Credit Rating

August 21, 2026 BSE Limited Na(cid:415)onal Stock Exchange of India Limited Phiroze Jeejeebhoy Towers Exchange Plaza, 5th Floor, Dalal Street Plot no. C/1, G Block Mumbai – 400001 Bandra – Kurla Complex , Bandra (E), Scrip Code: 542857 Mumbai – 400051 Symbol: GREENPANEL Dear Sir, Sub: Credit Rating Pursuant to Regula(cid:415)on 30 read with Para A of Part A of Schedule III of the Securi(cid:415)es and Exchange Board of India (Lis(cid:415)ng Obliga(cid:415)ons and Disclosure Requirements) Regula(cid:415)ons, 2015, this is to inform you that CARE Ra(cid:415)ngs Limited vide its press release dated August 20, 2026, has revised/reaffirmed the credit ra(cid:415)ngs for bank facili(cid:415)es of the Company as men(cid:415)oned below: Facili(cid:415)es Amount Rating Rating Action Long Term/Short Term Rs.160 crore CARE A+; Stable/ Reaffirmed; Outlook Bank Facilities (Enhanced from Care A1+ revised from Negative 120.00) Long Term Bank Rs.80 crore CARE A+; Stable Reaffirmed; Outlook Facili(cid:415)es revised from Negative Total Bank facilities Rs.240 crore A copy of press release dated August 20, 2026, is enclosed. Kindly take the above on records. Thanking you, Yours Faithfully, For Greenpanel Industries Limited Company Secretary and Compliance Officer ACS 18675 Encl. : As above Press Release Greenpanel Industries Limited August 20, 2026 S. Name of the Amount (₹ Facilities Rating2 Rating Action No. Regulator1 crore) Long-term / Short-term bank 1. RBI - - Withdrawn facilities 160.00 Long-term / Short-term bank CARE A+; Stable Reaffirmed; Outlook 2. RBI (Enhanced facilities / CARE A1+ revised from Negative from 120.00) Reaffirmed; Outlook 3. Long-term bank facilities RBI 80.00 CARE A+; Stable revised from Negative Details of facilities in Annexure-1. Rationale and key rating drivers CARE Ratings Limited (CareEdge Ratings) has reaffirmed ratings for bank facilities of Greenpanel Industries Limited (Greenpanel) at ‘CARE A+/ CARE A1+’ and simultaneously revised the outlook for long-term bank facilities from Negative to Stable. Reaffirmation of ratings for bank facilities of Greenpanel continues to draw strength from its established position in the domestic medium-density fibreboard (MDF) industry, strong brand image, extensive distribution network, and marketing support. Ratings also derive significant comfort from Greenpanel's large surplus liquidity and robust capital structure, despite the recently completed debt-funded capex. Ratings further factor in the strategic location of its manufacturing units, established raw material linkages, and the extensive experience of its promoters in the interior infrastructure industry. Revision of the outlook from Negative to Stable factors in the improvement in the operating margin in the range of 8%-9% over the last four quarters (Q2FY26-Q1FY27) after a subdued performance in Q1FY26 considering discontinuance of commercial grade MDF and lower share of value-added products. While overall financial performance remained impacted in FY26, due to abysmal Q1FY26, comfort is drawn from Greenpanel’s strong financial risk profile and debt coverage indicators. The MDF sales volume grew by 13% in FY26 y-o-y, supported by implementation of BIS certification from February 2025 and strong domestic demand. While the domestic sales volume grew by 12% in Q1FY27 y-o-y, overall MDF sales volume moderated slightly (by ~2%) owing to the absence of exports driven by the West Asia conflict. Furthermore, in view of no export and industry-wide price hike to pass on rise in chemical cost, the average sales realisation increased by ~11% in Q1FY27 y-o-y. CareEdge Ratings expects the company’s total operating revenue to witness growth supported by strong domestic demand for MDF and higher realisation. Operating margin is also expected to sustain supported by volume-led growth, gradual ramp-up of the enhanced facility in Andhra Pradesh (commissioned in March 2025) and better absorption of fixed overheads. Net debt / profit before interest, lease rentals, depreciation and taxation (PBILDT) is expected to improve to below unity in absence of major debt-funded capex in the near term. However, ratings are constrained by exposure of profitability to foreign exchange fluctuation and input price volatility, stabilisation risk of large-size brownfield expansion project, intense competition with capacity surpassing demand, and low-capacity utilisation. The withdrawal of rating (S. No. 1) is considering reclassification of these facilities from non-fund-based to fund/non-fund-based limit. Rating sensitivities: Factors likely to lead to rating actions Positive factors • Achieving the volume-driven growth in its total operating income (TOI) through sustained high-capacity utilisations (CU) while improving its operating profitability (PBILDT) margins and healthy return on capital employed (ROCE). • Improving total debt/PBILDT to below 0.50x while maintaining its comfortable overall gearing ratio at ~0.30x on a sustained basis. 1SEBI: Securities and Exchange Board of India; RBI: Reserve Bank of India; MCA: Ministry of Corporate Affairs; IRDAI: Insurance Regulatory and Development Authority of India; PFRDA: Pension Fund Regulatory and Development Authority 2Complete definitions of the ratings assigned are available at www.careratings.com and in other CARE Ratings Limited’s publications. 1 CARE Ratings Ltd. Press Release Negative factors • Inability to improve sales volume of MDF with sales realisation at below ₹25,000/CBM putting pressure on its profitability on a sustained basis. • Delay in stabilisation of newly implemented project, adversely impacting its ROCE and capital structure (overall gearing over 0.75x and net debt/PBILDT over 2x) on a sustained basis. Analytical approach: Standalone Outlook: Stable The outlook has been revised from Negative to Stable in view of sustained improvement in operating margin q-o-q after significant decline in Q1FY26. CareEdge Ratings expects the company shall continue to benefit from the strong market position of Greenpanel in the MDF sector supported with continued strong financial risk profile. Detailed description of key rating drivers Key strengths Strong position in domestic organised MDF industry with strong brand image Greenpanel is currently one of India’s largest MDF manufacturing companies commanding an established position in the organised MDF market and a strong brand presence. Greenpanel sells its entire product range under the brand ‘Greenpanel’. It enjoys healthy market share due to its superior product quality and continuous brand awareness initiatives. Unlike plywood, the MDF sector has fewer un-organised players, given the high capital requirement for setting up new plant. Extensive distribution network and marketing support Greenpanel has a PAN-India marketing network with seven branches, over 1,750 distributors/stockists, and 12,500 retailers (sales through dealers accounted for ~90% of total sales in FY26). Over the past, Greenpanel has strategically reduced its dealer/distributor network from over 2,500 due to merging its sales teams for plywood and MDF and with a view to focus on dealers having good payment track record, ensuring efficient working capital management. The sale to top 10 dealers accounted for only 17% of total sales in FY26, signifying diversified dealer network base. Greenpanel also has a presence in export markets with two overseas branches, which supports exports to nine countries. Satisfactory operating margin post subdued Q1FY26 After subdued financial performance in Q1FY26 primarily due to lower sales volumes following the discontinuation of commercial- grade MDF and elevated competition from imports ahead of the implementation of BIS norms in February 2025. However, volumes of commercial-grade MDF were gradually substituted by industrial-grade MDF, while the reduction in imports supported a recovery in sales volumes from Q2FY26 onwards. Consequently, operating margin also improved [Showing first 8,000 characters — download PDF for full document]