This Mid Cap Plywood Company Reports Healthy Net Profit Of 29.5%, Declares 100% Dividend, Stock Gets A Buy

Century Plyboards Q4 FY23 results were healthy. Based on the quarterly performance of a leading brokerage firm, Anand Rathi has given a 'Buy' rating on this mid-cap company stock. The stock broking firm sees a potential growth of nearly 25.35% from it.

Q4FY23 Performance

According to Anand Rathi's research note, Century Plyboards' fourth-quarter performance was ahead of the brokerage firm's estimates. The company posted a revenue, EBITDA, and PAT growth of 7.1%, 1.9%, and 29.5% y/y respectively to Rs 9.6 billion, Rs 1.6 billion, and Rs 1.1 billion.

This revenue growth was largely supported by the plywood segment. Although the input cost pressures continued year on year, the economies of scale restricted the EBITDA margin contraction. PAT increased by 30%, led by higher other income and lower tax incidence.

Management Guidance

Management expects plywood/laminate/MDF revenue to grow 15%/25%/30% and expects 12-14% margins in plywood and laminate each, and 22-25% in MDF. It expects a marginal revenue decline in plyboards with a 20% margin, highlighted by the stockbroking firm.

Valuation & Rating

Anand Rathi explained the reason for its suggestion of a Buy rating. "The vigorous capex provides medium-term growth assurance, and the healthy balance sheet is comforting. Revenue and earnings are expected to clock 18% CAGRs each over FY23-25. We have a Buy on the stock, with a 12-month target price of Rs 722, based on 30x FY25 expected earnings.

Dividend Details

The directors of Century Plyboards, in its board meeting held on May 15, 2023, have recommended a 100% dividend at Re 1 per equity share of face value Re 1 each.

This payment is subject to the approval of shareholders in the annual general meeting of the company. No record date or book closure details were shared by the company.

Scrip Movement

In the last one year, the share price of Century Plyboards has rallied by 7.9%, and in three years it has skyrocketed 413.33% to Rs 575.70 per share, as the latest market price. The 52-week high price is at Rs 709.60 per share while the 52-week low is at Rs 436.65 per share.

Disclaimer

The stock has been picked from the brokerage report of Anand Rathi. Greynium Information Technologies, the author, and the brokerage firm are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.