CENTURYPLY - Century Plyboards (India) Ltd. Share Price

In the earnings call on June 2, 2025, Century Plyboards' management provided a positive outlook, highlighting a 20% expected growth in revenues for FY '26 and a goal to achieve INR 12,000 crores in turnover by FY '31. Management reported consolidated revenue growth of 13% year-on-year, with MDF revenue surging by 37.5% and plywood revenue rising by 16%. They emphasized that both the MDF and Laminate segments are scaling up operations, with the MDF plant in Andhra Pradesh achieving EBITDA positivity in Q4.

Key forward-looking points include:

1. MDF price hikes are anticipated in the upcoming quarters, driven by demand outpacing supply, despite existing overcapacity. Expectation of an increase in both domestic and export markets.

2. The Hoshiarpur and Tamil Nadu plants are expected to contribute positively to revenue through additional capacity and operational efficiency, adding about 48,000 to 50,000 cubic meters in plywood capacity.

3. A decline in working capital days is projected, with an aim to reduce inventory by approximately 10 days in the current year as raw material prices stabilize.

4. The particle board segment is targeted for a significant EBITDA margin improvement, with expectations of achieving steady state margins around 15% post ramp-up of the new plant scheduled for Q2 FY '27.

5. Management maintains a conservative revenue margin guidance of 12% to 14% for plywood and aims for consolidated laminate margins to improve to around 10% by H2 FY '26.

Overall, management is optimistic about leveraging increased capacity and market demand to enhance profitability and operational efficiency in the coming years.

Here are the major questions and their respective answers from the Q&A section of the earnings transcript dated June 2, 2025:

Question 1: "Sir, I wanted to understand on the EPCG scheme benefits from the MDF plant. Can you please specify the quantum of exports and the timelines under which we have to export from this plant?"

Answer: "The EPCG benefit normally spans 6 years, with export obligations between INR150 crores to INR400 crores. However, the specifics depend on fluctuating market conditions, so we are determining that now."

Question 2: "Is it possible for you to specify what are the margins in our exports business?"

Answer: "We typically don't disclose specific margins between domestic and export segments."

Question 3: "Have we started exports on our new plant?"

Answer: "Yes, we have started exports, primarily to the Middle East, although pricing pressures make them limited currently."

Question 4: "Sir, regarding plywood, does the southern price hike give us leeway for increases in our segment?"

Answer: "Those association reports often fluctuate; on-ground effects do not reflect the stated 7% increase. We implemented a 2% price increase in April instead."

Question 5: "Any specific reason behind the jump in inventory days seen last March?"

Answer: "The hike in raw material prices necessitated building inventory for stability. However, we expect to start liquidating this inventory in H1."

Question 6: "Do you see increased opportunities for organized players to export laminates due to recent developments?"

Answer: "Yes, the compact laminates segment is growing, and India remains attractive for international outsourcing."

Question 7: "What is the current capacity of the plywood segment and expected increases from upcoming plants?"

Answer: "Currently, our plywood capacity is at 3.40 lakh CBM, increasing by 48,000 to 50,000 CBM from Hoshiarpur in the next year."

Question 8: "What are the expected EBITDA margins for MDF?"

Answer: "We anticipate MDF margins to rebound with 20% growth this year, targeting 8% to 10% in EBITDA margins as we scale operations."

Question 9: "Are we undergoing any changes in our distribution structure?"

Answer: "Yes, we have opened new RDCs to optimize supply chain and we are constantly refining our processes to enhance service."

Question 10: "What is the outlook for plywood demand?"

Answer: "Plywood demand is robust, and we anticipate continued strong growth in the coming periods, aiming for 20% growth in MDF demand specifically."

These concise answers maintain the details intelligently while respecting the 500-character limit requested.