BackMultibagger stock's rally may continue as brokerages raise target price post Q4 results
ICICI Securities and Edelweiss have maintained buy rating on the multibagger stock with revised target price
PremiumGreenpanel Industries has reported consolidated EBIDTA growth , much better than expected, driven by higher operating margins from MDF segment as the MDF margin expanded due to better product mix and higher realisations both in export/domestic markets, highlighted brokerage ICICI Securities in a note.
“Greenpanel continues to remain our preferred stock pick in the sector due to strong demand tailwinds and high profitability," the note stated. The brokerage has maintained its buy rating on the multibagger stock, that has rallied more than 135% in a year's period, with a revised March 2023E target price of ₹685 (earlier: ₹578).
Edelweiss recently initiated on the company citing favourable industry dynamics. Led by stronger than expected profitability in the MDF segment, it has further upgraded FY23/24E EPS up by 4%/21%.
The company's management is confident of 15-18% volume growth each in FY23E and FY24E, while maintaining margins at FY22 levels. Edelweiss has maintained ‘Buy’ rating on Greenpanel Industries shares with a revised target price upwards of ₹655 (earlier ₹578).
“With a lack of capacity expansion and strong profitability continuing, we expect the company to generate FCF of around ₹10 bn over FY23-24E compared to ₹5.2 bn over FY19-22. However, given that its existing MDF plant is likely to exhaust capacity by FY24E, the company is likely to announce new capacity plans soon, which would be required to sustain growth momentum," Edelweiss' note added.
Greenpanel Industries reported strong Q4FY22 results. While MDF volumes were down 11% YoY, strong profitability (35% margin) led to EBITDA/PAT growth of 42%/43% year-on-year.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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