Century Plyboards (India) Limited — Q4 FY25 earnings call

Call held 2 Jun 2025

Management summary

Century Plyboards reported a strong Q4 FY25 with consolidated revenue growing 13% YoY, driven by robust performance in Plywood and MDF segments. While Laminates faced margin pressure, the new MDF facility in Andhra Pradesh turned EBITDA positive. The company is focused on capacity expansion across segments and expects improved margins and debt repayment in the coming years, despite challenges in the Particle Board segment.

Highlights

  • Consolidated revenue increased by 13% YoY to INR1,198 crores in Q4 FY25.

  • Plywood segment revenue grew 9.8% YoY in Q4 with an EBITDA margin of 15.4%.

  • Laminate segment consolidated revenue increased by 1.9%, but stand-alone EBITDA margin was 5.6% due to higher schemes and sales overhead.

  • MDF segment consolidated revenue grew 37.5% with an EBITDA margin of 13.2%, and the Andhra Pradesh facility turned EBITDA positive in Q4.

  • Badvel plant (Laminate and MDF) achieved nearly 60% capacity utilization in Q4.

  • Particle Board segment revenue declined 23.2% in Q4 with an EBITDA margin of 5.6%.

  • The new Tamil Nadu plant is expected to be operational this quarter, improving EBITDA margins.

  • Management targets 20% overall growth for the current year and expects Laminate EBITDA margins to recover to 8-10% by H2.

Concerns

  • Particle Board Segment Pressure

Key financials

  1. Consolidated Revenue ₹1,198 Cr +13%YoY
  2. Stand-alone Revenue ₹1,049 Cr +2.3%YoY
  3. Full Year Revenue Growth — +16%YoY

What they filed

Q1 FY27: revenue up 32.5%, net profit up 38.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,063 1,004 1,049 1,017 1,205 +13%1,147 +14%1,277 +22%1,348 +33%
EBITDA122 104 128 112 139 +14%125 +20%143 +12%172 +54%
Net profit76 64 71 68 73 −4%59 −8%77 +8%94 +38%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Plywood
    9.8% Revenue Growth Q415.4% EBITDA Margin Q4
  • Laminate (Consolidated)
    1.9% Revenue Growth
  • Laminate (Stand-alone)
    5.6% EBITDA Margin Q4
  • MDF (Consolidated)
    37.5% Revenue Growth13.2% EBITDA Margin Q4
  • Particle Board
    -23.2% Revenue Decline Q45.6% EBITDA Margin Q4

Capital allocation

high confidence
  • Capex Capex disclosed
    • Plywood capacity addition (Hoshiarpur plant)
    • Plywood capacity addition (existing plants)
    • MDF Greenfield project cost (Andhra Pradesh) ₹730 Cr
    • Particle Board capex ₹57 Cr
    So the capacity utilization currently is about 90% for this entire year and already we've announced the Hoshiarpur plant, which will come about in the next 15 months, which will help us with our futuristic growth and we are expecting that to be about 48,000 CBM more. That will continue. So that will be another 50,000 CBM for this year. So we are sorted for this year. Even at the end of this year with the growth numbers we have in mind, we will still be at a decent capacity utilization. Still not at 100%, but yes, we will need another plant next year. My first question is for MDF segment. So like two listed players have recently indicated that they have taken a price cut of 4% to 5% in April month. So just wanted to know whether we have also taken any price cut in the current June quarter? Okay. For MDF like our cost has gone up from INR600 crore to INR730 crore and like we already commissioned this project in last March quarter. So whether this increase in cost is related to the brownfield expansion or it is related to our earlier project only? No, no. It is only related to the Greenfield in Andhra Pradesh.
  • Debt Debt disclosed
    But post that, I think that the balance sheet will strengthen substantially. We'll be repaying debt and so on and so forth until and unless we go for new projects, which will depend of course on. And over the course of the next two years, we'll be repaying the majority of debt. So I think we'll be at very, very low long-term debt by the end of FY '27.

Guidance & targets

Overall Growth

  • Revenue Growth Overall Growth · current year · High confidence 20%
    For the current year, our target will be 20% growth and we very well in line to achieve that depending on two or three factors such as relative price of timber, depending on the logistic costs.

    — Keshav Bhajanka

Laminate

  • EBITDA Margin Laminate · end of H2 · High confidence 8% to 10%
    For the current year, we are looking at 8% to 10% EBITDA margin towards the end of H2 and I think we will be online to achieve the same.

    — Keshav Bhajanka

  • Margin Laminate · this year · High confidence 10%
    This year I think we are looking at 10% and I'm sure by next year we will be confident enough to tell you.

    — Sanjay Agarwal

Particle Board (New Plant)

  • EBITDA Margin Particle Board (New Plant) · steady state basis · High confidence 15% plus
    So on a steady state basis, this plant should definitely give us a 15% plus EBITDA margin.

    — Keshav Bhajanka

  • Capacity Utilization Particle Board (New Plant) · H2 · High confidence 50%
    But I think in H2, we should be at 50% capacity utilization of the capacity of the new plant.

    — Keshav Bhajanka

  • Breakeven Capacity Utilization Particle Board (New Plant) · High confidence 60% plus
    I think breakeven would be achieved at 60% plus.

    — Keshav Bhajanka

MDF

  • Demand Growth MDF · continuing · High confidence 20% plus
    MDF demand is likely to continue to grow at 20% plus. The market has been growing at close to 20% and I believe that the market is likely to continue growing at 20%.

    — Keshav Bhajanka

  • Price Rise MDF · towards the end of the year · Medium confidence certain price rises
    But the expectation is towards the end of the year, there should be certain price rises in MDF.

    — Keshav Bhajanka

Consolidated Laminate

  • Margin Consolidated Laminate · H2 of this year · Medium confidence high single-digit
    Like we said, we are going to look at high single-digit consol margins toward H2 of this year.

    — Keshav Bhajanka

Sales Growth

  • Sales Growth Percentage Sales Growth · High confidence for value
    It's for value.

    — Keshav Bhajanka

Debt

  • Debt Repayment Debt · by the end of FY '27 · High confidence majority of debt repaid
    And over the course of the next two years, we'll be repaying the majority of debt. So I think we'll be at very, very low long-term debt by the end of FY '27.

    — Keshav Bhajanka

Working Capital

  • Inventory Days Reduction Working Capital · over the course of the current year · Medium confidence close to 10 days
    So going forward I'm hopeful that over the course of the current year, we will reduce inventory days by close to 10 days.

    — Keshav Bhajanka

What to watch in Q1 FY26

Laminate EBITDA Margin Recovery

H2 FY25
Current 5.6% (stand-alone Q4 FY25)
Target 8-10% (by H2 FY25)

Why it matters

Laminate segment faced margin pressure in Q4; recovery to targeted levels is crucial for overall profitability.

For the current year, we are looking at 8% to 10% EBITDA margin towards the end of H2 and I think we will be online to achieve the same.

Risks & concerns

  • Particle Board Segment Pressure

    high

    The Particle Board segment experienced a 23.2% revenue decline and low EBITDA margins (5.6%) in Q4 due to increased timber costs and competitive pressure from overcapacity and imports.

    Analyst acknowledged

  • MDF Overcapacity and Pricing Pressure

    medium

    Overcapacity in the MDF market due to new entrants and existing players has led to pricing changes and reduced realizations.

    Management acknowledged

  • Raw Material Price Volatility

    medium

    While timber prices for MDF have seen some decline, raw material prices for particle board have increased, impacting costs. Predicting future trends remains difficult.

    Management acknowledged

Q&A highlights

4 direct, 2 evasive
MDF EPCG Export Obligation Partial
Normally EPCG benefit can be availed over the course of 6 years and the quantum of exports, the obligation will depend on whether we take GST into account or not. So the obligation can be between INR150 crores to INR400 crores. This detail we'll be figuring out because, as you know, the export scenario has changed, but this is something that takes place sporadically.

Analyst sought clarity on export obligations for the new MDF plant, and management provided a range but indicated uncertainty due to changing market conditions.

Asked by Bhavin Rupani

MDF Export Margins Evasive
We never share numbers even in laminates and even in other products between domestic and exports unfortunately.

Management declined to provide specific margin details for export business, limiting transparency on profitability drivers.

Asked by Bhavin Rupani

Plywood Price Hikes by Associations Direct
So the thing is with respect to these association news that come, they are flyers that go out every quarter. So it's not something new. But when you'll actually see at ground what is effective, it is never effective at 7%. So usually it's not even effective at 1%.

Management clarified that reported price hikes by associations are largely ineffective on the ground, indicating limited pricing power in the plywood segment.

Asked by Bhavin Rupani

Working Capital and Inventory Days Direct
I think raw material prices have moved up substantially over the course of the past quite a few quarters now. So in line with the same, we have built up an inventory so that we would not face the constant pressure of increasing prices from the market. Having said that, I think now there has been a bit of stability. So because of the same, over the course of this and the next quarter, we will be able to liquidate some amount of raw material inventory. So this benefit we will get over the course of, say, H1.

Analyst questioned the significant jump in inventory days, and management explained it was due to raw material price increases and strategic inventory build-up, with expectations of reduction in H1.

Asked by Bhavin Rupani

Laminate White Labeling and Outsourcing Opportunities Direct
I think you're absolutely right. India is likely to remain one of the best destinations for export of laminates for the foreseeable future. And companies like ourselves have also been white labeling for a number of international brands over the course of the last two decades. But the opportunity now, particularly in compact laminates, is proving to be substantial.

Analyst inquired about a competitor's white-labeling deal, and management confirmed India's growing potential as an outsourcing hub for laminates, especially compact laminates due to labor intensity.

Asked by Rudraksh Raheja

MDF Stand-alone Volume Decline Direct
You see there is a catchment that we are serving from our North plant where it is more profitable to serve from our South plant. So obviously that rebalancing has taken place and that has led to higher EBITDA. But when you are catering to the South from the North and you have a plant in the South, then of course that change will take place.

Analyst questioned the 13% volume decline in stand-alone MDF, and management attributed it to strategic rebalancing of supply from North to South plants for better profitability.

Asked by Amit Purohit

BIS Norm Implementation Impact Partial
So I think BIS, it is too early to reply very frankly. Yes, even for smaller guys, they have permitted till I think August and they are not permitting anybody abroad till now. In Nepal, yes, they have allowed one or two companies. They have given BIS permission. So I really see that, yes, there is a positive notion as far as plywood or MDF, both are concerned.

Analyst sought an update on BIS norm implementation, and management indicated it's too early for full impact but sees positive long-term implications for domestic industry.

Asked by Amit Purohit

Entry into Furniture and Fitting Segment Evasive
So I think if you look at the history of Century Plyboard, we are a very prudent company and such decisions take a long time for us. So currently, we are in the process of exploring. We don't have concrete plans for exactly how we'll enter exactly which space we are going to enter, which products and the manner of entry. So we will keep you updated as time progresses.

Analyst asked for details on the planned entry into the furniture and fitting segment, but management stated they are still in the exploration phase with no concrete plans yet.

Asked by Shivkumar Prajapati

3 min read 7 chapters

Detailed narrative

Q4 FY25 Performance Overview and Full Year Growth

Century Plyboards reported a strong Q4 FY25, with consolidated revenue increasing by 13% year-on-year to INR1,198 crores, compared to INR1,061 crores in the previous year. Stand-alone revenue also saw a growth of 2.3% to INR1,049 crores. For the full fiscal year 2024-25, the company achieved a revenue growth of 16%, indicating consistent performance across the year.

Segmental Performance Highlights

The Plywood segment demonstrated robust growth, with revenue increasing by 9.8% year-on-year in Q4, achieving an EBITDA margin of 15.4%. The MDF segment also performed strongly, with consolidated revenue growing by 37.5% and an EBITDA margin of 13.2%. The Laminate segment, however, saw a modest consolidated revenue increase of 1.9% and a stand-alone EBITDA margin of 5.6%, impacted by higher schemes and increased sales overheads. The Particle Board segment faced challenges, with revenue declining by 23.2% in Q4 and an EBITDA margin of 5.6%.

MDF Business and Capacity Utilization

The company's MDF facility in Andhra Pradesh turned EBITDA positive in Q4, contributing to the segment's strong performance. The Badvel plant, which produces both Laminate and MDF, achieved nearly 60% capacity utilization during the quarter. Management expects MDF demand to continue growing at over 20% and anticipates price rises towards the end of the year, despite current overcapacity in the market.

Laminate Segment Strategy and Exports

Despite current margin pressures, Century Plyboards is confident in the Laminate segment's recovery, targeting an 8-10% EBITDA margin by the end of H2. The company has implemented several initiatives, including tweaking its Go-To-Market strategy, increasing sales teams, and expanding product ranges. India is also emerging as a key destination for laminate exports, particularly for compact laminates, due to labor cost advantages, and the company has a substantial export order book.

Plywood Capacity Expansion

The company is actively expanding its plywood capacity to support future growth. Current plywood capacity stands at 3.40 lakh cubic meters. An additional 48,000-50,000 CBM capacity is expected from the Hoshiarpur plant within the next 15 months, with another 50,000 CBM planned for the current year through debottlenecking and extra capacities in existing plants. This will lead to a total addition of approximately 100,000 CBM over the next two years.

Capital Allocation and Debt Management

The company's MDF Greenfield project in Andhra Pradesh saw an increase in cost from INR600 crores to INR730 crores, primarily due to higher basic building material costs and currency fluctuations. Management indicated that the peak of current capex is likely to be over by FY26. They also stated that they are at 'peak debt' and plan to repay the majority of their debt over the next two years, aiming for 'very low long-term debt' by the end of FY27, which will strengthen the balance sheet.

Raw Material and Inventory Outlook

Raw material prices, particularly for timber used in MDF, have seen some decline in Q1 FY26 (5-10% in North and South). However, timber costs for particle board have increased. The company had built up inventory due to rising raw material prices but expects inventory levels to reduce by approximately 10 days over the current year as prices stabilize. The new Tamil Nadu plant, becoming operational this quarter, is expected to lower production costs and improve EBITDA margins.

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