Khambatta Securities' research report on Century Plyboards (India)
Century Plyboards (India) Limited (CPIL) reported strong results in 1Q FY23, led by all key segments. Revenues grew by 94.3% y-o-y to Rs 888.8 crore. The sales growth was driven by robust increases in volumes across product segments, led by Plywood (+105.9%) and followed by Particle Board (PB) (+72.4%), Laminates (+60.5%) and MDF (+42.3%). PB, MDF and Laminates also saw healthy gains in average realisation between ~15-25%, while the average realisation for Plywood was ~3.5%, enabled by a combination of price hikes and better product mix. The first quarter is seasonally the weakest for the company. EBITDA grew by a robust 137.7% y-o-y to Rs 143.1 crore as EBITDA margin expanded by nearly 300 bps y-o-y to 16.1% in spite of high raw material prices, benefitting from price hikes as well as from operating leverage. PAT was almost 3x 1Q FY22 levels at Rs 92.6 crore as PAT margin increased by more than 360 bps y-o-y to 10.4%. The increase in PAT and PAT margin was further aided by operating leverage resulting from lower depreciation and amortisation expenses as a percentage of sales.
Outlook
We marginally increase our forecasts for FY23 and FY24. The CPIL stock has appreciated 239% since we initiated coverage on the company with a BUY rating on 09 October 2020. Based on an unchanged target P/E multiple of 35x FY24E EPS, we value CPIL at Rs 755 (vs previous target of Rs 741), reiterating a BUY with an upside of 30% from current levels.
More Info
At 17:30 Century Plyboards was quoting at Rs 572.15, down Rs 8.25, or 1.42 percent.
It has touched an intraday high of Rs 591.80 and an intraday low of Rs 569.60.
It was trading with volumes of 14,187 shares, compared to its thirty day average of 11,488 shares, an increase of 23.50 percent.
In the previous trading session, the share closed down 2.05 percent or Rs 12.15 at Rs 580.40.
The share touched its 52-week high Rs 749.00 and 52-week low Rs 352.25 on 23 March, 2022 and 30 August, 2021, respectively.
Currently, it is trading 23.68 percent below its 52-week high and 62.29 percent above its 52-week low.
Market capitalisation stands at Rs 12,711.63 crore.
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