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Last Updated : Jun 14, 2018 04:01 PM IST | Source: Moneycontrol.com

Hold Greenply Industries; target of Rs 270: JM Financial

JM Financial recommended hold rating on Greenply Industries with a target price of Rs 270 in its research report dated June 01, 2018.

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JM Financial's research report on Greenply Industries


Greenply continued its weak performance with low-single-growth in plywood volume in 4QFY18 (led by low-end segment and a drop in realisations) while MDF volume fell 25% YoY on intense competition (took a series of price cuts in 4QFY18). Adjusted for GST refund (INR 170mn) and forex loss (on MDF borrowing), the ply/MDF segments’ EBITDA declined 23%/36% YoY. The impending demerger (premium plywood unit in Rudrapur will go to the MDF business; will need to create a new distribution set-up for ply) may result in a market share loss for Greenply.


Outlook


We now value Greenply using SoTP (plywood business at 16x; MDF at 20x) to arrive at a Mar’19 TP of INR 270. We remain cautious and maintain HOLD


For all recommendations report, click here


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First Published on Jun 14, 2018 04:01 pm
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