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    Nitin Spinners Limited

    NITINSPIN
    Textiles·5 Aug 2025
    Management Summary

    Nitin Spinners reported a marginal decline in Q1 FY26 revenue to INR793 crores and a 6% decline in EBITDA to INR111 crores, with PAT at INR41 crores. This was attributed to lower yarn prices and export demand amidst global uncertainties and new US tariffs. Despite these challenges, the company maintained high capacity utilization (over 96% for spinning) and is progressing with its INR1120 crores capital expansion plans, aiming for improved margins through value-added products and renewable energy initiatives.

    Highlights

    5

    • Spinning capacity operating at over 96% utilization, while weaving and finishing division are operating at more than 90%.

    • Expects to reach last year's revenue for FY26, with production capacities running at full stream.

    • Maintained margins around 14-15% for the last 6-7 quarters despite higher domestic cotton prices.

    • Well-diversified product portfolio and customer base across different geographies.

    • Steadily progressing on the capital investment plans as per schedule, including renewable power initiatives.

    Concerns

    5

    • Revenue for Q1 FY26 stood at INR793 crores, a marginal decline of 1% on a year-on-year basis.

    • EBITDA for the quarter stood at INR111 crores, a 6% decline on Y-o-Y basis.

    • EBITDA margin for the quarter is 14.02%, a decline of 77 bps as compared to last year same period.

    • Profit after tax for the quarter stood at INR41 crores, a 3% decline as compared to last year's same period.

    • US government announced 25% tariffs on imports from India, creating uncertainty for the textile industry.

    What Changed1

    vs Q2 FY26

    Risks discussed5 → 4 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹793 Cr-1%YoY
    2. 02EBITDA₹111 Cr-6%YoY
    3. 03EBITDA Margin14.0%
    4. 04PAT₹41 Cr-3%YoY
    5. 05EPS₹7.29

    Segment breakdown

    Export
    62% Revenue Contribution
    Domestic
    38% Revenue Contribution
    List

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹1,120 crores

    Debt

    Debt disclosed

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Total Revenue
    last year revenue
    		High
    Revenue
    Incremental Revenue from Capex
    INR1,000 crores
    		High
    Margin
    EBITDA Margin
    around 14%, 15%
    		High
    Margin
    Margin Profile
    better than what it is today
    		Medium
    Margin
    Mid-teens margin
    mid-teens
    		High
    Capex
    IRR Payback for INR1120 crores Capex
    14% to 15%
    		High
    Product Mix
    Fabric Portion of Total Revenue
    35%, 40%
    		Medium
    Product Mix
    Value-Added Product Revenue Contribution
    50% level
    		Medium

    Resolution of US Tariffs

    Within calendar year 2025 (next 3-4 months).
    Current25% tariffs announced, industry evaluating impact.
    TargetTariffs settled at lower levels or clear mitigation strategy.

    Why it matters

    Affects export competitiveness and overall market sentiment for Indian textiles.

    Actually, in industry, we feel that whatever will happen will happen within this calendar year. So this should settle down by the end of this year.

    How to verify

    risks_and_concerns[risk='US Tariffs (25% on Indian imports)'].management_stance

    Risks & concerns

    4
    RiskSeverity

    US Tariffs (25% on Indian imports)

    US government announced 25% tariffs on imports from India, creating uncertainty and affecting exporters, though Nitin Spinners has limited direct exposure. — Management acknowledged

    high

    Global Market Uncertainties & Geopolitical Challenges

    Global procurement and shipments slower than expected due to ongoing tariff uncertainties and geopolitical challenges. — Management acknowledged

    medium

    Cotton Price Volatility (Indian MSP higher than international)

    Raw material prices in India are higher than international due to lower crop and MSP, but cotton prices are seen as bottomed out with limited downside. — Management acknowledged

    medium

    Demand Slowdown in US/EU

    Overseas buyers cautious, leading to lower export demand, but inventory levels across brands and retailers are at historic lows, signaling potential for revival. — Management acknowledged

    medium

    Q&A highlights

    8

    “First of all, as I explained in my opening remarks also, that we are not directly impacted because our exposure to the U.S. is very limited. So that is one part. So directly, we have not shared or any, on the tariff part or any reduction or rebate on that part to our customers in the U.S. So that has not happened.”

    Clarifies the company's direct exposure to US tariffs and their current strategy regarding cost sharing.

    asked by Rina, Individual Investor

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY26 Financial Performance Overview

    Nitin Spinners reported a marginal revenue decline of 1% year-on-year, reaching INR793 crores in Q1 FY26. EBITDA decreased by 6% to INR111 crores, resulting in an EBITDA margin of 14.02%, down 77 basis points from the previous year. Profit after tax also saw a 3% decline, settling at INR41 crores, with an EPS of INR7.29 per share. Despite the decline, the company maintained high capacity utilization, with spinning at over 96% and weaving/finishing at over 90%.

    02

    Industry Headwinds and US Tariff Impact

    The textile industry is experiencing a transient📎 phase with slower global procurement due to tariff uncertainties and geopolitical challenges🌐. The recent 25% US tariffs on Indian imports are a concern, though Nitin Spinners stated its direct exposure to the US market is very limited. Management is evaluating mitigation strategies and expects the tariff situation to settle within the calendar year, with potential impacts lasting 3-4 months.

    03

    Strategic Capital Expansion and Margin Improvement

    The company is progressing with its INR1120 crores capital investment plan, with INR50 crores allocated for modernization in FY26 and major expansion in FY27. This expansion is expected to generate an incremental revenue of INR1,000 crores and achieve an IRR payback of 14-15%. The strategy focuses on increasing fabric capacity and value-added products, aiming for a higher margin profile in the 'higher teens' post-expansion.

    04

    Product Mix and Value-Added Focus

    Nitin Spinners aims to strategically shift its product mix, projecting the fabric portion of total revenue to increase from the current 23-24% to 35-40% post-capex. The overall contribution from value-added products is targeted to reach a 50% level. This strategic pivot is intended to enhance overall margins, as value-added products typically offer better profitability than yarn.

    05

    Export and Domestic Market Dynamics

    Exports contributed 62% to Q1 FY26 revenue, with domestic sales making up 38%. The company is actively exploring opportunities from the FTA with the UK, which is expected to fructify fully by January 2027. Domestically, the demand scenario is described as 'quite robust,' with expectations of pickup during the festive season and growth from new and existing brands.

    06

    Raw Material and Operational Efficiency

    While Indian cotton prices are currently higher than international rates due to a lower crop and Minimum Support Price (MSP), management believes prices are near their bottom with limited downside. The company maintains high capacity utilization, with spinning at over 96% and weaving/finishing at over 90%. Initiatives in renewable power, including 20 megawatts of new capacity, are expected to reduce power costs by 30%.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.