Multibagger Stock: Century Textile skyrockets over 270% in 16 months, up 675% in 4 years; is now a good time to buy?

The stock market is known for its inherent volatility and unpredictability, which often leads to a continuous cycle of ups and downs in stock prices. Amid this tumultuous environment, only a select few stocks demonstrate resilience, capable of withstanding wide fluctuations while consistently delivering robust returns.

One such stock is Century Textile& Industries as the company's shares have been showing remarkable resilience over the last 16 months, steadily gaining without any significant pullbacks. From a trading price of ₹608 apiece in February last year, the shares have skyrocketed by 274% to trade at the current trading price of ₹2,275 apiece.

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Remarkably, the stock has closed in negative territory for only 4 months with minimal corrections. The stock has surged by 675% over the past 4 years.

Incorporated in 1897, Century Textile and Industries Limited has evolved from a single-unit textile mill into a diversified conglomerate with a presence in real estate and paper.

Emerging as a key player

The company is emerging as a leading player in the Indian real estate industry as its sales bookings rose from ₹4.6 billion in FY20 to ₹39.9 billion in FY24, reflecting a CAGR of 71%. It aims to achieve a sales booking milestone of ₹100 billion by FY26.

Since entering the real estate market in FY20, the company has launched projects with a total saleable area of 6.22 million sq. ft. and has sold 5.31 million sq. ft. (85% of the inventory) to date.

The company is currently focusing on four key markets in India: MMR, Bengaluru, NCR, and Pune, delivering premium real estate projects across residential, commercial, and mixed-use segments. It is developing land parcels through outright purchases as well as asset-light joint ventures, including its own land parcels.

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It has been successfully closing lucrative business development deals since last year, using a mix of joint development agreements (JDAs) and outright purchases at less than 15% of GDV. In the previous year, the company's business development totaled a GDV of over ₹160 billion.

In June 2024, the company acquired two projects in Gurugram and Pune with a GDV of ₹75 billion. The company’s guidance for business development in FY25 is ₹150–200 billion, and domestic brokerage Antique Stock Broking expects it to easily surpass this target with several large projects in the pipeline.

Strong surplus cash flow visibility

With all its ongoing projects significantly sold, the brokerage believes that the company has strong visibility of surplus cash flow. From its six ongoing projects, the company has receivables of ₹63.9 billion, with an estimated cost of ₹22.0 billion to complete these projects, resulting in a strong surplus cash flow visibility of approximately ₹32.6 billion.

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This surplus cash flow, even without assuming any additional sales, is realizable over the next 3–4 years and would be more than sufficient to service the entire existing debt of ₹24.8 billion, it noted.

Antique Stock Broking remains structurally positive on the company's growth prospects in the medium to long term. The stock is the brokerage's top pick, and it reiterates a 'buy' rating with a revised target price of ₹3,470.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.