Century Plyboards (India) Ltd (NSE: CENTURYPLY) Q4 2025 Earnings Call dated Jun. 02, 2025
Corporate Participants:
Navin Agarwal — Head, Institutional Equities
Sanjay Agarwal — Managing Director and Chief Executive Officer
Keshav Bhajanka — Executive Director
Nikita Bansal — Executive Director
Sumant Wattas — Chief Executive Officer MDF Business
Analysts:
Bhavin Rupani — Analyst
Rudraksh Raheja — Analyst
Praveen Sahay — Analyst
Keshav Lahoti — Analyst
Tanmaiy Mohta — Analyst
Amit Purohit — Analyst
Ritesh Shah — Analyst
Rahul Agarwal — Analyst
Sneha Talreja — Analyst
Shivkumar Prajapati — Analyst
Utkarsh Nopany — Analyst
Rishab Bothra — Analyst
Presentation:
Operator
Good day ladies and gentlemen, welcome to Century Plyboats Limited’s Q4 FY ’25 and FY ’25 Results Conference Call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the management’s opening remarks. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Naveen Agrawal, Head of Institutional Equities. Thank you, and over to you, sir.
Navin Agarwal — Head, Institutional Equities
Thank you good afternoon, ladies and gentlemen. I’m pleased to welcome you to this financial results conference call on behalf of Century Plywoads and SKP Securities. We have with us Mr Sanjay Agarwal, MD and CEO; along with Mr Kesha Bhajanka, Executive Director; Mr Nikita Bansal, Executive Director; Mr Arun Julasaria, Chief Financial Officer; Mr Sumant Wattas, CEO of MDF Business; and Mr Vishuk Goel, CEO of Decorative Business. We’ll have the opening remarks from Mr Sanjay Agarwal, followed by a Q&A session. Thank you, and over to you, Sanjay jee.
Sanjay Agarwal — Managing Director and Chief Executive Officer
Thank you, Naveen. Good afternoon, ladies and gentlemen. Welcome to Century Ply’s FY ’25 Q4 Earnings call. Before we begin, please note the standard disclaimer. Today’s discussion will cover the company’s past performance and future outlook and is not intended as a solicitation to invest. The earnings result and analytical presentation have been shared with you and are also available on the stock exchange website.
The Q4 results for FY ’25 are better on both year-on-year and quarter-on-quarter basis. On a year-on-year standalone basis, revenue rose from INR1,026 crores to INR1,049 crores and while consolidated revenue increases from INR1,061 crore to INR1,198 crores, representing a growth of 2.3% on a standalone basis and 13% on consolidated basis. The flywood segment is performing quite well and it stands out as one of the fastest-growing areas in the whole building material industry.
Revenue increased by 9.8% year-on-year for Q4 with an EBITDA margin of 15.4% for the quarter and primarily driven by higher volumes. Revenue for the full-year ’24-’25 has grown by 16%. The revenue from Leminate segment at the consolidated level increased by 1.9%. The standalone EBITDA margin stood at 5.6% with margin pressure resulting from higher schemes and increased sales overhead on account of improving costs.
Our facility in Andhra Pradesh is scaling up and is expected to support sales growth in this segment in the coming quarters. MDF revenue at the consolidated level grew by 37.5% with an EBITDA margin of 13.2%. Our facility in Andhra Pradesh turned EBITDA-positive in Q4. I’m also happy to report that both the segments Leminate and MDF at our Budwell plant has achieved nearly 60% of capacity utilization in Q4.
The particle board segment continues to be under pressure and revenue declined from 23.2% by 23.2% in Q4 with an EBITDA margin of 5.6%. The new plant at Tamil Nadu is expected to be operational from this quarter and will help in improving the EBITDA margin on account of lower-cost of production. With this, I conclude my opening remarks. Thank you. I now welcome to your questions.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask questions may press star and one on the touchstone phone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
The first question is from the line of Bhavin Rupani from Investec. Please go-ahead.
Bhavin Rupani
Hi, sir. Thank you so much for the opportunity. My first question is related to MDF plant. Sir, I wanted to understand on the EPCG scheme benefits from the MDF plant. Last-time we specified that we have some obligations of exports going ahead. Can you please specify the quantum of exports and the timelines under which we have to export from this plant? N
Keshav Bhajanka
Normally EPC benefit can be availed over the course of six years and the quantum of exports, the obligation will depend on whether we take JST into account or not. So the obligation can be between INR150 crores to INR400 crores. This detail we’ll be figuring out because as you know, the export scenario has changed, but this is something that takes place sporadically. Couple of years, exports may not be viable in a couple of years, they may be extremely viable. So we are figuring that out.
Bhavin Rupani
So have we started exports from our new plant?
Keshav Bhajanka
Yes, we have. Right now, the quantums are limited because as you know, in the international market, there has been substantial pressure on the prices of MDF. Alongside that, raw-material prices in India have increased drastically. So because of this phenomenon, exports aren’t as viable as they used to be, but we have already starting export. We have already started exports. Currently, predominantly we export to the Middle-East.
Bhavin Rupani
Okay. And if is it possible for you to specify what are the margins in our exports business?
Keshav Bhajanka
We never share numbers between — even in and even in other products between domestic and export unfortunately.
Bhavin Rupani
Got it. And sir, any price hikes, price cuts that we expect or we have taken during the quarter or we expect going ahead MDF.
Keshav Bhajanka
I think going-forward, we are all expecting price hikes in MDF, but it is a little too early for that to play-out. I think over the course of next couple of quarters, there’ll be a waiting more scenario. But the expectation is towards the end-of-the year, there should be certain price rises in MDF.
Bhavin Rupani
Got it, sir. Sir, second question is related to plywood. What we have heard is some associations in southern part of the country have taken some price hike of 7%. Does it give us more leeway to increase the prices going and going ahead in plywood segment as well?
Nikita Bansal
So the thing is with respect to these association news that come, they are flyers that go out every quarter. So it’s not something new. But when you’ll actually see at ground what is effective, it is never effective at 7%. So usually it’s not even effective at 1% association say that they want to take it to just create a pressure but ultimately, like right now, I can tell you that in the Nagar there is no increase so I don’t think there is any price increase that we can take, but we ourselves have taken a price increase in April of 2% in our Century brand.
Bhavin Rupani
Very much clear, ma’am. And last question is related to working capital spend specifically on working inventory days, we have seen significant jump-in March. Any specific reason behind it? And when do we expect this to normalize?
Keshav Bhajanka
Thank you. I think raw-material prices have moved up substantially over the Course of the past quite a few quarters now. So in-line with the same, we had built-up on inventory so that we would not face the constant pressure of increasing prices from the market. Having said that, I think now there has been a bit of stability. So because of the same, over the course of this and the next quarter, we will be able to liquidate some amount of raw-material inventory. So this benefit we will get over the course of, say, H1 . Alongside that, one structural change that is taking place is that we have definitely increased raw-material inventory of core in particular, because we have started importing it. As you know earlier, it was predominantly domestic sourcing. Now since it is imported, that change is likely to continue for the near-future. But overall, inventory will start to reduce from this quarter onwards.
Bhavin Rupani
All right. Thank you.
Operator
Thank you. The next question is from the line of Rudrak from PMS. Please go-ahead.
Rudraksh Raheja
Thanks for the opportunity. Am I audible?
Navin Agarwal
Yeah. Hi, Rudrak.
Rudraksh Raheja
Hi. Yes, sir. Sir, my question pertains to the laminate segment. Okay. So if I look at the industry, one of the organized players in this market has recently secured a white labeling business from Wilsonard, which is a global player from US. So do you see this as a normal-course of business or is this a strategic shift where other global players might look towards India as a destination to outsource their manufacturing needs.
Keshav Bhajanka
So I think you’re absolutely right. India is likely to remain one of the best destinations for export of laminates for the foreseeable future. And companies like ourselves have also been white labeling for a number of international brands over the course of the last two decades. But the opportunity now, particularly in compact is proving to be substantial. I think going-forward, you will see many more such agreements coming from organized players within the country ourselves included.
Rudraksh Raheja
So what exactly changed that triggered this huge opportunity opening for Indian players?
Keshav Bhajanka
I think there are a number of changes that are taking place. Firstly, in the case of compact laminates, the cost of labor is a major deterrent. Compact laminates, as you know, cannot be manufactured in any meaningful way through mechanization. It requires a labor-intensive process. As such, I think a structural benefit for India is likely to persist for the foreseeable future. Secondly, I think overall, the efficiency of Indian manufacturers to manufacture thin HPL has also helped us substantially this again is likely to continue going-forward
Rudraksh Raheja
And sir, are we looking-forward to any such opportunities
Keshav Bhajanka
Or a few
Rudraksh Raheja
A few okay. So could you quantify the production cost differential like you mentioned in India versus like a market like US?
Keshav Bhajanka
Sorry, could you repeat the question one?
Rudraksh Raheja
I wanted to repeat the question production cost differential.
Keshav Bhajanka
So the production cost differential between India and say, Europe or USA is going to only keep widening. You see labor cost there has increased substantially and environmental norms there also getting more-and-more stringent. So India will continue to have this advantage for the foreseeable future.
Rudraksh Raheja
So at this stage, what’s the amount, a ballpark figure, how much differential does exist?
Keshav Bhajanka
I would put it this way that a number of US companies have stopped their manufacturing operations in the US. A number of European companies have stopped manufacturing operations for laminate and compact for HPL and compact in Europe. So that should give you a sense. C
Rudraksh Raheja
Crypto here hear that. Thank you so much, sir.
Operator
Thank you. The next question is from the line of Praveen Sahai from PL Capital. Please go-ahead.
Praveen Sahay
Hi, thank you for opportunity. My first question is related to the plywood. So if you can share what’s the capacity of the plywood currently? And also as per the presentation, you are going to do a capex in all of your facilities, especially in the plywood. So what — what increase in the capacity you are expecting by end of FY ’26?.
Nikita Bansal
Excuse me, hello.
Praveen Sahay
Yes, ma’am,, please continue.
Nikita Bansal
Yeah. So the capacity utilization currently is about 90% of for this entire year and we already have announced a plant which will come about in the next 15 months which will help us with our futuristic growth we are expecting that to be about 48,000 CBM
Praveen Sahay
So 48,000 from the and others facility also, if I look at, whether it’s in the Joka or Gandhi Dham, et-cetera, there also you had done a capex and doing like 26 also years continue.
Nikita Bansal
So that will be another 50,000 CBN for this year. So we are for this year even at the end of this year with the growth numbers we have in mind, we will still be at a decent capacity utilization, still not at 100%, but yes, we will need another plant next year.
Praveen Sahay
Okay. Okay. Got it, ma’am. Second question related to the laminate, because the laminate this quarter if I look at that’s because of higher scheme discount or sales overhead, at the margin were on the lower side on the consolidated basis. So can you give some indicative the way forward because already you had given in the presentation for the guidance. But how to achieve the improvement in the margin the way forward? And also if you could talk about the export sales numbers for this year or the coming years, how that’s going to play-out.
Keshav Bhajanka
Normally, we do not give guidance particularly in export. But like you have said, our Andhra unit is predominantly designed towards exports and that will lead to a substantial decrease in our overall export base. And if you look at the margins for the current quarter, they have been impacted because we have invested substantially, whether it is in terms of plant, whether it is in terms of manpower and the growth has not come.
Because the growth has not come, the cost base has increased. This year we are very confident of 20% growth. And in-line with that, we have seen a good April and a good May. So I am confident that with increasing economies with increasing operational utility, with increasing volumes, we shall see a recovery to higher margins. For the current year, we are looking at 8% to 10% EBITDA margin towards the end of H2? And I think we will be online to achieve the same.
Praveen Sahay
Okay. Okay, sir. And also if you can say the timber pricing for a quarter, how has been north and South.
Keshav Bhajanka
Sumant, would you like to take that up?
Sumant Wattas
Yes. Yes, I will see much there. So for the MDF business, our timber prices for Q4 consumption prices are north is about INR6.7 rupees per kg and South is about INR6.3 per kg. That’s quarter-four. In-quarter one, we’ve seen some decline in both North and South in the range of 5% to 10% in both.
Praveen Sahay
And both the places south and both places you have seen decline.
Sumant Wattas
Yes, yes. There has been a marginal decline of 5% to 7% and hopefully it continues, but monsoons also coming year three. I think remain stable or will be a — maybe a minor correction.
Praveen Sahay
Okay. Thank you, sir. And all the best for the future.
Operator
Thank you. We’ll take the next question from the line of Keshav Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, thank you for the opportunity. One thing we can see your particle board hi, sir. So we can see your particle board CapEx has increased by INR57 crores. And secondly, your particle board margin, which is just 5% when a small plant is operating at an optimum utilization. How you see the particle board margin to be in this year and possibly FY ’27, what are the ramp-up plans?
Keshav Bhajanka
I think if you look at the current capacity versus the upcoming capacity, there is a structural difference. The current capacity is a multi-glight press, which has inherent disadvantages. Of course, the capacity has served us very well and we have had a very good return on it. But given today’s competitive landscape, we had to go for continuous line where you have close to 7% saving in terms of signing and trimming where you have 2% to 3% saving in terms of overhead, a further 2% saving in terms of resin. So on a steady-state basis, this
Keshav Lahoti
Plant should definitely give us a 15% plus EBITDA margin. This year and the first-half of next year will depend on capacity ramp-up. But I think that going-forward, the new unit is likely to lead to a good EBITDA for particle boat.
Keshav Bhajanka
Plant should definitely give us a 15% plus EBITDA margin. This year and the first-half of next year will depend on capacity ramp-up. But I think that going-forward, the new unit is likely to lead to a good EBITDA for particle boat.
Keshav Lahoti
Got it. So 15% is the normalized margin you were saying or earlier we are expecting to have a decent capacity utilization,
Keshav Bhajanka
Steady-state given prices, yes, that is a good EBITDA number. Of course, it does have a fluctuation. There is volatility in terms of margins in this industry. If prices rise going-forward for particle boat, you will see an increase in our margins as well.
Keshav Lahoti
Got it. Sir, one thing, particle board earlier this small press, we used to make 20% 25% margin, which is down to 5% to 6%. It’s purely because of timber cost or there are other reasons also attached to it.
Keshav Bhajanka
There are two reasons. Firstly, timber cost increase has impacted costs, but at the same time, realizations have not moved up. Now there are a number of reasons that have put pressure on realization, both overcapacity and domestic as well as imports. Imports, even though not very-high in terms of quantum, but they do act as a limitation for the domestic industry to take correct pricing positions. With DIS coming in, we should see a benefit there, but it is still early days. So let us wait for that to play-out.
Keshav Lahoti
Got it. And what about the MDF line rebalancing we wanted to do the expansion plan? When should that happen?
Keshav Bhajanka
So between September and December of this year, we should go for the expansion. However, we have not taken a concrete date yet. It will depend on how utilizations take place and when we can build-up sufficient inventory. It is going to be a shutdown that is in excess of 30 to 40 days. So we will have to plan it out. But I think in-quarter three, latest maybe by quarter-four, we’ll have to go for this.
Keshav Lahoti
Normally the demand is healthy in Q4. So whether Q4 it will be possible because people ideally then target the monsoon time
Keshav Bhajanka
There are a number of factors that go into it. I think our ability to build-up inventory, to build-up the correct inventory, get a sense of what we will require and availability from the OEMs who is going to also lead to that expansion, who is also going to work towards the expansion. All of these factors need to be taken into account. Whenever we go for it, we are going to ensure continual continuous servicing of the market.
The advantage we have, of course, is that we have multiple units. So even if one goes under shutdown, there is always the likelihood to feed it from the other, the loss of maybe slight amount of margin. So I do not think it will be a very big challenge for us. But you’re absolutely correct. The planning needs to be impeccable and that is what we are working on.
Keshav Lahoti
Understood. Got it. That is helpful. I’ll come back-in queue.
Keshav Bhajanka
Thank you.
Operator
We’ll take the next question from the line of Tanmay Mota from Lucas Investment Group. Please go-ahead.
Tanmaiy Mohta
Hi,. Hi,. Hi, am I audible?
Keshav Bhajanka
Yes. Yeah, yeah. You’re audible.
Tanmaiy Mohta
Yeah. So actually, I have two questions. So the first was on the line of the MDF business. So broadly, if you look at your margins, margins have declined substantially. So I just wanted to understand like is this only because of the good prices and what do you see margins going ahead?
And secondly, on the demand-side, given this significant overcapacity in the industry, what do you — what’s your sense on sort of demand growth at the industry level? And the second question is on the plywood side. So just wanted to understand, I mean, if we just look at your sort of sales volume breakup, your commercial linear business, I think the volumes have fallen substantially.
So within your plywood business, what do you expect sort of which is going to drive your 20% growth going-forward.
Keshav Bhajanka
So for MDF, there are two things that have played out. There has been overcapacity in the market, a lot of new capacity that have come. Because of that, you see the pricing in the market has also changed. Over the course of the past year, there has been close to 8% reduction in realization for us and far higher for competition.
So I think this is definitely a factor that together with the increase in raw-material has led to lower margins. Having said that, last quarter on a standalone basis, we have already clocked close to 20% EBITDA margin. So I think margins will look on the way up going-forward.
Sanjay Agarwal
The second question is regarding commercial linear or decorative linears.
Tanmaiy Mohta
Commercial linear.
Sanjay Agarwal
So basically understanding your — we are practically not in commercial linear anymore. We have a unit in, which serves as a raw-material supplier to us. So whatever high-grade material is consumed by us and the lower-grade material we sell-in the market and it’s not much, it’s very little. And we are no more in the business of commercial than we have practically.
Tanmaiy Mohta
Thanks. So just a follow-up just on the demand-side, what do you think on the demand-side the industry doesn’t going-forward? Do you think the industry could grow at about 10%, 15%
Sanjay Agarwal
Demand for — demand for plywood?
Tanmaiy Mohta
MDF, MDF,
Keshav Bhajanka
MDF MDM demand is likely to continue to grow at 20% plus. The market has been growing at close to 20% and I believe that the market is likely to continue growing at 20%.
Tanmaiy Mohta
Thank you. Thank you. I’ll just come back-in then.
Keshav Bhajanka
Thank you.
Operator
Thank you. We’ll take the next question from the line of Amit Purohit from Elara Capital. Please go-ahead.
Amit Purohit
Yes. Thank you for the opportunity. Hi, sir. Sir, just on the MDF part on a standalone basis, we saw a volume decline of almost 13%. What would you attribute this to?
Keshav Bhajanka
I mean, you see, there were catchment that we are serving from our North plant where it is more profitable to serve from our South plant. So obviously that rebalancing is taking place and that has led to higher EBITDAs. But when you are catering to the South from the north and you have a plant in the South, then of course that change will take place.
Amit Purohit
Okay. And so you think that the outlook for the next year, this should this should keep on happening for some time or you think this was just a 1/4 thing and now things should
Keshav Bhajanka
Like I said, for the year, our target will be 20% growth and very well in-line to achieve that depending on two or three factors such as relative price of timber depending on the logistic costs, we will keep balancing within the plans to come to optimum EBITDA levels.
Amit Purohit
Sure. Okay. And on the plywood side, while you highlighted two things, one that the timber prices have come down and it looks to be a bit more stable and may probably come down.
Keshav Bhajanka
Sorry, the timber prices have come down for MDF, that was indicated for MDF, who the CEO of MDF, not for plywood.
Amit Purohit
Okay, okay, okay. And not for plywood. So plywood, the number is broadly similar, right, on a sequential basis or on a Y-o-Y basis, what would it?
Nikita Bansal
So you are talking about raw-material prices?
Amit Purohit
Yes, timber.
Nikita Bansal
Yeah, yeah. Yeah. So currently, because we are very dependent on import and even the quality is far better. So currently there has not been much change in the import prices.
Amit Purohit
Okay. And I’m just — the reason I’m asking this is that we have guided for 12% to 14% plywood margins. If I look at our FY ’25 margins is close to about 14.5%. And generally, I mean, there is always an outlook that timber prices have probably peaked out and things should improve from here on. In that context, you think that there would — we are a bit more conservative in our guidance or how do you think about it?
Nikita Bansal
No, I think, see, we are not conservative. We always aim for a 12% to 14%, but when the volume is phenomenal in a year, it always gives you some EBITDA advantage because your fixed overheads are already the same. So this year has been very good for us in because of which we have delivered this type of EBITDA. Going-forward also, I will still maintain we will try to deliver at 5% to 14%.
Amit Purohit
Okay. Okay. And sir, lastly on laminate, when I look at other players also, we listed ones who have almost all of them have reported a decline in volumes. So just curious, I mean, from an industry perspective, I mean we have — I know it’s not rightly correlated, but we have plywoods, which is doing well, but laminates somehow you thought there is some bit of lower penetration and hence laminate demand should also kind of should pick-up. Why would it be
Keshav Bhajanka
Plywood or plywood, I would not say that the industry has done particularly well. For plywood assay, the India Limited has done well. And if you look at overall, the demand scenario in-building materials isn’t great. You look right across the building material segment. So in plywood, our gain has been on the basis of market-share gains and substantial market gains of that. So laminate, the demand scenario is muted.
Hopefully, it will recover as the building material cycle recovers, new launches coming to the market and so on and so forth. But currently, I don’t think domestic at least, there is a very healthy demand scenario forms.
Amit Purohit
Okay. And lastly, on the BIS norm implementation, anything that you’ve seen on-the-ground? I know these are too early days, but I mean, you think that when is The time that you think maybe the imported inventory gets utilized and things. If you could share some insights on what is the state-of-the industry in terms of giving the licenses to international companies and all, if you could?
Sanjay Agarwal
I think BIS, it is too early to reply very frankly. Yes, even for smaller guys, so they have permitted till I think August and they are not permitting anybody abroad till now in Nepal, yes, they have allowed one or two companies they have given BIS permission. So I really see that, yes, there is a positivene as far as plywood or NDF both are concerned. But yes, it will take some more time to really affect the market in India.
Sure. But I believe — I really believe that this time BIS and even the commerce ministry is very strong and they are very decisive about protecting Indian industry as a whole. So I believe that, yes, they will certainly see to it that Indian industry benefits out of it.
Amit Purohit
Sure. Best wishes, sir. Thank you.
Operator
Thank you. Participants, you may please press star and want to ask questions. The next question is from the line of Ritesh Shah from Investec. Please go-ahead.
Ritesh Shah
Hi, hi, sir. Thanks that. Hi, sir. Thank you so much for the opportunity. Sir, my first question is on the distribution side. Can you highlight where our distributed dealer count is, how it has improved over last one year. A related question over here is, are we looking to reject or have we already rejected our CDC, RDC network to improve supply-chain optimization? Sir, that’s the first question.
Sanjay Agarwal
Okay. So as far as supply-chain is concerned, you see from the day GST came in, we were very quick to assess what changes are required and accordingly, though it’s not much not very big but yes some changes have been done and as far as and as far you asked for only for supply-chain, isn’t it?
Ritesh Shah
Yes, sir. Sir, my question was basically we have I think a CDC at Joker and we had some RDC. So have there been any changes over last year or two
Sanjay Agarwal
Lemonate laminate. So I will ask to reply, yeah. Yeah.
Keshav Bhajanka
With regards to laminate, I think you’re absolutely correct. We have a CDC at our Duka facility and we have RTCs located pan-India. We have opened two new RDCs and we are constantly looking to improve our service time to the market. So although there are no significant changes that are taking place at this current point in time, but the objective is always to provide the best possible service to the customer. So we are always exploring the same.
Ritesh Shah
Okay. All right. Kesha, would you like to highlight any other initiatives, specifically on laminates? I was just looking at the Century Eshop expansion Solutions initiative. Anything on the distribution basically which can actually help on laminates going-forward or other
Keshav Bhajanka
Substantial number of initiatives, if you look at in, we have beat our GTM, we have increased our sales team to include a number of team members who focus exclusively on specifications. I think that these coupled with new digital tools that we are adding to our portfolio coupled with a new catalog and a far better and expanded range should help us and improve our position in domestic in particular.
For exports, like I’ve already said, with the larger sizes, we have come up with number of product categories for markets where we were never present. So all of these put together should help the books.
Ritesh Shah
Specifically for exports, do we have any firm order book right now?
Keshav Bhajanka
Yes. We have a substantial order book. And in fact, I’m very happy to share that last month was the highest turnover that the plant has ever done for laminate. So I think we are on the right trajectory. We will see improvements in laminate exports on account of the new capacities over the course of the current year.
Ritesh Shah
Okay. That’s great. And how confident are we on laminates for the local sales?
Keshav Bhajanka
And I think laminate, a number of things that we have tried out have not out as we had expected. But now there are a number of initiatives that are showing some traction on-the-ground and with a change in leadership and with a very senior and experienced sales professional coming in as the CEO of laminate. I think that there will be further growth impetus that comes out in the domestic — domestic laminate space.
Ritesh Shah
Right. Sorry, just to stretch this, but is there anything specific that we are trying different locally into laminates,
Keshav Bhajanka
Yes, like I said, we have already increased our sales footprint substantially. We have improved our range and our catalog. And the number of GTM changes that we have brought about. So once the go-to-market changes, it brings inherent advantages alongside the same. Provided it is implemented well. So I think all of these are going to lead to higher share for us in the domestic market. We should recover the position that we have launched over the course in the past couple of years.
Ritesh Shah
Sure. This is very helpful. And just last question. Thank you. Again, a question for Keshav. You indicated in a couple of prior questions that we are hopeful for MDF pricing to move-up. But we haven’t given any timeline to it. You did indicate that the growth is at around 20%.
Would you like to put some numbers on what is the demand and supply at the country-level right now? And any capacity additions that you foresee at the industry level that you are aware of, if you could just flag that, that would be quite useful. Thank you so much.
Keshav Bhajanka
So the reason that I try not to give guidance the same is every time I’ve given guidance in the past, I’ve been wrong. But having said that, I think that there is overcapacity in the market. As you know, substantial amount of capacity has been added by ourselves, by Green by action by all of the organized players and even some of the unorganized players have come in with continuous line presses. So because of that, there is still over-capacity position.
However, like you said, the demand growth has been sustained and it has been strong and has been implemented, which should lead to a greater share of domestic production as a part of the overall domestic demand. So it should play-out. But again, it is difficult for me to give you a timespan or give you a percentage increase. It is very easy to say that it will increase, but I cannot say that will increase by 5% in Q3 and 6% in Q4 and so on, so forth, because to be honest, we have no clarity on that.
Ritesh Shah
Thank you so much for the answers. All the very best. Thank you.
Keshav Bhajanka
Thank you.
Operator
Thank you. We’ll take the next question from the line of Rahul Agarwal from Asset. Please go-ahead
Rahul Agarwal
Hi, very good afternoon, sir. Hi, hi,. Hi, sir. Sir, two questions. I think both of them have been discussed. Just wanted to understand a different perspective. More from a longer-term, I understand you’ve given the guidance in the presentation. But just let’s say, if we think about three to four years, right, the company is essentially now peaking out on capex, peaking out on debt as well. So most of the capex should now be completed, let’s say, by March ’26.
If we take a three to four-year view, would you like to share and make us understand, maybe on a consol basis or segment-wise, whatever is comfortable in terms of where should the company stand-in terms of peak revenues, peak EBITDA, steady-state, what are you looking at internally if there is a plan? And that is the first question. And second was on the net working capital. I think the cycle has expanded as Keshav explained, because of some inventory things.
Just wanted to know if you could quantify how much of the inventory reduction we should expect, let’s say, by March of 2026, if that’s the balance sheet, should we expect it to completely come back? And if you could quantify that? That’s all, sir. Thank you.
Keshav Bhajanka
Okay. So I think that –. I think that you know, going-forward, like you rightly put it, the peak of the current capex is likely to be over by FY ’26. There will be some additions that we’ll plan in various units and so on and so forth going-forward. But post that, I think that the balance sheet will strengthen substantially. We’ll be repaying debt and so on and so forth until unless we go for new projects, which will depend, of course, on capacity utilization.
Having said that, we are — we have given a guidance of INR12,000 crore turnover by FY 31 and I think we’re very well online for the same. Today, all our units put together, I think peak — peak turnover would not exceed INR7,000 crores or INR7,500 crores. So I think that we will need to invest over the course of the next few years to reach that 12,000 target. That we will have to plan play by the year and plan as and when capacity utilization keeps increasing and we keep gaining market-share.
For the working capital cycle, you’re absolutely correct. Working capital cycle has expanded due to certain calls that we have taken in inventory, particularly for MDF. I think going-forward, like has already hinted that raw-material price increases in MDF have, I would say, kicked out and they are starting to normalize again. So going-forward , I’m hopeful that over the course of the current year, we will reduce inventory days by close to 10 days.
Rahul Agarwal
Perfect. Thank you so much and all the best for the year. Thank you so much.
Operator
Thank you. The next question is from Mohanti from Nuvama Wealth Management Limited. Please go-ahead.
Sneha Talreja
Hello, sir. Hi, yeah. Hi, here from Nuvama. Just a couple of questions from mine. You been going to a lot of times on the raw-material correction taking place. Just wanted to take a view in terms of what percentage of raw-material prices can ease in FY ’26 and FY ’27. Some sense there could be helpful.
Keshav Bhajanka
Hi, hi. I think that again, it’s very difficult to say. I think that the peak of raw-material prices, particularly in terms of timber for MDF and particle board is behind us, but predicting this is difficult. I think that as new supply hits because it’s simple and logical, when the price was INR2, I 2.5, at that point, farmers stopped doing agro forestry. Prices went up to INR7, the numbers quantum of agro first taking place increased substantially. So it will play-out at equilibrium and I think prices should go down, but giving a timeframe on that is extremely difficult.
Sneha Talreja
Understood. Secondly, on the MDF front, although you said that there is currently oversupply situation. And while we may agree FY ’26, we may not see a lot of capacity additions. We are hearing of some new players entering in FY ’27. So would you be able to suggest us what sort of a capacity addition is taking place in FY ’27 and how much is the oversupply situation currently according to you? In percentage terms would also be helpful.
Keshav Bhajanka
I think there are one or two new capacities that have been announced. So as of now, I don’t have a clear sense of what is the total quantum of addition. However, like I said, demand is increasing by 20% year-on-year. And the current inventory levels, the current capacity levels. I think that towards the end-of-the year, the industry should be at a far higher capacity utilization than what it was as of last year. So you know, going-forward, I don’t think that the quantum of capacity that is coming in is going to lead to further oversupply situation. That is based on current data as we have.
Sneha Talreja
So still we would be at around, 15% 20% oversupply at this point of time?
Keshav Bhajanka
Yes.
Sneha Talreja
On the particle board front, in case I may, you have given margin guidance on the particle board side. How is your utilization likely to go up? Any sense there that what could be the first year operating rate at? And what level do we plan to breakeven?
Keshav Bhajanka
You see in particular, once the new capacity starts, we will have to shut-down the old capacity. Like I’ve already explained, the new capacity gives us far more economies of scale gives us far lower-cost of production and so on and so forth. But I think in H2, we should be at 50% capacity utilization of the capacity of the new plant. So I think that gives us a bit of a sense. Next year, the objective will be to increase capacity utilization to substantially higher.
Sneha Talreja
And breakeven would be at?
Keshav Bhajanka
I think breakeven would be achieved at 60% plus.
Sneha Talreja
Understood. Thanks a lot, team and all the best. Thanks.
Keshav Bhajanka
Thank you.
Operator
Thank you. The next question is from Chef Kumar Prajapathy from Ambit Investment Advisors.Please go-ahead.
Shivkumar Prajapati
Hi, sir. Thanks for having my question. Yeah. So my first question, like my question is on the furnitures and fix fitting segment that we have planned to enter.
Keshav Bhajanka
Your voice is not clear. I’m sorry, but I can’t hear you clearly.
Operator
Sir, there is a lot of background noise from your line and please use your handset to ask questions.
Shivkumar Prajapati
Hello audible now? Is it here now it is still not there.
Operator
It’s not clear.
Shivkumar Prajapati
I hope I’m audible hello
Operator
Yes. Yes. Yes, please sorry for the inconvenience.
Shivkumar Prajapati
So my question was on the Furniture and Fitting segment that you have planned to enter. Could you please share some more details regarding the same, like what are — what are our strategies and what products we are trying to enter and what are the market segments that we’ll try to target in some more insights.
Keshav Bhajanka
So I think if you look in the history of Century Plywood, we are very prudent company and such decisions take a long-time for us. So currently, we are in the process of exploring. We have not — you know, we don’t have concrete plans for exactly how we will enter exactly which space we are going to enter, which products and the manner of entry. So we will keep you updated as time progresses. For the time-being, we are in exploration mode, but we will take some time. Our process is quite intense and we will deep-dive on the same and then we’ll come to a conclusion.
Shivkumar Prajapati
Can you start? Thank you.
Operator
The next question is from the line of Utkash Nopani from BOB Capital Markets Limited. Please go-ahead.
Utkarsh Nopany
Hi. Sir, my first question is for MDF segment. So like two listed players have recently indicated that they have taken a price cut of 4% to 5% in April month. So just wanted to know whether we have also taken any price cut in the current June quarter.
Keshav Bhajanka
We have taken no price cuts. There are schemes that we given to the market periodically. Typically if you look at it, Q1 isn’t a great quarter for MDO. So it might be that certain schemes have been given out in the market, but there are no rate cuts whatsoever.
Utkarsh Nopany
Okay. Okay. And sir, second question is for your particle boot segment, like we have seen a sharp decline in the volume in the past two-quarter period and your margin has also come under significant pressure. So can you please help us understand what is the reason for that?
Keshav Bhajanka
And you see cost has increased substantially, timber prices have increased, which you very well know. Because of that, servicing a number of accounts does not make sense to us anymore. So the number of accounts we are servicing currently or we have the capability to service with a multi-leg test has reduced. But going-forward with the new capacity, like I mentioned again and with the different economics as far as cost of production goes, we will be increasing our market-share.
In the new capacity, we are also going to be catering to the 8×4 market. As you know, 8×4 is the predominant size in India as far as MDF, plywood and laminates. That size, we were never in for particle because our press was a 9x press. So with the quantity line, we can manufacture 8 by four. It will be a different segment where we are absent from today. So considering all of these factors, going-forward, I think there is ample scope for volume growth in particle board.
Utkarsh Nopany
Okay. Okay. And sir, lastly, on the capex side, can you please help us understand the reason for upward revision in our MDF and particle board project costs.
Keshav Bhajanka
I think when the projects were envisioned, the cost structures were quite different. As you know in the interim and prices of pretty much all commodities and all raw materials, whether it’s steel, cement, whether it is any everything else have gone up substantially. So for us, the increase has not been so much in, I think the two, three aspects that have led to it is higher-cost of basic building material.
Secondly, there has been an upward revision in the dollar and the euro and most of our machinery has been bought in these — in these — in these currencies. And thirdly, normally, we expect that we complete our plants well within guidance. This time, we have completed just about guidance. So that means that any savings that come due to a lower time due to a lower setup time that hasn’t been there.
Utkarsh Nopany
Okay. So for MDF like our cost has gone up from INR600 crores to INR730 crore and like we already commissioned this project in last March quarter. So whether this increase in cost is related to the brownfield expansion or it is related to our earlier project only?
Keshav Bhajanka
No, no, it is only the brownfield. Sorry, it is only related to the greenfield in Andhra Pradesh.
Utkarsh Nopany
Okay. Okay. It is not covering the brownfield expansion cost.
Keshav Bhajanka
So the brownfield expansion was done earlier. Okay. That is a separate line-item.
Utkarsh Nopany
No, sir, like what I wanted to understand that we were looking to do some bank balancing that for our MDF project in AP, to increase our capacity, so it doesn’t include that cost from INR600 crores to INR7 crore
Keshav Bhajanka
A machinery has already been ordered. The cost of setting it up, I mean, there will be some cost in terms of you know, manpower and so on and so forth. But other than that, the machinery cost is very well included in this figure.
Utkarsh Nopany
Okay. Okay. Thanks a lot, sir. Thank you.
Operator
Thank you. Thank you. A reminder to all the participants that you may please press star and one to ask questions. We’ll take the next question from the line of Tanmay Mota from Locus Investment Group. Please go-ahead.
Tanmaiy Mohta
So hi. So actually this was some conclusion. So I just wanted to ask you if you could just mention your capacities amongst your sort of four divisions. So just help gives us a clear idea of what capacity is on-board and what’s yet to come. And the second thing is regarding your debt levels. So you said that peaked out. So could you quantify any sort of debt repayment you will have say over 26 and 27 if that’ll just help
Sanjay Agarwal
You are looking for capacity on each item, plywood level?
Tanmaiy Mohta
Yeah. Yeah. The existing capacity and what’s coming up and your debt repayment schedule.
Sanjay Agarwal
Okay. So in plywood, we have a capacity of 3 lakhs 40,000 cubic meters and we will be adding about 48,000 or 50,000 cubic meters in this year — in the year and next year we’ll be again adding up about 48 50,000 cubic meter next year also. So in two years maybe about 100,000 cubic meters will be in plywood. And laminate Joka we have capacity of 87 lakh 70,000 seats. Okay Budwell is that and Budwell capacity is 880,000 seats 8 lakhs 80,000 sheets MDF is 3 lakhs 13,500 cubic meter and Budwell is 2 lakhs 14,500 cubic meters. You want to know the capacity utilization also?
Tanmaiy Mohta
, utilization is fine. We can drag from your production. Thanks. Okay. Thank you. Participants, you may please press star and
Operator
Okay. Thank you. Participants, you may please press star and one to ask questions. The next question is from the line of Keshav Lahoti from HDFC Securities. Please go-ahead.
Keshav Lahoti
Hi, thank you for the follow-ups. This year you said 48,000, 50,000 addition implies. So it’s through debottlenecking entirely?
Navin Agarwal
Yeah, through some extra capacities within the existing plants and some debottlenecking, yeah. Understood. This is a continuous process you have seen in Century Plywood from the very beginning. In the existing plants, we have been creating capacities and we have gone even doubled the capacity within the plant actually in few years.
Keshav Lahoti
Yes, sir, I agree. But in FY ’27, you’re not factoring any debottlenecking because your will be coming that year also. Y
Sanjay Agarwal
Eah, Hoshi. In that year’s internal capacity planning we have not done as yet, but we can be sure that, yes, there will be some capacity addition in next year also in FY ’27 also in the existing plant also. Yes, it will be there. But that planning we have not done because that actually happens, it’s a continuous rolling thing kind of a thing. So you don’t require much of a planning for that. Wherever we see a possibility, we just go-ahead and do it.
Keshav Lahoti
Okay. Understood. Got it. And laminates earlier, we are expecting the AP plant to breakeven in Q2 FY ’27. Is that on-track or possibly that is delayed?
Keshav Bhajanka
No, I think it is pretty much on-track.
Sanjay Agarwal
Okay. Okay. That is regarding laminate, I think everybody seems to be a little bit this thing. I must tell you that in last about two years’ time we have changed a lot of things and all the experiments, etc., have now finished. As you have seen in panel, I would also earlier, we were doing so many experiments and all those experiments seized in the beginning of this year and this year we have done a good job, I think.
So in laminate also, I personally believe that all the experiments are seized, the management also internally, manpower also, everything has now really settled down well. And I really expect this year to be much, much better than all other years. Yeah.
Keshav Lahoti
That is good. So normally — I mean it’s earlier we used to do 15% kind of a margin also. Are these days should we expect in next two or three year or possibly — this year,
Sanjay Agarwal
I think we are looking at 10% and I’m sure by next year, we will be confident enough to tell you, but then yes, I cannot — and I should not tell you what we will be able to do next year, yeah.
Keshav Bhajanka
No, but you’re correct. Going-forward, like MD has said, we will strive to achieve high and higher EBITDA margins. This year we have given guidance. Next year, of course, the endeavor will be to do even better.
Keshav Lahoti
Got it. And then what would be the consol — I mean it margin for this year standalone is 8% to 10 consol would be how much? And what sort of utilization you’re expecting for the new laminates plant in this year?
Keshav Bhajanka
Like we have said, we are going to look at high single-digit consol margins towards H2 of this year. In capacity utilization, we will have to get back to you.
Keshav Lahoti
Okay. Got it. That is helpful. Okay. Thank you so much. That’s it.
Keshav Bhajanka
Thank you.
Operator
Thank you. The next question is from Rishabh Bothra from Anand Rathi Shares and Stockbrokers Institutional Equities. Please go-ahead.
Rishab Bothra
Hi, hi, hi, sir. Sir, just wanted to understand the guidance which you mentioned sales growth percentage. Is it for volume or value? It’s for value.
Keshav Bhajanka
It’s for value.
Rishab Bothra
Thanks a lot, sir.
Keshav Bhajanka
Yes. Thank you.
Operator
Thank you. Participants, you may press star and want to ask questions the next question is from Tanby Mota from Locus Investment Group. Please go-ahead.
Tanmaiy Mohta
Yeah. So that’s why I’ll come back yeah, sorry, just two bookkeeping questions. So one was, you mentioned that you’re hiring more people in your sales team, et-cetera. So just wanted to understand your employee cost going-forward, do you think it’s going to be at a similar level? And the second was regarding my previous question, it sort of didn’t get answered regarding the debt repayment schedule.
Keshav Bhajanka
So employee costs definitely will go down now because we have done the bulk of hiring and going-forward with increasing scale, we will see a lower percentage of employee cost. With regards to debt, I think we are at peak debt like I had already mentioned. And over the course of the next two years, we’ll be repaying the majority of debt. So I think we’ll be at very, very low long-term debt by the end of FY ’27.
Tanmaiy Mohta
Thank you. Thank you so much.
Keshav Bhajanka
Thank you.
Operator
Thanks.. Participants, you may please press star and one to ask questions. Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr Sanjay Agarwal for closing comments. Thank you, and over to you, sir.
Sanjay Agarwal
Thank you. Thank you. Thank you, ladies and gentlemen. It was great talking to you connecting to you looking-forward to a great Q1 sorry, Q2 and we’ll be back with a great results. Q1 — Q1, I’m getting confused, but yes, looking-forward to a great Q1 and getting back to you with better results as expected by you. Thank you.
Operator
Thank you members of the management. On behalf of SKP Securities Limited, that concludes this conference. We thank you for joining us and you may now disconnect your lines. Thank you