Century Enka reported a 37% revenue jump to Rs 558 crore in Q2 FY27, though net profit fell 17% to Rs 19 crore. While H1 performance remains strong, margins faced pressure from raw material volatility and import competition. The company is now focusing on its upcoming polyester tire cord fabric launch in Q4 to drive growth.
Century Enka Reports Mixed Q2 Results Amid Rising Input Costs
Century Enka reported Q2 FY27 revenue of Rs 558 crore and a net profit of Rs 19 crore.
For H1 FY27, the company clocked a 113% jump in net profit to Rs 80 crore, with revenue at Rs 1,113 crore.
Reader Takeaway: Strong H1 volume growth offset by Q2 margin pressure from raw material volatility and cheaper imports.
What just happened
Century Enka posted a healthy topline expansion in the second quarter, driven by higher volumes and raw material price pass-throughs. However, the bottom line contracted by 17% sequentially. The company highlighted that while sales volume rose 13% for the quarter, profitability was squeezed by volatile crude oil-based inputs and an influx of competitively priced imported tire cord fabric.
Why this matters
Investors are keeping a close watch on margin stability. Management has reiterated a target EBITDA margin range of 7% to 10%, noting that the exceptionally high margins seen in the previous quarter were bolstered by low-cost inventory gains. The current focus remains on navigating cost pressures while maintaining competitive pricing against imports.
Strategy & Outlook
The company is prioritizing diversification to insulate against market volatility. Key developments include:
- PTCF Expansion: Commercial sales of Polyester Tire Cord Fabric are slated to begin in Q4 FY27.
- Power Efficiency: A hybrid power project at Bharuch is expected to yield annual savings of Rs 10 crore once operational in Q4.
- Portfolio Shift: Management is targeting a 50% contribution from value-added products (VAPs) to bolster long-term margins.
Risks to watch
The primary risk remains the sustainability of realization levels, which are tied to crude-linked raw material prices. Furthermore, the volume impact from imported materials, which management characterized as a temporary ripple effect of client supply chain mitigation, requires monitoring to see if market share levels normalize in the coming quarters.
Context metrics
- Installed Capacity: ~92,000 MT
- Capacity Utilization: 80%–90%
- Q2 EBITDA Margin: 5.88%
What to track next
Shareholders should track the successful commercial ramp-up of the PTCF segment in Q4 and the actual realization of power cost savings, which will be vital for hitting the 7–10% margin guidance.