Buy Century Plyboards; target of Rs 341: Edelweiss

Edelweiss' research report on Century Plyboards

Century Plyboards (CPBI) reported a dismal Q4FY18. Muted volume growth in plywood (8% YoY) and margin pressure in non-plywood categories, primarily due to forex loss, led to EBITDA and PAT missing estimates 16% and 33%, respectively. The quarter’s numbers were dented by forex loss (INR70mn) and the unorganised sector gaining market share in the absence of E-way bill.

Outlook

We believe, CPBI will be key beneficiary of demand shift from unorganised to organised players riding strong branding, widening distribution reach, growing share of mid-end plywood brand Sainik and ensured raw material security. However, to factor in the near-term weak environment, we revise our FY19/20E EPS down 24%/23%, respectively. We reiterate ‘BUY’ with revised TP of INR341 (INR442 earlier) based on 27x FY20E EPS.