Century Plyboards (India) Ltd., founded in 1986, is a leading manufacturer of wood-based products, including plywood, laminates, MDF, particle boards, and veneers. Headquartered in Kolkata, it operates multiple manufacturing facilities across India. The company enjoys a strong brand presence, driven by innovation, quality focus, and extensive distribution. With diversified product lines and premium positioning, Century Ply caters to residential, commercial, and infrastructure sectors both in domestic and export markets.
Overall Performance
- Revenue Growth:
- Standalone: +6.8% YoY
- Consolidated: +16.3% YoY
- Growth aligned with previous guidance, demonstrating resilience and agility.
- EBITDA:
- Standalone (ex-forex): 12.7%, down from 13.5% YoY due to higher advertising spend (notably IPL sponsorship).
- Consolidated (ex-forex): 12.5%, up from 11.2% YoY — improvement driven by Badvel plant ramp-up.
Segment-Wise Highlights
1. Plywood
- Revenue Growth: +15.3% YoY driven by strong volume growth.
- EBITDA Margin: 13.8% — among the best in the industry.
- Industry Outlook:
- Positive long-term growth supported by urbanization, rising incomes, affordable housing, and shift to organized brands.
- BIS standards and environmental norms to favor organized players.
- July 2025 marked highest-ever sales volume in plywood.
2. Laminates
- Consolidated Revenue Growth: +12.8% YoY, +1.9% QoQ.
- EBITDA Margin: 5.9%.
- Early signs of turnaround with strategic cost-saving measures in place.
- Focus on gradual recovery in profitability.
3. MDF (Medium-Density Fibreboard)
- Consolidated Revenue Growth: +23.7% YoY.
- EBITDA Margin: 14.3% — one of the highest in the industry.
- Key Drivers: Improved capacity utilization (especially Badvel plant) and cost optimization.
- Market: Lower imports post-BIS norms, though some oversupply remains. Focus on market share gains.
4. Particle Board
- Revenue: Down YoY but improved sequentially from Q4 FY25.
- Margins: Under pressure from high timber costs and pricing issues.
- New Tamil Nadu plant began commercial production at end of Q1 FY26 — expected to improve cost structure and margins.
- New line enables production of 8×4 size boards, opening larger market opportunities.
Capacity Expansion
- New particle board facility in Tamil Nadu operational.
- Plywood Hoshiarpur plant expansion to be completed by Q2 FY27.
Working Capital
- Cycle improved from 76 days to 71 days — better raw material inventory management.
Strategic & Operational Initiatives
- Branding & Marketing: High ad spend in Q1 due to IPL sponsorship (plywood ad spend 5.7% of segment revenue vs. usual 4%).
- AI & Digitalization:
- Ongoing 3-year digitization plan includes AI adoption in multiple functions.
- Trial implementation of Distribution Management System (DMS) in small areas.
- AI-driven initiatives for dealer data capture, demand forecasting, and SKU optimization.
- Product Development:
- MDF: Launch of “Cenboil Plus” (high density, waterproof MDF).
- Particle Board: Superior quality continuous line boards.
- Laminates: Acrylic laminates with quality guarantee.
- PVC boards: New “louver” category.
Industry Trends
- Plywood: Growing shift from unorganized to organized market; consolidation underway.
- MDF: Lower imports post-BIS norms; industry capacity utilization improving.
- Particle Board: Competition from large players, but new technology and product quality expected to improve Century’s market position.
- Timber Prices:
- MDF & Particle Board: Slight rebound due to monsoon but overall easing trend.
- Plywood: Prices stable; reductions unlikely before late FY27 due to timber growth cycle.
Financial Outlook & Guidance
- Plywood: Maintain 10%+ annual growth target despite July peak sales.
- MDF: 20% revenue growth, 15% EBITDA margin guidance for FY26.
- Laminates: 20% revenue growth, mid- to high-single-digit EBITDA margin guidance.
- Particle Board: Target >₹500 crore turnover potential from Tamil Nadu plant at steady state; 15% EBITDA margin by Year 3.
Debt Position
- Consolidated debt as of March 2025: ~₹1,400 crore.
- Target to reduce long-term debt (₹400+ crore) to near-zero within 2 years, unless large capex undertaken.
Q&A Session – Question and Answer Format
Q: Plywood growth has exceeded guidance — is normalization expected?
A: Guidance remains 10%+ growth; actual performance could be better depending on market dynamics.
Q: MDF margins are strong — what’s the supply situation?
A: Imports are lower, capacity utilization improving; 15% EBITDA margin guidance maintained while focusing on market share gains.
Q: Can you share total inventory at June-end?
A: CFO will provide details separately.
Q: Timber price trends?
A: MDF/Particle Board prices easing but seasonal monsoon spikes; Plywood prices stable.
Q: Why have plywood EBITDA margins fallen despite higher gross margins?
A: IPL ad spend increased costs in Q1; spend was 5.7% of plywood revenue.
Q: Particle Board ramp-up plan and market traction?
A: New continuous line plant producing higher-quality boards; strong OEM response; volumes to rise sharply from H2 FY26.
Q: Particle Board revenue/margin outlook?
A: Target >₹500 crore turnover at steady state, 15% EBITDA margin by Year 3.
Q: Commercial MDF — is it part of portfolio?
A: Yes, but always with Century’s quality standards.
Q: Any strategy changes for Sainik 710/303 after BIS norms change?
A: No policy change; BIS compliance to be marked on products.
Q: AI and DMS adoption plans?
A: 3-year digitization roadmap; AI being rolled out in multiple functions; DMS pilot underway.
Q: Update on plywood Hoshiarpur capex?
A: Work starting soon; completion by Q2 FY27.
Q: Price hikes in Q1?
A: Plywood +2% (Apr), Laminates +2.5% in domestic 1mm portfolio; no hike in MDF.
Q: Organized vs. unorganized industry share?
A: No authentic data; Century has gained share in plywood and MDF; consolidation underway.
Q: Laminates strategy?
A: 20% revenue growth target; mid- to high-single-digit EBITDA.
Q: New product launches in MDF/Laminates/Particle Board?
A: Multiple launches including Cenboil Plus (MDF), acrylic laminates, PVC louvers.
Q: Furniture fittings business update?
A: Senior team in place; decision in next 6–9 months.
Q: Debt outlook?
A: Plan to reduce long-term debt (~₹400+ crore) to near-zero in 2 years.
Q: Timber price trends in North/South?
A: North ₹6.3/kg; South ~10% lower; Q1 prices down 8–10% QoQ.
Q: MDF competition — price war status?
A: No price war, but no price hikes; Century margins expected to outperform industry.
Q: Imported timber share in plywood?
A: Majority imported due to better quality; unlikely to revert to domestic soon.
Q: Plywood capacity/utilization?
A: 366,000 CBM capacity; 91% utilization; +30,000 CBM in H2.
Q: MDF export obligations?
A: Minimal exports (<5%) due to high timber costs; mainly Middle East.
Q: Laminates growth driver — domestic or exports?
A: Both domestic and exports improved.
Q: Plans for economy brand in MDF/Particle Board?
A: No such plans.