🧠 At a Glance
Greenlam Industries, India’s decorative laminates and veneer giant, has grown its topline steadily over five years. But rising debt, plunging margins, and a 50% profit drop in FY25 have peeled off the shine. Can its capex-heavy expansion deliver returns — or is this just plywood panic?
🧰 1. What Greenlam Does (Besides Confusing Investors)
Greenlam is your go-to brand when your architect says, “Sir, Italian look chahiye, but budget bhi dekhiye.”
They sell:
- 🎨 Laminates: High-pressure, compact panels, kitchen solutions
- 🌳 Veneers: Natural, teak, engineered wood
- 🪑 Wooden Flooring + doors, clads, and facades
- 🧱 Plywood & Blockboards
- 🔜 Particle Board (new plant in progress)
Essentially, if it looks like wood and costs less than wood, they probably sell it.
📈 2. 5-Year Financial Performance: Topline Good, Bottomline Burnt
🧾 Revenue (Consolidated)
| FY | Revenue (₹ Cr) | Growth |
|---|---|---|
| FY21 | ₹1,200 | — |
| FY22 | ₹1,703 | +42% |
| FY23 | ₹2,026 | +19% |
| FY24 | ₹2,306 | +14% |
| FY25 | ₹2,569 | +11% |
🟢 Revenue CAGR (5Y): 19% — impressive on paper.
💀 Net Profit
| FY | Net Profit (₹ Cr) | YoY Growth |
|---|---|---|
| FY21 | ₹74 | — |
| FY22 | ₹91 | +23% |
| FY23 | ₹129 | +41% |
| FY24 | ₹138 | +7% |
| FY25 | ₹68 | -50% 🩸 |
So FY25 saw a massive crash, with Q4 alone showing just ₹1.47 Cr net profit. That’s not earnings — that’s a rounding error.
💸 3. Margins & ROCE: Not Decorated Anymore
| Metric | FY21 | FY23 | FY25 |
|---|---|---|---|
| OPM % | 14% | 12% | 11% |
| ROCE | 15% | 14% | 8% |
| ROE | 14% | 11% | 6% |
- Margins are slipping like a badly glued laminate.
- ROCE almost halved — thanks to… drumroll… over-aggressive capex.
🧱 4. Capex Overload: New Plants, Old Problems
- FY24–25: Over ₹1,100 Cr spent on plant capacity
- Greenlam is entering:
- 🏭 Plywood (Gujarat unit commissioned)
- ⚙️ Particle Boards
- 🧪 Laminate expansion (largest in Asia?)
- Borrowings went from ₹398 Cr (FY22) → ₹1,199 Cr (FY25)
Result? Profits down, depreciation up, interest cost ballooning.
This is a textbook case of: “growth first, profits someday maybe.”
🧮 5. Valuation: Looks Expensive for a Wood-Themed Company
| Metric | Value |
|---|---|
| CMP | ₹236 |
| EPS (FY25) | ₹2.73 |
| P/E | 87x 😵 |
| Book Value | ₹44.2 |
| P/B | 5.33x |
| Market Cap | ₹6,000 Cr |
Let that sink in — P/E of 87 for a company with falling profits and 6% ROE.
Even Kajaria and Asian Paints are like: “Beta, thoda overconfidence ho gaya hai.”
📉 6. Fair Value Range: Depends on Recovery
| Scenario | EPS FY26E | P/E | FV Range |
|---|---|---|---|
| Bear 🐻 | ₹3 | 20–25x | ₹60–₹75 |
| Base 😐 | ₹4 | 30–35x | ₹120–₹140 |
| Bull 🚀 | ₹5 | 35–40x | ₹175–₹200 |
At ₹236, you’re paying for a 2026 bull case — with today’s earnings looking like a broken floor tile.
🚨 7. Shareholding & Sentiment
- 👨👩👧 Promoters hold 51% (stable)
- 🧳 FIIs: Barely 1.8%
- 🪟 Public Holding: Over 31%
Clearly, this is an undervalued institutional stock if you believe in fairy tales.
🪵 8. Edu Take: Laminate Lag Gaya
Greenlam’s story is simple:
- ✅ Great brand
- ✅ Solid topline growth
- ❌ Bad capital allocation
- ❌ Low margin businesses
- ❌ Terrible FY25 earnings
This isn’t a scam. It’s just a good business in the wrong market cycle with too much debt and very little pricing power.
So unless you like your portfolio laminated with 87x P/E stocks… maybe just watch from the showroom window.
🏷️ Tags:
Greenlam Industries, Laminates Stock India, Veneer Stocks, Decorative Plywood Stocks, Particle Board Plant India, High PE Smallcap Stocks, Greenlam Capex, EduInvesting 5-Year Recap
✍️ Written by Prashant | 📅 June 21, 2025
