Nitin Spinners Ltd Q2 FY26 Earnings Analysis
Published 26 May 2026 | Textiles & Apparels | Market Cap: ₹3.3K Cr
Price
₹554
Market Cap
₹3.3K Cr
P/E Ratio
18.3
Earnings Summary
Capacity expansion underway: spinning capacity to increase by ~25%, fabric division capacity to more than double, driving future growth. The company plans to increase revenues through a capex of about INR 1,100 crores, expanding spinning capacity by ~25% and fabric capacity by over 50%, partially benefitting FY '27 and fully FY '28 onwards.
📊 Revenue & Sales Performance
- →Capacity expansion underway: spinning capacity to increase by ~25%, fabric division capacity to more than double, driving future growth.
- →Incremental revenue from fabric expansion expected ~INR 1,000 crores annually once fully utilized (FY '28 onwards).
- →FY '27 revenue expected to increase by ~INR 400 crores from partial capacity ramp-up.
- →Current fabric revenues around INR 650-700 crores on 34-35 million meter capacity; post-expansion potential INR 1,300-1,400 crores annually.
- →Yarn volume stable; slight decline due to order deferrals expected to be recovered in current quarters.
- →Diversification into new geographies like UK, EU, Bangladesh, Turkey, and African markets planned to mitigate US tariff impact.
- →Growth driven by value-added yarns, blended yarns, and expanded fabric product basket targeting new segments (ladies, kids, uniforms, technical fabrics).
- →Expect volumes and revenues to at least reach prior year levels, with improvements post-normalization of market conditions.
📈 Profitability & Margins
- →The company plans to increase revenues through a capex of about INR 1,100 crores, expanding spinning capacity by ~25% and fabric capacity by over 50%, partially benefitting FY '27 and fully FY '28 onwards.
- →Incremental revenue from expansion expected around INR 400 crores for FY '27, with full revenue potential of INR 1,300-1,400 crores from fabric capacity by FY '28.
- →The company targets IRR around 12-15% on new capex, similar to existing margins despite margin compressions currently.
- →EBITDA margins compressed to about 13.1% in Q2 FY '26 from 14% earlier; further margin normalization is expected in the next 2 quarters with tariff normalization and lower raw material costs.
- →Net profit and EPS saw some decline in H1 FY '26 but management expects revenues to at least reach last year levels while cost efficiencies and expansion aid growth.
- →Working capital expected to increase by INR 200-250 crores to support higher revenues.
- →Management avoids explicit margin guidance but growth driven by capacity expansion and market diversification.
🏗️ Capital Expenditure Plans
- →Nitin Spinners is undertaking a major capex of about INR 1,100 crores focused on:
- → - Doubling fabric division capacity (more than 50% increase).
- → - Increasing spinning segment capacity by around 25%.
- →The new fabric capacity will add about INR 1,000 crores in annual revenue when fully utilized (expected by FY '28).
- →Partial production from new capacity expected starting September of next financial year, with around INR 400 crores revenue expected in FY '27.
- →The capex aims to move up the value chain for margin improvement, adding low weight products, industrial fabrics, technical products, and expanding product range for existing customers.
- →Maintenance capex is minimal and mostly charged to revenue, with modernization costs of INR 45-50 crores planned over 1.5 to 2 years for existing plants.
- →Investments in renewable energy (18 MW) worth INR 17.9 crores to reduce power costs by ~5%.
💰 Fundraising & Capital Structure
- →The company plans significant capex of around INR 1,100 crores mainly for capacity expansion in fabric and spinning segments.
- →They intend to fund this capex partly through debt while maintaining a prudent debt-to-equity ratio below 1:1.
- →The current average cost of borrowing is about 5.7% net of incentives.
- →Long-term debt-to-equity ratio stands at 0.53 as of September 2025, suggesting no immediate pressure from debt.
- →There is no explicit mention of raising funds through equity in the call transcript.
- →Management is focused on utilizing cheaper cost debt for growth without increasing financial burden.
- →No announcements or plans for fresh equity fundraising were indicated during the call.
📋 Order Book & Pipeline
- →There is no explicit mention of a current or expected order book or pending orders in the transcript.
- →However, it is noted that some customers deferred deliveries due to prevailing uncertainty and tariff issues.
- →The company expects these deferred orders to be fructified in the ongoing/current quarter.
- →Demand recovery is anticipated in the second half of the financial year, supported by government duty relaxations and potential trade deals.
- →The company remains focused on customer retention through sustained engagement and product mix optimization.
- →Growth plans include capacity expansion in yarn and fabric segments, which should help increase sales volumes.
- →Overall, the company anticipates improvement in revenue and margin normalization going forward.
Key Metrics
Frequently Asked Questions
What were Nitin Spinners Ltd Q2 FY26 results?
Capacity expansion underway: spinning capacity to increase by ~25%, fabric division capacity to more than double, driving future growth. The company plans to increase revenues through a capex of about INR 1,100 crores, expanding spinning capacity by ~25% and fabric capacity by over 50%, partially benefitting FY '27 and fully FY '28 onwards.
What is Nitin Spinners Ltd share price analysis?
Nitin Spinners Ltd currently shows a neutral. The stock trades at a P/E of 18.3 with a market cap of ₹3,253 Cr. Investors should review the full earnings analysis for detailed insights.
Is Nitin Spinners Ltd planning capital expenditure?
Nitin Spinners is undertaking a major capex of about INR 1,100 crores focused on: - Doubling fabric division capacity (more than 50% increase).
This analysis is AI-generated based on publicly available earnings data and concall transcripts. This is not investment advice. Please consult a SEBI-registered advisor before making investment decisions.