November 17, 2016 / 17:15 IST
Century Plyboards’ (CPBI) revenue rose 5% YoY to INR 4,627m (est. of INR 4,908m). On a YoY basis, revenue growth was flattish for plywood and allied products, 18% for laminates and allied products, and 5% YoY for logistics. EBITDA grew 2.2% YoY to INR 757m (est. of INR 893m), with margin contracting 50bp YoY to 16.4% (est. of 18.2%). EBITDA margin was 15.6% for plywood (17.4% in 2QFY16), 18.3% for laminates (14.1% in 2Q) and 39.2% for logistics (40.9% in 2Q). PAT grew 5% YoY to INR 493m (est. of INR 513m).
Given strong return ratios (32% RoE in FY18), huge opportunity size and likely shift from unorganized to organized in the wake of GST, we believe CPBI deserves multiples in line with similar building product leaders. Maintain Buy with a target price of INR263 (24x FY18E EPS).
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