Century Plyboards - Growth To Accelerate: HDFC Securities

HDFC Securities Institutional Equities

We maintain our Buy rating on Century Plyboards India Ltd., with a revised target price of Rs 945/share (40 times Sep-26E EPS). In our recent interactions, the management highlighted that despite muted demand, Century will deliver double-digit revenue growth for its ply, laminates and MDF segments (market share gains).

Timber prices have slightly increased QoQ in Q2. It expects timber prices to continue their uptrend for the next few quarters and they should cool off once supply from the new plantation kicks in.

Due to supply and cost pressure, MDF margin should remain sub-par for the next few quarters. Century’s MDF plant in Andhra Pradesh has hit 50% capacity utilisation and management is confident this plant will be Ebit positive from Q3 FY25 onwards.

As the MDF plant ramps up and supply and cost pressure eases off in H2 FY26, we expect the segmental margin will start to recover. The greenfield particle board (Chennai) capacity of 800 CBM/day is expected in Q4 FY25 (capex Rs 5.5 billion).

We model strong 17/23/20% consolidated revenue/Ebitda/adjusted profit after tax CAGR during FY24-27E.

We like Century’s strong franchise (pan-India distribution, aggressive marketing, and a wide range of SKUs) and leadership presence in most wood segments. These have driven its market share gains and healthy return ratios.

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