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Century Textiles Forms Double Bottom, Will It Sustain?

Century Textiles forms Double Bottom, Will it sustain?

Century Textiles & Industries reported nearly three-fold jump in its standalone net profit of Rs 156.52 crore for the second quarter ended September 30. The company, which has received shareholder’s nod to to sell its cement assets to Ultratech on October 24, had posted a net profit of Rs 52.78 crore in the July-September quarter a year ago, Century Textiles said in a BSE filing.

Its net sales stood at Rs 1,949.77 crore, up 8.83%, during the quarter under review as against Rs 1,791.53 crore in the corresponding period last fiscal. Century Textiles’ revenue from textile segment surged 37.83% to Rs 238.79 crore, as against Rs 384.13 crore. While revenue from cement was up 16.84% to Rs 977.01 crore in the second quarter this fiscal, it was Rs 836.14 crore in the corresponding period a year ago. Century Textiles’ Pulp and Paper’s revenue was up 28.04% at Rs 690.66 crore as against Rs 539.39 crore.

Over the outlook, the company said its “debt stood at around Rs 4,200 crore as at September 30, 2018 and after the demerger of cement division, it will be reduced by Rs 3,000 crore putting it in a strong position to deliver robust growth going forward”.

Century Textile has declined from its peak of 1478 levels towards low of 716.30 erasing 50% in the recent couple of months. At the lower levels, Stock has made hammer pattern on monthly charts and has been consolidating for several days. The consolidation depicts formation of double bottom pattern on daily and is trading at the neckline of the pattern awaiting breakout. This has come after a decent decline in stock and thus reversal can be witnessed. Around the neckline, the weekly flat TS line of Ichimoku continues to show resistance. Will the breakout happen? Oversold bounce has been witnessed from lower levels while stock dropping to the previous peak as seen on monthly chart has provided additional cushion at the bottom. Intraday and daily chart shows momentum in continuation and large bearish candle breaching higher. Thus it seems that breakout in place after some consolidation here. One should wait for the levels of 855 to breach for sustained breakout signal.

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