Century Plyboards Gets 'Buy', Cera Sanitaryware 'Neutral' As Motilal Oswal Initiates Coverage

Motilal Oswal initiates coverage on Century Plyboards with a Buy, and target price Rs 958 and Cera with a Neutral rating and target price Rs 5,842, and reiterates Buy rating on Kajaria Ceramcis and sets target price Rs 1,252..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Century Plyboards - Rating 'Buy'/ potential upside 27%We initiate coverage on Century Plyboards Ltd. with a Buy rating and a target price of Rs 958, premised on 36x Sep'27 P/E (same as its 1-year forward 10-year average). While the wood panel industry has faced multiple headwinds related to demand and margins over the past two-three years, the medium-to-long-term outlook remains intact, fueled by a jump in real estate registrations, commercial projects under implementation, a rise in private capex, and a demand shift to branded players. We believe Century Plyboards is well placed to capitalize on a demand pickup in the housing sector. We see it as a strong play on the growing interior infrastructure market in India with a comprehensive product portfolio, strong brand recall, and a wide distribution network. Century Plyboards commands better pricing power in the market due to its premium positioning backed by high brand recall, better channel support, and after-sales services. We expect Century Plyboards to clock a 15%/32%/51% CAGR in revenue/Ebitda/PAT over FY25-28, after a low 12%/8%/5% CAGR during FY19-25. The current depressed RoE/RoCE (due to heavy capex) is expected to improve to ~18%/23% in FY28 with a ramp-up in utilization..Cera Sanitaryware - Rating - Neutral/ Potential upside 6%We initiate coverage on Cera Sanitaryware Ltd. with a Neutral rating and a target price of Rs 5,842, based on 26x Sep’27 P/E (vs. its 1-year forward 10-year average of ~33x). We assign a 15% discount to Kajaria Ceramics' target P/E of 30x due to its lower earnings growth expectation. Notwithstanding the prevailing economic slowdown, management maintains an optimistic demand outlook, underpinned by steady demand for home improvement. Following a moderate 6%/7%/14% CAGR in revenue/Ebitda/PAT over FY19-25, we estimate a 9%/10%/8% CAGR over FY25-28E, respectively, in line with industry growth. Cera’s Ebitda margin is likely to remain stable in the 14-16% range, slightly lower than previously guided by the management. Healthy operating performance, combined with a disciplined credit policy, will enable Cera to generate strong free-cash-flow (~Rs 6 billion over FY25-28), increasing its cash surplus to over Rs 10 billion in FY28 from ~Rs 6 billion currently. Although the substantial cash balance could suppress its RoE to ~16%, we estimate a high RoIC of ~47% in the coming years..Kajaria Ceramics - Rating 'Buy'/ Potential upside- 15%We like Kajaria Ceramics Ltd. due to its-numero uno status in tiles,execution capabilities, strong FCF, and focus on market share gains led by expansion in distribution reach. Notwithstanding the near-term weakness in volume and margins, we believe Kajaria Ceramics' medium-to-long-term outlook is quite robust. Management hopes for a demand revival from H2 FY26, aided by improving consumer sentiment due to easing inflation and cuts in GST rates on essential items. Kajaria also aims for a 17%+ Ebitda margin to sustain, led by various cost optimization measures. Thus, after a low 8%/6%/4% CAGR in revenue/ Ebitda/PAT over FY19-25, we project a CAGR of 10%/20%/34% over FY25-28, with an RoE/RoCE/RoIC of ~18%/25%/36% and strong FCF (~Rs 5 billion annually). Kajaria’s stock price has been consolidating for the past three years owing to a moderation in demand and margins. Driven by our expectation of improving demand, we reiterate our Buy rating on Kajaria with a target price of Rs 1,252, premised on 30x Sep’27E P/E. A lower multiple to its 1-year forward 10-year average of ~40x is assigned, as volume recovery is yet to be seen..Click on the attachment to read the full report:.'Buy' Paytm Shares Maintains ICICI Securities, Hikes Target Price — Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Century Plyboards Gets 'Buy', Cera Sanitaryware 'Neutral' As Motilal Oswal Initiates Coverage

Motilal Oswal initiates coverage on Century Plyboards with a 'Buy' rating with a potential upside of 27%, and Cera gets Neutral and reiterates 'Buy' on Kajaria Ceramics.

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