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Century Plyboards' Debt Peaks, Stronger Profitability Ahead, Says Keshav Bhajanka
- •Century Plyboards has reached peak borrowing levels and initiated a deleveraging process, aiming to bring long-term debt within one time its operating profit by year-end.
- •The company expects a steady recovery in return on capital employed (ROCE), projecting it will cross the 20% hurdle rate by 2028-29 (FY29).
- •Robust demand across all product categories, especially plywood, is driving growth, with July recording the highest-ever monthly plywood sales in the company's history.
- •MDF margins are recovering after a Q1 dip, and the company has successfully passed on most raw material price increases, with optimism for further margin improvement in H2.
- •Operational improvements are expected to boost capital efficiency, with a decent ROC recovery anticipated this quarter and a firm belief in reaching 20%+ ROC in two years.
Key Questions Answered
Century Plyboards' Executive Director Keshav Bhajanka stated that the company's borrowing has reached its peak at around ₹1,800 crore due to higher working capital needs, and a deleveraging process has begun. The company expects to bring long-term debt down to within one time its operating profit by the end of the year.
Century Plyboards projects a steady recovery in its return on capital employed (ROCE), expecting it to cross the 20% hurdle rate by the 2028-29 financial year. Additionally, medium-density fibreboard (MDF) margins are recovering after a planned shutdown, and management is optimistic about margin improvements backed by potential raw material cost relaxations.
Demand across all product categories remains robust, with the plywood division posting 30% growth in the April-June quarter of 2026 and recording its highest-ever monthly sales in July. Existing plants have been operating at practically 100% capacity, prompting upcoming operations at a new facility in Hoshiarpur to provide a critical operational boost.
