Century Plywood - Q1 FY21 (Unaudited – Cons.)
CMP: 130
Revenue from operations 203 Crs
582 Cr (-65.1%) YoY | 530 Cr (-61.68%) QoQ
Year ending revenue: 2,317 Cr Vs. 2,280 Cr (-1.61%)
Net Profit of (11.79) Cr
39.91 Cr (-129.61%) YoY 36.27 Cr (-132.13%) QoQ
Year ending Net profit: 125.2 Cr Vs. 148 Cr (-15.54%)
EPS (in Rs.) (0.51)
1.81 YoY | 1.67 QoQ
Year ending EPS: 6.78 Vs. 6.67
View: Result is below expectation and declined. YoY and QoQ significantly revenue down and company has also posted losses in this quarter due to disruption of their business in Whole month of April and partially in May 2020.
Business Updates & Highlights:
EBITDA in Q1FY21 was around INR 5.45 Cr Vs. 93.77 Cr in Q1FY20 Vs. 70.18 Cr in Q4FY20 therefore declined by 94.2% in YoY and 92.2% in QoQ. EBITDA margin in Q1FY21 was around 2.7% Vs. 16.3% in YoY Vs. 13.4% in QoQ.
Plywood cover around 50% of topline. Plywood sales is declined by 67.9% in YoY and 64.3% in QoQ. Decorative plywood sales is declined by 69.1% in YoY and 64.5% in QoQ. Commercial Veneer sales is declined by 82.1% in YoY and 74% in QoQ. EBITDA in plywood business declined by 115% in YoY and 130.7% in QoQ.
Laminates verticle cover around 20% of topline. Lamintes Sales is declined by 62.8% in YoY and 62.2% in QoQ. EBITDA in laminates business declined by 84.5% in YoY and 89.9% in QoQ.
MDF business cover around 15% of their topline. MDF sales is declined by 70.2% in YoY and 67.2% in QoQ. EBITDA in MDF business declined by 89.8% in YoY and 88.8% in QoQ.
Financial
ROE and ROCE is around 16% and 17% respectively and book value per share is around INR 49 and share is currently trading at 2.7x of its book value. Company is currently trading at annualized PE of around 33 (forward PE) which is high as per Industry benchmark. Promoter holding in the company is around 73% which is very strong and stable. FIIs and mutual fund hold around 6.4% and 6.7% respectively. Net operating cash flow as of June 20 was around INR 26 Cr Vs. 212 Cr in March 2020.
Position: Share strong support price is INR 110. Long term investor may continue with the company.
Share View: Share price high 181 (52 week) and now 130. Century Plyboards Ltd. is an Indian manufacturer, seller and exporter of plywoods and veneers. The company offers plywood products under the brand name, Century Ply, and exports its range of products to over 20 countries.
Opportunities
CenturyPly enjoys a unique brand identity as the market leader, with offerings that are considered industry benchmarks. CenturyPly is the unprecedented choice of architects and interior designers from flexible plywoods that offer a unique blend of form and functionality to specially treated, Fire Retardant plywoods that find use in a myriad of construction purposes. Company is looking future with optimism. July, 2020 revenue was almost 75% of July 2019 revenue. Collection from Debtors is normalising and Debt level is again coming down. Loss caused by Amphan at Kolkata factory is fully covered with insurance. Company is also spending on advertisement of its newly added feature of VIROKILL technology in Plywood and Laminates. This technology kills all viruses on the surface of plywood & laminates and is well taken by consumers. Company is continuing to invest in balancing equipment and innovations wherever possible.
Risk
Significantly disrupted in this quarter for all the business vertical due to completely washed out for the month of April and Partial in May as well. Still company has not optimized the 100% Capacity and Q2 will also be challengeable. Till March 2020 company was reducing their debt but now in this quarter company has again increased their debt and new CC limit also taken for the time being and debt/equity ratio increased from 0.18 to 0.23 now. Delayed payment by customer and increased the debtor collection period from 30 to 60 days now and average collection around 100 days (significantly increased) and company has also delayed the payment of their vendors. ROCE was also negative in this quarter.
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