Overview
At Centuryply, we believe that governance is the most effective way of
changing the game.
At the heart of the governance ethic lies transparency. Transparency is
communicating to stakeholders what the company intends to do and then going out and doing
it. This enhanced clarity attracts and helps retain likeminded stakeholders, the platform
for all sustainable growth. The most decisive manner in which we deepened governance was
by telling the world how we expect to grow our business across the medium-term. In the
past, your management communicated this growth blueprint across a couple of years at most.
This time around, your management has created a blueprint eight years
into the future. This is possibly the most visible manifestation of our governance
commitment. The message is that we are engaged in the largest and fastest building of
capacities and capabilities in our existence. Your company will invest H2000 Crore in its
business in the space of three years, compared with H1050 Crore having been invested in
the previous 37 years.
Holistic approach
To achieve Vision 2031, it would be imperative for the company to not
just plan phased capital spending; my experience has been that intangible investments are
far more challenging to make. My focus will be on deepening the
Centuryply culture. Thereisafitting term for this priority:
‘Culture eats strategy for breakfast.' Culture determines how he will think, how
we will respond to market challenges, how and when we will plan, what products we will
develop, how we will execute our growth and how we intend to widen our leadership.
Besides, culture-deepening will comprise a priority in how we recruit,
manner in which we brand, way we distribute, how we promote and sell and the way will
continue to engage with our primary customers.
Financial foundation
I have no doubt that the graduation to the next orbit will be the most
exciting phase in our existence. There are good reasons for this. The Indian story appears
to be entering its most exciting phase. India continued to grow faster than the global
average in FY 2022-23 and it would be fair to state that India is among the few major
exceptions in the ongoing global economic slowdown. This is possibly among the first
instances of India decisively bucking the global trend, a reality that we expect to
witness in a sustainable way. This outperformance is being derived largely from the Indian
infrastructure growth story. During the last two Union Budgets, India proposed to invest
an aggregate of H17.5 Lac Crore in its infrastructure – the largest across any two
years combined in the history of this nation. This is sending out unambiguous signals:
that the government is making a decisive investment in India's growth; this growth
will translate into larger order books leading to wider livelihoods; the growth of
infrastructure will become an enabler for micro, small and medium enterprises; the
enhanced incomes arising out of this phenomenon are expected to catalyse national
consumption. When consumers spend more money, among the first things that they are likely
to spend on are their homes, comprising a disproportionate spending on wood products. This
augurs favourably for the entire interior infrastructure sector of the country; as the
market leader, Centuryply is attractively placed to capitalize.
Trickle-down
Centuryply took 37 years to reach a topline of
THE CENTURYPLY OF TODAY DOES NOT JUST POSSESS A ROBUST BALANCE SHEET TO
FUND THE CAPITAL EXPENDITURE OF THE DAY;
IT NOW POSSESSES A MULTI-
YEAR FOUNDATION TO KEEP INVESTING ACCRUALS IN ITS BUSINESS WITHOUT
BORROWING A RUPEE
H3620.65 Crore in FY 2022-23; the Company expects to more than double
this revenue size overthenextfour-five years.
This sharp growth will come even as the Balance Sheet becomes stronger,
margins widen and there is a larger return on the capital employed in our business. This
indicates that our growth will not be achieved by discounting our brand for short-term
gains; the growth will be achieved even as we continue to strengthen our brand, the most
sustainable of all possibilities.
The first orbit in our existence was profitable; the next orbit will be
larger and yet more sustainable for various reasons. In the last five years, the Company
repaidH398 Crore in debt, moderated working capital as a proportion of total employed
capital from 27% to 13%, transitioned from H602 Crore debt on the books as on 31st March,
2017 to a negligible amount as on 31st March, 2023 and strengthened our interest cover
from 9.16 to 33.16. The result is that the Centuryply of today possesses a multi-year
foundation to keep investing earnings and net worth in its business without borrowing a
rupee. We believe that this platform will make it possible for the company to be reliant
completely on its cash flows for growing the business – and the freedom to expand
whenever it wishes, by what extent it desires and in whatever segment of the interior
infrastructure universe it seeks.
Conclusion
Centuryply invested H1400 Crore in the five years ending FY 2022-23;
the company is investing H2000 Crore in the next three years. Each phase of investment
will generate sizable returns to the Company to re-invest in the subsequent expansion
phase. With the completion of each expansion phase, the company will become considerably
larger, creating an even bigger platform for its subsequent expansion. This approach is
fundamental to increasing shareholder value across the foreseeable future. What used to be
incremental annual growth funded largely through debt is now likely to become more
substantial and funded completely through proprietary resources. This is likely to enhance
value for all those associated with our company, particularly shareholders who have been
integral and patient partners in our growth journey across the decades.
Sajjan Bhajanka, Chairman
Overview
I am pleased with our company's performance during the last
financial year. I am what lies in store.
Your company reported a 20.65% growth in revenues from H3000.88 Crore
in FY 2021-22 to H3620.65 Crore in FY 2022-23. EBITDA strengthened 4.4% from H557.33 Crore
in FY 2021-22 to H581.84 Crore in FY 2022-23. Net profit strengthened 12.78% from H325.27
Crore in FY 2021-22 to H366.84 Crore in FY 2022-23 .
Your business reported attractive capital
Capital Employed stood at 25.97% compared to 31.09%; EBITDA margin
moved from 18.57% to 16.07%. The company's liquidity hygiene continued to be
protected, the increased interest rates notwithstanding. The company's net cash
position stood at H175.05 Crore against H144.76 Crore from year-start to year-end.
Interest cover stood at 33.16 at the year end, which indicates that the company continues
to be liquid and cash rich.