Greenply Industries Ltd. share price target

GIL's stricter working capital control and cost has brought about a strength in balance sheet. The continued demand from Europe and newer areas will hold the key for Gabon, going ahead, albeit the management has guided for muted H1FY22 given logistic issues. Furthermore, while plywood will witness decent growth on a benign base, GIL's relative market share and traction thereafter will be key for further rerating after sharp run up in share price. We maintain HOLD with a revised target price of | 230/share (22x...

GIL reported Q4FY21 consolidated revenue growth of 15% YoY backed by a 21% uptick in India business

Key takeaways from our interaction with the management of Greenply Industries (GIL).

GIL's stricter working capital control and cost has imparted strength to the balance sheet. We raise our FY21, FY22 earnings by 6%, 26%, respectively. The continued demand from Europe and newer areas will hold the key for Gabon, going ahead. Furthermore, while plywood is expected to grow handsomely on a benign base, GIL's relative market share, traction thereafter will be key for further rerating after sharp run up in share price of ~72% in last three months. We roll over to FY23 and maintain HOLD with a...

Greenply Industries' (GIL) consolidated Q3FY21 revenue dipped 2% YoY, bettering our estimate of a 6% drop.

We outline key highlights from our interaction with the management of Greenply Industries (GIL).

Plywood sales volumes declined 27.2% YoY at 11.1 million sq.mt. (MSM) in Q1FY21 (45.1% in H1 at 15.8 MSM) while realisations dipped 5.8% YoY to | 211/sq mt (decline of 3.1% YoY to | 215/sq mt in H1), given the product mix. GIL's own manufacturing facility is operating at 107% utilisation as of Q2FY21 (much improved from 50% utilisations in Q1). With reopening of economy and traction in metro cities, we expect the overall plywood segment to recover gradually. Additionally, it is strengthening its sales penetration via addition of dealers' network in the rural areas, which should...

Greenply Industries' (GIL) consolidated Q2FY21 revenue slipped 22% YoY, but still bettered estimates.

Key takeaways from our interaction with the management of Greenply Industries (GIL).

Gabon to recover faster. The Gabon operation was closed for only a week `in Apr'20 and is now ramping up well with face veneer supplies to Europe, the Mid-East, and India. Management expects a rise in face-veneer volumes in...

Greenply Industries' (GIL) consolidated Q1FY21 revenue declined 62% YoY as India sales dropped 65% due to the lockdown and Gabon subsidiary revenue fell 43%.

OINL: Gloomy outlook cut to REDUCE. Weekly Wrap: COVID spike worries markets. Greenply Ind: Lockdown saps Q4 performance. CPBI: Core business declines but MDF, laminates prop up margins

Key takeaways from our roadshow with the management of Greenply Industries (GIL).

Greenply Industries' (GIL) consolidated Q3FY20 revenue slipped 1% YoY, coming in below estimates.

In the plywood business, GIL's market share was at 26% of the | 4,500 crore organised plywood market (total plywood industry size: ~| 19,000 crore) with a pan-India network of 1,870 distributors/stockists, 6,000 retailers serviced by 27 branches. Currently, its product portfolio consists of 64%, 36% premium, mid-to-low segment plywood in volume terms (72%, 28% in value terms), respectively. To gain market share by increasing presence in the mid-to-low segment, GIL had earlier launched plywood under Bharosa & Jansathi brands. Going ahead, the management is aiming at premium, mid...

MTLM: India business steady; Gabon to lend growth impetus. IT Services: Positive readthrough from Accenture results. Infrastructure: NHAI call takeaways Order awards to gather pace from Q3

In our recent meeting, Greenply Industries' (GIL) management outlined the following targets for FY20: (1) India plywood business to grow 8-10% despite a challenging market, (2) India operating margins to expand 100-150bps to 10.5-11%, and (3) Gabon operations to ramp up substantially to ~Rs 2bn in revenues (+60% YoY) with ~18% (+200bps) operating margins.

Aims to achieve further growth through outsourcing Plywood sales volumes grew 4.1% YoY to 13.57 MSM (premium category contributed 64%) in Q1FY20 while realisations improved 3.3% YoY to | 222/sq mt. GIL's own manufacturing facility is operating at 139% utilisation as of Q1FY20. With capacity constraints in place, it plans to achieve further growth via outsourcing. It has already entered into a JV (30% ownership) for premium-end products (11 MSM plant capacity) that is expected to commence production by Q3FY20E & could ensure revenue worth | 100115 crore at peak utilisation for GIL. It is also planning to enter another JV...

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....