In the post-Covid situation, the shares of companies related to Home Decor Industries have been in focus. During COVID, organized sector companies related to home decor have been seen snatching market share from unorganized sector companies. Unorganized and small companies in this sector have suffered due to rising working capital requirements and rising raw material costs. The big and organized companies of this sector have benefited from which their market share has increased.
Wood panel makers are on the radar of analysts across segments of the home decor industries. Many analysts believe that the growth of wood panel makers will be higher than that of pipe and tile makers and they will get the benefit of consolidation.
Edelweiss Securities says that the market share of small and unorganized companies is still at a high level of 65-70 percent in the wood panel sector. In such a situation, there is ample opportunity for the organized and large companies of this sector to increase their market share. Among the home decor industries, Edelweed Industries is the most preferred woodpanel company.
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Edelweiss Securities says that companies making wood panels will get the benefit of further consolidation. The brokerage house expects that during the financial year 2021-24, the earnings per share of Wood Panel Industries may see a rise of 42 per cent year-on-year, while the earnings per share of tile makers in the same period is 32 per cent year-on-year. And the earnings per share of plastic pipe makers can see an increase of 8 percent on a yearly basis.
The brokerage house says that apart from this, the Government of India can also benefit Wood Panel Industries with all its steps. The government is preparing to ban the import of all products made from wood panels. This also includes furniture imports.
Explain that India imports furniture worth Rs 28 billion per year, out of which 40-50 percent of the import comes from China. Apart from this, the government can also impose counter-validation duty (CVD) on the MDF. India’s wood panel companies will get the benefit of this. Therefore, investors should keep an eye on stocks like Greenlam Industries Ltd, Century Ply. We can see good growth in these stocks going forward and they can make our portfolio shine.
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