Emkay Global has raised its price target for Nitin Spinners to Rs 800, following a strong Q2 FY27 performance where net profit jumped 155% year-on-year. Driven by higher yarn realizations and new capacity, the company’s stock recently hit a 52-week high as investors weigh its long-term revenue expansion goals.
Emkay Global has maintained its positive stance on Nitin Spinners, increasing its price target for the stock to Rs 800 from Rs 700. This revision comes as the textile manufacturer delivered a strong performance in the second quarter of the 2027 fiscal year, reflecting successful efforts to scale its production and capture better market prices for its products.
Nitin Spinners reported a significant growth in its core earnings, with EBITDA rising 76% year-on-year to Rs 1.75 billion. The total revenue for the quarter stood at Rs 985.15 crore, while net profit more than doubled, increasing 155% compared to the same period last year to Rs 88.66 crore. These results were primarily driven by a 28% increase in yarn realizations, which allowed the company to successfully offset rising fiber costs.
Strategically, the company is benefiting from its recent fabric production capacity expansion. Despite a minor one-time cost associated with ramping up these new lines, the firm maintained an adjusted EBITDA margin of 18.5%, showing a sequential improvement. Investors are also noting the impact of external policy support, as the extension of the cotton import duty waiver until December 31, 2026, provides a clearer outlook for supply-side stability in an environment where domestic cotton demand remains robust.
Market sentiment has been positive, with the stock recently reaching a 52-week high of Rs 680, tracking the company’s improved operational metrics and confidence in its long-term revenue target of Rs 48 billion to Rs 50 billion by fiscal year 2029.
While the outlook appears promising, investors may continue to monitor several operational risks inherent in the textile sector. The ability of the company to consistently pass on fluctuations in raw material costs, such as chemicals, coal, and freight, will be crucial to maintaining margins. Additionally, the fabric division's utilization rates and potential volatility in global yarn demand remain key factors that could influence future profitability. Any delay in demand recovery or sudden shifts in international pricing could pressure realizations, making consistent execution across both yarn and fabric segments a critical monitorable for shareholders in the coming quarters.