This smallcap company zooms 35% in 1 week after slipping 38% in 2 months

Shares of Century Enka rallied 8 per cent to Rs 615 in Tuesday's intra-day trade, extending its past four days up move on the BSE.

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Century Enka share price: Shares of Century Enka has rallied 8 per cent to Rs 615 on the BSE in Tuesday’s intra-day trade, extending its past four days up move, as the management cautiously optimistic about Nylon Tyre Cord Fabric (NTCF) demand growth in Q4 and FY26. 

 

In the past week, the stock price of this smallcap company has surged 35 per cent, as compared to 1.8 per cent fall in the BSE Sensex. Prior to that, the stock had declined 38 per cent in two months, from a level of Rs 735.65 on December 16, 2024. However, in the past six months, Century Enka has underperformed the market by falling 20 per cent, as against 8.5 per cent decline in the benchmark index. The stock had hit a 52-week high of Rs 863.90 on August 21, 2024.

 

The company is engaged in the manufacturing and selling of ‘Synthetic Yarn’ and related products. The company has one associate ABReL Century Energy and it is engaged in production of power.The company is a joint venture of B.K. Birla group and Accordis group of the Netherlands.

 

NTCF is used as reinforcement material in Bias/Cross ply tyres, which are primarily used in trucks, bus, two-three wheelers, and off-the-road (OTR) vehicles used for mining, forestry, farming, heavy earth moving etc. The company has forayed into Polyester Tyre Cord Fabric (PTCF) used as reinforcement for tyres of passenger vehicles.

 

The demand for Nylon Filament Yarn in India is driven by various factors, including the growth of the textile industry, imports substitution for technical textiles and Defense fabrics, increasing demand for ethnic wear and rising popularity of athleisure and sportswear.  READ: Tata Investment share price soars 10% on Tata Capital IPO report

 

For the Q3F25 operating results, Century Enka’s operating revenues stood at Rs 493 crore which grew by almost 9.5 per cent year-on-year (Y-o-Y). Earnings before interest, tax, depreciation, and amortisation (Ebitda) for the quarter stood at Rs 27 crore, up by 48 per cent Y-o-Y.  Ebitda margins improved 143 basis points (bps) at 5.51 per cent from 4.08 per cent. Profit after tax jumped to Rs 14.0 crore from Rs 4.7 crore in a year ago quarter.

 

The company’s Tyre Cord Fabric revenue for Q3FY25 decreased by around 5 per cent Y-o-Y to Rs 214 crore. While filament yarn revenue for the same period increased by about 23 per cent Y-o-Y to Rs 255 crore.

 

The management said the demand for NTCF was subdued during the quarter due to poor demand from the Truck & Bus segment which was partly compensated by sustained demand from the 2 & 3-wheeler segment. Demand from the Farm Tyres segment improved towards the end of the quarter due to the extended monsoon. Margins remained in pressure due to volatile raw material prices and imports from China.

 

Meanwhile, in filament yarn segment, better demand for fabrics due to marriage and festive season helped in improved capacity utilisation. Higher share of value-added products helped in sustaining margins. The management said the company to continue its focus on investments for higher share of value-added and niche products with better margins.