Century Plyboards - Near-Term Demand Headwinds: ICICI Securities

Medium density fibre brownfield expansion at Hoshiarpur (Punjab) is likely to be commissioned by end-Dec-22.

<div class="paragraphs"><p>Plyboards kept outside a shop. (Source: Usha Kunji/BQ Prime)</p></div>
Plyboards kept outside a shop. (Source: Usha Kunji/BQ Prime)

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ICICI Securities Report

We recently interacted with the management of Century Plyboard India Ltd. who indicated that demand has been tepid Q3-to-date with December 2022 likely to be the decisive month for the quarter.

Medium density fibre brownfield expansion at Hoshiarpur (Punjab) is likely to be commissioned by end-Dec-22 (earlier guidance was Nov-22) and management expects to start its ramp-up from mid-Q4.

Company has taken no material price increases across segments in Q3-to-date as raw material pressures (except for wood used in MDF) have abated.

Management indicated that the Q2 blended margins (~17%) are sustainable in the near term.

Company had guided for more than 20% YoY revenue growth in FY23 (implying H2 FY23 growth of ~5% YoY), which we believe is achievable. We tweak our estimates for FY23E-FY25E by 2%-3% respectively.

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ICICI Securities Century Plyboard Company Update.pdf


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