Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Greenply Industries - Initiating Coverage - Angel Broking

Posted On: 2018-03-05 10:10:50

The plywood maker for growing India

Greenply Industries Ltd (GIL) manufactures plywood & allied products and medium density fibreboards (MDF). GIL offers a portfolio of residential and commercial products comprising plywood & block boards, MDF, wood floors, flush doors and decorative veneers. GIL offers wood floors under the brand name Green Floormax. Currently, GIL has ~26% market share in the organized plywood industry.

Shifting of trend towards the organized plywood sector to propel growth: Indian plywood industry is estimated at Rs. 18,000cr (largely unorganised), and accounts for ~75% share of revenues. With the implementation of GST, the share of organized players is expected to improve, which would benefit branded players like GIL. Hence, we believe that GIL is best placed to gain market share on the back of better product quality, strong brands and wide distribution network. Currently, the company has ~26% market share in the organized plywood industry.

Capacity addition in MDF segment a growth catalyst: GIL has added new MDF plant in Andhra Pradesh, which would increase the capacity from 1,80,000 CBM to 540,000 CBM (new plant can generate revenue of Rs. 800-900cr). Total capex required for this MDF plant is Rs. 700cr out which the company has already spent ~Rs. 550cr till 1HFY18 and the balance would be spent by FY2019. The commercial production would start from 2QFY19, boosting the company's profitability. Currently the company has ~30% market share in MDF.

Pradhan Mantri Awas Yojana (PMAY) - trigger for MDF segment: The government has set an aim to build ~1.2cr houses by 2022 under PMAY, which would increase the demand for plywood industry for making doors and furniture. Moreover, in the lower segment, demand for MDF would increase for these houses.

Strong brand visibility with wide distribution network: GIL has been continuously focusing on strong brand visibility. Historically, the company has been spending around 3% (% of sales) on ad spends to increase its brand visibility. Currently, GIL's products (Plywood and MDF) are available across India through 30-35 branches, which address more than 2,000 dealers and nearly 10,000 retailers.

Outlook and Valuation: We expect GIL to report net revenue CAGR of ~14% to ~Rs. 2,478cr over FY2017-20E mainly due to healthy growth in plywood & lamination business and MDF (capacity expansion) on the back of strong brand and distribution network. On the bottom-line front, we expect ~13% CAGR to Rs. 179cr over the same period owing to strong revenue and better margins in MDF business. At the current market price of Rs. 340, the stock trades at PE of 23.3x its FY2020E EPS of Rs. 14.6. We initiate coverage on GIL with Buy recommendation and Target Price of Rs. 395 (27x FY20E EPS), indicating an upside of ~16% from the current levels.

Shares of GREENPLY INDUSTRIES LTD. was last trading in BSE at Rs.345 as compared to the previous close of Rs. 338.85. The total number of shares traded during the day was 1150 in over 95 trades.

The stock hit an intraday high of Rs. 345 and intraday low of 332.05. The net turnover during the day was Rs. 386928.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Dhunseri Investments Ltd acquires 4643 shares of Dhunseri Petrochem Ltd through Market Purchase

Pennam Sudhakar disposes 16700 shares of CIGNITI TECHNOLOGIES LTD

SITA DEVI sells shares of MAHAAN FOODS LTD through inter-se transfer

GPT Infraprojects Ltd Bags Order Valued at Rs.81.50 crore

Indian biosimilar market to be worth $40 billion by 2030

Result Update: Mirza International Ltd - BUY - TP Rs.104 - Kotak

Result Update: Asian Granito India Ltd - REDUCE - TP Rs.185 - Kotak

Result Update: Va Tech Wabag Ltd - BUY - TP Rs.378 - Kotak

Result Update: PNC Infratech Ltd - BUY - TP Rs.197 - Kotak

Result Update: KNR Constructions Ltd - BUY - TP Rs.235 - Kotak

Result Update: Talbros Automotive Ltd - BUY - TP Rs.400 - Kotak

Result Update: Sterling Tools Ltd - ACCUMULATE - TP Rs.361 - Kotak

Result Update: Engineers India Ltd - BUY - TP Rs.155 - Kotak

Result Update: Century Plyboards Ltd - BUY - TP Rs.232 - Kotak

Result Update: Eveready Industries India Ltd - BUY - TP Rs.310 - Kotak

Result Update: The Phoenix Mills Ltd - BUY - TP Rs.707 - Kotak

Result Update - Voltamp Ltd - BUY - TP Rs.1320 - Kotak

Result Update: Berger Paints Ltd - SELL - TP Rs.280 - Kotak

Company Visit Note: Ratnamani Metals & Tubes Ltd - NOT RATED - Kotak

Result Update: Insecticides India Ltd - BUY - TP Rs.643 - Kotak

Result Update: Nagarjuna Construction Company Ltd - BUY - TP Rs.135 - Kotak

Result Update: Shankara Building Products Ltd - BUY - TP Rs.1537 - Kotak

Result Update: Dollar Industries Ltd (DIL) - BUY - TP Rs.390 - Kotak

Result Update: Greenply Industries Ltd - ACCUMULATE - TP Rs.161 - Kotak

Result Update: Central Depository Services (India) Ltd - BUY - TP Rs.290 - Kotak

Result Update: Blue Star Ltd - BUY - TP Rs.655 - Kotak

Result Update: Bluedart Express Ltd - ACCUMULATE - TP Rs.2875 - Kotak

Result Update: Mahindra Holidays & Resorts Ltd - BUY - TP Rs.315 - Kotak

Result Update: GHCL - BUY - TP Rs.270 - Kotak

Result Update: NIIT Ltd - BUY - TP Rs.110 - Kotak

Result Update: Quess Corp Ltd - BUY - TP Rs.1072 - Kotak

Result Update: Praj Industries Ltd - REDUCE - TP Rs.108 - Kotak

Result Update: Supreme Industries Ltd - BUY - TP Rs.1205 - Kotak

Granules India Ltd Q2 consolidated PAT climbs to Rs. 60.26 crores

Result Update: Kansai Nerolac Paints Ltd - BUY - TP Rs.485 - Kotak

Result Update: Zensar Technologies Ltd - ACCUMULATE - TP Rs.257 - Kotak

Bajaj Auto Ltd - OPM below estimate; Retain Accumulate - Emkay

Result Update: Bodal Chemicals Ltd - ACCUMULATE - TP Rs.130 - Kotak

Result Update: Kajaria Ceramics Ltd - BUY - TP Rs.500 - Kotak

Result Update: Persistent Systems Ltd - BUY - TP Rs.870 - Kotak

Auto Industry Volume Update: September 2018 - Kotak

Sector Update - Natural Gas - Kotak

Company Visit Note: Jindal Stainless Ltd - NOT RATED - Kotak

Company Update: Bajaj Electricals Ltd - ACCUMULATE - TP Rs.545 - Kotak

Telecom: 2QFY19 preview - no respite - Kotak

Sector Update: Natural Gas - Kotak

Company Update: NBCC (India) Ltd - BUY - TP Rs.95 - Kotak

Sector Update: Paper Industry - Kotak

Management Meet Update: Maharashtra Seamless Ltd - BUY - TP Rs.805 - Kotak

Mid-Year FY19 Bank Outlook: Stress in Non-Corporate Segments - India Ratings and Research







Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018