Greenlam Industries Limited

Basic Materials — Lumber & Wood Production · NSE

₹215.44+₹1.88 (+0.88%)

DalalBaazaar Score

42 / 100

🟡 Moderate

Verdict

CAUTION

Risk

High

Driven by moderate debt load, small-cap size, which brings sharper price swings, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Valuation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Greenlam Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Greenlam Industries Limited, together with its subsidiaries, manufactures and sells laminates, plywoods, and allied products in India and internationally.

IndustryLumber & Wood Production

SectorBasic Materials

Employees3,480

Annual revenue₹2,986 Cr

How does it make money?

Turns over ₹2,986 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹11 left at the operating level before interest, tax and depreciation. Each of its 3,480 employees supports ₹85.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹85.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.2% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE22.3%

What is the outlook?

11 analysts covering the stock expect revenue to grow about 12.2% and earnings to grow about 58.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+12.2%

Est. earnings growth+58.6%

Analysts11

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +51% while net margin moved -71% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+51%

Margin effect-71%

DalalBaazaar Score

42/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROCE of 9.2% is below 10% — capital is not working hard
✗ ROCE has fallen by 4.4 points — returns are eroding
✗ EBITDA margin of 11.0% is thin — little cushion if costs rise
✗ Net margin of 2.9% is slim
• Revenue has compounded at 14.8% a year, which is the base these returns are earned on

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

40/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

59.0x

3Y Median

56.0x

40 monthly readings · mean 66.7x · range 38.3x–112.7x

Sector Median

28.7x

median of 4 sector peers

🟡Currently trading close to its 3y median of 56.0x — the market is paying about what it usually pays for this company.

⚠️Against its sector it trades 106% above the peer median of 28.7x.

vs. its own history

Fair

56.0x median over 40 months · +5%

vs. sector peers

Expensive

28.7x median of 4 peers · +106%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

20.0x

PEG

—

What's Good / What's Bad

🟢 What's Going Well2

Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 13.4% to 4.8% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 13.6% to 9.2% — often a sign of competition or overexpansion.

Red Flags

3 items require attention · 2 high · 1 watch

🔴Debt has risen sharplyFinancial
Total debt is up 85% over 3 years, from ₹628 Cr to ₹1,160 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 2.0x — little room if earnings dip.
🟡Profit is decliningFinancial
Net profit is down 56% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.5x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
A premium to the sector to defend
It trades 106% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 13.4% to 4.8%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 11% a year✓ 14.8% CAGR
Latest reported year was 18.2%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 9%✓ 11.0%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.5x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✗ 2.0x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹201 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 5 neutral · 3 weak

Market Cap

₹5,497 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

59.0x

Expensive

Expensive — verify against sector peers

P/B Ratio

4.66x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹3.65

Profitable

Profitable on a per-share basis

ROE

4.8%

Weak

Weak capital efficiency

ROCE

9.2%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.98x

Moderate

Moderate leverage

Revenue Growth (YoY)

18.2%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-19.3%

Falling

Profits are shrinking

Dividend Yield

0.19%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹201 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

23.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

5.6%

Average

Average margins

Net Margin

2.9%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.22

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.43

Defensive

Steadier than the market

52W Range Position

22%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

216.6 / 234.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

37.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,974 Cr	₹2,247 Cr	₹2,504 Cr	₹2,986 Cr	+14.8%
EBITDA	₹246 Cr	₹315 Cr	₹280 Cr	₹329 Cr	+10.2%
EBITDA Margin	12.5%	14.0%	11.2%	11.0%	—
PAT (Net Profit)	₹129 Cr	₹138 Cr	₹70 Cr	₹56 Cr	-24.1%
EPS	₹5.15	₹5.41	₹2.68	₹2.2	-24.7%
ROE	13.4%	12.8%	6.2%	4.8%	—
ROCE	13.6%	12.5%	8.7%	9.2%	—
Total Debt	₹628 Cr	₹1,109 Cr	₹1,199 Cr	₹1,160 Cr	+22.7%
Free Cash Flow	-₹297 Cr	-₹442 Cr	-₹57 Cr	₹201 Cr	—

🟢 Revenue has grown at 14.8% a year over 3 years.

🟢 EBITDA has grown at 10.2% a year over 3 years.

🔴 EBITDA Margin has fallen from 12.5% to 11.0% over 3 years (-1.4 pts).

🔴 PAT (Net Profit) has shrunk at 24.1% a year over 3 years.

🔴 EPS has shrunk at 24.7% a year over 3 years.

🔴 ROE has fallen from 13.4% to 4.8% over 3 years (-8.7 pts).

🔴 ROCE has fallen from 13.6% to 9.2% over 3 years (-4.4 pts).

🔴 Total Debt has grown at 22.7% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹297 Cr to ₹201 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3,004 Cr

Total Liabilities

₹1,825 Cr

Cash & Equivalents

₹64 Cr

Operating Cash Flow

₹292 Cr

Capex

-₹91 Cr

Shareholding (proxy)

Institutional Holding

8.5%

Insider Holding

80.8%

Corporate Actions

Dividend Rate

₹0.4

Ex-Dividend Date

03 Jul 2026

Analyst Consensus

Recommendations

6 Buy · 3 Hold · 3 Sell

Target Price (Mean)

₹268.33

+24.6% vs CMP

Target Range

₹225 – ₹316

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

1 positive2 mixed3 general

Ashish Dhawan portfolio stock Greenlam zooms 19%; here's why

Business Standard, 25 May

Earnings call transcript: Greenlam Industries Q1 2027 misses estimates, shares fall

Investing.com, 10 AugPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Analyst Estimates: Here's What Brokers Think Of Greenlam Industries Limited (NSE:GREENLAM) After Its First-Quarter Report

Simply Wall Street, 12 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Greenlam Industries Stock Signals to Watch This Week

Univest, 24 Sept

Greenlam Industries FY26 Net Profit at ₹56.02 Cr; Q4 Revenue Surges 25.8%

scanx.trade, 21 MayResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Greenlam Ind Standalone March 2026 Net Sales at Rs 655.46 crore, up 16.96% Y-o-Y

Moneycontrol.com, 26 May

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation · Risk

WeakBusiness Quality · Growth · Profitability

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 2 high-severity red flags sit above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑