Century Plyboards (India) Limited ($532548)

Good day, ladies and gentlemen, and welcome to Century Plyboards India Limited Q4 and FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Navin Agarwal, Head Institutional Equities at SKP Securities Limited. Thank you, and over to you, sir.

Good afternoon, ladies and gentlemen. I'm pleased to welcome you to this financial results conference call on behalf of Century Plyboards and SKP Securities. We have with us Mr. Sanjay Agarwal, MD and CEO; Mr. Keshav Bhajanka, Executive Director; Mrs. Nikita Bansal, Executive Director; along with Mr. Arun Julasaria, Chief Financial Officer; Mr. Nabarun Sen, COO of Plywood; Mr. Sumant Wat, CEO, MDF and Particle Board; and Mr. Vishoo Goyal, CEO, Laminates. We'll have the opening remarks from Mr. Sanjay Agarwal, followed by a Q&A session. Thank you, and over to you, Mr. Agarwal.

Thank you, Navin. Thank you. Good afternoon, everyone and a very warm welcome to our Q4 and FY '25-'26 earnings conference call. Before we begin, I would like to remind you that today's discussion may contain forward-looking statements, which are subject to risks and uncertainties. This call is not intended as a solicitation to invest. The financial results and investor presentation have already been shared and are available on the stock exchange websites. FY '25-'26 has been landmark year for the company, marked by strong growth across businesses, significant improvement in profitability and continued strengthening of our market position. I'm pleased to share that the company reported its highest ever quarterly revenue of INR 1,492 crores during Q4 FY '26. The top line registered a strong growth of 10.5% quarter-on-quarter and 24.5% year-on-year, reflecting healthy demand across our product portfolio and improved contribution from newly expanded capacities. At the profitability level, consolidated EBITDA margin, excluding ForEx losses improved to 13.6% compared to 12.6% in the previous quarter and 12.1% in the corresponding quarter last year. The improvement was driven by better operating leverage, higher capacity utilization, improved product mix and our continued cost optimization and operational efficiency. For the full year, FY '26, the company achieved top line growth of 19.2%, while EBITDA margin, excluding ForEx loss, improved significantly to 13% from 11.1% in FY '25. In absolute figures, EBITDA, excluding ForEx loss, has increased from INR 502 crores to INR 702 crores. Profit after tax increased by 44% to INR 268 crores compared to INR 186 crores in the previous financial year. These results demonstrate not only strong revenue growth but also substantial improvement in the quality of earnings and overall business efficiency. Segmental performance. Let me now walk you through the performance of our key business segments. Plywood segment. The Plywood business continued to demonstrate sustainable growth momentum supported by healthy demand, strong brand positioning and distribution expansion. During Q4 FY '26, the segment recorded revenue growth of 11.4% quarter-on-quarter and 17.9% year-on-year. EBITDA margin, excluding ForEx losses stood at 16.1%. For FY '26, the segment delivered revenue growth of 15.6% with EBITDA margin at 15.2%, reflecting strong operational performance and continued margin resilience. Laminate segment. The Laminate business delivered a turnaround during the year after remaining relatively subdued over the past 1 or 2 years. In Q4 FY '26, the segment recorded revenue growth of 8.3% quarter-on-quarter and 16.3% year-on-year, while EBITDA margin improved to 10.3%. For FY '26, revenue grew by 13.9%, while EBITDA margin improved significantly to 8.5% compared to 5.2% in FY '25. The improvement was driven by better capacity utilization, improved product mix and efficiency. The next segment, MDF. The MDF business continued its strong growth trajectory, driven by improving utilization levels and sustained demand momentum. During Q4 FY '26, the segment recorded revenue growth of 8.9% quarter-on-quarter and 31% year-on-year. EBITDA margin, excluding ForEx losses, stood at 11.3%. For FY '26, the segment achieved revenue growth of 25.5%, while EBITDA margin improved to 12.7% from 10.1% in the previous year. In the current quarter, we have taken a shutdown in our plant to increase the capacity by 20%. Particle Board segment. The Particle Board business witnessed robust growth during the year, supported by new capacity addition and improved utilization. In Q4 FY '26, revenue grew by 3.9% quarter-on-quarter and 108.3% year-on-year, while EBITDA margin stood at 7.2%. For FY '26, the segment recorded revenue growth of 38.2%, with EBITDA margin at 1.2%. We expect further improvement in operating performances, and utilization levels continue to increase. Century Ports, a wholly owned subsidiary of Century Plyboards (India) Limited commenced commercial operation during Q4 FY '25-'26, as the rejuvenated 2 docks to be on West at SamaPasar Makati port, Kolkata. The commissioning marks a strategic diversification into port logistics and infrastructure aimed at enhancing supply chain efficiencies and creating new growth revenues for the group. We will be cash positive in Q1 FY '27 from the port business. Financial overview. From a financial perspective, FY '26 reflects a year of strong execution, improved growth profitability and disciplined growth. Excluding ForEx losses, ROE improved from 10.6% to 15.2%, while ROCE increased from 12.5% to 14.6%, reflecting stronger operational performance and improved capital efficiency. Our continued focus on operational excellence, prudent capital allocation and strengthening of brand and distribution capabilities has enabled us to improve both scale and earning quality. We remain committed to investing in manufacturing excellence, distribution, expansion, brand, technology and sustainable long-term growth. Looking ahead, we remain optimistic about the medium- to long-term outlook for the building material and interior infrastructure industry. The sector continues to benefit from strong structural drivers such as rising urbanization, disposable income, et cetera. With our diversified product portfolio, strong brand equity, funding distribution network, improving capacity utilization and additional CapEx on new capacity across businesses. Century Plyboards remains well positioned to capitalize on the emerging growth opportunities across segments. We also expect further improvement in ROE and ROCE, as we continue to serve the substantial assets that have been created over the last 3 years. During the quarter, the industry witnessed inflationary pressure in certain chemical and resin related input costs due to ongoing geopolitical conflicts and supply chain disruptions in global market. However, the company was able to effectively manage the challenges through operational efficiencies, strategic sourcing initiatives, improved product mix and calibrated pricing excellence. Going forward, we will continue to focus on profitable growth, operational excellence, prudent financial management and sustainable long-term regulation for the stakeholders. We will now open the floor for questions.

[Operator Instructions] First question is from the line of Praveen Sahay from PL Capital. .

Many congratulations for good set of numbers. Sir, my first question is related to the MDF. There you had given around 39% of Y-o-Y growth in the quarter. Can you make us understand from where such kind of outperformance is coming? Is that the market share you're gaining or the channel expansion? How that's going on? Related to that, at what level of utilization in the MDF, you are running with. And also in this also, if you can give some color on the price hike, as you also highlighted related to the chemical price increased. So related to that MDF.

Already quite a lot of questions. So Sumant?

Yes. I think you asked 3 questions. One, I think on the Q-on-Q growth. It's a multitude of factors. Obviously, in March, some stocking does happen because the market was affecting price increases. So that has certainly been 1 factor, but not the only factor. As we are aging more in the south, we are convulpanding our network. I'm also working on the secondary, which is the carpenters and retailers. So it's a mix of, I would say, a little bit of year-end stocking, but also lot of fundamentals playing out in terms of enhanced network and enhanced demand generation. So that's part 1 of your question. I think your part 2 was on capacity utilization. With the current numbers, we're at about 80% to 85% capacity utilization, give or take, for our full capacity. And this is against the rated capacity. And if you look at the product mix, you can go up to 85% to 90% as a matched capacity on top of rated, and this is the reason why, as MD mentioned in his opening remarks, we are also taking the extension in our south plant, which will add another 60,000, 70,000 cubes per year of capacity going forward. On your third question, in terms of price increase, given the disruption in chemicals and supply chain and so on and so forth, we and the industry have taken a 15% price increase, which barely actually covers the cost that has gone up on account of chemicals disruption. It is very early days to see how much of it sticks. And also, given the uncertainty right now on supply chain again, we'll have to wait and watch to see will it sustain, will we need to take more price increases or will we need to take some corrections.

Okay. Okay. And this time, you are not giving a guidance for all the segments for FY '27?

In the present situation, I think It will not be right on our part to give you anything right now, but maybe by next time, we will be in a better position to -- because till now whatever we have projected we have been able to mostly achieve. So the situation is really, really -- and we do not know what will happen to this war because they have given 60 days for that uranium, something, they will again hit down -- so it may or may not, the war may again start. So you really don't know what is going to happen. So that's why we are reserving. Otherwise, there is no other reason.

Next question is from the line of Keshav Lahoti from HDFC Securities.

Congratulation on a strong set of numbers. seen you have announced multiple expansion, 1 more new function once how should we see apply capacity, what numbers in FY '27, '28, '29 give us some sense on that? And secondly, the -- because of this war...

On the capacity front, actually a lot is happening. Right now, we are utilizing our capacity tactically 100%, you can say. So the way we are growing, we have to take this chance and that's why we are expanding our capacities into our existing plant or plant fall-through. And our plan at on the -- I think Nikita can tell better. Nikita are you there online.

Yes. I'm there. Yes. So actually, in Q4, we had a capacity utilization of about 99%. We are increasing our capacity by about 30% within this year, part of it is about 20% is with internal plant expansion. And another -- the Hoshiarpur plant is supposed to come up in October this year. So that would make it a 30% expansion. Next year plan is another -- actually, the UP plant is a bit delayed. So we are looking at -- actually, we had earlier projected that we will be making CapEx in this year, but it seems because we've just got the land, so I think the CapEx of the same would start probably towards the end of this year, maybe Feb, March or maybe even Q1 next year, and it will be ready in Q1 '28-'29. In the meantime, we also have started the process of procuring land in Orissa. Given the way we are expanding, we believe that we will need a new plant 1 -- leaving 1 year apart, if we got Hoshiarpur, this year, I need a new plant in '28-'29. That's our projection for the next 5 years. That's how we are going about it. In between all year, we are expanding within our existing plants wherever it is possible.

Understood. And Chennai will double by Q3 FY '27.

Chennai is doubling in July this year. So that is the 20% expansion that I was talking, not really doubling because it's already taken out a lot of meat within its existing plant so about 40,000, which is, I don't know, maybe 30,000 or 25,000 CBM will increase in Chennai by July.

And this Particle Board, I can see in the press release, you mentioned as the capacity is 40,000. So we can see the real capacity of 72,000, old plants you are not counting in, so the plan is to completely scrap the old plant or possibly once the plant to ramp up, you will start to use the old plant also. And lastly, Particle Board listing, the CapEx is INR 500 crores for 2,40,000 CPM capacity. Earlier same plant, which you did the CapEx was higher at INR 700 crores. Why is that so?

Yes. This is Sumant here. Let me answer. The old plant, which is a multi-related slightly older technology that we have shut down. And as of now, there are no plans to revive it. So we will most likely scrap it. And -- I mean, if we add future capacity in Particular Board at a later stage should the market allow, it will be in a new greenfield capacity. So that's your question number one. Sorry, can you repeat question number 2, I forgot? What was the second question?

The Particle Board expansion cost is INR 500 crores, while earlier, the similar capacity costed you INR 700 crores.

But we have not taken any Particle Board expansion earlier, so which 1 are you referring to?

Yes. So, 2,40,000, which -- where you incurred INR 700 crores.

No INR 700 crores [Foreign Language]. That is what we are running now. The earlier plant, which we have closed down so that we are scrapping. So, therefore, I think we invested some INR 200 crores. The first plant.

The old plant was INR 70 crores. I think you have got your numbers mixed up. The old plant was an archiac old technology, which was multi press. And hence, the CapEx cost was much lower. This is a continues production line that the cost will be higher.

I'm talking about the Chenna greenfield, which you did Particle Board expansion of 2,40,000. That plant costing was around INR 700 crores. Is this number right?

No, the number is incorrect. The plant costing was about INR 550 crores.

Okay. So given the plant costing was INR 550 crores, but now the Orissa one you are doing, which will come more in...

It is just an MOU that we have done with the government with very, very rough calculation. It is something that we are still exploring. So Orissa, nothing has been finalized yet.

And Orissa, have we done a MoU for Particle Board plant or a Plywood plant.

For both, papa?

For both. Okay.

Yes. Yes. No, so I think if you're comparing the MOU, I think it's a wrong comparison to do because the MOU right now, we have got it with the caveat, if you read that it could be an MDF or a Particle Board, we will take a decision when the time comes. And as you know, in India, it takes a little bit of time. We are just in the stage of procuring land. And you've seen like even in the past, when we actually start procuring land, I don't see Orissa going live in another 2 years from now in like getting the line, then all the formalities will start. So I think 2 years from now, we can give you a better idea on costs and all the breakup. I hope that's clear.

Understood. Got it quite clear. And this MDF for AP is already done the debottlenecking thing for MDF.

Sorry, could you say again? Your voice was not clear.

They are asking for the de-bottlenecking.

So MDF, you were increasing capacity by 20%, 25% for AP plant, which you said in Q1, that is already done and dusted now.

No, no, that is going on as we speak. In Q1 this financial year, we are doing a brownfield expansion in our South plant. That will unlock about 60,000, 70,000 cubic meters per year of additional capacity. So that is ongoing currently and will get completed by the end of the quarter.

Got it. Will this have an impact on the sales volume for MDF in this quarter? Or you already had the surplus inventory?

Yes. So we plan for inventory, and hopefully, we'll be able to service the market sufficiently with the inventory.

One last question from my side. In the past, you used to import timber. Now all the geopolitical has been and container rates have increased. So in this a this will increase your costing for ply timber also. And you are facing any supply side sharing this?

Can you repeat it? Sorry, I missed your thing. .

So I said imply because of geopolitical, the freight rates have increased. So you used to import timber in ply segment. So is there any supply side challenge and whether you apply timber costing have increased due to higher freight rates?

Yes. So actually, there is no challenge per se, in getting the material. But yes, prices have increased, and we have taken a 7% price rise already in the month of April due to these reasons because we are so import heavy as well as our chemicals, which are imported as well, they too faced a lot of increase. You must be reading about phenol, melamine in the papers anyway.

[Operator Instructions] Next question is from the line of Utkarsh Nopany from Anand Rathi.

Sir, my first question is regarding your MDF segment. So like on volume side, you are doing pretty good. But on the margin side, if we see like your margin has come under pressure, with earlier not guided, so just wanted to know what is the reason for the margin pressure in the March quarter? And what should be the sustainable margin in this segment as we do and by when it is likely to be achieved, sir?

Yes. So if you compare our Q4 versus Q3, there has been a marginal erosion of about 1%, a marginal margin erosion. This is on account of 2 factors. One, some production-related disruptions linked to the chemical availability and prices. And secondly, some one-off spend, so we did a little bit of ATL on the MDF side, which also got hit in quarter 4. So that's the reason why you see the 1% margin decline quarter-on-quarter. I think in terms of steady state, once things stabilize on the chemical side, supply chain side, so on and so forth, our strong belief is that this is a high teens EBITDA business in steady state, and there are 2 reasons for it. One of operational improvement on the plant side that we do in regular course is likely to kick in again next year as well. Secondly, with this whole brownfield expansion, this out plant, it gives us efficiencies on power, fuel, so on and so forth. And then the efforts being made just in terms of product mix, and value-added products, which you want to push further and further. So in steady state, I think this is a high teens EBITDA business, if not higher. And we hope to achieve it as the next year goes by. I think the specific timeline is very difficult to put right now, given so much is happening globally, but that's our plan and our vision.

Okay. And sir, second on the temper side, like what we are hearing is that the timber prices in the local market has corrected by roughly around 10%, so just wanted to know, are you also seeing similar kind of auction in the local timber prices? And what is the outlook for the timber prices for FY '27?

Yes. So I think if we look at timber as the raw material and if I compare to the volatility in the year before and the years before that, timber has remained a lot more stable this year. While it's marginally corrected, I wouldn't say corrected by 10%, but it's remained stable. And there are some regular seasonal variations that happen any which is in timber. For example, in monsoon season, availability is low, so on and so forth. So that happens every year. But by and large, timber as a raw material has remained stable, and we expect it to remain stable going forward.

Okay. And sir, last, sir, if you can just highlight how much price hike we have taken in the other also like plywood laminate and particle board in Q4 and in Q1 till date? And what would be our CapEx for FY '27 and '28?

So I can answer for particle board and then I'll hand it over to Nikita maybe for ply. Look, particle board is a very key account management business, and the industry has not really announced any price hike per se. So it's not standard. But the raw material prices on account of chemicals have taken a hit similar to MDF and our price pass on has also been in the same range.

And I think I have already on the plywood side, already mentioned that we have passed on whatever price increases we had so far in April of 7%, but it's a wait-and-watch scenario. And if we feel that prices continue to rise, we will take further price rises accordingly.

Okay. And madam, what would be the CapEx guidance for '27 and '28 on a consol basis?

Vinay, can you answer that at a whole level, company level?

I'll just take that. The basic CapEx that we are going to incur, the majority of it is going to be towards our new Uhappur plant. Other than that, once we are online in Uttar Pradesh, once the land is in hand, we should be looking at commissioning Uttar Pradesh over the course of the next 2 years. Other than these 2, we have no major frozen CapEx as yet. So the CapEx will be predominantly directed towards plywood.

Next question is from the line of Rahul Agarwal from IKIGAI Asset Managers.

2 questions. One is more longer term, midterm in terms of strategy. Our operating cash flows every year are about INR 600 crores, INR 700 crores. Please correct me if I'm wrong. Our CapEx, total, including UP, Orissa is INR 2,000 crores, next 4 years, 5 years, roughly about INR 400 crores, INR 500 crores a year. Most of the heavy lifting on cash flow right now is plywood, 60% of EBITDA is coming from there. So just need to understand your thoughts on how do you manage your risk going forward, right? It's a lot more on execution, which will depend on to fund this CapEx. Second is, at the same time, we got to control on our financial leverage on the balance sheet. It's INR 1,600 crores right now. And third is, of course, spreading out this CapEx over 4, 5 years' time. so that the CapEx, which we just finished over the last 2, 3 years should actually generate the ROCE you want. So how do we play a balancing act here? Could you just explain in terms of your own thought process for the entire business? That's the first question.

I think the way to look at this, Rahul, we are a company that you have seen has invested when we believe that there is money to be made. But at the same time, for us, turnover is vanity, profit is sanity and cash is reality. So return on capital is one of the most important metrics that we track. Currently, as you rightly pointed out, we have invested substantially over the course of the past 2 years. And right now, I think it is opportune for us to sweat our assets to generate returns. We are looking at growth that is not exponential. We are looking at a sustained growth. Towards that, maintaining balance sheet discipline is one of the most important priorities. At this point in time, like I have already mentioned, our priority is going to be in creating capacity for plywoods, where we are seeing that we might face a shortage 1, 1.5 years from now due to very strong traction on the ground. Other than that, we will take a call on the other segments as and when we reach capacity utilization. There could be stagnancy in a couple of segments where we will not benefit substantially from volume addition for a period of 1 or 2 quarters, maybe from the fag end of next year onwards. But this will be offset by higher realizations and by higher value addition sales. So I think currently, there's no frozen CapEx for MDF or particle board, which are large substantial CapExes. We are going to be using our internal cash flows predominantly to strengthen our balance sheet. And going forward, as and when we take a call, we'll be the first to know.

And I would like to add one more thing to this that see in plywood, we are not doing unrealistic expansion because all this while you never saw expansion was because our existing plants had a lot of juice to actually take out. We could really do massive expansion within our plants. We've actually doubled, tripled our capacity within our existing plants over the last 5 to 6 years. But that is now no longer feasible. And because of that, we need to put up new plants, and we are looking at securing raw material sources because of which we are looking at Orissa or UP, et cetera, for future whenever we come back to local timber. And we are taking a very muted growth of 10% to 12% and a capacity utilization of 80% basis that we are planning our expansion.

Right. I absolutely get it. So just in terms of follow-up. But plywood Nita, the base is going to be very high, right? This year, we've done exceptionally well. To actually do the heavy lifting next year, you're talking about 10%, 12% growth for next year is what you're talking about?

Like MD said at the beginning, we don't want to give any numbers for this year. I think in the next call, we will talk about the numbers for this year, what we are expecting. Obviously, you will also see how we performed in Q1 by then. Like MD said at the beginning, we don't want to give any numbers for this year. I think in the next call, we will talk about the numbers for this year, what we are expecting. Obviously, you will also see how we performed in Q1 by then.

Sure, sir. I get that. So just in terms of your own comfort on debt overall level versus if I look at EBITDA, what's the comfort level from a balance sheet consol perspective? Right now, we are at about 2.5 if you look at debt to EBITDA gross levels.

I think operating debt or working capital debt is something because we are growing, and we are in a high-growth phase. 19% growth year-on-year for a business like ours does require certain working capital. But long-term debt, I don't think we'll exceed 1:1 EBITDA going forward.

Perfect. Got it. And just lastly on ForEx. I just wanted to understand what are these liabilities where ForEx in case INR devalues substantially in any quarter, which has just happened like that right now. What are these liabilities...

Our total ForEx is within INR 600 crores. Over the course of the past 2 decades, we have benefited substantially because of a natural interest hedge, as you are aware. One year, yes, there's been a stock loss. This is predominantly due to the fact that currencies appreciated beyond what anyone could have imagined. Having said that, I think our total ForEx expenditure for our total ForEx exposure is INR 600 crores. It is going to be limited to within that space, which is not going to have a very meaningful impact on our balance sheet going forward. We are not going to increase our ForEx exposure going forward.

No, absolutely, I understand. What I was asking was, is it part of debt? Or is it part of -- is it realized or this is mark-to-market?

No, no. This is mark-to-market.

Right. Okay. So this is part of...

It is mark-to-market.

Okay. This is not realized loss. This is largely on liabilities on short-term debt, is it?

No, it is on long-term debt. Majority of it is long-term debt because we have imported machinery and buy asset.

Next question is from the line of Sneha from Nuvama Wealth Management.

Congrats on -- just a couple of questions, sir.

Sorry to interrupt. Your audio is breaking. Can you come in a better reception area, please?

Is it better now?

Yes.

Yes. So I was just asking whether -- on the plywood front, whether we have opportunity for outsourcing? If yes, what would be the contribution of outsourcing currently? That's one. Although I understand you said that for incremental even 10%, 12%, we need to add growth, but the possibility of the outsourcing front also to get a higher growth. That's first. Secondly, a lot of your peers on the call mentioned that on MDF front, also we have taken price hike, but it's being partially passed on and due to competition, there are schemes and discounts going on. So just wanted to understand that how much of the raw material cost absorption across the board is done? And could we see any margin impact starting Q1 because of higher inflation?

So let me take the outsource question first, and then Sumant can take the next question. So the thing is with respect to outsource, I think I've mentioned it in the last call as well and our meet that we want to actually make it a complete 100% in-house production. We are hoping that by the time there is an internal expansion next year, April, and Hoshiarpur. So once Hoshiarpur comes, we will start moving a lot of our SAINIK MR, which is the only product we outsource in-house. And by the time we are here next year, we would probably make it 100% in-house.

On the pricing -- This is Sumant here. Like I mentioned previously, we and the industry have taken a 15% price increase this quarter. And that more or less covers the cost increase on account of supply chain disruptions and the war. You are right. Some peers in the industry have done selective rollbacks on this. So right now, it's in a bit of a flux given that the global tensions are again at play. We don't know which way the prices will go from here. Also in the market, like you rightly pointed, there have been some rollbacks by a few players here or there. So I think the situation is a bit -- we are waiting and watching and see which way it will go. Our hope is that we are able to pass on the cost increase as an industry in terms of prices, and therefore, there should be no margin impact. But right now, it's wait and watch for us. It's very difficult to say currently.

Got that. Lastly, just a third and last question from my end, which is related to across the categories. The reason I'm asking this, we've seen significant inflation in March, there was a lot of channel pushing, be it tires, be it pipes, be it even your space like MDF, where the traders or the distributors were expecting price hikes. And that is why the stuff material in the month of March and probably because of which April has been slow. Just a sense that I wanted to get how has May picked out? Are we seeing any scope of channel recouping and now taking material.

April was not slow.

So that answers.

So I want to clarify one more thing, as far as this outsourcing is concerned. See, you know that Century is absolutely into quality. And we have seen that outsourcing in plywood has really not worked as far as the quality is concerned. So that's why we are slowly and as fast as possible whether I should say, we are trying to withdraw from outsourcing, reduce outsourcing and do everything in-house because the quality is of utmost importance to us. And why I'm saying so because next time you build your house, you must buy only Century.

Next question is from the line of Shankaran Mehra from Invest.

Sir, just an extension to Rahul's question on the overall CapEx. So on the MDF front, you seem to be running at pretty high capacity utilization. And the debottlenecking probably helps you for growth next year. So what are the plans beyond that? I mean, we are -- if you want to expand capacity there, I'm sure something must be planned by now so that it's commissioned by FY '28. So any thoughts there? Or would the idea be to focus on more value-added products? How should we think about it?

Keshav, are you there?

Keshav, would you like to take that?

Sir, Keshav sir's like dropped. I will just call him back.

Meanwhile, maybe I can take a stab at answering. Well case of joins. Look, like Keshav mentioned a couple of questions back, obviously, debottlenecking is 1 area which would give us 60,000, 70,000 cubic meters more of capacity this year. And we would like to obviously try to sell it off as quickly as possible. In parallel, move towards value added is certainly very high on the agenda because that also gives us EBITDA uplift. In terms of capacity addition beyond that, nothing has firmed up and nothing is announceable as of now. We're obviously doing our internal brainstorming. Once we're in a position to give you specifics in terms of time lines and capacity, we will come back.

With our UP land acquisition, if it happens correctly on time, we'll be ready with the land and the land is ready, the rest of it is absolutely ready with us. There is no more science to it for us. So we will be able to put up a plant within, say, 15 to 16 months time, I think. But right now, yes, there is nothing absolutely for them.

And because of plywood, we would actually get the land ready regardless because we would need the common facilities and more or less the roads, et cetera. So the land will be ready if ever MDF decide it won't take as long a period as it takes for a fresh project.

Understood. So I mean just to sort of clarify that it's more a timing or a CapEx issue, nothing to suggest that the growth opportunities are sort of saturated I shouldn't be taking...

No, no, no, no. We are very, very bullish on -- we are very bullish on MDF there. The capacities are going to expand really big time, a lot of progress is going to come in. These are only [Foreign Language].

No, and I think the division will deliver EBITDA, where you all will also get the confidence that we further go into CapEx. So I think that is also important.

I'm looking forward to that. I wish you all the best.

Next question is from the line of Amit Purohit from Elara Capital. .

Congratulations on good set of number. Sir, just 2 questions. One on the demand, how are you seeing right now, given the fact that you have taken price increases in most of the segments. And second, when you take price increases, I just wanted to understand how do you -- I mean, just a bit of a mathematical thing trying to understand whether these price increases ensures you a percentage margin? Or I suppose the raw material prices would have gone up by how much in for MDF at an aggregate level or in plywood, if you couldn't give me, is it a price -- raw material price increase by 7% and 15% for you and that's why the amount of price increase has been taken, if you could help me that?

It's not that compensated. It's very simple. You see there are very different factors in cost. We have a very efficient costing management system. And very fast, we get the calculations that what are our costs going to be in, say, next 1 month time also. So accordingly, we take the price increase. It is not only raw material timber because timber is only maybe a certain percentage of the 1 thing in the chemicals, and there are factory inputs, and then there are logistic costs. And then, there is a dollar-rupee. So all these things we take into account, and we take the increase. It is much simpler than...

No, so I just want to know is that what is the raw material index for you increase in the MDF and plywood? If you could just tell us that on a Y-o-Y basis 7% and 15% price.

What is the raw material percentage in the total quarter...

Yes. It's something I personally don't want to share. I think at least for plywood, I don't want to share. And I think Sumant would say the same for MDF.

I don't think we should share for all these things.

Yes. And as far as the demand part goes, I would request Mr. Sen if he's on the line, he should answer for ply, and then Sumant can answer for MDF.

Are you there? Nikita you should take it.

Let me take it Yes. So the thing is that whenever we do a price increase, we expect that things will fall, but we have -- we are not seeing any drop in our secondary. So that, to me, shows that there might be some holding with the big dealers, but because we have such a wide expansion and we actually run routes on a daily basis when it comes to feeding smaller dealers, I feel that demand is continuing even post the price increase currently for ply.

Yes. And I think just to add to that -- sorry, you were saying something, please go ahead.

No, no, continue, and then, I'll just have 1 small follow-up on that.

Yes. Just a quick addition to that on the MDF side. Look for us also, demand has been quite stable. April, May, as compared to Q4, of course, there's a little bit of correction that happens from the Q4 exuberance. But in general, we don't see any fundamental deepening of demand. So it's quite stable and healthy.

Sure. And just -- I understand you may not like to share the exact percentages, but can you just say whether it is higher or lower versus the price increase that you have taken.

No, it will be higher, right? The raw material increase will be higher because of the ratio of the raw materials and pricing is -- it's not 100%, right? So obviously, the raw material price would be higher, obviously, but we pass on the exact, right? We do not let our EBITDA net hit. That's usually how we work as a company.

I think that answers your question. You're trying to ask. Are we trying to get more margin from the price increase? Or are we discovering our cost? I think Nikita answered is the philosophy is to pass on as much as cost as possible. So that's the intent.

Next question is from the line of Bhavin Rupani from Investec India.

Sir, first question related to plywood. So last quarter, we said 8% of our total revenue in plywood is with respect to, so first, if you can tell us what is it in terms of volume? And second, now we plan to bring in in-house. So does it mean that volume growth want to be commensurate to capacity growth going ahead? So is that a fair understanding?

So -- okay, let me answer it in 2 ways. Number one, we do not share breakup of SAINIK MR and SAINIK 710 and Prime. We've maintained this in the past, so I will not answer that question. With respect to the second part, Yes, so if you say in terms of the growth, the capacity expansion that is happening is quite aggressive at a smaller time line. So if you see -- if you've added 30% just this year, and then, we are adding another further 15% next year, is all to actually take up some part of this 8%. Obviously, we are not going to grow by 45% in this 1.5 years. Yes.

So just to follow up on this, if you can call out what is the capacity right now in plywood and what will be our capacity post you are done with all the CapEx that we have announced in F'27?

Will you take up those exact numbers, please? .

Sure. So capacity in case of plywood is INR 4,06,000...

Sir, sorry to interrupt you, you are sounding distinct.

Am I audible now?

Yes, sir.

Yes. So current capacity at plywood is INR 4,06,000 as on March '26, and we are coming up with new capacity of, which is 48,000 CGM, which is going to come up in the second half of this year. Apart from that, we are having expansion at different factories, which is Kandla, Chenna and Guhwati, which will add another 20% of this particular capacity, which has already told.

20% of total capacity is 80,000...

Yes, through brownfield.

Got it. Sir, second question related to Century port. So we have done an expense of somewhere around INR 60 crores to INR 70 crores over 3 years. So just wanted to understand what could be the potential cost savings we can expect from this?

What do you mean by cost given, for Century Ply?

Yes, cost saving or incremental revenue...

No, there is no cost saving in this -- there is a -- it makes life easier for many, many importers and exporters to us also, but there is no cost saving Century Plyboards in there.

We always maintain each thing as a separate profit center. So Century Ports will continue to have its own profit center and gives no benefit to Century Plyboards.

[Operator Instructions] Next question is from the line of Mehul Shah from NMV Securities. .

Sir, I wanted to know the current capacity for laminates.

Current capacity for laminates. .

And utilization.

So our capacity is at 84%, and our capacity is 87,70,000 sheets. .

87,70,000.

87,70,000 sheets.

Consolidated, right?

Badwel capacity is 11,200 CBM. These are 2 different kinds of numbers because there, the number was number of seats, 87,70,000 number of sales. Here, it is CBM because where we make a different kind of laminate actually. It's a thicker laminate, which is mostly for exports or for use in toiletries and all that. Utilization at Badwell is 47%. .

And what would be the capacity for '27 and '28?

Capacity for '27-'28, same.

So as we said, we will give those numbers in the next call because if I talk about capacity utilization, I will also end up talking about what is my plan for this year. So we will give that in the next call.

[Foreign Language]

He's asking capacity utilization percentage for this year?

And for MDF capacity is 5,28,000, right, current.

Okay, for MDF current capacity is about 30,000, 40,000 CBM per year. And with the downstream sanction, we'll add another 60,000 to 70,000. So we'll be, give or take 6,00,000 cubes a year. .

Next question is from the line of Anu Parakh from Anand Rathi.

So the first question is, what is the reason for weak performance of the laminate segment for the 18 quarters? And by when can we expect it to start to performing?

[indiscernible].

Yes. Yes, I can answer that. So this side. So I think there are 2 parts to the question, okay. In the last -- if you were to look at the proceeding 8 quarters, which is FY '24, '25 and '23, '24, okay, we had seen a certain amount of stagnancy as far as the laminate business is concerned, partially because of some internal changes in the context of how we wanted to take up the GTM level changes, which probably have not worked to our advantage and partially also because of the changing product mix, when you look at Indian as well as both export markets. So we took some corrective actions starting last year only. And if you were to look at this year, we have started seeing some green shoots as far as the financial year 25, 26 is concerned. So on a quarter-on-quarter basis, we have seen an uptick as far as the overall top line as well as the improvement on the bottom line is concerned, which essentially has come through the work which we have done both in the domestic market including working on some price points, trying to sharpen our go-to-market strategy and making some corrective changes there, including changes in the leadership team. Also at the export level, we have added the larger capacity prices, which is something which is more due to the kind of product mix, which is utilized or kind of demanded in the global markets all across Europe, Southeast Asia and stuff like that. So that also has started giving us some dividend. So to that extent, we are seeing some green shoots. And while, of course, we are in a context of building up the space for us. But for whatever we understand, including all the published companies within the published their results, we have done reasonably okay, as it now growth rate outstrips all of them from a published point of view. So industry itself has seen a certain amount of 8% to 10% kind of a revenue guidance, if you were to look at the market leaders and all other companies the way they are portraying. And at this stage, we continue to outgrow that. So as we move ahead, we will see more improvement in consolidation moving forward. And we may continue to outgrow the market by 3 to 4 percentages.

Okay. And sir, what is the -- how much has been the rise in the chemical prices compared to the average of Tier 4 in current market rate? And also, if you can share the chemical cost percentage of the proportion of revenue for plywood, laminate, MDF and particle board?

I don't think we share such fine costs, et cetera. We do not say it actually.

Okay. Sir, but how much has been the rise in the chemical prices?

[Foreign Language]

I can tell you. So see, for us, we have -- like in the context of MDF and plywood, we have taken a price increase to the tune of 10% to 12%, largely the impact in the quarter 1, okay? And that predominantly covers our raw material or the chemical cost price, which has happened, okay, because we are dependent on a lot of chemicals, and it does form a sizable portion of our input cost, but we have been able to pass on most of the price increases to the market.

So the cost increase in Chemicals will be a little higher than this percentage.

Yes. Yes.

Maybe we are unable to tell you at this moment exactly.

That was the last question in the queue. As there are no further questions, I would now like to hand the conference over to Mr. Sanjay Agarwal for closing remarks.

Yes. Thank you, everyone, for your insightful questions and continued interest in our company. We are encouraged by the strong performance during FY '26 and remain confident about sustaining the growth momentum across our businesses. If Iran war supposedly ending, I hope progress here in EBIT. We sincerely appreciate your continued trust and support, and we look forward to interacting with you again after our next quarter results. Thank you. Have a great day.

Thank you very much. On behalf of SKP Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.