ICICI Direct recommended hold rating on Century Plyboards (India) with a target price of Rs 275 in its research report dated May 18, 2018.
ICICI Direct's research report on Century Plyboards (India)
Century Plyboards’ (CPIL) topline grew 11.7% YoY to Rs 544.1 crore (our estimate: Rs 571.2 crore) mainly led by MDF division revenues (Rs 64.8 crore in Q4FY18 vs. Rs 0.6 crore in Q4FY17) The EBITDA margin contracted 180 bps YoY to 15.3% (our expectation: 17.4%) due to a rise in raw material costs PAT de-grew 36.1% YoY to Rs 35.7 crore (our expectation: Rs 51.1 crore) mainly on account of EBITDA margin contraction and higher interest costs (Rs 12.2 crore in Q4FY18 vs. Rs 2.6 crore in Q4FY17) The board has recommended a dividend of Rs 1/ equity share.
Outlook
Consequently, we downgrade our EPS estimates by 19.4%, 20.9% in FY19E, FY20E, respectively, leaving limited room for upside. Hence, we have a HOLD rating on the stock with a revised target price of Rs 275 (25x FY20E EPS).
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