Earnings Call Transcript Analysis Report #
Nitin Spinners Limited Q4 FY'25 Earnings Call Analysis #
Financial Performance #
Key Financial Metrics (FY'25 vs FY'24): #
- Revenue: INR 3,305.65 crores (FY'25) vs INR 2,905.65 crores (FY'24), an increase of 14%.
- Exports: INR 2,111 crores (FY'25), an increase of 24% vs FY'24.
- EBITDA: INR 471.43 crores (FY'25) vs INR 377.05 crores (FY'24), an increase of 25%.
- EBITDA Margin: 14.26% (FY'25) vs 12.98% (FY'24).
- PAT: INR 175.43 crores (FY'25) vs INR 131.52 crores (FY'24), an increase of 33%.
- EPS: INR 31.20 (FY'25) vs INR 23.29 (FY'24).
- Cash EPS: INR 57.48 (FY'25) vs INR 44.47 (FY'24).
Key Financial Metrics (Q4'25 vs Q4'24 & Q3'25): #
- Revenue (Q4'25): INR 841.29 crores vs INR 800.71 crores (Q4'24) (up 5% YoY) and INR 838.87 crores (Q3'25) (flat QoQ).
- EBITDA (Q4'25): INR 120.32 crores vs INR 116.24 crores (Q4'24) and INR 117.16 crores (Q3'25).
- PAT (Q4'25): INR 46.37 crores vs INR 39.17 crores (Q4'24) and INR 44.78 crores (Q3'25).
Dividend: #
- Recommended 30% on equity share capital (vs 25% last year).
Guidance/Forecasts: #
- No major volume growth expected in FY'26 due to capex fructifying in FY'27.
- Post-capex (FY'27 onwards), revenue potential to increase by INR 1,000 crores and margins by 100-150 bps.
Areas of Growth: #
- Revenue, Exports, EBITDA, PAT all showed significant YoY growth.
Cotton Yarn Spread: #
- INR 105 per kg (for Q4 FY'25).
- Around INR 102-103/kg for the full year.
Fabric Realization (Q4 FY'25): #
- Woven: ~INR 163/meter (Q3 FY'25 was ~INR 161/meter).
- Knitted: ~INR 283/kg (Q3 FY'25 was ~INR 297/kg, showing a sequential decline).
Strategic Initiatives & Business Updates #
Major Strategic Announcements: #
- Significant capex plan of approximately INR 1,100 crores across existing verticals (yarn and fabrics).
- This capex is expected to fructify in FY'27.
New Products/Services/Markets: #
- Capex aimed at expanding the product portfolio and introducing “high-value specialized products.”
- Focus on meeting rising demand for quality fashion fabrics from domestic and international brands.
Operational Changes/Updates: #
- Spinning capacity running at over 96% utilization.
- Weaving and finishing divisions operating at more than 90%.
- The capex will also enhance capabilities to process synthetic fibers.
- Ongoing/Completed Projects: The INR 1,100 crore capex is ongoing, with civil construction and regulatory approvals being the main time-consuming factors.
Market & Competitive Landscape #
Industry Trends: #
- Textile industry showing “promising signs of steady demand and moderate growth.”
- Global challenges: geopolitical tensions, regulatory challenges (tariff and non-tariff barriers).
- Domestic demand is good, and cotton prices have remained supportive.
- Export volumes have increased despite global pressures.
- US tariff announcements are expected to benefit the Indian apparel sector.
- UK FTA is a positive step for long-term textile exports.
- Global brands are relooking their supply chains (“China Plus One”).
Competitive Positioning: #
- Nitin Spinners’ diversified product portfolio and focus on value-added products allow it to benefit from rising export momentum.
- Well-diversified export base across Asia, Europe, and Latin America.
- Margins are “better than the industry margin.”
- Turkey is a competitor in yarn and fabric.
Market Challenges/Opportunities: #
- Challenge: Domestic cotton slightly more expensive than international cotton, affecting margins.
- Challenge: Short-term uncertainty due to non-clarity on final US tariffs.
- Opportunity: UK FTA could help India double its market share there.
- Opportunity: Restrictions on Chinese fabric imports (minimum import price of $3.5) could boost domestic demand, primarily for synthetic fabrics.
- Challenge: India lacks global scale garmenting capacity.
Market Share/Positioning: #
- UK textile imports: India’s share is less than 10%.
- Exports to Bangladesh: 27-28% of Nitin Spinners’ total revenue.
Risk Factors & Challenges #
Acknowledged Concerns: #
- Geopolitical tensions and regulatory challenges (tariffs/non-tariff barriers).
- Domestic cotton prices being higher than international prices.
- Short-term uncertainty from US tariff decisions.
- Current margins are lower than aspired levels (16-20%).
- Disadvantage in man-made fiber raw material prices in India compared to international prices.
Regulatory Issues: #
- Awaited clarity on final US tariffs.
- Impact of minimum import price restrictions on Chinese fabrics.
- Bangladesh government stopped cotton yarn imports via land route, increasing lead times but not costs for Nitin Spinners.
Supply Chain/Operational Constraints: #
- While Nitin Spinners’ utilization is high, overall spinning capacity utilization in India is estimated at 80-82%.
- India’s garmenting and finishing capacity needs significant ramping up to seize global opportunities.
Market Uncertainties: #
- Volatility of cotton prices.