Greenlam Industries Soars 30% on Strong Q2FY24 Performance

Greenlam Industries Soars 30% on Strong Q2FY24 Performance

VoM News Desk | November 2, 2023 | 02:35 PM IST | Breaking News | Follow on Google News

Greenlam Industries Soars 30% on Strong Q2FY24 Performance

Greenlam Industries Soars 30% on Strong Q2FY24 Performance

Greenlam Industries, one of the world’s top three laminate manufacturers, has witnessed a remarkable surge in its stock price, climbing nearly 30% in the past four trading sessions. The stock’s value jumped from ₹411 apiece to ₹534.50 apiece, reaching an all-time high of ₹572.45 in the previous trading session. This surge can be attributed to the company’s robust performance in Q2FY24.

Impressive Q2FY24 Performance Highlights

In Q2FY24, Greenlam Industries reported consolidated net revenue from operations amounting to ₹603.6 crore, representing a substantial 16.5% year-on-year (YoY) growth. The laminate segment’s revenue showed a strong YoY growth of 12.70%, reaching ₹531.2 crore.

The laminate business also witnessed remarkable volume growth of 15.7% on a YoY basis, driven by both domestic and international business. Operating profit surged to ₹53.7 crore, marking a substantial 40.8% increase compared to the corresponding quarter in the previous financial year. Additionally, the EBITDA margin improved by 210 basis points, reaching 12.5%, primarily attributed to the positive developments in the laminate business.

Greenlam Industries reported a net profit of ₹39.4 crore for Q2FY24, marking a remarkable 34.9% growth compared to the same quarter of the previous fiscal year. During the quarter, the company commenced commercial production at its greenfield laminate project in Naidupeta, Andhra Pradesh.

Analyst Recommendations and Technical Analysis

Following the company’s strong earnings, domestic brokerage firm Sharekhan retained its ‘buy’ call on the stock with a target price of ₹640 apiece. Sharekhan is optimistic about Greenlam’s growth prospects, driven by robust demand for laminates and a decline in input costs. They also anticipate gradual improvements in export markets, with capacity additions in laminates and contributions from the plywood and particle boards divisions expected to drive growth over the next three years.

On the other hand, Nuvama Institutional Equities maintained a ‘hold’ rating on the stock with a target price of ₹545 apiece, citing uncertainty surrounding the company’s new particleboard plant.

On the technical front, Rajesh Bhosale, equity technical and derivative analyst at Angel One, highlighted the stock’s impressive performance, with a saucer formation pattern breakout. He expects the uptrend to continue towards ₹580 in the near term, with ₹500 serving as a likely support level.

Conclusion

Greenlam Industries’ strong Q2FY24 performance and the positive sentiment from analysts and technical experts have contributed to the stock’s significant surge in recent trading sessions. The company’s growth trajectory and positive outlook make it an interesting stock to watch in the laminate manufacturing sector.

Disclaimer: The opinions and suggestions provided in this article are those of individual analysts and do not reflect the viewpoints of VoM News. We encourage investors to consult with certified experts before making any investment choices.

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VoM News Desk

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