Automation to drive higher growth rate for India's MDF industry -Greenpanel CFO

Greenpanel Industries

13/06/2023 10:33

By Savio Shetty
       June 13 (Reuters) - India's furniture industry will
witness major changes with the entry of domestic organised and
international players bringing in more automation, driving
higher growth rates for the medium density fiberboard (MDF)
sector, a top executive at Greenpanel Industries Ltd  GREP.NS 
said on Tuesday. 
    "Automation will lead to higher growth rates for the MDF
industry since it is a raw material produced in fully automated
plants," Vishwanathan Venkatramani, chief financial officer at
India's largest manufacturer of MDF said in an interview on the
Reuters Trading India forum.
    MDF - used widely in furniture, sports equipment and shoe
heels - has lower structural defects as compared to plywood,
which is produced in a labour-intensive environment,
Venkatramani added. While MDF is primarily used in making
furniture, other applications are also growing at a significant
rate, he said.
    The wood panel maker does not expect any major change in the
current quarter which is normally a slow starter.
    Demand is expected to pick up from July and the company is
expecting a 12%-15% volume growth in fiscal year 2024 over 2023.
    While plywood is facing demand constraints due to a slowdown
in residential real estate, Venkatramani expects the outlook for
premium plywood to improve significantly over the next two to
three years. The company is projecting an 8%-10% volume growth
for plywood in fiscal year 2024.
    The Gurugram-based company recently reported tepid
fourth-quarter earnings, due to lower margins in MDF export
volumes and a cut in export realization.  urn:newsml:reuters.com:*:nL4N37512J
    Greenpanel was one of the key beneficiaries during the
COVID-19 pandemic as Indians' appetite for readymade furniture
grew rapidly.
    This fueled the company's stock price, which rallied 26
times from May 2020 to April 2022, eclipsing the near two-fold
rise in the Nifty Midcap 100 index  .NIFMDCP100  over the same
period.
    Overall, analysts currently have a bullish view on the
stock, with eight out of 12 rating it a 'buy', according to
Refinitiv Eikon data.
    
    
    
(Join Trading India, a chat room hosted on Refinitiv Messenger:
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 (Reporting by Savio Shetty in Mumbai; editing by Eileen Soreng)
 ((savio.shetty@thomsonreuters.com;))