Century Plyboards (India), engeged in manufacturing of wood and wood products, reported strong operating performance in Q4FY21 led by uptick in demand. Its net sales increased 41% YoY to Rs 7.4 billion led by higher sales from Plywood, Laminates and MDF segments. EBITDA jumped 81% YoY to Rs1.2 billion and EBITDA margin expanded 381bps to 17.2% In Q4FY21 due to strong margin improvement in Plywood segment. Century is now a net debt free company; its working capital cycle days fell to 51 days (normal cycle 70 days).C

ommenting on the result review, IDBI Capital said, "Given stronger than expected margins in Plywood and Laminates segments in Q4FY21, we raise FY22/FY23 EBITDA/EPS forecast by 11-23% as we now anticipate plywood demand to remain strong.

We value the stock at a PER of 22x (Earlier 20x) on our FY23E EPS to derive a target price of Rs 427 (Rs 317 earlier). However, 31% increase in stock price in the last three months fairly discounts the positives. Hence, we downgrade the stock to a HOLD from an ACCUMULATE earlier."  

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