CRISIL assigns valuation grade of 4/5 to Century Plyboards

CRISIL Research has come out with its report on Century Plyboards. The research firm has maintained fair value at Rs 73 per share. The stock is trading at Rs 66 per share indicating 11% upside from the current level.

Century Plyboards (India) Ltd (Century Plyboards), a predominantly plywood and laminate manufacturer, has diversified to cement, ferro alloy and logistics. It now plans to demerge the cement and ferro alloys businesses into a separate entity. We maintain our fundamental grade of 3/5.

Modus operandi of de-merger:

• Century Plyboards has created a 100% subsidiary - Star Ferro and Cement Ltd (SFCL). Century Plyboards and its nominees currently hold 0.5 mn shares in SFCL, which represents the fully paid up share capital of SFCL.

• The ferro alloys division and the 70% cement subsidiary, Cement Manufacturing Company Ltd (CMCL), will be transferred to SFCL with effect from April 1, 2011.

• SFCL will be demerged from Century Plyboards and listed as a separate entity upon completion of the legal process, which is expected to take about 8-12 months. The process includes shareholders

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