash and cash equivalents of around Rs. 197 crore as on 31 March 2026.

The continuation of the 'negative' outlook on the long-term rating reflects ICRA's expectation that the debt protection metrics will remain moderate compared to its peers in the similar rating levels owing to pressure on operating margins due to volatile raw material prices and fixed overheads with respect to new plant started in March 2025. The ramp-up in capacity utilisation and operating margins will remain the key monitorable.

The long-term rating is constrained by GIL's exposure to intense competition from large organised and numerous small unorganised players in the MDF segment, which restricts pricing flexibility.

The demand for its products is vulnerable to real estate cycles. Besides, it faces volatility in raw material prices (timber and chemicals) and forex exchange rates as the company has unhedged foreign currency borrowings.

Greenpanel Industries (GIL) manufactures wood-based panel products, which includes MDF boards, plywood and allied products. It has two manufacturing facilities located in Pantnagar, Uttarakhand and Chittoor, Andhra Pradesh, with a total capacity of 8,91,000 CBM of MDF and 9 million square metres of plywood as on 31 March 2026. The products manufactured by GIL are sold across the country under the brand name of Greenpanel.

The scrip slipped 3.65% to end at Rs 188.75 on the BSE today.

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