Greenply Industries - Q2FY21 Company Update - ICICI Direct

Greenply Industries' (GIL) H1FY21 performance was more about balance sheet than P&L due to Covid-19 impact on overall demand as well as production. The company has reduced its consolidated debt by ~Rs. 73 crore in H1FY21 to Rs. 195 crore driven by strong receivables collection and moving to stricter working capital control. GIL's Q1 consolidated topline declined 22.3% YoY at Rs. 295.5 crore impacted by ~31% decline in standalone (plywood revenues) at Rs. 238.4 crore. Consolidated EBITDA was at Rs. 32.3 crore, down 27.9% YoY, with margins at 10.9%, down 90 bps YoY. PAT was down 30% YoY at Rs. 18.6 crore.

Valuation & Outlook

GIL initiative on stricter working capital control and cost rationalisation are praiseworthy amid challenging plywood demand. Gabon traction also looks healthy, albeit continued demand from Europe and newer areas will hold key. We await recovery in plywood segment (lion share of revenues) before turning constructive on the company. Hence, we maintain HOLD rating on the stock with a revised target price of Rs. 95/share (14x FY22E earnings).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_GreenplyInds_CoUpdate_Nov20.pdf

Shares of GREENPLY INDUSTRIES LTD. was last trading in BSE at Rs.83.6 as compared to the previous close of Rs. 80.6. The total number of shares traded during the day was 58654 in over 1250 trades.

The stock hit an intraday high of Rs. 85.4 and intraday low of 79.2. The net turnover during the day was Rs. 4805519.

Source : Equity Bulls

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