Buy Greenply Industries; target of Rs 131: Anand Rathi

Anand Rathi 's research report on Greenply Industries

Greenply’s Q2, though weak (revenue/PAT down 22%/30% y/y), recovered faster than expected, driven by both India (107% utilisation) and Gabon (64% revenue growth). Management expects the improved balance sheet (net WC, debt) to be maintained and aims at a 400bp margin expansion and to turn debt-free by FY23.

Outlook

Considering Greenply’s leading position in plywood, backward-integration, better balance-sheet and attractive valuations (~9x FY22e P/E), we retain a Buy on the stock, with a target of Rs131 (14x FY22e P/E), earlier Rs110. Domestic plywood recovery, ramp-up at Gabon are key monitorables.