Greenply Industries Ltd (NSE: GREENPLY) Q3 2026 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Unidentified Speaker
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Sanidhya Mittal — Joint Managing Director
Analysts:
Unidentified Participant
Karan Bhatelia — Analyst
Sucrit Patil — Analyst
Rehan Saiyyed — Analyst
Sneha Talreja — Analyst
Bhavik Bhavsar — Analyst
Karan Bhatelia — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Green Ply Industries Q3FY26 earnings conference call hosted by Asian Market Securities Private Limited. 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 a Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan from Asian Market Securities Private Limited. Thank you. And over to you sir.
Karan Bhatelia — Analyst
Thank you, Rudra. Good morning to all participants logged into the call. On behalf of Asian Market securities, we welcome all to Greenfly’s third quarter and nine months FY26 investor call. From the management side we have Mr. Manojan, Joint Managing Director and CEO Mr. Sarindya Mittal, Joint Managing Director and Mr. Sanjeev CFO. I would like to hand over this call to Manoji for his opening comments post which we can open the floor for Q and A. Over to you Manoji. Thank you.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Thank you Karan and good afternoon everyone. It is a pleasure to have you all on this call. I will be updating you on Veeamply’s operating and financial performance for quarter three and nine month FY 2026. As discussed in our previous call, the three brand communication strategy aimed at enhancing product visibility across key market segments is working well for us and showing very encouraging initial outcomes. This strategy has enabled us to deliver consistent growth in our Plywood and MDR business on a year on year basis as well as steady ramp up in our hardware business too.
Also mentioned in our previous call, we guided double digit volume growth in H2FY26 across both segments and I’m happy to report that we are on track. Having delivered double digit year on year growth in quarter three FY26 both in plywood and MDF. We remain confident of sustaining this momentum in quarter four FY26 and in the periods ahead. In our MDR business we successfully expanded capacity from 800 to 1000 CVM. While initial operational challenges impacted growth during the quarter, these issues have now been fully addressed. The plant is currently stable and operating efficiently. Production in the month of January was highest ever and we are confident of a strong rebound going forward in line with our growth expectations.
Now I’d like to share with you that we have achieved a consolidated quarterly revenue of 673.4 crores which is a growth of 9.6% on a YoY basis. Our consolidated core EBITDA for the quarter was 58.9 crores with a core EBITDA margin of 8.7% compared to 8.2% in corresponding quarter an increase of 50 basis points. On a nine month basis our consolidated revenue was at 196 2.8 crores which is a growth of 6.7% on a YoY basis. Our consolidated core EBITDA was at 177.3 crores which is a growth of 4.5%. On a yoy basis the core EBITDA margin was 9% as compared to 9.2% in 9 month FY25 EBT before the losses on equity accounted investees Foreign exchange gain loss as an adjustment to finance cost and exceptional Items is at 117 crores for 9 month FY26 which is a 13% YoY growth against PBT of 104 crores in 9 month FY25.
Let me now share the highlights of our individual business segments. As mentioned above about our go to market strategy, we continue to experience the demand for mid value products during this quarter also resulting in an average realization per square meter of rupees 244, a 4.9% decrease on a YOY basis. However on a QOQ basis there is a marginal increase from rupees 242 to 244 per square meter. In quarter three FY26 we achieved the volume growth of 12.5% on a YoY basis with a revenue of rupees 521.7 crores, a value growth of 8.9% on a YoY basis.
On the margin front our core EBITDA margin remained intact at 8.4% for both Quarter 3 FY26 and and Quarter 3 FY25. Even though there is a drop in the realization on a YoY basis. On nine month basis we have achieved revenue of 1517 crores a growth of 5% on a YoY basis. Our volume growth on nine month basis is 5.8% YoY. Despite having a negative growth of 3.1% in quarter one FY26 our core EBITDA grew by 4.7% on a YoY basis to 124 crores in nine month FY 2026 the EBITDA margin stood at 8.2% as against similar margin of last year nine month FY25.
Moving to our MBF business, revenue in quarter three FY26 stood at 152 crore with volume at 48,383 cvm reflecting year on year growth of 11.7% in value terms and 14.5% in volume terms. We had a good traction on Demand side in Quarter 3 FY26, but because of deficit in production during initial months of the quarter, we had to resort to limited trading activities to fulfill the orders in hand which resulted in a moderated margin of 10.1% which could have been otherwise in the range of 12% for this quarter itself. With operations now fully stabilized and running efficiently, we expect a strong rebound and are confident of aching our margin guidance in the coming quarters including quarter four FY26.
We are happy to share that the Board has approved an investment of rupees 400 crores towards expansion of second line of MDF in line with our earlier commentary and our preparedness for future growth. More details on the MDF business and the expansion will be shared by later. Moving on to our Furniture and Fittings JV, we have achieved the sales of 13.4 crores in Quarter 3 FY26 achieving total revenue of 31 crores on 9 month basis. The JV reported a PAT loss of 15 crores in Quarter 3 FY26 with our share of the loss amounting to 7.7 crore and on 9 month basis PAT loss of R 37.9 crore with our share of the loss Amounting to 19 crores.
Losses for the quarter increased on a sequential basis due to increase in marketing spend as we participated in two exhibitions. A consolidated net debt stood at 528 crore at the end of the current quarter in line with the guided CAPEX plans. Construction of the Plywood Orissa facility is progressing at full pace with all major orders already being placed and the project remains on track. We are confident that our debt to equity ratio will be within the guided range of 0.5 to 0.6x by year end despite the announcement of new CAPEX. With respect to our operations at Greenfly Middle East Limited we have further reduced exposure from USD 2.7 million to USD 1 million.
As a result, our contingent liability has also decreased from Rs. 24 crore to Rs. 10 crore. Now as on 31st December 25th. Just to mention, at the time of divestment this liability stood at USD 6.1 million. With these statements I would like to hand it over to SANID to provide more insight on the MDF business.
Sanidhya Mittal — Joint Managing Director
Thank you Manoji and good afternoon to everyone on the call. Our sales performance for this quarter delivered 11.7% year on year growth in value terms and 14.5% year on year growth in volume terms. However, during the quarter we encountered some initial production challenges in the month of October and November which had a temporary impact on sales and ultimately on the margins. Looking ahead to the fourth quarter, we expect a growth of more than 20% in sales on a year on year basis supported by improved margins. As mentioned earlier by our CEO about the announcement of the second MDF line at Vadodara, I will share some updates on the same.
The second line will be a 700 cubic meter per day capacity with a cost of rupees 400 crores and a revenue potential of rupees 600 crores. The plant is expected to be commissioned in the next 15 months and commercial operations to start in the next 18 months. Which means Q2 FY28. Trial production of the HDF flooring line started in the month of December and we executed a few orders also. But after that we faced some glitches and we are in the mode of correction phase. And we are confident of starting commercial production by March 26.
Construction of PVC and WPC plant is going as per plan and we are confident that the commercial production will start by March 26th as per our plan. With this I would like to open the floor for the Q and A session. Thank you.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone 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. Our first question comes from the line of Sukrit D. Patil from ISIGHT Fintrade Pvt Ltd. Please go ahead.
Sucrit Patil — Analyst
Good afternoon to the team. I have two questions. The first question to Mr. Manoj is. As the Plywood and board market continues to evolve how is the management thinking about prioritizing growth levers such as distribution, expansion and capacity over the medium term? Among this, which do you believe will be most critical in strengthening Greenfly’s competitive position and and long term value creation? That’s my first question. I’ll ask my second question after this. Thank you.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Okay. Hi Squet. See. You know we are last. Last one year. We are clearly working on two or three major initiatives. I think that is what gave us a lot of confidence also that we will start now growing in double digit in volume terms. In fact, you know the way things have happened we are even looking at a better growth in mid teens also going forward in the plywood business because you know we suffered a lot in between. But anyway there are corrections which were underway in the last 12 months. So one on the distribution side when you are saying there is a two prone strategy which continuously will work in the plywood business.
One, depth and reach. So you know there has been a lot of work which has now started in the, in the post six months for which there was a preparatory period of almost six to nine months and that’s where we were confident that now we will be able to see the results and we are happy to see the results in quarter three that finally we have grown at double digit in terms of volumes. Maybe possibly we could have even done better. But I am sure that in quarter four and in the year to come we will look at even better numbers in the volume growth.
So one clearly yes, I mean you know your question has the answer that distribution is key in this business and we are working a lot in terms of the depth of distribution and then the range of products. Both because we have range of products but you know we are somewhere we have not been able to justify our range of products distribution across the depth. And the second thing you know the, the business today is at a very sweet price point which is anywhere around 100 rupees or so. Somehow we were missing this and we realized this during this year we started branding our mid segment brand which is Ecotech.
And you know we have seen good positive green shoots. The moment we have started investing on the same not only in terms of the body line of our team but also the way the market has responded. So that is the next growth driver for you know, many more years to come and we’ll continue to invest larger money on the second brand. You know, I mean, you know in some time we’ll be able to see that this brand for us will become the largest brand in the whole kitty.
Sucrit Patil — Analyst
Thank you. My second question to Mr. Yeah, thank you very much. My second question to Mr. Sanjeev is along the similar lines. From a financial standpoint, can you elaborate on the key trade offs managed during the period between growth investments, cost discipline and working capital efficiency? How do these decisions, how do these decisions influence your outlook on cash creation and written metrics as the business continues to scale? Just want to understand your plan of action on this. Thank you.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So yeah, thanks Patil. See we are working on the working capital. If you see the working capital limit utilization is very low in our Case we are working on the. With the. Dealers dealers also to reduce their working capital and we are also introducing the. Dealer finance. So in that. In that sense increasing the return ROI of the dealers also on working on that working, working increasing the working capital cycle of the dealers. So these are the initiatives we have already taken. On our sales side we are also reducing our the debts. On a expansion side we have taken the steps for the now the internal accruals are there. We are adding that good number of the cash internal accruals on a capex we have already announced so and as the manoji said that the the our debt equity ratio will not increase more than the 0.6% at any point of the time.
So we are managing the our debt in that way.
Sucrit Patil — Analyst
Thank you and best of luck.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Just to add to that, you know, I would say that as an organization in the last three to four years where we have concentrated. Yes maybe partially we are successful and partially we may not be because everything the way we think sometimes doesn’t work out. But we clearly look at incremental capital output ratio. Okay, that finally the investment should go into the pockets where finally I’m making better buck compared to my investment which is going. So Sanidev will explain more on the strategy of why you know, now we are investing for the second plant of MDF and why you know, in invest Baroda because we see a lot of efficiencies which will get built up further today like from our first plant because of the mix maybe, you know, we’ll somewhere we not be able to do more than 88 or 89% of the capacity.
But the moment we put the second plant, the first plant also against 88, 89% can start giving us an efficiency of maybe 93, 94%. So clearly, you know, the I cor is something which we keep looking at and the justification on investments also gets driven from the same on the working capital side. In any case, if you go on the operating side, we need to improve further. We were much better. But yes, in fact in the board level also we had discussion yesterday a lot on the same that we need to be more efficient on the working capital and take out that money and invest more efficiently in the business.
So somewhere you will see in our announcement also we have mentioned that you know, most of our this investments which we are doing should come out of internal accruals because this is that one large investment MDF what we have except the plywood investments which we are talking about which is already on the way and if you look at the next three years cash generations which will happen, it will automatically take care of our existing debt as well as the new investments. So there’s a lot of semblance which we have tried to create now in the business and we are following those disciplines as a company.
Sucrit Patil — Analyst
Thank you for the detailed guidance and best of luck. Thank you.
operator
Thank you. Our next question comes from the line of Rishikesh Bhagat from Kotak Mutual Funds. Please go ahead.
Unidentified Participant
Hi, good afternoon. So since you spoke about that, you do look at the incremental return on capital. But when I look at it what the roce was when you were only solely green plywood and post that if I look at the MDF capital allocation, clearly the returns have diluted. Now against that backdrop, how do we justify the incremental capacity addition? Because we are still at 71, 72% utilization, the margins are pretty low. So that’s question one in terms of that. Second is on the capex also if I look at the capital cost, it’s largely similar to what it was on the past.
So kudos to that. But just wanted to check is there considering these are largely imported, is there no impact of rupee depreciation on the capital cost?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So I will answer the first question Rishikesh and the second question I leave sanity to explain largely on the same. So. So when you look at, you know, the history of last five years, the first thing yes, if you look at green ply definitely at that point I’m only with plywood business was throwing better roce. But is that the future product? Is that the level of risk which we should carry in our business by being just in one product. So these last four, five years for us were a lot of formative years where we have not gone to raise any level of capital.
We have not even thought about diluting any level of capital. The whole objective was that whatever money was there in the business, how we can get more efficient. On the one side where you ask this question, Yes, I think it’s quite valid that if I only look at plywood business, my roce was better. But when you look at a combined entity today, I think we have really made us risk free by getting into three line of business and two line of our business are now well established. MDF in no time has really got well established.
Today at least we have seven to seven and a half percent of market share. Also in that not raising capital again it’s something for sure was a discipline to take out money from the existing business. So I think from here on when you will see incrementally you will see that my ROCE overall and ROI will continue to invest. Because we have absolutely no plans at least at this point of time to dilute equity or raise any level of capital. So we understand that whatever other means, whatever is the cash flow we are generating we must make best utilization of the cash flow.
Now imagine if I generate cash flow in my plywood business and I don’t do any investments in MDF which is a futures led business, what will happen? Finally my ROC will continue to drop. The only other thing what we can do is to continue to just, you know, maybe distribute dividends.
Unidentified Participant
But I’m not debating your question in terms of that MDF is wrong move. My point is, isn’t it that the margins, current margins, do they justify the investment? My question was more on that front.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
No, no, totally appreciate. And that is when I’m saying the mar you will start seeing on MDF also we’ll get back to 16%. Yes, there are certain market realities also. But MDF again is like a business where you will see seesaw margins. Maybe you know, we will see times when it will go back to 20, 21% and then again it will come back to around 13, 14%. So, so we are, we are actually quite happy that we have gone into MDF as a business. It’s a futuristic product, more and more applications we are able to see today in the market.
And I think with these two line of business, which is our significant line of business, Plywood and mdf, the company will do very well going forward. Next question. I would request Anithya to answer.
Unidentified Speaker
Yeah, I’ll just add to what Manoji said. I think we are seeing the ROCE of the MDF business on a short term basis. And currently yes, there is overcapacity, there is a price fight in the market, there is a margin war where all the top players, the margins of the at least the listed peers have come down. But if you look at this on a three year or a five year or a seven year period, I am quite confident that, you know, the ROCs will come to a justified and respectable level. And if it does not come on a long term basis, it is obviously very clear that you know, people are not going to continuously invest, neither us and that green ply for us to be dominant in the wood panel space.
I think it was a very, very important move. Moving on to my second, moving to your second question. I think you were concerned about the CapEx cost with the current euro going up and the dollar going up, I think we are quite confident on the rupees 400 crore capex that we’ve announced and the capacity and we are looking at a very similar technology where we are looking at a German manufacturer. We’re looking at a 8ft wide continuous line. So with our cost that we have given, we are very confident that we’ll be able to achieve a 700 cubic meter German conti line at that cost.
And yes we have taken into account the euro cost.
Unidentified Participant
Thanks. Thank you. Thank you for the replay. Pleasure.
operator
Thank you. Our next question comes from the line of Rehan Sayads from Trinetra Asset managers. Please go ahead.
Rehan Saiyyed — Analyst
Yeah, good afternoon to the team and thanks for giving me the opportunity. I just one question from myself. I just want an understanding regarding your segmental sales strategy. So in the Livewood business, manufacturing is. Volume of the customer total has decreased from 43 in quarter three. 2534% in 26 quarter three. So is this a deliberate strategic shift towards a more asset light trading model and how does it impact your long term consolidated EBITDA margin target of 9%? Just more. Just one more clarification.
Unidentified Speaker
Rayan, your voice was not totally clear. Are you, are you saying on the, on the sales side is the question related to your sales volume between the premium and the economy?
Rehan Saiyyed — Analyst
Yeah, yeah. Like a manufacturing and trading order.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Oh you’re saying manufacturing and trading. Yeah. So. So look, you know clearly it is visible that and we have suffered this into the past. Okay. That when we were very high on our trading model we were suffering in terms of supply, we were suffering in terms of you know, price escalations on a regular basis. Of course that was a period when you know, the raw material timber prices were also moving up continuously. Now at least the raw material prices are much more stable. But over a period of time, you know we have also learned that if we are able to cater to larger supply from our factories that makes much more sense.
And of course you know, when in the short term when we will have a larger demand and our capacities, internal capacities are not adequate, we can always look at ramping up the trading model. So somewhere, you know we are carrying that as an additional space for ourselves to mitigate short term challenges in terms of hyper growth versus our own capacity. That is where we are looking at that model.
Rehan Saiyyed — Analyst
Okay. Okay. And the last one, just confirmation that you have said about your OD side sponsor status. Is it working? Still working. Program users comment started.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Which one? Sorry again. Actually your voice but Your seems to be very muffled. Yeah. Yeah.
Rehan Saiyyed — Analyst
Hello. Hello. Is it clear now?
Unidentified Speaker
Maybe slightly better but yeah. Please repeat the question.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Yeah, just one last question on the update that you have given about capacity. Work in progress or is that commenced.
Rehan Saiyyed — Analyst
For the MDF you are saying?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I think he’s asking.
Unidentified Speaker
Yeah, yeah, yeah. For the plywood in Odisha there is already a work in progress.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Okay. And can we get a guidance that expected commission date or project capital expenditure remaining for this project for the FY26 and FY27.
Rehan Saiyyed — Analyst
So. So you know our project commencement right now we have kept it as Q4 of FY27. And the total investments which we speak about this plant was close to around 130 odd crores. And I think we will be in that range only. Maybe we would have invested by this time already. How much we have invested already? Around 30 odd crores.
Unidentified Speaker
Okay. Sanjeev, do you have the number how much we would have invested? Around 25, 30 crores by this time.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Yeah, 25 to 30 crores already invested.
Unidentified Participant
Right. Okay. Okay.
operator
Thank you. Our next question comes from the line of Sneha Talrecha from Nuvama. Please go ahead.
Sneha Talreja — Analyst
My team. Thanks a lot for the opportunity. Just an extension. The question of Kishikesh. What is the realization and the margins now we are resuming on the new cubics. What is that realization in mds? Mdf. Mds. Yes.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I think we are targeting a similar level of realization in the. In the new plant also. And it’s quite soon to say, you know, this plant, this capacity will come up for us in. In 18 months from now. So yes, we are assuming that will be at similar levels.
Unidentified Speaker
These capacities will come in second by. By end of second quarter of FY28. So we still have a good time actually. But yes, right now we are only assuming that and we are able to grow our business at our current realization. We are able to grow well in quarter four. Actually we are looking at a much higher growth. So I mean at this point of time this is a fair assumption that we will continue to get this realization. Assuming that the market also behaves similarly. In case there is price increase which happens in the market by 4, 5, 6% in the next 12 months.
Then of course the realizations will also change.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Actually. Exactly my point. So the kind of rotis that you are expecting on the new, you know, line of business won’t be strong again as per your current realization number. Right.
Unidentified Speaker
You see, the investment is only 400 crores now. Okay. On a 700 CBM line despite the increase in, you know, the, the rupee euro and everything. So I think that is a big, big advantage which we are going to create in this. So yes, the ROC would be similar around anything between 16 and 18%, not more than that.
Sneha Talreja — Analyst
Right, right, understood. And what are the other capex plans that you have for FY27?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
FY27. Now the major plan is only this, you know, Plywood Orissa unit will get completed. So the, the balance investments will go there and this investment of 400 crores over 18 months. So it will actually start from quarter four itself. Some amount of investments will happen in quarter four and then it will continue up to quarter one of or quarter two of FY28.
Sneha Talreja — Analyst
Understood. And the Orissa plant you said will commission by quarter one or quarter two by 27.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
No, no, quarter four of FY27. So January, February, March, sometime in January, February, calendar year 27.
Sneha Talreja — Analyst
Understood. And sir, if I heard you correctly, you also said from now on you know, would be looking at mid teens sort of a growth for plywood division. What’s changed, you know, precisely between the first half to now that you know we are in double digit at this point of time and incrementally we can look at these amount of growth continuing.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So I think Sneha, we mentioned this, we mentioned this in the last call that we had taken support of a consulting house which is now with us almost for last more than 18 months. Actually maybe 21 months. And initially we worked on first thing first on our factory side availability of stock. We found that there were a lot of gaps at times when we were not able to deliver time to our customer despite having orders in place. So you know, once you are not able to deliver on time or there is a delay, of course, either you lose some amount of sales.
Because my dealer is not going to wait. Right. Plywood is not a category where specifically he will only wait for a green fly. So he can always. And you know that all of them are MBOs. Correct. So keeping that in mind, the first thing first, initial time we only worked correcting the supply side issues and everything on the factory side. Having done that then we came back to what we need to do on the sales side. So there was a lot of preparatory work which was going in terms of reach and distribution that you know, where are the gaps on reach and distribution.
Second, of course, you know, how do we do a better management in terms of our sfa, the salesforce automation. And we get and extract better throughput from every salesperson who is working, you know, whose feet is on the street. So we created Matrix, we created KPIs and you know those things started its trial run in quarter two. Good part, the best part which I even mentioned in my, in my last call is that the adaptability of the same with it from the team was very, very smooth. You know, normally it’s a big change management but you know, kudos to our team that they wholeheartedly took this in their stride and you know we started working on those metrics.
So there is granularity, there is depth in terms of the daily working also. And aided by that a bit tweak in our strategy which was we started investing on Ecotech as a brand. So this was something which, you know, which was the third support which is an organization which we provided to our overall strategy. So keeping all those things in mind now you can see in quarter three we have actually grown at 12.5% in volume which is after a long time, I think maybe after couple of years or so. So we are pretty confident and you know then rest time is only 10.
operator
Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit the questions to two per participant. Our next question comes from the line of Utkarsh no Pani from Anandra T. Please go ahead.
Unidentified Participant
Yeah, hi, good afternoon sir. So my first question is on your NBF segment. So if we see the value added product revenue share in that category has gone down from 22% in Q1 of FY25 to 17% in Q3 of FY26. So wanted to know what challenges we are facing that we are not able to grow the value added revenue mix over the past seven quarter period.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I think the number you’re referring to here is I think the prelim sales, you know, there are times that you know the company does some certain projects or certain orders where the prelims proportions are very high and then there are some times when those orders are not available. But if you look at our overall mix in terms of HMR Boil Pro exterior grade versus interior grade, I think we are very, very well placed. And as a strategy, you know, we do not want to provide that number and make it so easy for the competition. So I don’t think we should be worried looking at the pre lamp numbers going up and down.
That is how we look at it internally. Obviously that does not mean, I don’t mean to say that, you know, we don’t want the prelab numbers to grow Obviously we want it to continuously keep going. But overall, in terms of value added versus non value added, we are very comfortable and happy with our performance so far. And we think that in times to come this will not be a challenge. Maybe up to the second line, this won’t be a challenge. Starting the third line will be a challenge because then the capacity will be too high to sell maximum value added products.
Unidentified Participant
Okay. And sir, on the margin front that we see, it has turned out to be significantly lower in December quarter compared to our guidance of 16% plus which we are targeting in the H2 of FY26. So wanted to know what is the reason for such inferior margin compared to our guidance which we have shared in the first week of November and by what time frame we are expecting the margin to go up to our targeted level of 16% going forward.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Right. So we are targeting that, you know, we should have a similar that kind of a margin profile in the in quarter four itself. Number one. Number two, in quarter three, we did not get the entire benefit of the increased capacity. We disturbed ourselves in quarter two to expand the capacity and we did not get the full output in quarter three. That was one of the reasons why we could not achieve the margin. The second reason I think Manoji mentioned very clearly in his speech was that we had to do some kind of sourcing to ensure that our dealers, distributors do not suffer.
They continue to get the material. And obviously the sourcing comes at an extra cost. It does not come at your own cost of manufacturing. Hence, a 2% margin hit in the entire quarter was faced due to that reason. So given these scenarios in quarter three that, you know, we could not ramp up completely for the reason that, you know, we could not give you the projected result. Fingers crossed. Hopefully in quarter four we’ll give you that result for sure. That is one. And number two, I think Manoji also mentioned that January production was ever highest.
So, you know, we are very confident and looking at the same. We feel that, you know, quarter four will be in the lines of what we have committed.
Unidentified Speaker
So let me just add to that in quarter three when we spoke about 16% margin, now at least we can share that. We felt that, you know, we will get the added advantage of the production and we will do a 20% plus growth in quarter three. If you’d have hit that number for sure, we would have been at 16% margin. We would not have been troubled at all. But since we lost that much of value sales, it also impacted the margin. January has been excellent in Terms of on the production side. And that’s why this level of confidence that we’ll be back to our 16% plus margin from quarter four.
Unidentified Participant
And so lastly on the balance sheet side like at the time of Q4 of FY25 earning call we guided that we are looking forward to reduce our net debt position from 465 crore in March 25 to 250 crore by March 27. But now we believe that our net debt is likely to go up to close to around 650 crore by March 27 since we have undertaken new growth capex. So sir wanted to know with this CAPEX announcement our net debt to EBITDA is likely to remain at elevated level of more than two weeks. And are we comfortable at such high net debt to EBITDA on a sustained basis?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So net debt to EBITDA on. No, first of all it will not be more than two for even the coming year. Okay. We have looked at our numbers. I am not divulging all the numbers but it will be less than 2. But that will only be for one year. Okay. Because that will possibly. And we are not very sure that whether we will be at 6:50 or 600. We are just assuming because 400 crore will get spent over the next 18 months. So maybe it may happen that you know there are payments which goes to the last quarter also which is the sixth quarter.
But we are assuming that. Okay. Yes, fair basis we should be somewhere on 650. At 650 we are much less than 2. But that is just for one year. The next year itself we will be at 1 the subsequent year.
Unidentified Participant
Okay, Thanks a lot sir.
operator
Thank you. Our next question comes from the line of part Bhavsar from Investec. Please go ahead.
Bhavik Bhavsar — Analyst
Hi sir. So thank you for the opportunity. I have two questions. One is a clarification on the CAPEX number. So we sir mentioned that the CAPEX for the new MDF capacity would be 400 crores versus the media release it says 425 for a 7600 to 700 CBM capacity. So can we just confirm 400 crores for a 700 CBM capacity.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Sorry, I stand corrected. The number is 425 and the difference is on account of GST. You know when we did the internal calculation the operating team always calculates 400 but when the CFO does the calculation he takes the GST also into account which will get capitalized. The rest of the GST is only a cash flow item. But this 25.
Bhavik Bhavsar — Analyst
Cash flow item. Yeah, it’s a cash flow item. So you know, I mean yes, board, of course we’ll have to take along with the gst. Yeah, fair enough, fair enough. And sir, one other thing on input cost, like if you could throw some light on, you know, how the timber costs are trending and what was your consumption cost in Q3 and what is it right now? Are we seeing any moderation over here?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Timber cost, you know almost has remained stable in the last quarter slightly. It. It bumped up in the month of December for some period but again in January it is back to like you know, the same October, November levels. So yes, we are. We were expecting that the timber prices to be stable or it will start coming down. It is stable. It has start. It has not started coming down.
Bhavik Bhavsar — Analyst
Okay, okay. And so just one last question. So what sort of brownfield optionality do we have at this Baroda facility post this, you know, poses new expansion. Do we have any optionality in terms of, you know, land that is available to put up another line?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I think after MDF2 we will not have any spare land to you know, expand further our capacity over there. For sure. Maybe something small is a very different thing but not a large capex or a large plan.
Bhavik Bhavsar — Analyst
All right, perfect. Thank you sir. Those are my questions.
operator
Okay, thank you. Our next question comes from the line of Fenil Brahmavat from Choice Institutional Equities. Please go ahead.
Unidentified Participant
Hello, good afternoon and thanks for the opportunity. I have a couple of questions. Sorry if something repeating again but yeah, just to confirm. So could you able to share revised guidance for volume and margin for both playwood plywood and MDF business for FY26 and FY27 if we have any handy number.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
You’re saying for the full year?
Unidentified Participant
Yeah, full year.
Unidentified Speaker
I’m saying the for FY 2627. Our volume or margin guidance.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So. So you know we have not given any such guidance. But yes, while we were speaking we have mentioned that in plywood we have now started looking at double digit growth. We know from quarter three. We mentioned this earlier that in our last call previous call that in H2 we will look at a double digit growth in volumes in plywood as well as mdf. And at this point of time we will only maintain the same statement because we have been able to deliver in quarter three. We can see that happening in quarter four. And even for going forward, this is what internally we are looking looking at as a company and we feel pretty confident that yes, from here on we’ll be able to deliver those numbers.
But however you know. Yeah, the full, full FY26. Do we have any working for FY26? Full year maybe, you know, you can reach out to the team and the team can, you know, let you know afterwards because. Yeah.
Unidentified Participant
Or, or any, any quantified margin difference between MDF boards and pre lamp boards. Like do we have any different numbers for these two in MDF business? Like what is the margins over there?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
You want margins separately for prelab and separately for plain boards, right?
Unidentified Participant
Do we have that number with us?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I don’t think we have it handy. Maybe you can get in touch with Jay or the cfo. I don’t know if you all can share this.
operator
Okay. Okay, great. And considering this current, current market and the oversupply in mdf, so what’s our, what’s the management strategy for the MDF business? And considering this price war and steady demand and oversupply and do we look, looking for any exports opportunity as well?
Unidentified Participant
If you look at the export mix which existed for most players, I think people export at cost or slightly lower than cost to keep their plants running. That is what we’ve understood looking at certain other listed players. So definitely export is not an option, you know, with the Europe FTA or the European or the US deal. Now if those markets open up, I’m not sure how the scenario will be. But the current scenario, if you look at any other listed player who’s exporting, I don’t think they really make any money in exports. So our focus is definitely the domestic market.
If you look at our brand and our brand strength and our distribution strength, I think the capacity we have for MDF is very, very small today even though there is oversupply in the market. But as Manoji mentioned, we are Only looking at 7.5% of the market installed capacity today or that is our only market share today. So for the second line also we are not worried as the management of the company. We feel that with our brand we will easily sell through. And also you have to see the competitive advantage in terms of the regional strength.
So given that we are the only player producing MDF in western India, that is definitely giving us a strength and we want to continue to be dominant there. And hence we’ve announced our second facility there as well.
Unidentified Speaker
Okay. Okay. And that 400 crore MDF plan, new plan which we are talking about, that is for which location. In the same location and we plan to take many advantages having the second line in the same location. We feel that on a long term basis there will be raw material Advantage on a long term basis. There will be fixed cost advantage in terms of manpower and management. And also we are going to dedicate both lines for different purposes. So we are going to run our existing line in the future only to make thick boards and we are going to run the new line only to make thin boards. That way we will be able to churn out maximum capacity from each line.
Unidentified Participant
Okay, okay. Okay. And the last question from my side management outlook from for care of pack from furniture hardware. Jv if you have any, any outlook on that. On the furniture hardware. Jv. Yeah, so right now we are so.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Yeah, so, so the ramp up has been good. We are happy with the ramp up. Okay. And, and next year also we are seeing that we would be able to grow at around 30 35% for the next year. But even with the 30, 35% growth somewhere we will not be able to make profits the year subsequent. We will be able to make profit for two region. One, there will be another growth of maybe 35 to 40% for sure. Second, they are part of the products right now which we are importing. We are importing from Turkey where you know, my import costs are high.
And we have a plan now to do the expansion of phase two. So once that is being done, then the margins improve significantly the moment we start manufacturing those in India. So we will get this dual advantage. One, there will be a lot of improvement in the overall margin and second, the growth will also propel us in terms of bringing down the the losses. So FY28 for sure we will be into profits.
Unidentified Participant
Got it. Got it. Thanks for the answer and all the best.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Thank you.
operator
Thank you. Our next question comes from the line of Karan Battalia from Asian Market Securities Private Limited. Please go ahead.
Karan Bhatelia — Analyst
Hi sir. Thanks. Am I audible? Yes. Just to continue on the new capex. So correct to assume the new capex will be for thin line and the existing infra will be for the thick line. So I wanted to understand on the product profile how better could be the realization profile of thin, MDF and thick. And also on the margin side and if I have to break up the domestic market into thin and thick, how much is the share of each?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So honestly, today, whatever realization you see is a blended realization of thin and thickness. But today, given that we have one line and we have to produce all grades, all thicknesses, we have frequent stopovers and changeovers on that line. The moment we have two facilities in the same premise, we will dedicate each line for each category of product. So one line will only make thin all grades. One line will only make thick all grades. So in that case what happens is that the total output of each line can be increased with the fixed cost remaining the same.
That’s the way, you know, we can really increase our operating margins and leverage the efficiencies. So that is the major change which will come in. And answering your question about the thin thick, I think about 35, 40% of the market easily should be thin boards and the rest is thick according to me. But there’s more authentic data to back this and the experience we’ve gained over the years.
Karan Bhatelia — Analyst
Right, right. And on the MTF side again we’ve seen players getting into aggressive capex modes. So what’s the current installed base as on 26 end and how do we see the industry level CAGR over next two, three years from all branded and small regional brands?
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
I think we are looking at, I think that the industries, the MDF industry in India will grow at a 15% CAGR is what we internally feel. You know this was the same question asked by our board yesterday and that is the numbers that we feel and even our board feels confident and looking at the history, you know Greenply was involved in this category long back, you know, even when green ply was one entity. So you know we’ve seen this kind of a high growth CAGR over almost a decade now as organization.
Unidentified Speaker
The only worry is if supply grows by 15% plus we may not really have days where you can take price hikes or can see meaningful improvement in the margins or the return profile.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
So I think we’ll have to see, we’ll have to see the ROCE or the margin or you know how good an investment is over three or five years and seven years. So if we check the investments and returns on those intervals, I think we’ll be satisfied fairly. But if we see it on a short term basis, yes, it might look like a very bad decision or a bad choice that currently the global supply people are not making money. Should we invest or not invest? But looking at green price future and wanting to be dominant in the wood panel space, I think we need to continue to grow and dominate the space.
And I’m very confident that on a long term basis we’ll create enough value to satisfy us and each and every stakeholder.
Karan Bhatelia — Analyst
Yeah, thanks.
Manoj Tulsian — Chief Executive Officer and Joint Managing Director
Thanks for the current. Also Karan, what happens now? You know there is a. So the installed capacity in MDF we mentioned there in the call also we are not able to. Or most of the players, they are not able to operate on 100 of the install capacity at any point of time. So there’s already a gap of, let’s say 10 or 15%. Most of us will be able to operate because of the mix. So the install capacity, you know, when it comes from the German manufacturer, they spend speak about certain thicknesses, certain sizes met in that proportion.
The moment we have the real mix which we are today selling in the market, we also find that, you know, like today we are talking about 71%. I think the moment we go beyond 85, 86 somewhere we will start feeling that heat. Okay, so technically speaking though, we are saying thousand cbm but we will not be able to manufacture thousand CBM with the present mix what we are selling. And that is true for most of the players. So the capacity which is there in the market also, you know, when we do our calculations, we feel that that capacity should mostly get utilized in the next 12 months, whatever capacities are already in place.
And also remember which we have mentioned earlier that you know, these are such plants that they don’t operate at 85, 90% capacity on day one. It takes a cycle of two year to three year for them to reach that maturity of start delivering, you know, between 85 and 90% throughput. So I think there is a level of balancing which has already happened. And for us we clearly see that going into west is an advantage because there is a good market, there is no clutter there. We didn’t want it to go into that space where there are already so many plants in southern.
So you know, even last time like they were concerned. But I we’ve been able to prove to everybody that we took a good decision at that point of time. And I’m sure this time also we’ll be able to prove this, that you know what, we have taken the call both in terms of location and in terms of the pricing at which we will be able to establish this plant, the timeline. Possibly this will turn out to be good.
operator
Thanks. Thanks. No further questions. Any closing remarks management team would like to make.
Sanidhya Mittal — Joint Managing Director
Thank you all for taking time to participate in this call. In case of any further clarifications or queries, please feel free to reach us. Thank you.
operator
On behalf of Asian Market Securities Private Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.