This article first appeared on GuruFocus .
Release Date: May 11, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Nitin Spinners Ltd ( BOM:532698 ) reported its highest ever quarterly revenue of Rs 859.8 crores in Q4 FY26, driven by improved demand and yarn prices.
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EBITDA for Q4 FY26 grew by 16.9% quarter-on-quarter and 8.4% year-on-year, with an EBITDA margin expansion to 15.17%.
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The company achieved a significant profit after tax increase of 29.2% quarter-on-quarter and 23.7% year-on-year.
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Exports contributed 63% of total revenue in Q4 FY26, showcasing strong international market presence.
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The company is progressing well with its CapEx plans, expected to commercialize in the second half of FY27, which will enhance capacity and product range.
Negative Points
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Revenue for FY26 was marginally lower by 2.8% year-on-year due to lower yarn and raw material prices, particularly in the first half.
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The textile industry faced challenges due to geopolitical tensions and supply chain disruptions, impacting demand and operational efficiency.
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The ongoing West Asia conflict has increased freight costs and transit times, affecting logistics.
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The company faces uncertainties regarding the removal of cotton import duties, which could impact raw material costs.
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There is a risk of increased competition and potential capacity additions in the industry, which could affect future margins.
Q & A Highlights
Q: Can you explain the benefits of the Rajasthan Investment Promotion Scheme for your new CapEx and its impact on project IRR? A: The scheme offers capital subsidies ranging from 20% to 27% based on capital allocation and employment generation. Additionally, there is a 5% interest subsidy on eligible fixed investments for five years, along with various rebates. These incentives will positively impact our project IRR over a 10-year period. (Respondent: Unidentified_4)
Q: What reduction in power costs do you expect from your renewable energy investments by FY28? A: We anticipate annual savings of around 50 crores once the projects are fully operational, with an expected saving of 30 to 35 crores during the current year. (Respondent: Unidentified_4)
Q: What EBITDA margins are you targeting for the upcoming fabric expansion project? A: We expect the margins for finished fabrics to be superior to yarn margins. Our overall margin target remains in the range of 16% to 20%. (Respondent: Unidentified_4)
Q: When will the new capacities for fabric and spinning be operational? A: We expect some fabric capacity to start between October and December, and spinning capacity by January to February next year. (Respondent: Unidentified_4)
Q: How sustainable are the current yarn spreads, and what historical trends do you see? A: Yarn spreads have historically ranged from 90 to 150 rupees. Considering inflation and reduced capacity, we believe the current spread of 120 to 125 rupees is sustainable. (Respondent: Unidentified_4)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
