Looking at capex of Rs 700 cr over next 2 years: Century Plyboards

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Century Plyboards posted its Q4FY21 performance on a low base. Revenue is up around 40 percent and margins have expanded to 17 percent. Keshav Bhajanka, Executive Director at Century Plyboards, discussed the outlook.

Century Plyboards posted its Q4FY21 performance on a low base. Revenue is up around 40 percent and margins have expanded to 17 percent. Keshav Bhajanka, Executive Director at Century Plyboards, discussed the outlook.
The company is in expansion mode. “Majority of our expansion is going to come from internal. We are looking at a capex of close to Rs 700 crore over the course of the next two years, and this is going to be funded primarily from our internal cashflows. We generate a lot of cash, and we have a strong balance sheet. So, I don’t think we will be taking on much debt at any point in the near future,” Keshav explained.
The demand in April and May was quite poor. “First days of June have shown some revival but going forward, we still need to wait and watch. We are hoping that the bounce back will be similar to last year and Q2 will be fully back to normal,” he said.
On raw material pressure, he stated “We have passed it on to the market quite successfully, so I don’t think that is going to have any meaningful impact but operating leverage will have its effect. But going forward, I don’t see that as a problem at all.”
“From the next quarter, provided volumes are back on track, our margins should be back to our earlier levels,” he added.
In terms of sales, he mentioned, “95 percent of our sales go through our distribution network. It is figured approximately to be 70 percent in retail and less than 30 percent in projects.”
The company supplies materials to Ikea, Godrej, and other companies. “I don’t think it would be fair to treat them as competitors. They are definitely our customers, and going forward, very valued customers,” he shared.
For the full interview, watch the accompanying video.

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