Century Ply Q4 Results Review - Sluggish Demand, Premium Valuations Compel Rating Downgrade: Yes Securities

Yes Securities Report

Century Plyboards Ltd. reported a moderate growth of 10%YoY and 13% QoQ to Rs 10.6 billion. Operating margins came in at 12.9% versus 17%/11.3% in Q4 FY23/Q3 FY24, respectively. Margins improved on sequential basis largely due to expansion in plywood segment which stood at 15.3% in Q4 FY24 versus 9.5% in Q3 FY24. Overall Ebitda stood at Rs 1.37 billion, a decline of 16%YoY and a growth of 29.4% QoQ.

Plywood volume grew by 6.6% YoY & 16% QoQ (two-year CAGR stood at 9.5%), average selling price improved marginally on sequential basis and remained flattish on YoY basis. Hence plywood revenue (57% of total sales), increased by 7%YoY and 18.5% QoQ. Ebitda margins came in at 15.3% versus 15.9%/9.7% in Q4 FY23/Q3 FY24, respectively.

Laminates volumes increased marginally by 5%YoY and declined by 2%QoQ (two-year CAGR stood at -2.5%). Laminates sales (16% of revenue) grew by 4% YoY and 3% QoQ. Ebitda margins stood at 10.3% versus 14.1%/12.2% in Q4 FY23/Q3 FY24, respectively.

MDF volumes reported stellar growth of 34.4% YoY and 13.6% QoQ while ASP contracted by 8.6% YoY and 7.4% QoQ. Consequently, Ebitda margins declined from 27%/19.2% in Q4 FY23/Q3 FY24, respectively to 16.5%.

Particle boards volumes grew by 25% YoY and 14%QoQ, ASP contracted by 9% YoY and improved marginally by 2% QoQ. Margins came in at 19.8% as compared to 18.1%/15.8% in Q4 FY23/Q3 FY24, respectively.

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