Synopsis: Greenply Industries gained attention after a BUY call with a Rs. 355 target, implying 49% upside, supported by MDF capacity stabilisation, margin recovery, strong volume growth outlook, and disciplined balance sheet management.
A Small-cap company that offers a wide range of panel products including plywood, block boards, decorative veneers, doors, and film-faced plywood, among others, is in the spotlight after receiving Buy rating with target price by Choice Institutional Equities.
With the market capitalization of Rs. 2,984.82 crore, the shares of Greenply Industries Limited closed at Rs. 239, down by 1.59 percent from its previous day’s close price of Rs. 242.87 per equity share.
Target and Rational
Choice Institutional Equities has maintained a BUY call with a revised target price of Rs. 355 from Rs. 425, implying an upside of about 48.54 percent from current levels, driven by strong medium-term earnings visibility and margin expansion.
- Growth outlook & demand trends: The target is underpinned by expectations of sustained double-digit volume growth in both plywood and MDF segments, supported by healthy demand for mid-value products. The company remains on track to deliver double-digit volume growth in 2HFY26, with further margin improvement anticipated as operating leverage improves.
- MDF performance & capacity expansion: MDF margins are expected to recover meaningfully, aided by stabilisation of the expanded MDF capacity at 1,000 CBM. The company achieved record MDF production in January 2026, indicating a strong rebound in utilisation and growth momentum post-expansion.
- Capex & product mix: Greenply is entering a new capex cycle to support long-term growth, including new capacities in plywood, MDF, PVC, and WPC. A rising contribution from value-added products and gradual improvement in the furniture hardware JV, supported by localisation efforts, are expected to enhance profitability over the medium term.
- Financial discipline: Despite the expansion phase, the company continues to maintain prudent leverage, with debt-to-equity at ~0.6x and net debt/EBITDA capped at ~2x, expected to normalise to ~1x post-expansion, reflecting strong balance sheet discipline.
- Valuation & earnings visibility: Valuation is derived using a PEG-based framework, factoring in a robust ~35 percent EPS CAGR over FY25–FY28E, which supports the upside potential driven by earnings growth, margin recovery, and capacity-led expansion.
Financials
Greenply Industries Limited is a Kolkata-based interior infrastructure company engaged in manufacturing and trading plywood, MDF and allied products in India and overseas. Founded in 1984, it serves residential, commercial and industrial sectors through a wide distributor and retailer network.
The company reported revenue of Rs. 673 crore in Q3FY26, reflecting a 9.6 percent YoY growth over Rs. 614 crore in Q3FY25, though it declined 2.3 percent QoQ from Rs. 689 crore in Q2FY26. Profit after tax stood at Rs. 14 crore, which fell 41.7 percent YoY from Rs. 24 crore in the year-ago quarter and declined 12.5 percent QoQ from Rs. 16 crore, indicating margin pressure despite healthy annual revenue growth.
A return on equity (ROE) of about 12 percent, a return on capital employed (ROCE) of about 12.4 percent and debt to equity ratio at 0.64, demonstrate the company’s financial position. At the moment, the company’s P/E ratio is 39.9x higher as compared to its industry P/E 38.3x.
As of December 2025, the company’s shareholding pattern reflects strong promoter control with a 51.8 percent stake, while institutional ownership is sizable, led by DIIs holding 32.12 percent and FIIs owning 4.35 percent. Public shareholders account for 11.74 percent, indicating a well-balanced ownership structure with dominant promoter presence and meaningful institutional participation.
With stabilising MDF operations, improving utilisation, a favourable product mix shift towards value-added offerings, and disciplined balance sheet management, the company is well positioned to translate demand momentum into earnings growth. While near-term margins remain under pressure, sustained volume growth, capex-led expansion and improving operating leverage support the brokerage’s view that these drivers could unlock meaningful upside over the medium term, aligning well with the 49 percent upside thesis highlighted in the title.
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