Greenply Industries (MTLM) has finally returned to growth (with a bang: high double-digit growth) – that is the insight from our conversations with multiple plywood dealers (pan-India). With the (recent) sharp improvement in working capital management (leading to solid balance sheet strengthening) and sudden recovery in the secondary real estate market post-Covid, we expect growth momentum to sustain in the near-to-medium term.After several quarters of muted/decline in volumes,
With a sharp recovery in growth, we estimate the plywood Ebitda margin to improve to 13.6% by FY23 (vs. management guidance of 14.6%). At 13.8x FY23e earnings, we believe rerating is inevitable considering robust growth and margin outlook amid expected sharp improvement in Roces (30%+) by FY23e. Maintain Buy.