INTRODUCTION:

The Indian textile industry is one of the oldest and most significant industries
in the country. It accounts for around 4 per cent of the gross domestic product
(GDP), 14 per cent of industrial production and over 13 per cent of the country's total
export earnings. In fact, it is the largest foreign exchange earning sector in the country.
Moreover, it provides employment to over 35 million people. The Indian textile industry
is estimated to be around US$ 52 billion and is likely to reach US$ 115 billion by
2012. The domestic market is likely to increase from US$ 34.6 billion to US$ 60
billion by 2012. It is expected that India's share of exports to the world would also
increase from the current 4 per cent to around 7 per cent during this period. India's textile
exports have shot up from US$ 19.14 billion in 2006-07 to US$ 22.13 billion in 2007-08,
registering a growth of over 15 per cent.
Century Textile and Industries is 113 years old textile, cement, paper manufacturing
and Export Company based in Mumbai. The main business activity involves manufacture
of cotton textiles, yarn, denim, viscose filament rayon yarn, tire-cords, caustic soda,
sulphuric acid, salt, cement, pulp, and paper. The company also has a substantial
dominance in the international textile markets and exports its products to more than 45
countries around the globe. Century Textiles & Industries Limited is an IS/ISO 9001:2000
and ISO 14001 company. Government of India also awarded with 'Three Star Export
House' status Century Textiles & Industries Ltd is one of the Asias largest
Composite 100% Cotton Textile Mill. The company is not only the trend setter in
Cotton Textiles but has also made a remarkable presence in Yarn, Denim, Viscose
Filament Rayon Yarn, Tyrecords, Caustic Soda, Sulphuric Acid, Salt, Cement and Pulp
& Paper. During the quarter company spends nearly Rs 625 crore in the first phase of
Century Mills land development in Mumbai. Company plans to build a hotel and a
commercial complex for IT & ITeS companies on 20- acre land. Company plans to start
commercial real estate development at its Worli mill land. During the quarter company
opens a new state-of-art mill in Gujarat. The Cement segment witnessed a revenue growth
of 31.4% yoy in Q210, followed by 23.9% yoy growth in the textile segment. The top line
of the company is expected to grow at a CAGR of 12% over FY08 to FY11E.

Page 1 of 27

INDIAN TEXTILE INDUSTRY:

The textile industry is the largest industry of modern India. It accounts for over 20
percent of industrial production and is closely linked with the agricultural and rural
economy. It is the single largest employer in the industrial sector employing about 38
million people. If employments in allied sectors like ginning, agriculture, pressing, cotton
trade, jute, etc. are added then the total employment is estimated at 93 million. The net
foreign exchange earnings in this sector are one of the highest and, together with carpet
and handicrafts, account for over 37 percent of total export earnings at over US $ 10
billion. Textiles,1 alone, account for about 25 percent of Indias total forex earnings.
Indias textile industry since its beginning continues to be predominantly cotton based
with about 65 percent of fabric consumption in the country being accounted for by cotton.
The industry is highly localized in Ahmadabad and Bombay in the western part of the
country though other centers exist including Kanpur, Calcutta, Indore, Coimbatore, and
Sholapur.
The structure of the textile industry is extremely complex with the modern,
sophisticated and highly mechanized mill sector on the one hand and the hand spinning
and hand weaving (handloom) sector on the other. Between the two falls the small-scale
power loom sector. The latter two are together known as the decentralized sector. Over
the years, the government has granted a whole range of concessions to the non-mill sector
as a result of which the share of the decentralized sector has increased considerably in the
total production. Of the two sub-sectors of the decentralized sector, the power loom sector
has shown the faster rate of growth. In the production of fabrics the decentralized sector
accounts for roughly 94 percent while the mill sector has a share of only 6 percent.
Being an agro-based industry the production of raw material varies from year to year
depending on weather and rainfall conditions. Accordingly the price fluctuates too.

1
Page 2 of 27

GLOBAL SCENARIO:
The textile and clothing trade is governed by the Multi-Fiber Agreement (MFA)
which came into force on January 1, 1974 replacing short-term and long-term
arrangements of the 1960s which protected US textile producers from booming Japanese
textiles exports. Later, it was extended to other developing countries like India, Korea,
Hong Kong, etc. which had acquired a comparative advantage in textiles. Currently, India
has bilateral arrangements under MFA with USA, Canada, Australia, countries of the
European Commission, etc. Under MFA, foreign trade is subject to relatively high tariffs
and export quotas restricting Indias penetration into these markets. India was interested
in the early phasing out of these quotas in the Uruguay Round of Negotiations but this did
not happen due to the reluctance of the developed countries like the US and EC to open up
their textile markets to Third World imports because of high labor costs. With the removal
of quotas, exports of textiles have now to cope with new challenges in the form of growing
non-tariff / non-trade barriers such as growing regionalization of trade between blocks of
nations, child labor, anti-dumping duties, etc.
Nevertheless, it must be realized that the picture is not all rosy. It is now being
admitted universally and even officially that the year 2005 AD is likely to present more of
a challenge than opportunity. If the industry does not pay attention to the very vital needs
of modernization, quality control, technology up gradation, etc. it is likely to be left
behind. Already, its comparative advantage of cheap labor is being nullified by the use of
outmoded machinery.
With the dismantling of the MFA, it becomes imperative for the textile industry to
take on competitors like China, Pakistan, etc., which enjoy lower labor costs. In fact the
seriousness of the situation becomes even more apparent when it is realized that the nonquota exports have not really risen dramatically over the past few years. The continued
dominance of yarn in exports of cotton, synthetics, and blends, is another cause for worry
while export of fabrics is not growing. The lack of value added products in textile exports
do not augur well for India in a non-MFA world.
Textile exports alone earn almost 25 percent of foreign exchange for India yet its
share in global trade is dismal, having declined from 10.9 percent in 1955 to 3.23 percent
in 1996. More significantly, the share of China in world trade in textiles, in 1994, was
Page 3 of 27

13.24 percent, up from 4.36 percent in 1980. Hong Kong, too, improved its share from
7.06 percent to 12.65 percent over the same period. Growth rate, in US$ terms, of exports
of textiles, including apparel, was over 17 percent between 1993-94 to 1995-96. It
declined to 10.5 percent in 1996-97 and to 5 percent in 1997-98. Another disconcerting
aspect that reflects the declining international competitiveness of Indian textile industry is
the surge in imports in the last two years. Imports grew by 12 percent in dollar terms in
1997-98, against an average of 5.8 percent for all imports into India. Imports from China
went up by 50 percent while those from Hong Kong jumped by 23 percent.

Global factors influencing textile industry:

The history of the textile and clothing industry has been replete with the use of
various bilateral quotas, protectionist policies, discriminatory tariffs, etc. by the developed
world against the developing countries. The result was a highly distorted structure, which
imposed hidden costs on the export sectors of the Third World. Despite the fact that
GATT was established way back in 1947, the textile industry, till 1994, remained largely
out of its liberalization agreements. In fact, trade in this sector, until the Uruguay Round,
evolved in the opposite direction. Consequently, since 1974 global trade in the textiles and
clothing sector had been governed by the Multi-fiber agreement, which was the sequel to
an increasingly pervasive quota regime that began with the Short-term arrangement on
cotton products in 1962 and followed by the Long-Term arrangement. After the successful
conclusion of the Uruguay Round in 1994, the MFA was replaced by the Agreement on
Textiles and Clothing (ATC), which had the same MFA framework in the context of an
agreed, ten year phasing out of all quotas by the year 2005. The section that follows takes
a brief look at the history of these protectionist regimes as also a more detailed look at the
MFA and the ATC.

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COMPANY PROFILE:
Incorporated in the year 1897 as a Public Limited Company, Century Textiles and
Industries Limited had only one industrial unit Cotton Textile Mills till 1951. Since then
the company has made rapid progress in widely diverse fields. At present, the company is
a trendsetter in cotton textiles and also has a remarkable presence in the yarn, denim,
viscose filament rayon yarn, tyrecords, caustic soda, sulphuric acid, salt, cement, and pulp
and paper industries. In 2008, the company added to its fold, a vertically-integrated textile
plant, Birla Century at Jhagadia, Bharuch, in the state of Gujarat. This is a fully composite
cotton textile plant from blow room to made-ups, stretching over an area of 100 acres with
an abundant supply of water. The company's 100-per cent cotton yarn unit is situated in
Madhya Pradesh, with a capacity of 24,960 spindles. Its denim unit is also situated in
Madhya Pradesh, with a capacity of 21 million meters of denim fabric per year. Viscose
filament yarn (VFY), tyrecord and chemicals are manufactured at Kalyan (near Mumbai)
in Maharashtra. The company has four cement plants at different locations, with a total
cement manufacturing capacity of 9.25 million tonnes per annum. The company is in the
process of increasing capacity to 10.00 million tonnes per annum by July 2013 and to 12.8
million tonnes per annum by March 2014, after completion of its expansion plan. The
company's pulp and paper plant has a rayon grade pulp capacity of 31,320 tonnes per
annum, writing and printing paper capacity of 1,97,800 tonnes per annum and capacity of
36,000 tonnes per annum for tissue paper. Century Pulp & Paper has recently set up a 500
tonnes per day multilayer packaging board plant adjacent to its existing pulp and paper
plant at Lalkua, Uttarakhand. The company is managed by a Board of Directors
comprising eminent industrialists, businessmen and dedicated professionals. The
Chairman of the Board is Mr. B.K. Birla.
Century Textiles produces 100% cotton fabrics. Century's cloth covers the length and
breadth of the Globe. In the highly competitive international markets, Century's cloth has
carved a niche for itself. In fact, Century Fabric has charmed its way into: Bahrain,
Bangladesh, Belgium, Canada, China, Comoros, Egypt, France, Germany, Honduras,
Hong Kong, Hungary, Indonesia, Israel, Italy, Japan, Jordan, Kenya, Kuwait,
Madagascar, Mauritius, Morocco, Nepal, Netherland, Panama, Portugal, Russia, South
Africa, South Korea, Singapore, Spain, Sri Lanka, Sweden, Switzerland, Taiwan,
Thailand, Turkey, U.A.E., U.K., Uganda and USA.
Page 5 of 27

VISION, MISSION AND VALUES:

Vision:To manufacture products comparable to international standards, to be customerfocused and globally competitive through better quality, latest technology and continuous
innovation.

Mission:

To manufacture world-class products of outstanding quality that gives our customers a

competitive advantage through superior products and value, so we can make every

customer smile.
To encourage people's ownership, empowerment and working under team structure.
To attain highest level of efficiency, integrity and honesty.

Values:

Customer's satisfaction and delight.

Superior quality of performance.
Concern for the environment and the community.
Passionate about excellence.
Fair to all.
To provide a safe workplace and promote healthy work habits.

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MANAGEMENT OF THE COMPANY:

Management team:
The company is managed by a Board of Directors, comprising eminent industrialists,
businessmen and dedicated professionals under the Chairmanship of Shri B. K. Birla.
The composition of the Board of Directors of the company as on May 15, 2013 is as
under:
Shri B. K. Birla, Chairman
Shri Kumar Mangalam Birla
Shri Pradip Kumar Daga
Shri Arvind C. Dalal
Shri Amal Ganguli
Shri B. L. Jain (Whole time Director)
All the divisions / plants are headed by highly qualified professionals as under:

Senior Executives:
Birla Century, Century Yarn and Century Denim
Shri R. K. Dalmia - Senior President
Shri D. K. Agarwal President (Corporate Finance) & Secretary
Century Rayon, Tyrecord and Chemicals
Shri O. R. Chitlange Senior President
Shri R. Lalwani - President (Commercial)

Page 7 of 27

Century, Maihar, Manikgarh and Sonar Bangla Cements

Shri B. L. Jain Senior President
Century Cement and Sonar Bangla Cement
Shri Alok Patni - President (Works)
Maihar Cement Unit I
Shri R. K. Vaishnavi - President (Works)
Maihar Cement Unit II
Shri R. S. Doshi - Executive President (Commercial)
Manikgarh Cement Unit I
Shri P.S. Bakshi - President (Works)
Manikgarh Cement Unit II
Shri J. L. Tiwari - Senior Executive President (Plant)
Century Pulp & Paper
Shri Bipin Lal C. E. O.
Auditors
M/s Dalal & Shah, Mumbai

Page 8 of 27

BUSINESS SEGMENTS:

The Company has made rapid progress in expanding and diversifying its
activities and today it is a well diversified conglomerate. The details of activities
presently being carried on by the Company are as under:B

P
U
L
P
&
P
A
P

EI

E
N
T
S

Century Textiles and Industries' diverse business interests are driven by the following
divisions:Page 9 of 27

Birla Century:
Birla Century, a state-of-the-art, vertically integrated plant, was set up in 2008-2009
at Jhagadia, Bharuch, in the state of Gujarat.
Spread over an area of 100 acres, Birla Century uses sophisticated machinery to
produce a wide range of premium textiles from suiting and shirting to fine fabrics and
household linen. Innovative finishes such as wrinkle-free, easy-care and anti-bacterial are
imparted to fabrics through world-class automated processing with eco-friendly, non-toxic
dyes and chemicals.
The plant is equipped with a modern mechanical and chemical laboratory to test
fabrics as per international norms and has a pilot sampling facility to provide quick
services for the development of samples. It is also equipped with an in-house design
studio, and a research and development centre for continuous innovation in designs as per
the latest international trends.
Products:Shirting: Our shirting comes with innovative finishes such as wrinkle-free, bio-polish and
crease resistance in whites, solids, yarn-dyed, dobbys, structured etc in 100-per cent
cotton, cotton blends and linen.
Suiting: Our suiting is characterized by high dimensional stability, or, in other words, the
ability to retain its size and form. It is wrinkle-free, crease-recoverable, amazingly smooth,
and exudes a brilliant luster.
Fancy and finer varieties: We have a full range of products poplins, cambrics, lawns,
twills, mulls, voiles, dobbys and slubbed dress materials for retailers and garment
manufacturers.
Bed linen: The home textiles division of Birla Century manufactures premium quality
household linen that is elegantly tailored for domestic and international markets.

Century Yarn:

Page 10 of 27

Century Yarn, a vertically integrated plant, was set up in 1994 at Satrati village in the
state of Madhya Pradesh.
The ultra-modern plant is equipped with 24,960 spindles for the manufacture of
cotton yarn and is on par with the best in the world. The plant has an optimum mix of
high-tech machinery and high-caliber personnel.
Products:Century Yarn offers 100-per cent cotton combed yarn in the count range of 20s to 40s
in singles and doubles. A variety of conventional cotton of varying fiber specifications are
used to create a better quality of yarn, that is suitable for producing world-class cotton
fabrics in its category.

Century Denim:
Century Denim, a vertically integrated plant, was established in 1997, at Satrati
village in the state of Madhya Pradesh. The ultra-modern plant is capable of producing 21
million metres of denim fabric annually.
A confluence of sophisticated technology and world-class industrial design, the plant
is an example of impeccable technological finesse. The plant is equipped with BARCO
hardware and functionalities and boasts a biological effluent treatment and reuse plant
with zero discharge.
Products:Century Denim manufactures fine denim fabrics, with liquid indigo sourced from
DyStar to achieve the perfect shade of blue. The division offers denim in indigo blue /
dark shades in flat and emerised finishes.

Cottons by Century:
A leader in the manufacture of cotton fabrics, it was a natural progression to introduce
Century's own range of readymade clothing. In 2002, Century ventured in to the
Page 11 of 27

readymade garment segment with superfine cotton shirts, T-shirts, trousers, kurtas and
accessories like ties, belts, handkerchiefs.
Initially, Century's products were sold through the exclusive brand outlets called
Mangal Paridhan. These outlets were later phased out when Century ventured into the
competitive world of retailing with its own brand Cottons by Century.
Products:With contemporary styling and color, Cottons by Century features a range of distinct
and structured formal wear, chic and contemporary day wear as well as elegant evening
wear. The product range includes:

Men's wear: Shirts, trousers and casual wear

Women's wear: Formal wear, ethnic wear and western wear

Accessories: Ties, belts, socks, handkerchiefs and cufflinks

It also retails high-quality home fashion. Century's exclusive range of bed and bath

accessories adds that elusive touch of class and elegance.

Century Rayon:
Century Rayon was set up in 1956 at Kalyan, near Mumbai, in the state of
Maharashtra, to manufacture viscose filament rayon yarn.
Over the years, the division has grown and diversified. Today it is one of the largest
producers of viscose filament yarn (VFY) in India. In 1963, the company commenced
production of viscose tyre yarn and industrial yarn, followed by the production of caustic
soda in 1964. At Century Chemicals, Jamnagar (Gujarat), the company produces industrial
salt mainly for captive consumption.
Century Rayon exports its products all over the world. Tyre yarn is mainly exported
to Western Europe and Japan where it is used as a reinforcement material in ultra highperformance passenger car tyres. Rayon filament yarn, which is used for textiles and

Page 12 of 27

apparel application, is exported to North Africa, North and South America, and Western
Europe.
Products:Century Rayon manufactures high-quality VFY, continuous spun yarn, rayon tyre
yarn and a number of chemicals.

Century Cement:
Century Cement, a state-of-the-art cement plant, was established in 1974 at Baikunth
(Tilda), Raipur, in the state of Chhattisgarh.
Set up with the initial capacity of 0.6 million TPA of Portland cement, today, the plant
produces 100-per cent blended cement with a total capacity of 2.1 million TPA. The
cement plant is equipped with a captive power plant to ensure uninterrupted power supply.
The company sells its cement under the brand name Birla Gold.
Products:Century Cement produces 100-per cent blended cement, i.e. Portland Pozzolana
cement and Portland slag cement.

Maihar Cement:
Maihar Cement operates two cement manufacturing units that are located at Maihar,
Satna, in the state of Madhya Pradesh. The total installed capacity of the division is 3.8
million tonnes of cement per annum.
Maihar Cement Unit I
In 1980, the company established a Portland cement plant at Maihar with a capacity
of 0.8 million tonnes per annum. The present capacity stands at 1.80 million tonnes per
annum.
Maihar Cement Unit II
In 1995-96, another Portland cement plant was established with a capacity of 1
Page 13 of 27

million tonnes per annum, adjacent to the existing plant at Maihar. The present capacity is
2 million tonnes per annum.
Products:Maihar Cement is a pioneer in the production of blended cement namely, Portland
Pozzolana cement.

Manikgrah Cement:
Manikgarh Cement was established in the year 1985 at Gadchandur, Chandrapur, in
the state of Maharashtra.
This high-tech cement plant had an initial capacity of 1 million TPA which has been
expanded to its present capacity of 1.9 TPA.
Products:Manikgarh Cement produces ordinary Portland cement and Portland Pozzolana cement.

Century Pulp & Paper:

Century's rayon and/or paper grade pulp, and writing and printing paper unit was
established in 1984 at Lalkua, near Nainital in the state of Uttarakhand.
Its second paper unit, based on bagasse manufacturing, is adjacent to the existing
pulp and paper plant at Lalkua. It was established in 1995. The company also has a primegrade tissue paper plant at Lalkua.
The company's fiber line (pulp plant), with a capacity of 1.62 lac tonnes per annum,
and multilayer packaging board plant, with a capacity of 1.8 lac tonnes per annum, are
near completion. Production has begun and is expected to stabilize in due course.
Products:-

Page 14 of 27

The division's range of products includes a large variety of writing and printing paper,
tissue paper and paper board. The company also manufactures raw material for viscose
filament yarn, staple fiber and paper grade pulp.

SWOT ANALYSIS:
Meaning:
SWOT is an acronym for Strengths, Weaknesses, Opportunities and Threats. By
definition, Strengths (S) and Weaknesses (W) are considered to be internal factors over
which you have some measure of control. Also, by definition, Opportunities (O) and
Threats (T) are considered to be external factors over which you have essentially no
control.
A SWOT analysis can be carried out for a product, place, industry or person. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieving that objective.
The technique is credited to Albert Humphrey, who led a convention at the Stanford
Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune
500 companies. The degree to which the internal environment of the firm matches with the
external environment is expressed by the concept of strategic fit.
Setting the objective should be done after the SWOT analysis has been performed.
This would allow achievable goals or objectives to be set for the organization.

Strengths: characteristics of the business or project that give it an advantage

over others

Weaknesses: are characteristics that place the team at a disadvantage relative to

others

Opportunities: elements that the project could exploit to its advantage

Page 15 of 27

Threats: elements in the environment that could cause trouble for the business
or project

Identification of SWOTs is important because they can inform later steps in planning
to achieve the objective.
First, the decision makers should consider whether the objective is attainable, given
the SWOTs. If the objective is not attainable a different objective must be selected and the
process repeated. Users of SWOT analysis need to ask and answer questions that generate
meaningful information for each category (strengths, weaknesses, opportunities, and
threats) to make the analysis useful and find their competitive advantage.

Strengths:
Integrated player with low-cost sourcing capabilities.
Unique brand positioning.
Experienced and efficient management.
Design and merchandising expertise, with a pulse on fashion.
Wide apparel range.
Abundant raw material availability that helps industry to control costs and reduces
the lead-time across the operation.
Low cost skilled labor provides competitive advantage to industry.
Presence across the value chain.
Growing domestic market.
Strong backward integration.
Third largest cotton producer as well the largest area under cultivation.
Increasing presence across entire value chain.
Cheap and skilled manpower.
Sharp reduction in borrowing costs.
Recent government efforts to promote the industry.
Truly vertically integrated from raw material to finished products.
Steadily diversified its raw material base to include man-made fibers such as
Polyester, viscose, acrylic, polypropylene etc. as well as other natural fibers.
Flexible in terms of production quantity and lead time.
Having powerful and good brand image in terms of cement and textiles.
Today Birla Gold is a very popular brand because of its consistency and services

at par with all other brands.

Cottons by Century is also one of the popular brands having a distinctive range
of clothing and even bed and bath accessories.
Page 16 of 27

Century is an independent and self-reliant industry.

Industry has a large and diversified segment that provides wide variety of products.
Growing Economy and Potential Domestic and International Market.

Page 17 of 27

Weaknesses:

Continuous weakening of the Indian rupee against the US dollar has impacted the

cost of pulp and sulphur thus further increasing the already high production cost.
High cost of labor remains a cause of concern, which has further gone up

with increase in dearness allowances.

The business of the company is largely depends on the economic
conditions of US and European Countries as it export a large portion of its

products to those countries.

It is a highly Fragmented Industry.
Industry is highly dependent on cotton.
Lower productivity in various segments.
Lack of technological development that affect the productivity and other activities

in whole value chain.

Unfavorable labor laws.
Infrastructural Bottlenecks and Efficiency such as, Transaction time at ports and

transportation time.
Lack of trade membership, which restricts to tap other potential market.
Lacking to generate economies of scale.
Higher indirect taxes, power and interest rates.
There is declining in mill segments.
Effect of historical government policies.
Cost competitiveness.
Tech obsolescence despite of measures such as TUFS. Quality is not consistent.
Caters mainly to the low-end class.
Low level of training.
The export-import policy of India changes too frequently due to which it becomes

very difficult for importers to import goods.

Delay in delivering the goods at the right time.
Lack of advance processing capabilities.
Knitted garments manufacturing has remained as an extremely fragmented
industry. Global players would prefer to source their entire requirement from two
or three vendors and the Indian garment units find it difficult to meet the capacity

requirements.
Knitted garments still remaining as a SSI domain.
Labor force giving low productivity as compared to other competing countries.
Low bargaining power in a customer-ruled market.
India seriously lacks in trade pact memberships, which leads to restricted access

to the other major markets.

Urgent need for labor reforms in India.
Page 18 of 27

Page 19 of 27

Opportunities:

The growing retail market in India.

The cement industry is expected to witness an increase in demand due to
fund allocation to the Bharat Nirman Scheme which is a time bound plan for

building rural infrastructure.

Expanding into new geographies.
Brand image and Market Size.
The revolution in organized retailing would increase the consumption of apparel

and made-ups.
Growth rate of Domestic Textile Industry is 6-8% per annum.
Large, Potential Domestic and International Market.
Product development and Diversification to cater global needs.
Elimination of Quota Restriction leads to greater Market Development.
Market is gradually shifting towards Branded Readymade Garment.
Increased Disposable Income and Purchasing Power of Indian Customer opens

New Market Development.

Emerging Retail Industry and Malls provide huge opportunities for the Apparel,

Handicraft and other segments of the industry.

Greater Investment and FDI opportunities are available.
Huge demand for value added goods in all major countries.
Relocation from high cost economies.
Large and relatively untapped domestic market
Large Indian Expatriate community. Hence there is large demand for Indian

Garments.
Rate of import duties is minimal.
Bilateral Agreements on Avoidance of Double Taxation and Prevention of Fiscal
Evasion with respect to taxes on income and capital have further opened the

Opportunity for higher export for the garment sector.

Extensive commercial interactions have greatly helped
Increased use of CAD to develop designing capabilities and for developing greater

options.
Company need to concentrate on new product developments.
India's global share is just 3% while China controls about 15%. In post-2005,

China is expected to capture 43% of global textile trade.

Domestic market extremely sensitive to fashion fads and this has resulted in the

development of a responsive garment industry.

Low per-capita domestic consumption of textile indicating significant potential
growth.

Page 20 of 27

Threats:

Exports have declined due to lack of demand and financial crisis in USA, Europe

and Japan.
Lower price of imported yarn and availability of polyester yarn at a cheaper price

continue to pose a high risk.

The demand for rayon tyre yarn continues to remain depressed in view of

the sharp decrease in

Consumption by the automobile industry, which is witnessing a recessionary trend.
Inventory management.
Since the company is in fashion business, there is risk of obsolescence if

the fashion trends change.

Competition from other developing countries, especially China.
Continuous Quality Improvement is need of the hour as there are different demand

patterns all over the world.

Elimination of Quota system will lead to fluctuations in Export Demand.
Threat for Traditional Market for Power loom and Handloom Products and forcing

them for product diversification.

Geographical Disadvantages.
International labor and Environmental Laws.
To balance the demand and supply.
To make balance between price and quality.
Competition in post-2005 is not just in exports, but is also likely within the country

due to cheaper imports of goods of higher quality at lower costs.

Standards such as SA-8000 or WARP have resulted in increased pressure on

companies for improvement of their working practices.

Alternative competitive advantages would continue to be a barrier.
Need to improve the working conditions of those who are involved in this

profession.
Tackle Chinese aggression over the International market.

Page 21 of 27

NET SALES OF THE COMPANY:

Page 22 of 27

VALUATION:

At the market price of Rs.508.00, the stock trades at 10.89x and 9.71x for FY10E

and FY11E respectively.

EPS of the company is expected to be at Rs.46.63 for FY10E earnings and

Rs.52.31 for FY11E earnings.

On the basis of price to book value, the stock trades at2.47x and 1.97x for FY10E

and FY11E respectively.

The top line as well as bottom line of the company is expected to grow at a CAGR

of 12% and 20% respectively over FY08 to FY11E.

Company plans to start commercial real estate development at its Worli mill

land, which will offer additional growth opportunities as rentals harden.

The Company has taken possession of 159 acres of land for setting up the

grinding unit at Sagardighi in Dist. Murshidabad, West Bengal.

The grinding unit with a capacity of 1.50 million tonnes capacity per
annum is expected to be operational within a period of about two years from
the date of placement of orders for the plant and machinery which are

expected to be finalized within next three months.

The company plans to set up 100 tons a day prime grade tissue paper plant at a

total capital outlay of Rs 1.75 billion.

The expansion of their Paper unit for manufacturing Paper from waste paper with a
capacity of 211 tonnes per day is now running smoothly and is presently producing

over 80,000 tonnes of Recycle based Paper.

The expansion of cement manufacturing capacity by installing a new clinker line
of capacity of 2.50 million tonnes and an equivalent cement grinding facility
adjacent to the existing plant of Manikgarh Cement at Gadchandur, Maharashtra

along with a captive thermal power plant of 40 MW.

The Companys ready to wear products under the brand name Cottons by
Century are now well known among leading national brands. With the new super
fine fabrics on offer from Birla Century, the Apparel Division is poised to create

its own niche in the high-end customers.

The land development at Worli, Mumbai, where Century Mill was situated, is
under process for various commercial uses and permissions from Municipal
Corporation, Government of Maharashtra and other related agencies are being

pursued so as to commence physical construction work in the near future.

We recommend a BUY on the stock with a target price of Rs.570.00 for
medium to long term.
Page 23 of 27

BALANCE SHEET AS AT 31st MARCH, 2013

PARTICULARS

I
(a

EQUITY AND LIABILITIES

Shareholders Funds
Share Capital

)
(b

Reserves and Surplus

31.03.20

31.03.201

13

Rs in

Rs in

Crore

Crore

93.04

93.04

1711.91

1805.88

)
1804.95
(a

Non-Current Liabilities
Long Term Borrowings

)
(b
)
(c)
(d

1898.92

3148.15

1977.10

Deferred Tax Liabilities (Net)

242.92

262.74

Other Long Term Liabilities

Long Term Provisions

38.80
363.61

20.08
319.59

)
3793.48
(a

Current Liabilities
Short Term Borrowings

)
(b
)
(c)
(d

2579.51

1212.50

1444.80

Trade Payables

359.87

307.55

Other Current Liabilities

Short Term Provisions

987.22
102.40

968.83
92.50

(a

TOTAL
ASSETS
Non-Current Assets
Fixed Assets

)
(1

Tangible Assets

)
(2

Intangible Assets

)
(3

Capital Work-in-Progress

)
(4

Intangible Assets Under

II

2661.99
8260.42

2813.68
7292.11

4229.28

4103.99

3.11

3.48

1710.76

1111.92

0.48

1.73
Page 24 of 27

Development
5943.63

(b

Non-Current Investments

)
(c)
(d

Long Term Loans and Advances

Other Non-Current Assets

73.78

5221.12
69.28

290.45
19.64

288.03
16.69

)
383.87
(a

Current Assets
Current Investments

)
(b

Inventories

)
(c)
(d

374.00

2.07

1203.79

1095.24

Trade Receivables
Cash and Bank Balances

408.01
53.49

333.45
50.09

)
(e

Short Term Loans and Advances

237.76

198.86

)
(f)

Other Current Assets

29.87

17.28
1696.99
7292.11

1932.92
8260.42

TOTAL

RECOMMENDATIONS:

Setting up Textile Industries oriented SEZs.

Starting up new courses like Textile Manufacturing and Textile Technology at ITIs

and Engineering Institutes.

Liberalized labor laws, tax and other benefits of a Special Economic Zone need to

be implemented.
Access to high quality and cost effective manpower.
Excellent connectivity by road, rail and airports.
Single window clearance.

CONCLUSION:
The Indian textile industry has a significant presence in the Indian economy as well as
in the international textile economy. Its contribution to the Indian economy is
manifested in terms of its contribution to the industrial production, employment
generation and foreign exchange earnings. The industry also contributes significantly
to the world production of textile fibers and yarns including jute. In the world textile
Page 25 of 27

scenario, it is the largest producer of jute, second largest producer of silk, third largest
producer of cotton and cellulosic fiber\yarn and fifth largest producer of synthetic
fiber\yarn. Textile Industry is providing one of the most basic needs of people and the
holds importance; maintaining sustained growth for improving quality of life. The
Government of India has also included new schemes in the Annual Plan for 2007-08 to
provide a boost to the textile sector. These include schemes for Foreign Investment
Promotion to attract foreign direct investment in textiles, clothing and machinery etc.

Page 26 of 27

REFERENCES:

www.tradeget.com
www.ibef.org
www.ceturytextind.com
www.bharattextile.com
www.texprocil.com
www.economywatch.com
www.marketresearch.com
pd.cpim.org
meaindia.nic.in
ezinearticles.com
www.indialine.com
www.articlesbase.com
www.studymode.com
www.fibre2fashion.com
www.craftsinindia.com

Page 27 of 27