Rs 35 to Rs 335: This stock turned into a multibagger in three years; fell for three straight sessions

Shares of multibagger Greenpanel Industries Ltd have delivered over 800% percent returns to investors in the last three years. The stock, which closed at Rs 35.2 on June 22, 2020 rose to Rs 333.70 today (June 23 2023), clocking 848% returns during the period. In comparison, Sensex has risen 78.47% in three years. In the current session, Greenpanel Industries stock fell 2% to an intraday low of Rs 320.75 on BSE. Earlier, the stock opened higher at Rs 332.05 against the previous close of Rs 330 on BSE.  The multibagger stock has lost 5.86% in the last three sessions.   

The share belonging to the woodpanel industry has lost 5.77% this year and fallen 26% in a year. Total 0.12 lakh shares of the firm changed hands amounting to a turnover of Rs 40.52 lakh in today’s session. Market cap of the firm fell to Rs 3967 crore.  The stock hit a 52-week low of Rs 255 on March 29, 2023 and a 52-week high of Rs 522.45 on July 22, 2022 

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In terms of technicals, the relative strength index (RSI) of the stock stands at 51.3, signaling it's trading in neither in the overbought and nor in the oversold zone. Greenpanel Industries shares have a beta of 0.8, indicating very low volatility in a year. Greenpanel Industries shares are trading higher than the 50 day, 100 day but lower than the 5 day, 20 day and 200 day moving averages.   

Meanwhile, YES Securities has retained a buy call on the Greenpanel Industries stock with a target price of Rs Rs449. 

“We have valued the stock at 20x on FY25E EPS & arrived at a target price of Rs449, retaining our BUY rating,” said the brokerage in a report. 

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"Though we remain positive on growth of Medium Density Fibreboard (MDF) industry which is likely to come in at  15% CAGR,  we  believe  upcoming  domestic  capacities  and  higher  imports  will  keep realizations & margins under pressure. We expect Greenpanel Industries MDF volumes to grow by 13% CAGR over FY23-FY25E on account of rapid acceptance of MDF in domestic market & realisations to degrow by 4%, hence revenue should grow by 9% CAGR over similar period. Margins are likely to contract to 24% in FY24E & FY25E, hence  MDF's  EBITDA  growth  will  be flattish over the next 2 years. For plywood, we reckon volume & revenue to grow by 7% CAGR over FY23- FY25E & margins should be 8%. Hence, overall, we expect Revenue/EBITDA/PAT to grow by 9%/5%/4% over FY23-FY25E. At  the current market price,  the stock  trades  at  P/E(x)  of  18x/15x  on  FY24E/FY25E  EPS  of  Rs 19/22, respectively," the report added. 

Systematix Institutional Equities has a target of Rs 439 on Greenpanel Industries stock.  

“We like Greenpanel for its market leadership in the fast-growing MDF industry (finding support from the rising acceptance, strong demand revival in housing units and readymade furniture) and robust financials,” Systematix Institutional Equities said in a report. 

Seven promoters held 53.10 per cent stake in the firm and 1,17,334 public shareholders owned 46.90 per cent or 5.75 crore shares for the quarter ended March 2023. Of these, 1.13 lakh resident individuals held 1.90 crore shares or 15.57% stake with capital up to Rs 2 lakh. Only five shareholders with 2.13% stake or 26.06 lakh shares held capital above Rs 2 lakh for the quarter ended March 2023.  

In the March quarter of last fiscal, Greenpanel Industries posted net profit of Rs 68.9 crore against Rs 80.6 crore profit during the quarter ended March 2022. Sales fell to Rs  449.9 crore in Q4 against Rs 473.7 crore during the quarter ended December 2022.     

For the fiscal ended March 2023, the firm reported profit of Rs 256.5 crore against a profit of Rs 240.5 crore in the year ago period. Sales rose to Rs 1802.2 crore in the last fiscal against Rs 1634 crore for the fiscal ended March 2022.   

About the Company   

Greenpanel Industries, previously known as Green Panelmax, is the largest manufacturer of MDF in India and Asia. Its manufacturing plants have a combined annual capacity of more than 6,66,000 cubic meters of MDF complemented by distribution network of 3,000-plus outlets spread across the country. The company has state-of-the-art manufacturing plants in Uttarakhand and Andhra Pradesh.  

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