Century Plyboard

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.

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%.

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.

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.

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.

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 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.