Nitin Spinners Limited — Investor Meet, 31-01-2025: Analysts/Institutional Investor Meet/Con. Call Updates

1. **Financial Performance:** For Q3 FY '25, Nitin Spinners reported revenue of INR 839 Cr, reflecting a 2% quarter-over-quarter increase and an 11.7% year-over-year growth from INR 750 Cr. The nine-month revenue reached INR 2,464 Cr, up 17% from the previous year. EBITDA for the quarter was INR 117.16 Cr, with a margin of 13.97%, slightly up year-over-year. Profit after tax rose by 6.2% to INR 44.78 Cr, while cumulative PAT for the nine-month period jumped 39.7% to INR 129.06 Cr.

2. **Future Outlook and Growth Drivers:** Management emphasized a positive industry outlook driven by stable cotton prices and improved demand dynamics, particularly in exports. A significant capex plan of INR 1,100 Cr has been approved, focusing on enhancing production capabilities in yarn and fabric, along with investments in renewable energy.

3. **Order Book and Operational Updates:** Currently, the company operates at over 95% spinning capacity and more than 90% in weaving and finishing. The expansion plans, including additional spinning spindles and weaving looms, aim to alleviate capacity constraints.

4. **Analyst Q&A Insights:**

- Analysts inquired about revenue and profitability, with management noting ongoing cost optimization efforts and stable raw material pricing, which should positively influence margins.

- Questions about market position highlighted increasing competitiveness and potential margin recovery driven by improved demand and strategic investments.

- Concerns regarding operational challenges were addressed with management's confidence in managing cost pressures and supply chain efficiencies.

- Discussions around capital allocation mentioned plans for substantial debt funding in the upcoming expansion, with a projected IRR of 14%-15%.

5. **Strategic Focus Areas:** The management has targeted continuous improvement in operational efficiencies, sustainable practices, and diversification into value-added products, which position the company well for future growth.

6. **Investor Insight:** With its strong revenue growth, strategic capex, and bullish market outlook, Nitin Spinners appears to be on a solid trajectory. The management’s focus on cost control and capacity expansion could suggest a favorable investment consideration. Maintaining a cautious approach may be prudent given the fluctuating market dynamics.