The shares of Greenply Industries have witnessed an impressive 11 percent rally over the past two days, reaching Rs 182, following the company’s robust performance in the July-September quarter of 2023 (Q2FY24). This surge is attributed to significant growth in plywood volumes and a substantial increase in Medium Density Fiberboard (MDF) volumes.
The stock of this small-cap plywood manufacturer has seen a 24 percent increase year-to-date, outperforming the benchmark Sensex, which rose by 6 percent. Greenply shares are currently trading close to their 52-week high of Rs 185, reached on June 27, 2023.
In Q2FY24, Greenply’s consolidated revenue experienced a remarkable 23 percent year-on-year (YoY) growth, driven by a 12 percent YoY increase in ply volume. The company’s management remains optimistic and has provided guidance for an 8 percent volume growth for the full year of FY24.
Greenply’s newly launched MDF segment, which operated for only 55 days in Q1FY24, reported revenue of Rs 8,970 crore in the September-ended quarter.
Gross profit also showed significant growth, increasing by 24 percent YoY to reach Rs 242 crore in Q2FY24, compared to Rs 195 crore in the same period the previous year.
Analysts at JM Financial have issued a ‘buy’ recommendation for Greenply, setting a target price of Rs 300 per share. They stated, “We broadly maintain our FY24-26 EPS estimates to reflect the current quarter performance, building in the company’s price-to-earnings (PE) ratio over FY24-26 at 47.1 times (x)/10.9x.”
Greenply Industries is a company engaged in the manufacturing of plywood, offering a product range that includes ply boards, laminates, decorative veneers, particle boards, and prelam particle boards/MDF. The company operates in the plywood and allied products, medium-density fiberboard, and allied products business segments.
During the September-ended quarter, promoters, mutual funds, and foreign investors slightly reduced their stakes in the company.
Promoters reduced their holdings from 52.14 percent in the previous quarter to 52.12 percent in the September-ended quarter.
Mutual Funds also trimmed their stake from 32.21 percent in June 2023 to 32.2 percent in September 2023. Additionally, foreign investors reduced their holdings from 2.15 percent in June 2023 to 2.07 percent in September 2023.
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