Anand Rathi is bullish on Century Plyboards has recommended buy rating on the stock with a target price of Rs 171 in its research report dated August 13, 2020.
Anand Rathi 's research report on Century Plyboards
After almost no sales in April and May in all its major categories, Century’s weak Q1 was broadly as expected. Despite the poor Q1 sales, positive EBITDA was encouraging. Its stretched working capital and increase in debt would normalise as sales rise. We expect cost savings on several measures taken to continue in FY22 and reflect in our margin estimates (downside risk, if not). We like Century for its leading positions in its product categories, strong balance-sheet and healthy FCF generation. At ~12x FY22e P/E, it is our preferred pick in the wood-panel segment.
Outlook
We retain our Buy rating, with a target of `171 (earlier `169), valued at 15x FY22e P/E. Growth/margin recovery across segments and capex in MDF/PB are key monitorables.
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