Century Plyboards (India) Limited — Q1 FY26

Century Plyboards (India) Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=6x9OJBZAJ44 Published: 9 months ago

0:02 2 seconds Good day ladies and gentlemen and welcome to Century Plyboards India Limited's Q1 FI26 earnings conference 0:09 9 seconds call. As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing start then zero on your touchstone phone. 0:25 25 seconds Please note that this conference is being recorded. I now hand the conference over to Mr. Weber Aisia from SKP securities. Thank you and over to you sir. 0:37 37 seconds Thank you. Good afternoon ladies and gentlemen. I'm pleased to welcome you to this Q1 FI26 financial results 0:44 44 seconds conference call on behalf of Century Plyboards and SKP securities. We have with us Mr. Sanjay Agarwal MD and CEO 0:53 53 seconds along with Mr. Kesha Bajanka executive director Mrs. Nikita Bansel, executive director, Mr. Arun Joolasary, Chief 1:02 1 minute, 2 seconds Financial Officer, Mr. Sumant Watas, CEO, MDF and Particle Board Business, 1:09 1 minute, 9 seconds and Mr. Vishu Goel, CEO, Laminate Business. We will have the opening remarks from Mr. Sanjay Aarwal followed 1:16 1 minute, 16 seconds by a Q&A session. Thank you and over to you Mr. Aaran. 1:23 1 minute, 23 seconds Thank you, Eva. Thank you. Good afternoon ladies and gentlemen. 1:30 1 minute, 30 seconds Welcome to the FY25 due to earning call for century ply. 1:36 1 minute, 36 seconds Before we begin, I would like to provide the standard disclaimer. 1:42 1 minute, 42 seconds This discussion will focus on the company's historical performance and future prospects and is not intended as an invitation to invest in the company. 1:53 1 minute, 53 seconds The results and analytical presentations have been shared with you and are available on the stock exchange website. 2:03 2 minutes, 3 seconds Revenue performance. I'm pleased to share that our Q1 FY26 performance is in 2:09 2 minutes, 9 seconds line with the guidance we shared during our previous investor call. On a yearon-year basis, we delivered a 2:18 2 minutes, 18 seconds healthy revenue growth of 6.8% 8% on a standalone level and 16.3% on consolidated basis. 2:28 2 minutes, 28 seconds This performance underscores the resilience and agility of our strong business model. 2:37 2 minutes, 37 seconds AITA performance. 2:40 2 minutes, 40 seconds Now moving to profitability on a standalone basis, our AITA excluding foreign forex impact 2:49 2 minutes, 49 seconds came at 12.6 7% slightly lower than last year Q1 13.5. 2:56 2 minutes, 56 seconds This marginal decline is largely due to higher advertising and promotional spend we undertook during the quarter to 3:03 3 minutes, 3 seconds support our growth initiative on a consolidated basis. AITA excluding 3:10 3 minutes, 10 seconds forex impact improved significantly to 12.5% compared to 11.2% in Q1 FI25. 3:19 3 minutes, 19 seconds This uptick is primarily driven by the positive contribution from our budwell plant which was an early ramp up phased during the same period last year. 3:32 3 minutes, 32 seconds Now to business segment highlights. 3:36 3 minutes, 36 seconds Plywood. The segment continues to lead our portfolio with 15.3% 3:43 3 minutes, 43 seconds year-over-year growth in top line supported by strong volume growth. 3:50 3 minutes, 50 seconds The AITA margin in this segment stood at an impressive 13.8%. 3:56 3 minutes, 56 seconds placing us amongst the best. 4:02 4 minutes, 2 seconds The plywood industry in India is poised for steady growth over the medium to long term supported by structural 4:10 4 minutes, 10 seconds tailwinds such as urbanization, rising disposable incomes, government focus on affordable housing and the shift towards branded and organized products. 4:22 4 minutes, 22 seconds As consumer awareness around quality, sustainability and aesthetics increase, demand is expected to shift further in 4:31 4 minutes, 31 seconds favor of premium and eco-friendly private solutions. 4:35 4 minutes, 35 seconds The ongoing formalization of the sectored by BIS implementation and stricter environmental regulations is anticipated 4:44 4 minutes, 44 seconds to benefit organized players leading to consolidation in the market. 4:53 4 minutes, 53 seconds Despite near-term challenges from input cost volatility and subdued real estate cycles in certain region, the long-term outlook remains optimistic. 5:05 5 minutes, 5 seconds With continued infrastructure development, a revival in private capex and robust demand from the furniture and 5:12 5 minutes, 12 seconds interior decor segments, the private sector is expected to witness a good growth over next 3 to 5 years. 5:20 5 minutes, 20 seconds And I am happy to share that July 25 marked the historic milestone for us as 5:27 5 minutes, 27 seconds we recorded our ever highed highest ever sales volume in plywood. 5:33 5 minutes, 33 seconds Now to lemonets I am happy to report that the segment is showing early signs of a turnaround. We recorded a 12.8% 5:42 5 minutes, 42 seconds year-over-year and 1.9% Q quarteron quartarter growth in consolidated revenue. The AITA margin 5:50 5 minutes, 50 seconds came in as 5.9% and we are optimistic about continued gradual recovery in the quarters ahead. To support margin 5:59 5 minutes, 59 seconds expansion, we are focusing on strategic cost-saving interventions across operations. 6:05 6 minutes, 5 seconds MDF. Our MDF business has performed very well with a 23.7% 6:12 6 minutes, 12 seconds year-on-year revenue growth on a consolidated basis and an AITA margin of 14.3% 6:21 6 minutes, 21 seconds among the highest in the industry. The improved results are a reflection of better capacity utilization 6:29 6 minutes, 29 seconds especially at our budwell facility and cost optimization at both the plants. 6:36 6 minutes, 36 seconds article board. The segment continues to be in recovery phase. Although revenue has declined year on year compared to Q1 6:45 6 minutes, 45 seconds of last year, there has been a sequential improvement over Q4. 6:51 6 minutes, 51 seconds Margins remain under pressure primarily due to elevated timber cost and ongoing pricing challenges. 6:58 6 minutes, 58 seconds However, with the launch of our new facility, which offers a cost advantage, we anticipate an improvement in margins going forward. 7:09 7 minutes, 9 seconds Capacity expansion update. I am also pleased to share that commercial production at our new particle board plant in Tamil Nadu commenced toward the end of Q1. 7:20 7 minutes, 20 seconds We believe this addition will not only support our growth trajectory but also help improve our cost structure over the medium term. 7:29 7 minutes, 29 seconds Working capital cycle. 7:32 7 minutes, 32 seconds The working capital cycle which had increased in the previous quarter due to higher inventory levels has improved 7:39 7 minutes, 39 seconds this quarter coming down from 76 days to 71 days primarily driven by better management of raw material inventory. 7:49 7 minutes, 49 seconds To conclude, we remain confident in our long-term strategy and we are focused on 7:56 7 minutes, 56 seconds execution efficiency and innovation across all segments. 8:01 8 minutes, 1 second We thank you for your continued trust and look forward to updating you again next quarter. 8:11 8 minutes, 11 seconds Now I open the forum for questions and answers. 8:17 8 minutes, 17 seconds Thank you very much. We now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 8:27 8 minutes, 27 seconds If you wish to remove yourself from the question queue, you may press T and two. 8:32 8 minutes, 32 seconds Participants are requested to use handsets while asking a question. 8:37 8 minutes, 37 seconds Ladies and gentlemen, we will wait for a moment while the question Q assembles. 8:49 8 minutes, 49 seconds The first question is from the line of Rahul Aaral from Mik. Please go ahead. 8:57 8 minutes, 57 seconds Hi. Hello. Good afternoon. Hi everybody. Afternoon. Yeah. Yeah. 9:03 9 minutes, 3 seconds Sir uh uh quick questions uh four of them. 9:07 9 minutes, 7 seconds Firstly on plywood obviously we are running ahead of our guidance. uh I also see that last year uh rest of the nine months you know from July to March we 9:16 9 minutes, 16 seconds have seen a very strong revenue growth going forward you know guidance remains the same at 10% sales growth but does 9:23 9 minutes, 23 seconds that mean we are basically looking at normalization in growth going forward because July looks like highest ever uh so just some sense on plywood topline 9:32 9 minutes, 32 seconds please that's the first question see uh in plywood we've always believed 9:40 9 minutes, 40 seconds to give a 10% plus. Now 10% plus can vary uh market dynamics can change etc. 9:50 9 minutes, 50 seconds So we would like to continue giving that guidance. Obviously we will not have a degrowth and these are things that you 9:57 9 minutes, 57 seconds know investors understand they see the trend they've seen the trend last year but uh it is to give a guidance from the company we will continue to say that we 10:05 10 minutes, 5 seconds will deliver 10% plus growth this year. 10:11 10 minutes, 11 seconds Okay, get it. So essentially we are looking at normalization, right? Because last year 9 months the growth was very high. Is that fair to understand? 10:21 10 minutes, 21 seconds So again like we said you know the objective will always be to deliver better guidance is at 10%. But our company will always try could deliver 10:29 10 minutes, 29 seconds best case in terms of value and volume growth. I hope that clarifies. 10:36 10 minutes, 36 seconds Go ahead. Uh similar question on MPF. I think uh we've achieved 15% consolida. Looks like things are getting better. 10:44 10 minutes, 44 seconds I'm assuming this. You just comment on you know what's really happening with uh the supply side of MDF right now. I know exports are much lower uh sorry imports 10:52 10 minutes, 52 seconds are much lower but domestic supply and the pricing trends looks better. So going forward uh you know console margins at 15%. Uh is it fair enough or there is some upside potential here? 11:04 11 minutes, 4 seconds No you're right on both accounts. 11:06 11 minutes, 6 seconds Imports are much lower and exports also much lower. So you were correct there. 11:09 11 minutes, 9 seconds But um having said that I think that yes there is still some over supply in the market. You know a lot of capacities have come up and light line has started 11:17 11 minutes, 17 seconds over the course of the last year. But going forward I think we reaching a stage where capacity utilization has begun to improve right across the 11:25 11 minutes, 25 seconds industry. In the next few quarters we seeing this continuing the reason for 15% accumment continue with 15% is that 11:33 11 minutes, 33 seconds right now our focus is going to be on market share. We are going to definitely try and meet the numbers but at the same time this is a time period with BIS 11:41 11 minutes, 41 seconds coming in with the imports being curbed where we can expand substantially and we are trying to gain a foothold as the 11:48 11 minutes, 48 seconds market leader. So I think that for the current uh foreseeable future let's say 9 months next three quarters the guidance holds. 11:58 11 minutes, 58 seconds Got it. Thirdly on inventory I think Sanji mentioned we are obviously reduced raw material inventory but when I look at balance sheet uh reported as of March 12:06 12 minutes, 6 seconds right it was about 986 crores uh I think that's a function of raw material finished goods and wip uh in the presentation we have raw material and 12:14 12 minutes, 14 seconds finished goods just wanted to know is it possible to share the overall inventory total as of June end is it possible to share that 12:22 12 minutes, 22 seconds when I will take it up sorry u just give me a Okay, 12:33 12 minutes, 33 seconds I think our team will get back to you on that. The CFO will get back to you with details on the same. I don't have it in front of me right now. 12:40 12 minutes, 40 seconds Okay. And lastly on pricing trends for timber on MBF and plywood. uh you know if you just discuss a bit on qualitatively what's really happening uh 12:49 12 minutes, 49 seconds because we've heard there is some bit of timber deflation uh if you could just help us understand it better over the you know balance of the year that will help that's all from my 12:57 12 minutes, 57 seconds yeah you're absolutely right in MDF and particle uh both the prices seem to be uh rebounding slightly there seems to be 13:05 13 minutes, 5 seconds a little bit of leaving out but I think it's still waiting watch currently in the in this month itself prices have jumped up because of monsoons but that's a trend that takes place every few 13:13 13 minutes, 13 seconds months But I do hope that the peak of timber prices are behind us and we should see some slight spike during the course of the coming year. As far as 13:21 13 minutes, 21 seconds pywood is concerned, I think timber prices are pretty much at similar levels. But that also does mean that the increase that we have seen over the 13:29 13 minutes, 29 seconds course of past couple of years. There's no steep jump as of now. Prices are more or less at similar levels. So MDF particle board should benefit from 13:37 13 minutes, 37 seconds slightly lower cost. In plywood, it will more or less remain in line with what it has been. 13:44 13 minutes, 44 seconds They say the private timber to grow takes longer time. So the price reduction will happen still I don't 13:51 13 minutes, 51 seconds think before the next year or the year uh end of the next year I think should be a little bit of a help because it 13:58 13 minutes, 58 seconds takes longer time to mature the tree required for it sir. Uh completely understand. Thank 14:07 14 minutes, 7 seconds you so much and you know best wishes for the rest of the year. Thank you Rahul. Thank you. 14:13 14 minutes, 13 seconds Thank you. Next question is from the land of Nihad Alraa from Noama Wealth. Please go ahead. 14:20 14 minutes, 20 seconds Hi uh good afternoon team and thanks a lot for the opportunity and congratulations on set of numbers. Hello sir. Uh so just couple of questions from 14:28 14 minutes, 28 seconds my end. Uh just wanted to understand we've seen good amount of improvement with your gross margins in the plywood segment but that's not translated into 14:36 14 minutes, 36 seconds you know EIDA margins there we've seen some of is it some you know increase in ad spend or something that we've seen particularly this particular quarter. 14:46 14 minutes, 46 seconds So uh this quarter we were in uh IPL. So uh that is a massive spend which happens 14:53 14 minutes, 53 seconds in Q1 uh because of which you are seeing a translated uh into EITA but um going 15:01 15 minutes, 1 second forward obviously uh we will continue to spend and we are also investing a lot more in our brand um but we won't have 15:11 15 minutes, 11 seconds the IPL cost for the rest of the year and Mr. going to be the percentage of adent this particular quarter? 15:19 15 minutes, 19 seconds Sorry, can you repeat your question? 15:22 15 minutes, 22 seconds What will be the percentage of ad spend for only plywood division this particular quarter? 15:33 15 minutes, 33 seconds Oh uh so we um do you have it? 15:41 15 minutes, 41 seconds We keep it four but what was in Q1? 15:44 15 minutes, 44 seconds Okay. So we'll get back usually throughout the year we keep it as a 4% but uh we don't know what it was in obviously it was higher in Q1 but the exact percentage will come. 15:58 15 minutes, 58 seconds Thanks Dr. that was helpful. Uh secondly what I wanted to ask is your scale up and MDF uh you know segment has been pretty great. We've seen that over the 16:06 16 minutes, 6 seconds years. Uh my similar question was in the particle boss segment. How are we planning things? Because when I look at your current business at this point of 16:14 16 minutes, 14 seconds time, we are still seeing some drop in terms of volumes. Whereas our new capacity has just come up there um 16:21 16 minutes, 21 seconds margins of course on the falling trend of course that can be given uh because sector itself is probably not doing that well in terms of particle board. How are 16:29 16 minutes, 29 seconds we seen scenario improving because our new capacity is already come on board. 16:34 16 minutes, 34 seconds Um do we have visibility already starting up from OEMs? So I think this couple of these things will be helpful. 16:41 16 minutes, 41 seconds So say you know I think you're absolutely correct but um the only point of difference that I have is that the 16:48 16 minutes, 48 seconds new line is a continuous line. So the quality of product that is very very different as compared to the earlier 16:55 16 minutes, 55 seconds product whereas in the market pricing is similar. So the multiclite line was competing against continuous lines that have been brought in by two large scale 17:03 17 minutes, 3 seconds players in the industry and as a result of that the traction that we had because the quality parameters have changed but I'm very happy to tell you that the 17:12 17 minutes, 12 seconds quality that we have gotten from the new line um well once you see the board it looks more like an MDF than a particle board. So we are very happy with the 17:20 17 minutes, 20 seconds product quality that has been uh established. The product has started selling the market. The response from OEMs and the market in general has been 17:27 17 minutes, 27 seconds superb. I think uh with this quality of product you shall see a rapid scale up in the volumes. Maybe this quarter we'll 17:35 17 minutes, 35 seconds take a little time to stabilize the new plant because like I said it's just commission but from next quarter onwards in H2 you will see a huge spike as far as particle volumes are concerned. 17:44 17 minutes, 44 seconds Fantastic. 17:45 17 minutes, 45 seconds This was really helpful. And what are we estimating for particle board in 4 seconds? Are you able? 17:52 17 minutes, 52 seconds Just uh yes, I can hear you. But uh just uh reminded me of one more point. We have not currently been in the 8x4 18:00 18 minutes market in particle board. As you remember, our earlier line was a 9x6 multi-led press where we could manufacture 9x6 and 8x6. So a huge chunk 18:09 18 minutes, 9 seconds of the market which sells as per 8x4 size that was not available to us. 18:13 18 minutes, 13 seconds However, now because we have a 8 ft bite line, we can manufacture 8x4 as well. 18:18 18 minutes, 18 seconds So, this again will help us to increase volumes. 18:23 18 minutes, 23 seconds This was again helpful. Uh just lastly on the particle board segment uh because this is a new segment. Just wanted to you know you know get some numbers here. 18:33 18 minutes, 33 seconds what could be the revenue looking like in first, second, third year of operation and eventually uh how does the scale up happens in terms of margins 18:40 18 minutes, 40 seconds because u you know wrong have been easing out but other players what I'm seeing are you know still doing losses who have recently commissioned which is 18:48 18 minutes, 48 seconds some sense from uh you would particle board right again for particle board yes for particle board you will see our 18:57 18 minutes, 57 seconds total turnover potential will be in excess of 500 crores from the existing line of course the objective will be to push it higher And as you know that we 19:04 19 minutes, 4 seconds always attempt to reach 100% capacity utilization 90% plus by the third year having said that a VA margin that steady 19:11 19 minutes, 11 seconds state will look at 15%. During the ramp up phase is very difficult for me to give you guidance but I'm assuming that from next year we will be at double 19:19 19 minutes, 19 seconds digit plus and going forward by year three we should definitely be at 15% plus. This was really really helpful. Thanks. 19:28 19 minutes, 28 seconds Thanks. stand for notifications and all the very best to please. 19:33 19 minutes, 33 seconds Thank you participants. You may press star and one to ask a question. 19:39 19 minutes, 39 seconds Next question is from the line of reta from investor India. Please go ahead. 19:46 19 minutes, 46 seconds Yeah. Hi opportunity. Uh so two hi hi sir number six. Yeah. 19:51 19 minutes, 51 seconds Uh sir two basic questions. uh sir one is wanted to understand uh how do we look at commercial NDF uh does it is it 20:00 20 minutes is a part of our product portfolio or is it absolutely a nogo zone for us uh that's that's the first question 20:09 20 minutes, 9 seconds look uh hi good afternoon we we offer products to different segments uh you know be the OEMs be trade uh you know 20:18 20 minutes, 18 seconds etc so we can offer the full gambit uh you know uh there are no red zones or no go zones but you know as a company we 20:27 20 minutes, 27 seconds want to offer products that are of the highest quality so we'll never compromise on quality uh of course individual specific requirements we cater to so no red zones uh but at the 20:36 20 minutes, 36 seconds century certified quality uh okay uh so would it be possible for 20:43 20 minutes, 43 seconds us to uh indicate what percentage of volumes would uh that be and uh a followup over here uh you do indicate 20:52 20 minutes, 52 seconds like century level of quality which is great. Uh but if I had to just push you a little further, would it qualify under the BIS norms? 21:01 21 minutes, 1 second So, so let me answer your first question first. Uh you know, we won't be able to share any any details on our product mix percentages that we don't usually share. 21:09 21 minutes, 9 seconds Uh and second, you know, of course, uh you know, we we strive for BIS and much more. BIS is hygiene. 21:17 21 minutes, 17 seconds Okay. And that that's helpful. Uh my second question is on the ply side. uh are we looking to uh the way in which we 21:25 21 minutes, 25 seconds position sin 710 and 303 in the marketplace are we looking to re our strategy specifically post uh I wouldn't 21:34 21 minutes, 34 seconds say dilution probably dilution of BIS norms uh uh has has our strategy around 21:41 21 minutes, 41 seconds product positioning uh 710 versus 303 changed Uh what do you mean by policy change? 21:56 21 minutes, 56 seconds Uh sir uh so are we continuing with seik 710 in the marketplace uh after the new 22:03 22 minutes, 3 seconds norms from BIS came in uh two months back seven uh sanic 710 is just a brand 22:14 22 minutes, 14 seconds and we will be clearly writing down on the this thing whether what BIS norm it is it will be written on every piece of 22:22 22 minutes, 22 seconds plywood. So even earlier it was there even in future it will be there. So there is no policy change and sanic 710 22:30 22 minutes, 30 seconds is a brand so that brand stage correct correct okay sir I will call you offline for this uh I'll take it off. 22:40 22 minutes, 40 seconds Yeah thank you thank you so much for the thank you participants you may press 22:47 22 minutes, 47 seconds star and one to ask a question. Next question is from Sukrit Patel from eyesight fra please go ahead. 22:56 22 minutes, 56 seconds Uh good afternoon to the century fly team and my to Mr. 23:02 23 minutes, 2 seconds uh aware of sir are you there on yes I am here yes sir good afternoon my question is uh 23:09 23 minutes, 9 seconds given century ply strong yearon-year growth and stable margins despite in inflationary pressures I want to 23:17 23 minutes, 17 seconds understand how are you thinking about deploying AI dri AIdriven demand forecasting or automated stock keeping 23:25 23 minutes, 25 seconds units rationalization across your dealer networks by the next uh two 23:31 23 minutes, 31 seconds And do you think by doing this it could unlock working capital efficiencies and improve product market fit in the tier 2 23:41 23 minutes, 41 seconds tier three clusters as managing director? What is your vision on this? I want to understand that sir. Thank you very much. See, century plywood has been 23:50 23 minutes, 50 seconds trying to make plywood as an FMCG good and we have been doing many other things 23:58 23 minutes, 58 seconds as far as credit control is concerned, distribution is concerned, but the plywood market does not accept the DMS. 24:07 24 minutes, 7 seconds Until unless we can install uh software which is known as DMS, distribution management system. Till then we do not 24:14 24 minutes, 14 seconds have visibility of what happens after the wholesaler or the dealer. Of course we have started other screens through 24:22 24 minutes, 22 seconds which we are now having some data about the retailers and all that. So we get data how much material is being bought 24:31 24 minutes, 31 seconds by the 4,000 retailers or 5,000 retailers across the country from our dealers. that data. Now we have and we pay some incentive on that. We are 24:40 24 minutes, 40 seconds working on a very very recently we have decided to actually implement DMS in a very small area and try a new effort but 24:50 24 minutes, 50 seconds it is going to be a herculean task. So I cannot put any timeline but yes as far as century plywood is concerned we are 24:59 24 minutes, 59 seconds very strongly pushing AI in every department in our company and uh 25:06 25 minutes, 6 seconds we believe that we will be in line with everybody else in every other industry as far as AI is concerned 25:14 25 minutes, 14 seconds but I think Nikita wants to say something else. 25:17 25 minutes, 17 seconds Yeah. So I would just like to add that see as a company I mean you've also read in our annual report that we've taken a 25:24 25 minutes, 24 seconds three-year digitization plan and no digitization plan can be complete without AI being there. So we have uh we 25:34 25 minutes, 34 seconds are taking up AI in a big way. We are also training our people in AI because today AI is something that not many people understand. It is not as just as 25:43 25 minutes, 43 seconds going and geni has become the most in word right now. So we are training our 25:50 25 minutes, 50 seconds people about AI and then encouraging everyone to use and as far as gear segment goes see we have so many lines 25:58 25 minutes, 58 seconds of business. So in the laminate business we are using AI we are using we are going to use AI if it is successful there we will use it in other divisions. 26:08 26 minutes, 8 seconds So um if you really look at uh the next five year road map, I think if a company 26:16 26 minutes, 16 seconds does not adopt AI and does not utilize AI to its fullest extent, uh it will be 26:23 26 minutes, 23 seconds at a loss. So and Century has always been ahead of the curve. So we'll continue to be ahead of the curve. 26:30 26 minutes, 30 seconds Great. Thank you. That pretty much answers my question. So uh just on a ending note would it be would would I be right to assume that uh in the next uh 2 26:39 26 minutes, 39 seconds to 3 years uh you will start you you will be starting implementing all the things which you have just mentioned right now uh probably earlier. 26:50 26 minutes, 50 seconds Okay great. Thank you very much. Have a nice day. 26:54 26 minutes, 54 seconds Thank you. Participants you may press star and one to ask a question. 27:05 27 minutes, 5 seconds Next question is from Nanosagnik Sarkcar from SKP Securities. Please go ahead. 27:12 27 minutes, 12 seconds Hi Mr. Sar. 27:20 27 minutes, 20 seconds May I request you to unmute your line and proceed with your question? 27:30 27 minutes, 30 seconds Did no response. We move on to the next participant. 27:34 27 minutes, 34 seconds Next question is from line of Ashtoh Katan from Asian market securities. Please go ahead. Yeah. Hi, I have a question on the PL. 27:43 27 minutes, 43 seconds Uh yeah. Hi. 27:44 27 minutes, 44 seconds So basically what's the update on the new capeex for the plywood hoshar plant sir? 27:52 27 minutes, 52 seconds Uh the update is we are uh progressing. 27:55 27 minutes, 55 seconds you're going to soon start work uh and we should have something by it should go live by making your Q2 this time. 28:04 28 minutes, 4 seconds Uh sorry it's Q2 of FI 27. Yes. 28:10 28 minutes, 10 seconds Okay. And uh next is on the price hikes like have you uh taken any price hikes for this quarter in plywood or uh any other division? 28:20 28 minutes, 20 seconds Uh so in plywood we did take a price hike at the end of April. Um we took a 28:25 28 minutes, 25 seconds 2% price hike. Um, as far as MDF and uh, laminate. 28:35 28 minutes, 35 seconds Um, and as far as other segments go, we did not make any price. 28:41 28 minutes, 41 seconds Oh, and in laminate, sorry. 28:46 28 minutes, 46 seconds Yes, we've also taken a price increase in laminates to June of 2 and a half%. 28:51 28 minutes, 51 seconds which has been implemented on one particular portfolio within the domestic segment which is the 1 mm portfolio. 28:59 28 minutes, 59 seconds Okay. Okay. Got it. That's it from my side. Thank you. Thank you. 29:07 29 minutes, 7 seconds Next question is from land of Shivkumar from Amit Capital. Please go ahead. 29:14 29 minutes, 14 seconds Yeah. Hi. Uh good afternoon and thanks for uh giving me the opportunity. Uh first of all congratulations on great set of numbers. So so my first question 29:23 29 minutes, 23 seconds uh is on the industry front uh like wood panel as a whole. So I just want to understand u what was the organized I 29:31 29 minutes, 31 seconds mean just want to understand the organized versus unorganized share across all segments uh as of suppose 29:38 29 minutes, 38 seconds FY25 and what was the share uh like 2 3 years before and uh the demand versus 29:45 29 minutes, 45 seconds the capacity across all segments that we operate. Uh this is my first part. 29:58 29 minutes, 58 seconds So basically there's authenticated data in our industry. It is all on the basis of estimates. But what I can tell you safely is that the industry has not been 30:05 30 minutes, 5 seconds growing at a fast click which is obvious from results that you will see right across. Whereas we have been growing at quite a fast pace whether it be plywood 30:13 30 minutes, 13 seconds or MDF. So in plywood and MDF we have definitely increased our market share but there is no authenticated source of data. So flyboards the total market size 30:21 30 minutes, 21 seconds has been we have been saying 25 to 30,000 crores based on various publications for the past so many years. 30:28 30 minutes, 28 seconds So unfortunately we cannot give you much closer representation but in terms of market share you are absolutely right. 30:33 30 minutes, 33 seconds We would have gained market share over the course of the last five to six years. 30:39 30 minutes, 39 seconds Okay. And sir uh is there any sign of industry consolidation in any of the segments that we operate? 30:47 30 minutes, 47 seconds Yes definitely. You see if the industry is not growing and some of the organizers uh are doing well that shows 30:55 30 minutes, 55 seconds that there is a certain amount of consolidation that is taking place. So I think there is some amount of consolidation taking place in plywood. 31:01 31 minutes, 1 second There's some amount of consolidation taking place in MBF. They should get accelerated by BIS but BIS onmemes 31:08 31 minutes, 8 seconds industries will only become effective from this month onwards. So let's wait and watch how it play out. 31:16 31 minutes, 16 seconds All right. So thank you. That's it for mine. Thank you. 31:22 31 minutes, 22 seconds Next question is from line of Yasha Santalia from Eagle Wise public alternates. Please go ahead. 31:30 31 minutes, 30 seconds Hi team. Thank you for taking my question. So my first question is like you already alluded we haven't taken any 31:36 31 minutes, 36 seconds price hike in MDF while there was some correction in prices of timber. So can you help me with what's uh margin 31:45 31 minutes, 45 seconds guidance if this price is sustained going ahead and are there any plans or chances of we taking price cuts or price 31:53 31 minutes, 53 seconds hike yeah volume discounts or taking back the volume discounts again you know markets are dynamic so as 32:01 32 minutes, 1 second and when the market scenario unfolds we will definitely have to look at pricing discounts and so on so forth but in terms of guidance like I've already 32:08 32 minutes, 8 seconds mentioned 20% revenue growth with a 15% emit mic uh emitter titles. This is what 32:16 32 minutes, 16 seconds we're looking at and uh we will attempt our best to deliver the same for you. 32:22 32 minutes, 22 seconds Got you. Thank you. That's all from myself. 32:27 32 minutes, 27 seconds Thank you. Next question is from L of Nanda from Oless Investment Managers. Please go ahead. 32:34 32 minutes, 34 seconds Um thank you so much uh and congratulations to the uh century ply boards uh team for excelling set of 32:41 32 minutes, 41 seconds numbers. I had a couple of questions uh first of which is related to the real estate cycle. So we keep seeing data 32:49 32 minutes, 49 seconds from anodok and other uh research organizations that come out with uh the data on real estate saying that uh sales 32:56 32 minutes, 56 seconds have actually gone down now uh that the industry the whole cycle is sort of turning in real estate. uh the growth that we saw in FY2324 is now coming off. 33:06 33 minutes, 6 seconds Uh so I wanted to understand how does the plywood market work out? Uh when will most of the orders for uh plywood 33:15 33 minutes, 15 seconds uh be coming in given where we are in the cycle? How does that play out? And secondly, my question is on your laminates division. Uh what is the game 33:23 33 minutes, 23 seconds plan going forward? because I think this was uh one of those uh first quarters where uh both volume and realization 33:30 33 minutes, 30 seconds growth was uh pretty uh solid uh after multiple quarters of uh degrowth. So I wanted to understand where do you see 33:38 33 minutes, 38 seconds the division going forward in the next one to two years. 33:43 33 minutes, 43 seconds Um so with respect to the first question um 33:49 33 minutes, 49 seconds see the thing is that um sorry 33:57 33 minutes, 57 seconds sorry uh on the real estate cycle we for a very long time I in private division need to guide ourselves this is the real 34:06 34 minutes, 6 seconds estate cycle but what we realizing truly and it's about uh even though we don't have authentication market share data. 34:14 34 minutes, 14 seconds It the fact remains that because organized is such a small part of the entire industry, we need to stop looking 34:22 34 minutes, 22 seconds at cycles and we need to start concentrating more towards uh capturing the unorganized to organized and if that 34:30 34 minutes, 30 seconds is going to be the focus the growth is going to be there irrespective of the real estate cycle. So that has been our goal. I don't there might be years we 34:40 34 minutes, 40 seconds succeed the years we don't succeed but uh I would like to not uh follow this these real estate cycles because there 34:48 34 minutes, 48 seconds is a substantial uh base that is going to remain even if there is a regrowth or a growth in the industry. 34:57 34 minutes, 57 seconds Uh fair enough. I just had one followup on this. Uh so I I completely understand where you're coming from. uh the the 35:04 35 minutes, 4 seconds followup that I have over here is then from a particle board and MDF uh division perspective especially uh going forward uh from this real estate cycle 35:13 35 minutes, 13 seconds because we see that commercial real estate is actually going really strong uh and because MDF and particular board is basically uh you know it doesn't have 35:22 35 minutes, 22 seconds this uh entire dynamic of a very large uh unorganized market it's it's mostly organized or imported and imports have really stopped now because of the BIS 35:31 35 minutes, 31 seconds norms where do Do you uh do you have any uh clarity on how your demand and how your uh volumes uh will go uh especially 35:40 35 minutes, 40 seconds in the context of the commercial real estate cycle in the next one to two years? 35:47 35 minutes, 47 seconds Hi I think on the MDF and particle board the industry is very nent right like you know if you look at the entire industry MDF is barely penetrated 20 25% of the 35:56 35 minutes, 56 seconds industry so I think at this early stage of the category in the industry we actually immune to real estate cycles and therefore we see robust demand uh 36:04 36 minutes, 4 seconds you know going forward I think right now for us the game is to create the categories okay all right 36:11 36 minutes, 11 seconds yeah and my second question is the laminate uh division question is uh surrounding uh 36:20 36 minutes, 20 seconds uh yeah so my question was basically uh given that the last quarter the cookie on FI26 we saw really good uh volume and 36:28 36 minutes, 28 seconds uh realization growth uh in the lame section uh after a very long time I wanted to understand what's the game plan what's the strategy uh surrounding 36:36 36 minutes, 36 seconds volumes and what is your guidance uh for realization and volumes going uh forward in the next one to two years 36:43 36 minutes, 43 seconds um so like I And our target is to do 20% plus in terms of revenue growth and uh 36:50 36 minutes, 50 seconds this together with high singledigit or uh mid to high single digit a bit for the current year that is what we are targeting. However, I think we have just 36:59 36 minutes, 59 seconds started on the journey towards correction. There were of course mistakes that have been made but with new leadership in place and with a lot 37:06 37 minutes, 6 seconds of good initiatives that we have put into execution I think both on domestic and export fronts we've been doing better. So hopefully this will persist. 37:15 37 minutes, 15 seconds So I think this year 20% revenue plus uh midwify single digit evita should be realistic for all right that answers all my questions. 37:26 37 minutes, 26 seconds Thank you so much. 37:29 37 minutes, 29 seconds Thank you. Next question is from Rahul Aaral from AKI asset managers. Please go ahead. 37:38 37 minutes, 38 seconds Thank you so much for the followup. uh I think you talked about uh new product development uh you know and launches for particle 37:46 37 minutes, 46 seconds board something like uh you know the sizes which were not present earlier now you have similarly could you uh you know 37:53 37 minutes, 53 seconds share some color on laminates and MDF uh in terms of overall century plywood the entire company uh and the thought 38:01 38 minutes, 1 second process over the next 12 months in terms of filling you know wide spaces across whatever product segments we're talking about now we also have a lot of many 38:09 38 minutes, 9 seconds plants which are learning. You could help us on laminates would really help us. Sure. So um as far as MDF is 38:17 38 minutes, 17 seconds concerned over the course of the past year we have boil plus which is our highest density highest waterproof MDF product till date in particle board like 38:26 38 minutes, 26 seconds you rightly mentioned we have already launched our new product which has been very well accepted in the market uh which is a far superior version of the earlier 12 particle board that we are 38:34 38 minutes, 34 seconds manufacturing. Alongside that we have launched a whole new range as far as particle board and MDF are concerned in terms of VA and our shade selection our 38:43 38 minutes, 43 seconds shade cards. This will be on display within the next few exhibitions which starts off with Maticia uh which takes 38:50 38 minutes, 50 seconds place this month in Delhi itself. In uh PVC boards we have launched a new category called Lords which is gaining good traction from the market and again 38:58 38 minutes, 58 seconds it is another product launched that will be displayed at the upcoming event. Uh in laminates we have launched acrylic laminets. So acrylic this is a product 39:06 39 minutes, 6 seconds category that in India has been selling well for quite some time but nobody has been able to give a guarantee or a warranty because the product quality is 39:15 39 minutes, 15 seconds normally considered to be quite inferior. We have finally been able to develop a superior quality product and we'll be launching it in the current 39:21 39 minutes, 21 seconds month. So there are so many yes or so many new opportunities that keep arising and as of now these are three of the 39:28 39 minutes, 28 seconds launches that we are focusing on. going forward. We will update you as and when new floor categories start coming up. 39:35 39 minutes, 35 seconds Anything on the ply side as well? 39:39 39 minutes, 39 seconds There is a lot of work that is going on on the plywood side but I think it is too early to share details on the same. 39:45 39 minutes, 45 seconds We can update as and when further progress is made. 39:50 39 minutes, 50 seconds Fair point. Uh anything on the furniture fittings? Uh uh things have moved forward from there on. 39:58 39 minutes, 58 seconds Sorry, could you just uh repeat on your voice cracked for the furniture fittings? Uh have things moved forward on that? 40:08 40 minutes, 8 seconds Yes, we have definitely moved forward. 40:09 40 minutes, 9 seconds We've already created a senior team and we are at a very advanced stage of understanding the segment. However, you know, with century, we are very prudent 40:17 40 minutes, 17 seconds when it comes to new product categories and to cash injection in particular. So, we will be studying the segment. I think maybe over course of next 6 to 9 months 40:26 40 minutes, 26 seconds we'll be able to take a call of whether we are committed to going into the segment or not but it is not something that uh we'll be able to tell you in a month or so. 40:37 40 minutes, 37 seconds Perfect. Got it. And lastly bookkeeping on the debt side I think consolidated debt was about 1,400 crores as of March. 40:44 40 minutes, 44 seconds Uh how does this number look like end of March 26 27 based on the cash flow planning? I think we should be looking 40:52 40 minutes, 52 seconds more towards the long-term growth because the short-term debt will be a part of it considering the scale at which the company is growing as the turnover increases working capital 40:59 40 minutes, 59 seconds requirements do tend to increase but having said that long-term debt within the course of next two years I think we'll be able to repay the majority of 41:07 41 minutes, 7 seconds the long-term debt and unless until we come up with another large pay or something of that sort we'll be coming close to zero long-term debt on the 41:15 41 minutes, 15 seconds books which is 400 crores independent about approximately 4 unusual fair number. 41:23 41 minutes, 23 seconds Uh yes, more than 400 repayment. So we will be looking to bring long-term debt as close to to zero as possible. But 41:32 41 minutes, 32 seconds yes, cash flow generation has been strong over the course of next few quarters. Most of the cash flow is going to be towards debt repayment. 41:41 41 minutes, 41 seconds Thank you so much for asking the question. Thank you. All the best. Thank you. Thank you. 41:48 41 minutes, 48 seconds Next question is from land of Vun Singh from AAPMS. Please go ahead. 41:54 41 minutes, 54 seconds Yeah, thanks for the opportunity. Uh so would you like to call out timber pricing for us in north and south and maybe how much it would have declined in the quarter. 42:04 42 minutes, 4 seconds Yeah, you know timber prices did uh decline marginally. uh for uh Q1 our north pricing was close to about 6.3 42:12 42 minutes, 12 seconds rupees per kg and and south was about you know 10% uh lower uh and and over the quarter they would have declined by 42:19 42 minutes, 19 seconds you know about 8 to 10% Q4 over Q1 over Q4 uh and as ED mentioned a while back this quarter there might be a slight 42:28 42 minutes, 28 seconds increase on account of monsoons but uh on the long term we hope that the timber prices stabilize. 42:36 42 minutes, 36 seconds Okay, understood. And uh secondly, I'm not sure if you have already answered this question. So please pardon uh I joined call a little bit late. So on uh 42:45 42 minutes, 45 seconds in MDF when you talk about uh competitive intensity etc or that the industry is consolidating. So can we 42:53 42 minutes, 53 seconds safely assume that now maybe there is no more kind a price war kind of a situation and we are able to or everyone is able to comfortably sell their 43:02 43 minutes, 2 seconds product at some equilibrium rate. uh I mean uh how should we judge the competition as of now? 43:11 43 minutes, 11 seconds I think what we can safely assume is that you know there are two plants that we have put in place which are located at strategic locations within India and 43:19 43 minutes, 19 seconds considering that we are a brand which has tremendous planful with high uh premiums in terms of pricing alongside 43:27 43 minutes, 27 seconds which we are perhaps the lowest cost of production in the country. on the margin fronts we should be able to do okay despite whatever happens in the market 43:35 43 minutes, 35 seconds while there is no trend for price war there's also no trend for a price increase so we'll have to see how the market plays out but I think in terms of 43:43 43 minutes, 43 seconds margin we will be doing uh better in the industry so to speak so to 43:50 43 minutes, 50 seconds say understood understood sir that's it from my side thank you and wish you all the 44:00 44 minutes Thank you very much. A reminder to all the participants. You may press star and one to ask a question. Next question is from line of Kajiwala from Yes Security. 44:10 44 minutes, 10 seconds Please go ahead. 44:12 44 minutes, 12 seconds Uh good afternoon team. Thank you for taking my question and congratulations on a great set of numbers. Thank you. 44:19 44 minutes, 19 seconds With the major questions answer just one thing in your plywood. What was the uh imported timber question for this quarter? 44:28 44 minutes, 28 seconds Uh so we have pretty much moved to imported timber now. Um I would say that it is to the 44:38 44 minutes, 38 seconds but we don't share such details but I would say majority is imported. 44:47 44 minutes, 47 seconds Okay. And what would be the margin you know the kind of difference between the domestic and the imports now and going ahead if the domestic price are expected 44:54 44 minutes, 54 seconds to come down could you shift back I mean what's the thought process there so currently uh we are looking at it as 45:03 45 minutes, 3 seconds that uh quality is the most important thing for that entry and we believe that the quality of the timber is far 45:11 45 minutes, 11 seconds superior to the domestic quality currently available in the country. So I think in the foreseeable future uh we will continue to import. 45:23 45 minutes, 23 seconds All right. Thank you. Next sir. Thank you. 45:29 45 minutes, 29 seconds Next question is from L of Bhavin Rupani from Invest India. Please go ahead. Yeah. Hi sir. Thank you so much. 45:37 45 minutes, 37 seconds Uh hi sir. 45:39 45 minutes, 39 seconds Uh so my first question is related to plywood. So what is our current capacity and what is the utilization in that capacity and also if you can spell out 45:48 45 minutes, 48 seconds what is the proportion of in-house versus outsourcing right now versus what it was last year. 45:54 45 minutes, 54 seconds Okay. So our current capacity is uh 3 lakh 66,000 cbm and we have a 46:01 46 minutes, 1 second utilization of 91% and we are going to be increasing our capacity in H2 46:08 46 minutes, 8 seconds um by another 50,000 CP. 46:14 46 minutes, 14 seconds All right. And what is the proportion of uh inhouse versus outsourcing? We do not share that number. 46:19 46 minutes, 19 seconds Unfortunately we don't share these numbers. 46:24 46 minutes, 24 seconds All right. And uh as far as uh MDF is concerned, if I'm not wrong, we have some export obligations over there, right? So when do we start uh exports 46:33 46 minutes, 33 seconds from this new plant and what is the export obligation and absolute um if you can spell out that can you repeat your voice again? Sorry, 46:40 46 minutes, 40 seconds I think it's from my is it clear now? Yes. 46:46 46 minutes, 46 seconds So for MDF plant uh we have some export obligations, right? So what uh when do we start with the exports from this new 46:53 46 minutes, 53 seconds plant and uh what is the export obligation in absolute terms? 46:58 46 minutes, 58 seconds So we have already started with regards to exports. The value of the export obligation I don't have me with me on off hand but um our CFO can share the 47:07 47 minutes, 7 seconds same with you but currently the potential to export from this plant is very limited because timber prices are still elevated. They're not as high 47:14 47 minutes, 14 seconds rupees which had gone but the viability in exports isn't substantial. So we are working on it and once viability comes 47:22 47 minutes, 22 seconds back then I think the export quantum will move up. We have started exports but a very limited quantity predominantly communities. 47:30 47 minutes, 30 seconds Okay. And what would the proportion right now? Very negligible I think less than 5%. 47:40 47 minutes, 40 seconds Okay. And anything on particle boards? 47:42 47 minutes, 42 seconds Do we have similar obligations in particle good plant as well? 47:46 47 minutes, 46 seconds Uh no we would have some small obligations. I don't have the numbers off hand but we can share the same and the question of outsource I would 47:55 47 minutes, 55 seconds just like to mention one more thing in plywood that uh all our main brands are completely manufactured in our plants 48:04 48 minutes, 4 seconds it's a very small percentage of fenic mr that we uh outsource um but all our main 48:12 48 minutes, 12 seconds brands which is senic 710 and obviously all brands of centi are manufactured inhouse out. 48:20 48 minutes, 20 seconds All right. Uh and so next question is on laminates. So it was encouraging to see our revenue and a bit grow in this uh segment. I wanted to understand was it 48:29 48 minutes, 29 seconds due to increase in exports or due to domestic market. 48:34 48 minutes, 34 seconds Um I think we've done well on both sides. There's been growth in domestic as well as in exports. And uh the 48:41 48 minutes, 41 seconds execution on the ground, the execution reserve which perhaps wasn't as great for the past few quarters. Now that has started to kick in. So I'm hopeful that 48:49 48 minutes, 49 seconds we'll see results improving quarter quarter. 48:56 48 minutes, 56 seconds All right. And so last question uh on particle board and MDF uh given the competitive intensity and the over supply in this uh category we are saying 49:05 49 minutes, 5 seconds right now. Uh do we have plans to launch anything similar to sanic plywood in this categories? 49:13 49 minutes, 13 seconds No, we are not. Perfect. All right. Thank you. Thank you. 49:21 49 minutes, 21 seconds Thank you very much. 49:24 49 minutes, 24 seconds A reminder to all the participants, you may press R and one to ask a question. 49:43 49 minutes, 43 seconds As there are no further questions, I would now like to hand the conference over to Mr. Sanjay Agarwal for closing comments. 49:52 49 minutes, 52 seconds Thank you. Thank you everyone for their support. We look forward to meet you again for briefing on the Q2. Thank you. 50:03 50 minutes, 3 seconds Thank you very much on behalf of Securities Limited. That concludes this conference. Thank you for joining us and 50:10 50 minutes, 10 seconds you may now disconnect your lines. Thank you.