ats company reports: century ply

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Page 1: ATS Company Reports: Century ply
Page 2: ATS Company Reports: Century ply

Company Details

Century Plyboards is the largest manufacturer of plyboards in India (with a capacity of 210k

cubic metres). It has a market share of 25% in the organised market and a market share of

7.5% in the overall market. Against the plyboard industry growth rates of 12% over the last 6

years, Century Plyboard recorded a 17% CAGR led by market share gains from the

unorganised segment. Century has also established itself as one of the leading laminate

brands in India (third-largest manufacturer in India after Greenply and Merino). Its laminate

revenue recorded a 15% CAGR over FY09-14; the company plans to expand this segment

and it has ramped up capacities to 4.8mn sheets from 2.4mn sheets last year. Century also

owns two container freight stations in West Bengal, which comprise 4% of its overall revenues.

Timber products (another segment of home building materials which is witnessing rising

demand) has a large addressable market, and consumer preference in this segment is shifting

to branded products. Century Plyboards, with its enhanced capacities and strong pan-India

brand/distribution network is set to be a leading franchise for years to come. Improved

management bandwidth and security around critical raw materials will render long-term

stability to the business. We expect the company to deliver 52% EPS CAGR over FY14-16

backed by volume traction and margin expansion.

The current market capitalisation stands at Rs 3,814.11 crore. The company has reported a

standalone sales of Rs 404.84 crore and a Net Profit of Rs 35.76 crore for the quarter ended

Sep 2014.

Page 3: ATS Company Reports: Century ply

Category No. of Shares Percentage

Promoters 165,434,851 74.46

Other

Companies21,354,547 9.61

General

Public15,129,932 6.81

Foreign

Institutions13,373,092 6.02

NBFC and

Mutual Funds5,957,609 2.68

Foreign - NRI 351,789 0.16

Financial

Institutions325,943 0.15

Others 245,227 0.11

Market Cap (Rs Cr) – 3814.11

Company P/E – 34.49

Industry P/E – 31.71

Book Value (Rs) – 13.10

Dividend (%) – 100 %

EPS (TTM) – 4.97

Dividend Yield (%) – 0.58%

Face Value (Rs) - 1

Share Holding pattern Financial Details

Page 4: ATS Company Reports: Century ply

Industry Details

The segment in which Century Plyboards operates, plywood and laminates, can be classified as discretionary

spending in the housing segment. Demand-supply dynamics in this segment greatly depend on real estate-sector

growth/churn and changing lifestyle preferences. General economic growth and demographic factors have a huge

bearing. Improving income streams/levels, nuclear family structure, and easier financing options have propelled

growth of housing-stock in India.

The size of the plywood sector is estimated at ~`160bn, with laminates at `42bn, and has registered a 6% CAGR in

the past five years. Within this, the organised sector accounts for a mere 30%. Improving quality

preferences and well-marked brand equity are now slowly heralding a shift towards branded products in the market;

and that is accentuating the shift towards the organised players. Another dogma of the sector is that most dealing in

the industry is in cash, even with end users. Of late, however, with the per-household ticket size increasing, the shift

towards the banking system by end users is playing a role in tilting the balance in favour of regulated operators.

Overall, the sector is expected to register a 6% CAGR in the coming five years. Within this, the organised segment

would outstrip sector growth at 25-30% as brand equity, quality, amongst others, make their impact felt on the

dynamics of demand. The GST implementation could further erode

the share of the unorganized sector.

Century Plyboards is a dominant operator in the organised plywood market and accounts for ~25% of the organised

market share. Laminate is used to provide an aesthetic look and improve the finishing to wooden furniture. Hence, it

has a high degree of co-relation with the plywood market, and the latter has a huge influence on the laminate

market. The peculiarity of this sector is that customer involvement is low;

so too are brand awareness and product knowledge. Other than being overlaid on plywood, laminates are also

utilised in readymade furniture, largely from pre-laminated particle board and MDF. Laminates is now a

`42bn industry and seeing an 8% CAGR. Century Plyboards, being the third-largest laminate producer, is set to post

industry-beating growth in years to come.

Page 5: ATS Company Reports: Century ply

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 22.25 22.25 22.75 22.75 22.75

Equity Share Capital 22.25 22.25 22.25 22.25 22.25

Reserves 269.16 227.42 289.78 253.90 204.23

Networth 291.41 249.67 312.53 278.38 228.77

Secured Loans 445.88 444.92 337.09 205.86 178.47

Unsecured Loans 0.00 0.00 0.00 5.18 17.79

Total Debt 445.88 444.92 337.09 211.04 196.26

Total Liabilities 737.29 694.59 649.62 489.42 425.03

Application Of Funds

Gross Block 370.84 316.96 319.63 287.78 209.73

Less: Accum. Depreciation 158.88 131.29 145.25 121.89 98.62

Net Block 211.96 185.67 174.38 165.89 111.11

Capital Work in Progress 18.77 36.01 36.28 10.02 46.52

Investments 37.89 15.62 73.29 55.62 50.45

Inventories 292.65 217.67 196.66 171.17 149.43

Sundry Debtors 204.63 181.62 166.74 120.81 105.91

Cash and Bank Balance 18.04 79.74 42.06 10.93 14.56

Total Current Assets 515.32 479.03 405.46 302.91 269.90

Loans and Advances 133.18 121.90 92.37 96.71 55.60

Total CA, Loans & Advances 648.50 600.93 497.83 399.62 326.50

Current Liabilities 148.03 133.02 130.65 114.23 101.66

Provisions 31.81 10.61 1.52 27.50 7.89

Total CL & Provisions 179.84 143.63 132.17 141.73 109.55

Net Current Assets 468.66 457.30 365.66 257.89 216.95

Total Assets 737.28 694.60 649.61 489.42 425.03

Book Value (Rs) 13.12 11.24 14.04 12.43 10.19

Page 6: ATS Company Reports: Century ply

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 1,283.97 1,131.15 1,118.35 1,075.08 804.76

Excise Duty 0.00 0.00 0.00 61.23 37.37

Net Sales 1,283.97 1,131.15 1,118.35 1,013.85 767.39

Other Income 9.47 7.31 -9.10 14.85 45.00

Stock Adjustments 3.92 16.02 3.54 6.70 4.76

Total Income 1,297.36 1,154.48 1,112.79 1,035.40 817.15

Expenditure

Raw Materials 777.79 735.03 696.17 551.04 414.06

Power & Fuel Cost 26.96 24.33 51.46 42.15 33.44

Employee Cost 151.39 118.35 94.37 77.23 57.66

Other Manufacturing Expenses 0.00 0.00 0.00 12.86 9.89

Selling and Admin Expenses 0.00 0.00 0.00 220.88 157.13

Miscellaneous Expenses 183.56 156.62 141.35 18.63 16.51

Total Expenses 1,139.70 1,034.33 983.35 922.79 688.69

Operating Profit 148.19 112.84 138.54 97.76 83.46

PBDIT 157.66 120.15 129.44 112.61 128.46

Interest 55.12 39.05 39.96 12.77 13.00

PBDT 102.54 81.10 89.48 99.84 115.46

Depreciation 33.24 26.73 26.51 24.18 18.92

Profit Before Tax 69.30 54.37 62.97 75.66 96.54

PBT (Post Extra-ord Items) 69.30 54.37 62.97 76.71 96.30

Tax 2.37 1.72 2.87 1.27 15.35

Reported Net Profit 66.94 52.65 60.09 74.51 80.95

Total Value Addition 361.91 299.30 287.18 371.75 274.64

Equity Dividend 22.22 5.55 22.22 22.22 22.22

Corporate Dividend Tax 3.78 0.95 3.61 2.65 0.95

Page 7: ATS Company Reports: Century ply

Dividend History

Page 8: ATS Company Reports: Century ply

Index and Company Comparison

Page 9: ATS Company Reports: Century ply

Company Forecast

Page 10: ATS Company Reports: Century ply

PBIT – 8.88 v/s 7.56

RoCE – 16.87 v/s 13.44

RoE – 16.63

Net Profit Margin – 5.17 v/s 4.62

Return on net worth – 22.97 v/s 21.07

Reserves – 269.16 cr v/s 227.42

PAT – 66.94 cr v/s 52.65 cr

Total assets – 737.28 cr v/s 694.6 cr

Net sales – 1283.97 cr v/s 1131.15 cr

Book Value – 13.12 v/s 11.24

Days BSE NSE

30 156.87 156.84

50 151.04 151.11

150 111.81 111.90

200 93.10 93.16

Important Ratios Simple Moving Average

Page 11: ATS Company Reports: Century ply

Recommendations

Buy Century Plyboards at current or lower market levels

Reasons for the recommendations are :

Sound financial position of the company.

Availability of adequate manufacturing facility to meet demands and no

need for capital expenditure in near term.

Growth in real estate sector and new GST rules can act as a supplement

to growth.

Shifting consumption pattern and reasonable pricing will help to increase

sales.

Production of laminations which is a base material for many of its

products will complement growth.

Page 12: ATS Company Reports: Century ply