Financials
In Q3FY25, Greenpanel?s revenue/EBITDA/APAT declined 7/71/68% YoY, led by muted volume growth, weak pricing and soaring timber prices. MDF sales volume declined 2% YoY (domestic/ export: -1/-8% YoY) owing to weak demand and entry of new players in domestic market (market share loss). MDF EBITDAM declined 1450/800bps YoY/QoQ to 5.1% (18-quarter low). Ply segment performance continues to remain weak. Its MDF capacity expansion of 35% (231K CBM) is delayed by a quarter and is likely to be commissioned by Q4FY25 end.
Investment Rationale
HDFC Securities expects the MDF industry margin to be near its bottom; the brokerage believes industry capacity utilisation will increase in FY26, which will lead to improvement in MDF realisation. Despite this, the industry margin will remain sub-par in FY26. HDFC Securities downgrades it to REDUCE with a lower target price of Rs 255/share (from Rs 285 earlier) (20x Sep-26E EPS).
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