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1. At a Glance
Four quarters ago this company posted an operating profit of ₹14.8 crore. This quarter it posted ₹127.11 crore, on revenue of ₹966.10 crore. Same spindles, same cotton, same Ludhiana. Roughly eight and a half times the operating profit.
Net profit came in at ₹69.88 crore against ₹15.96 crore in the June 2025 quarter — a rise of about 338%. EPS moved from ₹4.42 to ₹19.36, on an unchanged share count of 3.61 crore shares. Operating margin for the quarter was 13%, the highest in the ten quarters on record here, and a long way from the 2.1% printed in December 2025.
For context on how much a single quarter can carry: the full financial year ended March 2026 produced ₹158 crore of operating profit across twelve months. This one quarter did 80% of that.
Spinning is a spread business. You buy cotton, you sell yarn, and your entire existence is the gap between the two. When the gap widens, everything looks like operating leverage; when it narrows, the same fixed costs — ₹91.35 crore of annual depreciation, ₹320.42 crore of employee cost — sit there regardless. Nahar Spinning’s ten-quarter record is a reasonably pure sample of both states.
Elsewhere in the period: the board proposed reappointing Dinesh Oswal as Managing Director from January 1, 2027, along with two independent directors from August 2027; a dividend record date was fixed for September 4; and the AGM was set for September 25, 2026. The full-year picture underneath all this — sales of ₹3,218 crore in FY26 against ₹3,285 crore in FY25 — is a different shape entirely, which the P&L section gets to.
2. Introduction
Nahar Spinning Mills was incorporated in 1980 and manufactures cotton yarn, blended yarn and hosiery knitwear. It is part of the Nahar Group, and is described as one of the largest cotton yarn manufacturers and an exporter of knitted garments.
The physical footprint is in Punjab and Madhya Pradesh: manufacturing units at Ludhiana, Jitwal Kalan, Jodhan and Lalru, plus Raisen and Mandideep. Across these it runs spinning, mercerizing-cum-dyeing, knitting and garmenting. Two cogeneration power plants sit at Ludhiana and Lalru at 3.8 MW and 4.8 MW, and solar stations of 0.81 MW, 0.78 MW and 1.3 MW at Jodhan, Lalru and Mandideep. Rooftop solar capacity was recorded at 14,470 KW.
Exports run to Bangladesh, China, Egypt and Vietnam, with longstanding relationships with garment retailers in the US and Canada. Recorded export sales share was 49.2%, against 62.70% in the earliest year on record. Export destinations were recorded at 35 countries.
The capacity story is recent. In FY24 the company completed an expansion of 31,200 spindles at Lalru, plus 768 air-jet spindles, and a modernization programme — financed in part by a ₹262 crore term loan from banks and the balance from internal accruals. Installed capacity now stands at 5,73,408 spindles, 1,080 rotors and 768 air-jet spindles. Cotton consumption was recorded at 800,000 bales a year, doubled from the 400,000 of earlier years. Permanent employees were 10,497.
In July 2025 the board approved a further ₹325 crore modernization of the spinning units and ₹25 crore of solar PV capex, to be completed by FY28, stated as aimed at efficiency and exports.
On the financing side, CRISIL reaffirmed the long-term rating at ‘A’ and short-term at ‘A1’ in August 2025, with the outlook revised to Stable, and reaffirmed a ₹23.5 crore commercial paper programme. A July 2026 CRISIL bulletin lists the bank facility stack: cash credit lines of ₹545 crore from Punjab National Bank, ₹280 crore from State Bank of India and ₹100 crore from IDBI Bank, term loans of ₹265 crore, ₹152 crore and ₹7.4 crore, and letters of credit totalling ₹159 crore — all at Crisil A/Stable or Crisil A1.
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3. Business Model: WTF Do They Even Do?
They turn cotton bales into yarn, and some of that yarn into knitwear that ends up on a shelf in Ohio.
That is the whole thing, and the elegance is in how few decisions it leaves you. There is no brand to build, no customer to charm, no app. You buy 800,000 bales of cotton a year. You spin it through 5,73,408 spindles, 1,080 rotors and 768 air-jet spindles. Some goes out as yarn. Some gets mercerized, dyed, knitted and stitched into hosiery knitwear that goes to Bangladesh, China, Egypt, Vietnam, or to retailers in the US and Canada.
The FY24 revenue split tells you what kind of company this is: sale of products around 96%, export incentives around 3%, sale of services around 1%. That 3% is not decoration — it’s a line item large enough to have its own policy risk, in a business where the full-year operating margin was 4.9%.
The cost stack is where the drama lives. Raw material cost was ₹2,108.21 crore in FY26 against sales of ₹3,217.92 crore — roughly two-thirds of the top line is cotton. Power and fuel was ₹304.86 crore. Employee cost was ₹320.42 crore. Those last two barely move: power and fuel has sat between ₹233 crore and ₹310 crore
