DAM Capital said that shortage of timber have driven key wood prices higher and that the lukewarm demand post the price hikes means that raw material inflation pass-through is getting difficult.
DAM Capital has initiated coverage on both Greenpanel and Greenlam Industries, while maintaining its buy recommendation on its peers - Greenply Industries and Century Plyboards.
DAM Capital observed that there is a large potential market available for the players and that the market share of leaders also does not exceed 20 percent of the overall market. The note said that the balance sheet of these players is fairly strong from pre-Covid times.
Meanwhile, Century Plyboards told CNBC-TV18 that the demand is slightly muted currently.
The company’s market share is around 7 percent and it has been gaining market share in Plywoods steadily.
It also said that there is a strong case for anti-dumping duty on MDF. India’s MDF capacity stands at 2.5 million cbm as against China’s more than 50 million cbm.
Shares of Greenpanel Industries are trading 7.5 percent higher, while those of Greenlam Industries are trading 4.2 percent higher.
