Greenply Industries expects a revenue growth of around 10-12 percent in the current year, the company’s joint Managing Director, Shobhan Mittal told CNBC-TV18.
Earlier today, the company reported a 15 percent topline growth for the quarter ended June. Going forward, Mittal expects margins to improve by 100-150 basis points for the entire year.
The company expects the plywood business to grow around 11 percent and the medium density fibreboard (MDF) segment to grow 27 percent year-on-year. Improvement in prices, optimal capacity usage and trading business will boost growth in both segments despite initial sluggishness in the first quarter, Mittal said.
The company is also looking to increase its dealers in FY16, he said.
Below is the transcript of Shobhan Mittal’s interview with Mangalam Maloo & Reema Tendulkar on CNBC-TV18.
Reema: You have guided for a 10-12 percent revenue growth in FY16. Can you break that up in what is the growth that you foresee in plywoods and what is the growth that you see in MDF for the full year?
A: Growth in both the segments would remain pretty standard. We had very high utilisation close to 90 percent last year in MDF so we would look at 10-12 percent growth in MDF as well as in plywood.
Mangalam: Your guidance was 11-12 percent for the whole year. While this quarter itself it has come in at 15 percent which is seasonally a lean quarter for plywood business so would you not up your guidance?
A: From the plywood side, in MDF we are restricted in terms of capacity available so in the long run if you look at my first quarter last year, we had a very low utilisation of the MDF. That is why you see very high revenue utilisation, but overall over the year we had 90 percent utilisation in MDF as well.
Reema: Can you tell us a little bit about your margins. On the whole they have gone up but that is aided by the margins in MDF. It has gone up above that 30 percent mark. What is the kind of margin that you are expecting for the full year in MDF as well as in plywood?
A: On a company level, we expect 100-150 basis points improvements at the full year level. On MDF, we would be maintaining roughly 27 percent odd margins on a yearly level.
Reema: And plywood?
A: Plywood we should be looking at may be 10-11 percent.
Mangalam: While the MDF business margins have shown a substantial growth the plywood margins continue to be sluggish so how do you think you will get to that 11-12 percent margins that you just said?
A: The first quarter for the plywood business is always sluggish. Going forward, there will be some contribution from price increases over the year and of course better capacity utilisation and better value mix over the year.
We intend to increase the dealer base this year quite substantially in the plywood business. The trading business is growing quite substantially as well so all these would contribute to improvement of margins in the plywood business for sure.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
