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Overall performance strong

Century Plyboards (CPBI IN) delivered revenue growth of 24.5% YoY in Q4 to INR 14.9bn, 7% above our and consensus estimates. CPBI delivered broad-based growth across Plywood (+17.9% YoY), MDF (+31.5%), Laminates (+16.4%), Container Freight Station (+39.3%) and Particle Board (+108.3%), led by healthy volume growth across segments, except Laminates. EBITDA margin (ex-forex) improved to 13.7% (+160bps YoY), driven by operating leverage, better product mix, higher capacity utilization and cost optimization. We retain Buy with a TP of INR 935 (unchanged) on 40x (unchanged) Dec ’27E P/E as we roll forward

Strong performance across segments, MDF realization dropped:

Plywood continued its steady growth trajectory with revenue growth of 17.9% YoY and volume growth of 24.5% YoY in Q4, supported by strong brand, distribution expansion, and healthy demand. MDF revenue rose 31.5% YoY with volume growth of 39% YoY, but segmental EBIT margin slipped to 6.4% (7.0% in Q3) on chemical-led cost disruption and one-off ATL spend. MDF realization declined 5.1% YoY due to product mix. Laminates revenue improved 16.4% YoY, while EBIT margin was reported at 8.7% versus negative 2.9% in Q4FY25 on better mix and utilization. Particle Board posted its highest-ever quarterly revenue growth (+108.3% YoY) but EBIT remained negative at -9% as the new line ramps up. Century Ports commenced commercial operations at Kidderpore Docks in Q4 and is expected to turn cash positive in Q1FY27.

Sustained capacity expansion to support future growth:

CPBI is actively expanding capacities to meet demand. Plyboard is the near-term priority, with current capacity of 406k CBM. CPBI is increasing capacity by ~30% in Plywood this year via internal brownfield expansion at Karnal, Chennai and Guwahati plus a 48k CBM Hoshiarpur greenfield in H2FY27, with a further ~15% addition planned next year to in-house Sainik MR volumes. In Plywood, capacity utilization reached ~99% in Q4. MDF capacity of ~530-540k CBM is being lifted to ~600k CBM through a south-plant brownfield (60-70kCBM, completing by end of Q1FY27). New Particle Board capacity is ramping up, with the old plant being scrapped. Longterm plans include new integrated facilities in Uttar Pradesh and a potential Odisha plant for MDF or particle board.

Margins expansion curtailed to input cost inflation:

Q4 EBITDA grew by 31.8% YoY to INR 1.8bn while EBITDA margin increased 66bps YoY to 11.9%. Plywood EBITDA margin stood at 15.9% in Q4, while MDF was at 11.4%. Q4 saw inflation in resin and chemical inputs (phenol, melamine) amid geopolitical disruption leading to ~15% price rise in MDF, ~7% rise in Plywood in April. Management highlighted steady-state potential of high-teen margin for MDF and continued improvement in Laminates and Particle Board as utilization rose. We anticipate overall EBITDA margin of 12.5%/13.7% in FY27E/28E respectively, indicating 163bps gain from FY26E-28E

Retain Buy with an unchanged TP of INR 935:

We revise our EPS downwards by 10%/4.6% for FY27E/28E to factor in lower margin. We pencil in 17.3% EBITDA CAGR on FY26-29E and retain a Buy with a TP of INR 935 (unchanged) on 40x (unchanged) Dec’27E P/E as we roll forward. We introduced FY29E estimate.

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