Investec maintains a ‘Buy’ rating on Greenply Industries, with a target price of ₹420, implying a potential upside of 32.8% from the current market price of ₹316.20. Following a management interaction, the brokerage remains optimistic about the company’s growth prospects despite certain operational challenges.
Key Takeaways:
- Minimal impact of Gujarat MDF plant shutdown: Management anticipates only a limited effect on sales due to the temporary closure of the Gujarat Medium-Density Fibreboard (MDF) facility.
- Furniture fittings JV ramp-up: Greenply is bullish on the furniture fittings joint venture. The company has set a revenue target of ₹100 crore for FY25, with the potential to scale up to ₹800-900 crore annually in the long term.
- Encouraging MDF price hikes: Recent increases in MDF prices have been positively received, with management expecting further hikes in the near future. However, the sustainability of these price hikes will be a key metric to monitor.
Investec believes Greenply’s strategic focus on its furniture JV and pricing strategies positions it well for future growth. However, the brokerage notes the need to keep an eye on the company’s ability to sustain price increases in a competitive market.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.