Greenply Industries Q3 Results Review - Operating Performance Inline; Maintain Hold: IDBI Capital

IDBI Capital Report

Greenply Industries Ltd.'s Q3 FY24 operational performance was in-line with our expectations. The company achieved highest ever sales during the quarter to Rs 6,208 million (+45% YoY). Ebitda increased by 11% QoQ to Rs 568 million. Ebitda margins expanded by 71 basis point QoQ to 9.1% despite higher raw material prices and advertisement expenses.

Net debt increased by Rs 190 million to Rs 7,320 million. The company aims to offload majority stake in its Gabon business and transaction will get completed by the end of Q4 FY24 (Gabon has reported consistent losses).

We maintain our FY24/FY25 estimates and introduce FY26 forecast in this report. We now value the stock at price-to-earnings ratio of 18 times FY26 (earlier 15 times FY25) earnings per share and derive a target price of Rs 268 (earlier Rs 185) but maintain our 'Hold' rating on the stock as we await a better entry point.

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