Multibagger Alert: This plywood manufacturer has given investors a return of 256%

Multibagger Alert: This plywood manufacturer has given investors a return of 256%

by 5paisa Research Team Last Updated: 2022-12-13T10:19:52+05:30

On a YTD basis, the stock has given a return of 183%.

One of the largest plywood-makers in the country, Century Plyboards (India) Limited has given investors stellar returns of 256.67% over the last year. The share price stood at Rs 185.2 on November 9, 2020, and since then, the stock has more than doubled investor wealth.

The company recently reported its Q2 numbers, showcasing strong outperformance across all parameters. The company reported its best-ever net sales, EBITDA and net profit. Standalone net sales rose 55.5% YoY to Rs 808 crore led by an over 60% YoY growth in revenues in plywood and laminates followed by the particleboard (49% YoY) and MDF (36% YoY) segments. Overall, standalone operating profit stood at Rs 158.6 crore which was up 85.2% YoY and 162% sequentially.

Century Plyboards engages in the manufacture and sale of plywood, laminates, decorative veneers, pre-laminated boards, and flush doors. The management of the company has targetted Rs 5,000 crore in revenues by FY26 with an aggressive capex plan of Rs 1,230 crore that would be funded majorly through internal accruals. This would result in revenues growing at 19% CAGR over FY21-FY26.

The building materials industry was one of the many industries severely affected during the Covid-19 led lockdowns during Q1FY21 and it affected peak sales during the year. The high fixed cost structure of the industry dragged down the net earnings. However, the sector has been one of the fastest to recovery as lockdown restrictions were eased domestically. Companies such as Century Plyboards have seen a sharp improvement in capacity utilization levels and scaling up in revenues since June 2021. The industry is well on track to rebound with strong growth in FY22 and this is being reflected in the stock price of such companies.

At 1.13 pm on Wednesday, the stock is trading at Rs 646.70, down by 2.10% or Rs 13.85 per share on BSE. The 52-week high of the scrip is recorded at Rs 681.20 and the 52-week low at Rs 181 on the BSE.

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