Q4FY22 Result Review

TP Rs651 Key Stock Data

Century Plyboards BUY CMP Rs537 Bloomberg / Reuters CPBI IN /CNTP.BO
Margin performance commendable; upgrade to BUY Potential upside/downside +21% Sector Mid-cap
Previous Rating HOLD Shares o/s (mn) 222
Summary Market cap. (Rs mn) 119,385
Price Performance (%)
Century Plyboards Q4FY22 profitability was ahead of our expectations. Its net 3-m daily average value (Rs mn) 15.1
-1m -3m -12m
sales jumped 21% YoY to Rs8.9 bn on higher sales from Plywood, MDF and 52-week high / low Rs749 / 346
Absolute (19.6) (10.5) 55.7
Laminates segments. Despite rising prices of key inputs, its EBITDA margin Sensex / Nifty 54,318 / 16,259
Rel to Sensex (12.7) (4.3) 46.1
remained flat QoQ at 18%. This is commendable in our view as many companies
in the building materials pace are witnessing margin pressures. Overall, EBITDA V/s Consensus Shareholding Pattern (%)
increased by 27% YoY to Rs1.6 bn. We broadly maintain our FY23-24 estimates EPS (Rs) FY23E FY24E Promoters 73.0
and continue to value the stock at a PER of 28x FY24E EPS to derive a target IDBI Capital 19.8 23.3 FII 6.9
Consensus 18.2 21.4 DII 11.1
price of Rs651. Given the recent fall in share price, we have upgraded the stock
% difference 8.7 8.7 Public 9.0
to a BUY from a HOLD earlier.

Key Investment Rationale Financial snapshot (Rs mn)

 Strong growth across all business verticals: Plywood sales increased by 19% Year FY20 FY21 FY22 FY23E FY24E
YoY to Rs4,768 mn while segment EBITDA grew by 41%YoY to Rs717 mn. MDF Revenue 22,827 21,135 30,236 34,975 39,636
Change (yoy, %) 1 (7) 43 16 13
segment sales grew by 37% YoY to Rs1,627 mn while segment EBITDA
EBITDA 3,152 3,461 5,801 6,714 7,789
increased by 67% YoY to Rs533 mn respectively. Even Laminates sales grew by Change (yoy, %) 3 10 68 16 16
13% YoY to Rs1,736 mn. Other smaller segments like Logistics and Particle EBITDA Margin(%) 13.8 16.4 19.2 19.2 19.7
Board also witnessed robust topline growth. Adj.PAT 1,582 2,040 3,480 4,414 5,177
EPS (Rs) 7 9.2 15.6 19.8 23.3
 Capex update: MDF expansion at Hoshiarpur remains on track and is expected Change (yoy, %) (0) 29 71 27 17
to get commission by Q2FY23. Also, Greenfield project for MDF segment in PE(x) 74.8 58.1 34.0 26.8 22.9
Andhra Pradesh and laminate segment will get commission from Q2FY24 (in Dividend Yield (%) 0.3 0.3 0.7 1.1 1.3
EV/EBITDA (x) 38.3 34.3 20.3 18.0 15.3
phased manner).
RoE (%) 15.5 17.4 24.6 25.7 25.2
 Outlook: With a pick-up in real estate demand and expansion of business RoCE (%) 17.9 20.9 32.1 29.7 29.3
Source: IDBI Capital Research
across business verticals, we believe there are structural tailwinds for
Century’s business. The recent fall in share price provides valuation comfort. Bhavesh Chauhan Kuber Chauhan
Hence, we have a positive view on the stock. [email protected] [email protected]
+91-22-2217 1849 +91-22- 2217 1854
May 18, 2022
Century Plyboards | Q4FY22 Result Review

Exhibit 1: Quarterly Snapshot (Standalone) (Rs mn)

Year-end: March Q4FY22 Q3FY22 QoQ (%) Q4FY21 YoY (%)

Net sales 8,953 8,485 5.5 7,386 21.2
Expenditure 7,343 6,968 5.4 6,118 20.0
EBITDA 1,609 1,517 6.1 1,268 26.9
EBITDA margin (%) 18.0 17.9 10bps 17.2 80bps
Interest 32 21 49.5 29 11.1
Depreciation 172 172 0.2 159 8.0
PBT 1,458 1,382 5.4 1,117 30.5
Tax 547 410 33.6 284 92.4
Reported Net profit 910 973 (6.4) 833 9.3
Adjusted Net profit 910 973 (6.4) 833 9.3
Adj. diluted EPS (Rs) 4.1 4.4 (6.4) 3.8 9.1
Source: Company; IDBI Capital Research

Exhibit 2: Actual vs. Estimates (Rs mn)

Q4FY22E Q4FY22A Variance (%)

Net sales 8,850 8,953 1.2
EBTIDA 1,256 1,609 28.1
Margin (%) 14.2 18.0 378bps
Adj. PAT 842 910 8.0
Adj. diluted EPS (Rs) 3.8 4.1 6.8
Source: Company; IDBI Capital Research

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Century Plyboards | Q4FY22 Result Review

Exhibit 3: Plywood segment revenue up 19% YoY Exhibit 4: MDF segment revenue up 37% YoY
(Rs mn) 125.3% (Rs mn)
5,500 140.0% 2,200 200% 250%
4,500 66.3% 110.0% 1,800 200%
3,500 80.0%
22.9% 1,400 150%

1,797
43.0% 19.4% 50.0%

1,628
2,500 1,000 100%

1,274
1,191
20.0%

3,992

4,457

4,388

4,767
37%

910
Q1FY22 2,226
1,500 600 41% 54% 50%
-10.0% 36%
500 -40.0% 200 0%

Q4FY21

Q1FY22

Q2FY22

Q3FY22

Q4FY22
Q4FY21

Q2FY22

Q3FY22

Q4FY22
Sales YoY growth - RHS Sales YoY growth - RHS
Source: Company; IDBI Capital Research Source: Company; IDBI Capital Research

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Century Plyboards | Q4FY22 Result Review

Conference call highlights

 In Q4FY22, Century ply’s topline grew by 21% YoY on account of strong demand from real estate space
particularly in the month of February and March.
 In FY22, company took a price hike across its business segments i.e 7-8% in plywood, 15% in particle
boards, 13-14% in laminates and 20% in MDF segment to mitigate input costs.
 In Q4FY22, net working capital cycle stood at 53 days as compared to 48 days in Q3FY22. Going ahead,
company aims to keep working capital days in the range of 50-54 days.
 On segmental front, company’s plywood segment is gaining good traction as compared to other players
due to increasing in demand from real estate space and strong brand equity. It targets a topline growth of
20% and EBITDA margin of 13-15% in FY23.
 Laminates segment is expected to perform better in Q1FY23 with a topline growth of 15-20% and EBITDA
margin of 14-25%.
 In FY22, the domestic market contributed 75% and export market contributed 25% of total revenue.
 MDF brownfield expansion at Hoshiarpur (Punjab) is progressing well and is expected to come on stream
by Q2FY23. Total capex will be around Rs2.5 bn.
 The first phase of MDF plant in Andhra Pradesh for MDF project is expected to get commission in H2FY24
with a capacity of 950 cbm per day. The total capex for the plant will be around Rs6 bn.
 The company will be setting up a greenfield laminate manufacturing facility in two phases with an installed
capacity of 4 mn sheets at a capex of Rs2 bn in Andhra Pradesh. As per the management, both the phases
in laminates will get commission by H2FY24.
 The company is planning to debottleneck Chennai and Guwahati plants to maximize the capacity which
can generate incremental production for plywood, MDF, particle boards in FY23.
 From FY23, Century will be following new tax regime leading to tax rate of 25% compared to 30% in
previous years.

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Century Plyboards | Q4FY22 Result Review

Financial Summary

Profit & Loss Account (Rs mn)

Year-end: March FY19 FY20 FY21 FY22 FY23E FY24E

Net sales 22,638 22,827 21,135 30,236 34,975 39,636
Change (yoy, %) 15.1 0.8 (7.4) 43.1 15.7 13.3
Operating expenses (19,635) (19,786) (17,781) (24,663) (28,511) (32,122)
EBITDA 3,064 3,152 3,461 5,801 6,714 7,789
Change (yoy, %) (2.0) 2.9 9.8 67.6 15.7 16.0
Margin (%) 13.5 13.8 16.4 19.2 19.2 19.7
Depreciation (500) (676) (626) (675) (743) (817)
EBIT 2,564 2,476 2,835 5,126 5,971 6,972
Interest paid (446) (372) (108) (96) (86) (69)
Other income - - - - - -
Pre-tax profit 2,119 2,104 2,609 5,030 5,885 6,903
Tax (531) (522) (687) (1,549) (1,471) (1,726)
Effective tax rate (%) 25 25 26 31 25 25
Minority Interest - - - - - -
Net profit 1,588 1,582 1,922 3,480 4,414 5,177
Exceptional items - - (118) - - -
Adjusted net profit 1,588 1,582 2,040 3,480 4,414 5,177
Change (yoy, %) 1 (0) 29 71 27 17
EPS 7.1 7.1 9.2 15.6 19.8 23.3
Dividend per share 1 2 2 4 6 7
Dividend Payout % 19 30 19 23 30 30

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Century Plyboards | Q4FY22 Result Review

Balance Sheet (Rs mn)

Year-end: March FY19 FY20 FY21 FY22 FY23E FY24E
Shareholders' funds 9,691 10,734 12,649 15,649 18,738 22,362
Share capital 223 223 223 223 223 223
Reserves & surplus 9,469 10,511 12,426 15,426 18,516 22,140
Total Debt 4,692 2,504 965 2,012 3,009 2,659
Other liabilities 20 64 233 420 420 420
Curr Liab & prov 3,260 2,985 4,023 4,065 6,917 7,839
Current liabilities 3,165 2,914 3,951 3,995 6,538 7,410
Provisions 95 71 72 71 379 430
Total liabilities 7,971 5,553 5,221 6,497 10,347 10,919
Total equity & liabilities 17,662 16,287 17,870 22,146 29,085 33,281

Net fixed assets 7,474 7,294 7,032 8,607 15,040 15,945

Investments 975 1,135 1,166 1,547 1,547 1,547
Other non-curr assets 990 800 782 344 344 344
Current assets 8,223 7,058 8,890 11,648 12,154 15,445
Inventories 4,010 3,541 3,302 4,895 5,464 6,192
Sundry Debtors 2,936 2,582 2,970 3,489 4,915 5,570
Cash and Bank 226 212 755 2,493 521 2,262
Loans and advances 54 56 1,162 33 93 106
Other current assets 998 667 702 738 1,161 1,316
Total assets 17,662 16,287 17,870 22,146 29,085 33,281

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Century Plyboards | Q4FY22 Result Review

Cash Flow Statement (Rs mn)

Year-end: March FY19 FY20 FY21 FY22 FY23E FY24E
Pre-tax profit 2,119 2,104 2,609 5,030 5,885 6,903
Depreciation 422 676 809 847 1,425 1,595
Tax paid (456) (485) (530) (960) (1,471) (1,726)
Chg in working capital (205) 546 (217) (941) 798 (474)
Other operating activities - - - - - -
Cash flow from operations (a) 1,880 2,840 2,670 3,975 6,636 6,298

Capital expenditure (1,279) (495) (547) (2,422) (7,857) (2,500)

Chg in investments (14) (160) (32) (381) - -
Other investing activities - - - - - -
Cash flow from investing (b) (1,293) (655) (579) (2,803) (7,857) (2,500)

Equity raised/(repaid) - - - - - -
Debt raised/(repaid) (338) (2,188) (1,539) 1,047 997 (350)
Dividend (incl. tax) (298) (475) (384) (813) (1,324) (1,553)
Chg in monorities - - - - - -
Other financing activities - - - - - -
Cash flow from financing (c) (635) (2,662) (1,923) 234 (327) (1,903)

Net chg in cash (a+b+c) (48) (477) 169 1,406 (1,548) 1,895

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Century Plyboards | Q4FY22 Result Review

Financial Ratios
Year-end: March FY19 FY20 FY21 FY22 FY23E FY24E
Book Value (Rs) 44 48 57 70 84 100
Adj EPS (Rs) 7.1 7.1 9.2 15.6 19.8 23.3
Adj EPS growth (%) 1.3 (0.4) 28.8 70.6 26.8 17.3
EBITDA margin (%) 13.5 13.8 16.4 19.2 19.2 19.7
Pre-tax margin (%) 9.4 9.2 12.3 16.6 16.8 17.4
Net Debt/Equity (x) 0.5 0.2 0.0 0.0 0.1 0.0
ROCE (%) 18.4 17.9 20.9 32.1 29.7 29.3
ROE (%) 17.6 15.5 17.4 24.6 25.7 25.2
DuPont Analysis
Asset turnover (x) 1.3 1.3 1.2 1.5 1.4 1.3
Leverage factor (x) 1.9 1.7 1.5 1.4 1.5 1.5
Net margin (%) 7.0 6.9 9.7 11.5 12.6 13.1
Working Capital & Liquidity ratio
Inventory days 65 57 57 59 57 57
Receivable days 47 41 51 42 51 51
Payable days 30 30 44 38 45 46

Valuations
Year-end: March FY19 FY20 FY21 FY22 FY23E FY24E
PER (x) 74.5 74.8 58.1 34.0 26.8 22.9
Price/Book value (x) 12.2 11.0 9.4 7.6 6.3 5.3
EV/Net sales (x) 5.4 5.3 5.6 3.9 3.5 3.0
EV/EBITDA (x) 40.1 38.3 34.3 20.3 18.0 15.3
Dividend Yield (%) 0.2 0.3 0.3 0.7 1.1 1.3
Source: Company; IDBI Capital Research

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Century Plyboards | Q4FY22 Result Review

Notes

Dealing (91-22) 6836 1111 [email protected]

Key to Ratings Stocks:

BUY: 15%+; HOLD: -5% to 15%; SELL: -5% and below.

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Century Plyboards | Q4FY22 Result Review

Analyst Disclosures
We, Bhavesh Chauhan and Kuber Chauhan, hereby certify that the views expressed in this report accurately reflect our personal views about the subject companies and / or securities. We also certify that no part of our compensation were, are or would be directly or indirectly
related to the specific recommendations or views expressed in this report. Principally, we will be responsible for the preparation of this research report and have taken reasonable care to achieve and maintain independence and objectivity in making any recommendations herein.

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