Century Plyboards Mulling Price Hike In Q2

Century Plyboards India Ltd. is expected to hike prices across categories to contain the margins after a significant dip in net profit in the first quarter of fiscal 2025.

The company is mulling price rise as the timber price could be on the higher side, according to Keshav Bhajanka, executive director of Century Plyboards India Ltd.

Bhajanka expects the timber price to remain on the higher side and the company could announce another price hike to tackle the margin issue. “In our plywood segment, we have taken a price increase. We took a price increase last quarter and we are taking a price increase this year as well,” he said.

The company's net profit fell 60.86% year-on-year to Rs 34.1 crore in the first quarter of the fiscal 2024-25, against Rs 87.12 crore in the year-ago period. On the other hand, revenue increased 12% YoY to Rs 1,014 crore in the period under review compared to Rs 903 crore in the year-ago period. The company's Ebitda dropped 17% to Rs 120 crore versus Rs 145 crore in the year-ago period.

The company managed to do well despite a muted demand environment, Bhajanka said. "If you look at the plywood segment YoY volume would be up 14-15% and our value will also be higher. Our realisation would be up 1-1.5%."

The company faced some pressure in the MDF segment, in terms of realisation, going into an extremely competitive demand environment, he said.

"However, we have still clocked in 25% value growth on account of 40% plus volume growth. Laments have been more or less flattish but across our segment we have been within the threshold limit of our margin guidance," he said.

• Plywood: Rs 567 crore up 14% from Rs 497 crore.

• MDF (medium density fiberboard): 26% growth to Rs 209 crore against Rs 166 crore.

• Laminates: Rs 154 crore, down 1% from Rs 155 crore.

• Particle board: Revenue dropped 8% to Rs 36 crore, versus Rs 39 crore.

• Others: Rs 37 crore, up 12% from Rs 33 crore.

In the MDF segment, Century Plywoods recorded a nearly 90% drop in the Ebitda margin. The drop was not alarming and largely driven by the capex on setting up a new plant in Andhra Pradesh, according to Bhajanka.

“In the first quarter, a large new unit will also be able to ramp up that quickly. However, we were close to 14% Ebitda margin in Q1 FY25 for our standalone unit,” he said.

He projected an Ebitda margin of 15% and 40% growth in the MDF as the company scales up production at the new unit in Andhra Pradesh.

Shares of Century Plyboard Ltd. were trading 2.19% higher at Rs 701.55 per share, compared to a 0.02% advance in the Nifty 50.