Greenlam Industries - Entry Into New Segments To Fuel Growth: HDFC Securities

HDFC Securities Institutional Equities

We like Greenlam Industries Ltd. for its leadership positioning in laminates. However, we are cautious of plant ramp-up in the new ply and particle board segments (large capacities added in a short time).

We expect net debt/Ebitda to gradually reduce from an elevated level of 3.2x in FY24 to a comfortable level of 1.5 times in FY27E, owing to lower Capex and ramp-up of plants in new segments.

We maintain our Add rating on Greenlam, with a revised target price of Rs 625/share (33 times September-26E earnings per share versus March-26E EPS earlier).

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