Buy Greenlam Industries; target of Rs 771: Anand Rathi

Anand Rathi's research report on Greenlam Industries

Greenlam’s Q3 revenue stepped up 7% y/y to Rs6bn. Stable input costs led to a slight, 20bps y/y, better gross margin to 55%. Front-loading of certain costs w.r.t the particle board plant pushed EBITDA down 11% y/y to Rs635m. Higher depreciation and interest on the commissioning of plants and prior-period tax adjustment pulled PAT down a significant 50% y/y to Rs125m. Outlook

We expect 21%/33% revenue/earnings CAGRs over FY24-27. At the CMP the stock trades at 61.7x/34.8x/21.9x FY25e/FY26e/ FY27e earnings. We retain our Buy recommendation with a 12-mth TP of Rs771, 30x FY27e earnings (earlier Rs801, 30x FY27e).

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