ats company reports: century ply
TRANSCRIPT
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.
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
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.
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
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
Dividend History
Index and Company Comparison
Company Forecast
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
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.