Century Textiles & Industries stock have zoomed 30 per cent in the past two months following the demerger of the cement division and its merger into UltraTech Cement.
Post demerger, its debt/ebitda (earnings before interest, tax, depreciation and amortisation) ratio is at a healthy 1.85, paving the way for further growth in the businesses. After demerger, Century Textiles & Industries has three divisions (textiles, pulp and paper and real estate) and the cement division has been demerged along with associated liabilities including a debt of around Rs 3000 crores. This transaction aims at deleveraging the company’s balance sheet and creating an opportunity for its new phase of growth in the remaining businesses with a primary focus on real estate. It also achieves unlocking of the value of the cement divisions to its shareholders through issuance of equity shares of UltraTech directly to shareholders of the company.
Meanwhile, the company’s outlook for both paper and textile sector is positive and it expects to reverse this trend in the second half of the financial year. The management is confident of sustaining and improving its performance in the second half of the year on the back of revenue enhancement measures and a continued focus on operational efficiencies and cost control.
