SPECIAL REPORT CENTURY TEXTILE & INDUSTRIES LTD

COMPANY PROFILE

Incorporated in 1897, Century Textiles & Industries Limited manufactures cotton textile products and has presence in the yarn, denim, caustic soda, sulphuric acid, salt, cement, and pulp and paper industries.

Century Textiles & Industries Limited 100 % cotton yarn unit and its denim unit are both situated in Madhya Pradesh. The cotton yarn unit has a capacity of 24,960 spindles and the denim unit produces 21 million metres of denim fabric per year.

Century Textiles & Industries Limited cement segment manufactures and markets cement and clinker products for use in water tanks, roads, bridges, dams, sea walls, turbine blocks, and residential or multi-storeyed buildings under the Birla Gold brand. Century Textiles & Industries Ltd has three cement plants at different locations, with a total cement manufacturing capacity of 7.8 million tonnes per annum.

Century’s pulp and paper plant has a capacity of 31,320 ton- nes per annum, writing and printing paper capacity of 1,97,800 tonnes per annum and a capacity of 36,000 tonnes per annum for tissue paper. The Company has set up a 500- tonnes per day multilayer packaging board plant adjacent to its existing pulp and paper plant at Lalkua, Uttarakhand.

STOCK INFORMATION

STOCK PRICE

573.25

TARGET PRICE

590-605

SECTOR

CEMENT&CEMENT PRODUCT

SYMBOL (AT NSE)

CENTURYTEX

ISIN

INE055A01016

FACE VALUE (IN RS.)

10.00

BSE CODE

500040

STOCK FUNDAMENTALS

MARKET CAP

5,318.03

BOOK VALUE

187.80

EPS - (TTM) (IN RS. CR.)

6.87

P/E

83.20

INDUSTRY P/E

SHAREHOLDING PATTERN

16.65

INVESTMENT RATIONALE

CENTURY TEXTILE has 40 acres of mill land in Worli, one of Mumbai’s most attractive real estate micro-markets. Recent transactions/PE deals in Central Mumbai have materialized at a valuation of INR1.6b-1.8b/acre. Going ahead, we believe cost savings from upcoming CPP (would meet 80% require- ment) and new cement plants with better operating effi- ciency will enhance operating margins, though it will be diffi- cult to completely bridge the gap with peers. We expect 19% CAGR in cement EBITDA/ton over FY14-15 to INR734.

SHAREHOLDING PATTERN

OUTLOOK AND VALUATION

While the cement business is poised for steady improve- ment, acute margin pressure in non-cement segments, high leverage (FY15E net debt-equity of 4.9x) and delay in real estate value unlocking would limit upside potential. CENT trades at 11.1x FY15E EBITDA. For the cement business, this implies FY15E EV of USD72/ton v/s USD64/ton for MOSL Mid Cap Cement Universe and USD111/ton for overall Cement Universe. Our SOTP-based valuation is INR460/share: (1) ce- ment (USD75/ ton), (2) paper (1x FY15E sales), (3) textiles (0.4x FY15E sales), and (4) land (FY15E NAV). We initiate cov- erage with a buy rating; our target price 605 levels.

RESULTS (Quarterly )(Rs CR.)

 

SEP' 14

JUN' 14

MAR' 14

DEC' 13

SEP' 13

Sales

1,705.83

1,887.37

1,849.07

1,639.33

1,586.69

Operat- ing profit

155.67

204.94

183.47

168.05

148.58

Interest

109.26

96.26

93.70

90.47

91.13

Gross profit

57.27

116.14

97.66

84.21

66.43

EPS (Rs)

0.08

7.15

-0.53

0.17

-3.40

TECHNICAL VIEW

CENTURY TEXTILE LTD is looking strong on charts. We advise to buy around 565-575 with stoploss of 545 for the targets of 590- 605 levels. RSI is also showing upside momentum in it on daily charts.

SYMBOL

VALUE

ACTION

RSI(14)

66.062

BUY

STOCH(9,6)

66.352

BUY

STOCHRSI(14)

100.000

OVERBOUGHT

MACD(12,26)

-16.880

SELL

ADX(14)

24.967

BUY

WILLIAMS %R

-3.646

OVERBOUGHT

CCI(14)

182.9524

BUY

ATR(14)

18.5250

LESS VOLATILITY

HIGH/LOWS(14)

29.9071

BUY

ULTIMATE OSCILLATOR

61.636

BUY

ROC

10.314

BUY

BULL/BEAR POWER()13

46.3260

BUY

BUY: 8 SELL:1 NEUTRAL: 2

SUMMARY : STRONG BUY

Our Other Recommendation for Next Week

SCRIP

ACTION

CMP

ENTRY

SL

TGT

TIME FRAME

INDIA CEMENT

BUY

102.45

101-103

98

105-109

ONE WEEK

BHARAT FORGE

BUY

1023.30

1010-1025

980

1050-1080

ONE WEEK

JAIN IRRIGATION

BUY

69.55

68-70

66

72-75

ONE WEEK

SUNPHARMA

BUY

853.10

840-855

820

875-895

ONE WEEK

ARVIND

BUY

274.50

272-275

268

279-284

ONE WEEK

Performance of Previous Week

SCRIP

LOT

ACTION

ENTRY

SL

TGT

P&L

REMARK

CLOSE / LOW/ HIGH

TCS

125

BUY

2525

2460

2580-2620

6875.00

FIRST TGT HIT

2538.30 / 2590.00

HEXAWARE

 

BUY

210.30

205

214-218

16000.00

BOTH TGT HIT

217.60 / 220.40

NMDC

 

BUY

135.30

134

144-148

0.00

NOT OPEN

135.70 / 137.25

JUST DIAL

 

BUY

1471.85

1430

1490-1520

7500.00

BOTH TGT HIT

1547.60 / 1593.90

INTELLECT

 

BUY

115.70

104

120-125

10000.00

BOTH TGT HIT

126.95 / 134.40

WOCKPHARMA

 

BUY

1080.25

1058

1090-1100

10000.00

BOTH TGT HIT

1036.60 / 1118.00

NET PROFIT

 

 

 

 

 

50375.00

 

 

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DISCLAIMER

This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.

 

 

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