Greenply Q2 Results Review - Lower Than Anticipated Margin Hit Profitability: IDBI Capital

IDBI Capital Report

Greenply Industries Ltd.’s Q2 FY25 revenue was in line with our estimates while, Ebitda and profit after tax were below our estimates. Revenue grew 13% YoY to Rs 6.4 billion, led by healthy growth of 8% YoY in plywood segment and low base of MDF in Q2 FY24.

Ebitda increased by 19.3% YoY to Rs 576 million with Ebitda margin expanding by 49 bps YoY to 9.0%, driven by higher margins in plywood segment, although MDF margins dragged. Profit after tax stood at Rs 176 million, down 6% YoY impacted by higher finance costs (up 22% YoY).

Greenply incurred capex of Rs 250 million in H1 FY25 and aims to incur capex of Rs 400-450 million in H2 FY25 while maintaining net debt levels at Rs 4.5 billion. We cut our FY25 EPS estimates by 16%. We value the stock at PER of 25 times FY26 earnings per share, deriving a target price of Rs 340 and maintain our Hold rating on the stock as we await a better entry point.

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