Shares of Century Textiles & Industries hit a fresh 52-week high of Rs 515, up 5 per cent on Monday, having surged 9 per cent in the past two trading days, in an otherwise range-bound market on the BSE on expectation of a healthy financial performance going forward.
The stock of the BK Birla Group company has zoomed 30 per cent in the past two months, after it turned ex-date on October 11, for demerger of cement division and its merger into UltraTech Cement. The shareholders of Century Textiles & Industries got 1 new equity share of UltraTech for every 8 equity shares held in the company.
The firm said that post demerger, its debt/EBITDA (earnings before interest, tax, depreciation and amortisation) ratio is at a healthy 1.85, paving way for further growth in the businesses.
“After this demerger, the Century Textiles & Industries have three divisions (textiles, pulp & paper and real estates) and the cement divisions has been demerged along with associated liabilities including debt of around Rs 3000 crore”, the company said.
“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 the shareholders of the company,” it added.
Meanwhile, the management said the outlook for both paper and textile sector is positive and it expects to reverse this trend in the second half of the financial year 2019-20.
Further, 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.
At 11:18 am, Century Textiles & Industries was up 5 per cent at Rs 513 on the BSE, as compared to a 0.32 per cent rise in the S&P BSE Sensex. The trading volumes on the counter more than doubled with a combined 3.74 million equity shares changed hands on the NSE and BSE so far.