At a Glance
Nitin Spinners Ltd, based in Bhilwara, Rajasthan, spins a global yarn story with its cotton and blended yarn, knitted, and woven fabrics. Over 50+ countries buy from them. But while the threads are strong, margins are thinning, working capital cycles are stretching, and profits are now more woven with interest and depreciation than actual growth.
🧠 TL;DR
- 🧶 One of India’s largest cotton yarn and fabric exporters
- 📉 Margins down from 24% to 14% in 2 years
- 🏭 CWIP cleared, but high depreciation now eating into profits
- 💸 ROE down to 14% from 37% highs
- 📈 Stock still up 60% in 5 years — outperforming textiles peers
- 💡 Fair Value Range: ₹330–₹400 based on 12–14x normalized EPS
🧵 1. What Does Nitin Spinners Actually Do?
“Spinning money from thread… unless interest cost spins it back.”
- Started in 1992, based in Rajasthan
- Core products:
- Cotton & blended yarn
- Knitted fabrics
- Greige & finished woven fabrics
- Supplies to 50+ countries
- B2B export-oriented model (low brand, high volume)
- Recent push into renewable energy via 18.12% stake in CGE II Hybrid for 18MW power
🧠 Unlike players like Page Industries (brand-led), Nitin is infra-intensive — capex cycles define its fate.
💰 2. Financials at a Glance (FY21–FY25)
| ₹ in Cr | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue | 1,622 | 2,690 | 2,404 | 2,902 | 3,306 |
| EBITDA | 257 | 652 | 297 | 377 | 471 |
| EBITDA Margin (%) | 16% | 24% | 12% | 13% | 14% |
| Net Profit | 69 | 326 | 165 | 132 | 175 |
| ROE (%) | 11% | 37% | 12% | 12% | 14% |
| EPS (₹) | 12.25 | 58.01 | 29.32 | 23.39 | 31.20 |
🧾 Note: FY22 was peak margins, post-COVID. Now settling into normalized cycles.
📦 3. What Changed in 5 Years?
- Sales doubled from ₹1,622 Cr (FY21) → ₹3,306 Cr (FY25)
- Profit didn’t — from ₹69 Cr → ₹175 Cr (only 2.5x)
- Margins collapsed post FY22 due to:
- 🧃 Global cotton price volatility
- 💡 High power/fuel cost
- 💸 Depreciation up 70% (due to asset-heavy expansions)
And here’s the fun part:
In FY22, net profit was ₹326 Cr with 24% OPM.
In FY25, sales are higher — but profit is half that.
🧾 4. Balance Sheet Biryani
- Gross Debt: ₹1,165 Cr
- Net D/E: ~0.9x
- Interest cost: ₹90 Cr (FY25)
- Depreciation: ₹148 Cr (also FY25)
- Capex funded via both equity + debt
So yes, profit before depreciation and interest looks nice. But when you subtract those?
“EBITDA is the new mirage.”
🧊 Add to that a cash conversion cycle of 137 days, and you’re basically loaning your vendors free money.
📉 5. Valuation & Peer Comparison
| Company | CMP (₹) | P/E | ROCE | 5Y CAGR |
|---|---|---|---|---|
| Nitin Spinners | ₹382 | 12.3x | 13.2% | 60% |
| KPR Mills | ₹1,114 | 46.7x | 20.3% | 80% |
| Vardhman Textiles | ₹468 | 15.3x | 11.2% | 25% |
| Trident | ₹30 | 41.4x | 9.5% | 21% |
👑 Nitin is cheapest on P/E and has better ROCE than Trident, but way lower brand recall than KPR.
🧠 6. Fair Value Calculation
Let’s assume normalized EPS = ₹28 (excluding FY22 boom)
- If P/E settles at 12x → ₹336
- If market re-rates to 14x (comparable to peers) → ₹392
🎯 Fair Value Range: ₹330 – ₹400
📉 Downside if cotton crisis or global slowdown drags — ₹300 is the floor
📈 Upside if margins go back to 16%+ and interest cost drops
🥲 7. So, Should You Stitch This into Your Portfolio?
Nitin is a well-run, export-oriented textile play. Management is conservative, and it hasn’t over-promised.
But…
- Capital intensity is high
- Working capital cycle is bloated
- Profit is highly sensitive to cotton prices, power costs, and global demand
It’s not flashy like Page, not cheap like Trident, but somewhere in the middle — quietly compounding.
More of a “hold for stability” than “bet for multibagger”.
📦 Tags
Nitin Spinners, Textile stocks, Cotton yarn, Bhilwara companies, ROE analysis, Working Capital Cycle, Export stocks, KPR Mills vs Nitin, Spinning mills India, EduInvesting Recap
✍️ Written by Prashant | 📅 18 June 2025
