Buy Greenpanel Industries; target of Rs 239: Prabhudas Lilladher

What happened

Prabhudas Lilladher maintained its BUY rating on Greenpanel Industries and lowered its target price to Rs 239 from Rs 271. Greenpanel’s MDF volumes fell 3.1% year on year in Q2FY27, while the broker cut its earnings estimates for the following two financial years.

Confirmed

Global impact / market context

Lower near-term sales volumes and reduced earnings estimates point to weaker expected profit generation, while the lower target price reflects that change in the broker’s assessment. A recovery depends on customer demand returning, export conditions improving, and chemical cost inflation easing as management expects.

Analyst inference

The report describes pressure from subdued original equipment manufacturer demand after earlier pricing benefits were withdrawn, customers exploring imports, and Middle East disruptions weighing on exports. It also cites a goal of mid-teen MDF volume growth in FY27, alongside uncertain chemical costs tied to crude prices and geopolitics.

Confirmed

What to watch

1. Check whether MDF volumes recover from Q3FY27, as management expects; stronger sales would support the company’s FY27 volume growth target, while continued weakness could put it at risk. Analyst inference
2. Track chemical cost inflation in the second half of FY27 and crude-price developments; easing chemical costs could help the margin recovery expected from better capacity use and cost efficiencies. Analyst inference
3. Watch for further broker estimate or target-price changes: Prabhudas Lilladher cut its earnings estimates for the next two financial years and lowered its target to Rs 239. Confirmed

Evidence

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