Century Plyboards (India) Ltd. share price target

Century Ply has reported good numbers inspite of a weak demand enviornment in real estate for the 3rd consecutive quarter now.

Century Plyboards' (CPBI) standalone Q3FY20 revenue growth was in line with estimates at 2.9% YoY, aided by 9.5% growth in the MDF segment.

MDF division shows improvement in EBITDA margins CPIL reported MDF sales volumes growth by 23% YoY to 33,271 CBM in Q2FY20. We highlight that MDF realisations grew 5% QoQ (grew 3% YoY) to | 23,342/CBM, which is encouraging. MDF EBITDA margin expanded 16.4 percentage points YoY to 22.3% in Q2FY20. This was primarily on account of drop in prices of raw materials viz. glue by 20%, operating leverage on account of higher utilisation and benefits of 3-4% price hikes taken for thick MDF by the company in Q1FY20. For MDF, CPIL has maintained higher focus...

Century Ply has reported strong numbers inspite of a weak demand environment in real estate.

MDF division shows improvement in EBITDA margins CPIL's MDF facility operated at ~82% capacity utilisation in Q1FY20. MDF EBITDA margins rose to 23.4% in Q1FY20 on account of a number of factors: a) 3-4% hike taken in thicker MDF during the quarter; b) operating leverage on account of higher utilisation; c) cost benefits as prices of adhesives & raw materials have come down & electricity consumption reduced to 250 units/CBM vs. 350 units/CBM earlier. Also, there have been no notable price cuts in the industry recently. With this, the management expects margins to...

Century Plyboard's Plywood and MDF margins were stellar in Q1FY20. Century's net sales at Rs5.7 bn was slightly below our forecast. However, EBITDA at Rs926 mn was 9.9% above our forecast. Plywood segment EBIT margin expanded to 14.9% (+360bps QoQ) on lower prices of raw materials. Segment EBIT improved 28.7% QoQ to Rs470 mn. Further, higher realization led to improvement in MDF segment's EBIT margin by 1,012bps QoQ to 18.4% and segment EBIT improved 168.4% QoQ to Rs169 mn. For FY20/21, we raise our realization estimates for MDF given improvement in demand and better realization in Q1FY20. We value the stock at PE multiple of 16x on our FY21E...

Century Plyboards (Century) reported marquee improvement of over 550 BPS q-o-q in its operating profit margin (OPM), leading to standalone adjusted net profit growth of 49% q-o-q. Standalone revenue grew by 6.8% y-o-y (down 1.6% q-o-q) in a weak environment. Management expects profitability improvement across verticals, barring CFS, to sustain in FY2020, with 10% revenue growth guidance along with 15% EBITDA margin and 11% PBT margin for FY2020. Management plans to expand medium-density fibreboard (MDF) and...

Century Plyboards' (CPBI) standalone revenue growth for Q1FY20 was better than estimates at 6.8% YoY, aided by the MDF (+32%) and laminate (+17%) divisions.

Century Ply has reported strong numbers above estimates inspite of a weak demand enviornment in real estate.

We recently met the management of Century Plyboards (CPBI) for insights into the company's FY20 growth outlook. Key takeaways: (1) MDF segment to log 80-90% capacity utilisation, (2) plywood/laminate businesses to grow ~10%/15%, (3) blended margin to improve backed by margin gains across the MDF, plywood and laminate segments, albeit partly offset by competitive pressures in CFS. Maintain BUY on reasonable valuations of 15.9x FY21E P/E. Our Mar'20 TP remains unchanged at Rs 200....