Wood Panels Sector Check – Demand To Remain Healthy; Margins In Plywood To Improve: ICICI Securities


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Wood panel companies under our coverage reported healthy revenue growth in Q1 FY23 aided by continued uptick in the housing market, shift of market from unorganised to organised sector, and wider acceptance of readymade furniture, which has driven demand for the medium density fibre segment.

Plywood companies (Century Plyboards India Ltd., Greenply Industries Ltd.) reported revenue growth of 113%/85% YoY (three-year compound annual growth rate of 14.6%/8.9%) and volume growth of 105.9%/79.4% YoY (three- year CAGR of 12%/5.7%) aided by a tepid base.

Medium density fibre players (Greenpanel Industries Ltd., Century Plyboards) reported revenue growth of 54.1%/70.9% YoY (three-year CAGR of 38.7%/19.2%) and volume growth of 10.9%/42.3% YoY (three-year CAGR of 17.7%/3.2%).

Margins for plywood companies remained under pressure with Century Plyboards/Greenply Industries margins contracting 442 basis points/126 bps QoQ due to higher raw material costs and other expenses.

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