Century Plyboards - Near-Term Outlook Remains Tepid: ICICI Securities

ICICI Securities Report

We recently interacted with the management of Century Plyboards India Ltd. The management indicated demand has improved QoQ in Q4-to-date for plywood, remained steady for medium density fibre (due to lack of additional capacities) whereas in laminates it continues to remain tepid.

Century Plyboards has expanded its MDF brownfield capacity by ~70% at Hoshiarpur (Punjab) which has been commissioned in early-March 2023 and is expected to ramp-up from Q1 FY24 and thus aid growth for the company from this segment.

Century Plyboards has taken a price increase of ~2% in plywood segment in the ongoing quarter (Q4 FY23) due to increased cost of timber whereas in other segments there have been no material price changes.

Timber cost remains elevated and will likely keep margins subdued in the near term. The company faces near-term demand (due to inflationary environment) and margin headwinds (due to increased cost of timber).

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