Greenply Industries Ltd. share price target

Greenply Industries (GIL) reported consolidated Q1FY20 revenue growth of 13%, with India plywood operations growing at 6.2% YoY.

Business outlook improving; demerger could boost valuations Greenply Industries (GIL) continues to see improving traction in plywood sales, clocking high single-digit growth in Q1FY20, per our channel checks. MDF too has seen traction in Q1 and prices here have stabilised. GIL is trading at attractive valuations and could command higher multiples post demerger MDF business (record date set for 15 Jul), as plywood carries a stronger ROCE and growth profile, especially with the ongoing ramp-up in Gabon operations....

Strong volume growth in plywood division in FY19 Plywood business revenues grew 26.7% YoY to | 380.8 crore driven by 23.9% volume growth at 17.2 million sq mt (MSM) while average realisation grew 1.4% YoY to | 220 /sq meter in Q4FY19. Despite plywood industry growing <5% YoY, GIL's plywood sales grew 19.6% YoY to | 1,372 crore in FY19. This was primarily on account of strong sales volume growth of 19.5% YoY to 61.0 MSM in FY19. Higher sales volume was as GIL got incremental market share on account of gain in market share due to stricter...

An inverted yield curve is indicating a slowing global economy. US Fed's dovish stance of no rate increase in CY19 led to decline in yields across the world. Equity markets also fell as growth slows. In the above backdrop, Indian yields were flat but INR appreciated as FPI inflows have continued. Indian equity markets also rose. Markets now await RBI policy on 4 April 2019. Given the extent of growth slowdown since the last policy and continued undershooting of...

Robust growth, better ROCE guided for plywood business We recently hosted Rajesh Mittal, JMD of Greenply Industries (GIL), who has been running the company's plywood division since inception and will continue...

ICICI Securities Ltd | Retail Equity Research Greenply Industries' (GIL) topline grew 15.9% YoY to | 462.9 crore on account of strong growth in plywood business EBITDA margins contracted sharply by 300 bps YoY to 12.6% on account of weak realisation in the MDF segment...

ICICI Securities Ltd | Retail Equity Research We attended the analyst meet of Greenply Industries (GIL). The key takeaways are: -i) MDF industry currently operates at 50% capacity utilisation, ii) the management has guided for ~60% blended utilisation for its MDF business while Andhra MDF plant is expected to reach breakeven at PBT level in FY20E, iii) on the plywood business, GIL will increase the proportion of outsourcing to 30% in the next three years and iv) the management has guided for | 1500-1600 crore revenues and 11.5% EBITDA margin for plywood business post de-merger. We maintain our...

CPI inflation plunged to 13-month low of 3.3% in Oct'18 led by decline in food inflation to (-) 0.9% in Oct'18 from 0.5% in Sep'18. On the other hand, core inflation went up to 6.3% in Oct'18 from 5.9% in Sep'18. Healthcare, household and personal goods along with higher prices of petroleum products drove the increase in core. With benign food prices and recent decline in international oil prices, CPI inflation is likely to remain below 4% in H2FY19. Hence, RBI is also likely to remain on hold....

ICICI Securities Ltd | Retail Equity Research Greenply Industries' (GIL) topline remained flattish YoY at | 448.3 crore on account of weak performance of the MDF division EBITDA margins contracted sharply by 500 bps YoY to 9.3% (our expectation: 12.6%) mainly on account of contraction in MDF division EBITDA margins (4.7% in Q2FY19 vs. 26.0% in Q2FY18) PAT significantly de-grew 60.8% to | 14.2 crore (our expectation: | 22.9 crore) due to sharp EBITDA margin contraction and high...

ICICI Securities Ltd | Retail Equity Research Greenply Industries' (GIL) topline grew 3.7% YoY to | 404.9 crore (our estimate: | 406.7 crore) led by the weak performance of the MDF division. MDF division revenues de-grew 30.1% YoY to | 91.1 crore (our estimate: | 116.7 crore) EBITDA margins contracted 113 bps YoY to 11.3% (our estimate: 14.0%) mainly on account of contraction in MDF division EBITDA margins by 240 bps YoY to 22.1%...