ICICI Securities Rates Greenpanel Industries HOLD: Q2 Results Mixed, FY26 Outlook Trimmed but ₹266 Target Unchanged!

ICICI Securities has issued a research report on Greenpanel Industries, maintaining a 'HOLD' recommendation and an unchanged target price of INR 266 for September 2026. The report highlights Greenpanel Industries' consolidated revenue growth of 17.5% year-on-year (YoY) for the second quarter of fiscal year 2026 (Q2FY26). This growth was primarily fueled by a 20.4% YoY increase in Medium Density Fiberboard (MDF) revenue. MDF volumes saw a significant rise of 25.1% YoY, with domestic volumes climbing 30.5% YoY, indicating a successful execution of the company's new strategy to boost sales.

Despite the volume and revenue gains, the reported MDF Operating Profit Margin (OPM) declined by 100 basis points (bps) YoY, though it improved sequentially by 630 bps QoQ. The report notes that this reported OPM appeared higher due to benefits from the Export Promotion Capital Goods (EPCG) scheme, and the adjusted OPM actually contracted by 269 bps YoY and 636 bps QoQ.

Looking ahead, Greenpanel Industries' management expects higher teens YoY MDF volume growth and an MDF OPM in the higher single-digit to lower double-digit range for FY26. In light of these factors, ICICI Securities has revised its EBITDA estimates downwards, cutting FY26E and FY27E EBITDA by 21.5% and 6.8%, respectively.

**Impact:** This report provides investors with a mixed outlook. While revenue and volume growth are positive, the contraction in adjusted operating margins and the subsequent EBITDA cut suggest challenges in profitability. The HOLD rating indicates that the current stock price may reflect these factors, with limited immediate upside potential according to ICICI Securities' analysis. The unchanged target price suggests the firm sees long-term value, but near-term performance might be constrained. This news can impact investor sentiment towards Greenpanel Industries and potentially influence trading decisions for the stock. Rating: 6/10.

**Difficult terms:** * **MDF (Medium Density Fiberboard):** An engineered wood product made by breaking down hardwood or softwood into wood fibers, combining it with wax and resin binder, and forming panels by applying high temperature and pressure. It's commonly used in furniture and cabinetry. * **YoY (Year-on-Year):** A comparison of a period's performance against the same period in the previous year (e.g., Q2FY26 vs. Q2FY25). * **QoQ (Quarter-on-Quarter):** A comparison of a period's performance against the immediately preceding quarter (e.g., Q2FY26 vs. Q1FY26). * **OPM (Operating Profit Margin):** A profitability ratio that shows how much profit a company makes on a dollar of sales after paying for variable costs of production, but before paying interest or income taxes. It's calculated as Operating Income / Revenue. * **bps (basis points):** A unit of measure used in finance equal to one-hundredth of a percentage point. 100 bps = 1%. * **EPCG benefits:** Benefits derived from the Export Promotion Capital Goods scheme, which allows import of capital goods at a concessional customs duty for export-oriented businesses. * **EBITDA:** Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a firm's overall financial performance and is used as an alternative to net income in some circumstances. * **FYXX (Fiscal Year XX):** Refers to the financial year. FY26 means the financial year ending March 31, 2026. * **TP (Target Price):** The price at which a stock analyst or broker believes the stock will trade in the future.