INSUBCONTINENT EXCLUSIVE:
Edelweiss Financial Services has a buy call on Century Plyboards (India) with a target price of Rs 315.
The current market price of Century
Plyboards (India) is Rs 249.50.
Time period given by the brokerage is one year when Century Plyboards (India) price can reach the defined
cent YoY to Rs 865mn, in line with estimate
However, PAT surpassed estimate 33 per cent due to change in the depreciation policy
Though plywood and laminates businesses remain strong, we foresee pressure in MDF due to intensifying competition
To factor in margin pressure, we revise down EBITDA 7 per cent each for FY19 and FY20
However, bolstered by change in the depreciation policy, we revise up PAT 12 per cent and 4 per cent for FY19E and FY20E, respectively
We trim valuation multiple by 10 per cent to 24x to factor weak demand scenario, margin pressure in MDF and sluggish demand shift from
unorganised to organised segment
Hence, we cut our target price to Rs 315 (Rs 341 earlier)
