Buy Century Plyboards; target of Rs 198: ICICI Securities

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ICICI Securities research report on Century Plyboards

In the recent rally on the bourses, majority of building material stocks seem priced-in and in some cases expensively valued. Century Plyboards (CPBI) however provides a rare combo of compelling valuations (14.4x FY22E earnings) amid sharp improvement in its fundamentals – impressive strengthening of balance sheet in FY20 with sharply improved CFO and significant debt repayment.

Outlook

CPBI is also well positioned to witness a swift earnings recovery in FY22E driven by a) its best-in-class execution capabilities; b) expected faster recovery in categories like laminates, MDF and particle boards; c) cost cutting initiatives undertaken by the company and; d) rolling out of initiatives like ILP (influencer loyalty programme) and SFA (sales force automation) recently. Maintain BUY.

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