Any current/future new fundraising through debt or equity?

There was a plan for fundraising of Rs. 100 crore through warrants to Polus Global Fund which was dropped. Warrants worth Rs. 50 crore had been converted in May 2016; however, the latest round (another 50 crore) was dropped. No specific mention of new fundraising through debt or equity in the current or future timeframe. The company's focus is on reducing existing debt, with a plan to repay about Rs. 65 crore in FY17-18, targeting an overall 10% debt reduction. No indication of raising fresh debt; rather, the emphasis is on debt reduction post-project completion.

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

The company has recently completed a major capacity expansion project worth Rs. 612 crores, increasing denim capacity from 70 million meters to 110 million meters per annum, added 10 million meters in shirting capacity, and increased spinning capacity for backward integration. No specific mention of new or upcoming capex or strategic investments beyond this completed expansion. Focus currently is on streamlining operations and fully utilizing the enhanced capacity, targeting full utilization by March. The company is investing in marketing and establishing its brand image, especially for value-

Future growth expectations in sales/revenue/volumes?

Expect about 15-20% improvement in top line (sales/revenue) in FY18, driven by a 15% capacity increase and some selling price improvement. Volume growth alone is estimated around 15% for FY18. No significant top line growth expected in FY17 due to demonetization and operational challenges. Full utilization of expanded capacity targeted by March FY17 end; real benefits and growth to be visible in FY18. Anticipate double-digit revenue growth in FY18 as the expanded capacity strengthens domestic market share and global footprint. Focus on shifting product mix towards value-added and pro

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

EBITDA margins are expected to improve beyond the previous range of 16-16.5% due to enhanced capacity utilization and focus on profitable segments. PAT (Profit After Tax) will improve significantly, aided by operational capacity becoming fully functional and state government benefits (5% interest subsidy on debt and VAT refunds). The company targets a double-digit growth in revenue for FY18, with an expected top-line growth of 15-20%, driven by 15% volume growth and some price increases. Bottom line growth for FY18 is anticipated to be substantial, though exact figures are not disclosed; impro

Current/ Expected Orderbook/ Pending Orders?

The company has completed its capacity expansion and the entire plant is in the process of becoming fully operational. Orders and demand have started improving since January, with sufficient orders being received. The company expects to reach maximum capacity utilization by February and stabilize operations by March. The full benefits of the expanded capacity, including improved top line and bottom line, are expected to be visible in the financial year 2017-18. The management is optimistic about a double-digit growth in revenue for FY18 due to the new capacity coming online. Marketing efforts

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Nandan Denim LtdQ4 FY18Textiles & Apparels

Nandan Denim Ltd Q4 FY18 Earnings Call Analysis

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

Price: ₹2.46P/E: 11.8Market Cap: ₹402 CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Order

N/A

Capex

N/A

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Expect about 15-20% improvement in top line (sales/revenue) in FY18, driven by a 15% capacity increase and some selling price improvement.
→Volume growth alone is estimated around 15% for FY18.
→No significant top line growth expected in FY17 due to demonetization and operational challenges.
→Full utilization of expanded capacity targeted by March FY17 end; real benefits and growth to be visible in FY18.
→Anticipate double-digit revenue growth in FY18 as the expanded capacity strengthens domestic market share and global footprint.
→Focus on shifting product mix towards value-added and profitable segments to drive growth and margins.

Margin guidance

Category 1

→EBITDA margins are expected to improve beyond the previous range of 16-16.5% due to enhanced capacity utilization and focus on profitable segments.
→PAT (Profit After Tax) will improve significantly, aided by operational capacity becoming fully functional and state government benefits (5% interest subsidy on debt and VAT refunds).
→The company targets a double-digit growth in revenue for FY18, with an expected top-line growth of 15-20%, driven by 15% volume growth and some price increases.
→Bottom line growth for FY18 is anticipated to be substantial, though exact figures are not disclosed; improvements in margins and government subsidies will positively impact profits.
→EBITDA and PAT are expected to improve as the company shifts towards more value-added products and better customer mix.
→Debt reduction of approximately 10% per year will further improve profitability.
→Overall, FY18 is expected to be a "good year" with strengthened domestic market share and expanded global footprint.

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Fundraise plans

→There was a plan for fundraising of Rs. 100 crore through warrants to Polus Global Fund which was dropped.
→Warrants worth Rs. 50 crore had been converted in May 2016; however, the latest round (another 50 crore) was dropped.
→No specific mention of new fundraising through debt or equity in the current or future timeframe.
→The company's focus is on reducing existing debt, with a plan to repay about Rs. 65 crore in FY17-18, targeting an overall 10% debt reduction.
→No indication of raising fresh debt; rather, the emphasis is on debt reduction post-project completion.

Order book

→The company has completed its capacity expansion and the entire plant is in the process of becoming fully operational.
→Orders and demand have started improving since January, with sufficient orders being received.
→The company expects to reach maximum capacity utilization by February and stabilize operations by March.
→The full benefits of the expanded capacity, including improved top line and bottom line, are expected to be visible in the financial year 2017-18.
→The management is optimistic about a double-digit growth in revenue for FY18 due to the new capacity coming online.
→Marketing efforts are ongoing to target both domestic and export markets, with focus on value-added denim products to secure orders.
→The supply chain channels are currently being replenished, leading to a good appetite for fabric and encouraging demand outlook.

Capex plans

→The company has recently completed a major capacity expansion project worth Rs. 612 crores, increasing denim capacity from 70 million meters to 110 million meters per annum, added 10 million meters in shirting capacity, and increased spinning capacity for backward integration.
→No specific mention of new or upcoming capex or strategic investments beyond this completed expansion.
→Focus currently is on streamlining operations and fully utilizing the enhanced capacity, targeting full utilization by March.
→The company is investing in marketing and establishing its brand image, especially for value-added denim products, both domestically and in exports.
→No announced plans for fresh capital expenditure; emphasis is on leveraging the existing expanded capacity to improve top line and margins in FY18.

How does Nandan Denim Ltd rank vs peers in Textiles & Apparels?

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