Greenpanel Industries- Riding On Strong Prospects Of MDF; Scope For A Re-Rating: Systematix Initiates Coverage

Systematix Research Report

Greenpanel Industries Ltd., with 660,000 cubic billion metre capacity and 29% market share, is India’s largest manufacturer and exporter of medium density fibre, the fastest growing category in the Rs 400 billion wood panel industry.

While concerns exist of rise in competition in MDF industry on huge capacity additions two-three years, we expect additional capacities to get absorbed over time on an estimated 15-20% sales volume compound annual growth rate.

Low penetration, rising acceptability, strong revival in demand for housing units and readymade furniture are the key drivers.

Greenpanel Industries, an established player, is aptly placed to capitalise on the huge opportunity in the MDF industry. After a robust 40%/77%/91% CAGR in revenue/Ebitda/profit after tax over FY19-22 on robust volume growth and margin expansion, we estimate low 17%/15%/15% CAGR over FY22- 25E, expecting moderation in demand and margins.

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