Greenpanel Industries Ltd Management Discussions

Global Economy

The global economy exhibited resilience throughout 2025 amid evolving trade policies and divergent regional performances. Investments in technology, notably in artificial intelligence (AI) and associated sectors, helped offset pressures from tariffs and heightened policy uncertainty. Global headline inflation stabilised at 4.1%, with annual rates remaining consistent across regions, aided by several economies reporting figures below market expectations.

Global GDP growth attained 3.4% for the year, in line with prior estimates, though this masked varying performances across other regions. Advanced economies expanded by 1.9%, with the United States achieving 2.1%, supported by strong technology expenditure and fiscal stimulus. The euro area registered 1.4%, while Japan recorded 1.2%. Emerging market and developing economies delivered a stronger performance at 4.4%, led by China at 5.0% and India at 7.6%.

Trade tensions moderated through notable developments, including a US-China truce that reduced bilateral tariffs until November 2026 and suspended export controls on semiconductors and rare earth minerals. The United States also lifted tariffs on select agricultural products applicable to all trading partners, maintaining effective tariff rates near previous levels. Policy uncertainty eased from October 2025 peaks but remained elevated year-over-year. Financial conditions stayed broadly accommodative, despite volatility in sovereign yields.

Global trade volumes remained steady, buoyed by strong technology exports from Asia that offset weakness elsewhere. Central banks navigated inflation via calibrated monetary adjustments: gradual rate reductions in the United States and United Kingdom, steady policy in the euro area, and modest hikes in Japan. These measures sustained supportive financial conditions against persistent trade and geopolitical headwinds.

(Source: WEO- April (IMF))

Outlook

The global economic outlook, as published by the IMF in April 2026, indicates a steady growth of 3.1% in 2026, consistent with 2025 levels before easing slightly to 3.2% in 2027. This forecast incorporates a modest upward revision from prior estimates, driven by sustained technology investments in artificial intelligence and related domains that counterbalance trade policy challenges. Fiscal stimulus across major advanced economies, combined with supportive financial conditions, underpins this path, although risks from policy uncertainty and geopolitical pressures are expected to remain.

(Source: WEO- April (IMF))

However, the geopolitical environment remains uncertain, with rising tensions in West Asia emerging as an important source of disruption for global trade, energy flows, and supply chains. Although the Russia-Ukraine conflict continues to affect commodity markets and logistics, global attention has increasingly shifted to West Asia, where instability is adding pressure on supply chains, raising inflation concerns, and increasing market volatility. These developments are creating indirect challenges for businesses across sectors through higher input costs, shipment delays, and uncertainty in the availability of critical materials and services. Disruptions arising from the temporary restriction of access to the Strait of Hormuz amid the West Asian conflict affected global oil and LNG supplies, leading to a sharp rise in energy prices and renewed concerns over the stability of international trade flows. These developments heightened uncertainty across global markets and affected the availability and pricing of critical energy inputs, while also adding pressure to inflationary trends in several economies.

At present, global uncertainty is being shaped more significantly by developments in West Asia, where heightened disruption is affecting multiple industries globally. Ongoing supply chain disruptions and input shortages, particularly in critical areas such as LPG availability, helium shortages, and other industrial commodities, are creating ripple effects across sectors and contributing to cost pressures, sourcing challenges, and operational uncertainty.

The broader impact of these developments is being felt across manufacturing, logistics, and allied industries, with indirect consequences for pricing, production planning, and overall business sentiment. As global trade and growth remain under pressure, the continuing volatility in energy markets and supply chains is expected to sustain uncertainty across sectors in the near term.

Indian Economy

Indias economy in FY 2025-26 has shown steady strength and broad momentum against a global backdrop of geopolitical tensions, trade uncertainty, and financial market swings. Second Advance Estimates (SAE) project real GDP growth at 7.6% and Gross Value Added (GVA) at 7.7%. This highlights the durability of our domestic demand-led growth model. Good agricultural output supported rural incomes. Urban consumption improved with steady employment, tax measures, and lower inflation

India continues to remain one of the worlds fastest-growing major economies, supported by resilient domestic demand, strong investment activity, and ongoing structural reforms. Latest estimates indicate that India has slipped from the position of the 4th largest to the 6th largest economy in the world, with a nominal GDP of about USD4.15 trillion in 2026. The country is expected to maintain its strong growth momentum and may improve its global ranking over the medium term as economic expansion continues.

SL#	Country	GDP	GDP Growth	GDP per Capita
1	United States	USD32.38 trillion	2.32%	USD94,430
2	China	USD20.85 trillion	4.41%	USD14,874
3	Germany	USD5.45 trillion	0.79%	USD65,303
4	Japan	USD4.38 trillion	0.72%	USD35,703
5	United Kingdom	USD4.26 trillion	0.80%	USD61,056
6	India	USD4.15 trillion	6.48%	USD2,813
7	France	USD3.6 trillion	0.86%	USD52,083
8	Italy	USD2.74 trillion	0.52%	USD46,505
9	Russia	USD2.66 trillion	1.09%	USD18,525
10	Brazil	USD2.64 trillion	1.91%	USD12,313

(Source: Worldometer- IMF, Indian Express)

Private consumption continues as a primary driver, aided by lower inflation and higher real incomes. Investments picked up pace, propelled by public capital expenditure of 12.2 lakh crore that enhanced infrastructure and spurred activity in manufacturing, construction, logistics, and energy sectors. Initiatives like Viksit Bharat 2047 and Kartavya Kaal promote self-reliance, capacity building, and duty-focused development amid external pressures.

(Source: Press Information Bureau /PIB)

The Union Budget for 2026-27 reaffirms the governments focus on driving economic growth while managing the nations finances responsibly. By continuing to prioritise long-term investments in infrastructure and manufacturing, the budget supports the broader vision of a developed India. Significant emphasis has been placed on energy transition, digital innovation, and support for small and medium-sized enterprises (MSMEs). Additionally, new measures to simplify business operations and im prove access to cred it are expected to boost consumer demand and industrial production. These initiatives collectively create a strong environment for increased investment and energy consumption, laying a solid foundation for sustainable future growth.

(Source: PIB)

Outlook

The outlook for the Indian economy remains positive and stable. For the upcoming fiscal year (FY27), real GDP is expected to grow between 6.8% and 7.2%, demonstrating Indias ability to maintain strong momentum even during uncertain times globally. This growth will likely be fuelled by ongoing government spending on infrastructure, a steady increase in private sector investment, and a strengthening manufacturing base. Additionally, the services sector is expected to continue its consistent expansion. Backed by a stable economy and steady government policies, India is well-prepared to manage global challenges while ensuring that economic progress remains inclusive and sustainable over the long term.

(Source: PIB (FAE))

War Impact

The ongoing geopolitical tensions in West Asia have created significant challenges for the Indian economy, primarily through disruptions in global energy and petrochemical supply chains. As India remains heavily dependent on imported crude oil and related energy inputs, any disruption in the movement of oil and other key supplies through critical trade routes may exert upward pressure on energy prices, freight costs and import bills. Higher energy costs may, in turn, add to inflationary pressures, create strain on the current account and affect the broader macroeconomic environment.

For the MDF and plywood industry, these developments are particularly relevant as the sector depends on a combination of timber, resins, formaldehyde-based chemicals, adhesives and other petrochemical-linked inputs. Disruptions in supply chains and higher crude-linked input costs may lead to increased raw material prices, tighter availability of certain chemicals and elevated logistics expenses, thereby putting pressure on procurement planning, operating margins and pricing decisions.

Industry Overview Global Furniture Market

The global furniture market supplies homes, offices, and public spaces with seating, storage, sleeping, and workspace solutions. The market size is valued at USD791.08 billion in 2025. It is expected to reach USD833.94 billion in 2026 at a CAGR of 5.4%. Further, the market is projected to attain USD1,050 billion by 2030, growing at a CAGR of 6.1% during 2026-2030. This expansion reflects rising disposable incomes across emerging economies, broadening customer base alongside premium eco-friendly smart-home-compatible products gaining preference through connected living trends, multifunctional smart furniture, urban expansion, and digital retail integration. Production consolidates in Southeast Asia, leveraging cost efficiencies and resource access while global players adopt circular design models, transparent sourcing, and align stricter sustainability standards.

Furniture Market

Market forecast to grow at a CAGR of 6.1%

The Asia-Pacific wooden furniture market was valued at USD166 billion in 2025 and is projected to grow from USD173.9 to reach USD287.4 billion by 2035, representing a CAGR of 5.7% from 2026 to 2035. This growth is supported by rapid urbanisation, rising disposable incomes in emerging economies, and a strategic shift toward sustainable and high-quality craftsmanship. Post-pandemic housing starts, and the rise of home offices, which boost demand for modular, ergonomic, and multifunctional pieces. E-commerce penetration accelerates access, while millennials and Gen Z prioritise sustainable materials and smart integration. Replacement cycles and renovation activity add steady volume.

(Source: Research and Markets, Global Market Insights)

Global Medium-Density Fibreboard (MDF) Market

Global medium-density fibreboard (MDF) serves as an engineered wood panel made from wood fibres bonded with resin under heat and pressure. Manufacturers use it widely for furniture cabinets, doors, shelving, interior panelling and decorative mouldings because of its smooth surface machinability and cost advantages over solid wood. The market was valued at USD44.02 billion in 2025 and expected to grow to USD46.83 billion in 2026 and is expected to reach USD76.93 billion by 2034, with a CAGR of 6.4%.

(Source: Straitsresearch)

Urbanisation, housing construction and furniture replacement fuel consumption, particularly in residential and commercial spaces. Consumers prefer MDF for its stability against heat, humidity and defects, making it ideal for ready-to-assemble modular and sustainable furniture. Work-from-home trends boost home office desks, ergonomic chairs and study tables. Green building practices favour low-emission MDF boards.

Global Plywood Market

The global plywood market continues to expand steadily, driven by construction growth and furniture demand. Asia Pacific remains the dominant region, accounting for over 70% of consumption.

The global plywood market focuses on the production and supply of engineered wood panels, manufactured by bonding multiple thin wood veneers cross-grain. This specific construction technique ensures superior strength and dimensional stability, making it essential for diverse applications across the construction, furniture, packaging, and marine sectors for both residential and commercial projects.

The global plywood market was valued at USD52.5 billion in 2025 and is projected to reach USD77.6 billion by 2034. This growth trajectory represents a CAGR of 4.31% during the 2026-2034 forecast period.

Market expansion is primarily propelled by a resurgent global construction sector, where significant investment in residential, commercial, and industrial infrastructure continues to stimulate demand. Beyond traditional building, the materials widespread adoption in the marine industry acts as a major growth catalyst; plywoods unique capacity to withstand seawater and high humidity while resisting fungal decay makes it indispensable for maritime applications. Furthermore, the cross-grain engineered stability of plywood ensures its continued dominance across the furniture and packaging industries, where strength and durability are paramount.

Asia Pacific leads due to urbanisation and large-scale projects in China and India. North America shows strong growth from construction activity, with positive indices in the US. Europe and emerging markets follow, supported by infrastructure investments.

Rising residential and commercial construction is expected to boost demand, alongside furniture manufacturing. Sustainability trends favour engineered wood products. Urbanisation in developing economies accelerates adoption.

(Source: Imarc: International Market Analysis Research and Consulting)

Indian Furniture Market

The Indian furniture market exhibits growth, propelled by urbanisation, rising disposable incomes, and real estate expansion. It ranks as the worlds fourth-largest market, with wood dominating material preferences at nearly 60% share.

The market is valued at USD29.27 billion in 2025 and is projected to grow from USD31.51 billion in 2026 to hit USD45.52 billion by 2031 at a CAGR of 7.63%. Urbanisation, middle-class expansion, and e-commerce surge fuel demand, alongside multifunctional furniture needs in compact urban homes. Organised retail and exports further boosted growth.

India Furniture Market

Market Size (USD Billion)

The Furniture (Quality Control) Order 2025, effective February 13, 2026, mandates BIS standards for sofas, beds, tables and other categories expected to impact 30-35% of market demand while driving renewed consumption of compliant panel, decorative adhesive and hardware products. International brands face certification redesign and supply chain adjustments, creating market entry barriers that favour early-compliant domestic players alongside importers navigating BIS documentation inspections and localised manufacturing partnerships. This standardisation enhances consumer trust, product durability, safety positioning, compliant manufacturers for premium pricing, competitive differentiation and long-term ecosystem leadership.

(Source: Mordorintelligence, Global Omega, The Gazette of India)

Indian MDF Market

The Indian MDF market has emerged as a cornerstone of the nations evolving furniture and interior design landscape, reflecting broader shifts in construction practices and consumer lifestyles. With rapid urbanisation and a growing middle class spurring demand for cost-effective, versatile materials, medium-density fibreboard (MDF) has transitioned from a niche import substitute to a vital component of modern interiors, particularly in modular furniture and panelling applications.

Indias MDF sector flourishes amid the countrys real estate surge and the drive towards organised retail in home furnishings. The Sector has grown at a CAGR of 14-15% p.a., and this momentum is expected to continue over the next few years. This expansion surpasses traditional timber options, as MDFs smooth finish and machinability attract manufacturers serving urban apartments with space limitations. Residential projects account for the majority of consumption, supported by government initiatives like PMAY (Pradhan Mantri Awas Yojana) that emphasise affordable housing.

(Source: Imarcgroup)

The Quality Control Order (QCO) on plywood and MDF boards implemented from October 2025 has significantly strengthened domestic manufacturing standards while curbing sub-standard imports that previously eroded market share. Initially facing industry resistance due to compliance costs and testing gaps, the sector now embraces mandatory BIS certification, recognising the long-term benefits of international quality positioning, particularly as domestic players achieve compliance ahead of global competitors. This regulatory shift boosts investments in formalisation, enhances raw material demand and creates competitive advantages for organised manufacturers serving furniture, real estate and institutional applications.

(Source: Economic Times, Ply Reporter)

Urban millennials and Gen Z consumers, seeking style and utility, drive uptake of pre-laminated MDF boards. E-commerce channels have broadened reach, helping small retailers challenge unorganised competitors.

Indian plywood market

The Indian plywood market remains a vital component of the construction and furniture sectors, driven by rapid urbanisation and a growing preference for durable, cost-effective wood alternatives.

Residential housing accounts for the majority of demand, bolstered by government initiatives like PMAY and the rising popularity of modular interiors among urban consumers. Despite challenges like raw material price volatility, the industry is increasingly adopting eco-friendly adhesives to ensure sustainable, long-term growth.

(Source: Imarc)

Company Overview

Greenpanel Industries Limited (‘Greenpanel or ‘the Company) is Indias largest wood panel manufacturer and the No. 1 MDF company. Incorporated in 2017 and headquartered in Gurugram, it specialises in engineered wood products made from 100% renewable agro-forestry wood.

The Company operates state-of-the-art manufacturing facilities in Pantnagar/Rudrapur (Uttarakhand) and Srikalahasti/Tirupati district (Andhra Pradesh), with a combined MDF capacity of approximately 8,91,000 CBM per annum and plywood capacity of 9 million sqm as of mid-2025. These plants serve domestic markets via an extensive network of 1,750+ distributors and export to over 60 countries, mitigating regional risks through geographic diversification.

Key offerings include Medium Density Fibreboard (MDF), High-Density Water Resistant (HDWR) boards, pre-laminated MDF, plywood, blockboards, decorative veneers, wooden flooring, and doors under the Greenpanel brand. Products emphasise sustainability, durability, and innovation, such as Perma Click™ flooring and Quadra Pro Technology for plywood.

Greenpanel holds a leadership position with a ~21% share in Indias MDF market, supported by advanced German technology, a premium segment focus, and brand-building through IPL partnerships and ATL campaigns. It exports significantly while expanding domestic reach through dealer networks and government collaborations to reduce imports.

Operational Highlights FY 2025-26

Sales and Marketing Excellence: During FY 2025-26, the Company strengthened its sales and marketing focus through the FORSE 2025-26 Annual Sales Excellence Meet, which helped align the sales force with long-term growth priorities and volume expansion. The Company also deepened engagement across its distribution network through initiatives such as the Greenpanel Privilege Club Bali Tour and the relaunch of the MITR 2.0 mobile app, which enhanced partner loyalty and outreach. These efforts were supported by wide-scale customer and channel engagement across the country, including more than 600 carpenter meets, 75+ contractor meets, and 12+ sub-dealer meets, covering over 21,000 participants.

Product Innovation and Portfolio Expansion: The Company continued to expand its product portfolio during the year with the launch of new offerings such as HDWR Doors, Thin MDF, and Fire Retardant MDF, supported by targeted activation across more than 650 outlets across 32 cities. In December 2025, the Company also introduced its BWP HDF product “BoilBlack”; which was positioned as a benchmark in strength, durability, and performance. These product launches reflect the Companys continued focus on innovation, market relevance, and the development of solutions that meet changing customer requirements.

Operational Scaling and Cost Efficiency: A key operational priority during the year was the successful ramp-up of the new MDF plant in Andhra Pradesh, which helped increase production volumes and improve utilisation levels. MDF capacity utilisation reached 60% by the fourth quarter, reflecting steady progress in plant stabilisation and operating performance. At the same time, the Company worked on improving cost efficiency through raw material optimisation, better consumption management, and tighter inventory control. These measures helped strengthen working capital discipline, with the cash conversion cycle being maintained at 38 days during the year.

Brand Visibility and Digital Reach: The Company expanded its brand presence through a combination of on-ground visibility and digital engagement. Physical branding was extended to over 7,000 dealer and sub-dealer locations, while digital campaigns for products such as BWP HDF and Prelam generated strong reach and lead generation. This was complemented by the Companys increasing focus on technology-led communication, including the MD and CEOs participation in the “Visionaries of Viksit Bharat” platform, which highlighted the role of technology in shaping the future of the engineered wood industry.

Community Development and CSR: Through the Greenpanel Foundation, the Company continued to strengthen its community development initiatives during the year. Key interventions included a women-led Mobile Medical Unit that reached more than 2,000 beneficiaries, along with the installation of RO water plants and drip irrigation systems in underserved areas. The Foundation also partnered with the Furniture and Fittings Skill Council under NSDC to support carpenter training and skill development, reinforcing the Companys broader commitment to inclusive growth and workforce upliftment.

Segment-Wise performance MDF Segment

In FY 2025-26, the MDF segment revenue increased 9.3% YoY, representing 91.2% of the total Company revenue. Domestic MDF volumes increased by 16.9% YoY, while export volumes fell 7.6% YoY. Operating EBITDA margins stood at 9.3%.

Plywood Segment

Plywood sales volume was almost flat, year-over-year, with operating EBITDA margins of 3.8%. In FY 2025-26, the Company adapted to challenges such as rising wood prices, supply chain disruptions, and the fragmented and unorganised nature of the industry, along with shifting market needs.

Financial Performance

(INR Crores)

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Particulars	FY 2026	FY 2025
Revenue from Sale of Products	1,502.24	1,393.88
Operating EBITDA	132.66	148.19
Profit before tax	(-)43.76	69.69
Tax	14.63	(-) 2.42
Profit after tax	(-)29.13	72.11

Key Financial Ratios

Particulars	Units	FY 26	FY 25	% Change	Rationale for >25%
Current Ratio	Times	1.90	1.94	0.12%	Non-reportable variance
Inventory Turnover Ratio	Times	5.69	5.08	11.95%	Non-reportable variance
Debtor Turnover Ratio	Times	26.85	37.62	-28.61%	The receivables have increased in the last quarter on account of higher sales in March, followed by lower export receipts due to the Middle East crisis. Hence, the Ratio has declined considerably.
Debt-equity ratio	Times	0.26	0.28	-7.59%	Non-reportable variance
Debt Service Coverage Ratio	Times	0.93	2.76	-66.43%	An increase in interest outgo, along with a reduction in profits over the last year, has resulted in a change.
Interest Coverage Ratio	Times	-0.19	11.45	-101.68%	Decrease is due to an increase in foreign currency fluctuations and higher operational expenses on account of the new MDF Line in Andhra Pradesh.

Profitability ratios:

Particulars	Units	FY 26	FY 25	% Change	Rationale for >25%
Operating Profit Ratio	%	6.3	11	-43.14%	Decrease is due to an increase in foreign currency fluctuations and higher operational expenses on account of the new MDF Line in Andhra Pradesh
Net Profit Ratio	%	-1.94	5.17	-137.48%	Decrease in net profit due to an increase in foreign currency fluctuations and higher operational expenses on account of the new MDF Line in Andhra Pradesh.
Return on Equity Ratio	%	-2.13	5.34	-139.82%	Decrease is due to an increase in foreign currency fluctuations and higher operational expenses on account of the new MDF Line in Andhra Pradesh.
Net Capital Turnover Ratio	Times	5.48	5.35	0.39%	Non-reportable variance
Return on Net Worth	%	-2.15	5.21	-141.27%	Decrease is due to an increase in foreign currency fluctuations and higher operational expenses on account of the new MDF Line in Andhra Pradesh.

S.W.O.T Analysis

Strength

1. Unrivalled Market Leadership & Scale:

Greenpanel maintains its position as Indias largest wood panel manufacturer and the No. 1 MDF player. With a combined annual MDF capacity of 8,91,000 CBM across its Uttarakhand and Andhra Pradesh plants, the company commands a dominant ~21% domestic capacity market share, ensuring significant economies of scale. The new line in Andhra Pradesh (MDF 3) was operationalised last year and serves the growing segment of Thin Panels.

2. Technological Prowess: The integration of state-of- the-art German manufacturing technology alongside robust IT infrastructure drives optimal capacity utilisation.

3. Solid Brand Equity & Distribution: Effective marketing, including high-visibility sponsorships done previously, has solidified brand recall. Together with a sprawling distribution network spanning India and international markets (supported by hubs in Dubai and Singapore), the company enjoys immense pricing power and dealer loyalty.

4. Strong Financial Parameters: The company is solid financially, with a Debt to Equity ratio at 0.26 times, Current Ratio at 1.90 times and Cash Conversion Cycle at an industry-leading 38 Days. Thus, with its strong leverage and comfortable liquidity profile, the company is poised for good organic growth in the near future.

Weakness

1. Margin Sensitivity to Raw Material Volatility: Rising cost of raw materials - especially chemicals and resin due to a volatile external environment.

Opportunities

1. Future Growth Catalyst: MDF continues to gain market share from the traditional plywood market and has emerged as a product for the future. It is cheaper, highly durable, and an easily machinable substitute. Thus, changing consumer preference is driving a double-digit CAGR for the Indian MDF industry, ensuring a long-term volume growth runway.

2. Real Estate Upcycle & Urbanisation: The ongoing boom in both residential real estate and commercial infrastructural development serve as a growth driver. Government initiatives for affordable housing and a nationwide shortage of urban housing units also contribute to growing demand for interior panels.

3. Formalisation of the Unorganised Sector The implementation of GST and evolving consumer awareness regarding sustainable, eco-friendly (low formaldehyde) materials are accelerating the shift from the unorganised sector to branded players like Greenpanel.

Threats

1. Supply Chain Equilibrium: Projected industry overcapacity poses the risk of a supply glut, potentially triggering aggressive pricing wars. Such market saturation could exert downward pressure on margins, necessitating a strategic focus on cost discipline and value differentiation to protect profitability.

2. Threat of Cheap Imports: The domestic sector remains continually exposed to the threat of cheaper, lower-grade MDF imports from Southeast Asian countries, and dumping practices can put pressure on domestic players.

Outlook

The global economic environment remains overshadowed by ongoing geopolitical tensions in the Middle East, which represent the most significant variable for the industry. These disruptions have adversely impacted global supply chains, leading to a marked escalation in input costs, particularly within the chemical segment. While timber costs have remained relatively stable over the past quarter, we continue to monitor the volatility in raw material pricing closely.

The domestic Medium Density Fibreboard (MDF) sector is undergoing a structural transition. Currently, Indias MDF capacity stands between 4.0 and 4.5 million CBM per annum. We anticipate domestic demand to sustain a healthy growth trajectory in the early double-digit to mid-teen range. A pivotal trend remains the substitution of lower-grade plywood with high-grade MDF. This shift is displacing unorganised players in favour of the organised market, as consumers increasingly recognise MDF as the product of the future due to its affordability, uniform quality, and superior finish.

Greenpanel concludes the period with a robust operational foundation. Having operated at 60% capacity utilisation in Q4 FY 2025-26, the Company possesses significant headroom for organic growth in the coming fiscal year without the immediate necessity for additional material capital expenditure. This operational flexibility allows us to scale volumes efficiently as market demand accelerates. While the MDF industry is already largely organised, we observe a continuing consolidation of market share toward larger players, as smaller manufacturers struggle to absorb rising operational overheads.

Industry growth remains underpinned by a confluence of positive drivers, including an improving real estate cycle, increased private and public capital expenditure (Capex), rising household incomes, and accelerated urbanisation. Furthermore, the trend toward "premiumisation" is encouraging consumers to opt for higher-value interior solutions. To capitalise on these opportunities, Greenpanel will continue to drive "Customer Excellence" and "Volume Scale-Up," supplemented by an aggressive drive to achieve a "leaner cost base" in our manufacturing processes.

Risk Management

Risks	Potential impact	Mitigation measures
Peer Risk	The entry of new competitors and rising imports will increase competition in the market. This development could create challenges for the Companys growth plans and future expansion.	• Continued investment in expanding capacity and widening market reach
		• Emphasis on high-value products to remain competitive
		• Stronger market presence supported by wide distribution, custom solutions and regular product improvements
		• Quality products offered at competitive prices
		• Consistent supply of quality products to maintain customer satisfaction
		• Ongoing efforts to tap new domestic and export markets and reduce competition risk
		• Continued research and development to improve product quality and standards
		• Consumer awareness initiatives to explain the advantages of the products over alternatives
		• Regular initiatives to strengthen brand presence and visibility
		• Close relationships maintained with distributors and retailers
		• Incentive programmes for carpenters and consumer rewards to encourage engagement
Demand Risk	A slowdown in market activity or shifts in demand patterns can hurt the Companys growth prospects and profitability.	• Premium segment kept at the centre to support profitability and long-term growth
		• Export footprint expanded to reach a wider customer base and strengthen brand visibility across markets
		• Operations spread across more than 7 countries to reduce dependence on any single market and provide stability when domestic demand softens
		• Strategic partnerships pursued and new markets explored to lower risk and improve the Companys global position
		• International presence used to track emerging trends, anticipate market changes and stay ahead competitively
Dependency on Original Equipment Manufacturer (OEM) Business	Dependency on OEM sales can adversely affect profitability.	• Business expanded through a strengthened dealer network
		• Dealer network widened to reach end consumers more directly
		• Sales allocation adjusted to align production capacity with domestic demand
		• Export volumes redirected to domestic sales whenever required, based on margins
Geographical Risk	Geographic exposure can influence a Companys performance and growth potential. Events in specific regions pose risks to the Company.	• Production facilities located in Rudrapur in Uttarakhand and Tirupati district in Andhra Pradesh to spread operations across different regions and reduce location-specific risk
		• A contingency plan is in place to shift operations between regions or countries when required
		• Buffer capacity has been created at each plant to address additional demand during temporary disruption at the other facility or sudden increases in domestic and export demand • Potential constraints to adaptation have been identified to reduce the risk linked to geographical concentration
Brand Risk	Building a new brand in a short period demands strategic marketing efforts, consistent product quality, and effective customer engagement, supported by FTS and regular engagement with trade partners.	• Executed ATL marketing activities for two years to strengthen brand presence
		• Increased engagement with trade partners through Foreign Tour Schemes, Carpenter meets, retailer outreach, and other activation programmes
		• Positioned as "Indias Largest Wood Panel Manufacturer" and "Indias No. 1 MDF Company" to establish a strong brand identity
Raw Material Risk	A shortage of raw materials can disrupt production schedules and delay order deliveries. This affects customer satisfaction and harms the Companys reputation. Rising timber prices add further pressure by increasing costs. Higher expenses squeeze profit margins and make it harder to keep prices competitive. These factors could weaken Greenpanels market position and financial results.	• A dedicated team was put in place to oversee farm forestry development and monitoring
		• Farmer education programme rolled out to support improved agricultural practices
		• A centralised planning and procurement team was put in place for enhanced monitoring and control
		• Capabilities expanded to use alternative wood species as demand patterns evolve
Logistics Risk	Geopolitical tensions and rising fuel prices can drive up freight costs. This may disrupt supply chains and elevate operational expenses. Higher costs could also strain pricing strategies and compress profit margins.	• Logistics processes streamlined to improve operational efficiency
		• Manufacturing plants are located strategically to help reduce logistics costs
		• Supply chain reviewed and optimised regularly to support timely deliveries, lower transportation expenses and improve overall cost efficiency
Finance Risk	Inadequate cash flow can impair the Companys ability to meet operational and financial obligations.	• Strong cash flow generation supported by brand reputation
		• High operational discipline maintained on Working capital management.
		• Leverage & available liquidity remain comfortable to support growth.
Attrition Risk	High employee turnover can disrupt the Companys operations.	• Employee contributions recognised through suitable compensation for key and motivated staff
		• Career growth supported through development opportunities and professional learning initiatives
		• Performance management framework established to encourage results and accountability
		• Variable pay policy introduced for senior management employees
		• Reward and recognition scheme implemented across the organisation to acknowledge employee efforts and achievements
Compliance Risk	Regulatory permissions and restrictions on raw material sourcing pose a key risk. With wood as the primary input, any curbs on its availability or procurement could disrupt the Companys operations.	• Wood sourcing was kept sustainable across all requirements
		• Risk management processes maintained to track regulatory changes and assess their operational impact
		• Business policies reviewed and updated regularly to remain aligned with government and market regulations
		• Active engagement maintained with industry stakeholders to stay updated on regulatory changes and respond quickly to new standards
Technology Risk	Suboptimal technology can lead to higher operational costs, lower product quality, and reduced capacity utilisation. These issues may hinder the Companys growth.	• Advanced German technology adopted to improve manufacturing plant efficiency
		• Ongoing technology upgrades pursued to support operational efficiency, maintain competitive position and respond to market requirements
		• New solutions explored to improve production, reduce costs, enhance product quality and support long-term growth and sustainability

Human Resource

Employees form a central part of Greenpanels efforts to meet growth targets and hold its market position. The Company works to create a high-performance environment focused on steady development.

Greenpanel invests regularly in training and skill programmes. These build employee knowledge, abilities, productivity levels, and teamwork. This approach creates a positive workplace that keeps staff engaged. Specific initiatives help with retention as well.

The Company runs a leadership development programme to spot and grow leaders from inside the organisation. During FY 2025-26, Greenpanel reorganised its plywood sales team. This step aims to increase market share and make better use of production capacity soon.

As of March 31, 2026, the total workforce stood at 1,913 employees.

Technological Initiative

Greenpanel relies on technology to drive its business operations. The Company makes regular investments in systems like data analytics, ERP software, and people management tools. These upgrades streamline processes and lift operational efficiency across the board.

The SAP ERP platform manages key activities such as order processing, invoice creation, payment collection, and credit note issuance. Greenpanel has also rolled out the SAP C4C Sales Cloud CRM system to support field sales teams. This covers attendance tracking, customer visits, order placement, and sales performance monitoring. Everything connects directly to the core SAP ERP system that runs business operations.

Greenpanel applies Total Productive Maintenance (TPM) practices to keep equipment running reliably and maintain consistent performance.

Internal Control Systems and their Adequacy

Greenpanel has a robust internal control framework tailored to its size and operational requirements. The Audit Committee of the Board of Directors oversees the internal control system by establishing implementation guidelines and evaluating its adequacy, effectiveness and application. The system is designed to ensure operational efficiency, measurability and verifiability, along with the reliability of accounting and management information. The Company also ensures compliance with all relevant laws and regulations while safeguarding the Companys assets. Consequently, the internal control system plays a key role in the timely identification and management of the Companys operational, compliance, economic and financial risks.

Cautionary Statements

The Management Discussion and Analysis contain statements describing the Companys objectives, projections, estimates and expectations, which may be considered “forward-looking statements within the meaning of applicable laws and regulations. The Companys actual results, performances, or achievements may differ materially from those expressed or implied. Key factors influencing the Companys operations include, but are not limited to, economic conditions affecting demand, supply and pricing, raw material price volatility, changes in government regulations and tax policies, economic trends, competitive pressures and other incidental factors. The Company assumes no obligation to publicly amend, modify, or revise any forward-looking statement in response to future events or developments.