Hold Greenply Industries; target of Rs 95: ICICI Direct

ICICI Direct's research report on Greenply Industries

Greenply Industries’ (GIL) H1FY21 performance was more about balance sheet than P&L due to Covid-19 impact on overall demand as well as production. The company has reduced its consolidated debt by ~Rs 73 crore in H1FY21 to Rs 195 crore driven by strong receivables collection and moving to stricter working capital control. GIL’s Q1 consolidated topline declined 22.3% YoY at Rs 295.5 crore impacted by ~31% decline in standalone (plywood revenues) at Rs 238.4 crore. Consolidated EBITDA was at Rs 32.3 crore, down 27.9% YoY, with margins at 10.9%, down 90 bps YoY. PAT was down 30% YoY at Rs 18.6 crore.

Outlook

Hence, we maintain HOLD rating on the stock with a revised target price of Rs 95/share (14x FY22E earnings).

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