Buy Greenpanel Industries, target price Rs 430: HDFC Securities

HDFC Securities has buy call on Greenpanel Industries with a target price of Rs 430.The current market price of Greenpanel Industries is Rs 328.65. Greenpanel Industries, incorporated in the year 2017, is a Small Cap company (having a market cap of Rs 4039.96 Crore) operating in Building Materials sector.

Greenpanel Industries key Products/Revenue Segments include Fibre Board, Plywood, Grants, Export Incentives and Other Operating Revenue for the year ending 31-Mar-2022.

Financials

For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 464.92 Crore, down -1.34 % from last quarter Total Income of Rs 471.25 Crore and up 9.51 % from last year same quarter Total Income of Rs 424.55 Crore. Company has reported net profit after tax of Rs 72.46 Crore in latest quarter.

The company’s top management includes Mr.Shiv Prakash Mittal, Mr.Shobhan Mittal, Ms.Mahesh Kumar Jiwrajka, Mr.Salil Kumar Bhandari, Mr.Arun Kumar Saraf, Ms.Shivpriya Nanda. Company has S S Kothari Mehta & Co as its auditors. As on 30-09-2022, the company has a total of 12 Crore shares outstanding.

Investment Rationale

The brokerage likes Greenpanel for its leadership positioning in the high-growth MDF segment, superior margin, and working capital profile (most efficient among peers). Even on a high base of FY22, the brokerage estimates Greenpanel would deliver 11% MDF volume CAGR until FY25E,maintaining its industry lead. The company is also expanding the share of value added products (VAP), retail sales and marketing spend to counter the medium term competition impact on supply influx.

Promoter/FII Holdings
Promoters held 53.1% stake in the company as of September quarter, while FIIs owned 0% and DIIs 21.19 per cent.