Buy Century Plyboard Ltd for the Target Rs 772 by Prabhudas Liladhar Ltd
Capacity Expansion to Support Long-Term Growth
We maintain our ‘BUY’ rating on Century Plyboards India (CPBI). The company reported healthy growth momentum across its plywood and laminate businesses, while MDF continued to face margin pressure amid industry overcapacities. Management has guided for FY27 revenue growth of 25%+ in plywood and 20%+ in laminates, with EBITDA margins of 14–15% and 10–12%, respectively. The MDF segment is expected to deliver 16–18% revenue growth, with EBITDA margins reaching double digits by FY27, while a meaningful recovery towards ~20% is expected from FY29 onwards as industry capacity gets absorbed. The particleboard business is expected to deliver over 100% revenue growth in FY27, with margins turning double-digit by year-end. We estimate revenue/EBITDA/PAT CAGR of 15.4%/18.9%/23.2% over FY26-29E with Plywood/Laminate/MDF volume CAGR of 15.1%/4.3%/10.7% over FY26-29E. We cut our earnings estimate by 4.3%/3.6% for FY28/29E and Maintained ‘BUY’ rating revised TP of INR 772 (INR 871 earlier), based on 30x Sep’28 earnings
Q2FY27 financial performance:
Revenue stood at INR 17.8bn up 28.5% YoY (PLe: INR15.7bn). Plywood volume grew by 20.1% YoY, revenue stood at INR 9.8bn (up 28.6% YoY), 11.2% above with our est. of INR 8.8bn.Laminates volume declined by 1.6% YoY, revenue stood at INR2.2bn (up 20.6% YoY), 16.7% above our est. of INR 1.9bn. MDF volume grew by 8.9% YoY, Revenue came in at INR 3.8bn (up 10.5% YoY), 3.2% below our estimate of INR 3.9bn. Gross margin contracted by ~190bps YoY to 46.3%, (PLe: 46.1%). EBITDA stood at INR2.3bn up 31.6% YoY (PLe: INR1.9bn). EBITDA margin expanded by 30bps YoY to 12.9% (Ple: 11.8%). PBT grew by 44.3% YoY to 1.4bn, (PLe: INR 1.1bn). Adj. PAT stood at INR 1.0bn up 46.1% YoY, (PLe: INR 831mn).
H1FY27 financial performance:
Revenue stood at INR 33.4bn up 30.8% YoY. Gross margin contracted by ~170bps YoY to 46.7%. EBITDA stood at INR4.3bn up 41.2% YoY. EBITDA margin expanded by 90bps YoY to 12.8%. PBT grew by 52.3% YoY to 2.6bn. Adj. PAT stood at INR 1.9bn up 50.9% YoY.
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SEBI Registration number is INH000000933
