Greenlam Industries Ltd. share price target

We attended the analyst meet of Greenlam Industries (GRLM) to gain comprehensive insights into the woodpanel segment and its demand-supply dynamics. The company has recently completed greenfield and brownfield expansions in laminates, plywood, and chipboards. The management expects...

Backed by its domestic business up 22.2% y/y, Greenlam’s Q1 revenue was up 11.4% y/y to Rs6.7bn. On lower input costs the gross margin expanded 102bps y/y to 53%.

Greenlam’s Q3 revenue stepped up 7% y/y to Rs6bn. Stable input costs led to a slight, 20bps y/y, better gross margin to 55%. Front-loading of certain costs w.r.t the particle board plant pushed EBITDA down 11% y/y to Rs635m.

Dismal Q3 on weak performance of laminates segment and slow ramp-up of plywood segment

Greenlam’s Q2 revenue climbed 12.8% y/y to Rs6.8bn. The 52% gross margin was broadly the same. EBITDA rose 7.7% y/y to Rs 814m, while PAT was significantly down 11.6% y/y to Rs 345m.

Weak Q2 on lower-than-expected laminate volume and slow ramp-up of plywood segment

We retain a Buy on Greenlam Industries Limited with an unchanged PT of Rs. 670, considering its strong earnings growth trajectory over FY2024-FY2026E.

Consolidated revenues were in line with estimates, at Rs. 605 crore (up 17.4% y-o-y) aided by 13%
y-o-y growth in laminates revenues (volume growth of 12% y-o-y) and contribution from plywood
segment.

? We retain a Buy on Greenlam Industries Limited with a revised PT of Rs. 670, assigning a higher valuation multiple considering its strong earnings growth trajectory over FY2024-FY2026E.

GRLM: Management meet: Topline to strengthen post capex drive

Greenfield laminate plant in Andhra Pradesh to aid market share gains for GRLM in both export and domestic markets

AL: Margins continue to improve, maintain BUY. GRLM: Soft quarter on tepid demand environment. ORCMNT: Topline muted as volumes decline. PRINCPIP: Lacklustre quarter on sustained market share loss

Q3 PAT missed our estimate by 31% on weak laminate volumes and sharp increase in capital charge

Relief in national and regional lockdowns led to restoration of demand during Q2 but sales were below pre-COVID levels. During the quarter domestic / international...

Domestic laminate revenues degrew by 65.7% y/y while international laminate revenues marginally declined by 12.9% y/y. Further on y/y comparison, domestic veneer/wood flooring/doors witnessed sharp decline in sales of 75.4%/70.9%/27.4% respectively. Accordingly, totalnetsalescameinatRs1,604mn(44.6%y/y). AlthoughGRLMmanagedtoreduceoperatingcostsby37% y/y,theverynatureoflaminateindustryremainsfixedcost...

We attended Greenlam Industries' (GRLM) analyst meet and outline management's outlook on growth across business segments.