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We anticipate overall volumes for wood panel/tiles companies across segments to remain weak owing to subdued demand. The plywood segment is likely to log low to mid-single-digit YoY growth. For the MDF segment, sector players have been aggressively pushing volumes in the domestic market via introducing new incentives (ranging over 5-6%) to gain market share; this action may hit their EBITDA margin during Q4FY24. Besides, our channel checks have indicated that ~0.9mn CBM/year of new MDF capacity has been commissioned (>30% of the existing capacity) in Q4. Near-term headwinds are likely to persist for the MDF sector with delay in the implementation of BIS norms by a year (to Feb-25), which could result in higher imports. For tiles, we expect domestic volumes to grow in low single digits YoY. Realizations for the tiles segment are likely to remain under pressure in the near term, given that 35-40 new units are slated for commissioning gradually in Morbi going ahead.

Century Ply: Marginal topline growth aided by recent MDF capacity expansion

We expect Century Ply to register mere 3% YoY revenue growth at Rs9.9bn, led by 2% growth in the plywood segment and 16% growth in the MDF segment. The MDF segment is likely to have seen growth owing to its recently expanded capacity. We anticipate the laminate segment to register a 4% YoY decline in revenue mainly owing to a 7% fall in realizations. Overall, we estimate EBITDA margin to remain broadly flat QoQ (down 570bps YoY) to 11.2%.

Greenpanel Ind: EBITDA margin to contract owing to higher discounting

We estimate MDF volumes to decline 10% YoY (up 5% QoQ) to ~125K CBM due to a sharp fall in the exports segment. We expect domestic volumes to grow by 19% YoY/17% QoQ mainly owing to higher push in volumes in trade through new incentives. Subsequently, owing to higher trade discounts, we expect MDF EBITDA margins to contract by 463bps YoY (233bps QoQ) to 17.3%.

Kajaria Ceramics: Mid-single-digit volume growth expected in Q4FY24

We anticipate Kajaria to register 7% YoY volume growth to 30msm; however, we anticipate realizations to decline by 5% YoY (2% QoQ) to Rs367/sqm. Subsequently, we anticipate overall revenue to increase by 3% YoY to Rs12.5bn. We expect EBITDA margin to decline by 50bps QoQ (up 40bps YoY) to 15% owing to pressure on tile pricing. We expect non-tile revenue (12% of sales) to register healthy revenue growth of 22% YoY.

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