Hold Century Enka; target of Rs 272: Firstcall Research

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Hold Century Enka; target of Rs 272: Firstcall Research

Firstcall Research has recommended a hold rating on Century Enka with a target of Rs 272, in its October 21, 2010 research report.

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Firstcall Research has recommended a hold rating on Century Enka with a target of Rs 272, in its October 21, 2010 research report.

"Century Enka Limited was established in 1965, as a joint venture of the B K Birla group. Century Enka Limited has emerged as a leading Nylon Filament yarn manufacturer in India with commitment of modern technology to manufacture global standard quality Nylon Filament Products. During the quarter, the company disclosed a loss of Rs 145.90 million as against of Rs 151.90 million for the quarter ended June 30, 2010. Century Enka has converted 10 lakh preferential warrants into 10 lakh fully paidup equity shares of Rs 10 each to Century Textiles and Industries and TGS Investment & Trade."

"Century Enka has recommended dividend at the rate of Rs 6 per share (60%). Net Sales and PAT of the company are expected to grow at a CAGR of 6% and 61% over 2009 to 2012E respectively. Price to Book Value of the stock is expected to be at 0.84 x and 0.76 x respectively for FY11E and FY12E. Earning per share (EPS) of the company for the earnings for FY11E and FY12E is seen at Rs 29.71 and Rs 31.88 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 6% and 61% over 2009 to 2012E respectively. On the basis of EV/EBITDA, the stock trades at 3.09 x for FY11E and 2.91 x for FY12E."

"At the current market price of Rs 240.35, the stock is trading at 8.09 x FY11E and 7.54 x FY12E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend 'Hold' in this particular scrip with a target price of Rs 272 for medium to long term investment," says Firstcall Research report.

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To read the full report click on the attachment