IGI Logo

Steady performance, margins to remain under check!

Result Synopsis

Greenlam Industries Ltd (GIL), registered a steady topline growth of 14%YoY & 10%QoQ. Laminates revenue grew by 14%YoY & 9.5%QoQ wherein volumes declined by 10%YoY & grew by 3.4%QoQ while realizations improved by 21%YoY & 5.6%QoQ. Other segment’s revenue reported a growth of 18.4%YoY & 15.7%QoQ to Rs468Mn. During the quarter Veneers/Floors/Door segment operated at capacity utilization of 37%/17%/11% respectively.

Laminates EBITDA margins came in at 12.1% as compared to 11.5%/12.4% in Q2FY22/Q1FY23, while Veneers & other segment registered an EBITDA loss of Rs32Mn Vs loss of Rs16Mn/25Mn in Q2FY22/Q1FY23 respectively. During the quarter, company did not take any price hikes & higher cost of Kraft & design paper weighed on laminates margins

Going ahead, company is confident of achieving a 25% topline growth in FY23 & laminates margins should be ~12-13%. GIL is expanding their capacities in Laminates, recently commenced Gujarat laminates plant, Plywood plant is expected to get commissioned by end of FY23, cumulatively management expects incremental revenue of Rs11-12Bn at peak utilization in coming years. Moreover, company’s particle board plant will get commissioned by FY24 end which will further accelerate GIL’s growth.

We expect Revenue/EBITDA/PAT growth of 27%/41%/37% respectively over FY22-FY24E & continue to value the company at P/E(x) of 25x on FY24E EPS of Rs14. Hence, we maintain our NEUTRAL rating on the stock.

Result Highlights

* Revenue stood at Rs5.18Bn, growth of 14%YoY & 10%QoQ. Laminates (91% of revenue) sales stood at Rs4.71Bn, reporting a growth of 14%YoY & 9.5%QoQ. Other segment’s revenue increased by 18%YoY & 15.7%QoQ.

* EBITDA margins came in at 10.4% in Q2FY23 as compared to 10.1%/10.7% in Q2FY22/Q1FY23 respectively. Absolute EBITDA grew by 17%YoY & 6.6% to Rs537Mn.

* Laminates margins came in at 12.1% in Q2FY23 as compared to 11.5%/12.4% in Q2FY22/Q1FY23 respectively.

* Net profit stood at Rs292Mn, a growth of 40%YoY & 19%QoQ.

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://yesinvest.in/privacy_policy_disclaimers
SEBI Registration number is INZ000185632

Above views are of the author and not of the website kindly read disclaimer