Nitin Spinners: Q3 Profit Dips Marginally, Eyes Recovery with Major Capex Plan

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AuthorRiya Kapoor|Published at:
Nitin Spinners: Q3 Profit Dips Marginally, Eyes Recovery with Major Capex Plan
Overview

Nitin Spinners Limited reported a mixed Q3 FY'26 performance. Revenue dipped 4.5% YoY to INR 800.68 Cr but grew 5.3% QoQ. PAT saw a marginal 0.8% YoY decline to INR 44.41 Cr, yet rose 27.7% QoQ. The company is embarking on a significant INR 1,120 Cr expansion and a INR 230 Cr solar power project, aiming to boost future growth and efficiency amidst positive long-term textile sector outlook.

📉 The Financial Deep Dive

Nitin Spinners Limited announced its financial results for the third quarter and nine months ended December 31, 2025 (Q3 FY'26), revealing a mixed performance characterized by YoY declines offset by QoQ improvements.

The Numbers:

  • Revenue: For Q3 FY'26, revenue stood at INR 800.68 crores, a 4.5% decrease year-on-year (YoY) from INR 838.87 crores in Q3 FY'25. However, it marked a positive quarter-on-quarter (QoQ) uptick of 5.3% from INR 760.08 crores in Q2 FY'26, driven by stable demand and higher sales volumes. For the nine months ended December 31, 2025, revenue was INR 2,354 crores, down 4.5% YoY.
  • EBITDA: The company reported EBITDA of INR 111.54 crores for Q3 FY'26, down 4.8% YoY from INR 117.16 crores. QoQ, EBITDA saw a substantial rise of 12.0% from INR 99.56 crores. For the nine-month period, EBITDA declined 8.7% YoY to INR 322.35 crores.
  • PAT: Profit After Tax (PAT) for the quarter was INR 44.41 crores, a marginal 0.8% decrease YoY from INR 44.78 crores, but a robust 27.7% increase QoQ from INR 34.78 crores. Nine-month PAT stood at INR 120.18 crores, down 6.9% YoY.
  • Margins & EPS: The EBITDA margin for Q3 FY'26 was 13.93%, a slight improvement from 13.10% in Q2 FY'26 but marginally lower than 13.97% in Q3 FY'25. Earnings Per Share (EPS) for the quarter was INR 7.90.

The Quality & Management Commentary:
The QoQ recovery in revenue and PAT signals resilience, despite broader YoY headwinds such as weaker demand and reduced selling prices impacting the top line. Management expressed optimism regarding the long-term structural tailwinds in the textile sector, citing government initiatives, the upcoming EU Free Trade Agreement (FTA), and recent US tariff reductions as key growth drivers.

The Grill & Strategy:
Management acknowledged the impact of US tariffs on the knitting segment, which led to scaled-down operations, but anticipates revival following recent tariff reductions. They project an improvement in margin profiles by 100-150 basis points (bps) from current levels, targeting around 16% by FY'28. Discussions also touched upon yarn realization and spread, with exploration into new geographies and value-added fabric segments. While garmenting is on the horizon, definitive plans are yet to be established. The company remains open to inorganic growth opportunities.

🚩 Risks & Outlook

Risks: The primary risks highlighted include the fluctuating impact of international trade policies (like US tariffs), which can affect specific business segments. Execution risks associated with large-scale capacity expansion also need to be monitored.

The Forward View: Investors will be keen to watch the ramp-up of the new integrated fabric facility, which is projected to generate an additional INR 650-700 crores in revenue. The operationalization of the captive solar power plant by Q2 FY'27 is expected to yield significant annual savings of approximately INR 51 crores, bolstering profitability. The company's strategic focus on capacity expansion and leveraging macro-economic tailwinds positions it for future growth, contingent on demand recovery and effective execution.

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