The company said it will spend Rs 29 crore for installation of mat heating system and Rs 26 crore on the installation of a wax emulsion system. The capital expenditure shall be funded through a mix of internal accruals and debts, it added.
In the past three months, the stock has rallied 160 per cent as compared to a 25-per cent rise in the S&P BSE Sensex.
The company said its business has improved considerably in the July-September quarter (Q2FY2021). MDF volumes have grown by 31.3 per cent year-on-year (YoY) and operating margins have improved by 220 basis points (bps) to 21.8 per cent. The company had a small volume de-growth of 4 per cent in plywood segment, however, operating margins have increased by 430 bps to 16.4 per cent.
Overall EBITDA (earnings before interest, taxes, depreciation, and amortization) margins were up by 320 bps YoY at 20.5 per cent due to wastage reduction and cost optimisation in both plywood and MDF segments.
The management is hopeful that the government's focus on reduction in cost of finance for the rural and economically weak Indians could benefit the company as a decline in the cost of home financing can strengthen the offtake of the company's products.
"Our emphasis on widening the distribution reaches and focus on small towns and cities is yielding results both on volumes and reduction in working capital investment. We are optimistic on sustainable growth in future quarters," said Shobhan Mittal, Managing Director and CEO, Greenpanel Industries, while announcing Q2FY21 results on October 30.
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