Khambatta Securities has given Buy recommendation for Century Plyboards (India) with a target price of Rs. 475 in its research report issued on Jun 21, 2021

Khambatta Securities’ research report on Century Plyboards (India)

Century Plyboards (India) Limited (CPIL) reported the strongest-ever quarterly performance in 4Q FY21. Registering robust growth, the company reported all-time high sales and the highest EBITDA margin in history. In spite of a sharp degrowth during 1H FY21, 2H FY21 performance saw the sales loss suffered in the first half being almost recouped. All business units returned strong performances in 4Q FY21 with the laminates segment doing particularly well with strong profitability growth aided by lower raw material cost. In spite of some degrowth (-8.1% y-o-y) in FY22 topline, full-year EBITDA increased marginally while PAT grew robustly, benefitting from lower interest expenses. The company turned net debt negative with Rs 191 crore of treasury assets against Rs 109 crore of debt. Management has decided against prepayment of the remaining debt as the average cost of borrowing is lower than the average return on treasury assets. On a consolidated basis, net cash, bank deposit and investments stood at Rs 87 crore.


Raising the target P/E multiple to 30.0x (vs 25.0x) basis robust demand, progress in capacity expansion and enhanced visibility, we revise our price target upward to Rs 475, reiterating a BUY rating with a 15% upside.