Greenpanel Industries Ltd

Over the last two years, multiple new capacities have been added in the MDF sector, particularly in the organised space.

Dear Shareholders,

It is a pivotal moment at Greenpanel, as we continue to strengthen our position in India's building materials space. The MDF industry remains one of the most promising segments within India's building materials space, supported by strong fundamentals and shifting consumer preferences.

The Indian MDF market is on a strong growth trajectory, expected to reach Rs. 9,400 crore by 2030, driven by a robust CAGR of 12.4% from 2023 to 2030, largely propelled by rising demand in the furniture and construction sectors.

Several factors continue to drive this growth: increasing urbanisation, rising disposable incomes, a growing preference for readymade furniture, and greater awareness of MDF's sustainability benefits over solid wood. Additionally, e-commerce MDFhasplayedasignificant adoption, with demand for ready-to-assemble furniture rising significantly.

The past year presented challenges, including intensified competition, increased imports, and volatility in raw material prices. Over the last two years, multiple new capacities have been added in the MDF sector, particularly in the organised space. However, the overall market size has not grown at the same pace, leading to pricing pressure. Additionally, the delay in implementing the Bureau of Indian Standards (BIS) quality norms postponed much-needed relief from import competition. With the new norms implemented with effect from February 2025, we anticipate a more favourable business environment for domestic manufacturers.

We strategically balanced pricing and market share, ensuring that while the competitive landscape evolved, we maintained financial discipline.

While margins were impacted by elevated timber prices, we are now seeing stabilisation in raw material costs and a positive demand trajectory.

We continue to be India's largest MDF producer and a leader in innovation. Our leadership is built on a strong distribution network, superior product quality, and a commitment to customer satisfaction. With the commissioning of our new MDF Line 3 in Andhra Pradesh, we are now positioned to cater to the thin MDF segment, which constitutes nearly 30% of the overall MDF market. This expansion enables us to serve both domestic and export markets more effectively.

Our commitment to strengthening brand recall and expanding our reach remains steadfast. Over the past year, we have invested significantly in Above the Line (ATL) branding, moving beyond traditional Below the Line (BTL) activities. Our television campaigns have reinforced our market presence, and our continued association with IPL's Delhi Capitals has enhanced brand visibility.

On-ground activations and dealer engagements remain critical. We have actively strengthened partnerships with key stakeholders, ensuring that our dealer and influencer networks remain strong and engaged.

We remain financially robust. Our prudent financial management has allowed us to invest Rs.120.75 crore in fixed-income bonds with a YTM of 8.23% to generate positive arbitrage over traditional fixed deposits.

Additionally, we have realigned our banking structure, transitioning from Consortium Banking to Multiple Banking to optimise cost efficiencies. We have also expanded our international footprint by establishing a new overseas branch in Dubai to cater to export markets in the Middle East.

Sustainability remains a key focus for Greenpanel. Our efforts in responsible sourcing and agroforestry-based raw material procurement reinforce our commitment to environmental stewardship. This year, we increased our utilisation of mixed waste wood, including mango and cashew, and expanded our use of bio-based fuels such as bagasse and mustard husk.

We are also exploring the adoption of renewable energy solutions, including solar power integration at our plants.

While the financial impact remains marginal due to regulatory constraints, its environmental benefits align with our long-term sustainability vision.

On the CSR front, our commitment to community welfare remains strong. We have initiated various social projects in the areas of healthcare, education, rural development, art & culture, disaster management and more. Our collaboration with Sri Venkateswara Pranadana Trust for promoting healthcare activities in Tirupati, with Srinivasan Services Trust for rural development project and with Akshaya Patra to provide food and nutrition support to school children are further steps toward creating meaningful social impact.

Our future strategy includes increasing domestic market penetration, optimising capacity utilisation, and expanding our portfolio of value-added products. We are confident in our ability to leverage our strengths and seize the limitless opportunities ahead.

Our journey of growth and innovation is driven by the trust and dedication of our employees, customers, partners, and shareholders. Your persistent support continues to strengthen our vision and propel us forward. As we step into another promising year, We look forward to achieving new milestones together, fostering innovation, and creating lasting success.

Sincerely,