Equity Research INDIA

December 7, 2017
BSE Sensex: 32597
Greenply Industries BUY
ICICI Securities Limited Upgrade from Hold
is the author and
distributor of this report
Upgrade to conviction BUY; FY20 at an inflection point Rs335
Reason for report: Company update and recommendation change
We upgrade Greenply Industries (GIL) to high conviction BUY from Hold led by a)
Wood Panel growth optimism in the plywood and MDF space, particularly post FY19 in sync
with managements positive commentary at the recently conducted analyst meet;
Target price Rs460 b) incremental plywood and MDF capacities of GIL coming on stream over the
next one year; c) scope for margin improvement, and d) structural improvement in
Earnings revision RoCEs over the next 3-5 years. Rolling forward earnings to FY20 a year of key
(%) FY18E FY19E inflection in growth and margins; we expect GIL to report revenue and PAT
Sales 0.0 1.2
EBITDA 2.0 0.3 CAGRs of 20.2% and 21.7%, respectively over FY17-FY20. We thus arrive at a TP
EPS 2.6 3.6 of Rs460, valuing it at 25xFY20 earnings offering an upside of 37% from current
levels.
Target price revision Decoding management optimism on plywood and MDF segments. The subdued
Rs460 from Rs290
guidance in the past by management on plywood and MDF segments has been in
Shareholding pattern sync with the actual deliverables with revenue and PAT clocking muted CAGRs of
Mar Jun Sep
6% and 10.9%, respectively over FY14-17. The recent optimism shared by
17 17 17 management mirrors our view with respect to likely inflection in growth in plywood
Promoters 51.0 51.0 51.0
Institutional
and MDF segments over the next 3-5 years with inflection point expected FY19
investors 32.5 32.3 32.9 onwards. This would be largely led by market share gains from the unorganised
MFs and UTI 20.3 20.1 21.4
Insurance 0.0 0.0 0.0 sector in plywood segment; increasing awareness and acceptance in the MDF
FIIs 12.2 11.8 11.5 segment; incremental capacities of GIL (plywood, decorative veneers and MDF)
Others 16.5 16.7 16.1
Source: NSE
coming on stream over the next one year. Higher utilisation in both the key business
segments, incremental revenues from new plants, evolution of brand Greenteriors
and improvement in overall margins are key catalysts attributing to such
Price chart management optimism.
390 High conviction BUY; apt time to raise target multiple Top pick in the
340 building material space. Significantly improving revenue visibility over the next
290 three years, capex cycle largely to be over by Dec18, and increasing free cash
(Rs.)

240 generation post FY19 resulting in declining debt and higher RoCEs (upwards of
190 20%) would warrant a strong re-rating for the stock going forward. We thus assign a
140 P/E multiple of 25x compared to 20x and arrive at a TP of Rs460 based on 25x FY20
90 earnings.
40
Structural story yet to unfold; expect FY20-FY25 to be the best phase in GILs
Jun-15

Jun-16

Jun-17
Dec-14

Dec-15

Dec-16

Nov-17

history. Structurally, the story is on a strong footing with FY20-FY25 likely to be the
best phase for the company. The phase is likely to see a) significant traction in
plywood growth led by market share gains from unorganised and gradual recovery in
real estate sector; b) moving towards optimum utilisation in AP MDF unit; c) shift
from exports to domestic volumes for the AP MDF unit; d) reduction in debt and
significant improvement in RoCEs.
Market Cap Rs41.1bn/US$637mn Year to Mar FY17 FY18E FY19E FY20E
Reuters/Bloomberg GRPL.BO/MTLM IN Revenue (Rs mn) 16,618 17,764 23,930 28,788
Shares Outstanding (mn) 122.6 Rec. Net Income (Rs mn) 1,254 1,473 1,719 2,256
52-week Range (Rs) 335/163 EPS (Rs) 10.2 12.0 14.0 18.4
Free Float (%) 44.9 % Chg YoY (2.2) 17.4 16.7 31.3
Research Analysts: FII (%) 13.7 P/E (x) 32.7 27.9 23.9 18.2
Nehal Shah Daily Volume (US$/'000) 413 CEPS (Rs) 14.4 16.2 21.7 26.6
nehal.shah@icicisecurities.com Absolute Return 3m (%) 23.8 EV/E (x) 18.5 17.3 13.0 10.2
+91 22 6637 7235
Absolute Return 12m (%) 31.0 Dividend Yield (%) 0.2 0.2 0.3 0.3
Jigar Shah
Sensex Return 3m (%) 3.2 RoCE (%) 18.8 16.9 17.3 20.1
jigar.shah@icicisecurities.com
+91 22 6637 7416 Sensex Return 12m (%) 25.1 RoE (%) 18.1 17.5 17.4 19.3
Please refer to important disclosures at the end of this report
Greenply Industries, December 7, 2017
Analysing management optimism
Key pointers Earlier guidance
Plywood volume Volume growth expectation of 8-10%
growth expectations over FY17-FY19: Muted growth
guidance on the back of:
a) sluggish demand in real estate sector
b) Implementation of GST and RERA
c) Higher GST rate of 28% resulting in
further increase in price differential
between the organised and
unorganised players
Plywood margins Plywood margin guidance in 10.5-
expectation 11% range over FY17-FY19 on the
back of:
a) lower demand due to GST transition
leading to lower capacity utilisation
b) Offering of incremental discounts due
to widening of price gap between
organised and unorganised post
introduction of GST with 28% tax rate
MDF volume growth Volume growth expectation of 8-10%
expectations over FY17-FY19 led by:
a) Lower demand in MDF due to GST
transition
b) Capacity constraints with the south
India plant expected to commence
operations only in Sep/Oct18
MDF margin MDF margins for the existing
expectation Rudrapur MDF unit were likely to
Existing and new reduce to 23-24% due to expected
AP unit increase in competitive intensity in the
region.
FY19 margins of the new AP plant
were likely to be subdued due to
expected commissioning of the plant in
Sep/Oct18
2
ICICI Securities
Current guidance
Despite the sluggishness in real estate sector
expected to continue, the volumes guidance
stands revised to 12-15% over FY18-FY20 and
18%+ over FY20-FY25: Optimism on the back of:
a) Recent decline in GST rate to 18% from 28%
b) Price gap between organised and unorganised
declining with organised players passing on the
benefit of lower tax rate
c) Introduction of EWay billing in Apr18 to
enforce stricter compliance on the unorganised
sector thereby expected to narrow the price gap
further between the organised and unorganised
d) Incremental capacities coming on stream for
GIL i) plywood plant in UP (Dec18), and ii)
Decorative veneer plant in Gujarat (Jul18)
Revised upwards to 11.5-12% over FY18-FY20
led by:
a) higher capacity utilisation led by expectation of
market share gains post decline in GST rate to
18%
b) higher probability of taking price hikes
c) superior product mix with the decorative
veneer unit commencing operation in H2FY19
d) Sourcing of low cost face veneers from
recently commissioned facility in Gabon, West
Africa
Volume CAGR expectation of 25% over FY18-
FY22 led by:
a) Demand for MDF to improve with expected
higher compliance in the cheap plywood segment
b) New MDF unit in AP expected to commence
operations in Jul18 vs. Q3FY19 earlier
c) Exports to be significant driver initially;
however, dependence to decline gradually with
increasing penetration in domestic space
With recent increase in MDF margins to 30-31%
from 27-28% earlier (led by cost control
initiatives), the existing MDF unit margins are
now expected to correct to 27% for the existing
plant (implying 300-400bps higher margins than
initially estimated)
FY19 new AP plant margins are likely to be at
14-16% led by higher capacity utilisation on
expectation of earlier commencement of the plant
(possibly in Jul18)
Greenply Industries, December 7, 2017 ICICI Securities

Brand Greenteriors set to gain traction

In FY16, GIL created an umbrella brand Greenteriors for trading into interior-related
products by leveraging its existing distribution network and strong brand equity. To
start with, GIL introduced wallcovers under this brand in FY16. The company recently
introduced two more products - acrylic solid surface sheets and fiber cement boards,
thereby broadening its trading portfolio. GIL expects revenues under this brand to
reach Rs1bn by FY20 while margins are likely be in 12-15% range.

Existing product portfolio under brand Greenteriors

Wallcovers

Acrylic solid surface

Fibre cement boards

3
Greenply Industries, December 7, 2017 ICICI Securities
Wallcovers: GIL ventured into the business of trading of wallcovers sourced from
various overseas suppliers (largely US and Europe) and marketing in India under the
brand name Greenteriors. GIL achieved a turnover of Rs100mn in FY17. With the
company having introduced multiple range of wallcovers (nearly 600 SKUs) across
high-end, mid-market and economical segments over the past few quarters, GIL
expects this segment to touch revenues of Rs350mn by FY20.

Acrylic solid surface: In Sep17, GIL entered into a trading arrangement with
Aristech of US (largest global manufacturer of continuous cast acrylic solid surface
sheets) for the marketing of acrylic solid surface sheets in India. The product would be
marketed in India under the co-branding arrangement with the US Company under the
brand GreenteriorAcrylic Solid Surface By Avonite Surfaces, USA. The product has
applications for interior decoration in airports, restaurants, hospitals, buildings, kitchen
and bathrooms. GIL has already sold few containers of solid surface sheets in India
through imports model. It expects this segment to achieve revenues to the tune of
Rs350mn by FY20.

Fibre cement boards: GIL recently introduced fibre cement boards (FCBs) under the
brand Greenteriors. FCBs are composite materials made of sand, cement and
cellulose fibers. The product is seen as a replacement to plywood and is also
affordable compared to the latter. While FCB is highly resistant to termites (unlike
plywood), the heavy weight of the product is its biggest disadvantage and thus is not
recommended to be used for mobile furniture applications. GIL expects this product to
generate revenues of Rs300mn by FY20.

Chart 1: Greenteriors revenues to touch Rs1bn by FY20

Wallcovers Fibre cement boards Acrylic solid surface

400
350 350
350
300
300
250
(Rs mn)

200
200
150 150 150
150
102 100
100
50
50
- -
-
FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

4
Greenply Industries, December 7, 2017 ICICI Securities

Decoding the numbers Past and forward looking

Past (FY14-FY17) Forward looking (FY17-FY20)
Chart 2: Revenue and revenue growth trend
Net Sales (Rs mn) Growth (%) Net Sales (Rs mn) Growth (%)

17,000 14% 35,000 40%

16,457 16,549
16,500 28,788 35%
12% 30,000
16,000 15,608 23,930 30%
25,000
10%
15,500 25%
20,000 17,764
15,000 8% 16,549
20%
15,000
14,500 6% 15%
13,900
14,000 10,000
4% 10%
13,500 5,000 5%
2%
13,000
0 0%
12,500 0% FY17 FY18E FY19E FY20E
FY14 FY15 FY16 FY17
Source: Company data, I-Sec research

Chart 3: EBIDTA and EBITDA growth

EBIDTA (Rs mn) EBIDTA growth (RHS) EBIDTA (Rs mn) EBIDTA growth (RHS)
3,000 25%
2,450 5,000 4,539 40%
2,500 2,342 20% 35.3%
4,500 35%
2,037 4,000 3,631
2,000 15% 30%
1,725 18.1% 3,500
15.0% 2,685 25%
3,000
1,500 10% 2,450 25.0%
2,500 20%
1,000 5% 2,000 15%
1,500
4.6% 9.6% 10%
500 0% 1,000
500 5%
4.6%
0 -2.2% -5% 0 0%
FY14 FY15 FY16 FY17 FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

Chart 4: EBIDTA margin trend

15.0 14.8 16.0
15.8
14.5 14.2 15.8

14.0 15.6

15.4
13.5 15.2
13.1 15.2 15.1
(%)

(%)

13.0
15.0
12.4 14.8
12.5
14.8
12.0
14.6
11.5 14.4
11.0 14.2
FY14 FY15 FY16 FY17 FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

5
Greenply Industries, December 7, 2017 ICICI Securities
Chart 5: PAT and PAT growth trend

PAT (Rs mn) PAT growth (RHS) PAT (Rs mn) PAT growth (RHS)

1,400 1,283 1,254 70% 2,500 35%

1,242 2,256
1,200 60% 30%
60.8% 50% 2,000
1,719 31.3% 25%
1,000
40% 1,473
773 1,500 20%
800 30% 1,254
17.4% 16.7% 15%
600 20%
1,000 10%
10%
400 3.2% 5%
0% 500
200 -6.8% -2.2% -10% 0%
-2.2%
0 -20% 0 -5%
FY14 FY15 FY16 FY17 FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

6
Greenply Industries, December 7, 2017 ICICI Securities

Strong revenue visibility and fast improving RoCEs post FY19

Perfect recipe for re-rating
After achieving RoCE of 22.3% in FY16, the companys RoCEs have been declining
largely led by huge capex initiative undertaken since then. With the capex cycle likely
to be over by FY19, we expect significant increase in free cash generations which
would result in declining debt levels and higher RoCEs going forward. We expect
RoCEs to inch upwards of 20% by FY20, thereby presenting a strong case for re-
rating in the stock. We thus assign a P/E multiple of 25x compared to 20x and arrive at
a TP of Rs460 based on 25x FY20 earnings.

Chart 6: GIL: A re-rating candidate

Source: Company data

Chart 7: Improving CFO and FCF Chart 8: Working capital days to remain in check

CFO FCF
3,000 60 Working capital (no of days)
2,500 57
55 52 55 55
2,000
1,500 50 49
1,000 45 48
(Rs mn)

500
0 40
(500) 35
(1,000) 32
30
(1,500)
(2,000) 25
(2,500) 20
FY14 FY15 FY16 FY17 FY18E FY19E FY20E FY14 FY15 FY16 FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

7
Greenply Industries, December 7, 2017 ICICI Securities

Chart 9: Debt/Equity to decline Chart 10: RoCEs to inch upwards of 20% by

FY20E
1.2 RoCE (%)
Net Debt/equity
1.0 23%
1.0 22.3%
22%
21%
0.8
0.7 20.1%
20%
0.6 19.0%
(x)

0.6 19% 18.8%

0.6 0.4 18.1%
18%
0.4 17.3%
0.4 17%
0.4 16.9%
0.2 16%
15%
0.0 14%
FY14 FY15 FY16 FY17 FY18E FY19E FY20E FY14 FY15 FY16 FY17 FY18E FY19E FY20E

Source: Company data, I-Sec research

8
Greenply Industries, December 7, 2017 ICICI Securities

Structural story yet to unfold; Expect FY20-FY25 to be the best

phase in GILs history
Structurally, the story is on a strong footing with FY20-FY25 likely to be the best phase
for the company. The phase is likely to see a) significant traction in plywood growth led
by market share gains from unorganised and gradual recovery in real estate sector; b)
moving towards optimum utilisation in AP MDF unit; c) shift from exports to domestic
volumes for the AP MDF unit; d) reduction in debt and significant improvement in
RoCEs.

GILs financials in Phase FY14-FY17 Phase FY17-FY20 Phase FY20-FY25

phases
Revenue CAGR 6% CAGR 20.2% CAGR High and sustainable
Sluggishness in real Decline in GST rate from 28% double-digit growth
estate sector (FY16 to 18% resulting in market Accelerated market
onwards) share gains in plywood from the share gains from the
Capacity constraints unorganised sector unorganised sector in
in MDF segment Incremental capacities in plywood space
Demonetisation and plywood, decorative veneers Optimum utilisation of
destocking issues in and MDF coming on stream in plywood and MDF
anticipation of GST FY19 capacities added in FY19
implementation Expected implementation of E- Exponential growth in
Way billing from FY19 onwards brand Greenteriors
to inch up compliance levels in
the unorganised plywood space

EBIDTA margins (%) 12.5-14.5% range 14.5-16% range 17-18% range

Low capacity Higher capacity utilisation led by Increasing share of MDF
utilisation in plywood expectation of market share revenues led by optimum
Capacity constraints gains post decline in GST rate utilisation of AP MDF unit
in MDF segment to 18% Increasing share of
Higher discounts to Higher probability of taking price domestic revenues as
maintain market share hikes against exports from AP
Superior product mix with the MDF unit
decorative veneer unit Increasing operating
commencing operation in leverage in the plywood
H2FY19 segment
Sourcing of low cost face
veneers from recently
commissioned facility in Gabon,
West Africa
Increasing share of MDF
revenues from 29% in FY17 to
38% in FY20
PAT CAGR 10.9% CAGR 21.7% CAGR Profitability to gain further
Muted operational Improving operational traction post FY20 led by
performance performance with sound strong operational matrix
Higher working capital working capital management and expectation of further
requirements improvement in working
capital cycle
Debt/Equity Decline from 1x to 0.4x Decline from 0.6x to 0.4x despite Significant financial
aggressive capex initiatives leverage to kick in post
FY20
RoCEs Started declining from Expected to inch upwards of 20% Significant improvement in
FY16 to sub 20% levels post FY19 (with capex cycle to be ROCEs (upwards of 25%)
due to aggressive capex largely over by Dec 18)
initiatives

9
Greenply Industries, December 7, 2017 ICICI Securities

Key takeaways from management interaction

Plywood division
Demand for plywood remains sluggish despite recent reduction in GST rate.
Expect demand to improve from Q1FY19 with implementation of E-Way billing.
Company expects plywood margin to improve to 11.5-12% from current 10.5-11%
led by operating leverage and lower input costs.
Plywood segment currently operating at 108% utilisation. The optimum capacity
utilisation for the existing units expected at ~120%.
The company is currently undertaking greenfield expansion in Lucknow, Uttar
Pradesh which will have a capacity to manufacture 13.5mn-sqm of plywood.
Targeting to increase outsourcing revenues from current 22% to 30% of the overall
plywood revenues over next 3 years.
Recently set up a backward integrated unit in Gabon (West Africa) through step-
down subsidiary for production of face veneers with capacity to peel 35,000 CBM
logs annually.
First phase of Gabon unit commenced commercial production in Jul17 while the
second phase is expected to be operational in Dec17. Optimum revenue potential
for the Gabon unit pegged at Rs1bn.
MDF division
Revenues from Andhra Pradesh (AP) unit expected at Rs3.5bn (at 45% capacity
utilisation) in FY19. The optimum revenue at full utilisation is expected at Rs9bn-
Rs9.5bn.
Existing MDF revenue mix Plain MDF (70%), Exterior grade MDF (15%) and
Value added MDF (15%).
Veneered MDF boards, UV coated boards and Laminated flooring form part of
Value added MDF segment.
No tax benefit in the upcoming AP plant except for SGST refund on sale of MDF
within the AP state.
Targeting exports to key countries like Sri Lanka, Iran and Middle East.
MDF margins from the existing Rudrapur unit likely to come down to 27% levels
from current 30-31% led by increasing competitive intensity in the northern region.
Margins from AP unit expected in 13-14% range for the 1st year (FY19) with
exports likely to contribute nearly 30% of the plant revenues. Margins expected to
improve post FY19 led by higher utilisation and increasing share of domestic
revenues.
Blended margin for MDF division seen at 23-24% in FY19.

10
Greenply Industries, December 7, 2017 ICICI Securities
Others
Tax rate expected at 26% for FY19/FY20.
Current distribution network: 1,600-1,650 dealers in plywood and 840 dealers in
MDF.
Expect significant increase in dealer network, particularly in MDF space in
southern and western region post commissioning of AP unit.
GST refund from Nagaland plywood unit and Rudrapur MDF unit expected in the
range of Rs130mn-Rs150mn going forward.
Cost of borrowing for the new MDF unit at 7.25-7.3%, including the hedging cost.
Working capital cycle to improve with increasing contribution from MDF segment.
Capex in H1FY18 at Rs5.3bn.
Recent capex initiatives:
Facilities Capacity Capex Commission date
MDF unit (AP) 360,000CBM Rs7.5bn Sep-Oct18
Plywood unit (UP) 13.5MSM Rs1.25bn Dec18
Decorative veneer unit (Gujarat) 0.2MSM Rs420mn Jul18

Industry outlook
Plywood industry growth expected to remain muted/stagnant, it may even decline.
Branded players expected to post double digit growth led by market share gains
from unorganised counterparts.
Compliance levels in the plywood space have still not improved post the GST rate
change. However, significant improvement expected post E-Way bill
implementation (Apr18).
MDF industry expected to exhibit 15-20% CAGR over the next 3-4 years.
Management guidance
Plywood growth expected at 12-15% for next 2 years (FY19-FY20) and 18%+
CAGR post FY20.
MDF revenue expected to clock 25% CAGR over next 4 years.

Table 1: Earnings revision (introducing FY20 earnings)

(Rs mn)
Old New % change
FY18E FY19E FY18E FY19E FY20E FY18E FY19E
Revenue 17760.1 23654.9 17,763.5 23,929.9 28,787.6 0.0 1.2
EBITDA 2740.0 3619.5 2,684.7 3,631.4 4,539.2 (2.0) 0.3
PAT 1513.1 1782.4 1,473.2 1,718.7 2,256.5 (2.6) (3.6)
EPS 12.3 14.5 12.0 14.0 18.4 (2.6) (3.6)
Source: I-Sec research

11
 Greenply Industries, December 7, 2017 ICICI Securities

Financial summary
Table 2: Profit & Loss statement Table 5: Cashflow statement
(Rs mn, year ending March 31) (Rs mn, year ending March 31)
FY17 FY18E FY19E FY20E FY17 FY18E FY19E FY20E
Net Revenues 16,618 17,764 23,930 28,788 Operating Cashflow 1,607 2,088 2,716 3,156
Operating Expenses 14,231 15,079 20,299 24,248 Working Capital Changes (224) 252 (1,870) (2,112)
EBITDA 2,387 2,685 3,631 4,539 Capital Commitments (2,826) (4,500) (1,500) (200)
% margins 14.4% 15.1% 15.2% 15.8% Free Cashflow (1,443) (2,160) (654) 844
Depreciation & Amortisation 507 512 947 999 Cashflow from Investing
Gross Interest 189 236 501 622 Activities 26 - - -
Other Income 100 110 140 140 Issue of Share Capital 487 0 - -
Recurring PBT 1,791 2,046 2,323 3,058 Inc (Dec) in Borrowings 1,271 1,470 1,000 (600)
Less: Taxes 559 573 604 801 Dividend paid (87) (110) (147) (147)
Less: Minority Interest - - - - Change in Deferred Tax
Add: Share of Profit of Liability 177 100 (25) -
Associates 22 - - - Chg. in Cash & Bank
Net Income (Reported) 1,254 1,473 1,719 2,256 balance 431 (701) 174 97
Extraordinaries (Net) - - - - Source: Company data, I-Sec research
Recurring Net Income 1,254 1,473 1,719 2,256
Source: Company data, I-Sec research
Table 6: Key ratios
Table 3: Balance sheet (Year ending March 31)
FY17 FY18E FY19E FY20E
(Rs mn, year ending March 31) Per Share Data (in Rs.)
FY17 FY18E FY19E FY20E EPS 10.2 12.0 14.0 18.4
Assets Cash EPS 14.4 16.2 21.7 26.6
Total Current Assets 7,575 6,426 9,543 12,471 Dividend per share (DPS) 0.6 0.8 1.0 1.0
of which cash & cash eqv. 781 80 254 351 Book Value per share (BV) 63.0 74.1 86.9 104.1
Total Current Liabilities &
Provisions 4,035 4,041 5,140 5,758 Growth (%)
Net Current Assets 3,540 2,385 4,404 6,712 Net Sales 0.9 7.0 34.7 20.3
Investments 261 261 261 261 EBITDA 0.5 12.5 35.3 25.0
Net Fixed Assets 5,259 5,597 12,486 11,687 PAT -2.2 17.4 16.7 31.3
Capital Work-in-Progress 2,687 6,337 - - Cash EPS -2.6 12.7 34.3 22.1
Goodwill - - - -
Total Assets 11,747 14,580 17,151 18,661 Valuation Ratios (x)
P/E 32.7 27.9 23.9 18.2
Liabilities P/CEPS 23.3 20.7 15.4 12.6
Borrowings 3,880 5,350 6,350 5,750 P/BV 5.3 4.5 3.9 3.2
Deferred Tax Liability 140 140 140 140 EV / EBITDA 18.5 17.3 13.0 10.2
Minority Interest - - - - EV / Sales 2.7 2.6 2.0 1.6
Equity Share Capital 123 123 123 123
Face Value per share (Rs) 1 - - - Operating Ratios
Reserves & Surplus* 7,604 8,967 10,538 12,648 Raw Material / Sales (%) 53.2 56.2 56.8 56.2
Less: Misc. Exp. n.w.o. - - - - Employee cost / Sales (%) 10.7 9.3 9.0 9.0
Net Worth 7,727 9,089 10,661 12,770 SG&A / Sales (%) 0.0 14.0 13.9 13.9
Total Liabilities 11,747 14,580 17,151 18,661 Other Income / PBT (%) 5.6 5.4 6.0 4.6
*Excluding revaluation reserves Effective Tax Rate (%) 31.2 0.3 0.3 0.3
Source: Company data, I-Sec research Working Capital (days) 31.5 48.0 55.0 55.0
Inventory Turnover (days) 34.9 40.0 45.0 45.0
Table 4: Quarterly trend Receivables (days) 66.4 68.0 70.0 70.0
Payables (days) 69.7 60.0 60.0 60.0
(Rs mn, year ending March 31) Net D/E Ratio (x) 0.4 0.6 0.6 0.4
Dec-16 Mar-17 Jun-17 Sep-17
Net revenues 3,588 4,466 3,978 4,461 Profitability Ratios (%)
% growth (YoY) (14.0) (0.3) (4.1) 2.1 Net Income Margins 7.6 8.3 7.2 7.8
EBITDA 485 718 562 637 RoACE 18.8 16.9 17.3 20.1
Margin (%) 13.5 16.1 14.1 14.3 RoAE 18.1 17.5 17.4 19.3
Other income 28 31 5 10 Dividend Payout 6.9 7.5 8.6 6.5
Extraordinaries (Net) - - - - Dividend Yield 0.2 0.2 0.3 0.3
Net profit 240 419 306 364 EBITDA Margins 14.4 15.1 15.2 15.8
Source: Company data, I-Sec research Source: Company data, I-Sec research

12
 Greenply Industries, December 7, 2017 ICICI Securities

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New I-Sec investment ratings (all ratings based on absolute return; All ratings and target price refers to 12-month performance horizon, unless mentioned otherwise)
BUY: >15% return; ADD: 5% to 15% return; HOLD: Negative 5% to Positive 5% return; REDUCE: Negative 5% to Negative 15% return; SELL: < negative 15% return

ANALYST CERTIFICATION
ANALYST CERTIFICATION
We /I, Nehal Shah, CA; Jigar Shah, CA; Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this
research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or
indirectly related to the specific recommendation(s) or view(s) in this report. Analysts are not registered as research analysts by FINRA and are not associated persons
of the ICICI Securities Inc.
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financial products. ICICI Securities Limited is a SEBI registered Research Analyst with SEBI Registration Number INH000000990.ICICI Securities is a wholly-owned
subsidiary of ICICI Bank which is Indias largest private sector bank and has its various subsidiaries engaged in businesses of housing finance, asset management, life
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associates might have investment banking and other business relationship with a significant percentage of companies covered by our Investment Research
Department. ICICI Securities generally prohibits its analysts, persons reporting to analysts and their relatives from maintaining a financial interest in the securities or
derivatives of any companies that the analysts cover.
The information and opinions in this report have been prepared by ICICI Securities and are subject to change without any notice. The report and information contained
herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to
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herein on a reasonable basis, ICICI Securities is under no obligation to update or keep the information current. Also, there may be regulatory, compliance or other
reasons that may prevent ICICI Securities from doing so. Non-rated securities indicate that rating on a particular security has been suspended temporarily and such
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to this company, or in certain other circumstances.
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ICICI Securities or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from
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ICICI Securities or its associates might have received any compensation for products or services other than investment banking or merchant banking or brokerage
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ICICI Securities encourages independence in research report preparation and strives to minimize conflict in preparation of research report. ICICI Securities or its
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the research report. Accordingly, neither ICICI Securities nor Research Analysts and their relatives have any material conflict of interest at the time of publication of this
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It is confirmed that Nehal Shah, CA; Jigar Shah, CA; Research Analysts of this report have not received any compensation from the companies mentioned in the report
in the preceding twelve months.
Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions.
ICICI Securities or its subsidiaries collectively or Research Analysts or their relatives do not own 1% or more of the equity securities of the Company mentioned in the
report as of the last day of the month preceding the publication of the research report.
Since associates of ICICI Securities are engaged in various financial service businesses, they might have financial interests or beneficial ownership in various
companies including the subject company/companies mentioned in this report.
It is confirmed that Nehal Shah, CA; Jigar Shah, CA; Research Analysts do not serve as an officer, director or employee of the companies mentioned in the report.
ICICI Securities may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report.
Neither the Research Analysts nor ICICI Securities have been engaged in market making activity for the companies mentioned in the report.
We submit that no material disciplinary action has been taken on ICICI Securities by any Regulatory Authority impacting Equity Research Analysis activities.
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This report has not been prepared by ICICI Securities, Inc. However, ICICI Securities, Inc. has reviewed the report and, in so far as it includes current or historical
information, it is believed to be reliable, although its accuracy and completeness cannot be guaranteed.

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