Greenlam Industries reported a 23% drop in net profit for the September quarter, reaching Rs 24.5 crore, despite an 8.3% rise in total revenue. While the laminates business faced volume headwinds and margin pressure, the chipboard segment surged by 124%. Management highlighted rising freight costs and geopolitical tensions as key challenges impacting profitability.
Greenlam Industries Q2 FY27 Results
Revenue grew 8.3% to Rs 875.2 crore, while net profit fell 22.9% to Rs 24.5 crore.
Reader Takeaway: Strong growth in the new chipboard business provides a buffer against declining volumes in the core laminates segment.
What just happened
Greenlam Industries reported mixed results for the quarter ending September 30, 2026. While revenue showed growth, profitability was severely impacted by a 330 bps contraction in EBITDA margins to 9.9%. The company’s core laminates business saw flat revenues and a 12% volume decline, shifting investor focus to the emerging chipboard and plywood segments.
Why this matters
The company is currently absorbing significant cost pressures. Geopolitical instability in the Middle East has disrupted logistics, leading to elevated freight costs and container shortages. These external factors, combined with volatile raw material prices, have created a difficult operating environment that has diluted the gains from top-line expansion.
The backstory
Greenlam has been aggressively diversifying its portfolio to reduce dependency on the laminate cycle. The chipboard business has reached an operating profit milestone with Rs 8.7 crore in EBITDA (pre-forex), validating the company's recent capital expenditure strategy. This transition is critical as the core laminate business faces a cyclical slowdown.
Capacity Expansion Update
The company is set to boost its production capacity by adding 2.0 million sheets at its Naidupeta plant in Andhra Pradesh. This brownfield expansion is expected to begin commercial production in Q4 FY27, which may improve economies of scale once operational.
Risks to watch
Investors should monitor the company's ability to pass on rising freight costs to customers. If geopolitical tensions persist, margin volatility could continue through the next two quarters. Additionally, the recovery in laminate volumes remains a primary concern for overall growth.
What to track next
Watch for the ramp-up of the Naidupeta expansion and whether the chipboard segment can maintain its triple-digit growth trajectory to offset potential weaknesses in the laminates business.