Century Plyboard Q3 Results Review - Below Estimate. Contraction In Margins: Prabhudas Lilladher

Prabhudas Lilladher Report

We downward revise Century Plyboards India Ltd.'s FY24/25/26E earnings by 13.8%/15.8%/7.7% to factor in muted Q3 performance and weak Q4 margin guidance across its Plywood/Laminates/medium-density fibreboard segments to 12-14%/12-14%/ less than 20%.

Century Plyboards has also downward revised its Q4 Plywood/laminates revenue growth guidance to single digit and MDF to 20%. Plywood segment (~55% revenue) reported soft vol. growth of 3.8% YoY versus Greenply Industries Ltd. at 11.3% YoY, while significant correction in MDF/particle board/laminate realisations by 13.2%/18.9%/10.0% YoY impacted revenue in Q3 FY24.

Consolidated Ebitda margin contracted 11.3% with drop in realisation and one-off expenses related to dealers meet and consultant fees which is expected to be range bound in coming quarters.

We expect overall revenue/Ebitda/profit after tax compound annual growth rate of 12.2%/15.7%/12.0% with plywood/laminates/MDF volume CAGR of 9.0%/11.3%/25.9%.

Maintain ‘Buy’ rating with revised target price of Rs 848 (earlier Rs 888) valuing the stock at 35 times FY26 earning per share.

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