Emkay Global Financial's research report on Century Plyboards
Century Ply’s Q2FY24 standalone EBITDA declined 7% YoY/increased 8% QoQ to Rs1.4bn, in line with our estimates. EBITDA margin slipped by 253bps YoY/54bps QoQ to 14.2%. Regarding MDF, with stabilization of the second line at Hoshiarpur, the management revised its H2FY24 growth target from 20% to 25%, given that margin is likely to remain stable/improve. The ongoing MDF & Laminates project at AP is on track for commissioning in FY24.
Outlook
We broadly maintain FY24E-26E EBITDA/EPS and revise Sep-24E TP to Rs820/share, post quarterly rollover, based on 32x P/E. Overall, we expect EBITDA/EPS CAGR of 19-21% over FY23-26E. We maintain our BUY rating on Century Ply, as we like its integrated business model, leadership position, strong branding and higher growth visibility, underpinned by expansion plans and a robust balance sheet.
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