EPS of $3.04 decreased by 57.9% from previous year
Gross margin of 44.9%
Net income of 370.19M
""We are facing unprecedented challenges in the raw material costs which are affecting our profitability margins significantly. Our strategy will be pivoted towards operational efficiencies to counter these cost pressures."" - Management Team
In the first quarter of FY 2024, Greenpanel Industries Limited reported revenues of ₹3,861.86 million, a decline of 5.5% YoY and 8.0% QoQ, reflecting ongoing challenges in the Paper Lumber and Forest Products sector. A significant drop in gross profit by 24.3% YoY to ₹1,735.10 million, alongside a net income slump of 57.6% YoY to ₹370.19 million, highlights intense competitive pressure and cost inflation impacting profitability.
Management emphasized their focus on cost management and operational efficiencies during the earnings call, with plans to streamline operations and explore new markets to mitigate adverse trends. Investors should note that despite these challenges, the company's EBITDA margin stands at 17%, suggesting an ability to maintain some level of operational profitability. Strategic adjustments may improve results over the next quarters, making close monitoring essential for stakeholders.
Key Performance Indicators
Revenue
3.86B
QoQ: -7.98% | YoY:-5.50%
Gross Profit
1.74B
44.93% margin
QoQ: -38.39% | YoY:-24.30%
Operating Income
475.73M
QoQ: -57.71% | YoY:-64.04%
Net Income
370.19M
QoQ: -47.27% | YoY:-57.55%
EPS
3.04
QoQ: -47.33% | YoY:-57.89%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: ₹3,861.86 million (YoY Change: -5.5%, QoQ Change: -8.0%)
**Gross Profit**: ₹1,735.10 million (YoY Change: -24.3%, QoQ Change: -38.4%)
**Operating Income**: ₹475.73 million (YoY Change: -64.0%, QoQ Change: -57.7%)
**Net Income**: ₹370.19 million (YoY Change: -57.6%, QoQ Change: -47.3%)
The substantial drops in revenue and profitability metrics indicate the company’s struggles amidst rising raw material costs and fluctuating demand in the market. Declines across all key financial metrics raise concerns about competitive positioning and market share preservation going forward.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.86B
-5.50%
-7.98%
Gross Profit
1.74B
-24.30%
-38.39%
Operating Income
475.73M
-64.04%
-57.71%
Net Income
370.19M
-57.55%
-47.27%
EPS
3.04
-57.89%
-47.33%
Key Financial Ratios
grossProfitMargin
44.9%
operatingProfitMargin
12.3%
netProfitMargin
9.59%
returnOnEquity
3.1%
operatingCashFlowPerShare
$3.04
freeCashFlowPerShare
$3.04
priceToBookRatio
3.41
priceEarningsRatio
27.52
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Commentary:
- Market Conditions: Management explained, "We are facing unprecedented challenges in the raw material costs which are affecting our profitability margins significantly. Our strategy will be pivoted towards operational efficiencies to counter these cost pressures."
- Future Outlook: The management stated, "Our focus for the next quarter will be on cost management and expanding our footprint in newer markets, aiming to stabilize our top line and improve margins. We are optimistic about turning around our performance in the subsequent quarters."
"We are facing unprecedented challenges in the raw material costs which are affecting our profitability margins significantly. Our strategy will be pivoted towards operational efficiencies to counter these cost pressures."
— Management Team
"Our focus for the next quarter will be on cost management and expanding our footprint in newer markets, aiming to stabilize our top line and improve margins. We are optimistic about turning around our performance in the subsequent quarters."
— Management Team
Forward Guidance
Management has outlined a cautious but strategically positive outlook for the upcoming quarters, focusing on operational efficiencies and market expansion. They anticipate slight stabilization in raw material pricing over the next quarter, which could mitigate some cost pressures. The key metrics to monitor will be revenue recovery and margins in response to these strategic initiatives, enabling more detailed projections for FY 2024.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
GREENPANEL.BO Focus
44.93%
12.30%
3.10%
27.52%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the current financial performance highlighted by significant revenue and profit contractions, investors should approach Greenpanel Industries Limited with caution. Although management has laid out strategic measures to address challenges, the effectiveness of these initiatives will determine the future trajectory of growth. Key factors to monitor include recovery in gross margins and the company's capacity to increase revenues through market expansion and operational efficiencies. As competitive pressures persist, close scrutiny of the company's quarterly performance will be vital for making informed investment decisions.
Key Investment Factors
Growth Potential
Greenpanel has opportunities to explore new market segments and diversify its product offerings, potentially leading to revenue recovery. Additionally, ongoing trends in home improvement and green building are likely to boost demand for sustainable materials, which could benefit Greenpanel.
Profitability Risk
Main risks include continued volatility in raw material prices, intense competition leading to margin compression, and potential slowdowns in housing and construction sectors affecting sales volumes.
Financial Position
The company maintains a reasonable cash position with a cash balance of ₹497.32 million, but the decline in net income raises concerns about its operating cash flow stability and ability to reinvest in growth.
SWOT Analysis
Strengths
Established market presence in India with a diversified product portfolio in wood-based products.
Ability to adapt by focusing on operational efficiencies and cost management.
Weaknesses
Significant decline in profitability metrics could jeopardize investor confidence.
Heavy reliance on fluctuating raw material prices.
Opportunities
Potential expansion into newer geographies and market segments.
Increasing consumer demand for eco-friendly and sustainable wood products.
Threats
Intense competition from both domestic and international players.
Potential downturn in housing and construction sectors affecting overall demand.