Motilal Oswal has issued a 'Buy' rating on Century Plyboard with a target price of ₹893 in its research report dated August 04, 2026, significantly higher than ICICI Securities' ₹802 target. The brokerage's bullish stance is based on the company's leadership position in key building product segments and high earnings growth expectations. The recommendation comes as the company continues to demonstrate strong operational performance across all segments, with revenue, EBITDA, and PAT jumping 34%, 54%, and 55% YoY respectively in Q1FY27, which were 17-25% ahead of estimates.
Century Plyboard delivered exceptional Q1FY27 results with consolidated revenue growth of 33.5% year-on-year and 4.6% quarter-on-quarter. The company's plywood segment continued to surprise positively with robust revenue growth of 32% YoY and a strong EBIT margin of 16.5%, up 190 basis points YoY and 170 basis points QoQ. Revenue in Laminate, MDF, and Particle Board segments also grew by healthy 15%, 29%, and 157% YoY respectively. Consolidated operating profit margin (OPM) increased 171 basis points YoY to 12.7%, while EBITDA grew 54.3% YoY driven by improved operational efficiency. The strong performance across all segments demonstrates the company's ability to maintain growth momentum despite market challenges.
The company showed mixed margin performance across segments in Q1FY27. Plywood OPM improved significantly by 239 basis points YoY to 16.9% due to operating leverage benefits, with the segment delivering strong EBIT margin of 16.5%. Laminate margins expanded substantially by 436 basis points YoY to 10.2% on a low base, indicating strong operational improvements. However, MDF margins contracted 723 basis points YoY to 7% due to higher raw material costs, reflecting the impact of input cost pressures. Management noted that demand continues to remain healthy across all segments in Q1 and expects this positive trend to continue in the medium term. Segment margins remained tepid, which management expects to revive with increased capacity utilization.
Management maintained a cautious stance for FY27, continuing to refrain from providing guidance due to geopolitical uncertainties. Despite near-term challenges, the company's strong Q1 performance and healthy demand trends across segments provide a positive foundation for future growth. Motilal Oswal has reiterated its BUY rating on CPBI with a target price of ₹893, based on 33x FY28E P/E. The brokerage's valuation reflects confidence in the company's operational capabilities and market positioning despite external uncertainties. Any weakness in the Plywood business poses downside risk to the bullish call, while the company's leadership position in building product segments supports the positive outlook.
