Century Plyboards India Ltd (CPIL) is a plywood manufacturer dealing in plywood, laminates, MDF (Medium Density Fibreboard) and others with presence across India and overseas. CPIL is also engaged in logistics business through management of a container freight station. We expect CPIL to report net revenue CAGR of ~17% to ~`2,896cr over FY2017-20E owing to healthy growth in plywood and lamination business, foray into MDF and particle boards coupled with strong brand and distribution network. On the bottom-line front, we expect CAGR of ~16% to `306cr over the same period on the back of strong revenue and better margin in MDF business. At the current market price of `317, the stock trades at a P/E of 23.3x its FY2020E EPS of `13.7. We initiate coverage on the stock with a Buy recommendation and Target Price of `400 based on 29x FY2019E EPS, indicating an upside of ~26% from the current levels.

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