JM Financial retains 'Buy' on Greenply Ind; check what's fuelling optimism

Analysts at JM Financial have reiterated their bullish stance on the stock, maintaining a Buy rating with a target price of ₹370 per share, based on a 23x FY27E price-to-earnings (P/E) multiple

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Greenply Industries is poised for robust growth, driven by strategic initiatives and strong demand, according to brokerage firm JM Financial. Analysts at the firm have reiterated their bullish stance on the stock, maintaining a Buy rating with a target price of ₹370 per share, based on a 23x FY27E price-to-earnings (P/E) multiple.

 

The brokerage highlighted that Greenply’s focus on volume-led growth, margin recovery, and expansion into the furniture and fittings segment positions the company well for the upcoming quarters. Amid this, the company’s shares were trading with marginal gains of 0.64 per cent from its previous close at ₹284.25 per share on the NSE at 09:55 AM on Monday.

Management confident on growth, margins

Following a recent interaction with Greenply’s management, JM Financial noted that the company remains confident of delivering double-digit volume growth and a 16 per cent-plus margin in MDF for the second half (2H) of the fiscal year. Plywood volumes are expected to grow around 10 per cent, with sequential margin improvement in 2H compared to the first half (1H).

 

The analysts also highlighted that Greenply is making a stronger push into the mid-economy segment, aiming to deepen market penetration and support volume-driven growth. “Raw material costs are expected to stabilise from 3QFY26, which could aid in margin recovery,” the report said.

Scaling up JV operations

Greenply is focusing on scaling up its Greenply-Samet joint venture (JV), with revenue guidance of ₹25–30 crore for 2HFY26, ₹100 crore for FY27, and ₹150–200 crore for FY28. The company has allocated capex of ₹150–160 crore for FY26, including investments in the JV.

 

The analysts noted that the JV, which posted revenue of ₹113 million (₹11.3 crore) and a net loss of ₹59 million (₹5.9 crore) in Q2, is expected to reach a monthly run rate of ₹50 million (₹5 crore) in the second half of FY26. “The JV is projected to generate ₹25–30 crore in revenue for 2H, scaling up to ₹100 crore in FY27 and ₹150–200 crore by FY28,” JM Financial said.

Focus on volume growth, margin improvement

Greenply has ramped up its MDF capacity by 25 per cent to 1,000 cubic meters in Q2, consolidating its position as the sole MDF manufacturer in western India. The company aims for high double-digit volume growth in FY26 for MDF, with a targeted margin of 16 per cent or more in 2H. The implementation of Bureau of Indian Standards (BIS) norms has reduced imports significantly, while a shift toward value-added products is expected to support an Ebitda margin of 14–15 per cent in the medium term.

 

“Combined with the ramp-up in MDF production, an improving product mix, and regional exclusivity, the company is well-positioned for sustained earnings momentum,” the analysts wrote.

Strategic shift, operational efficiencies

JM Financial noted that Greenply is recalibrating its portfolio strategy to complement its premium positioning with a greater focus on the mid-economy segment. The company has onboarded a consultant to streamline backend processes and improve sales management. Operationally, it is working on debottlenecking plywood capacity, prioritising MDF expansion, and exploring adjacent markets in furniture and fittings. 

Capex and debt management

 

Greenply’s capex guidance for FY26 remains at ₹150–160 crore, largely for line balancing in plywood and construction at its Odisha facility. As of September 2025, net debt stood at ₹510 crore, down ₹27 crore Q-o-Q. The management expects further reduction as excess inventory is liquidated from Q3 onwards. “Despite further capex plans in 2HFY26, Greenply is confident of maintaining its net debt-to-equity ratio at 0.5x,” JM Financial noted. 

(Disclaimer: Target price and stock outlook has been suggested by JM Financial. Views expressed are their own.)