Century Plyboards Q2 FY27 Earnings Call: PAT Jumps 46% On Record Revenue, Aggressive Plywood Expansion Planned (CENTURYPLY)

Century Plyboards (India) Ltd held its Q2 FY27 earnings call on November 04, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Revenue and PAT, Broad-Based Segment Strength

• Highest-ever quarterly revenue of Rs.1,780 crore (+28.5% YoY) — consolidated Q2 FY 2026-2027; EBITDA ex-forest losses of Rs.232.3 crore at 13.1% margin (vs Rs.181.6 crore YoY).
• PAT up 46% YoY to Rs.103.6 crore — versus Rs.70.9 crore in the prior-year quarter.
• ROE improved to 16.6% in Q2 FY27 (from 13.1% in FY26) and ROCE to 16.67% (from 13.4%), which management attributed to operating leverage from sweating assets built over the past few years.
• H1 revenue grew from Rs.2,500 crore (H1 FY 2025-2026) to Rs.3,300 crore (H1 FY 2026-2027) — management explicitly linked this pace to higher working capital requirements and resulting debt.
• Stated focus shifts to disciplined capital allocation — prioritizing utilization and asset productivity rather than aggressive capacity expansion.

Plywood Leads; Particle Board Crosses Rs.100 Cr Milestone

• Plywood revenue +28.6% YoY and +14% QoQ — EBITDA margin of 15.7% in Q2 FY 2026-2027, which management says positions it among the leading players in the industry.
• Particle board crossed Rs.100 crore quarterly revenue for the first time — +16.8% QoQ and +211% YoY; EBITDA margin ex-forest losses improved to 7.4% from 3.7% in the previous quarter.
• Laminates revenue +20.6% YoY — EBITDA margin improved to 11.6% on better product mix, higher capacity utilization and operational efficiencies; volume decline reflects a deliberate shift away from low-realization liners toward decorators and compacts.
• MDF revenue +13.6% QoQ and +10.5% YoY — despite a challenging, highly competitive market; EBITDA margin ex-forest losses improved sequentially to 8.9%.
• Logistics revenue of Rs.58.8 crore (+72.7% YoY) — already nearing EBITDA break-even in only its second quarter of operation; management believes the business has potential to emerge as an additional growth driver over the coming years.
• MDF capacity of ~6–6.2 lakh cubes p.a. in FY 2026-2027 — translating to ~Rs.2,000 crore of annual top line at current mix (Sumant Vats, CEO – MDF & Particle Board); particle board capacity of ~2.4 lakh cubes p.a. translates to ~Rs.600 crore, seen rising to ~3 lakh with efficiency improvements (period unspecified).

Consolidation Phase Before FY29 Recovery

• Industry-wide MDF capacity addition of 30%+ over the last 3 months and the next 9 months — spanning ~Q2 FY 2026-2027 through ~Q2 FY 2027-2028; management expects this to be the last large-scale addition, with no concrete additional capacity fixed thereafter.
• Management described a typical overcapacity situation — margins cannot return to the erstwhile 20% range until excess capacity is absorbed; competitors Action (new capacity) and Elixir (one capacity addition) added capacity in Q2 FY 2026-2027.
• ~10% MDF margin visibility in H2 FY 2026-2027 — Q3-Q4 FY 2026-2027 seen as a consolidation phase, with gradual margin recovery expected in FY 2027-2028.
• Double-digit MDF EBITDA margin guidance applies to H2 FY 2026-2027 — management clarified it is a year-end target, not for the full year FY 2026-2027 (H1 FY 2026-2027 was ~8%, analyst-cited).
• FY 2027-2028 MDF margins should be better than FY 2026-2027 — though management did not quantify by how much; margin trajectory back to 20% expected from FY 2028-2029 onwards.
• 17-18% MDF growth guided for FY 2026-2027 — with H2 FY 2026-2027 expected to deliver the same; management prioritizing double-digit margins over aggressive growth amid raw-material cost pressure.

Hoshiarpur Live; UP Land Allotted; Aggressive Plywood Expansion

• Hoshiarpur plywood plant (60,000 CBM p.a.) commissioned from 2nd November 2026 — launched in October and already running at 100% capacity utilization.
• Letter of allotment received from the Government of Uttar Pradesh — for land acquisition for the proposed project in the state (timeline not specified); the first phase there will be plywood capacity of about 1,08,000 cubic meters of annual capacity.
• Guwahati and Kandla brownfield expansions progressing as planned — enhanced production expected to commence from July 2027 (FY 2027-2028).
• Management said it has "no choice but to expand capacity aggressively" — via expansion within existing plants, UP phase one (to begin once land is secured), and further Hoshiarpur expansion in FY 2027-2028, including bringing the entire Scenic MR range in-house in FY 2027-2028.
• The 3,30,000 CPM MDF capex in Uttar Pradesh has no firm commissioning date — earlier slated for Q2 FY29; management will take a call on the MDF plant as time progresses.
• No MDF/particle board capacity constraint till FY29 — beyond FY29 constraints are seen as definite; expansion plans to be figured out over the next couple of quarters (H2 FY 2026-2027), weighing balance sheet strength and return ratios. No further particle board expansion currently planned.

Aamir Khan Campaign Weighs on Plywood Margins

• FY 2026-2027 plywood margin guided at 14-15% — below the H1 FY 2026-2027 actual of 16.3%, reflecting planned marketing campaign spends with heavier outlay in Q3 and Q4 FY 2026-2027; Nikita Bansal noted the guidance range has historically moved from 12-14% to 13-14% to 14-15%.
• Branding campaign featuring Aamir Khan launched for Total Cover Guarantee (TCW) — India's first comprehensive plywood warranty extending to the customer's overall furniture; 10-year coverage on premium Club Prime and Architect Ply ranges, launched in August.
• A 7% plywood price increase was taken in April (start of FY 2026-2027) — FY 2026-2027 value growth is running at 30%+, including the 7% price contribution; management attributed 20% volume growth outperformance to brand building, distribution and stakeholder engagement rather than regulation alone.
• Laminates: 7-8% price hike in Q1 FY27 and an additional 2-2.5% effective November 2026 (Q3 FY27) — hence technically no Q2 FY27 laminate price hike (Vishu Goel, CEO – Laminates); 20%+ laminates revenue growth seen comfortably achievable for FY 2026-2027, with revenue (not volume) as the base metric going forward.
• On BIS, management noted there are 3,000–4,000 manufacturers — getting all of them BIS-compliant is a long process; the company has been able to stop imports, but ensuring domestic players are BIS-compliant will take time, and management said the government is doing a good job on this.
• Management said government initiatives such as GST and BIS "take a very long time for effects to materialize and accrue industry-wide, never to a single player" — citing its own "10X710" strategy as what enabled it to utilize the GST benefit when introduced.

Debt Has Peaked; Deleveraging Through FY 2027-2028

• Net debt/EBITDA cited at 2.4x in Q2 FY 2026-2027 — Keshav Bhajanka concurred leverage is elevated, attributing it to capex undertaken (repayment "well on track") and working capital build-out on a 60-day working capital cycle.
• Debt has peaked out in the medium term — at least the next two years — before the company pursues the next leg of MDF expansion; no further large capex planned other than the cloud capacity in Uttar Pradesh, with maximum profit going toward debt repayment.
• Long-term debt/EBITDA target has always been 1:1 — management committed to bringing it well below 1x in FY 2027-2028, with future working capital funded through internal generation; the binding target is long-term debt/EBITDA, not total net debt/EBITDA, since sustaining 30% growth (continuing the FY 2026-2027 pace) entails ongoing working capital needs.
• No large capex while long-term debt/EBITDA exceeds 1x — large-scale capex to be considered only once this leverage level is achieved.
• FY 2026-2027 EBITDA guided at close to Rs.900 crore — with cash flows described as fairly robust in FY 2026-2027; management expects a substantial reduction in debt levels in FY 2027-2028 (by end of FY 2027-2028, per the analyst's March 2028 question).
• Management refrained from giving guidance beyond FY 2026-2027 — FY 2027-2028 guidance may be provided next quarter (Q3 FY 2026-2027). On renewables/green energy, a "good chunk" of power cost saving is possible, with details to be elaborated once plans are firmed up (period unspecified).