From Rs 93 to Rs 662: Why this multibagger stock is showing 55% fall in some trading apps today

Greenlam Industries shares ex-bonus: Mutlibagger stock Greenlam Industries Ltd is showing up to 50 per cent fall in some trading apps today as all these the shares turned ex-bonus, adjusting to the pre-announced corporate action. The company had announced to issue bonuses for the eligible shareholders in 1:1 ratio, which is indicating a sharp downside in their stock price.

The company board of Greenlam Industries had announced the issue of bonus shares on January 30, 2025 and later fixed the record date as March 21, 2025 (Friday) to determine the eligibility of the shareholders. All the eligible shareholders will get 1 equity share each for the existing one share of the company held by them as on the record date.

Shares of Greenlam Industries settled at Rs 592 on Thursday, rising 5.92 per cent for the day, and opened at Rs 277 on Friday, post the adjustment of 1:1 bonus. It is possible that trading apps of certain brokerages might be showing the unadjusted share price for yesterday and, thus, suggesting up to a 55 per cent-odd fall on the counter.

Post adjustment of bonus issue, shares of Greenlam Industries dropped more than xx per cent to Rs 272 on Friday, with its total market capitalization over Rs 7,500 crore mark. The stock has tumbled nearly 10 per cent from its adjusted 52-week high at Rs 331, hit in May 2024. However, the stock is still up over 36 per cent from its adjusted 52-week low at Rs 217.85 hit on March 4, 2025.

Shares of Greenlam Industries had soared nearly 620 per cent within a span of 5 years as the stock surged to its 52-week high of Rs 662 from its lows at 92 in March 2020. The stock, which has remained mostly flat on a year-to-date (YTD) basis, is up 12 per cent in the last one month and 28 per cent in the last one year.

Greenlam Industries reported a 44.15 per cent decline on a year-on-year (YoY) in the net profit at Rs 19.46 crore in the December 2024 quarter, while its net sales came in at Rs 534.51 crore for the quarter, up 3.37 per cent YoY. Its Ebitda stood at Rs 63.51 crore, down 16.21 per cent on a yearly comparison.

Stable input costs led to a slight, 20 bps YoY, better gross margin to 55 per cent. Front-loading of certain costs with respect to the particle board plant pushed EBITDA down 11 per cent YoY. Higher depreciation and interest on the commissioning of plants and prior-period tax adjustment pulled PAT down a significant 50 per cent YoY, said Anand Rathi Shares & Stock Brokers.

"The management expects 50 per cent utilisation and aims to be profitable at this level. It expects Rs7.5bn revenue at optimal utilisation in 3 years. A favourable demand context led to the international business faring well," it added. Anand Rathi has maintained its 'buy' rating on the stock but cut its target price to Rs 771 from Rs 801 earlier, which turns out to be 385.5 post bonus.

Antique Stock Broking also has a 'buy' rating on the stock with a target price of Rs 650 (Rs 325 post ex-bonus basis). On the other hand, YES Securities and BoB Capital Markets had downgraded the stock post quarterly results.

YES Securities does not foresee any major improvement in veneers and allied segments, new categories viz. Plywood and Particle board (Chipboard) will be the key monitorable going ahead. Though plywood has reported decent growth, the same has been below expectations. The ramp-up of the Chipboard plant will drive topline for the coming 2-years, it said.

"However, blended margins are likely to remain under pressure. We have lowered EPS estimates for FY25E/FY26E/FY27E by 17 per cent/9 per cent/8 per cent to Rs 8.7/Rs 14.4/Rs 18.2, respectively and value the company at P/E of 30 times on FY27E EPS for a target price of Rs 547, (Rs 273.5 post bonus). We have downgraded to stock to 'reduce' from 'add' tag," YES Securities said.

New Delhi-based Greenlam Industries is among the top laminate manufacturers globally. It is a leading integrated substrate and surface solutions provider. The company offers a wide range of products to customers in over 120 countries, consistently delivering innovation and quality.

"We downgrade our rating on the stock from 'hold' to 'sell' on weak earnings profile due to muted demand and higher raw-material cost; return ratio profile to remain weak over the next 12-18 months due to high capex incurred and expectation of unfavourable industry dynamics for particleboard sector; and expensive valuations," said BoB Capital Markets with a target price of Rs 500 (Rs 250 post bonus adjustment).