Buy Greenpanel Industries; target of Rs 310: Prabhudas Lilladher

Prabhudas Lilladher's research report on Greenpanel Industries

We downward revise our FY26/27 earnings estimates by 4.4%/6.5% to account for weak performance in Q4FY25 and rising domestic competition. GREENP has guided for domestic/export MDF volume growth of 28%/~12% (YoY) in FY26. MDF domestic realization increased by 7.2% YoY in Q4FY25 and margins stood at 16.3%, due to Export Promotion Capital Goods (EPCG) scheme incentives of Rs350mn and expect Rs510mn over FY26/27. The company expects MDF/plywood margin of 12%/7-8% in FY26. We had considered consolidated EBITDA margin of 11.8% with 1) steep increase in timber prices, 2) higher OEM vol in the MDF segment, 3) lower domestic volumes, and 4) lower realization with competition in MDF. Timber prices will continue to impact margins in coming quarters. The management has indicated moderation in timber prices only with new crop arrival from FY26.

Outlook

We estimate revenue/EBITDA/PAT CAGR of 19.9%/62.1%/70.6% over FY25-27E with MDF volume CAGR of 21.2%. We maintain ‘BUY’ rating with a TP to Rs310 (Earlier Rs330), based on 18x FY27E earnings.