From textile glory to quarterly chaos, Nahar Spinning looks cheap… but so does a fire-sale at a bankrupt mall. Is there still alpha in this yarn stock, or is it just fluff? 🧵
Here’s your full EduInvesting 13-point analysis — satirical, savage, but financially sharp:
1. 🧷 At a Glance
With a Book Value of ₹413 and CMP at ₹271, Nahar Spinning screams “deep value.” But P/E of 63.5, ROE of 1%, and a 3-year EPS rollercoaster suggest that investors are spinning wheels in thin air. Is this just a value trap wrapped in cotton?
2. 🧵 WTF Do They Even Do?
NSML is part of the Nahar Group, and their core biz is:
- Cotton and blended yarn manufacturing
- Export of knitted garments
- Hosiery knitwear, mostly for global brands
- Integrated ops, from spinning to ready-to-wear exports
In short: if you’ve worn an Indian-made T-shirt in Europe, Nahar might’ve spun the yarn.
3. 📉 Financials – Profit, Margins, YOY Drama
| Year | Revenue (₹ Cr) | PAT (₹ Cr) | OPM % | ROE % | EPS (₹) |
|---|---|---|---|---|---|
| FY22 | 3,594 | 502 | 23% | 33% | 139.11 |
| FY23 | 2,797 | 111 | 8% | 7% | 30.69 |
| FY24 | 3,050 | -51 | 3% | 1% | -14.15 |
| FY25 | 3,285 | 12 | 5% | 1.04% | 3.42 |
🔁 One good year (FY22), followed by two years of cotton-spun heartbreak.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹271
- Book Value: ₹413 → P/B = 0.66x
- P/E: 63.5x 😬
- Market Cap: ₹979 Cr
- ROCE: 3.85%
✅ Undervalued by P/B
❌ But overvalued by P/E → the value trap tension is real
5. 📢 What’s Cooking – News & Triggers
🧾 Latest activity:
- KYC updates & compliance notices
- Trading window closed for Q1
- Minimal public comms = sleepy promoter behavior 😴
No real capex, no dividends, no expansion headlines. Just trying to survive cotton price cycles.
6. 🧾 Balance Sheet – Assets vs Spinning Dreams
| Metric | FY25 |
|---|---|
| Borrowings | ₹1,101 Cr |
| Net Worth | ₹1,489 Cr |
| D/E | ~0.74x |
| Total Assets | ₹2,750 Cr |
| Fixed Assets | ₹864 Cr |
🔧 Not overleveraged.
But no visible return either.
7. 💵 Cash Flow – Where’s the Liquidity?
| FY | CFO (₹ Cr) | FCF Quality |
|---|---|---|
| FY23 | ₹609 | Excellent |
| FY24 | -₹395 | Woah |
| FY25 | ₹93 | Meh |
One year it rains cash, next year it bleeds. FY24 = cash drain due to raw material costs + operating inefficiencies.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 1.04% |
| ROCE | 3.85% |
| OPM (FY25) | 5% |
| D/E | 0.74x |
| Interest Coverage | ~1x |
🛑 Red flag: Interest coverage is dangerously low
🧪 This business needs a turnaround — or better cotton pricing — fast.
9. 📈 P&L Breakdown – Quarterly Saga
- Q4FY25 PAT: ₹22 Cr (biggest in 5 quarters)
- FY25 net profit = ₹12 Cr, so Q4 saved the year
Still, margins are weak across all 4 quarters — with many barely breaking even. Q4 was a relief rally, not a trend.
10. 🧺 Peer Comparison – How Does It Stack?
| Company | ROE (%) | P/E | P/B |
|---|---|---|---|
| KPR Mill | 17% | 51x | 8.2x |
| Vardhman Textiles | 9.3% | 16.5x | 1.5x |
| Welspun Living | 13.7% | 21.7x | 2.8x |
| Nahar Spinning | 1.04% | 63.5x | 0.66x |
It’s like wearing Louis Vuitton on EMI — flashy multiple, poor returns.
11. 🧪 Misc – Promoters, Shareholding & Governance
| Shareholder | Stake (Mar 2025) |
|---|---|
| Promoters | 67.42% |
| FIIs | 0.00% |
| DIIs | 0.59% |
| Public | 31.96% |
📌 Promoter holding is high and stable.
📉 No mutual fund or institutional interest.
😐 Sleepy capital allocation. Dividend payout is just ~9% of profits (past 3 years).
12. 🎯 Fair Value Range – Kya Lagta Hai?
Let’s estimate conservatively:
- FY26E EPS = ₹12–15 (assuming margin improvement + cotton prices normalize)
- Assign P/E = 10x–15x (low-growth textile multiple)
🎯 Fair Value = ₹120 to ₹180
CMP ₹271 = way above intrinsic fair value unless a textile supercycle kicks in.
13. 🧑⚖️ EduInvesting Verdict™
✅ What’s working:
- Low P/B = Looks undervalued
- Debt under control
- Promoter holding stable
❌ What’s broken:
- Margins, cash flow, ROE – all need ICU
- 3-year financial performance = flatline
- High P/E = investors betting on a turnaround that isn’t here yet
Final Word:
“Nahar Spinning is like an old Singer sewing machine — reliable in legacy, but outdated in pace. Unless the cotton winds shift massively, investors may be stuck threading needles for a return.”
✍️ Written by Prashant | 📅 10 July 2025
Tags: Nahar Spinning, Textile Stocks India, Cotton Yarn, Low P/B Stocks, Turnaround Stories, ROCE Analysis, Value Trap, EduInvesting
