Century Textiles and Industries Ltd, an integral part of the Aditya Birla Group, has a rich legacy dating back to 1897. Over the decades, the company has diversified its portfolio, becoming a powerhouse in cotton textiles, pulp and paper, and real estate. Recently, the company has shown impressive stock performance, reaching a record high, which has garnered significant attention from investors. This blog delves into the current financial health, historical growth, and future potential of Century Textiles and Industries Ltd.
Table of Contents
Introduction: Century Textiles & Industries Ltd – Current Position and History
Century Textiles began as a single-unit textile entity but has evolved into a diversified conglomerate with operations across multiple industries. Known for its premium cotton textiles and high-grade pulp and paper, the company also boasts a growing real estate division. Its resilience and ability to innovate have played a key role in the company’s growth, particularly in the competitive Indian market.
In recent years, Century Textiles has experienced consistent growth across its major business verticals. In Q2FY24, the company reported a consolidated net profit of ₹17.35 crore, rebounding from a loss in the previous year. The real estate arm has gained traction, with large-scale projects in key metropolitan areas, making it a potential growth driver in the coming years. The company’s focus on sustainability, as seen in its paper and textile businesses, also aligns with modern market demands.
Summary of Century Textiles’ Potential and Current Business Segments
Revenue Breakup Q2FY24:
- Paper & Pulp: 73%
- Textiles: 22%
- Real Estate: 4%
- Others: 1%
Paper & Pulp Business:
The paper division was established in 1984 and owns the largest single-location paper plant in India with a production capacity of 4.45 lakh MTPA. In H1FY24, the capacity utilization stood at 92%, indicating efficient operations. The sales mix for the same period showed paper contributing 50%, multi-layer board at 34%, tissue paper at 14%, and pulp at 1%. Century’s commitment to sustainability has led to the launch of eco-friendly products such as carrier tissue and high-BF kraft, aiming to capitalize on the growing demand for sustainable packaging.
Textiles Business:
The textile segment remains integral to Century Textiles’ identity. Having started in 1897, the division has grown to produce high-quality cotton textiles, catering to global brands like Levi’s and M&S. Its vertically integrated 100-acre manufacturing facility operates at a capacity of 40 million meters of fabric annually. The business is positioned to tap into both domestic and international markets, thanks to its reputation for premium offerings.
Real Estate Business:
Century Textiles forayed into real estate in 2016. The company’s real estate arm is focused on land development projects, including both residential and commercial properties. Current projects like Birla Aurora, Century Bhavan, and Centurion in Mumbai are near full occupancy, making the division a stable contributor to the company’s overall performance. In Q2FY24, the company acquired projects worth ₹10,300 crore in Thane and New Delhi, showcasing its aggressive expansion plans in the property market.
Financial Analysis Based on Recent Data
Let’s take a glance at the balance sheet dashboard and let’s understand step by step.
Sales, Net Profit, and Operating Profit (Referencing image data):
- Sales Growth: From March 2021 to March 2024, sales increased from ₹2,617 crore to ₹4,514 crore. By March 2025, sales are expected to reach ₹5,191 crore, reflecting the company’s consistent growth trajectory.
- Net Profit: The company reported a loss of ₹34 crore in March 2021 but turned profitable in March 2022 with a net profit of ₹162 crore. As of March 2024, the net profit is ₹60 crore, and it is predicted to rise to ₹260 crore by March 2025.
- Operating Profit: Operating profits grew from ₹205 crore in March 2021 to ₹1,123 crore in March 2024. For March 2025, the prediction is ₹1,123 crore, indicating strong operational efficiency.
Operating Profit Margin (OPM%):
Operating profit margin improved from 7.83% in March 2021 to 14.16% in March 2024. The predicted OPM for March 2025 is 21.64%, suggesting the company’s ability to control costs and maximize profitability.
Earnings Per Share (EPS):
EPS grew significantly from a negative ₹2.73 in March 2021 to ₹24.34 in March 2023. For March 2024, the EPS stands at ₹4.52, with predictions estimating it to be ₹19.59 by March 2025, indicating improved earnings for shareholders.
Return on Equity (ROE):
ROE reflects the company’s profitability relative to shareholder equity. After negative ROE of -0.97% in March 2021, the company recorded an ROE of 6.82% in March 2023. It’s expected to stabilize at 2.42% by March 2025.
Asset and Liability Distribution:
The company’s assets are primarily composed of other assets (₹6,015 crore), fixed assets (₹3,734 crore), with investments worth ₹692 crore and CWIP (Capital Work in Progress) at ₹58 crore. On the liabilities side, borrowings stand at ₹2,502 crore, with strong reserves of ₹3,867 crore.
Target Prices and Stock Analysis
- Current Price: ₹2,896
- Short-term Target (3 months): ₹3,100
- Long-term Target: ₹3,400
- Stop-loss: ₹2,650
Given the current financials and market sentiment, Century Textiles stock shows promising growth potential. With a strong real estate pipeline and steady revenue from textiles and paper, the company is poised for a positive outlook.
Conclusion
Century Textiles & Industries Ltd has a long history of resilience and innovation. The company’s diverse portfolio, spanning textiles, paper & pulp, and real estate, positions it well for sustained growth. With strong financials, impressive stock performance, and expansion plans across business segments, Century Textiles offers a compelling investment opportunity. Its commitment to sustainability and operational efficiency further enhances its appeal. Both short-term and long-term investors could benefit from monitoring this stock closely, given its promising trajectory.
FAQs
What is the main business of Century Textiles and Industries?
What was the recent stock performance of Century Textiles?
How is Century Textiles’ real estate business performing?
What is the company’s earning per share (EPS) forecast?
How has the operating profit margin (OPM%) improved?
What are the short-term and long-term price targets?
What are the company’s primary growth drivers?
Check out In-depth Fundamental Analysis of TCS
Check out In-depth Fundamental Analysis of INFOSYS
Check out In-depth Fundamental Analysis of Adani Ports
