Analysts remain optimistic about Century Plyboards India, highlighting its market leadership and strategic brand investments, even as increased advertising spend is expected to temporarily pressure margins.
Century Plyboards India remains a buy for analysts who see the company extending its lead in the wood-panel market, even as heavier advertising spending is set to weigh on margins in the near term.
According to the brokerage note published by The Hindu BusinessLine, management told investors that demand stayed firm after a strong first quarter, with July the best month so far. Channel inventories were normal by the end of June, suggesting the recent run-up in sales has not been driven by excess stock-building.
The company is also stepping up brand investment. It has brought in Aamir Khan for an advertising campaign, which should widen visibility and support growth, but will also lift marketing costs. The brokerage said that means plywood margins are unlikely to hold at the elevated levels seen in the first quarter of FY27.
That softer margin outlook comes even as Century Plyboards continues to expand capacity and bring more plywood production in-house. Outsourcing has already fallen to a single-digit share of the mix, and the company expects additional capacity to help it strengthen its position across segments. The brokerage said Century’s pan-India distribution, broad product range and aggressive marketing continue to set it apart from peers.
Recent results underline both the company’s momentum and the pressure points ahead. Market summaries of the quarter ended June 30 showed revenue rising 33.5% year-on-year, while profit after tax increased 57.4%. Another analysis said EBITDA margin improved by 171 basis points to 12.67%, though it also noted weak profitability in MDF and losses in particle board. On that basis, the brokerage trimmed its FY27 earnings estimate slightly, while keeping forecasts for FY28 and FY29 unchanged.
The stock was assigned a target price of ₹990, valuing it at 40 times September 2028 estimated earnings per share.
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