NAHARSPING - Nahar Spinning

📊 NSE: NAHARSPING 🏢 Textiles - Cotton/Blended 📅 Last Updated: 12/14/2025 10:15

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment (Textile), which achieved a total income of INR 3,318.91 Cr in FY25, representing a growth of 8.26% compared to INR 3,065.57 Cr in FY24.

Geographic Revenue Split

Exports contributed INR 1,634.53 Cr (49.25% of total income), growing 0.58% YoY. Domestic sales account for the remaining 50.75% of revenue.

Profitability Margins

Net Profit Margin improved to 0.38% in FY25 from -1.67% in FY24. Return on Capital Employed (ROCE) stood at 0.03 (3%) compared to 0.00 in the previous year, while Return on Equity (ROE) turned positive at 0.01 (1%) from -0.03 (-3%).

EBITDA Margin

EBITDA margin improved to 5.9% (INR 195.79 Cr) in FY25 from 3.2% (INR 99.11 Cr) in FY24. CRISIL projects margins to further recover to 6.5-7.0% in FY26 due to reduced cotton price volatility.

Capital Expenditure

The company completed modernization and expansion projects during FY22-FY24. Current annual debt obligations and maintenance capex are estimated at INR 35-45 Cr, which are well-covered by projected cash accruals of INR 150-200 Cr.

Credit Rating & Borrowing

Short-term rating is CRISIL A1 with a Stable outlook. Total borrowings as of March 31, 2025, stood at INR 1,100.87 Cr (INR 185.08 Cr long-term and INR 915.79 Cr short-term). Finance costs were INR 74.20 Cr, implying an effective interest rate of approximately 6.74%.

⚙️ Operational Drivers

Raw Materials

Cotton is the primary raw material, with total material consumption costs of INR 2,222.28 Cr, representing 66.96% of total income in FY25.

Import Sources

Not specifically disclosed, though the company is subject to seasonal domestic cotton procurement cycles in India.

Capacity Expansion

Modernization of plants was undertaken during FY22 to FY24 to remove production bottlenecks. Revenue growth in FY25 was driven by higher volume sales resulting from this increased capacity.

Raw Material Costs

Raw material costs increased by 3.83% YoY to INR 2,222.28 Cr. Procurement strategy involves maintaining higher inventory levels until November to mitigate seasonal price fluctuations.

Manufacturing Efficiency

Operating efficiency is described as modest due to a high-power-expense product mix and export-oriented focus. Capacity utilization is expected to rise following recent modernization.

Logistics & Distribution

Susceptible to significant volatility in shipping costs due to the high volume of overseas sales (49% of revenue).

📈 Strategic Growth

Expected Growth Rate

Growth Strategy

Growth is targeted through higher volume sales from recently expanded capacities, efficiency-improvement measures to remove bottlenecks, and a focus on the knitted garments segment. The company also relies on financial flexibility from group entity Nahar Capital, which holds INR 1,632 Cr in investment assets.

Products & Services

Cotton yarn and knitted garments.

Brand Portfolio

Nahar Spinning Mills.

New Products/Services

Not specifically disclosed, though focus remains on increasing the share of value-added knitted garments.

Market Expansion

Targeting overseas markets which already account for nearly 50% of revenue, despite geopolitical headwinds.

Market Share & Ranking

The company holds a strong position in the Indian cotton yarn and knitted garments segments, though specific market share % is not provided.

Strategic Alliances

The company receives need-based financial support from group company Nahar Capital and Financial Services Ltd.

🌍 External Factors

Industry Trends

The industry is seeing a gradual recovery in operating performance with a shift toward stable raw material prices. Operating margins in the sector are recovering from decadal lows seen in FY24.

Competitive Landscape

Competes with other large-scale Indian spinning and garmenting players; efficiency is currently lower than some peers due to higher power costs.

Competitive Moat

Moat is based on large-scale operations, moderate integration in the textile value chain, and strong financial flexibility provided by the Nahar Group's investment arm.

Macro Economic Sensitivity

Highly sensitive to global demand for textiles and domestic cotton crop yields. Interest coverage ratio improved to 1.22 in FY25 from 0.90 in FY24.

Consumer Behavior

Demand is driven by global apparel consumption trends and shifts in international sourcing preferences (e.g., 'China Plus One').

Geopolitical Risks

The Bangladesh crisis impacted performance in late 2024/early 2025. Potential US tariffs pose a risk to the 8-10% garment export segment.

⚖️ Regulatory & Governance

Industry Regulations

Operations must comply with Section 135 (CSR) and Section 143 (Internal Financial Controls) of the Companies Act, 2013. The company is also subject to international trade regulations and potential tariffs.

Environmental Compliance

CSR expenditure was INR 5.24 Cr in FY25, down from INR 5.87 Cr in FY24.

Taxation Policy Impact

Deferred tax liability increased to INR 30.03 Cr in FY25 from INR 19.66 Cr in FY24. Effective tax expense for FY25 was INR 8.78 Cr.

Legal Contingencies

The company has disclosed the impact of pending litigations in its financial statements, though specific case values were not detailed in the provided summaries.