Greenply Industries Ltd - Q1 FY22 Result Report - YES Securities

(Rating: BUY, TP: Rs240 Upside 24%)

- Greenply Industries Ltd (GIL) announced its foray into Medium Density Fiber (MDFs). Company will set-up 800cbm/day capacity at Vadodara by incurring total capex of Rs5.48Bn. With plant expected to begin commercial operations from March'23, we reckon MDF to operate at ~50% utilization in its first year of full operations i.e FY24.

- We believe that Plywood will continue to remain company's flagship product, which should report volume growth of 16% CAGR over FY21-FY24 and revenue growth of 17% over similar period on the back of sharp revival in real-estate industry coupled with higher demand for branded plywoods. GIL's total revenue are expected to grow by 21% CAGR over FY21-FY24E to Rs20.9 Bn

- With input cost stabilizing and better utilizations from new plywood unit, operational margins of plywood are expected to expand. We believe plywood EBITDA margins to come in at 12%/12.7% in FY23E/FY24E respectively. Company's overall EBITDA are likely to report 35% CAGR over FY21-FY24E.

Valuations: AT CMP, GIL is trading at 13.7x its FY24E EPS of Rs14. We continue to value the company at 17x on FY24E EPS arriving at a target price of Rs240/share- indicating an upside of 24%. Hence, we maintain our "BUY" rating on the stock.

Shares of Greenply Industries Ltd was last trading in BSE at Rs. 193.1 as compared to the previous close of Rs. 203.1. The total number of shares traded during the day was 39314 in over 1593 trades.

The stock hit an intraday high of Rs. 201.5 and intraday low of 192. The net turnover during the day was Rs. 7663245.

Source : Equity Bulls

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