Century Plyboard, dominant in plywood and laminates segment, is in the limelight. The stock has run up close to 270 percent on a YTD basis and the company’s market cap stands at around Rs 2000 crore.
The company was in news post reports of it divesting entire shareholding in its arm Aegis business on August 23. However, the management denied such a move.
In an interview to CNBC-TV18, Sanjay Agarwal, MD & CEO of Century Plyboard, said they haven’t gone ahead with the divestment part yet but are “marketing their shares for the future”.
He said the company has seen a healthy growth of around 23-24 percent over the past two months. Even the laminates business, which has been doing well, has delivered best of the results in the past two months.
“In laminates business, the EBITDA is about 13-14 percent, while for plywood, it is about 12-13 percent. We are working hard but the market situation has not improved the way we had expected,” Agarwal said, adding that the company is looking to increase prices.
Below is the transcript of Sanjay Agarwal's interview with Reema Tendulkar and Ekta Batra on CNBC-TV18.
Ekta: There is news on the company - you all have divested your entire shareholding in your arm Aegis Business, which took place on August 23. Can you tell us the reason for the divestment and how much did you possibly earn. Could you give us all the details on it?
A: We have not divested anything in our company. We are holding about 74 percent for a long time, neither we have bought a single share nor we have sold till date. Yes, we are marketing our shares.
Ekta: How business is doing at this point in time. Can you give us a sense in terms of what your laminate segment is doing?
A: We had about 25 percent growth in Q1 overall in value and months of July and August have also gone very well. The numbers are with me but we have a growth of about 23-24 percent in the last two months. Laminate business is growing. It’s one of the best results over years.
Reema: This year laminate is your high margin business, can you tell us going ahead can you increase margins further and currently what the margins at laminate business stand at?
A: The EBITDA is about 13-14 percent in laminate and in plywood is about 12-13 percent. We are working very hard but then the market situation has not improved the way we thought it will improve. We are of course trying to increase the prices also. We have been able to increase prices in plywood to some extent and laminate I am sure will follow up. We are working on it. We are not working on increasing the prices, we are working on increasing our depth and width in the market. So once we have a bigger channel right now -- suppose if we are working with 4,500 dealers across the country, once it reaches and crosses about 6,000-6,500, I am sure the price increasing and all these changes become much easier for us. At this moment, there are certain pressures in the market which we have to sometime adjust.
Ekta: Can you tell us how much of a price hike did you take in the plywood segment and how much could you be contemplating in the laminate segment if in case that is even possible?
A: In plywood by reducing certain discount, schemes or by increasing certain prices, we have been able to take around 4-4.5 percent price rise from April onwards. In laminate, now we are contemplating of increasing our prices by about Rs 40 a sheet. We have increased sometime in April also about Rs 30 per sheet or something and we had to pass on some out of that but again we are contemplating increasing price of about Rs 30-40 a sheet.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
