'Century Enka (CEL), part of Aditya Birla Group, manufactures industrial and textile yarn and fabric such as nylon tyre cord fabric (NTCF) and nylon filament yarn (NFY). The company produces nylon tyre cord fabric (NTCF) for the tyre industry, high tenacity yarn for technical textiles and NFY for the apparel industry. It is the leader in NFY and NTCF segments, with a market share of 25% and 23%, respectively.
NTCF is used as a reinforcement material in bias and cross-ply tyres. Some of the biggest tyre brands using NTCF include Apollo Tyres, MRF, Ceat Tyres, Goodyear, JK Tyres, Metro, and BKT Tires.
NFY is a long continuous lustrous fibre extensively used to produce a comprehensive range of textile fabrics such as sarees, draperies, furnishings and upholstery, sportswear, mosquito nets and for embroidery. The entry into the polyester tyre cord fabric (PTCF) segment was with commissioning of the PTCF plant in Q4 FY2024.
As much as 50% of the total revenue was contributed by reinforcement (NTCF), 45% NYF, and the balance by others in H1FY2026. Of the total revenue from NFY, about 35% was from value-added products (Vap) and the balance from commoditized nature of products. Due to the pricing power for Vap products and most of the dumping happening from China being generic, the margins of the segment are protected. Further, there are plans to increase the contribution of Vap to 50%, from the current 35% in next couple of years.
Over the last few years, there has been a preference shift to radial tyres made using steel cord and polyester tyre cord fabric (PTCF) as the reinforcement material, from bias tyres. The radialisation of truck and bus tyres, the largest end segment of NTCF, increased from 33% in FY2015 to 60-65% currently. The commissioning of the PTCF plant will facilitate catering to the radial tyre segment as well. Approval for PTCF products is expected from customers. Commercial supplies expected by end of FY2026. PTCF is more profitable than NTCF.
Additionally, there are plans to broaden its NFY portfolio to serve the growing demand for active wear and performance apparel. Capex of around Rs 100 crore has been utilized in PTCF facility. Revenue is expected to start kicking in from Q4FY2026.
CEL as part of technical textile value chain along with other group companies is likely to benefit from the synergies of the group including large customer base and sourcing capabilities of the group in the long run. Net cash and investment, which stood around Rs 350 crore end September 2025, will be used to expand capacity and enhance the Vap portfolio.
Sales declined by 24% to Rs 408.7 crore in Q2 FY2026 over a year ago. The OPM inclined from 7.1% to 7.7%, leading to a 17% decline in OP to Rs 31.63 crore. Pat was up 4% to Rs 22.33 crore.
Sales declined by 24% to Rs 810.2 crore in H1FY2026 over a year ago. The OPM declined to 6.4%, from 7.4%, leading to a 35% drop in OP to Rs 51.52 crore. Net profit was down by 18% to Rs 37.71 crore.
A fire accident in the NFY spinning plant in Bharuch, Gujarat, in Feb 2025 affected the performance in Q4FY2025 and Q1FY2026. Sales volume of the filament yarn segment improved sequentially in Q2FY26 following the successful restart of the plant after revamp. So H2FY2026 will see the benefit of low base apart from improved demand for tyres as well as incremental contribution from PTCF.
Recent GST reductions on tyres and festive season demand for auto sector will drive demand for the products of CEL in H2FY2026. Reduction of GST on passenger vehicles (PVs) should aid volume growth of PVs, thereby boosting the volume of tyres and demand for NTCF and PTCF products.
CEL is facing significant challenges from subdued demand and increased low-cost imports from China in both NTCF and NFY segments. It is pursuing for the imposition of anti-dumping duty with the government to counter the threat. In addition, trade settlement between US and China will redirect the volumes being dumped to India.
We expect CEL to register consolidated EPS of Rs 31.0 for FY2026 and Rs 35.6 for FY2027. The scrip was trading around Rs 427.60 on the BSE at the close of 12 January 2026.
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