Century Plyboards QoQ operating performance was weaker in Q1FY22 due to regional lockdowns while its margins were affected due to rising prices of key inputs. Its net sales fell 40% QoQ to Rs 4.5 billion led by lower sales from Plywood, Laminates and MDF segments.

EBITDA fell 52% QoQ to Rs 0.6 billion and EBITDA margin contracted 354bps QoQ to 13.6%. Nevertheless, the company is witnessing improvement in operating performance from July and expects Q2FY22 to be a normal quarter.

Commenting on the result review, IDBI Capital Equity Research said, "Given weaker than expected sales/margins in Plywood and Laminates segments during Q1FY22, we lower our FY22 sales/EBITDA/EPS forecast by 11-20%. Nevertheless, we broadly maintain our FY23 forecasts. We continue to value the stock at a PER of 22x on our FY23E EPS to derive a target price of Rs 426 (Rs 427 earlier). Sharp increase in stock price in the last six months fairly discounts the positives. Hence, we recommend Hold rating as we await better entry points."

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