Century Ply expects to reach pre-Covid levels of turnover by fiscal-end

Century Ply, the country’s largest plyboard maker, expects turnover to hit pre-Covid levels by the end of Q4 of this fiscal.

The company is seeing some slowdown in August sales, primarily on account of localised lockdowns. However, overall Q2 numbers are expected to be at 75 per cent of pre-Covid levels, led by recovery in demand in suburban and upcountry markets.

According to Keshav Bhajanka, Executive Director, Century Plyboards Ltd, good recoveries were noticed beginning July. This came after a ‘near washout’ in the first three months of the fiscal, with sales plunging 25-30 per cent. The plyboard and veneer industry had been witnessing a slowdown even in the pre-Covid days.

“We previously expected turnover to be 50 per cent of pre-Covid levels for Q2. July sales were good, at 75 per cent recovery (in turnover),” Bhajanka told BusinessLine.

“In August, we are seeing some slowdown due to localised lockdowns. However, we should end Q2 at 75 per cent levels. So, by Q4 of this fiscal, we are expecting to be back at pre-Covid levels,” he added.

Century Ply reported a net loss of over ₹8 crore in the June quarter; while the turnover stood at ₹201 crore. It reported a cash profit during the quarter.

Upcountry markets

Recoveries are led by suburban or upcountry markets that have so far seen a lesser load of the virus. For instance, the upcountry markets of Bihar, Odisha and Haryana, and the suburban areas around Lucknow are back to pre-Covid levels in terms of demand and turnover.

The replacement markets in urban areas are still slow but are expected to pick up as fears over the virus subside.

Normalisation in production, supply and demand will help margins improve. Margins are expected to remain around 16 per cent levels for the full year, Bhajanka said.

Collection from debtors is normalising and debt level is coming down, the company maintained in an investor presentation.

The company will also look at gaining market share as it plans ad-spends for its ‘VIROKILL’ technology-imbibed plywood and laminates.

Capex plans

Meanwhile, Century Ply will reconsider investment plans. The ₹450-crore proposed Sitapur project in Uttar Pradesh has been kept in abeyance since there are issues with licences. Alternative options being explored include an investment of ₹150 crore for additional expansion of facilities at its Hoshiarpur (Punjab) unit.

“Additional investments in Hoshiarpur will be mostly through internal accruals. We are still in the process of finalising them,” Bhajanka said.