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ICICI Securities
Greenlam Industries (Buy)
CMP: ₹519
Target: ₹754
The sharp correction in the stock of Greenlam Industries (GRLM) should be used as an ideal opportunity to invest for medium to long term, in our view. Despite the ongoing Covid-19 crisis and the expected muted demand environment (for its product basket) in the near term, we believe the positives (decent traction in laminate exports and considerable decline in resin costs in its laminate segment which seems unlikely to be fully passed on) are likely to outweigh the negatives (sustained decline in domestic laminate volumes and expected fall in volumes and margins of decorative veneer segment), which suggests the earnings pullback could be faster than anticipated once the situation normalises. Upgrade to ‘buy’.
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