Century Textiles advanced further on Tuesday on good buying support following expectations of sops for the textiles sector in the forthcoming Union Budget.
The stock of the diversified company was up by 3.12% at Rs 54.60 on the BSE in a lacklustre market. A relatively higher volume of over 940,000 shares was recorded on the counter till 12:45 IST. In the last seven sessions, the stock rose by 12% from Rs 48.75 on 14 February 2003.
Analysts said the rally on the counter was due to expectations that the company may benefit from sops in the Budget to the textiles sector. The textiles segment contributes around 60% of Century Textiles' profit and 40% of its sales.
The sops expected from the Budget for the textiles sector are uniform excise duty on cotton and synthetic yarns at 8% from the current 18.4%, reduction in import duty on raw materials from the current 20% to 10% and export incentives to textiles and garments exports.
Meanwhile, if sops are granted to the housing construction and infrastructure sectors, the company may gain indirectly due to surge in the demand for cement. Cement division contributes over 40% of the company's revenues. However, it accounts for only 12% of the profit.
Meanwhile, analysts are optimistic that Century Textiles may post good financial performance in the coming quarters.
For the third quarter ended 31 December 2002, Century Textiles reported a impressive performance, registering a net profit of Rs 18.71 crore as compared to a net loss of Rs 4.40 crore in the corresponding period of the previous year. Net sales increased by 6% to Rs 563.83 crore (Rs 5.63 billion) from Rs 534.01 crore (Rs 5.34 billion) in DQ 2001.
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