Nitin Spinners Limited , a leading textile manufacturer, has reported a marginal decline in revenue for the first quarter, reflecting the challenges faced by the Indian textile industry amidst global market uncertainties.

Financial Performance

The company reported total revenue of INR 793.00 crores for Q1, marking a slight 1% year-on-year decline. Despite the challenging environment, Nitin Spinners maintained strong operational performance with its spinning capacity operating at over 96% utilization, while weaving and finishing divisions ran at more than 90%.

EBITDA for the quarter stood at INR 111.00 crores, down 6% year-on-year, with margins at 14.02%. Profit after tax was INR 41.00 crores, declining 3% compared to the same period last year.

Export Performance and Market Dynamics

Exports continued to be a significant contributor to the company's revenue, accounting for 62% of total sales, while the domestic market contributed 38%. The slight decline in revenue was attributed to lower yarn prices, which followed reduced cotton prices, and decreased export demand as overseas buyers remained cautious due to tariff uncertainties.

Operational Highlights

Market Challenges and Company Strategy

The company noted that the recent announcement of 25% tariffs on imports from India by the U.S. government is not expected to have a significant direct impact on Nitin Spinners due to its limited exposure to the U.S. market. However, the company is closely monitoring the situation and its potential indirect effects on the global textile trade.

Expansion Plans

Despite the current market challenges, Nitin Spinners is proceeding with its INR 1,120.00 crores capacity expansion plan. This initiative is expected to generate INR 1,000.00 crores in incremental revenue, with 60% coming from fabrics and 40% from yarn. The company's management expressed confidence in maintaining current margin levels and reaching the previous year's revenue despite market challenges.

Outlook

Dinesh Nolkha, Chairman and Managing Director of Nitin Spinners, commented on the company's performance and outlook: "While some short-term volatility may persist, we remain optimistic for the medium-to long-term growth. Our well-diversified product portfolio, customer base across different geographies, focus on value-added products, and cost efficiencies allow us to withstand challenges and capitalize on opportunities."

The company is also increasing its renewable power footprint to lower production costs and improve overall margins. These strategic initiatives aim to strengthen Nitin Spinners' market position, expand its product portfolio, and introduce high-value specialized products to meet the rising demand for quality fashion fabric from domestic and international brands.

As the textile industry navigates through this transient phase, Nitin Spinners appears well-positioned to adapt to changing market dynamics and maintain its growth trajectory in the coming quarters.

Nitin Spinners , a leading textile manufacturer, has reported a steady performance for the first quarter, while outlining ambitious growth plans for the future.

Q1 Financial Highlights

The company's financial results for the quarter show:

• Revenue from operations stood at Rs 793.31 crore, marking a slight decrease of 1.20% compared to Rs 802.97 crore in the same quarter last year.
• EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was Rs 111.25 crore, down 6.36% year-on-year from Rs 118.80 crore.
• Profit After Tax (PAT) reached Rs 40.99 crore, a 2.68% decrease from Rs 42.12 crore in the corresponding quarter of the previous year.
• The EBITDA margin for the quarter was 14.02%, compared to 14.80% in the same period last year.

Management Commentary and Future Outlook

Dinesh Nolkha, Chairman and Managing Director of Nitin Spinners, commented on the results: "We began on a steady note, utilizing our capacities at an optimum level. However, on the export front, demand was marginally low, as customers have been temporarily cautious due to tariff-related concerns and geopolitical tensions."

Looking ahead, the company remains optimistic about future prospects:

• Nitin Spinners anticipates healthy demand in the second half of the financial year, expecting better clarity on strategic trade agreements and tariffs.
• The company reported that 35-40% of its sales come from higher value products, with fabrics contributing 22% and specialized yarns accounting for 15-20%.
• Management projects additional revenue of Rs 1,000 crore from new capacity expansion, with an expected internal rate of return of 14-15%.
• The company expects to maintain revenue levels and anticipates EBITDA margins to remain around 14-15%.

Strategic Focus and Expansion Plans

Nitin Spinners is emphasizing value addition and capacity expansion:

• The company is focusing on developing value-added products in both fabric and yarn segments.
• A significant capacity expansion is underway, with plans to increase spinning capacity by 20% to 132,400 tonnes per annum.
• Weaving and finishing fabric capacity is set to increase by 88% to 75 million meters per annum.
• The expansion project, with an approximate cost of Rs 1,120 crore, will be funded through internal accruals and term debts.

Sustainability Initiatives

In line with industry trends towards sustainability, Nitin Spinners is undertaking several initiatives:

• Adding 11MW(DC)/9.6MW(AC) of renewable solar power capacity.
• Signed a Power Purchase Agreement for procurement of 18 MW hybrid power under a Group Captive Model.
• The company is focusing on eco-friendly practices, including the use of sustainable fibers like BCI, organic, and regenerated cotton, with about 43% of production incorporating these materials.

As Nitin Spinners continues to navigate global market challenges, its focus on value-added products, capacity expansion, and sustainability initiatives positions the company for potential growth in the evolving textile industry landscape.