ICICI Direct recommended hold rating on Century Plyboards (India) with a target price of Rs 195 in its research report dated November 09, 2018.
ICICI Direct's research report on Century Plyboards (India)
Century Plyboards’ (CPIL) topline grew 18.9% YoY to Rs 564.4 crore (our estimate: Rs 580.3 crore) mainly led by MDF division revenues (Rs 61.3 crore in Q2FY19 vs. Rs 0.1 crore in Q2FY18) EBIT margins contracted 154 bps YoY to 11.2% (our expectation: 12.7%) mainly as the company reported losses in the MDF division at EBIT level (-Rs 0.5 crore vs. Rs 4.7 crore in Q1FY19) PAT de-grew 5.8% YoY to Rs 37.8 crore (our expectation: Rs 43.0 crore) mainly on account of lower-than-expected operating performance and higher interest cost.
Consequently, we downgrade our EPS estimates by 13.4%, 18.8% to Rs 8.1, Rs 9.7 in FY19E, FY20E, respectively, leaving limited room for upside. Hence, we have a HOLD recommendation on the stock with a revised target price of Rs 195 (20x FY20E EPS).
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