Hold Greenpanel Industries; target of Rs 373: Prabhudas Lilladher

Prabhudas Lilladher's research report on Greenpanel Industries

GREENP has guided for flat YoY domestic MDF volume growth for FY25, downward revised from 15-18% YoY for H2FY25 earlier. However, we have considered MDF volume growth at -3.8% for FY25. MDF domestic realization decreased 5.5% YoY in Q3FY25 due to competitive pricing. MDF exports were affected as the company operated on FOB basis and halted shipments to customers unwilling to absorb the significant rise in wood prices, resulting in reduced export revenue and volume.

Outlook

We are downgrading our recommendation to HOLD from BUY given the continued disappointing performance. We cut our FY25/FY26/FY27E EPS estimates significantly by 48.7%/43.8%/12.8% to factor in elevated timber prices and higher MDF capacity restricting realization to improve which we believe would continue for couple of quarters. Further, we revise TP to Rs373 (Rs427 earlier), based on 20x FY27E earnings.