Greenply Industries Ltd - Q3 FY21 Result Update - YES Securities

(Rating: BUY, TP: Rs 177, Upside 29%)

- Although ply volumes for Greenply at 14 msqm during Q3FY21 witnessed decline of 2.4% y/y, it was better than our estimates of 12.8 msqm (outperformance primarily in outsourced segment which grew by ~17% y/y). Further, operational margins for the company continues to inch upwards - at 12.3% during Q3FY21 (+76.5 bps y/y) and 77 bps higher than our estimates. Greenply is striving to drive the same up to 14-14.5% by FY23E.

- Going ahead, we estimate sales/EBITDA/PAT CAGR of 19%/34%/49% over FY21E-FY23E. Further, our long term investment thesis remains intact as we believe that 1. Brand leveraging would drive asset light growth in future, 2. Gabon unit would act as supporting pillar for growth, and 3. High entry barriers in plywood industry would protect existing margins.

- Assigning DCF derived P/E multiple of 14.5x on FY23E EPS of Rs 12.2, we maintain our TP of Rs 177 and we maintain our BUY rating on the stock.

Shares of GREENPLY INDUSTRIES LTD. was last trading in BSE at Rs.164.45 as compared to the previous close of Rs. 137.05. The total number of shares traded during the day was 609695 in over 8740 trades.

The stock hit an intraday high of Rs. 164.45 and intraday low of 140.25. The net turnover during the day was Rs. 95503670.

Source : Equity Bulls

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