Nitin Spinners (NSE:NITINSPIN) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Nitin Spinners Limited q one and FY twenty seven earnings conference call. As a reminder, all participants will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then 0 on your dash tone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Avnish Chandra from Swiss Limited. Thank you, and over to you. Thanks a lot, Muskaan, and thank you very much, everyone, for joining this call. On behalf of SNS Limited, I welcome you all to first quarter financial year FY 'twenty seven earnings conference call of Nitin Spinners Limited.

0:51 We are pleased to host the top management of the company. Today, we have with us Mr. Deniz Nolka, Chairman and Managing Director of the company Mr. Nitin Nolka, Managing Director of the company and Mr. P. Maheshwari, Chief Financial Officer. We will start the call with initial commentary on the results and then we will open the floor for question and answer. Now I will hand over the call to Mr. P. Maheshwari, CFO of the company. Over to you, Maheshwari, sir. Thank you, Omneji. Good afternoon, and a warm welcome to all the participants to this Q1 FY 'twenty seven Earnings Call of Nitin Spinners Limited. I hope you have had a chance to go through the financial results and investor presentation available on the company's website and stock exchanges.

1:43 I will start with a brief overview on operational and financial performance for the quarter. Post that, our CMD, Sridharan S. G. Will give you an overview of industry and business scenario. Coming to our financial and operational performance, Q1 FY 'twenty seven, the company has reported another quarter of strong all round performance with improvement in revenue, EBITDA and PAT. Revenue for Q1 stood at INR $8.75 crores, which is a growth of 10.3% on year on year basis and 1.8% on quarter on quarter basis. It is our highest ever quarterly revenue for second time in a row, driven by improvement in the annualization and better demand scenario.

2:30 EBITDA before other income for the quarter stood at INR155.6 crores, which is a growth of 39.85% on year on year basis and 19.3% on quarter on quarter basis. EBITDA margin for this quarter stood at 17.78% against Q1 FY 'twenty six margins of 14.02%, that is an increase of three seventy six bps on year on year basis and two sixty one bps on quarter on quarter basis. That is due to improved realization and cost saving initiatives. Profit after tax for the quarter stood at INR 75.3 crores, that is a growth of 33.63% on year on year basis and 31.2% on quarter on quarter basis.

3:24 EPS and cash EPS for the quarter stood at INR 13.39 and INR 20.08 per share, respectively. In terms of geographical split of revenue, export contributed nearly 65% and domestic 35% of the total revenue during the quarter. In FY 2027, our spinning capacity was operating at 98% utilization and woven fabric at over 92% utilization. That is all from my side. I now request with NITINSPINSPINSKI to share his insights about the industry and business scenario. Thank you. And over to Siddhanesji.

4:12 Thank you, Mitraji. Good afternoon, everyone. FY 'twenty seven has commenced on a positive note for the textile This positive momentum has been supported by an improvement in demand from the last quarter itself, following the removal of the additional tariffs by The U. S. Cotton prices increased during quarter one by about 8% to 10%, primarily driven by overall lower global production, global supply chain and logistics challenges due to West Asia war. Government of India, due to this, has also removed the import duty on cotton, so looking to the higher prices in the domestic as well as international markets.

4:57 The price parity between international and domestic cotton improved, which was one of the factor for the improvement in the performance of the textile industry. The upstream textile industry also witnessed an improved market scenario with yarn prices increasing higher than the cotton prices, supported by healthy demand from both the domestic and export markets. The increased demand of cotton yarn in export market from China was one of the factors for a better demand scenario for the Indian spinners. The recently implemented India UK FDA is also expected to support India's exports by opening up new sourcing and export opportunities for the Indian textile sector. Other trade agreements like EU FTA will also play an important role in creating a more level playing field for India against other competing textile nations.

5:51 India's textile sector continues to have good long term growth potential, supported by its large manufacturing base, raw material availability, increasing focus on value added products, innovation and sustainability. Further favorable government initiatives and increasing global interest in diversified sourcing will contribute to the improved going forward, the improved demand. We anticipate that the demand for fabric and yarn will continue to be better, supported by demand coming from growth across the downstream sector and the consolidation of the spinning industry. Now coming to the company's performance, we are pleased to announce our highest ever quarterly revenue for the second consecutive quarter at about INR $8.75 crores, driven by improved annualizations with better demand environment and optimum capacity utilizations.

6:40 The fabric business witnessed a stable pricing environment compared to the previous quarter. Margins for the quarter improved on both a sequential and on a year on year basis as well. This improvement was primarily driven by higher realizations across our products and the cost saving initiatives. Going forward, our one of our future growth driver will be our capacity addition plan, which is going progressing as per schedule with the expansion of our public capacity by around 35,000,000 meters and spending capacity by additional 74,000 spindles. We anticipate closing financial year 'twenty seven on a stronger note compared to financial year 'twenty supported by the partial contribution from the new capacities in the second half of this financial year.

7:29 The CapEx will further support an expansion of our in our blended margins, as highlighted earlier as well, driven by an increase in the share of value added products in overall revenue mix. The renewable power expansion plan is also going as per schedule and expected to be operational by the end of Q3 'twenty seven. Upon completion of the same, we are expected to reduce our power costs further. The positive external environment, including the trade measures and improved prosperity of Houghton, gives us a confidence in faster ramp up of these capacities once they become operational and help us in sustaining the margins. With this, I would like to open the question floor for the question and answer session. I think we can go forward with that.

8:15 Thank you very much. We will now begin the question and answer section. Anyone who wishes to ask question may press star and one on the touch tone telephone. If you wish to remove yourself from question queue, you may press star and 2. Participants are requested to use sensors while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue is assembled. First question is from the line of Madhu Rathi from Counter Cyclical Investments. Sir, if you could help us understand what was our spreads during Q1 FY 'twenty seven and what are current spreads right now in Q2?

9:10 In the first quarter, I think in the last quarter of the last financial year, the spreads were in the range of about 110, and now it is in the range of INR 130. 130? Yes. And sir, are we sustaining in Q2 as well? As as far as as far as today's solution is there, we are sustaining the same. Got it. Sir, so what has led to the spread improvement? Is it the difference between the pricing of Indian cotton versus international cotton? Or the demand is much higher than the supply, if you could help us understand? In fact, are a couple of reasons. First is there is an improved demand scenario and also consolidation of the capacities.

10:04 We have seen some capacities going out of business in the last one and two years. And then there was a very dull period of demand, especially post the announcement of The U. S. Tariffs and the prices went down substantially lower. Now that has corrected itself. And accordingly, there is a stable price regime. Maybe we can say we have come back to the similar levels, what was their pre U. S. Tariff levels. And also, there was a and the important one of the important factors, as you rightly pointed out, was the parity between the Indian cotton and the international cotton. For good one point five to two years from 'twenty four, end of 'twenty three till the middle of 'twenty five, our Indian cotton was outpriced.

10:52 But they were higher much higher than the international prices. So now this course correction has happened, so that is also resulting in increase improvement. Got it. Sir, can you quantify what is the premium on international cotton versus Indian cotton currently? And historically, where has it like you mentioned that we were at a disadvantage like in 'twenty three and 'twenty four. So how is it compared to that right now? If we have to look at the Cottluk index, normally Indian Cottloc Index is basically index of six larger groups of cotton. So, we compare that, normally Indian Cotton was minus the Cottloc Index, maybe a couple of, let's say, couple of percentage points minus the cock look index in view of the quality of the cotton which we produce in India.

11:44 So in 'twenty three, 'twenty four, our cotton prices were about 5% to even 7% higher than the cotton look index. And now it is at this point of time at the similar level, minus 1% or 2%, the cotton look index level. The overall delta change has been in the range of 7% to 8%. Got it. Sir, just final few questions from my end, sir. We are adding the 35,000,000 metric meters of capacity in our finishing division. So is it more towards weaving? Or is it more towards printing? And, sir, it seems that the printing... The textile printing, although the volumes are getting much smaller, so so are we moving from rotary printing towards digital printing, if you could help us understand?

12:32 First of all, printing is a very small part of the business. The capacity which we are adding is both in the reading as well as finishing. So we are adding both reading capacity as well as finishing capacity. And this new capacity will be for solid dyes, solid dyed fabrics, also the yandex fabrics as well. So we are not adding any capacity in the printing segment. Already, we have printing segment available where we are already running the thing. So we're not adding any capacity in that particular segment. Got it. And sir, also considering this demand improvement that we have seen, but our volume... Yarn volume have actually degrown on a q on q and a y on y basis. So so why was it, I think, majority came from the realization improvement? So so how do we see FY 'twenty seven in terms of top line and bottom line? And so the volume, should we expect these to move up going forward or customers are delaying their purchases because of higher yarn prices?

13:38 There is I think there is no degrowth as such. The volume has degrown because our fabric divisions have consumed more. If we go into the detail, our fabric divisions have consumed more and slight some stocks were left out at the end of the quarter because of logistic challenges. So there was slight increase in the stocks with us, which got dispatched later because of the non availability of the vessels or other things, logistics, as I highlighted in my earlier comments also. So because of that, otherwise, there is no reduction in the sales side of in quantum, I would say. Going forward, as our capacity increase, yes, the quantum will also increase. That is also going to increase going further.

14:25 For the what will be the as I've been on other things for the financial year, I think in the last conference call also, we have highlighted that we should be already with our new expansion, we should add another crores to INR300 crores to our revenues going in this whatever capacity we had, plus the existing revenue should be slightly higher than the last year. So all put together, so that there will be a reasonable increase in our revenues. Got it. Sir, thank you so much and all the best. Thank you. The next question is from the line of from Bamboo Capital. Please go ahead. Yeah. Thanks for the opportunity, and congratulations for good set of numbers. Sir, as you have been saying that, know, you were in the respects are sustaining in second quarter also.

15:23 But let's say, if we, you know, if if our for most of the spinners, for most of the yarn companies, the low price inventory should get over by maximum by Q2. So let's say, how do things look like for our company in Q3, with us also procuring higher cost inventory during Q1, Q2, if you can talk about that? We are not at all relying on our inventories alone. We are trying to pass on the increase in the raw material prices. This has happened in the past also. And going forward also, if the prices there is no abnormal increase in the raw material prices. I think we should be in a position to pass on the increased cotton prices also. This quarter itself, in the Q2 itself, we are also seeing the increase in the raw material prices in comparison to last six months and which is getting passed on.

16:30 Okay. Okay. Okay. And we have been hearing about China starting to procure cotton yarn cotton yarn supplies from India and others countries. So is that one of the major reasons why, you know, such high demand and high prices are sustaining? And what's your view on continuity of the same? First of all, it is one of the reasons. I would not say it is the only reason. Overall, demand in the domestic market has also been good. If you see there is an incremental increase in the exports, were India was exporting in the range of 90,000,000 to 100,000,000 kgs during the whole of year 2025.

17:19 In 2026, in the calendar year 2026, China started to import it. We went up to 110,000,000 to 115,000,000. So there is not very large increase or let's say, the kind of capacity which they used to buy in earlier years in 'twenty one, 'twenty two kind. But this is also supporting the overall requirement. So I would say that we are expecting because of the strategy which China is adopting, there is a lower crop expected in China. And then we're going for this kind of continuity of the import of Yanbil should continue. Okay. So given all this, we expect that the current margins for the quarter, let's say, around 1718%, that should sustain going forward, at least for next quarter or two?

18:08 We are expecting same. In view of the cost saving initiatives going forward, which is also going to kick in and also the margins looking reasonable, unless we have seen extraordinary changes in global scenarios or something like that, geopolitical things, we should be able to maintain. Okay. Maintain and not improve. The main margin should stay at around 1718% level. Improvement, I cannot comment upon at this point of time. Sure. Okay. Okay. Okay. But at least it should not go down from the Q1 levels or at least not much... Not significantly lower than q one levels. No comments on this link. I'm just giving you the facts on the ticket. Sure. The margin will come automatically when it comes.

18:54 Sure. Okay. Thank you. Any problem? Thank you. The next question is from the line of Narayan Danak, an individual investor. Please go ahead. Sir, thank you very much for the opportunity. I hope I'm all in. Yes. You are. Please. Yeah. Thank you. So I see that the volumes Q o Q down per yarn around 14% and Y o Y 7%. That is compensated by increasing the volumes for clot, right, by 7%.

19:46 And that is clear from what you just said. And demand perspective, they have not increased in terms of volume, right? I think what you pointed out as a demand perspective, can you please put forward the facts in terms of how the demand has increased and the volumes are actually down? That's the first question. And second question, if are these spreads, right, is specifically due to spread increase is due to the cost reduction in terms of imports. That's how I understand it. So correct me if I'm wrong. And how much is it sustainable given this China scenario, which you just explained? These are the two things that you can address, please. Coming to your first question, there is basically, if you see the production capacity, it is running at a similar production capacity.

20:41 So we are running at 98% capacity utilization. And accordingly, the increase in volumes is not possible beyond the capacity which we have. So last year also, are running at this level and this year also, we are running at same level. Now out of the capacity, the yarn which is produced, it goes for different applications. Sometimes we have our knitting capability, we have our building capability. So when it goes more into those in house consumptions, then the utilization increases here, the outside sales slightly reduces. So that is what you are seeing at this point of time. Some quantity reduction, which is left in our stocks is also reflected in our numbers is due to the non dispatches of the material from our end because of logistic challenges in the international market.

21:33 So that is one of the reasons, and that is later on already in the month of July and others, it has already got this tight as well. So this is the reason why the volumes you are looking at is changing. So that is from our side, there is no major change in the volumes, and it remains as it is. So all the increase which has happened is due to the increase in the realization, and there is no reduction in the volumes of the yarns which we are producing or which we are selling at the moment. Now coming to your second question, where you've asked about the cost initiatives. In this particular quarter, there is some our renewable energies portion has kicked in, the new capacity which we have started. So has contributed partly for the reduction in the costs. But that is not very substantial, I would say. We have also gone in for an effort of saving the energy. So that is also resulted in the lesser energy consumption per unit of the production.

22:37 So these two things have resulted. Some automations have also been done, which was also a part of our expansion plans. So we have also modernized some of our existing capabilities. So all these three things have resulted in some of our cost savings, which is going to continue. These cost savings are for permanent in nature and will continue going forward as well. Right, sir. Thank you. So most of the cost saving is coming due to input prices, the way I understand. And part of it is due to what you just No, no, input prices due to the power. Input prices have gone up rather. And accordingly, the finished goods have also gone up. So input prices have not gone down. So if you see so the increase in the revenue is more than what the input increase is there.

23:29 Right. Right. And that's why spread about INR 130 that you just mentioned previously, right? And sir, the last question from my side, how does it look when the full capacity expansion comes alive and we are producing more FY 'twenty and FY 'twenty nine? Do we see substantial demand to absorb the capacity expansion that we have done? The new capacity which is going to come in will be in the young capacity with what we are adding will be more for our sublet business. It will go for out of the new capacity, about 22,000 metric tons we are adding going forward. So which out of which, nearly 16,000 to 18,000 will go for our yarn production for our fabric production.

24:24 Also, we are adding yarn dying capacity. So some part of the capacities will also be it's a new product for us. So that will be also some of the yarns will be going forward. So in total, we'll be adding very small capacity for our gray yarn business, which would be easily absorbed looking to our presence all around the world and the demand of our products at this moment also. So there is no issue at all for absorbing the yarn capacity. Now coming to fabric capacity, this is going to we are also introducing many new products in our range in the fabric. And also these new markets which are opening for us, like with the FTAs happening for The U. K. And also going forward for The EU, we expect that we'll have more customers coming from these markets, which we are already in discussion. So they will that will further enhance our utilization capacity.

25:20 But the ramping up of fabric will take some time to happen. So that is going to take six to eight months' time going forward. Got it. Thank you, sir. And the margins from these new products, right, at least they would be matching the margins of Yarn, if I'm not missing Yes, of course. Of course. Yes, yes. You very much. Yes. Thank you. The next question is from the line of Abhishek Shah from Fortitude Fund Management. Please go ahead. Hi, sir. Firstly, congratulations on the set of numbers. I mean, we are very impressed with how we've been able to foresee the up cycle.

26:07 So just a couple of questions. I think last quarter on the con call, you said the price rise in fabric was not being passed through the way it was getting passed on in yarn. So just wanted some clarity, has that pass through started now? I mean, are we getting higher margins in fabric as well? Basically, let's say, we have been able to pass on 100% of the raw material increase in the yarn business or rather in fact improve it, let's say, the increase is 100%, we have been able to pass 120% or 125%. I'm just giving you example. But in the case of fabric business, only whatever raw material increase actually has happened in the cotton, that is only getting passed on. We are not able to improve upon the margins as we are able to improve upon the margins in the Yan business.

26:58 Got it. So do you expect this to sort of improve in the coming quarters? Yes, definitely, with the settling down of the cotton prices at higher levels, yarns at a level, we expect that definitely with the demand coming from various quarters all around the world, I think we should be able to do that. Got it. Sir, in terms of the new capacity that comes in, in addition to the previous person who asked you on that capacity ramp up. Sir, of the 1,000 crore is what we were guided incrementally will be the turnover that gets affected. How much of that will be yarn and how much of that will be fabric? Is it INR 500 crores, INR 500 crores? No. Fabric will be about INR 600 crores plus. Got it. So, in terms of ramp up, what will be the tentative timeline for Yarn and Fabric?

27:50 I think we should be as far as Yarn is concerned, I think we would have ramped up all our capacities by March 31 of this financial year. So that will be there. And fabric 100% ramp up may take a quarter or two more in FY 2028. Sir, lastly, in terms of the solar capacity, has any of the benefits accrued as yet or all of it will come in Q3 itself? I think some of it has come in the Q this year this quarter also. I think about INR 1.2 crore or INR 1.5 crore is the exact number. It has come in this particular quarter. Yes, it's going to come going forward. So if I'm not wrong, I think the number is INR 30 crores, 35 crores, right, for savings will start, say, post Q3?

28:42 I think annually, it will be about it should be in the at the EBITDA level, it should be around INR 50 crores. INR 50 crores. Okay. Sir, and this INR 50 crores, so maybe INR 50 crores divided by four will start from Q4. Is that safe to assume? Yes, definitely. Okay. All right. Thank you so much, sir. Thank you. The next question is from the line of Kushal Sengupta, an individual investor. Please go ahead. Hello. Yes. Congratulations on a great set of numbers. I just wanted to ask, any chance of you looking at a buyback at any point in time? I think at this point of time, we are in a growth phase where we are deploying our capital for the growth purposes, internal approvals as well as we are also taking some loans as well. So it would not be prudent for us to go for buyback at this point of time.

30:16 So we can see there is a 39.8% growth in EBITDA, and the margins has improved from 14% to 17.78%, which is a three seventy six bps incremental EBITDA. So can you just help me, like, sort of bridge the Y o Y EBITDA expansion? Like how much of it is from Cotton Yard spread? How much is the realization? And how much is from the mix or from the cost efficiency that you've been talking about? So can you just help me on that? A lot of I think a lot of number can think we'll have to go over here. I'll just give you a brief outline. On saving on the cost of power is, if you see, about 0.5% of our EBITDA, whatever if you compare with last year to this year, has gone is due to our power because we have done some savings on our existing systems also as well as the solar capacity has also increased. Some capacity increased last year, some capacity increased this year. So part of it is going from that side.

31:26 Also, that is about 0.5% of our EBITDA. Further, there is an improvement in the yarn realization. We have been able to increase the prices more than our raw materials. So I would be if you see our gross margin, they have substantially improved from 34%, 3535% levels to now to about 40% levels, 40% plus levels. So the major increase is due to the increase in the annualizations only. Okay. And I would like to just have a follow-up on that. So how much of this is coming through the cotton inventory that's been there, like the valuation gain on that? Is there anything from the cotton inventory?

32:11 No, we do not increase the valuation normally. So that is basically the inventory part because of substantial jump in the cotton prices. Definitely, there was some inventory gain. But as a policy of the company, we do not carry extraordinary inventories, and our inventories are normally balanced with our sales. If we have inventory, we also have the sales in hand going forward. So a very small portion would have come in from the inventory gains. Majority of it has increased due to the realization increase only. Understood. And is there any impact on the working capital cycle over the last quarter versus currently what it is? There is no major change as such. The cycle has more or less remained similar compared to the last quarters or the financial year.

33:12 The next question is from the line of Varun Gajaria from Boring AMC. So I just wanted to understand when we talk about Yarn capacity ramp up and fabric, what portion of that yarn will go towards internal consumption? What will be like internal consumption towards fabric? If you... You are talking about the overall AI engine consumption, or are you talking about that? I'm talking about the 1,100 plus CapEx that we are doing. Right? Okay. From that in... From Yarn, how much portion will go to fabric, and what will be towards fixed consumption? About 60% plus will go for our internal consumption and the balance will be for the safe, 40% will be for the sales.

34:11 Okay. So on fabric front, next year for the next year, at least we'll be able to do INR 200 crores from the fabric, right, considering that it's towards second half of the year? The facility ramp up is towards the second half of the year? 200 crores of what revenue? Incremental incremental revenue. We could be able to do 200 crores of incremental revenue from there? No. No. It will be much higher. It will be much higher. Our fabric revenue, if you see today, is totally about 700 crore plus for the last financial year. Going forward in FY 'twenty eight, we are expecting that our revenues will go up to INR 1,200 crores from this.

34:58 So net net around C and close addition from new capital? About INR 500 crores will be added. Yes, INR 500 crores has to be has to come from this. Got it. Got it. And and in fabric, the acetone should be around 11.2%... 1.2 times. How much is it usually? Pardon? One The acetone. What is acetone like in fabric? Acetone in fabric is if you see individually the fabric, then it is about 1.3, 1.4. But when it... Since we are a composite unit, it is less than one. Okay. Thank you so much for taking my question and all the best. Thank you. Thank you.

35:44 The next question is from the line of Narayan Denuk, an individual investor. Please go ahead. Sir, I just wanted to understand the industry outlook. I understand from you're saying that we are operating at optimum capacity, and we don't have spare capacities that we are not able to save more, that the volumes came down. But when we would have capacity, what are the avenues? What is the industry an overall as an overall, having tailwind or headwind or it is neutral outlook for next two to three years? You say that some of the capacities in off the market, sometimes closed.

36:31 So how is it happening overall in terms of industry structure? As far as industry structure is concerned, I think the outlook is very positive. Going forward, it's the kind of avenues which is opening for the Indian textile. We see very good opportunities going forward. Important thing is that we should be able to capitalize on them by selling the finished products. We are, at this point of time in India, a very good producer of yarns and fabrics. But ultimately, most of the European countries as well as The U. S. And Japan, which are the bigger markets for textiles and exports, is consuming the garments. So a lot of our future growth will depend on how the Indian garment industry takes up and also the home textile for the finished fabric take it up going forward.

37:28 A lot of capacities in India is going to come up in these sectors to ramp up the overall thing. For them, we'll be then they will need they will also need a lot of industrial supplies, which is in the form of yarns and fabrics. And we are part of that particular chain. There, the demand and supplies at this point of time, very finely balanced. In last two years, we have seen consolidation from weaker players going out of business, some smaller capacities which were unviable also stopped. This gave a very good, I would say, a balancing factor, so that because of which we could see this kind of price increases at this point of time. Going forward, not much capacity is coming up in these segments.

38:18 And we expect that the major investment which is going to happen will be in the field of commenting and also in the field of the finished products. So going forward, that is going to be the future for the country as such. Once if we are able to capitalize on that, then the future looks very bright, not even for two, three years, but even for both and longer. Yes, sir. Just a last follow-up. The way we expanded and increased the product lines vertically from time to time, are we thinking of going to garments someday? Definitely. We have to if we have to as I have highlighted here, that the future will be dependent on how our garmenting industry performs.

39:09 Definitely, we have to look for that particular field as well. We are just waiting for the right opportunity and right conditions. We want to first capitalize on whatever capacities we have, And this is going to be one of the areas which we are very looking very seriously. Maybe what you just pointed out that printing and other segments, other products that you are creating, I think they are downstream to garments. Once they are successful, I think you might venture into governments. Is that fair to assume? Should be. We are successful in ramping up our capacities for the fabric division and all the different kind of products are available in our basket, you may have a look at that also. I'll make sure that that helps as well.

40:11 The next question is from the line of Sandeep Gul, an individual investor. This is Sandeep Berg. My questions are also on the new capacity, is coming up. One, can you give me the time line for the new spending capacity as well as weaving and the finished product, finished fabric capacity that is going to come up over the next couple of quarters? Second, had been mentioning about 1,000 crores of turnover from the new capacity. But in the last six months, prices have gone up by about 20 odd percent. So are we looking at higher revenue from this new capacity that is coming up? And lastly, since you have an integrated fabric capacity and on January, you may expect between 15 to 18% depending on where the prices are. What would be the margin for the integrated fabric unit, if you can throw some light on that?

41:17 First of all, on your question on your time line, I think we'll start our weaving capacities in a couple of months' time. We should be starting the same. Processing capacities will take then further one, one point five more months to start, which is around Diwali. And spinning capacity should be on stream by around December. So next four months, we should be most of four to five months' time, most of our capacities should be up and running. If the utilization will increase slowly, so utilization levels will ramp up by March 31. For fabric, it may take slightly more time, especially the processing side. It will take more time as it is fashion oriented. So normally, it takes longer time to put the capacity at full level.

42:12 Then second question regarding the top line increase. You are very right, it can increase. But today, looking to the volatility, we are not factoring it in. Yes, the increase since there is an 8% to 10% increase in the prices. This can also happen with the finished with a new turnover also, this may go up also. Thirdly, you are you've asked about, think, third question was, Margin can you on the integrated circuit. Yes. On integrated normally we do not calculate in that manner. We are just calculating the overall margin. Yes, I have already highlighted that since we have at this point of time, our top line prices about 20% to 21% of our fabric, which you should go up to about 30% going forward. And this should add about 100 bps to 150 bps to our margin.

43:07 So, our overall margins may increase by this level. So, that is what so incrementally that should be the situation. Okay. No, that's very helpful. You mentioned that by first or second quarter of next financial year, you should be able to ramp up your new fabric capacity as well. So that's, say, about twelve to thirteen months from now. Beyond that, how are you looking at growing the business? There are various opportunities available for us. So we keep on evaluating the same. And at this point of time, there's no firm business plan. If you go over track, you see in our track record, we have been consistently growing.

43:53 If you see any block of three to five years, we have consistently had a CAGR of about north of 15%. And we hope to maintain the same. So we'll definitely let you know with our plans going forward what we are planning once we have reaffirmed that. Sir, the reason why I'm asking this question is because the market dynamics are changing. As you mentioned that market is looking very positive given the FDAs that India has signed and of course, given the strength that India has in the cotton levy chain. Now any new capacity will take at least twelve to fifteen months. And given that and given the market opportunity, I wanted to understand your thought process on expansion. Definitely, the capacities and we can get into some new lines as well we have the opportunity to expand in our existing capacities also.

44:50 But since I have no we have we can horizontally increase, we can vertically increase, both the options are available with us. And we will evaluate and accordingly come up with the firm plans. As of now, whatever CapEx we have announced, we are not completing any new CapEx in the next FY. FY 'twenty eight, this is all done from for FY to FY 'twenty eight. So anything which is going to come up is going to come up only after FY 'twenty eight. So let us in the meantime, we are working out what is the best options available with us and not hurry it up and see the markets which are opening and then decide. Thank you, sir. And my last question, sir, I think the new capacity is coming under the Rajasthan scheme or textile scheme, where a lot of incentives have been made available by the government.

45:42 Given these incentives, what kind of incremental margin can be added to the new business in your opinion? These incentives are available for our existing business also. It is not the last which last two expansions which we have undertaken, we also had these incentives available to us. A part of this incentive is capital subsidy, which does not form part of our revenues or other things. It is in the other income. So margin profile does not increase or change because of that particular fact. And then there is interest subsidy. Again, it is a part of EBITDA only. So margin profiling does not change with this kind of incentives which we have. Yes, of course, net profit increases.

46:32 So it is not going to majorly change. We are already having those incentives available on our earlier projects as well. Understood, sir. Thank you so much for answering my questions. Thank you. Thank you. The next follow-up question is from the line of Abhishek Shah from Fortitude Fund Management. Please go ahead. Hi, Just a quick follow-up on the previous participant. Just want to understand on the next level of growth. I understand once we get to this, we'll be at around INR4500 crores, INR4600 crores of turnover. You did mention that garmenting could be something that we could evaluate. So just want your thoughts on a couple of things, maybe are you we open to looking at the inorganic opportunities in garmenting maybe at a later stage? That is one.

47:21 Or and second is the garmenting versus home textiles, maybe just your views on each of them? First of all, definitely, if the opportunity is interesting, we would be interested in inorganic as well. There is no issues with that. Plus organic growth is also possible. Both ways we can look at this particular fleet. But we have to evaluate which areas, which particular segment of the industry we want to get into also in the government. So that evaluation will take some time and then only can go forward with it. So at this point of time, we have not formed up anything. It's just an, I would say, idea that this is an area which is growing, which has to grow if the country has to grow. So that is one of my things that you can say it is a rider that I'm not saying that we are entering into garmenting for sure.

48:17 So secondly, as far as second question was your second question was regarding? Sir, home textiles, I mean, what I'm trying to understand is that from INR 400 crores to INR 4,500 crores, we've made a journey. Now, of course, for us to keep maintaining a good amount of growth, maybe spinning, we might saturate at some levels. So what next is what I was trying to understand. So could it be home textiles or garmenting? Yes. Home textiles versus garmenting, both are the key growth areas for Indian textiles. Home textiles had a very rough phase for last one point five, two years because of these regulatory changes in The U. S. Since we had a lot of dependence on The U. S. Market from India. But our home textile, if you see the industry is very, very strong and having all the capabilities with the Europe opening, a lot of opportunities are also coming in their way as well. So, it will be a big opportunity in EU where the presence is smaller, could be where the home textile can grow very substantially.

49:21 So, definitely both of these areas have very good opportunities available and can be evaluated at any given point of time, both are equally good opportunities, I would say. Got it. Fair enough. That's all from me. Thank you. Yes. Thank you. Thank you. The next question is from the line of Poojit Agarwal, an individual investor. Please go ahead. Hello. Yeah. Hi. Thank you so much for giving me this I just wanted to understand what are blended power cost per unit would be once once our solar capacity comes on stream. Would it be possible to share that?

50:09 Exactly, I will not be able to share, but I can give you a ballpark number. This should be once we have our complete capacity up and running, which would be constituting about 65% of our 60% to 60, it's about 60% of our overall requirements. Our blended cost would be in the range of about INR 5.50. Got it. Got it. And considering the fact that some states like Jammu and Kashmir and other states have really lucrative policies for spilling industry, Jammu And Kashmir or let's say MPE for that matter as are we planning to diversify and increase our exposure in other states going ahead as a company?

51:00 We keep on evaluating the various policies all around the country, And there are pluses and minuses in all the states as far as policy is concerned. And I don't see any major negative factor remaining in Rajasthan that we have. We have only location disadvantage of slightly higher logistic costs. Otherwise, we are able to bring in solar capacity to this level, which is not possible in many states in the country. And the one you are mentioning as well, where the solar capacity cannot come to this level. There are pluses and minuses both ways. So this needs to be so it is not that we have to diversify or go into some other state compulsory.

51:49 We may go for other logical reasons, but not only for the incentives. Got it. Got it. Thank you so much. Thank you so much. Thank you. The next question is from the line of, an individual investor. Please go ahead. Hello. Am I audible? Yes, you are, please. Yes. Yes. Hi. Thank you for the opportunity. In the last call, if I'm not mistaken, you had mentioned that the margins the guidance you had given for margins was about 16% to 20%. We are somewhere in the midpoint there.

52:36 I... One of the earlier call... Callers, you mentioned that it would improve from your... Or, like, remain steady. I just wondering for the long term, maybe not in FY '27, but 2829, do we see this closer to 20%? That's my first question. Sorry. My my... I I have a few more questions. In terms of the value added products, I wanted to understand the demand of of these products. Third is you mentioned entering new markets other than UK and EU, the region. Is... Are there any other countries or, like, domestically, any other states that we've we've recently, ventured into?

53:30 And lastly, on the cotton inventory, could you tell us how many months of cotton inventory are we currently holding? Like your first question was regarding the margins. I have guided or have informed that the kind of product mix which our company has, we should be in the range of 16% to 20, while still maintain the same, that we should be the kind of product profile as well as the kind of cost metrics we have, we should be still remain in this range. It is always the endeavor of the management to go to the upper level of the band, which we have discussed. And that is a continuous effort, but cannot give any guidance on that part at this point of time, but we will definitely reach that level. It is our endeavor. We always try to move in that direction.

54:29 Your second question was regarding value addition. There are various value added products, which we are already having, and this is a continuous process. It is not in textiles. Once the value added products after three, four, five years become a commodity product. So, it is not that once you have done a value addition product, it will remain like this, the margins will remain like this. So we have to continuously evolve and identify the new product, which is going to happen. So this is a continuous process, which we keep on which keeps on happening. So we are always working on that direction that keeps our company in the leadership position.

55:14 So we continue to do that. Your third question was, I think, regarding the cotton inventory position. I'm sorry, I will we are not able to disclose about this. We normally do not disclose our inventory positions. And as far as new markets and other areas or other states are concerned, it's a continuous process. We do not disclose our marketing strategies on the investor conference calls where we are heading and where we are heading. We can just give you a broad picture where we can tell you that these are the areas where we can which may give us the growth to all the companies as well as ours. Understood. This is very helpful. Just one last question. On the knitted fabric production, it's slightly up sequentially.

56:02 And I remember the last call, you had mentioned that there were some headwinds from The U. S, and you were expecting utilization to be around, I think, 65%, 70%. Could you just give an update on how it is currently? This is in the range of about 55% to 60% at this point of time. We have not yet reached the 65% level. The usual utilization pre this U. S. Tariff regime used to be around 60% to 65%. We have not yet reached that level due to the various uncertainties, which is still prevailing in The U. S. Market. We have had a major presence of our net subject business in The U. S, which has impacted because of this lot of changes, which is happening very often in the tariff rates and others.

57:04 Due to the time constraint, we'll take one last question from the line of Uday Kumar from UK Capital. Sir, just one last question on the crop size. How was the crop size as the quarter as the season is going to end and the quality issues you have been mentioning in the earlier quarters? And how do you see the crop size and quality shaping for the next upcoming season? Last year, I think the have closed at about INR 3 crore 20 lakh bills, nearly we'll close it over normal pricing bills I am talking about, which is more or less equal to what we had in the previous year. This is about plus minus one. I think it was $3.26 or $3.27 lakh bills in the year 'twenty four, 'twenty five. I think we'll close at around $3.18 to $3.20 lakh bills around that level only.

58:07 So there is a very minor blip. The coming year, the crop at this point when the season starts when the sowing season started, the crop was the sowing was lagging behind. As of the last data, which I have received last week itself, that we have the acreage is more or less same, 05% or about 1% less than what it was in last year, so not a major change. The major factor today would be how the rains pan out during the next one month that will decide the size of the crop. But it is at this point of time, it is expected that it should remain at the similar levels as of last year. As far as the quality is concerned, the last day quality cotton the cotton quality was not that good.

58:54 And that has that was one of the reasons, which has prompted most of the spinners from India to import the cotton from outside the country. Although the cotton parity international and domestic was more or less same, but still people imported more cotton because the quality of the cotton available was not as good. In this year, at this moment, quality looks good, but it was at 26, 27, it quality looks good. But as I said, the range in the next four weeks is going to decide how it shapes up. Thank you, sir. Thank you for answering my question. Thank you. Ladies and gentlemen, that was the last question for the day. I would now hand the conference over to Mr. Avnish Chanda for closing comments. Over to you, sir.

59:42 Denis, sir, before taking your closing comment, just one quick comment on your margin. The first time after long, we have hit the mid of our given margin range. And since product mix is going to improve, power saving will be there. So can we say that our margin now will be in the guided range of 16% to 20% in foreseeable future? Definitely, that is what we are working on. And we definitely with the kind of changes in the margin profile of the company, looking to the power savings as well as the fabric business increase in the fabric business, we should remain in this brand, definitely. Sure, sir. Thank you very much, NITINSPIN and management team to giving us the opportunity to host this call. Sir, your closing comment?

1:00:36 Yes, definitely. With this, I would like to thank everyone for taking our time for joining the call. I hope we have been able to address the most of the queries. I would also thank Smith's team and Agniesi for hosting the call. For any other information or any of the which we have not been queries, which we have not been able to answer, you can contact our finance team or our Investor Relations advisers. Thank you once again for and hope to see you all in the next earnings conference call. Thank you very much. Thank you. On behalf of Nitin Spinners Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.