Buy Century Plyboards; target of Rs 700: Sharekhan

Sharekhan's research report on Century Plyboards

For Q2FY2023, Century Plyboards Limited (Century Plyboards) reported in-line standalone revenue, led by strong growth in MDF and particle boards. However, OPM lagged estimates, led by sharp q-o-q correction of OPM in MDF and particle board along with one-off impairment loss. Management reiterated its over 20% y-o-y revenue growth forecast, retaining segment-wise volume and value guidance. Capacity expansion plans in MDF and laminates are on track. The company announced particle board greenfield expansion in Tamil Nadu at a capex of Rs. 550 crore. Century Plyboards is scouting for land in Hoshiarpur for plywood expansion.

Outlook

We retain our Buy rating on Century Plyboards with an unchanged price target of Rs. 700, considering strong earnings growth over FY2022-FY2025E, led by healthy demand, capacity additions, and market share gains from the unorganised sector.