The document provides a stock analysis and recommendation for Nitin Spinners Ltd. Key details include: - In Q4 FY15, the company's net sales increased 54% to Rs. 1881 crore and net profit grew 43% to Rs. 123 crore. - Earnings per share grew 43% to Rs. 2.69 for Q4. - The analyst recommends buying the stock with a target price of Rs. 53, citing expected sales and profit growth of 18% and 16% annually through 2017.

1. CMP 44.00
Target Price 53.00
ISIN: INE229H01012
MAY 6th
2015
NITIN SPINNERS LIMITED
Result Update (PARENT BASIS): Q4 FY15
BUYBUYBUYBUY
Index Details
Stock Data
Sector Textiles
BSE Code 532698
Face Value 10.00
52wk. High / Low (Rs.) 50.00/15.55
Volume (2wk. Avg. Q.) 187000
Market Cap (Rs. in mn.) 2016.70
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 6168.01 7117.88 8114.39
EBITDA 1043.06 1184.66 1336.40
Net Profit 409.59 474.51 541.18
EPS 8.94 10.35 11.81
P/E 4.92 4.25 3.73
Shareholding Pattern (%)
1 Year Comparative Graph
NITIN SPINNERS LTD BSE SENSEX
SYNOPSIS
Nitin Spinners Ltd, an ISO 9001:2008 company and
a Government of India Recognized Export House,
manufacturing 100% Cotton Yarns and Fabrics in
India.
The company’s net sales registered 54.26% increase
and stood at a record Rs. 1881.48 million from Rs.
1219.70 million in the corresponding quarter of
previous year.
In Q4 FY15, Net profit jumps to Rs. 123.08 million
an increase of 43.33% against Rs. 85.87 million in
the corresponding quarter of previous year.
During the quarter operating profit is Rs. 328.64
million as against Rs. 218.77 million in the
corresponding period of the previous year, grew by
50.22%.
Profit before tax (PBT) at Rs. 168.70 million in Q4
FY15 compared to Rs. 117.47 million in Q4 FY14,
registered a growth of 43.61%.
EPS of the company Rs. 2.69 for the 4th quarter as
against an EPS of Rs. 1.87 in the corresponding
quarter of the previous year.
Nitin Spinners Ltd has recommended dividend @
10% i.e. Re. 1.00 per share for the financial year
2014-15.
Net Sales and PAT of the company are expected to
grow at a CAGR of 18% and 16% over 2014 to
2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Nitin Spinners Ltd 44.00 2016.70 8.94 4.92 1.21 10.00
Alok Industries Ltd 6.93 9544.80 1.78 3.89 0.18 3.00
Suditi Industries Ltd 20.10 335.20 0.53 37.92 1.34 5.00
Arrow Textiles Ltd 28.10 535.10 2.63 10.68 2.08 0.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q4 FY15,
The company has achieved a turnover of Rs. 1881.48 million for the 4th quarter of the financial year 2015 as
against Rs. 1219.70 million in the corresponding quarter of the previous year. EBITDA of Rs. 328.64 million in Q4
FY15, an increase of 50.22% against the corresponding period of last year. In Q4 FY15, net profit of Rs. 123.08
million against Rs. 85.87 million in the 4th quarter of the previous year. The company has reported an EPS of Rs.
2.69 for the 4th quarter as against an EPS of Rs. 1.87 in the corresponding quarter of the previous year.
Break up of Expenditure
Rs. In million MAR-15 MAR-14 % Change
Net Sales 1881.48 1219.70 54.26
PAT 123.08 85.87 43.33
EPS 2.69 1.87 43.33
EBITDA 328.64 218.77 50.22
Break up of
Expenditure
(Rs. In millions)
Q4 FY15 Q4 FY14 % Chng
Cost of materials
consumed
1148.57 781.47 47%
Employees benefit
expenses
104.98 66.28 58%
Power & Fuel 166.07 89.97 85%
Depreciation and
amortization expenses
85.29 63.79 34%
Other Expenses 141.53 90.25 57%

3. COMPANY PROFILE
Nitin Spinners Limited. Incorporated in 1993 is an ISO 9001:2008 company and a Government of India
recognized Export House, manufacturing 100% Cotton Yarns and Fabrics. Nitin Spinners Limited is committed to
operating a successful business by developing, manufacturing, marketing and supporting quality yarn products
for the global textile industry.
Nitin Spinners Limited located in North West India at Bhilwara, Rajasthan, with their stringent commitment to
Global standards of Quality has seen grow phenomenally over the last decade. The company has kept up pace
with changing global customer demands for textiles and has focused its attention on select core products. Such a
focus has enabled the company to play a dominant role in the global textile arena.
Nitin Spinners Limited started with a small open-end facility, the company has grown into one of the largest
producers of 100% cotton yarn and fabrics in India. Nitin Spinners Limited possess one of the best pool of skilled
workforce in the textile Industry. The company’s diverse competencies enable to address the most challenging
business realities effectively. This rich people capital has been manifested in unmatched reputation, wide
product variety, internationally accepted quality and presence in all the continents across the globe.
The company has been an innovator in textile field and conducted its business with the purpose of growing into a
notable organization. Today, despite the midst of highly fierce and competitive textile markets, Nitin Spinners
Ltd. is still poised to serve both local and international markets with a pledge of providing great satisfaction to
it's customers.

4. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
FY14A FY15A FY16E FY17E
I. EQUITY AND LIABILITIES:
A. Shareholders’ Funds
a) Share Capital 458.34 458.34 458.34 458.34
b) Reserves and Surplus 857.22 1211.65 1635.73 2134.62
Sub-Total-Net worth 1315.56 1669.99 2094.07 2592.96
B. Non-Current Liabilities:
a) Long-term borrowings 1307.06 2942.46 4148.87 5227.57
b) Deferred Tax Liabilities [Net] 211.47 339.34 447.93 577.83
c) Long Term Provisions 23.56 42.52 57.40 70.03
Sub-Total-Long term liabilities 1542.09 3324.32 4654.20 5875.43
C. Current Liabilities:
a) Short-term borrowings 134.67 533.37 757.39 954.31
b) Trade Payables 106.99 93.67 85.24 79.27
c) Other Current Liabilities 388.82 417.13 437.99 455.51
d) Short Term Provisions 51.72 60.48 67.74 74.51
Sub-Total-Current Liabilities 682.20 1104.65 1348.35 1563.60
TOTAL-EQUITY AND LIABILITIES (A+B+C) 3539.85 6098.96 8096.62 10031.99
II. ASSETS:
D. Non-Current Assets:
Fixed Assets
i. Tangible Assets 1912.14 4164.02 5719.39 7206.43
ii. Intangible Assets 0.00 3.36 3.56 3.74
iii. Capital work-in-progress 211.76 0.00 0.00 0.00
a) Sub-Total-Fixed Assets 2123.90 4167.38 5722.95 7210.17
b) Long Term Loans and Advances 299.77 272.66 250.85 233.29
Sub-Total-Non-Current Assets 2423.67 4440.04 5973.80 7443.46
E. Current Assets:
a) Inventories 706.98 941.89 1167.95 1412.19
b) Trade Receivables 248.93 404.20 557.80 691.67
c) Cash and Bank Balances 0.64 6.79 10.05 12.76
d) Short Term Loans and Advances 46.92 38.52 33.90 30.51
e) Other Current Assets 112.71 267.52 353.13 441.41
Sub-Total-Current Assets 1116.18 1658.92 2122.82 2588.54
TOTAL-ASSETS (D+E) 3539.85 6098.96 8096.62 10031.99

5. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs.in.mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 4886.88 6168.01 7117.88 8114.39
Other Income -0.91 39.49 52.92 62.44
Total Income 4885.97 6207.50 7170.80 8176.83
Expenditure -3943.12 -5164.44 -5986.14 -6840.43
Operating Profit 942.85 1043.06 1184.66 1336.40
Interest -174.64 -226.20 -270.54 -311.12
Gross profit 768.21 816.86 914.12 1025.28
Depreciation -248.66 -279.40 -307.34 -335.00
Profit Before Tax 519.55 537.46 606.78 690.28
Tax -171.74 -127.87 -132.28 -149.10
Net Profit 347.81 409.59 474.51 541.18
Equity capital 458.34 458.34 458.34 458.34
Reserves 857.22 1211.65 1635.73 2134.62
Face value 10.00 10.00 10.00 10.00
EPS 7.59 8.94 10.35 11.81
Quarterly Profit & Loss Statement for the period of 30 Sep, 2014 to 30 Jun, 2015E
Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E
Description 3m 3m 3m 3m
Net sales 1358.48 1601.00 1881.48 1934.16
Other income 7.16 11.86 12.81 18.96
Total Income 1365.64 1612.86 1894.29 1953.12
Expenditure -1150.01 -1346.22 -1565.65 -1618.89
Operating profit 215.63 266.64 328.64 334.23
Interest -45.52 -56.41 -74.65 -89.58
Gross profit 170.11 210.23 253.99 244.65
Depreciation -62.85 -68.42 -85.29 -80.68
Profit Before Tax 107.26 141.81 168.70 163.96
Tax -13.40 -36.81 -45.62 -35.74
Net Profit 93.86 105.00 123.08 128.22
Equity capital 458.34 458.34 458.34 458.34
Face value 10.00 10.00 10.00 10.00
EPS 2.05 2.29 2.69 2.80

6. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 7.59 8.94 10.35 11.81
EBITDA Margin (%) 19.29 16.91 16.64 16.47
PBT Margin (%) 10.63 8.71 8.52 8.51
PAT Margin (%) 7.12 6.64 6.67 6.67
P/E Ratio (x) 5.80 4.92 4.25 3.73
ROE (%) 26.44 24.53 22.66 20.87
ROCE (%) 43.21 25.70 21.31 19.05
Debt Equity Ratio 1.10 2.08 2.34 2.38
EV/EBITDA (x) 3.67 5.26 5.84 6.13
Book Value (Rs.) 28.70 36.44 45.69 56.57
P/BV 1.53 1.21 0.96 0.78
Charts

7. OUTLOOK AND CONCLUSION
At the current market price of Rs. 44.00, the stock P/E ratio is at 4.25 x FY16E and 3.73 x FY17E respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.10.35 and
Rs.11.81 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 18% and 16% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 5.84 x for FY16E and 6.13 x for FY17E.
Price to Book Value of the stock is expected to be at 0.96 x and 0.78 x respectively for FY16E and FY17E.
We expect that the company surplus scenario is likely to continue for the next three years, will keep its
growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of
Rs.53.00 for Medium to Long term investment.
INDUSTRY OVERVIEW
India’s textiles sector is one of the mainstays of the national economy. It is also one of the largest contributing
sectors of India’s exports contributing 11 per cent to the country’s total exports basket. The textiles industry is
labour intensive and is one of the largest employers. The industry realised export earnings worth US$ 41.57
billion in 2013-14. The textile industry has two broad segments, namely handloom, handicrafts, sericulture,
power looms in the unorganised sector and spinning, apparel, garmenting, made ups in the organised sector.
The Indian textiles industry is extremely varied, with a hand-spun and handwoven sector at one end of the
spectrum, and the capital intensive sophisticated mill sector at the other. The decentralised power looms/
hosiery and knitting sector form the largest and knitting sector form the largest section of the Textiles Sector.
The close linkage of the Industry to agriculture and the ancient culture, the traditions of the country make the
Indian textiles sector unique in comparison to the textiles industry of other countries. This also provides the
industry with the capacity to produce a variety of products suitable to the different market segments, both within
and outside the country.
The Indian textiles industry, currently estimated at around US $108 billion, is expected to reach US $ 141 billion
by 2021. The industry is the second largest employer after agriculture, providing direct employment to over 45
million and 60 million people indirectly. The Indian Textile Industry contributes approximately 5 per cent to
GDP, and 14 per cent to overall Index of Industrial Production (IIP).
The Indian textile industry has the potential to grow five-fold over the next ten years to touch US$ 500 billion
mark on the back of growing demand for polyester fabric, according to a study by Wazir Advisors and PCI

8. Xylenes and Polyester. The US$ 500 billion market figure consists of domestic sales of US$ 315 billion and
exports of US$ 185 billion. The current industry size comprises domestic market of US$ 68 billion and exports of
US$ 40 billion, according to Mr Prashat Agarwal, Managing Director, Wazir Advisors.
Outlook
The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well
as export demand. With consumerism and disposable income on the rise, the retail sector has experienced a
rapid growth in the past decade with the entry of several international players like Marks & Spencer, Guess and
Next into the Indian market. The organised apparel segment is expected to grow at a compound annual growth
rate (CAGR) of more than 13 per cent over a 10-year period.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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