Century Textiles hits fresh 52-week high, surges 40% in 3 months

Shares of Century Textiles & Industries gained 3 per cent to hit a fresh 52-week high of Rs 553 on the BSE on Tuesday amid expectations of improved financial performance in the second half of the current financial year (H2FY20). The company is scheduled to announce Q3FY20 results on January 28, 2020.

The stock of the BK Birla Group company has zoomed 40 per cent in the past three months, after it turned ex-date on October 11, 2019 for the demerger of cement division and its merger into UltraTech Cement.

In the July-September quarter (Q2FY20), Century Textiles had reported 43 per cent year-on-year (YoY) growth in standalone net profit at Rs 202 crore, despite 12.7 per cent YoY decline in net sales at Rs 851 crore.

However, the management is confident of sustaining and improving its performance in the second half (October- March) of the year on the back of revenue enhancement measures and a continued focus on operational efficiencies and cost control. The scenario is improving across the sectors of interest - paper, real estate, and textiles.

The first half of FY20 was subdued for the pulp & paper industry on account of surge in imports leading to some correction in pricing. Sales of textile unit at Bharuch in Gujarat were impacted by floods in its key markets, during the last season. These resulted in de-growth in revenues YoY and corresponding pressure on margins during the quarter.

However, the outlook for both the paper and textile sectors is positive and the management expects to reverse this trend in the second half of the FY. The company's recent residential launches have received very encouraging response from customers despite subdued market conditions.

The company said its Worli (Mumbai) project, on its own land bank, with a saleable mixed-use area potential of 5 million sq. ft., is expected to be launched by June 2021.

Post demerger, the company’s debt/EBITDA (earnings before interest, tax, depreciation and amortisation) ratio is at a healthy 1.85, paving way for further growth in the businesses, it said.

At 10:46 am, the stock of Century Textiles was trading 2 per cent higher at Rs 548 on the BSE. In comparison, the S&P BSE Sensex was down 0.3 per cent at 41,403 points. A combined 708,926 shares have changed hands on the counter on the NSE and BSE so far.