Century Enka Ltd (CENTENKA) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Century Enka Limited Q2 and H1 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during this conference call, please signal for an operator by pressing star followed by zero on your touchtone telephone. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Purvangi Jain (Valorem Advisors): Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Century Enka Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and the first half of the financial year 2027. Before we begin, let me mention a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings conference call is purely to educate and bring awareness about the company's fundamental business and financial performance for the quarter under review. Now, let me introduce you to the management participating with us in today's earnings call. We have with us Mr. Suresh Sodani, Managing Director and CEO, and Mr. Yogesh Shah, Chief Financial Officer. Without any delay, I request Mr. Sodani to start with his opening remarks. Thank you, and over to you, sir.
Suresh Sodani (Century Enka Ltd): Thank you, Purvangi. Good evening, everyone, and welcome to our earnings conference call for the second quarter
Suresh Sodani (Century Enka Ltd): and the first half of financial year 2027. I would like to thank our host Valorem Advisors for hosting this call. Now, let me brief you on the operational highlights for the period under review. The automotive sector witnessed healthy momentum during the second quarter, with passenger, passenger and commercial vehicles emerging as the key growth drivers supported by festive demand. This provides a constructive demand environment for the tyre industry, although the outlook for the coming quarters will depend on deficit monsoon impact, inflation, and interest rate movements. Within our tyre cord fabric segment, underlying demand for NTCF remained healthy, reflecting encouraging demand fundamentals. However, the increase in imports impacted sales volume during the second quarter. We continue to focus on strengthening our market position while navigating competitive pricing pressures and volatility in raw materials and fuel costs. While geopolitical developments, the ongoing war, and fluctuations in crude oil prices remain key near term uncertainties, we believe the improving automotive demand environment provides a supportive backdrop for the industry. On the PTCF front, the approval process is progressing in the desired direction and we expect to commence commercial sales in Q4 FY '27. This represents an important milestone in our product diversification journey and is expected to broaden our presence in the tyre reinforcement segment. The nylon filament yarn business recorded an improvement in sales volume during the quarter driven by stronger demand during the festive season. However, margins remain constrained by continued influx of competitively priced imports from China, particularly in base and low grade yarns, alongside significant fluctuation in raw material costs. To strengthen margin realization, we continue to prioritize value added products and enhance our product mix. During the quarter, we further expanded capacity in this segment to support the growing focus on higher margin offerings. Turning to raw materials and power and fuel costs, the quarter saw a challenging cost environment with significant volatility in raw material prices continuing to weigh on operating margins. Additionally, the benefit of lower cost opening inventory, which had supported margins in quarter one, moderated during the quarter resulting in a normalization of profitability. Further, energy cost emerged as another area of pressure with higher grid power tariff at Bharuch and elevated LNG prices increasing the overall cost of operations. To address this, we are strengthening our hybrid power capacity, which is expected to start delivering cost benefits from Q4 FY '27. Our focus remains on mitigating external cost pressures through greater energy efficiency and operational optimization while working towards a more sustainable cost structure over the coming quarters. I'll now now request our CFO, Mr. Yogesh Shah, to brief you on financial performance.
Yogesh Shah (Century Enka Ltd): Thank you, Suresh sir, and good evening everyone. Let me now brief you on the financial performance for the period under review. For the second quarter of financial year 2027, revenue from operations grew 37% year-on-year to ₹558 crores. EBITDA stood at ₹33 crores, registering a year-on-year growth of 4% with EBITDA margin at 5.88%. Profit after tax stood at ₹19 crores, declining 17% year-on-year, while PAT margins came in at 3.31%. Moving to our performance for the first half of financial year 2027, revenue from operations grew 37% year-on-year to ₹1,113 crores. EBITDA increased significantly by 130% year-on-year to ₹119 crores with EBITDA margin at 10.66%. Profit after tax stood at ₹80 crores, registering an exceptional year-on-year growth of of 113%, while PAT margin came in at 7.21%. Now, turning to the segmental performance, total volume for the quarter grew by 13% year-on-year to 20,162 metric tons. Within this, tyre cord fabric sales increased by 37% to ₹251 crores, while filament yarn sales reported a growth of 39% to ₹293 crores. Total volume for the first half grew by 13% year-on-year to 39,361 metric tons. Within this, tyre cord fabric sales increased significantly by 53% to
Yogesh Shah (Century Enka Ltd): is Rs. 557 crores while filament yarn sales reported a growth of 30% to Rs. 523 crores. With this, we open the floor for questions and answers.
Moderator: Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may enter "*" followed by "1" on their touch-tone telephones. If you wish to remove yourself from the question queue, you may enter "*" followed by "2". Participants are requested to please use only handsets while asking a question. We will wait for a moment while the question queue assembles. To ask a question, please enter "*" and "1". The first question is from the line of Pratham Nayak. Please go ahead.
Pratham Nayak: Hello. Good afternoon, sir.
Suresh Sodani (Century Enka Ltd): Good afternoon.
Pratham Nayak: I have two questions. First of all, the revenue grew by 37% year-on-year in Q2 FY '27. So, could you elaborate on the key growth drivers particularly the you know contributions from higher realizations, pricing, as well as the product mix? And how sustainable are the current realization levels?
Suresh Sodani (Century Enka Ltd): You had two questions. Are you asking second one as well?
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