Multibagger stock: Century Plyboards shares hit 52-week low; here's why analyst sees 58% potential rise
1 min read 20 Mar 2023, 07:17 PM ISTDespite Century Plyboards hitting a 52-week low on Monday, brokerage house ICICI Securities sees value in it
PremiumCentury Plyboards stock has delivered multibagger return to its long-term investors as it has zoomed more than 800 per cent in the last 10-year period. However, the stock has been under pressure in the last one year.
If you look at the current share price, the stock hit its fresh 52-week low of ₹466 apiece in Monday's intraday trade. It hit its 52-week high of ₹749 on 23 March, 2022; the stock is currently down almost 38 per cent from that level.
Despite Century Plyboards, the country's leading plywood manufacturer, hitting a 52-week low today, brokerage house and research firm ICICI Securities sees value in it.
"CPBI faces near-term demand and margin headwinds due to inflationary environment and increasing timber cost. However, we continue to like CPBI for its strong growth prospects, high return ratios and healthy balance sheet and believe it will potentially be a major beneficiary of the uptick in housing demand and higher spend on home improvement post the pandemic," the brokerage said after interacting with the management of Century Plyboards.
ICICI Securities has maintained a 'Buy' rating on the stock with a target price of ₹758, implying a 58 per cent upside from the stock's current levels.
Key risks to the call includes slowdown in housing demand, continuing higher input prices, which may adversely affect demand or profitability.
HDFC Securities, on the other hand, kept its "buy" rating on the stock and a target price of ₹715 per share. "We like Century for its strong franchise (pan-India distribution, aggressive marketing, and a wide range of SKUs), leadership presence in most wood segments, and healthy return ratios," the brokerage stated.
Analysts at Nuvama Research have also retained its "buy" rating on the stock with a target price of ₹663 apiece. The brokerage remains positive on the company’s long-term growth prospects given its diverse product portfolio, broad distribution, and strong brand name.
However, the brokerage has slashed its FY23/FY24 earnings estimate by 14 per cent and 9 per cent, respectively, due to the current weakness in demand. Nuvama said the firm's operational performance in Q3FY23 was subdued due to a contraction in growth in the MDF segment and lower growth in other key segments.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
