Century Plyboards (India) Ltd. Q3 FY26 Earnings Call Summary

Summary

Century Plyboards (India) Ltd. - Q3 FY26 Earnings Call Summary Thursday, February 05, 2026 12:00 PM

Event Participants

Executives 7 Arun Julasaria (CFO), Keshav Bhajanka (Executive Director), Navarun Sen (COO, Plyboards), Nikita Bansal (Executive Director), Sanjay Agarwal (MD & CEO), Sumant Wattas (CEO, MDF & Particle Board), Vishu Goel (CEO, Laminates)

Analysts 5 Balaji Vaidyanath (NAFA Asset Managers), Bhavin Rupani (Investec), Keshav Lahoti (HDFC Securities), Rahul Agarwal (IKIGAI Asset Management), Rehan Saiyyed (Trinetra Asset Managers)

Financials & KPIs

Geographic & Segment Commentary

• Plywood: Grew at 14.9% YoY, outperforming the estimated industry growth of 6-7%. Strategic shift underway to move 20% of outsourced “Sainik MR” production in-house over the next year to improve margins.
• MDF: Recorded 19.1% YoY growth with 9M growth at 24%. Management expects margins to hit 15% in the near term as timber prices stabilize and Badvel (AP) line extension (70,000 CBM) completes in Q1 FY27.
• Laminates: Achieved 13% growth in 9M FY26 with an ASP jump due to larger sizes in the export market. Management targets 20%+ growth and return to double-digit EBITDA margins in FY27.
• Uttar Pradesh (UP) Expansion: Planned ₹1,100 crore mega-project including 3 lakh+ CBM MDF plant and 1.2 lakh CBM plywood unit. Site selected for its perennial timber supply; currently awaiting land possession.

Company-Specific & Strategic Commentary

• Capacity Expansion Strategy: Increasing total MDF capacity to 6.25 lakh CBM by Q1 FY27 via South plant debottlenecking. Plywood capacity reaching 4.3 lakh CBM in Q4 FY26, with further expansions in Hoshiarpur and Chennai coming online in Q3 FY27.
• Market Share Gains: Over the last few years, the company has increased its plywood market share from ~4% to ~8.5% (internal estimates).
• Vertical Integration: Focusing on internal expansions (Kandla, Guwahati, Joka) to reduce reliance on outsourcing and capture more value in the mid-market segment.
• Raw Material Outlook: Management anticipates a medium-term decline in timber prices due to extensive nation-wide plantations maturing, despite recent short-term spikes in North India.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

MDF Capacity & Competition

• Question: Is the massive 3.3 lakh CBM expansion in UP risking a “telecom-style” price war? (Balaji Vaidyanath)
• Answer: MDF is growing at 20% annually. While short-term “fights” happen every 2-3 years, large players must add capacity in advance to deter new entrants. Prices have bottomed as current EBITDA levels won’t support further cuts. (Sanjay Agarwal & Keshav Bhajanka)

Plywood Growth Drivers

• Question: What is the “magic” behind consistent 15% plywood growth vs 6-7% industry growth? (Sneha Talreja)
• Answer: It is a result of constant experimentation. We fail often, but the 20% of experiments that succeed drive the growth. We have doubled our market share estimate to ~8.5% since pre-COVID. (Nikita Bansal & Sanjay Agarwal)

Capex Intensity

• Question: Why is the UP Plywood plant capex higher per CBM than MDF? (Bhavin Rupani)
• Answer: Initial greenfield capex is always higher as it includes foundational infrastructure and sheds. Future expansion from this base will be significantly cheaper (“brownfield optionality”). (Keshav Bhajanka)

Laminates Outlook

• Question: Why have margins dropped in Laminates and what is the outlook? (Sneha Talreja)
• Answer: Margins were impacted by mix, but higher ASPs in exports are helping. We guarantee a return to double-digit margins in FY27. (Keshav Bhajanka)

Key Takeaway

Century Plyboards delivered a robust Q3 FY26 with 18.4% revenue growth, reaching ₹1,350 crores, despite seasonal festive headwinds. The company is successfully outperforming the plywood industry, growing at double the market rate, while its MDF segment maintains 24% growth for the nine-month period. Strategically, the firm is pivoting towards a massive ₹1,100 crore expansion in Uttar Pradesh to secure long-term timber access and is bringing outsourced production in-house to bolster margins. While MDF margins were temporarily compressed to 12.1% due to North India floods and competitive pricing, management signals that realizations have bottomed out. With a target of ₹12,000 crore revenue by FY31 and significant capacity additions in Hoshiarpur and Chennai scheduled for Q3 FY27, Century Plyboards remains positioned as a dominant aggregator in a consolidating building materials market, though the execution of its large-scale capex remains a key watch point for the next 24 months.