Smart City theme, housing-for-all and urbanization (smart village) initiative may help
CMP: 955
Suggested Buying zone: Either on sustained break out above 960-990 or in dips around 915-885
TGT: 1035-1160-1275 (1-12M)
TGT: 1675-1800 (24-36M)
TSL<870
Note: Consecutive closing below 870-844 zone for any reason, GIL may fall up to 700 area, where it can be again accumulated for better buying average (investment purpose).
Some key points & rationale:
GIL has demerged its low yielding laminate business into separate vertical which may result into much improved financial metrics and various analysts are re-rating the stock.
Assam based GIL is in an ideal position to exploit the expected huge demand for P & MDF (Ply wood & Medium density fibreboard) interior furniture/infrastructure as a result of NAMO's smart city/village theme, housing-for-all initiative. Also, with overall economic recovery as widely expected in FY-17, demand of corporate as well as small business office space might help P & MDF demand as well.
GIL has strong pan India branch & distribution network and brand portfolios in the P&MDF market. Implementation of GST may also help it to improve margins and capture more market share because of reduced price differential between organized & unorganized sectors. There is growing awareness & acceptance of MDF ready made furniture among masses as it is affordable and stylus.The company is expected huge demand for it and planning to set up a new plant in AP and also foraying into other related products in the interior furniture & infrastructure segment.
GIL also commenced commercial production of UV coated panels in its Pantnagar (Uttarakhand) plant.
For GIL, as on 31/03/2015 (YOY):
Net debt : Rs.258.28 / 549.50 cr
Debt/Equity ratio: 0.53/0.94
Net Profit: Rs.121.82/114.47 cr
EPS: 50.47/47.42
As par BG metrics:
Current median valuation may be around: 1010
Projected fair valuations might be around: 1050-1110-1210 (FY:16-18)
| SCRIP | EPS(TTM) | BV(Act) | P/E(AVG) | LOW | HIGH | MEDIAN | 200-DEMA | 10-DEMA |
| GREENPLY | 56.11 | 200.52 | 20 | 1007.32 | 1008.19 | 1007.76 | 904.2 | 905.77 |
| GREENPLY | 60.8 | 260.65 | 20 | 1048.57 | 1049.48 | 1049.03 | 904.2 | 905.77 |
| GREENPLY | 67.65 | 335.75 | 20 | 1106.07 | 1107.03 | 1106.55 | 904.2 | 905.77 |
| GREENPLY | 80.7 | 440.5 | 20 | 1208.05 | 1209.10 | 1208.57 | 904.2 | 905.77 |
Analytical Charts:
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