The Kharagpur-based extrusion specialist demonstrated resilience in maintaining profitability despite tepid revenue momentum. Net sales in Q2 FY26 stood at ₹109.66 crores, registering a sequential uptick of 5.29% from ₹104.15 crores in Q1 FY26, but year-on-year growth remained constrained at 2.97%. The company's ability to expand margins amidst modest top-line growth signals improving operational efficiency, though concerns persist regarding demand headwinds in the broader industrial products ecosystem.
Quarterly Performance Trajectory
| Quarter | Net Sales (₹ Cr) | QoQ % | Net Profit (₹ Cr) | QoQ % | PAT Margin % |
|---|---|---|---|---|---|
| Sep'25 | 109.66 | +5.29% | 2.76 | +16.95% | 2.52% |
| Jun'25 | 104.15 | -13.06% | 2.36 | -11.61% | 2.27% |
| Mar'25 | 119.79 | +15.69% | 2.67 | +8.98% | 2.23% |
| Dec'24 | 103.54 | -2.78% | 2.45 | +2.94% | 2.37% |
| Sep'24 | 106.50 | +5.01% | 2.38 | -2.06% | 2.23% |
| Jun'24 | 101.42 | +9.88% | 2.43 | +111.30% | 2.40% |
| Mar'24 | 92.30 | — | 1.15 | — | 1.25% |
Financial Performance: Margin Expansion Drives Bottom Line
Century Extrusions' Q2 FY26 performance reveals a company navigating through a challenging demand environment whilst simultaneously improving operational metrics. Revenue growth of 2.97% year-on-year to ₹109.66 crores falls significantly short of the company's historical five-year sales compound annual growth rate of 18.92%, highlighting the current headwinds facing the aluminium extrusion industry.
The sequential revenue improvement of 5.29% from Q1 FY26 provides some respite, suggesting stabilisation after the sharp 13.06% quarter-on-quarter decline witnessed in the previous quarter. However, when compared to the robust 29.78% year-on-year growth recorded in Q4 FY25 (March 2025 quarter), the current growth trajectory appears notably subdued.
On the profitability front, the company demonstrated commendable margin discipline. Operating profit before depreciation, interest, tax, and other income (PBDIT excluding OI) expanded to ₹7.67 crores in Q2 FY26, yielding an operating margin of 6.99%, up from 6.69% in Q1 FY26. This 30-basis-point sequential improvement, whilst modest, represents a positive trend given the pricing pressures in the aluminium sector.
Net profit margin expanded to 2.52% in Q2 FY26 from 2.27% in Q1 FY26, a 25-basis-point improvement that underscores effective cost management. The absolute profit of ₹2.76 crores, whilst representing healthy sequential growth of 16.95%, remains constrained when viewed against the company's potential, particularly considering the strong 111.30% quarter-on-quarter jump witnessed in Q2 FY25 (June 2024 quarter).
Employee costs remained relatively stable at ₹5.10 crores in Q2 FY26 compared to ₹4.95 crores in Q1 FY26, demonstrating controlled wage inflation. Interest expenses rose to ₹3.02 crores from ₹2.67 crores sequentially, reflecting higher working capital requirements and elevated debt levels. The tax rate moderated to 22.69% in Q2 FY26 from 24.84% in the previous quarter, providing some earnings support.
Operational Challenges: Debt and Return Metrics Under Pressure
Whilst Century Extrusions has maintained profitability, deeper analysis of operational metrics reveals concerning trends. The company's return on equity (ROE) averaged 11.04% over recent periods, which, whilst positive, remains relatively weak compared to industry standards. The latest ROE of 11.64% suggests marginal improvement but falls short of the threshold typically associated with high-quality industrial franchises.
Return on capital employed (ROCE) averaged 16.99%, with the latest reading at 15.81%, indicating that the company generates reasonable returns on deployed capital. However, the declining trend in ROCE—from historical highs—warrants attention. The half-yearly ROCE for the period ending December 2025 dropped to its lowest level at 14.80%, as flagged in the financial trend analysis, signalling potential efficiency challenges.
Leverage Concerns Mounting
Key Warning Signals: The company's debt-to-equity ratio surged to its highest level at 0.86 times on a half-yearly basis, significantly above the average of 0.70 times. Interest coverage, measured by EBIT to interest, averaged just 2.11 times—a weak metric that leaves limited cushion for earnings volatility. With debt to EBITDA averaging 2.20 times and interest expenses climbing to ₹3.02 crores in Q2 FY26 (the highest quarterly interest burden), the leverage profile warrants close monitoring.
Balance sheet analysis reveals mixed signals. Shareholder funds strengthened to ₹82.97 crores as of March 2025 from ₹73.05 crores a year earlier, reflecting retained earnings accumulation. Long-term debt declined favourably to ₹1.86 crores from ₹4.30 crores, demonstrating deleveraging efforts. However, current liabilities expanded to ₹83.10 crores from ₹81.08 crores, with trade payables rising to ₹27.13 crores, suggesting extended payment cycles.
Working capital dynamics present another area of concern. Cash flow from operations in FY25 stood at ₹13.00 crores, up from ₹11.00 crores in FY24, indicating healthy operational cash generation. However, changes in working capital absorbed ₹8.00 crores in FY25 compared to ₹4.00 crores in FY24, reflecting higher inventory and receivables. The debtors turnover ratio, whilst reaching its highest level at 15.06 times on a half-yearly basis, needs to be sustained to ensure efficient capital deployment.
Industry Context: Navigating a Challenging Aluminium Cycle
The aluminium extrusion industry faces multiple headwinds, including volatile raw material prices, subdued demand from end-user sectors such as construction and automotive, and intense competition. Century Extrusions' modest 2.97% year-on-year revenue growth in Q2 FY26 must be contextualised against these sector-wide challenges.
The company's strategic location in Kharagpur, West Bengal—proximate to leading primary aluminium manufacturers—provides a logistical advantage in raw material sourcing. However, this geographical benefit has not fully translated into pricing power or market share gains, as evidenced by the tepid top-line expansion.
Applications for aluminium extrusions span doors, windows, partitions, furniture, transport, and consumer durables. Whilst the long-term structural demand story remains intact, driven by urbanisation and infrastructure development, near-term cyclical pressures have dampened growth momentum. The company's ability to maintain positive operating leverage amidst this environment demonstrates operational resilience, though revenue acceleration remains elusive.
Competitive Positioning: Value Player in Fragmented Market
Century Extrusions operates in a highly fragmented aluminium extrusion market with numerous regional players. The company's ₹174.00-crore market capitalisation positions it as a micro-cap entity, limiting access to growth capital compared to larger peers. Established in 1988 by Late Shri M P Jhunjhunwala and C L Jhunjhunwala, the company has built a niche presence but faces challenges in scaling operations meaningfully.
Peer Comparison: Valuation Discount Reflects Quality Concerns
| Company | P/E (TTM) | P/BV | ROE % | Debt/Equity | Div Yield % |
|---|---|---|---|---|---|
| Century Extrus. | 17.34 | 2.02 | 11.04% | 0.70 | — |
| Parmeshwar Metal | 17.94 | 2.50 | 15.50% | 0.12 | 0.54% |
| Galaxy Bearings | 30.45 | 1.81 | 17.86% | -0.09 | — |
| Baroda Extrusion | 37.07 | 9.04 | 6.10% | 0.27 | — |
| Sampann Utpadan | 21.44 | 3.62 | 3.37% | 2.10 | — |
| Cubex Tubings | 21.86 | 2.06 | 2.06 | 0.48 | — |
Century Extrusions trades at a price-to-earnings ratio of 17.34 times, broadly in line with the peer average of approximately 26 times but below the industrial products sector median. The company's price-to-book ratio of 2.02 times appears reasonable compared to peers, particularly when considering its ROE of 11.04%—superior to several competitors but trailing leaders like Parmeshwar Metal (15.50%) and Galaxy Bearings (17.86%).
The valuation discount becomes more pronounced when examining operational quality. Century Extrusions' debt-to-equity ratio of 0.70 times, whilst manageable, exceeds that of better-capitalised peers like Parmeshwar Metal (0.12) and Baroda Extrusion (0.27). The absence of dividend payments further distinguishes Century Extrusions from yield-generating peers, reflecting capital retention needs.
The company's market capitalisation of ₹174.00 crores ranks fourth amongst the peer group, limiting institutional interest. With just 0.28% institutional holdings and negligible mutual fund participation (0.00%), the stock lacks the research coverage and liquidity profile of larger industrial players.
Valuation Analysis: Attractive Entry Point or Value Trap?
At the current price of ₹22.19, Century Extrusions trades at a trailing twelve-month P/E ratio of 17.34 times, representing a premium to the industry P/E of 12 times. This 44.50% premium appears unjustified given the company's below-average growth profile and operational challenges. The stock's price-to-book ratio of 2.02 times, whilst not excessive, offers limited margin of safety considering the modest ROE of 11.64%.
The proprietary valuation assessment categorises the stock as "ATTRACTIVE," having transitioned from "VERY ATTRACTIVE" in August 2025. The EV-to-EBITDA multiple of 8.67 times and EV-to-sales ratio of 0.55 times suggest reasonable valuations on an enterprise value basis. However, the PEG ratio of 0.54 times—calculated against the five-year EBIT growth rate of 27.49%—presents a more nuanced picture, indicating potential value if historical growth rates can be sustained.
The stock's 52-week trading range of ₹15.36 to ₹34.80 reveals significant volatility, with the current price 36.24% below the 52-week high and 44.47% above the 52-week low. This mid-range positioning offers neither compelling value nor clear momentum, reflecting market uncertainty about the company's growth prospects.
Critically, the absence of dividend payments since July 2010 (latest dividend: ₹0.10 per share) eliminates any income component from the total return equation. For investors seeking stable cash flows, this represents a meaningful shortcoming, particularly given the company's positive profitability and cash generation in recent years.
Shareholding Pattern: Stable Promoter Base, Minimal Institutional Interest
| Category | Dec'25 | Sep'25 | Jun'25 | QoQ Change |
|---|---|---|---|---|
| Promoter | 52.04% | 52.04% | 52.04% | 0.00% |
| FII | 0.28% | 0.16% | 0.32% | +0.12% |
| Mutual Funds | 0.00% | 0.00% | 0.00% | 0.00% |
| Insurance | 0.00% | 0.00% | 0.00% | 0.00% |
| Other DII | 0.01% | 0.01% | 0.01% | 0.00% |
| Non-Institutional | 47.68% | 47.80% | 47.63% | -0.12% |
Promoter holding has remained rock-solid at 52.04% across the last five quarters, signalling strong commitment from the founding families. The promoter group comprises entities including Paramsukh Properties (14.26%), Sita Devi Jhunjhunwala (12.63%), Vintage Securities Limited (9.30%), and Jeco Exports & Finance Ltd (8.21%), amongst others. This stable ownership structure provides governance continuity, though the reported 13.54% pledged shares introduce a note of caution regarding potential liquidity needs.
Foreign institutional investor (FII) holdings increased marginally to 0.28% in December 2025 from 0.16% in September 2025, representing a modest 0.12 percentage point uptick. Whilst directionally positive, the absolute level of FII participation remains negligible, with just two FIIs holding positions. The complete absence of mutual fund holdings (0.00%) and insurance company participation (0.00%) underscores the stock's lack of institutional appeal, likely attributable to its micro-cap status and limited liquidity.
Non-institutional holdings, comprising retail and high-net-worth individuals, account for 47.68% of the equity base. The marginal 0.12 percentage point sequential decline to December 2025 suggests neutral retail sentiment. The low institutional ownership of 0.28% represents both a risk (lack of professional oversight and research coverage) and an opportunity (potential for significant rerating if fundamentals improve and attract institutional attention).
Stock Performance: Underperformance Amid Technical Weakness
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | +2.35% | +0.50% | +1.85% |
| 1 Month | -1.68% | +0.79% | -2.47% |
| 3 Months | -18.72% | +0.43% | -19.15% |
| 6 Months | +0.73% | +4.50% | -3.77% |
| YTD | -4.06% | -1.16% | -2.90% |
| 1 Year | -0.14% | +10.41% | -10.55% |
| 3 Years | +133.09% | +38.81% | +94.28% |
| 5 Years | +366.18% | +63.46% | +302.72% |
Century Extrusions' stock performance presents a tale of two timeframes. Over the longer term—three years and beyond—the stock has delivered exceptional returns, generating 133.09% over three years and a remarkable 366.18% over five years, massively outperforming the Sensex with alpha of 94.28% and 302.72% respectively. This historical outperformance reflects the company's successful navigation of the post-pandemic recovery and aluminium sector upcycle.
However, recent performance tells a markedly different story. The stock has declined 0.14% over the past year, significantly underperforming the Sensex's 10.41% gain, resulting in negative alpha of 10.55%. More concerning is the sharp 18.72% decline over the past three months against the Sensex's marginal 0.43% gain, indicating severe relative weakness. The one-month return of -1.68% versus the Sensex's +0.79% and year-to-date decline of 4.06% further underscore the recent momentum loss.
Technical analysis reveals a "MILDLY BEARISH" trend as of February 11, 2026, having transitioned from "Bearish" on the same day. The stock trades below all key moving averages—5-day (₹21.52), 20-day (₹21.95), 50-day (₹22.22), 100-day (₹24.78), and 200-day (₹23.18)—a classic sign of technical weakness. The MACD indicator shows bearish signals on both weekly and monthly timeframes, whilst the Bollinger Bands suggest continued bearish pressure.
Delivery volumes have surged, with a 536.39% increase over the trailing one-month period compared to the previous month, potentially indicating accumulation by long-term investors at lower levels. However, the stock's high beta of 1.50 (adjusted) classifies it as significantly more volatile than the broader market, with annualised volatility of 61.67%—a risk factor that cannot be ignored.
Investment Thesis: Mixed Signals Across Parameters
The proprietary Mojo Score of 45 out of 100 places Century Extrusions firmly in "SELL" territory, down from a "HOLD" rating as recently as January 20, 2026. This deterioration reflects the confluence of bearish technical trends, flat financial performance in recent quarters, and significant one-year underperformance versus the broader market.
The investment case rests on a precarious balance. On the positive side, the "ATTRACTIVE" valuation grade suggests the stock trades below intrinsic value, potentially offering a margin of safety for patient investors. The "AVERAGE" quality grade acknowledges the company's reasonable long-term financial performance, characterised by 18.92% five-year sales growth and 27.49% EBIT growth.
Conversely, the "FLAT" financial trend for recent quarters and "MILDLY BEARISH" technical trend represent significant headwinds. The combination of deteriorating near-term fundamentals and negative price momentum creates an unfavourable risk-reward profile for most investors. The absence of institutional support and dividend income further diminishes the stock's appeal in a market offering numerous alternatives.
Key Strengths & Risk Factors
KEY STRENGTHS
- Margin Expansion: Operating margin improved to 6.99% in Q2 FY26 from 6.69% in Q1 FY26, demonstrating pricing power and cost control
- Debt Reduction: Long-term debt declined to ₹1.86 crores from ₹4.30 crores year-on-year, strengthening balance sheet
- Cash Generation: Operating cash flow of ₹13.00 crores in FY25 supports working capital and growth investments
- Attractive Valuation: Trading at reasonable multiples with "ATTRACTIVE" valuation grade and PEG ratio of 0.54x
- Stable Ownership: Promoter holding steady at 52.04% provides governance continuity and alignment
- Strategic Location: Kharagpur facility proximity to primary aluminium producers offers logistical advantages
- Long-Term Track Record: Five-year returns of 366.18% demonstrate wealth creation capability during favourable cycles
KEY CONCERNS
- Revenue Stagnation: YoY growth of just 2.97% in Q2 FY26 significantly below historical 18.92% five-year CAGR
- Rising Leverage: Debt-to-equity ratio surged to 0.86 times (highest level), with interest coverage weak at 2.11x
- Declining ROCE: Half-yearly ROCE dropped to 14.80%, the lowest recorded, signalling efficiency deterioration
- Weak ROE: Return on equity of 11.04% trails industry leaders and limits valuation premium justification
- No Dividends: Absence of dividend payments since 2010 eliminates income component from total returns
- Minimal Institutional Interest: Just 0.28% institutional holdings and zero mutual fund participation limit liquidity and research coverage
- Technical Weakness: Trading below all moving averages with bearish indicators across timeframes
- Sector Underperformance: One-year return of -0.14% versus industrial products sector gain of 71.20%, underperforming by 71.34 percentage points
Outlook: What to Watch in Coming Quarters
POSITIVE CATALYSTS
- Revenue acceleration above 10% YoY driven by improved demand from construction and automotive sectors
- Operating margin expansion beyond 7.50% through operational leverage and raw material cost optimisation
- ROCE improvement back above 17% levels, demonstrating enhanced capital efficiency
- Institutional buying interest, particularly mutual fund participation, improving liquidity profile
- Resumption of dividend policy to attract income-focused investors and signal cash flow confidence
RED FLAGS
- Further revenue deceleration below 5% YoY indicating structural demand weakness
- Debt-to-equity ratio rising above 1.0x or interest coverage falling below 2.0x
- ROCE declining below 14% on sustained basis, questioning capital allocation decisions
- Working capital absorption exceeding ₹10 crores annually, straining cash flows
- Promoter pledge levels increasing beyond current 13.54%, raising governance concerns
- Stock breaking below ₹20 levels (support zone) on sustained basis with high volumes
The path forward for Century Extrusions hinges on its ability to reignite revenue growth whilst maintaining the recent margin gains. Management's capacity to navigate the challenging aluminium cycle, optimise working capital, and potentially attract institutional interest will determine whether the stock can reclaim its historical outperformance trajectory or remains mired in cyclical headwinds.
The Verdict: Tactical Sell on Deteriorating Momentum
Score: 45/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst valuations appear reasonable, the combination of flat financial trends, bearish technical setup, and significant sector underperformance creates an unfavourable risk-reward equation. Consider waiting for clearer signs of revenue acceleration and technical stabilisation before committing capital.
For Existing Holders: Consider reducing exposure or exiting positions, particularly for those sitting on long-term gains. The stock's 366.18% five-year return provides an opportune exit window before potential further deterioration. Investors with high conviction may hold with strict monitoring of quarterly revenue trends and ROCE metrics, but should prepare for continued volatility given the high beta of 1.50.
Fair Value Estimate: ₹18.00-₹20.00 (19% downside from current levels), based on normalised earnings, peer multiples, and cyclical headwinds. The stock would become more attractive on weakness towards ₹15-₹16 levels, offering a better margin of safety.
The investment case for Century Extrusions remains challenged by near-term cyclical headwinds, rising leverage, and deteriorating operational metrics despite attractive long-term valuations. The "SELL" rating reflects the unfavourable confluence of flat financial trends, bearish technicals, and superior alternatives available in the industrial products space.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The views expressed are based on data available as of February 12, 2026, and are subject to change.
