Century Textiles & Industries Ltd Management Discussions.

This report covers the operations and financial performance of the Company for the year ended 31st March, 2021 and forms part of the Annual Report.


The overall profitability of the Company during the year under review, as compared to the previous year, has been adversely affected due to the unfavorable economic and market conditions prevailing throughout the year in all the business segments on account of disruptions caused by the COVID 19 pandemic and the lockdown pursuant to Govt.s directives to prevent spread of pandemic.

In Textiles it was affected due to weak domestic market conditions throughout the year, and in Paper realizations dropped due to subdued international market conditions. Working and operational parameters at all the plants of the Company were satisfactory during the year.

In Real Estate, execution of the Companys first residential project at Kalyan (named Birla Vanya) and the second project, Birla Alokya, in Bengaluru both launched in the year 2019-20 are progressing as per schedule. Due to spread of pandemic Covid 19 though the progress of aforesaid projects was affected, however it will not affect the end schedule for completion of the projects.

During the year, your Company launched its first residential project at Gurugram, NCR (named Birla Navya). Further, we are very well poised to launch our flagship mixed use project at Worli, Mumbai, in FY 22.


a. Industry Structure and Development

Indian Textile market contracted in the FY 21 by around 30% and Indias export decreased by around 15%. Apparel formal wear and semi formal wear got more hit than casual wear / lounge wear or home furnishings/ made ups since Work-From- Home became a new normal. Though 2020-21 was a challenging year for the textile industry, it has been a learning year and taught us to conduct the business in a different manner.

On positive note there have been lot of developments undertaken, including different product mix, introducing several health and hygiene products and exploring new business channels. Even during these torrid times, the business has managed the working capital well.

b. Opportunities and Threats

Currently the biggest threat is a second wave of COVID 19. It all depends how fast it can be controlled to help in boosting confidence and reducing uncertainties. Further abnormal increase in input cost and non-clarity on rates of export benefits are creating uncertainty among the manufacturers / exporters.

As expected, some customers in USA and Europe have started shifting textile business from China to India, Bangladesh, Vietnam, etc. Further brands focus has changed to sustainable product lines which can satisfy fashion needs also. We are preparing ourselves to take the advantage of both these changing trends.

c. Segmental Review and Analysis Apparel Fabrics:

Due to weak domestic textile market through-out the year, our Retail segment i.e. Over the counter (OTC) and Ready to Stitch (RTS) as well as domestic trade segment was down by around 45% vis-a-vis last year. However, exports and brand business performed well and in that segment our sales growth was marginal as compared to previous year.


Home linen / made ups has been running on full capacity since resuming operations post Covid-19 due to good demand in the market and reliable customers. Further, we have successfully launched our products through E-commerce in the US market under our label - "Avonleigh Linen".


We also explored some business in masks, PPE suits, etc. and focused on yarn business when the demand of our core product was less.

Due to abnormal increase in raw-material cost (specially yarn) and weak market sentiment, the margins were under pressure. However, due to efficient working capital management, we were cash positive throughout the year.

d. Risks and Concerns

Major concern is volatility in yarn prices (almost 50% increase from November 20). Market takes time to absorb above increase in prices at garment / fabric stage considering MRP increase on finished product is not an option in current scenario. Further limited availability of specialty fibres like organic, Supima and Egyptian also impacts our offering to the customer.

A shift towards online business has happened and price sensitive products are more in demand as fashion clothing demand dropped due to restricted attendance in functions / get-togethers and increased Work-From-Home culture.

e. Outlook

In the coming year FY 21-22, we are foreseeing increase in demand since few export customers have started shifting their orders from China to India. However, the Global market outlook is still not clear because of the new strain of Corona virus, world-wide. Vaccination drive has started and there is hope to cover most of the population by 2nd quarter across the globe.

Our Product mix are more focused on sustainability having innovative finishes and accordingly we are ready to cater to the market, once domestic and international markets reopens in full swing.


a. Industry Structure & Development:

During last one-year, the entire world has witnessed a serious challenge on account of the Covid pandemic.

Due to the pandemic, entire world was on standstill continuously for weeks together. Therefore, almost all paper consumption centres i.e. schools, colleges, educational institutions, offices, court, judiciary, airports, bus stands, railway stations, malls, shopping centres as well as public meetings etc, were either closed or on hold, during this period. As a result, there was a dis-equilibrium between consumption and supply pattern of many essential commodities including paper & paper products.

Paper industry being one of the oldest and core industrial manufacturing sector in the world, this industry always acts as a mirror of socio-economic developments. Last one year, was one of the worst years for the paper industry. Industry has lost, not only its business volumes, but also price realisation to a large extent.

Gradually, this crisis is softening, and world-wide economy is expected to open up shortly and become fully functional. Till then, gaps will remain in consumption and supply sources.

b. Opportunities and Threats:

Because of Covid-19, in general, even a poorest person is more & more conscious about health, hygiene and cleanliness aspects of his life. This awareness is helping in widening boundaries of the market for Tissue and Packaging Board segments of paper industry.

Paper consumption centres are expected to become fully functional (i.e. full fledge operations in schools, colleges, offices, judiciary etc.) once herd immunity sets-in post vaccination or otherwise. Once that happens, it will reinvigorate demand for paper.

Governments initiatives, to implement new education policy w.e.f. FY 22, will also help in boosting additional demand of writing & printing paper, during 2nd half of FY 22.

Major part of last one year, was under a Lockdown situation for the entire world. As a result, world-wide Imported Pulp productions fell to their lowest levels. In addition, International disruptions in Supply Chain and Logistics services, further restricted movements of imported pulp. All these factors together resulted in a sharp increase in pulp prices.

With shrinking forests and stringent norms imposed by various regulatory authorities to curb pollution and to save the environment, there are plenty of challenges in the normal availability of raw material for the paper industry.

c. Segmental Review and Analysis:

During the last financial year, globally Paper industry faced its toughest situation. This resulted, in a shrinkage of the business volumes as well as sharp drop in the average price realisation. There was also a very short tenure, during which paper manufacturers sold their products even at variable cost levels. Therefore, financial performance during the period under review, will not lend itself to a comparison with the past performances.

d. Risks and Concerns:

Availability of wood at reasonable prices is and continues to remain the biggest concern for domestic paper industry. In the recent years, with technology advancements, sugar industry is extracting higher recovery of sugar juice from sugarcane. As a result, availability of bagasse per ton of sugarcane has reduced, which has adversely affected the supply of bagasse as a raw material input for paper industry.

Demand-supply gap will remain a concern for the paper industry, until global economy revives to its pre-Covid consumption levels.

e. Outlook

Medium to long-term outlook of the Indian paper industry is positive and is expected to grow in-line with the countrys GDP and economy.


a. Industry Structure and Development

Real estate sector is one of the major sectors of the Indian economy. The sector ranks third among the 14 major sectors in terms of direct, indirect, and induced effects in all sectors of the economy1. It comprises of four primary sub sectors - residential, commercial, retail and hospitality as well as many upcoming ones like warehousing, data centres, etc. The growth of this sector has been driven by urbanisation in the country, increasing the demand for office space as well as quality urban and semi-urban accommodation.

The COVID-19 pandemic and the nationwide lockdown in the first quarter of FY 21 severely impacted the real estate sector with unavailability of migrant workforce, liquidity crisis and slowdown in absorption. The residential segment saw sluggish sales and collections while the commercial segment saw corporate occupiers delaying their leasing decisions. This period also saw many businesses remain flexible about their need for physical interactions and ‘work from anywhere concept.

Government of India along with the governments of respective States has taken several initiatives to help revive the sector and infuse liquidity. The Atmanirbhar Bharat 3.0 package announced in November 2020 included income tax relief measures for real estate developers and homebuyers. To revive around 1,600 stalled housing projects across top cities in the country, the Union Cabinet has approved the setting up of INR 25,000 Crore alternative investment fund (AIF) improving consumer sentiments. Maharashtra Government not only reduced stamp duty for purchase of apartments till 31st March, 2021 but also reduced some statutory premiums for construction approvals by 50% till 31st December, 2021.

By Q3 FY 21, buoyed by the historic low home loan interest rates, stamp duty cuts by state governments, improved home affordability and shift of sentiment towards owning a home, residential demand revived to a healthy level across regions and price points. Even though, absorption in terms of value decreased by 14% in 2020 (y-o-y) across the country due to the Covid pandemic2, the absorption of the top 10 listed realty players has increased by almost 10% in 9M FY 213.

The commercial sector was also affected by the pandemic and the ensuing lockdown. New office space absorption fell by 44% during 2020 to 25.82 million sq. ft from a record 46.5 million sq. ft in 20194. However, office rents in 2020 remained stable across the major office markets in India. As business activities resumed with the gradual opening of the economy in the third quarter of 2020, the office market witnessed green shoots of recovery. With stable range-bound vacancy levels and limited upcoming Grade A supply across key markets, the office market in India continues to be owner dictated. India remains a preferred destination for MNCs to setup global captive centers due to low rentals and availability of skilled manpower ensuring that the Indian office market remains a multi-year growth story with a combination of volume / rental growth.

The Covid-19 pandemic has irrevocably accelerated the evolution of the Indian real estate industry by reshaping business operations and consumer preferences. This has led to many new opportunities for the real estate developers especially branded and organized players.

b. Opportunities and Threats

The preference for home ownership has risen due to the increased time spent at home due to the pandemic. The pandemic has reiterated the emotional security associated with home ownership as homes remain the centre of our lives morphing from a fitness lounge in the morning, virtual schools, and offices in the day to an entertainment hub in the evening. Your Company with its commitment towards delivering high quality homes with open spaces, connected infrastructure and thoughtful amenities is ideally positioned.

Along with home ownership, the second significant shift in customer preference is the inclination towards branded players. This has led to such players outperforming the market and increasing their market share. This has also increased the pace of consolidation in favour of branded players. Your Company is uniquely poised to capitalize on the opportunity with the brand having a huge legacy and symbolising trust, transparency, quality, and excellence.

Consolidation in the sector has also accelerated due to improvement in governance standards as landowners and smaller developers seek to partner with reputable developers through the joint development model to maintain future business viability. Your Company with best in class governance standards and access to institutional funding is in a prime position to benefit from consolidation.

With customer centricity and thoughtful design being the primary focus of your Company, the changing consumer dynamics provide an opportunity to strengthen our positioning. Timely delivery, transparency in operations will become the basic expectations from developers and product innovation and thoughtfulness, customer focus, etc. will become key differentiating factors. Real estate players who can establish a track record of delivering high quality construction will be preferred.

There may be pressure on lease rentals and occupancy in the short term as organisations remained flexible about their need for physical interactions and ‘work from anywhere concept. In the future, companies may prefer a more distributed workforce linked through technology. The growth in the commercial segment is however, expected to continue in the coming years as India remains a preferred destination for MNCs to setup global captive centers.

c. Segment Review Analysis

Your Company has sold 1 million sq. ft in less than 2 years in the three launched projects and crossed cumulative sales worth INR 1,000 Crores.

During the year, your Company launched its first residential project at Gurugram, NCR (named Birla Navya). We achieved cumulative booking value of more than INR 500 Crores with sales exceeding 225 units.

At Birla Vanya, Kalyan, over 95% of the launched inventory (in terms of value) has been already sold till date. Birla Alokya, Bengaluru has achieved a robust sales performance with more than 50% of the launched inventory (in terms of value) being sold till date.

Your Company launched a digital sales platform ‘buyonline. birlaestates.com for a seamless online sales experience. The end-to-end digital platform, christened as "ALIVE", will help us increase our reach manifold as customers not only can explore every detail about the project from their living room but also can book an apartment. Customer centricity remains an important pillar for our business. We interacted and engaged with our customers through the lockdown period and created a bond based on empathy and emotions. As part of this ‘Customer Connect, we conducted various initiatives for the customers of Birla Vanya and Birla Alokya.

The occupancy rate at our two commercial assets, Birla Aurora and Birla Centurion remains at a high level ensuring stable lease rentals. Our primary focus is to ensure a safe and healthy environment for all the stakeholders at our properties.

The Birla Vanya, Kalyan site had about 500 workers residing at the site when the lockdown was imposed. During the lockdown, well-being of site workers was taken care of by ensuring adequate provisioning, daily health screenings, cleaning, and fumigation of labour camps etc. With the opening up of the travel modes such as Shramik trains etc the labour strength dropped significantly. Construction resumed with the increase in manpower and material movement post easing of lockdown restrictions across the country. Site Operations at the launched projects (Birla Vanya, Kalyan and Birla Alokya, Bengaluru) was underway with almost 90% of the required labour strength as at 31st March, 2021.

The approval process at our Magadi Road project at Bengaluru and Century Mills project at Worli, Mumbai, which are at a planning & development stage is progressing as per plan with critical approvals received. We are very well placed to launch our flagship mixed use project at Century Mills, Worli (Mumbai) in FY 22.

d. Risks and Concerns

The sector continues to face substantial procedural delays with regards to land use, project launches and construction approvals. These delays may be exacerbated as the government machinery remains locked in combating the succeeding waves of the pandemic.

e. Outlook

The stimulus measures offered by the Government, increased need for home ownership and resumption of economic activity has aided in recovery from the pandemic. Digitization is taking a centre stage in all business processes associated with real estate. It is also ensuring developers, customers and service providers leverage it efficiently to communicate, deliver services, and transact. The pandemic has changed buyers preferences in terms of choice of real estate: larger layouts with higher safety, hygiene, and captive amenities may become more attractive. With improving growth prospects, real estate prices in the prime cities are expected to stay stable.

Despite the short-term disruptions, Indias commercial real estate sector continues to attract interest from occupiers and investors looking at the long-term horizon. The employers and employees are seeking the right balance of in-office and remote working options.

The fresh lockdowns in the beginning of FY 22 to combat the second wave of Covid 19 Pandemic have once again put pressure on customer visits to the sites and labour availability. The digital outreach channels will once again take center stage to reach customers and provide virtual tours of the project.

The current restrictions in Maharashtra allow construction sites with labour residing at the site to operate with some restrictions. We expect minimal disruptions to site operations at Birla Vanya, Kalyan.

With a slew of economic and policy reforms, stimulus packages introduced by the authorities, the vaccination program, fresh appreciation for the need for owned space, the sector will have a positive outlook in 2021. The continued shift in the customer preference for branded players, and the trust in the Birla Brand and product will hold us in good stead as we accelerate our growth and cement ourselves as a leading player in the Indian Real Estate.


The Company maintains adequate and effective Internal Control Systems commensurate with its size and complexity. It believes that these systems provide, among other things, a reasonable assurance that transactions are executed with management authorization. It also ensures that they are recorded in all material respect to permit preparation of financial statements in conformity with established accounting principles along with the assets of the Company being adequately safeguarded against significant misuse or loss. An independent Internal Audit function is an important element of Companys Internal Control System. This is supplemented through an extensive internal audit program and periodic review by the management and the Audit Committee of Board.


(Rs in Crores)

Particulars ^



2020-21 2019-20 2020-21 2019-20
1. Total Income 2690.19 3467.63 2678.19 3458.63
2. Earnings before finance cost, tax, depreciation and 366.17 695.22 285.32 600.06
Amortization (EBITDA)
3. Less: Finance Cost 88.55 93.13 70.70 87.09
4. Profit before depreciation, amortization and taxation. 277.62 602.09 214.62 512.97
5. Less: Depreciation and Amortization 229.02 227.76 231.13 228.58
6. Profit / (Loss) before taxation 48.60 374.33 (16.51) 284.39
7. Add: Adjustment of tax relating to earlier periods 19.25 - 19.25 -
8. Less / (Add): Deferred Tax Debit / (Credit) 17.81 (93.69) 17.81 (93.69)
9. Profit / (Loss) after tax from continuing operations 50.04 468.02 (15.07) 378.08
10. Less: Loss after tax from discontinued operations 18.54 17.65 18.54 17.65
11. Net Profit / (Loss) for the year 31.50 450.37 (33.61) 360.43

The Consolidated EBITDA from continuing operations for the year 2020-21 is Rs 285.32 Crores as against Rs 600.06 Crores. The Standalone EBIDTA from continuing operations for the year 2020-21 is Rs 366.17 Crores as against Rs 695.22 Crores.

In consolidated accounts interest cost has gone down from Rs 87.09 Crores to Rs 70.70 Crores.

For the Company as a whole, the technical performance of all the plants has been satisfactory.


Ratios F.Y. 2020-21 F.Y. 2019-20 Change (%) Explanation for change
1. Debtors Turnover Ratio 15.14 17.30 -12.49 *
2. Inventory Turnover Ratio 0.93 1.72 -45.93 *
3. Interest Coverage Ratio 2.80 5.39 -48.05 *
4. Current Ratio 1.38 0.98 40.82 Improved due to reduction in current liability consequent to repayment of borrowing matured during the year.
5. Debt Equity Ratio 0.28 0.38 26.32 The Company has conserved cash by better working capital management which is used for repayment of debts.
6. Operating Profit Margin (%) 10.00 17.20 -41.86 *
7. Net Profit Margin (%) (1.31) 10.82 -112.11 *
8. Return on Net Worth (%) (0.92) 9.98 -109.22 *

The Company has maintained satisfactory performance ratios despite adverse market situation prevailing for a major part of the year in all the business segments of the Company.

* Due to protracted lockdown to prevent spread of Covid-19 pandemic, there was sluggishness in domestic as well as international markets throughout the year which impacted the turnover, profitability, and hence the ratios.


The total number of employees as on 31st March, 2021 were 4268 (4492 as on 31st March, 2020). The number of employees has reduced during the year by 224. The aforesaid figure does not include 1018 employees (previous year1030) of discontinued operations of Yarn & Denim units of the Company. The industrial relations in all units of the Company continue to be cordial. The skills, experience and passion of our people facilitate deeper customer understanding and engaging relationships and strengthen our brand value as a preferred employer. We continue to step up efforts to accelerate our value-based growth strategy and the overall development of human capital. We nurture our people by investing in their empowerment through learning and development, wellness, and safety besides providing contemporary workplace facilities.


The Company continues to accord the highest priority to health and safety of its employees and communities it operates in. The Company has been fully committed to comply with all applicable laws and regulations and maintains the highest standard of Occupational Health

and Safety and ensures safer plants by conducting safety audits, risk assessments and periodic safety awareness campaigns and training to employees. We believe in good health of our employees. Modern occupational health and medical services are accessible to all employees through well-equipped occupational health centers at all manufacturing units.

Further, to prevent the spread of pandemic Covid 19, the Company has taken all precautionary measures required, such as use of masks and sanitizers, social distancing etc., at all its plants and construction sites as well as at office locations. Your Company is in full compliance of all Government directives issued in this behalf. The Company has always considered safety as one of its key focus areas and strives to make continuous improvement on this front.


Statements in this report on Management Discussion and Analysis, describing the Companys objectives, projections, estimates, expectations, or predictions may be forward looking, considering the applicable laws and regulations. These statements are based on certain assumptions and expectation of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include finished goods prices, raw materials costs and availability, global and domestic demand supply conditions, fluctuations in exchange rates, changes in Government regulations and tax structure, economic developments within India and the countries with which the Company has business contacts. The Company assumes no responsibility in respect of the forward-looking statements herein, which may undergo changes in future based on subsequent developments, information or events.