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IDBI Capital Report
Greenpanel Industries Ltd.'s Q1 FY25 results were significantly below our and street estimates on all the parameters. Revenue de-grew by 6% YoY to Rs 3.6 billion, due to weak performance across segments. Ebitda declined 45% YoY Rs 360 million.
Ebitda margin contracted by 715 bps YoY to 9.9%, due to sharp margin contraction in MDF segment (down 830 bps YoY), driven by a sharp increase in wood prices (up 31% YoY) and lower volumes due to increased price competition.
Furthermore, the management has re-iterated a 15% volume growth for MDF segment in FY25 and expect Ebitda margin to remain above 16% unless it is forced to cut MDF prices.
We revise downwards our FY25 and FY26 EPS estimates by 21% and 15%, respectively. We are downgrading our rating from Buy to Hold with a revised target price of Rs 344 (earlier Rs 371), valuing the stock at 22 times FY26E earnings per share.
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