Hold Century Plyboards; target of Rs 687: ICICI Securities

ICICI Securitie's research report on Century Plyboards

CPBI reported YoY revenue growth of 12.8% YoY with plywood / laminates / MDF segment reporting growth of 14.2% / (-1.1)% / 25.5% YoY. Plywood / laminates / MDF & allied volume was +13.4% / -6.5% / 47.3% YoY (5-year CAGR of 9.7% / 4.1% / 11.4%). Management stated demand was sluggish in Q1, but is likely to improve going forward as housing market demand remains buoyant. For FY25, management has maintained its guidance for revenue growth of >10% YoY in plywood, 20% in laminates (aided by new capacity for exports) and 40% in MDF (due to capacity expansion). NWC in Q1FY25 was down 3 days YoY to 66 (primarily due to inventory days decline of 3 days YoY).

Outlook

We continue to like CPBI due to its comprehensive wood panel product portfolio, wide distribution network, strong brand and believe it will be a major beneficiary of the uptick in housing market. Maintain HOLD with a rolled-over target price of INR 687, set at an unchanged 31x P/E Jun’25E and await a better entry point.