Greenlam Industries shows green shoots of recovery

Abhishek Law Kolkata | Updated on July 31, 2021

Saurabh Mittal, MD and CEO of Greenlam Industries

The company which reported consolidated revenues of ₹336 crore is expecting to “maintain similar numbers” in the coming quarters

Surfacing solutions company, Greenlam Industries is witnessing business recovery from July onwards, both on the manufacturing front and demand side. Despite some Asian markets looking “erratic” because of resurgence of Covid cases, the overall outlook across export and India markets remain positive.

The company which reported consolidated revenues of ₹336 crore is expecting to “maintain similar numbers” across the coming quarters unless a third wave of infections led to disruptions.

According to Saurabh Mittal, MD and CEO, “things look quite okay” and there are no disruptions on the supply side. In the domestic market, sale to construction or project sites continue and retail sales – which account for majority of the laminate and veneer offtake - have resumed with most markets opening-up June onwards. “Residential demand is back and the improving home sales numbers say so too. Replacement sales are inching back to normal,” he told BusinessLine while referring to the company’s core laminate business.

Also read: Greenlam Industries faces uncertainty in domestic markets

Decorative wood veneer, door and flooring verticals – which are about 5 per cent of the company’s turnover - have also started witnessing recoveries on a year-on-year basis and Mittal remains “quite positive” on the “long term outlook” of these verticals.

Price hikes to the tune of 7-8 per cent have also been initiated – across verticals like veneers, door and flooring - September 2020 onwards in view of rising raw material costs. Laminate prices in the domestic market are also up 10-12 per cent over a nine month period. “In Q1FY22 (April to June), the verticals have performed reasonably and as markets open up, post uncertainties, we are confident of the new verticals doing well. Price hikes here are expected to come into effect August onwards,” Mittal said.

In terms of manufacturing, laminates are operating at full capacities; while in veneer and floorings, capacity utilizations are lower.

International Business

According to Mittal, international businesses reported around ₹₹200 crore of revenues in Q1FY22 and Greenlam expects to maintain the run rate at least in the September-quarter.

Asian markets like Malaysia and Indonesia remain quite “erratic” because of sudden surge in Covid cases there; but the company has factored in issues like there being some shut-downs and subsequent open-ups during the year. Challenges also persist on availability of shipping containers.

The company will focus on Russia, Poland and other CIS countries. Last fiscal, it set up two subsidiaries - one each in Russia and Poland – and assigned dedicated teams for “deeper presence in these markets”. “We are quite well spread across geographies. We are factoring in issues like some closures and opening ups as Covid cases go up or down in countries or regions. Overall, the export demand looks positive with Europe, UK and the USA opening up again, and there being orders coming in from Asian nations,” he said.

Published on July 31, 2021

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