ICICI Securities has maintained its 'HOLD' rating on Century Plyboards with a target price of ₹802 following a 33.5% year-on-year revenue increase in the first quarter of FY27. While the company saw strong sales in its plywood segment, profit margins in the MDF business remain under pressure due to rising raw material costs, leading to a cautious stance from analysts.
Century Plyboards (India) Limited reported a significant rise in its total sales for the first quarter of fiscal year 2027, with consolidated revenue climbing 33.5% year-on-year to ₹1,561.38 crore. The company also posted a 57.4% jump in net profit, which reached ₹83.3 crore for the period. Following these financial results, brokerage firm ICICI Securities has kept its 'HOLD' recommendation on the stock, setting a price target of ₹802.
Financial data reveals a clear split in how different parts of the business performed during the quarter. The plywood segment, which is a key contributor to the company’s earnings, maintained a strong performance with an EBIT margin of 16.5% to 16.9%. This reflects healthy demand for the company’s core wood-based products. However, the company faces challenges in its Medium Density Fiberboard (MDF) and particle board segments. These areas have been experiencing margin pressure caused by higher raw material costs and increased competition in the market, which has prevented the company from passing on full cost increases to customers.
To manage its supply chain, the company is actively expanding its manufacturing capabilities. A new resin manufacturing unit in Andhra Pradesh successfully started commercial production on May 28, 2026. This is part of the company's broader strategy to support its manufacturing processes, though the immediate financial benefit will depend on how effectively these operations are scaled up in a competitive sector.
The 'HOLD' rating from the brokerage firm suggests a balanced outlook. Investors are currently weighing the company's ability to deliver consistent revenue growth against the risk of thinning profit margins in the MDF business. While the plywood segment shows stability, the company's profitability in other segments remains sensitive to fluctuations in input costs.
Going forward, the most important factor for investors to track will be the company’s ability to improve margins across its non-plywood segments. Management has expressed a goal of returning to double-digit operating profit margins in core segments by the fourth quarter of FY27. Additionally, because the company relies on the broader home improvement and real estate market, any slowdown in these sectors could impact future demand. Investors will likely look for updates on how management navigates these raw material cost pressures and whether they can successfully maintain price stability in a crowded market.