Buy Greenpanel Industries; target of Rs 469: Anand Rathi

Anand Rathi's research report on Greenpanel Industries

Greenpanel Industries’ Q3 revenue/gross profit/EBITDA/PAT fell 6.8%/28%/71/69.3% y/y to Rs3.6bn/1.6bn/173m/85m. The poor showing stemmed from export volumes falling (due to unprofitable orders) while domestic volumes were flat. Rising timber costs squeezed the gross margin, leading to the EBITDA margin contracting. Capex pulled cash surplus down 36% y/y. Management is uncertain about its earlier FY25 guidance and expects greater volumes in FY26 on a pickup in demand and capacity added.

Outlook

We expect 12.5%/21.5% revenue/earnings CAGRs over FY24-27. At the CMP, the stock trades at 80.5x/29x/15.2x FY25e/26e/27e earnings. We retain our Buy recommendation, with a lower TP of Rs469, based on 22.5x FY27e earnings (earlier Rs528 on 22.5x FY27e earnings).