Greenlam Industries - Q2FY21 First Take: Sales in-line; beat on operating margins - YES Securities

- Revenue for quarter stood at Rs 2,893 Mn (est. of Rs 2,792 Mn), reporting a de-growth of 17.1% y/y but a strong recovery of 80.4% sequentially.

- Gross profit margins came in at 49% Vs 47.1% / 49.7% in Q2FY20 / Q1FY21 respectively. In absolute terms, gross profit stood at Rs 1,416 Mn - a degrowth of 13.8% y/y but a strong growth of 77% as compared to Q1FY21.

- Company reported EBIDTA of Rs 405 Mn (vs. est of Rs 348 Mn); a decline of 16.6% y/y. EBIDTA margins came in at 14% (est. of 12.5%) - an improvement of 8.3 bps y/y in a challenging environment.

- Net profit stood at Rs 186 Mn (vs. our est of Rs 131 Mn) as against Rs 275 Mn in Q2FY20 and loss of Rs 77 Mn in previous quarter.

- P&L performance for H1FY21 is supported by strong cash flows as CFO (pre-tax) stood at Rs 486 mn vs EBITDA of Rs 483 mn during the same period.

- Valuations - At CMP of Rs 751, company is trading at ~P/E of 13x on FY23E. We have a TP of Rs 1,031/share based on 25x P/E on FY22E. We would revise our estimates post earnings call scheduled on Nov 3 at 3.30 pm IST.

Shares of Greenlam Industries Ltd was last trading in BSE at Rs.755.4 as compared to the previous close of Rs. 769. The total number of shares traded during the day was 4 in over 4 trades.

The stock hit an intraday high of Rs. 765.9 and intraday low of 747.7. The net turnover during the day was Rs. 3029.

Source : Equity Bulls

Keywords