Century Enka net profit jumps 298% to ₹613 crore in Q1FY27
Century Enka's Q1FY27 results show a 298% jump in standalone net profit to ₹613.1 crore, fueled by strong demand for synthetic yarn and tyre cord fabrics. Revenue grew 38% to ₹5,543 crore, with EBITDA margins widening significantly to 15.46% from 4.96% in the prior year quarter.
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Century Enka reported a standalone net profit of ₹613.1 crore for the quarter ended June 30, 2026 (Q1FY27), marking a 298% increase from ₹153.5 crore in the corresponding period of the previous year. The sharp rise in profitability was driven by a 38% year-on-year growth in revenue from operations to ₹5,542.9 crore, reflecting strong demand for its synthetic yarn and tyre cord fabric products. Consolidated net profit stood at ₹617.0 crore, compared to ₹154.0 crore in Q1FY26, with EBITDA margins widening significantly to 15.46% from 4.96%. This performance underscores the company’s ability to translate top-line growth into substantial bottom-line gains amidst favorable market conditions.
The Board of Directors approved the unaudited financial results on July 28, 2026, pursuant to Regulations 30 and 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. KKC & Associates LLP served as the independent auditor, conducting a limited review of the financial statements prepared under Ind AS 34. The results were published in Business Standard and Loksatta on July 29, 2026.
Financial Performance Highlights
Revenue from operations climbed to ₹5,543 million in Q1FY27 from ₹4,015 million in Q1FY26. This top-line expansion was accompanied by significant margin improvement. EBITDA rose to ₹857 million from ₹199 million, widening the EBITDA margin to 15.46% from 4.96% in the year-ago quarter. Profit after tax (PAT) margins expanded to 11.13% from 3.84%.
| Metric | Q1FY27 | Q1FY26 | Change |
|---|---|---|---|
| Revenue from Operations | ₹5,543 mn | ₹4,015 mn | +38.1% |
| EBITDA | ₹857 mn | ₹199 mn | +330.7% |
| EBITDA Margin | 15.46% | 4.96% | +1,050 bps |
| Standalone Net Profit | ₹613.1 cr | ₹153.5 cr | +298% |
| Consolidated Net Profit | ₹617 mn | ₹154 mn | +300.6% |
| EPS (Basic & Diluted) | ₹28.24 | ₹7.04 | +301.1% |
Other income decreased to ₹85 million from ₹136 million in the prior year quarter. Tax expense for the quarter was ₹180 million. The company’s share in profit from its associate, ABReL Century Energy Limited, contributed ₹4 million to consolidated earnings. Total income for the standalone entity was ₹56,278 million, while consolidated total income remained identical at ₹56,278 million.
Operational Drivers and Product Mix
Management attributed the strong performance to robust demand in the Nylon Tyre Cord Fabric (NTCF) segment, supported by GST cuts on tyres and automobiles. All auto segments registered healthy growth, resulting in good demand for tyres from OEMs. Sales volume remained robust at 19,199 metric tons, up from 17,072 metric tons in Q1FY26.
Product-wise, Reinforcement (tyre cord fabric) accounted for 55% of sales, generating ₹3,059 million in revenue, while Yarn contributed 42% with ₹2,304 million. The company highlighted that productivity improvements and higher operating rates aided margin expansion. Additionally, one-time inventory gains from low-cost opening stock supported margins, though management cautioned that high-cost inventory at the end of the quarter may normalize margins going forward.
Strategic Outlook and Risks
The company noted that the approval process for Polyester Tyre Cord Fabric (PTCF) is moving in the desired direction, with commercial sales expected in H2FY27. In the filament yarn segment, new Mother Yarn and VAPs continued to support margin improvement. However, imports of commodity products from China continued at very low prices, and the Finance Ministry did not notify Anti-Dumping Duty (ADD) on Nylon Filament Yarn despite favourable findings by the DGTR on dumping from China.
Legal and Regulatory Updates
The auditor’s report included an emphasis of matter regarding an ongoing excise duty dispute. The Excise Department had raised a demand of ₹22,927 crore plus interest and penalty in 2013. Following orders by CESTAT and the Commissioner, CGST & Central Excise, Raigad, the confirmed demand was reduced to ₹730 crore. Century Enka has deposited this amount under protest, with the appeal pending before the Supreme Court of India. Based on legal advice, no provision has been made for this liability.
What the Numbers Show
The dramatic expansion in net profit margins indicates that Century Enka is successfully translating revenue growth into bottom-line gains, likely due to favorable input-output price dynamics and operational efficiencies. The absence of exceptional items in the current quarter, contrasted with the prior year’s labor code adjustments, suggests a stabilization in regulatory cost impacts. Investors should monitor the outcome of the Supreme Court appeal regarding the excise duty dispute, as it represents a potential contingent liability, though management maintains a strong legal position. The reliance on one-time inventory gains for margin support warrants caution for future quarters as cost structures normalize.
Historical Stock Returns for Century Enka
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.51% | -6.14% | +3.20% | +27.56% | +13.02% | +35.87% |
How will the normalization of margins due to high-cost inventory at the end of Q1FY27 impact Century Enka's profitability in Q2FY27?
What is the projected revenue contribution from Polyester Tyre Cord Fabric (PTCF) once commercial sales commence in H2FY27?
How might the lack of Anti-Dumping Duty on Nylon Filament Yarn imports from China affect Century Enka's competitive positioning and pricing power?
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