Nitin Spinners Limited

Company Background:

Nitin Spinners Lts is a Private limited Company incorporated in 1992 October & Subsequently the company was converted into a public limited company on 15th November, 1994 and the name was changed to Nitin Spinners Limited.

Nitin Spinners is an ISO 9001:2008 company and a Govt of India recognised Export House, manufacturing 100% Cotton Yarns and Fabrics.

The Company is exporting cotton Yarns and Knitted fabrics to countries like China, Colombia, Egypt, Israel, Korea, Russia, Poland, U.S.A, UK and Austrlia. Since, it’s exports are restricted to few countries , which leaves significant scope for the company to explore new markets and to increase it’s presence accordingly.

The Company has successfully implemented expansion project for installation of 72480 Spindles and 19 Knitting Machines at cost of Rs. 281 Crores against envisaged project cost of Rs. 286 Crores and commercial production on expanded capacity commenced w.e.f. 09.02.2015 against projected date of 31.03.2015. After implementation of this expansion project installed capacity of Company has increased  to 150096 Spindles, 2936 Rotors and 49 Knitting  Machines. The investments in the project are eligible for Interest subsidy and other benefits under TUF Scheme of Government of India and Rajasthan Investment Promotion Scheme, 2014. The production on expanded capacity is on full swing and  Company will get benefits of expansion for full year  in the year 2015–16.

Nitin Spinners has been conferred first prize by the Department of Energy, Government of Rajasthan under Rajasthan Energy Conservation Award Scheme in recognition of efforts made for Energy Conservation for the year 2014-15. The award has been given in the Category of Textile Spinning & Weaving.

Textile Industry Prospects:

The prospect of Indian Textile Industry looks promising and organised apparel segment is expected to grow at an annual growth of more than 12 to 15% over a 10-year period.

Growth of the company:

Compounded Sales Growth:

10 Years: 22.65%
5  Years:    15.34%
3 Years:   12.9%

Compounded Profit Growth:

10 Years: 24.93%
5 Years:    146.2%
3 Years:    417.55%

Return on Equity:

10 Years:  15.15%
5 Years: 23.91%
3 Years: 28.13%

Earning Per Share:

Mar’11 – 1.47
Mar’12 – 0.07
Mar’13- 3.08
Mar’14 – 7.59
Mar’15 – 8.94

Book Value of the Share:

Mar’11 – 18.84
Mar’12 –  18.91
Mar’13 – 21.99
Mar’14 – 28.70
Mar’15 – 36.44

Current Debt Equity ratio is around 2.08 but it’s expected to reduce significantly in coming years and both EPS and Book Value of the stock is expected to surge outstandingly.

Why we need to invest on this stock?

Company is expected to give good Quarter.

Company has good consistent profit growth of 146.20% over 5 years

Company has a good return on equity track record of more than 23% on an average for last 5 years.

Net Sales and PAT of the company are expected to grow significantly considering the fact that there is an increase in volumes due to expansion project, focus on niche and value added products and exploring new markets. One can safely invest on this stock at CMP of 77.50

Wish you a very Happy and Prosperous New Year. May God Bless you all. Om Sairam.