Buy Century Plyboards, target price Rs 715 : HDFC Securities

HDFC Securities has buy call on Century Plyboards (India) with a target price of Rs 715.0. The current market price of Century Plyboards (India) is Rs 510.35.

Century Plyboards (India), incorporated in the year 1982, is a Mid Cap company (having a market cap of Rs 11329.71 Crore) operating in Building Materials sector.

Century Plyboards (India) key Products/Revenue Segments include MDF Board, Prelaminated Particle Board, Freight & Other Containers, Veneers, Others, Agricultural Products, Other Operating Revenue, Export Incentives, Scrap for the year ending 31-Mar-2022.

Financials
For the quarter ended 30-09-2022, the company has reported a Consolidated Total Income of Rs 928.97 Crore, up 3.82 % from last quarter Total Income of Rs 894.79 Crore and up 13.26 % from last year same quarter Total Income of Rs 820.18 Crore. Company has reported net profit after tax of Rs 94.48 Crore in latest quarter.

The company’s top management includes Mr.Sajjan Bhajanka, Mr.Sunil Mitra, Mr.Naresh Pachisia, Mr.Probir Roy, Ms.Ratnabali Kakkar, Mr.J P Dua, Mr.Debanjan Mandal, Mr.Amit Kiran Deb, Mrs.Nikita Bansal, Mr.Keshav Bhajanka, Mr.Ajay Baldawa, Mr.Vishnu Khemani, Mr.Prem Kumar Bhajanka, Mr.Sanjay Agarwal, Mr.Rajesh Kumar Agarwal, Mr.Vijay Chhibber. Company has Singhi & Co. as its auditors. As on 30-09-2022, the company has a total of 22 Crore shares outstanding.

Investment Rationale Enthused by demand tailwinds, the company is aggressively expanding in all segments (without stressing its balance sheet), which should maintain its leadership position as well as drive robust earnings growth (EBITDA/PAT 15/14% CAGRs during FY22-25E). It is expanding its MDF and particle board businesses (both high-margin) aggressively. Both segments are likely to grow at a faster rate within the wood panel industry.

Promoter/FII Holdings
Promoters held 73.04 per cent stake in the company as of 30-Sep-2022, while FIIs owned 7.01 per cent, DIIs 12.5 per cent.