Any current/future new fundraising through debt or equity?

Nandan Denim is planning to raise Rs.100 Crores from strategic investors by issuing warrants. The fundraising is intended to support new business expansion and add future growth engines. This capital infusion is needed as government subsidy schemes (TUFS and Gujarat Government scheme) are being withdrawn or ending. The company has already spent around Rs.550 Crores of the Rs.600 Crores capex, with Rs.40 Crores remaining, expected to be spent within a month. The equity raise aims to fund capacity additions or new lines of business related to Nandan Denim. There is no immediate seriousness or pl

Any current/future capex/capital investment/strategic investment?

Ongoing capacity expansion nearing completion with about Rs. 40 Crores left to invest in plant and machinery, expected to be spent within a month. Total capex for the current expansion around Rs. 600 Crores, with Rs. 550 Crores already invested. Expansion includes Denim manufacturing capacity increase from 99 million meters to 110 million meters per annum and spinning capacity from 70 to 124 tonnes. Post-expansion, the company aims to diversify product and market offerings, including entry into yarn dyed shirting business. Nandan is exploring raising Rs. 100 Crores from strategic inves

Future growth expectations in sales/revenue/volumes?

Nandan Denim expects a 20% volume growth post capacity expansion from 100 million meters to 120 million meters, with stabilization expected by Q4 FY2017 and robust growth in FY2017-18 (Page 8). The domestic market is growing at a CAGR of 15%+, supporting new capacity additions and demand for fashion fabric (Page 5). Export volumes currently at ~12%, with an intention to increase export share to above 25%-30% of total volumes, either through direct or deemed exports (Page 22). Long-term volume and revenue improvement will depend on capacity utilization, market dynamics, execution of development

Future growth expectations in earnings/operating earnings/profits/EPS?

EBITDA currently around Rs. 200 Crores; expected to rise to Rs. 300 Crores from expansion in 2 years. Operating margins expected to improve further once expanded spinning capacity is operational. EBITDA growth of 8% YoY reported in Q1 FY2017; profit before tax grew 18% YoY. Continuous efforts underway to shift product mix towards more value-added Denim, enhancing margins. New capacity and technology adoption expected to drive productivity and profitability sustainably. Volume growth anticipated with capacity increase from 99 million to 110 million meters, with 20% volume growth expected post-e

Nandan Denim LtdQ1 FY17Textiles & Apparels

Nandan Denim Ltd Q1 FY17 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹2.47P/E: 9.7Market Cap: ₹356 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

Nandan Denim expects a 20% volume growth post capacity expansion from 100 million meters to 120 million meters, with stabilization expected by Q4 FY2017 and robust growth in FY2017-18 (Page 8).
The domestic market is growing at a CAGR of 15%+, supporting new capacity additions and demand for fashion fabric (Page 5).
Export volumes currently at ~12%, with an intention to increase export share to above 25%-30% of total volumes, either through direct or deemed exports (Page 22).
Long-term volume and revenue improvement will depend on capacity utilization, market dynamics, execution of development projects, and market acceptance of higher value-added products (Pages 16-18).
The company sees export market as a growth driver to balance domestic market fluctuations (Page 22).
Continuous efforts are being made to shift product mix towards value-added denim to improve margins and revenue (Pages 10-11).

Margin guidance

Category 3

EBITDA currently around Rs. 200 Crores; expected to rise to Rs. 300 Crores from expansion in 2 years.
Operating margins expected to improve further once expanded spinning capacity is operational.
EBITDA growth of 8% YoY reported in Q1 FY2017; profit before tax grew 18% YoY.
Continuous efforts underway to shift product mix towards more value-added Denim, enhancing margins.
New capacity and technology adoption expected to drive productivity and profitability sustainably.
Volume growth anticipated with capacity increase from 99 million to 110 million meters, with 20% volume growth expected post-expansion.
Export share targeted to increase from current ~18-20% to 25-30%, supporting future growth.
Margin improvements projected through product mix change, better pricing, and cost control.
Steady improvement expected year-on-year; April 2017 expected better than 2016, with continued progress thereafter.

See what Nandan Denim Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

Nandan Denim is planning to raise Rs.100 Crores from strategic investors by issuing warrants.
The fundraising is intended to support new business expansion and add future growth engines.
This capital infusion is needed as government subsidy schemes (TUFS and Gujarat Government scheme) are being withdrawn or ending.
The company has already spent around Rs.550 Crores of the Rs.600 Crores capex, with Rs.40 Crores remaining, expected to be spent within a month.
The equity raise aims to fund capacity additions or new lines of business related to Nandan Denim.
There is no immediate seriousness or plan to launch a branded segment in the next 12 months; focus remains on capacity expansion and value-added products.

Order book

The transcript pages provided do not explicitly mention the current or expected order book or pending orders for Nandan Denim Limited as of August 11, 2016. However, related insights include: - The company is in the final stages of capacity expansion, expecting new capacities to be operational and stabilized by Q4 FY2017, which should drive volume growth. - Management is optimistic about growing export volumes, aiming to increase from around 18-20% to above 25-30% over time. - The market environment is positive, with denim demand growing domestically and actively exploring export markets to diversify and offset any domestic oversupply risks. - Continuous investments are made in infrastructure, market research, and marketing to drive product quality and order inflow. - No specific order book numbers or pending order values are disclosed in the discussed transcript.

See what Nandan Denim Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes

Ongoing capacity expansion nearing completion with about Rs. 40 Crores left to invest in plant and machinery, expected to be spent within a month.
Total capex for the current expansion around Rs. 600 Crores, with Rs. 550 Crores already invested.
Expansion includes Denim manufacturing capacity increase from 99 million meters to 110 million meters per annum and spinning capacity from 70 to 124 tonnes.
Post-expansion, the company aims to diversify product and market offerings, including entry into yarn dyed shirting business.
Nandan is exploring raising Rs. 100 Crores from strategic investors via issuance of warrants to fund new business/ future growth beyond current expansion.
No immediate plans for launching a branded segment in the next 12 months.
Future capital expenditure beyond current projects will be considered after stabilization of ongoing expansions.

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Nandan Denim Ltd Q1 FY17 Earnings Call Analysis

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