Buy Nitin Spinners; target of Rs 96: East India Securities

East India Securities is bullish on Nitin Spinners has recommended buy rating on the stock with a target price of Rs 96 in its research report dated June 21, 2020.

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June 22, 2020 / 10:12 IST

26 Aug, 2025 12:21

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East India Securities' research report on Nitin Spinners

Nitin Spinners Ltd (Nitin) came out with a better-than-expected performance during Q4FY19 with strong operational performance. The company registered a sales growth of 21.3% YoY to Rs 3,801 mn, driven by ~16% YoY volume growth in yarn business. The YoY growth in the business was well supported by the increasing capacity utilization of new woven fabric business. Although realization in yarn segment was down 5% YoY, gross margin of overall business improved by 300 bps YoY because of the correction in cotton prices and contributions from the new woven fabric division. Sequentially, Nitin posted a strong improvement of 381bps in EBITDA margin as despite flattish cotton prices, the company was getting good prices for its products. EBITDA grew by 16.3% YoY/ 28.8% QoQ to Rs 544 mn.

Outlook

Nitin reported a flattish cash profit of Rs 310 mn. The company has already hit ~70% capacity utilization during June month after lockdown got lifted as the company is getting decent export orders. We continue to maintain our Buy rating on the stock of the company.