ICICI Direct's research report on Greenply Industries
Greenply Industries’ (GIL) topline grew 18.1% YoY to Rs 516.2 crore on account of strong growth in plywood business and better-than-expected MDF revenue growth. EBITDA margins contracted sharply by 273 bps YoY (227 bps contraction QoQ) to 10.3% due to low capacity utilisations at AP MDF plant and change in MDF sales mix with increase in export volumes. PAT declined 17.3% YoY to Rs 27.0 crore on account of higher finance cost.
Outlook
We remain positive on GIL on a medium to long term basis as the share of organised plywood players is set to expand with increasing compliance towards e-way bill, higher brand aspirations & GIL’s strong brand recall. However, due to MDF supply glut in domestic market, MDF prices could take some time to stabilise. Also, while MDF margins are expected to stabilise at ~17% in the interim, they are still below our initial expectations of 20-25%. We rollover our valuation on FY21E estimates & maintain HOLD recommendation on the stock with a TP of Rs 175/share (~13x FY21E EPS).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!