Buy Century Plyboards; target of Rs 210: Emkay Global Financial

Emkay Global Financial is bullish on Century Plyboards has recommended buy rating on the stock with a target price of Rs 210 in its research report dated November 11, 2020.

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November 13, 2020 / 15:08 IST

26 Aug, 2025 12:21

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Emkay Global Financial's report on Century Plyboards

Q2 results were ahead of our estimates, led by higher profits in the Plywood and MDF (OPM at 28.1%, highest-ever for MDF) segments. EBITDA came in at Rs859mn vs. estimated Rs638mn and OPM was at 16.5% vs. estimated 12.6%. Key positives: 1) 19% yoy growth in MDF volume with OPM improvement of 5.8pp yoy, 2) 5.8% yoy growth in volumes of particle boards, 3) 83.5% yoy/64.6% qoq reduction in interest expense. The key negative factor was a 24.7% fall in revenue of Laminates. All the segments have seen a better recovery in Oct’20 and management is cautiously optimistic for future growth. New technology “Virokill” has helped create higher demand in plywood and its full benefits will be visible in the next two quarters. CPBI is planning new capacity for MDF in the South region.

Outlook

We raise EBITDA by 9.8% for FY21E and by 4.3% each for FY22/23E on higher volume and price assumptions. We expect CPBI to benefit from strong demand in the MDF and particle board segments. Maintain Buy.

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