Greenply
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2536
Printed Date: 21/Apr/2025 at 4:41pm
Topic: Greenply
Posted By: rohans
Subject: Greenply
Date Posted: 24/Nov/2009 at 11:21am
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Find below my notes on greenply:
· “Largest Interior Infrastructure” company as they call themselves · Leadership position in all the segment of plywood, laminates and Veneer. Setting up a Greenfield MDF plant to be commissioned in Q4 which will give it a 30% mkt share of the MDF market · Expanding capacity for the laminates · Focus on brand building and have built up a decent brand with good recall · Focus on value added products with wide product range across different price points · Strong Marketing and Distribution network · Introducing chain of branded retail stores to display it’s wide range of product. Already 3 stores open with plan to ramp it up to 20 stores this year. Using franchisee model. This is more from brand building perspective and contribution to topline / bottomline from retailing won’t be significant in my view · Started focus on exports as well · Do not have any info on the management, but looking at the way the company is shaping up (Brand building, expanding capacities, Creating new markets e.g. MDF, Retailing, exports etc.) the management seems to be doing right things Financials: · CAGR of 30%+ of topline for last 3 years · EPS for FY09 was 21.95 (after forex loss of 16 Cr, excluding forex loss eps would have been around 29), FY08 EPS was 22.47 · H1 FY10 EPS already 13.16 · Was analyzing topline for last 13 quarters and company has shown consistent growth in topline QoQ except for the period Oct’08 to mar’09 which is understandable. Growth is back on track from April’09 onwards · ROE in mid 20’s · Came out with rights issue couple of month back at 90 · Consistent dividend paying, although they reduced dividend to Rs. 1.5 for FY09 from Rs. 3 for FY08 · Current Market cap around 250 Cr. MCap / Sales ratio is 0.3 Investment theme · Market leader · Play on movement of market share from unorganized sector (~80%) to Organized sector · Similar play as Asian Paint and Pidilite, obvious it has a long way to go before it can be reach anywhere near the league of Asian Paint / Pidilite but the company seems to be making all the right moves · Should be able to deliver CAGR at 30%+ for next few years · On a conservative side I expect them to do a EPS of 28 for current year and 35 for FY11. You can calculate the P/E on CMP of 120 Im my view “It’s a cheap stock which can / has potential to become moderately expensive”.
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Replies:
Posted By: smartcat
Date Posted: 24/Nov/2009 at 11:53am
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Inspite of heavy advertising, I think plywood stocks will have low brand recall - mostly because of little quality/product differentiation and their similar sounding brand names - archidply, greenply, Kitply and so on.
Pidilite Industries (Fevicol) is a better "interior infrastructure" play - because whatever plywood you use, you will end up using Fevicol to stick it in place.
HSIL (Hindware) too has similar brand pull.
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Posted By: rohans
Date Posted: 25/Nov/2009 at 12:27pm
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Agree with you but i think real kicker comes when you convert a commodity into a brand which is what they are trying and focussing. I think at PE of 4 for this year and 3.5 for FY11, their isn't much to loose. But who knows about future. Being a market leader, I am betting on P/E expansion as well as Earnings growth.
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Posted By: subu76
Date Posted: 25/Nov/2009 at 12:50pm
| I think Ashish Dhawan is a big investor on this one. |
Posted By: wiseowl
Date Posted: 25/Nov/2009 at 3:46pm
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Kitply is reeling under debt. Archidply has other businesses as well. Greenply is the only "pure" plywood-laminates company. The two problems with this sector : 1) Lack of a sustainable forest / plantation policy from the govt's side to harvest wood. The organised industry can really suffer because of bans and other regressive policies. 2) Threat of imported cheaper, good quality wood products and/or alternative products (rubberwood, etc). The retail business is interesting. ------------- You alone are responsible for your actions. |
Posted By: nazgul
Date Posted: 25/Nov/2009 at 4:25pm
 and i thought they were using recycled wood and something called cosmetic wood.------------- I don't do funds, i do fundas. |
Posted By: hit2710
Date Posted: 25/Nov/2009 at 6:01pm
Excellent work Rohan. 
Only thing I dont like about this company is consistent increase in its debt. Loan Funds Mar09 Mar08 Mar07 Mar06 Mar05 Secured Loans 192.72 133.86 125.46 103.77 66.18 Unsecured Loans 65.27 37.26 21.11 20.03 11.34 Total 437.91 318.10 254.17 188.66 115.77 Technically the stock is in a consolidation mode between 100 and 140 since past 3-4 months. The stock made a high of 420 in Jan 08 and fell down to form some sort of double bottom at 39-40 levels. Recent high was 145 in Aug 09 and stock has been taking support at its 200 dema recently and currently it is at 110. ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: hit2710
Date Posted: 25/Nov/2009 at 6:03pm
Here is Sep 09 non promoter shareholding. Sl. No. Name of the Shareholder No. of Shares Shares as % of Total No. of Shares 1 Emerging Markets Management LLC A/C The Emmumb Rella Funds Emerging Markets South Asianstars Fund 848,113 4.99 2 Volrado Venture Partners 465,000 2.74 3 Payash Securities Pvt Ltd 862,403 5.07 4 Morgan Stanley Maruti Company Ltd 290,722 1.71 5 JM Trustee Company Ltd A/c JM Mutual Fund - Basic 887,989 5.22 6 Ashish Kacholia 597,758 3.52 7 Ashish Dhawan 1,135,090 6.68 Total 5,087,075 29.93 By the way who is Ashish Dhawan? ------------- Stockmarket is a weird place. For every person who buys a stock there is a person who sells it and both think they are very smart. |
Posted By: rohans
Date Posted: 25/Nov/2009 at 9:21am
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Company is setting up a greenfield plant for MDF at cost of 250 Cr and a laminate unit at cost of 105 Cr which explains the debt part.
The MDF plant will commence production in Q4 whereas for Laminates unit 2 out of the 3 presses are already commissioned. Currently 70% of MDF req is imported and this plant will give them a mkt share of 30% part. MDF and Laminate units once commissioned will add 600Cr to the topline in a year at full capacity. (as per their investor presentation on the website).
Also worth reading is their annual report where they have done excellent analysis of all their business segments, market dynamics, challenges and future etc. It's not available on their website, i downloaded the free preview of annual report (about 40 pages of management analysis) from reportjunction.com. Excellent read.
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Posted By: gbhupesh
Date Posted: 18/Dec/2009 at 12:11pm
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This stock is up 50% in last 3-4 sessions .. ( 188 now ) ~20 % up now.. |
Posted By: rohans
Date Posted: 19/Dec/2009 at 7:49pm
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The up movement has been accompanied with huge volumes of >1Mi daily compared to average daily volume of 50K.
It is still currently valued at a P/E range of around 4 -5 for FY11 at CMP of 188. It still continues to reflect what i had written in my first post that "It’s a cheap stock which can / has potential to become moderately expensive”. still a long way to go.
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Posted By: rohans
Date Posted: 20/Dec/2009 at 9:35am
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Company's annual report is now available on their website. Worth reading, shows passion of the mgmt towards the business.
http://www.greenply.com/web/annual_report_09.asp - http://www.greenply.com/web/annual_report_09.asp
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Posted By: sainivas
Date Posted: 21/Dec/2009 at 11:48am
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Greenply has survived and done reasonably well in what was a tough period for realestate: ie CY 2009.
With even a slight improvement in capex spending, real estate in early 2010: the company can report good numbers. ------------- Agey Dekho |
Posted By: siddharth
Date Posted: 25/Jun/2010 at 9:50am
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Hey Rohan, Do you have any estimates of the sales contribution of this new commissioned MDF plant? Also what kind of profit margins can be expected in this product? BajaJ hindustan is the second biggest MDF manufacturer. I tried but couldnt find any details about the profit margins in MDF. Any details would be very appreciated. |
Posted By: siddharth
Date Posted: 10/Jul/2010 at 2:08pm
| The new annual report is now available. Worth a read. |
Posted By: gbhupesh
Date Posted: 14/Aug/2010 at 12:58pm
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I raised following questions with Greenply : I have question regarding company' Plywood and allied Products line. This is in view that all four manufacturing units of this line are running over 100% capacity utilization. 1) What % volume growth you see in coming 3-5 years in this business segment for the company? 2) How you plan to meet this growth in this segment, how much more volume these unit can provide with out much signification investment? 3) Do company has any investment plan in this segment in coming years either on existing units or on new units? --- 1) We expect a volume growth of 15% in coming 3 years in this segment. 2) We expect to meet this growth through a three-pronged strategy: a) Scale up utilisations by another 8-10% from existing capacities. b) Meet the increased demand from outsourcing. We are working on a strategy to meet the demand for mid-segment plywood from outsourcing and produce maximum premium plywood from our own units. This will enable us to achieve volumes as well as improve our value-mix. c) If required, we may also do a small expansion to meet increased demand with minimum investments. 3) At present, we do not intend to make any major investments in plywood segment. |
Posted By: commnman
Date Posted: 02/Feb/2012 at 7:51pm
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Q3/Fy-12 Results out...
Total Income up 32.1% to 418.66 Cr from 316.89 Cr. EBIDTA up 78% to 49.45 Cr from 27.79 Cr. Net Profit almost doubled to 14.09 Cr from 7.19 Cr. EBIDTA margin is 11.8% V/s 11.6% (SQ-11) and 8.8% (DQ-10) NET Pr margin is 3.4% V/s 2.4% (SQ-11) and 2.3% (DQ-10) Total Raw material costs as a %ge to Income is 59.3% V/s 60.2% (SQ-11) and 63.1% (DQ-10) Employee costs to Income is 7.6% V/s 8.5% (SQ-11) and 8.4% (DQ-10) Other expenses to Income is 21.3% V/s 19.7% (SQ-11) and 19.7% (DQ-10) Interest expense to EBIT is 40.8% V/s 36.4% (SQ-11) and 53.4% (DQ-10) Tax Rate is 12.6% V/s 15.4% (SQ-11) and 15.4% (DQ-10) SEGMENTS: Plywood: Sales up 21.4%, PBIT DOWN 31.6%, margin 5.6% v/s 6.8% (SQ-11) and 9.9% (DQ-10) Laminate: Sales up 12%, PBIT up 30%, margin 7.2% v/s 7.4% (SQ-11) and 6.2% (DQ-10) MDF: Sales multiplyd to 67.27 Cr from 14.21 Cr PBIT profit at 10.68 Cr from a LOSS of 6.84 Cr with a Margin of 15.9%. 9M/Fy-12 v/s 9M/Fy-11: Total Income up 36.5% to 1184.94 Cr from 868.32 Cr (Fy/10-11: 1217.89 Cr) EBIDTA up 73% to 140.1 Cr from 81.1 Cr (Fy/10-11: 118.24 Cr) Net Pr up 94% to 37.15 Cr from 19.17 Cr (Fy/10-11: 25.09 Cr) Reported Nine-Month EPS 15.39 V/s 7.94 (Fy/10-11: 10.39) - ------------- main toh aam aadmi hun... jo sunta hoon wohi sach maanta hoon |
Posted By: srisaurabh2000
Date Posted: 02/Jun/2012 at 8:21pm
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Anyone tracking this? Their FY12 results have been good compared to FY11 and with no major capex planned going forward in FY13 the bottom line should show improvement. The primary growth seems to come from MDF which typically is an organized sector play unlike plywood. Last quarters the ads on TV and other media has also increased. Volumes though are a big deterrant in this stock.
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