Accumulate Century Plyboards; target of Rs 358: Yes Securities

Yes Securities has recommended accumulate rating on Century Plyboards with a target price of Rs 358 in its research report dated October 27, 2017.

November 09, 2017 / 11:19 IST

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Yes Securities' research report on Century Plyboards

MDF is expected to remain one of the fastest growing (15-20%) wood panel product with pricing differential of MDF vs. cheap plywood (low at 10-12%) and with better durability & newer applications,. Additionally, capacity constraint of existing players in North India will provide CPL with an opportunity given its strong distribution network and brand awareness to ramp up its production and gain market share in a fast growing category.

Outlook

We expect CPL to post Revenue/EBITDA CAGR of 20%/21% over FY17-FY20E with the new MDF capacity coming on stream and believe it to be one of the best plays on building material companies. Company is expected to improve ROIC to 20% by FY21E from 17% in FY17. We value stock at 30x FY19E EPS with TP of INR 358 and initiate coverage with ACCUMULATE.

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