Century Plyboards (India) Ltd. share price target

We recently interacted with the management of Century Plyboards (CPBI). The management indicated demand has improved QoQ in Q4-TD for plywood, remained steady for MDF (due to lack of additional capacities) whereas in laminates it continues to remain tepid. CPBI has expanded its MDF brownfield capacity by ~70% at Hoshiarpur (Punjab) which has been commissioned in early-Mar’23 and is expected to ramp-up from Q1FY24 and thus aid growth for the company from this segment.

Century Plyboards (CPBI) reported a revenue of INR884cr (up 3.4% YoY) that was broadly in line with consensus/our estimate of INR887cr/INR873cr owing to healthy growth in the plywood segment.

Century Plyboards (CPBI) has reported in-line consolidated revenue growth of 3.4% YoY in Q3FY23 (3-year CAGR of 13.5%) on a high base. Plywood / laminate/MDF revenues grew 9.8% / 5.5% / (-7.2)% YoY with volumes growing 6.2% / (-2.8)% / (-14)% YoY (3-year CAGR of 11% / 2.1% / 5%), respectively.

We recently interacted with the management of Century Plyboard (CPBI) who indicated that demand has been tepid Q3-TD with Dec’22 likely to be the decisive month for the quarter.

Century Plyboards (CPBI) reported standalone revenue growth of 11.4% YoY in Q2FY23 (3-year CAGR of 15.2%), in line with expectation.

Our recent interaction with dealers and industry players indicates that in the ongoing
Q2FY23 (Jul-Sep’22), demand trends remain steady in the wood panel sector led by
continuous momentum in the residential market and higher spending on home
improvement post the pandemic.