Buy Century Plyboards; target of Rs 740: ICICI Securities

ICICI Securities is bullish on Century Plyboards recommended buy rating on the stock with a target price of Rs 740 in its research report dated August 08, 2023.

Broker Research

August 10, 2023 / 11:58 IST

Buy

26 Aug, 2025 12:21

Volume

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ICICI Securities research report on Century Plyboards

Century Plyboards (CPBI) reported YoY flat consolidated revenue growth in Q1FY24. Plywood / laminates / MDF revenues grew 3.1% / (-4.7)% / 7.2% YoY with volumes being flat / flat / +5.9% YoY (4-year CAGR of 8.8% / 6.9% / 3.9%), respectively. Consolidated EBITDA margin fell 116bps YoY (-202bps QoQ) to 14.9%, primarily due to lower profitability in laminate and MDF segments, resulting in EBITDA / APAT decline of 7.0% / 5.8% YoY. Plywood margin expanded 280bps YoY (due to low base), while laminates margin fell 350bps YoY (higher A&P) and MDF margin contracted 950bps YoY (due to higher RM costs). Management has guided for operating margins of 14% / 13-15% / 25% in plywood / laminates / MDF for FY24. It stated that demand was subdued in Q1, but expects it to pick up H2FY24 onward as the housing market remains healthy. It has cut its volume guidance for FY24 to 6-7% / 15% / 20% YoY (vs earlier guidance of 13% / 25% / 30%) in plywood / laminates / MDF respectively.

Outlook

We cut our PAT estimates by ~4% each year for FY24E-FY25E and maintain BUY with a rolled-over Sep’24E target price of INR740 (earlier: INR732).

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