Healthy Outlook ahead!
About the stock: Greenlam Industries manufactures a wide range of products spanning Laminate, particleboard, plywood, decorative veneer, engineered wooden floors & Doors for customers in over 120 countries.
• It is India’s leading global laminate manufacturer, with 17.8% market share in organised laminate market and >29% share in laminate exports.
Q4FY26 Performance: Greenlam’s consolidated topline for Q4FY25 stood at ₹857.7 crore, up 25.8% YoY. Laminate revenues at ₹658.5 crore, was up 14.4% YoY, driven by a 4.5% YoY volume growth to ~5.1 million sheets and an 11.7% increase in realization to ₹1,243/sheet. The Plywood & Allied segment revenue stood at ₹119.3 crore, up 17.9% YoY, with volumes up 43.5% YoY to ~2.2 MSM. Meanwhile, the Panel & Allied segment recorded revenue of ₹79.8 crore with a volume of 38,799 CBM, though realization dipped by 2.8% to ₹20,562/CBM. Consolidated EBITDA stood at ₹108.2 crore, with EBITDA margins at 12.6% (up ~323 bps YoY) as the laminate margins were at 18.1% (up ~440 bps YoY) whereas plywood segment reported EBITDA loss of ₹4.8 crore (vs. ₹3.2 crore loss in base). The company reported PAT of ₹40.5 crore. For FY26, revenue from operations stood at ₹3046.1 crore, up 18.6% YoY. EBITDA margin stood at 10.7% flat YoY. PAT stood at ₹56 crore, down 18.1% YoY.
Key Investment Thesis
• Healthy growth ahead, led by higher utilisation of Plywood/Chipboard and stable Laminates: For FY27, management guided for 18-20% overall revenue growth, with laminates revenue is projected to grow by 10-12%. We expect overall topline to grow at 15.5% CAGR over FY26-28E to ₹4072 crore, driven by steady Laminates and inching up of capacity utilisations for Plywood and Chipboard, segment.
• Breakeven in Plywood and Particleboard to improve margins further: Supported by capacity expansions, the particle board segment is expected to reach EBITDA breakeven by Q1FY27, followed by plywood in H2FY27. Consequently, we expect EBITDA margins of ~12.5%/14% in FY27 & FY28, respectively vs 10.9% in FY26. We expect earnings CAGR of ~116% over FY26-FY28E on a low base, largely led by volumes recovery and margins improvement across all the segments.
Rating and Target Price
• Given the strong earnings growth, we expect return ratios of Greenlam to reach a respectable mid teen levels from single digits currently.
• We maintain BUY rating with target of ₹310(30x FY28 P/E).
