Mehabe score: 6 G Factor: 5 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 4.
Description
Century Textiles and Industries Ltd has transformed from a single-unit textile entity in 1987 into a commercial powerhouse with interests in diverse industries. Currently, the business house is a trendsetter in cotton textiles and also has a remarkable presence in the Pulp and Paper and Real Estate sectors.Site:CENTURYTEXMain Symbol:CENTURYTEX
Stock trades at 936.0, above its 50dma 815.46. It also trades above its 200dma 619.14. The stock remains bullish on techicals
The 52 week high is at 969.00 and the 52week low is at 301.45
Price Chart
P/E Chart
Sales and Margin
Strengths
– has reduced debt.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 64.54%
Weakness
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 14.4x. Century Textiles trades at the industry’s max P/E of 119.53x. CENTURYTEX trades at a P/E of 116.0x
– Industry’s mean G-Factor is 4.7 while the mean Piotski score is 5.0. CENTURYTEX has a G-Factor of 5 and Piotski scoreof 4.
– Average 1 month return for industry is 6.6%. The max 1- month return was given by West Coast Paper: a return of 15.35 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 1014.0 cr compared to Rs 607.0 cr for period ended Sep 2020, a rise of 67.1%
Operating Profits reported at Rs 112.0 cr for period ended Sep 2021 vis-vis 49.0 for period ended Sep 2020 .
Operating Margins expanded 297.3 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 4.0 compared to Rs 1.93 for previous quarter ended Jun 2021 and Rs -1.26 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 3465.0 cr for period ended TTM vis-vis sales of Rs 2617.0 cr for the period ended Mar 2021, a healthy growth of 24.5%. The 3 year sales cagr stood at -4.2%.
Operating margins expanded to 10.0% for period ended TTM vis-vis 8.0% for period ended Mar 2021, expansion of 200.0 bps.
Net Profit reported at Rs 90.0 cr for period ended TTM vis-vis sales of Rs -30.0 cr for the period ended Mar 2021, rising 133.3%.
Company reported a poor Net Profit CAGR of -75.4% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 566.0 cr for period ended Mar 2021 vis-vis Rs -23.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has worsened on its Return on Equity (RoE) metric. The RoE on Last Year basis was -1.0% compared to 65.0% over the last 3 Years. – The stock has given a return of 196% on a 1 Year basis vis-vis a return of 36% over the last 3 Years. – The compounded sales growth on a TTM bassis is 30% vis-vis a compounded sales growth of -12% over the last 3 Years. – The compounded profit growth on a TTM basis is 41% vis-vis a compounded profit growth of % over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 8.86% vis-vis 9.51% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 26.29% vis-vis 26.55% for Jun 2021
Conclusion
– has reduced debt.
– is expected to give good quarter
– has a good return on equity (ROE) track record: 3 Years ROE 64.54% – might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 815.46 and is trading at 936.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
