Hold Century Plyboards (India); target of Rs 155: ICICI Direct
ICICI Direct’s research report on Century Plyboards (India)
Century Plyboards (CPIL) topline grew 13.5% YoY to Rs 578.9 crore, mainly led by better utilisation in MDF division. MDF division clocked revenues of Rs 88.2 crore in Q3FY19 vs. Rs 47.3 crore in Q3FY18 EBITDA margins were flattish QoQ at 13.1% (our expectation: 14.5%) due to lower EBITDA margin in plywood division (12.1% in Q3FY19) PAT de-grew 11.2% YoY to Rs 41.4 crore (our expectation: Rs 44.6 crore) mainly on account of a contraction in EBITDA margin.
Also, we would be keenly watching CPIL’s plan on capacity addition (in UP) in the already oversupplied MDF market. Hence, we maintain HOLD rating on the stock with a revised target price of Rs 155 (20x FY20E EPS).
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