Nitin Spinners Ltd (NITINSPIN) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, please stay connected. The call will begin shortly. Thank you.
Moderator: Ladies and gentlemen, good day, and welcome to Nitin Spinners Limited Q2 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Avnish Chandra from Smith's Limited. Thank you and over to you, sir.
Avnish Chandra (SMIFS Limited): Thanks a lot, Huda, and thank you very much, everyone, for joining this call. On behalf of Yes Securities Limited, I welcome you all to second quarter first half financial year FY '27 earning conference call of Nitin Spinners Limited. We are pleased to host the top management of the company. Today, we we have with us Mr. Dinesh Nolkha, Chairman and Managing Director of the company, and Mr. P. Maheshwari, Chief Financial Officer of the company. We will start the call with initial commentary on the results, and then we will open the floor for question and answer. Now I will hand over the call to Mr. P. Maheshwari, CFO of the company. Over to you Maheshwari sir.
P. Maheshwari (Nitin Spinners Ltd): Thank you, Avnish ji. Good evening and a warm welcome to all the participants to this Q2 and H1 FY '27 earning call of Nitin Spinners Limited. I hope you have had a chance to go through the financial results and the investor presentation available on our website and the stock exchanges. I will start with a brief overview on operational and financial performance for the quarter, post that, our CMD, Mr. Dinesh Nolkha will give you an overview of industry and business scenario. Coming to our Q2 FY '27 financial and operational performance, Q2 FY '27 has been another strong all-round quarter for the company. Total revenue for the quarter stood at ₹985.2 crores as against ₹760.1 crores in Q2 FY '26, that is a growth of 29.6% year-on-year. This is our highest-ever revenue quarterly revenue, third time in a row, driven by higher yarn realization, stable demand scenario and higher sale volume in fabric business. EBITDA for the quarter stood at ₹175.5 crores as against ₹99.6 crores, that is a growth of 76.3% YoY, driven by better realization, optimum capacity utilization and ongoing cost saving initiatives. EBITDA margin stood at 17.8% as against 13.1% in Q2 FY '26, that is an expansion of 471 basis points, and was sustained at the Q1 FY '27 level of 17.78%. Profit after tax is at ₹88.7 crores as against ₹34.8 crores, that is a growth of 155% YoY. EPS for the quarter stood at ₹15.77 per share and cash EPS at ₹22.57 per share. In terms of geographical split of the revenue, exports contributed about 68% and domestic 32% of the revenue. In Q2 FY '27, spinning capacity utilization was over 98%, and woven fabric capacity utilization was about 90% during the quarter. Now coming to H1 FY '27 financial and operational performance, for H1 FY '27, total revenue stood at ₹1860.20 crores as against ₹1553.4 crores, that is a growth of 19.8%. EBITDA stood at ₹331 crores as against ₹210.8 crores, that is a growth of 57%, with EBITDA margin improving by 423 basis points. PAT stood at ₹163.9 crores as against ₹75.8 crores, that is a growth of 116.4%. EPS for half year is 29.16 and cash EPS ₹42.65 per share. Regarding capex, we are pleased to inform that partial trials have commenced in all the segments of the expansion projects. Commercial commission production in all the divisions is expected to commence by the end of December '26 as planned.
P. Maheshwari (Nitin Spinners Ltd): Our projects progressing as per schedule and expected to get operational by end of December '26. This will take our renewable energy capacity from 41 MW to about 95 MW and meeting about 50% to 55% of power needs post expansion. That is all from my side. Now may I request Shri Dinesh ji to share his insights about the industry and business scenario. Thank you, and over to Dinesh ji.
Dinesh Nolkha (Nitin Spinners Ltd): Thank you, Maheshwaran ji. Good evening everyone. The first half of financial year '27 has been favorable for the Indian textile industry, particularly for upstream players. Yarn demand stayed healthy with steady buying from major importing countries as well as domestic players amidst stable tariff environment. Cotton prices remain firm during the quarter. Domestic prices moved up around ₹67 to ₹68,000 per candy on lower arrivals and concerns that deficient rainfall in some parts of India will lower the 26-27 crop. The international cotton prices also firmed up to about 80 cents per pound. The import duty exemption on cotton improved the raw material availability and is extended for the nearly half of this year. Importantly, domestic cotton prices continue to remain more or less at par with international cotton prices. This keeps the Indian yarn competitive globally and helps spinning spreads remaining healthy. Further various trade policy measures will increase competitiveness of Indian textile industry over long-term, especially the free trade agreements which is happening all around the world by the, by India is going to help all of us in improving the competitiveness of the textile industry. In the near term, the inflationary conditions across commodities and services and liquidity chain in downstream channels are factors which are closely to be watched. But the long-term outlook and medium to long-term outlook for the industry remains positive. Coming to our company's performance, Q2 of this has been a landmark quarter for the company. We achieved some key milestones together: highest-ever quarterly revenue, highest-ever quarterly exports, and highest-ever quarterly revenue for our fabric business. Also, the EBITDA margin was sustained at a reasonable level. The factors that have driven this all-round performance are better realizations, optimum asset utilization, a higher share of exports, and other cost-saving initiatives taken by the company over over time. As informed by Maheshwari ji, our expansion plans are going on as per schedule. Once these are commissioned and ramped up, a larger share of our yarns will be consumed in-house and will enable us to sell more value-added products in fabric as well as yarn product portfolio. Thereby strengthening our profile further. Further the renewable power capacities will help us in optimizing our costs going forward. I would like to highlight here that the company is steadily moving up the value chain by enhancing the capacities in the finished fabric and value-added yarns, and they're well positioned to deliver sustainable growth in the coming years with an expanding presence in the higher-value yarns. With this, I would like to open the floor for the question and answers. Thank you.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jatin Damania from Swan Investments. Please proceed.
Jatin Damania (Swan Investments): Good evening, sir, and congratulation on the good set of numbers. Sir, just wanted to understand now since you indicated that the cotton price in the domestic market has firmed up and is in line with the international level, so just wanted what was the spread in Q2 and how do you see the spreads given the new cotton supply coming in?
Jatin Damania (Swan Investments): was good. But when you look at the EBITDA margin on a sequential basis, we were flat. Now since more of the value added product has come into into consideration, just wanted to understand what led to a flat margin or what was the one-off expenses that was pertaining to the new capacity that has hit in the P&L?
Dinesh Nolkha (Nitin Spinners Ltd): In this in this particular quarter, we have some small revenues coming in from of our trial production and all the cost, etcetera, related with that is also being debited to the P&L account only. And that is means about the top line is about 21 crores. We have also displayed that we have produced about 41 lakh meters, out of which the revenue was, some was in stock and some was sold for 21 crores with a EBITDA I think, loss of about 1 crore. So, if we remove if we if we so, if we remove that part out of this, the EBITDA will be around 18.5%.
Jatin Damania (Swan Investments): Okay, okay. So, that will be almost around 100 bps improvement. And, sir, once this capacity ramps up now, just on the new capacity, which is a fabric and we are in increasing the yarn capacity, which is more of a backward integration, on an incremental capacity, what should be the EBITDA margin of the ROC once you'll assume once the capacity runs at the optimum level in FY '28, with your RE coming in?
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