We had recommended Century Enka in volume no. 33, issue no. 37 (dated July 3, 2017) when the scrip was trading at Rs 395. Our recommendation was backed by factors like its improved margins in FY17 and growing demand for its products from industries. In Q1FY18, although the company’s revenue grew 28.09 per cent to Rs 337.47 crore YoY, the EBITDA margin dipped from 16.7 per cent to 4.1 per cent YoY due to rising raw material prices. The PAT margin too declined from 8.5 per cent to 1.8 per cent YoY due to dropping operating profits. Due to GST, we expect pressure on margins to continue in Q2FY18. Also, the textile industry is seen to be under pressure post implementation of GST. Hence, we recommend investors to EXIT from the scrip.