Current price BSE 991.50

Sector PLYWOODS

No of shares 241.46(in millions)

52 week high 2176.00

52 week low 344.25

BSE Sensex 28376.38

Nifty 8723.30

Average Volume 15973

BSE Code 526797

NSE Symbol GREENPLY

Greenply Industries Ltd.

Recommendation

– BUY/HOLD

Date – 17/03/2015

Company Overview

Greenply Industries Ltd. (GIL) is a manufacturer and marketer of interior infrastructure products,

based in India. Greenply Industries Limited, an interior infrastructure company, manufactures,

markets, and distributes plywood, laminates, particleboards, and allied products primarily in

India. Its interior infrastructure products include decorative veneers and laminates, plywood,

block boards, flush doors, medium density fiberboards, and restroom cubicles, laminated

flooring and UV coated panels, and others.

The company offers its products under the Greenlam, Greenply Plywood, Green Club Premium

Ply, Greenlam Laminates, Green Decowood, Ecotec, and Green Panelmax brand names

through 46 marketing offices and a network of approximately 15,000 distributors, dealers, sub-

dealers, and retailers. Greenply Industries Limited also exports its products to North America,

Latin America, Europe, the Middle East, and the Asia Pacific. The company markets its products

in 65 countries which include Thailand, Indonesia, Canada, Singapore, UAE, Australia, Saudi

Arabia, Russia and China.

The company was formerly known as Mittal Laminates Private Limited and changed its name to

Greenply Industries Limited in 1995. Greenply Industries Limited was founded in 1990 and is

headquartered in Kolkata, India.

The current market capitalization stands at Rs 2,375.02 crore. The company has reported a

standalone sales of Rs 390.52 crore and a Net Profit of Rs 26.14 crore for the quarter ended

Dec 2014.

Category No. of Shares Percentage

Promoters 13,275,000 55.00

General Public 4,700,889 19.48

Foreign Institutions 3,689,799 15.29

NBFC and Mutual Funds 1,913,642 7.93

Other Companies 504,179 2.09

Foreign - NRI 48,049 0.20

Others 4,816 0.02

Market Cap (Rs Cr) – 2375.02

Company P/E (x) – 18.27

Industry P/E (x) –40.06

Book Value (Rs) – 241.84

Price / BV (x) – 4.04

Dividend (%) – 60%

EPS (TTM) – 53.95

Dividend Yield (%) – 0.30%

Face Value (Rs) – 5

Share Holding Pattern Financial Details

Industry Overview

The segment in which Greenply Ltd. operates, plywood and laminates, can be classified as discretionary

spending in the housing segment. Demand-supply dynamics in this segment greatly depend on real estate-

sector growth/churn and changing lifestyle preferences. General economic growth and demographic factors

have a huge bearing. Improving income streams/levels, nuclear family structure, and easier financing options

have propelled growth of housing-stock in India.

The size of the plywood sector is estimated at 160bn, with laminates at `42bn, and has registered a 6% CAGR

in the past five years. Within this, the organised sector accounts for a mere 30%. Improving quality

preferences and well-marked brand equity are now slowly heralding a shift towards branded products in the

market; and that is accentuating the shift towards the organised players. Another dogma of the sector is that

most dealing in the industry is in cash, even with end users. Of late, however, with the per-household ticket

size increasing, the shift towards the banking system by end users is playing a role in tilting the balance in

favour of regulated operators.

Overall, the sector is expected to register a 6% CAGR in the coming five years. Within this, the organized

segment would outstrip sector growth at 25-30% as brand equity, quality, amongst others, make their impact

felt on the dynamics of demand. The GST implementation could further erode the share of the unorganized

sector.

Greenply Industries a dominant operator in the organised plywood market and accounts for ~25% of the

organised market share. Laminate is used to provide an aesthetic look and improve the finishing to wooden

furniture. Hence, it has a high degree of co-relation with the plywood market, and the latter has a huge

influence on the laminate market. The peculiarity of this sector is that customer involvement is low so too are

brand awareness and product knowledge. Other than being overlaid on plywood, laminates are also utilised in

readymade furniture, largely from pre-laminated particle board and MDF. Laminates is now a

`42bn industry and seeing an 8% CAGR..

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 12.07 12.07 12.07 12.07 11.05

Equity Share Capital 12.07 12.07 12.07 12.07 11.05

Reserves 571.06 465.06 359.40 310.69 260.46

Networth 583.13 477.13 371.47 322.76 271.51

Secured Loans 381.16 354.56 345.56 434.49 366.57

Unsecured Loans 168.34 178.44 255.32 85.30 40.83

Total Debt 549.50 533.00 600.88 519.79 407.40

Total Liabilities 1,132.63 1,010.13 972.35 842.55 678.91

Application Of Funds

Gross Block 937.67 857.11 780.01 727.80 634.98

Less: Revaluation Reserves 0.00 0.00 0.00 0.34 0.95

Less: Accum. Depreciation 252.37 205.32 160.72 123.86 92.21

Net Block 685.30 651.79 619.29 603.60 541.82

Capital Work in Progress 94.99 23.37 13.50 10.54 13.49

Investments 31.29 17.53 8.75 8.75 4.13

Inventories 382.88 327.91 277.29 229.28 199.75

Sundry Debtors 350.28 343.21 290.87 212.75 151.13

Cash and Bank Balance 10.80 16.28 12.16 7.91 5.46

Total Current Assets 743.96 687.40 580.32 449.94 356.34

Loans and Advances 167.23 145.77 91.77 80.33 61.80

Fixed Deposits 0.00 0.00 0.00 5.50 13.46

Total CA, Loans & Advances 911.19 833.17 672.09 535.77 431.60

Current Liabilities 559.46 488.77 321.92 307.87 304.28

Provisions 30.67 26.96 19.37 9.00 8.83

Total CL & Provisions 590.13 515.73 341.29 316.87 313.11

Net Current Assets 321.06 317.44 330.80 218.90 118.49

Miscellaneous Expenses 0.00 0.00 0.00 0.77 1.00

Total Assets 1,132.64 1,010.13 972.34 842.56 678.93

Contingent Liabilities 633.65 315.36 478.57 85.65 72.52

Book Value (Rs) 241.60 197.68 153.90 133.72 122.87

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 2,159.52 2,000.81 1,643.66 1,378.33 980.12

Excise Duty 0.00 0.00 0.00 55.42 37.21

Net Sales 2,159.52 2,000.81 1,643.66 1,322.91 942.91

Other Income 6.76 6.50 5.91 -9.20 8.21

Stock Adjustments 13.58 13.97 20.70 13.14 -2.74

Total Income 2,179.86 2,021.28 1,670.27 1,326.85 948.38

Expenditure

Raw Materials 1,313.84 1,214.89 1,030.52 769.27 522.52

Power & Fuel Cost 88.96 100.16 105.51 72.98 38.76

Employee Cost 193.51 161.68 130.01 106.40 80.65

Other Manufacturing Expenses 0.00 0.00 0.00 7.70 5.49

Selling and Admin Expenses 0.00 0.00 0.00 242.12 184.18

Miscellaneous Expenses 318.30 280.47 231.75 12.78 10.79

Total Expenses 1,914.61 1,757.20 1,497.79 1,211.25 842.39

Operating Profit 258.49 257.58 166.57 124.80 97.78

PBDIT 265.25 264.08 172.48 115.60 105.99

Interest 58.29 60.72 60.78 42.50 26.48

PBDT 206.96 203.36 111.70 73.10 79.51

Depreciation 57.57 51.99 46.77 40.99 22.02

Profit Before Tax 149.39 151.37 64.93 31.85 57.24

PBT (Post Extra-ord Items) 149.39 151.37 64.93 32.09 56.19

Tax 34.91 37.22 11.51 5.77 6.34

Reported Net Profit 114.47 114.16 53.41 25.09 49.57

Total Value Addition 600.78 542.31 467.27 441.98 319.88

Equity Dividend 7.24 7.24 4.83 2.41 3.31

Corporate Dividend Tax 1.23 1.23 0.78 0.39 0.55

Per share data (annualised)

Shares in issue (lakhs) 241.36 241.36 241.36 241.36 220.97

Earning Per Share (Rs) 47.42 47.30 22.13 10.39 22.43

Equity Dividend (%) 60.00 60.00 40.00 20.00 30.00

Dividend History

Index and Company Price Movement Comparison

Company Forecast

Symbol Value Action

RSI(14) 62.213 Buy

STOCH(9,6) 69.965 Buy

STOCHRSI(14) 89.825 Overbought

MACD(12,26) 7.000 Buy

ADX(14) 44.590 Buy

Williams %R -16.134 Overbought

CCI(14) 108.9592 Buy

ATR(14) 18.8429 High Volatility

Highs/Lows(14) 20.8893 Buy

Ultimate Oscillator 54.622 Buy

ROC 210.132 Buy

Bull/Bear Power(13) 54.9540 Buy

Technical Indicators

PBIT – 11.96 v/s 12.87

RoCE – 18.33 v/s 20.99

RoE – 19.06 v/s 20.39

Net Profit Margin – 5.28 v/s 5.68

Return on net worth – 19.62 v/s 23.92

D/E Ratio – 0.92 v/s 1.12

Interest Cover – 3.56 v/s 3.49

Current Ratio – 0.91 v/s 0.89

Reserves – 571.06 cr v/s 465.06 cr

PAT – 114.47 cr v/s 114.16 cr

Total assets – 1132.64 cr v/s 1010.13 cr

Net sales – 2179.86 cr v/s 2021.28 cr

Book Value – 241.10 v/s 197.68

Important Ratios (YoY)

Days BSE NSE

30 958.91 960.05

50 924.77 925.40

150 933.10 934.02

200 866.45 869.11

Simple Moving Average

Greenply Industries Ltd. is in a healthy financial position with Rs.571.06Cr as reserves and and have made

significant increase in production capacity to meet increasing market demand.

Company have a well diversified product mix with plywood's and MDF and well established network of

distributers and retailers.

Change in demography pattern and disposable income in Indian population along with increase in numder of

nuclear families and increase in per capita expenditure on high quality interiors gives company a good growth

opportunity.

Demerger of Greenlam Industries from Greenply industries will increase the profitability of the company.

Acquisition of raw materials domestically will reduce the logistics expenses significantly and it will add on to

the profits.

Price to Sales Ratio of the company stands at 0.86% which implies the current market price of the company

is still very much fairly valued.

Improvement in industrial construction and real estate sector will demand for the products of the company.

Revenue is growing in a healthy CAGR of 17.1% and the Gross Profit margin of the company is improving

Year on year basis.

Improvement in demands for furniture and increase in exports will increase the sales.

Investment Rationalize