Why to Buy CENTURY TEXTILES Stock And Hold It

Why to Buy CENTURY TEXTILES Stock And Hold It?
1. Century Textiles & Industries Ltd. one of the hottest stock. The company reported a phenomenal performance for the first quarter ended 30th June 2009. During the quarter, the net profit of the company surged 2.27 times to Rs.141.62 crore as against Rs.62.50 crore in Q1FY09. Net sales increased to Rs 1,121.7 crore versus Rs 951.8 crore, YoY.
Its biggest earner has been cement, contributing 64% to the net sales at Rs.717.90 crore. EBIT from this division for the quarter was at Rs.255.66 crore, up over 117% on a YoY. EBIT margin at 36% is one of the best in the cement sector.  The other two –pulp & paper and textiles have not really done too well. Pulp division posted a sales of Rs.235.70 crore, which is 21% of the net sales. On this, it posted an EBIT of merely Rs.1.02 crore, which is much below the EBIT of Rs.30.45 crore it had in Q1FY09. The textiles unit continues to suffer the most. Sales was at Rs.174.62 crore, which is today just 15% of the net sales.But textiles also will come into profit in next quarters, since festival seasons are on its way.
2. Other good reasons to Hold on this stock.
2.a Century is sitting on prime property of 40 acres in Worli, Mumbai.This property is all set for development and once the realty sector improves, this could become the biggest earner for Century. The company is not planning to sale any significant portion but is planning to lease it and this can give it an annual rental income of around Rs.800 crore.
2.b In addition to Worli property, Century owns Century Bhavan at Prabhadevi, having area available for development of close to 2 lakh sq. ft. and about 1.5 lakh sq. ft. at Shivaji Park known as Century Flats.
Both these properties have present value of close to Rs.1500 crore and would see development in the near future.
Buy CENTURY TEXTILES stock current levels with profit horizon of six months.thanks