Greenpanel Industries Ltd. share price target

In Q3FY23, Greenpanel Industries (GREENP) reported flat consolidated revenue YoY with MDF volumes declining 2.1% YoY (-6.3% QoQ) as domestic volumes fell 7.4% YoY (-6.7% QoQ) due to rise in imports. Consolidated operating margin declined 264bps YoY (-136bps QoQ) on lower margin in MDF/plywood segment resulting in EBITDA/PAT decline of 11.1%/20.9% YoY, respectively.

Increase in MDF imports could pose a threat to domestic price realisation, if not curbed

Q2 revenue increased 8% YoY to Rs 4.6bn led by 14% growth in MDF, though plywood business was down 17%

Greenpanel Industries (GREENP) has reported Q2FY23 consolidated operating margin
decline of 170bps YoY to 24.7% due to margin decline of 100bps/630bps YoY in MDF/plywood segment on account of RM cost pressure.

Our positive stance on Greenpanel Industries (GREENP) stands bolstered post our
interactions with dealers and industry participants indicating MDF demand remains
healthy and continues to grow in double digits YoY (in the ongoing quarter too) despite a YoY strong base.

Plans to expand MDF capacity by adding 231,000cbm at a capex of Rs 6bn, for commercial production in Q2FY25

Well placed to capitalise on near-term MDF demand traction, with strong guidance of 15-18%/15% volume growth in FY23/FY24

GREENP well placed to capitalise on near-term MDF opportunity with management guiding for 15% volume growth in FY23E

Q1 consolidated revenue growth robust at 242% YoY with 272%/132% rebound in MDF/plywood segments off a soft base