Greenlam Industries Limited (“Greenlam” or the “Company”) is the largest laminate player in the country with 13% market share in the organized domestic market.
Price – Rs. 751.10
Distribution Network – Greenlam Industries has the largest and widest distribution network of over 14,000 distributors, dealers and retailers across the country. In the international market, Greenlam is present in over 100 countries with its own marketing and distribution setup in over 13 countries.
Manufacturing Facilities – Greenlam’s products are produced in the world class state of the art manufacturing facilities situated at Behror – Rajasthan and Nalagarh – Himachal Pradesh.
PRODUCT PORTFOLIO
Financial Position
| Particulars | FY15 | FY16 | FY17 | FY18 |
| Revenue (In Rs. Cr.) | 925.62 | 1,029.74 | 1,075.80 | 1,144.73 |
| Growth | – | 11.25% | 4.47% | 6.41% |
| EBITDA (In Rs. Cr.) | 90.15 | 126.78 | 138.33 | 148.89 |
| EBITDA Margin | 9.74% | 12.31% | 12.86% | 13.01% |
| EBIT (In Rs. Cr.) | 56.77 | 91.81 | 101.69 | 112.94 |
| EBIT Margin | 6.13% | 8.92% | 9.45% | 9.87% |
| PBT (In Rs. Cr.) | 28.50 | 62.39 | 75.65 | 96.52 |
| PAT (In Rs. Cr.) | 19.33 | 37.70 | 49.66 | 64.61 |
| PAT Margin | 2.09% | 3.66% | 4.62% | 5.64% |
| EPS (In Rs.) | 8.01 | 15.62 | 20.57 | 26.77 |
| EPS Growth Rate | – | 95% | 32% | 30.1% |
| Historic P/E (Closing Price of 31st March) | 54.87 | 31.88 | 31.98 | 44.75 |
| CURRENT P/E (based on price of 1st March – Rs. 751.10 and EPS TTM –Rs. 29.52) | 25.44 | |||
| Shareholder funds (In Rs. Cr.) | 219.81 | 245.11 | 298.14 | 356.13 |
| Minority Interest (In Rs. Cr.) | 0.06 | 0.07 | 0.08 | 0.09 |
| Debt (In Rs. Cr.) | 351.82 | 265.62 | 257.85 | 210.35 |
| Cash (In Rs. Cr.) | 5.86 | 5.23 | 7.85 | 10.40 |
| D/E | 1.60 | 1.08 | 0.86 | 0.59 |
| Interest Coverage | 2.99 | 3.93 | 4.85 | 8.25 |
| ROCE | 9.93% | 17.97% | 18.29% | 19.93% |
| ROE | 12.97% | 25.45% | 25.37% | 27.10% |
Quarterly Performance
| Quarterly Results | Q3 FY 2018 | Q2 FY 2019 | Q3 FY 2019 | TTM | Q-o-Q % | Y-o-Y % |
| Revenue (In Rs. Cr.) | 280.25 | 318.41 | 313.96 | 1,231.62 | -1.40% | 12.03% |
| EBITDA (In Rs. Cr.) | 39.07 | 39.33 | 41.05 | 152.96 | 4.37% | 5.07% |
| EBITDA Margin | 13.94% | 12.35% | 13.07% | |||
| PAT (In Rs. Cr.) | 17.36 | 18.22 | 19.81 | 71.24 | 8.73% | 14.11% |
| PAT Margin | 6.19% | 5.72% | 6.31% | |||
| EPS (Rs.) | 7.19 | 7.54 | 8.21 | 29.52 | 8.89% | 14.19% |
WHAT’S DRIVING THE STOCK?
Market leader in the Laminate Industry
The Company is the top player in the Rs. 4,000 Cr. domestic laminates industry with an 18% market share, including exports. It is also the world’s third-largest manufacturer of decorative laminates and Asia’s largest with exports accounting for 40% of revenue in FY18 on a consolidated basis. Greenlam Industries continues to be the highest exporter of Laminates from India accounting for 33% of the total export market.
The Company’s brands like ‘Greenlam’ & ‘Decowood’ are the leading brands in the respective laminate and veneer segment. Furthermore, the Company also launched Engineered Wood Flooring and Engineered Door segment in India in 2014 and 2015, respectively which are branded under ‘Mikasa’.
Satisfactory Capacity Utilisation of Laminates Division
Capacity utilisation of Greenlam Industries for the laminates division has been satisfactory over the years with 101% capacity utilization in FY18. The Company increased its installed capacity of decorative laminates to 14.02 mn sheets per annum with additional 2 million sheets per annum commencing operation in June 2017.
Customer Profile –
Reduction of the applicable GST rate from 28% to 18% in November 2017
The revised GST percentage in November from 28% to 18% on Veneer and Allied category will further help to reduce the price gap between the organized and the unorganized sector.
Manufacturing Capacity and Utilization
Capacity utilisation of Greenlam Industries for the laminates division has been satisfactory over the years with 101% capacity utilization in FY 2018.
WHAT’S DRAGGING THE STOCK?
Low Equity Base | Thin Trading Volume.
Intense Competition
The decorative laminates, panel boards and laminates industry is intensely competitive, given the numerous domestic unorganized and organized players as well as minor presence of international brands.
Low Capacity Utilization of the recently introduced products
The capacity utilization of the relatively newer product, viz., engineered wood flooring and engineered doors segment continued to remain on the lower side.
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