Century Plyboards: Building on a Strong Foundation in Q2 FY26

Century Plyboards (India) Limited, a prominent player in the Indian building materials sector, has reported a robust performance for the second quarter of Fiscal Year 2026 (Q2 FY26). The company achieved its highest-ever quarterly consolidated revenue, underscoring its resilience and strategic execution amidst a dynamic market environment. This quarter's results highlight Century Plyboards' ability to leverage strong demand across its diverse product portfolio and capitalize on newly commissioned capacities.

For Q2 FY26, Century Plyboards recorded a consolidated revenue of 1,385.53 crore, marking a significant 17.1% year-on-year growth. This impressive top-line expansion was complemented by a notable improvement in profitability. The consolidated EBITDA margin, excluding forex impacts, expanded to 13.1%, a substantial increase from 10.3% in the corresponding quarter of the previous fiscal year. This margin expansion was primarily attributed to effective cost optimization initiatives and enhanced capacity utilization across its manufacturing units. The company's profit after tax (PAT) for the quarter also reflected this positive trend, demonstrating strong operational leverage.

Segmental Performance: A Deep Dive

Century Plyboards' diversified business segments each contributed meaningfully to the overall strong performance:

• Plywood: The plywood segment delivered an exceptional quarter, achieving its highest-ever quarterly revenue of 760 crore. This growth was fueled by healthy volume expansion and an expanded distribution network, reinforcing the company's leadership in this traditional segment.
• MDF (Medium Density Fibreboard): The MDF business continued its robust growth trajectory, with revenue reaching 343 crore. This segment witnessed strong volume growth and improved plant utilization. While the EBITDA margin saw a slight moderation to 13.6% (from 14.3% QoQ), this was primarily due to temporary cost pressures related to raw materials.
• Laminates: The laminates division showed clear signs of recovery, achieving its highest-ever quarterly revenue of 181 crore. Revenue grew by 16.6% year-on-year and 8.4% quarter-on-quarter, driven by encouraging demand in both domestic and export markets, particularly for design-driven and premium SKUs. The EBITDA margin for laminates expanded to 9.5%, aided by better cost absorption and an improved product mix.
• Particle Board: The new Particle Board plant commenced commercial production and sales during the quarter. While the segment's EBITDA remains under pressure from high fixed costs during the ramp-up phase, performance is expected to improve as utilization and efficiencies rise. The company reported approximately 55 crore in sales for this segment in Q2 FY26.
• Others: This segment contributed 23.41 crore to the net turnover for the quarter.

Here is a financial summary of Century Plyboards' Q2 FY26 performance:

Strategic Initiatives and Future Outlook

Century Plyboards is actively pursuing several strategic initiatives to sustain its growth momentum and enhance operational efficiency:

• MDF Capacity Expansion: The company plans an MDF line extension at its South plant, which is expected to increase capacity by approximately 25% in the first half of the next fiscal year (H1 FY27). This expansion is critical to meet the projected 15-20% industry growth and address potential capacity constraints.
• Particle Board Ramp-up: With the new Particle Board plant now operational, the focus is on scaling up production and sales. Management is confident in achieving a 40% sales growth for FY25-26, targeting around 200 crore in annual sales, and expects to reach a steady-state EBITDA margin of 15% as utilization improves.
• Brand Building and Distribution: Continuous investment in brand building, technology upgrades, and distribution enhancement remains a core strategy to strengthen market presence and drive long-term growth.
• Plywood Internal Capacity Increases: The company is internally increasing capacity across its existing plywood plants, with recent expansions in Q1 and Q2 FY26, and further progress ongoing in Kandla and Chennai.

Management highlighted that the medium-term outlook for the building material and interior solution industry remains positive. This optimism is underpinned by factors such as rising urbanization, increasing disposable incomes, and a growing consumer preference for branded and premium products. The company also noted the beneficial impact of quality assurance orders, which have curbed imports of MDF and plywood, creating a more favorable domestic market.

Financial Discipline and Investor Confidence

Century Plyboards has demonstrated strong financial discipline, with a significant improvement in its working capital cycle. The standalone working capital cycle reduced to 63 days (from 76 days in FY24), and the consolidated cycle improved to 70 days (from 84 days). This efficiency gain, coupled with robust cash flow generation, has enabled the company to fund its capital expenditure requirements largely through internal accruals.

Cash Flow from Operating Activities increased substantially to 269.4 crore in H1 FY26, a remarkable turnaround from a negative 2.73 crore in FY24-25. This strong cash generation underscores the quality of earnings and the company's disciplined capital allocation strategy, which aims to maintain healthy return ratios.

Concluding Thoughts

Century Plyboards' Q2 FY26 performance reflects a company in strong growth momentum, effectively executing its strategies across diversified segments. Despite facing temporary raw material cost pressures in some areas, the company's focus on operational efficiency, capacity expansion, and market penetration has yielded impressive results. With a clear vision for growth, supported by strategic investments and a positive industry outlook, Century Plyboards appears well-positioned to continue its trajectory of sustained performance and value creation for its stakeholders.