Release Date: November 08, 2024
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) recorded its highest ever quarterly revenue of INR 5,822.5 crores, marking an 11.5% year-over-year increase.
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The company achieved a 48% increase in EBITDA for the half-year period, indicating strong operational performance.
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The debt-equity ratio improved from 1.17 in March 2024 to 0.97 by September 2024, reflecting better financial management.
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Nitin Spinners Ltd (BOM:532698) reported its highest ever quarterly exports of INR 522 crores, showcasing strong international market penetration.
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The company is focusing on increasing the share of value-added products and investing in renewable energy, which could drive long-term sustainable growth.
Negative Points
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Global demand remains subdued due to geopolitical tensions, impacting overall sales growth potential.
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There is a significant disparity between domestic and international cotton prices, affecting profit margins.
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The company faces challenges in expanding its garment export capacity due to limitations in current infrastructure.
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The knitting segment is experiencing lower value addition, impacting overall profitability.
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Nitin Spinners Ltd (BOM:532698) is cautious about capital allocation for expansion due to ongoing market disruptions.
Q & A Highlights
Q: How do you see domestic demand and export demand recovery after Q2, especially during the festive season? A: Domestic demand has been slightly improving, particularly in the last one or two months leading up to the festive season. We expect better domestic demand in the second half due to seasonal requirements. Global demand remains subdued due to geopolitical tensions, but we are maintaining momentum by exploring new markets and deepening relationships with existing customers. (Respondent: Unidentified_4)
Q: How has the political situation in Bangladesh affected your business, and what are the medium to long-term prospects? A: The transition in Bangladesh was smooth and did not significantly affect our yarn business. However, there are small issues cropping up, leading customers to look for new suppliers. This scenario presents an opportunity for India, and as a fabric supplier, we can benefit from increased domestic demand. (Respondent: Unidentified_4)
Q: What is your strategic plan for capacity expansion, and when can we expect an announcement? A: We are cautious about capital allocation and are evaluating products with long-term strategic value and better margins. We are studying various avenues and firming up our plans, which is taking time. We will announce our plans shortly. (Respondent: Unidentified_4)