Greenlam Industries surges 13% on robust Q4 numbers

Shares of Greenlam Industries Ltd jumped over 13 percent in afternoon trade on May 29 after the laminates and decorative veneers manufacturer reported a 109.59 percent year-on-year (YoY) increase in net profit at Rs 54.32 crore in the March quarter of the financial year 2023.

The company posted a net profit of Rs 25.92 crore in the year-ago quarter.

Improvement in margins was primarily driven by significant softening in the company’s sea freight costs, which are now below pre-Covid levels for most of the regions.

In the March quarter, total revenue stood at Rs 489.14 crore, up 15.64 percent from Rs 423.01 crore in the corresponding period of the previous fiscal year.

At operating level, EBITDA (earnings before interest, tax, depreciation and amortisation), jumped 49.5 percent to Rs 74.06 crore compared. Margins improved to 13.9 percent from 10.7 percent in the year-ago quarter.

The laminates division’s revenue was up 16 percent to Rs 491.6 crore, while that of the veneer segment rose 6.8 percent to Rs 42.17 crore. The veneer business, however, reported an EBITDA loss of Rs 1.08 crore from Rs 4.35 crore in the previous year.

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Outlook

Greenlam Industries is expecting 20-25 percent growth in the current financial year as new capacity comes on stream.

The greenfield laminate project in Andhra Pradesh is expected to start commercial production by the second quarter of 2023-24, while the particle board project in the state should start commercial production by the fourth quarter.

Greenlam’s earnings per share (EPS) increased to Rs 4.25 in March 2023 from Rs. 2.15 in March 2022. The stock has declined 4.55 percent over the last six months, and 1.17 percent over the last year.

At 2.29 pm, the stock was trading 12 percent higher at Rs 351.80 on National Stock Exchange.

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