Sharekhan's research report on Greenlam Industries
The company is expected to benefit from sustained healthy demand environment in laminates post Q4FY2023 which would help achieve its realistic target of 10-12% y-o-y volume growth guidance for FY2024. Plywood units commence operations in June 2023 at an opportune time when Plywood prices recovering from H2FY2023. Plywood to add Rs. 200 crore and Rs. 400-450 crore revenues during FY2024 and FY2025. Management retained its consolidated revenue growth guidance of 20-25% y-o-y with OPM of 12-13%. Greenfield laminate and particle board capacities on track to start operations from Q2FY2024 and Q4FY2024.
Outlook
We retain a Buy on Greenlam Industries Limited (Greenlam) with a revised PT of Rs. 520, rolling forward our valuation multiple to FY2025E earnings and considering its strong growth outlook over FY2023-FY2025E.
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