Shares of Greenpanel Industries Limited (GIL) have doubled investors' money in the last 12 months. In the past year, the share price jumped from Rs 233 to Rs 551, logging around 136 per cent return in this period.
Recently, the company reported earnings for the quarter ended March 2022. Greenpanel Industries posted 42.7 per cent increase in consolidated net profit to Rs 80.5 crore on a 20.9 per cent rise in net sales to Rs 470.08 crore in Q4 FY22 over Q4 FY21.
On the segmental front, Medium-density fibreboard (MDF) sales came in at Rs 389.81 crore and Plywood sales stood at Rs 70.46 crore in the fourth quarter.
With a market capitalisation of Rs 6,425 crore, the shares stand higher than 100-day and 200-day moving averages but lower than 5-day, 20-day, and 50-day moving averages
Yes Securities noted that Greenpanel Industries Ltd (GIL) delivered another set of strong numbers in Q4FY22. At current capacity, GIL can deliver MDF volumes of 660,000cbm and with MDF displacing low and mid-end plywood coupled with a strong uptick in the real estate segment, we reckon GIL to reach its peak utilisation by FY24E, it said.
"With no major capacity coming up in FY23 and imports likely to remain below 12%, we expect MDF prices to remain sturdy at Rs30,500/cbm. Post which, prices are likely to soften as supply should grow owing to newer upcoming capacities," it added.
The brokerage house highlighted that the company is planning another capex which will be funded via internal accruals and will cater to the incremental growth going ahead.
"With expectations of higher prices & margins to sustain, we revise our EPS upwards to Rs28.4/Rs30.5 in FY23E/FY24E respectively. We continue to value the company at 22x on FY24E EPS & upgrade our target price to Rs 671. Hence, we maintain our BUY rating on the stock," Yes Securities said.
Greenpanel Industries is India's largest manufacturer of wood panels. Its manufacturing plants in Uttarakhand and Andhra Pradesh make medium-density fibreboard (MDF), plywood, veneers, flooring, and doors.
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