Buy Greenply Industries; target of Rs 387: Anand Rathi

Anand Rathi's research report on Greenply Industries

Greenply Industries’ Q4 revenue/gross profit/EBITDA grew 8.2%/16.5%/18.1% y/y to Rs6.5bn/2.7bn/681m. Easing input cost helped the gross margin to inch up 297bps y/y to 41.5%. Higher employee and other expenses restricted the EBITDA margin improvement at 88bps y/y to 10.5%. Adj. PAT fell 29.9% y/y to Rs166m. PAT declined mainly due to increased losses in JV/subsidiary companies apart from higher, 45.8% y/y, interest expenses, partly offset by increased, 61.3% y/y, other income. Management expects healthy, double-digit revenue growth, supported by plywood/MDF businesses, with EBITDA margins exceeding 10%/16%, respectively, in FY26.

Outlook

Management expects healthy revenue growth with margin tailwinds. We expect 12.7%/52.9% revenue/earnings CAGRs over FY25-27. The stock trades at 24.1x/17.5x FY26e/27e earnings. We retain a Buy rating on the stock, with a 12-mth TP of Rs 387 (earlier Rs408), 22.5x FY27e earnings (22.5x FY27e earnings).

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