Century Plyboards India : Q4 FY 22-23

Century Plyboards India Limited

May 16, 2023

Pranav:

Sir, I just wanted to understand on the plywood side. So, what drove the growth in plywood?

And are we actually seeing market share gain coming in plywood, let's say, from the unorganized

side? And even on the realization front, you have performed well in the segment. So, if you can

throw some light on how the premium plywood had performed? That was my first question.

Nikita Bansal:

Thank you, and I will answer this question. So, see, plywood, the growth that has come because

of the growth that we have been driving in Sainik as well as in the Century. We said in the past

as well that both products will continue to grow, and Sainik, the growth will be faster because

there is, it's playing in a larger market because it's the Delhi is about 40% to 45% for Sainik

which is between Rs. 80 to Rs. 100 plus, whereas Century plays in a smaller market. So, but

both will continue to grow.

We have been doing various strategies over the past few years. And in Q4, definitely, we saw

this, all these strategies finally coming to fruition, and we saw a good performance, and we hope

to continue with this performance even in this year, but definitely not with the type of growth

that we saw between Q3 to Q4. That was a very big jump, because overall Q3 is a lower quarter

for us because of festivity etc., everything. So, Yes, I hope I have answered your question.

And in terms of EBITDA, because you have to realize that our fixed costs remain the same and

because we did exponential sale, we were able to give a very good extra for just this quarter, but

it is not a sustainable EBITDA because seasonality comes into play. And we continue to

maintain that we are going to try and deliver 12% to 14% EBITDA. So, as you know, the product

mix of premium has improved in Q4. We hope that this continues even this year.

Pranav:

And then my second question was related to laminate. So, what kind of strategic level changes

you are making in laminates, let's say, in order to grab incremental market share? And are you

also looking at now going after export opportunity as well?

Keshav Bhajanka:

Definitely. You know, in laminates, we had a very tough year, and this has enabled us to

introspect and look at what are the growth levels that we should be activating. So, we have

already, as you correctly mentioned out, looked at a huge export market, which we are not

catering to due to a lack of sizes, and we have taken the decision to go for two new sizes, 14 by

6 and 10 by 4. These larger size presses will be commissioned along with our Andhra unit which

is going to add to our overall turnover and export substantially.

Alongside that in the domestic market, we are seeing those trend that are selling branded product

to Plywood, and the fact that it has catered to the belly of the market. Similarly, in laminates, we

are now launching or we have the launch this month launch Sainik laminates, and we are sure

this will be a growth lever for us going forward.

Alongside the same, we are also launching our new catalog next month which is going to be

industry first and has a number of innovations. So, all of these put together, we are confident of

robust growth for the current year.

Century Plyboards India Limited

May 16, 2023

Pranav:

And sir, my last question was related to MDF. So, what gives you the confidence that you will

be able to grow at 30% on volume and value in FY '24? So, basically, some import challenges

are impacting the industry, though the overall consumption continues to remain good. But this

30% kind of volume growth implies that you are expecting some market share gain. So, if you

can throw some light on how this volume growth?

Sanjay Agarwal:

Yes. You see, you have seen that in last six months, the international prices have come down.

And the particle board industry has been badly affected. The particle board prices have gone

down. So, you have seen the impact in the results also, but there has not been any change as far

as MDF industry is concerned. The prices have gone down, but the MDF industry in India has

not buzzed even 1%.

The only change I believe is actually in times to come. Our product has already come into the

market, our expanded capacity. Green Plywood's new capacity has come into production. I think

by July or by August I think Action's plant will come into production, and there may be one or

so I think some small plant also will come into production. So, all these are going to throw a

challenge, but because we had the capacity, and the market is growing by 25% per annum, so

that is where actually because we have the capacity, everybody else does not have the capacity,

you know, available to them.

So, that is why I believe that we will be able to grow by 30%. And you know, I expect that by

the end of this year, the financial year, we will be able to utilize the full expanded capacity, but

the average capacity utilization I think will be giving us this growth of around say 30%.

We are quite confident. Otherwise, you see, we are a person. You see, you have seen that we are

really not very too bullish a person. We are quite conservative in our approach usually. About

this, I believe that yes, we will be able to, maybe in some quarter here or there, that might happen,

but yes, we will.

Moderator:

Thank you. The next question is from the line of Rahul Agarwal from InCred Capital. Please go

ahead.

Rahul Agarwal:

I think the panels was going through a bad phase. Plywood performance actually gives a lot of

motivation. Firstly, one clarification on plywood. So, there is no capacity increase done in fourth

quarter, right?

Sanjay Agarwal:

You see, we have been continuously improving our processes and few, you know, gap machines

in our existing plans, and that's how we still have capacities available in our existing plants. But

yes, now a big expansion in Hoshiarpur has been taken. And presently also, we have some

capacity. Even for this year, we are absolutely ready. Whatever growth is coming, we are ready

with that capacity within our existing plants.