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Amount (Rs. crore)



Long-term Bank Facilities

(enhanced from 478.4)
(enhanced from 490)

(Single A)
CARE A1 (A One)

Revised from CARE A(Single A Minus)


CARE A1 (A One)


Short-term Bank Facilities
Total Bank Facilities
Short-term Debt (including
Commercial Paper)*

*by earmarking fund-based working capital limit
Rating rationale
The revision in rating of the long-term facilities of Greenply Industries Ltd (GIL) takes into account the improvement in the
financial risk profile of the company in FY13 (refers to the period April 1 to March 31), on the back of stabilization of operations
of the Medium Density Fiber (MDF) division.
The above ratings also continue to derive strength from the experienced promoters, long track record of GIL, leadership position
in the interior infrastructure sector and improving capacity utilization across the three divisions – plywood, laminates and MDF.
Furthermore, Forest Stewardship Council (FSC) Certification, empanelment with Military Engineers Services (MES) for supply
of MDF products, extensive distribution network & marketing support, strategic location of all the manufacturing units leading
to cost advantages and increasing presence in export market also support the ratings. The ratings also factor in the dominance of
unorganised sector players in the domestic plywood sector, leading to intense competition, exposure to foreign exchange
fluctuation risk, risk associated with implementation of the ongoing projects and significant dependence on the prospects of the
real estate sector. The ability of GIL to improve its profitability as envisaged, while maintaining its capital structure, complete the
projects within the envisaged timelines & cost and sustainability of selling prices of its products in future vis-à-vis the prospect in
the domestic and global real estate sector scenario would remain the key rating sensitivities.
GIL was incorporated in August 1984, to manufacture veneer (ply) at Tizit, Nagaland. It is currently engaged in the
manufacturing of plywood, laminates, decorative veneers, MDF and allied products with manufacturing units located in six states
(Nagaland, West Bengal, Uttarakhand, Rajasthan, Himachal Pradesh and Gujarat).
GIL is the leader in the domestic plywood, laminate, decorative veneers & MDF industry and is the only integrated manufacturer
in India.
Credit Risk Assessment
Long track record of operation and experienced promoters
GIL incorporated in 1984, has a long track record of operation of about three decades in the plywood industry. The promoters,
Mr Shiv Prakash Mittal and Mr Rajesh Mittal, are well-known in the interior infrastructure sector with experience of more than
two decades in the industry. Moreover, the senior management team of GIL has extensive experience in the industry.
Leadership position in interior infrastructure sector
GIL, the market leader in the interior infrastructure sector, is well-positioned to reap the benefits from the increasing
urbanization, lower renovation cycle and growing real estate sector. Due to its superior product quality and continuous brand
awareness initiatives, GIL enjoys healthy market share across its three divisions. GIL’s brands like ‘Greenply’ & ‘Green Club’, in
the plywood segment, ‘Greenlam’ & ‘Green Decowood’ in the laminate segment and ‘Green Panel Max’ in the MDF segment
are the leading brands in their respective product categories.


Complete definitions of the ratings assigned are available at and in other CARE publications


more or less. Currently. coupled with accretion of higher levels of profits to reserves. aiding the growth in the overall CU of the laminate division. which was low (31. GIL has received the approval from Military Engineers Services (MES) for use of “Green Panel Max” MDF in defence works. the company has set-up another subsidiary in the UK for marketing of its products in Europe. dealers. the USA. branding in the MDF division is focused on product education through BTL activities like carpenters. coupled with increase in realizations. Increasing presence in the export market GIL has an extensive presence in the quality stringent export market and the same has increased over the last three years. Accordingly. respectively. GIL’s export stood at Rs. Improvement in the financial risk profile over the last three years especially in FY13 on the back of stabilization of operations of MDF unit The net sales have grown at a CAGR of about 28. CU of the plywood division continued to remain highly satisfactory and was high at more than 100% during the period.Improving capacity utilisation across all divisions Capacity Utilization (CU) for all the product divisions has generally been comfortable over the years and witnessed further improvements in FY13 primarily driven by higher demand supported by higher marketing support.6 crore (about 11% of total sales) in FY13 as against Rs. architects. sub-dealers and retailers across 21 states. PAT (after defd tax). While the company primarily focuses on ATL activities like television commercials for plywood and laminates division. Taiwan. debt-equity and overall gearing ratios. Singapore. etc.5-3% of its net sales towards marketing and branding activities across the three divisions. Hong Kong. the company has set-up another subsidiary in the UK for marketing of its products in Europe. On an average. China. to cater to the growing demand in south-east Asian countries and America. Australia.000 distributors.86%) in FY11 in view of teething trouble. due to higher level of profits. real estate and construction industry meets. over the previous account closing date due to scheduled repayment of term loans for the recently completed projects. Accordingly. Extensive distribution network and marketing support GIL has a pan-India marketing network with 46 branch offices and more than 14. 2 . GIL’s extensive distribution network is supported by various marketing and branding exercises across the three product divisions. the governments and other organizations in European countries are insisting on FSC-certified products in their purchasing policies. the net sales increased by about 22% in FY13 over FY12 in line with greater penetration in new territories in domestic and export market.255. the debt coverage indicators like term debt/GCA and total debt/GCA also witnessed improvements as on March 31.183. The PBILDT margin improved by about 184 bps in FY13 over FY12 in view of higher sales price realization for all its product categories coupled with increased CU at all its product facilities (especially MDF division) leading to higher absorption of fixed overhead expenses. 2013. Forest Stewardship Council (FSC) Certification and empanelment with MES for supply of MDF products GIL has received the FSC chain of custody certification for its units at Kriparampur and Rajkot. Indonesia. Apart from increasing penetration in the existing product portfolio. CU of the MDF division (unit commissioned in November 2010). GIL has set up two subsidiaries (Greenlam Asia Pacific Pte Ltd & Greenlam America. improved performance of the MDF division was the main diver for growth in sales for GIL in FY13. improved to 66. This translates into an easy access for the company to highly environmentally sensitive markets (European countries) and also strengthens its brand value. interior designers. Mexico. Further.2% over the last three years on the back of continuous product development initiatives and wider marketing & distribution network. The company engages in several brand building initiatives through a mix of Above the Line (ATL) and Below the Line (BTL) marketing initiatives.) as foreign marketing outfits. It has one of the largest distribution networks in the interior infrastructure industry of the country. In FY13. the company spends about 2. 2013. In the laminates division. The company is targeting the key B2B influencer groups through advertisements in trade journals and carpenter magazines as well as carpenter education programmes. Both. coupled with stable capital charge. Inc. Russia. both the Behror and Nalagarh units witnessed a considerable improvement in CU. It has two subsidiary companies in Singapore and the USA to explore the market opportunities for laminates in south-east Asia and the USA.7% in FY12 and further improved to 87. doubled during the even period in view of higher PBILDT level. Malaysia.8% in FY13 with gradual stabilization of operation. the company is continuously focussing on increasing its export presence in line with higher demand for its various premium laminate brands. improved as on March 31. Furthermore.8 crore in FY12 GIL primarily exports laminates to countries like Thailand. In FY13. the stabilization of operations of the MDF unit in FY13 led to notable increase in y-o-y sales of MDF. Over the last few years.

commercial office space and retail space. the ability of the company to complete its ongoing projects on time and without any cost overruns and maintain its capital structure shall be crucial. Veneered MDF) in MDF division and to tap the huge market potential for such products in urban and semi urban markets. phenol. Risk associated with extension into value-added product segment and increase in manufacturing capacity of MDF In order to cater to the growing demand for value added product segments (HDF flooring.255. Moreover. most of its units enjoy various fiscal benefits.119. For the balance amount. it is partially insulated against foreign exchange fluctuation by way of natural hedging.5 lacs CBM) unit at its manufacturing unit at Behror. in order to cater to the growing demand for veneered wooden flooring and Pre-laminated particle board.8 crore in FY13) through import. top veneer wood. In FY13. At any given point of time. the company is setting up a “Engineered Veneered Wooden Flooring” (capacity of 8 lakh square metres p. ensuring steady supply of raw materials. as the company exports about 11% of its gross sales (Rs.98:1. the prospects of the company will be primarily driven by the demand from sectors like hospitality.3:1 (internal accruals of Rs.3 crore and term loans of Rs. Prospects GIL enjoys good brand recognition in the organised plywood as well as laminates segment. Foreign exchange fluctuation risk GIL sources about 42% of its raw material requirement (decorative paper. The commercial production from the unit is expected to commence from July 2014. thus. The company has already received a sanction of 6 million USD from Standard Chartered Bank for the project.a) and “Pre-laminated Particle Board” (capacity of 7. as both raw materials & finished goods are bulk products. the proposal is in advanced stage and the sanction is expected to be received soon. Initiatives taken to ensure availability of raw materials The company also plans to float a local subsidiary in Myanmar for setting up a veneer-cum-plywood unit. the capacity and the cost is yet to be firmed up. The debt has been availed as envisaged and the project is near completion. The aggregate cost of the aforesaid project of Rs. However. 3 . which would then by transported to India. for which. the project is in nascent stage and. to part fund its recently completed capex programme GIL had availed ECBs. Moreover. Furthermore.83 crore). GIL is in the process of setting up a unit for the manufacturing of such products at its existing plant at Pantnagar (Uttarakhand). Rajasthan. The Government of Myanmar has been discouraging exports of wood and is likely to ban exports of wood from 2014. UV coated panels. Given the fact that all the three divisions of the company are operating at satisfactory CU levels. the company is generally hedged to the extent of 85-90% of its total exposure.41. The company is yet to finalise on the total project cost. It is expected to commence commercial operation from Q3FY14 onwards. going forward. thus. healthcare. the company is planning to set up a new MDF plant in Andhra Pradesh. the demand for MDF has been growing and GIL’s MDF has been well-accepted in the market. The aggregate project cost of Rs. Any additional debt availed for the project is expected to result in deterioration in the capital structure of GIL. This enables it to save cost on transportation. the company uses buyer’s credit facility.36.462. the principal and interest payments of which remain partially hedged (in some cases interest payments remain hedged while in some cases the principal remains hedged upto a certain rupee dollar rate and in some cases both interest and principal remain un-hedged).Cost-efficient sourcing and locational advantage GIL has strategic advantage vis-à-vis its competitors as most of its units are located adjacent to the ports or market or source of major raw materials. Furthermore. This exposes the company to foreign exchange fluctuation risk to a certain extent. The company plans to procure wood from the local markets in Myanmar and make some value addition to the product. GIL booked foreign exchange loss to the tune of Rs. However.3 crore is expected to be financed at a debt-equity ratio of 2. GIL also takes forward cover to hedge its forex payables for minimising the exchange fluctuation risk.3 crore was financed at a debt-equity ratio of 3. However. etc – Rs.7 crore.6 crore in FY13).

5 38.216.642.8 10.007.72 1.1 404.7 1.52 11.88 1.10 1.32 2.7 151.4 98.92 112.31 26.0 64.5 1.16 (49.99 1.4 52.75 10.60 18.7 41.5 30.05 4.E/As on Mar. Working Results Net Sales Total income PBILDT Depreciation Interest & finance charges Profit before tax PAT .after defd.1 12.7 2.38) 34.643. A) 2012 (12m.19 2.99 3.4 114. A) 1.17 2.88 22.20 0.70 1.62 13.69 20.9 123.06 10.14 0.3 1.31.4 12.after defd tax (%) ROCE (%) RONW (%) Leverage Debt equity ratio Overall gearing ratio Interest coverage Long term debt/GCA Total debt/ GCA Liquidity Current ratio Quick Ratio Turnover Average collection period (days) Average creditors period (days) Average inventory period (days) Working capital cycle (days) 4 (Rs.217.7 195.200.7 1. Cr) 2013 (12m.67 1.2 173.05 2.21 26.89 3.0 63.73 5.12 4.21 1. tax Gross Cash Accruals Financial Position Equity share capital Tangible networth Total capital employed Ratios Growth Growth in total income (%) Growth in PBILDT (%) Growth in PAT (after defd tax) (%) Profitability PBILDT margin (%) PAT margin .5 12.96 57. A) 2011 (12m.1 517.63 51 40 77 88 57 33 68 93 61 43 69 87 .23 0.8 64.12 41.05 8.01 113.91 5.63 4.1 346.9 53.3 275.7 866.1 74.55 0.0 42.79 14.55 9.3 46.06 0.997.Financial Results Y.116.5 1.9 25.

sell or hold any security. based on the amount and type of bank facilities/instruments. CARE has based its ratings on information obtained from sources believed by it to be accurate and reliable. 5 . disburse or recall the concerned bank facilities or to buy. CARE does not. renew. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee.DISCLAIMER CARE’s ratings are opinions on credit quality and are not recommendations to sanction. guarantee the accuracy. however. adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.

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