Apr 10, 2015

Nitin Spinners Ltd : Value and Growth Stocks

Established in 1993 as a response to the apparent need in the Indian Textile industry for the high quality products and services. Nitin Spinners Ltd., an ISO 9001:2008 company and a Government of India Recognized Export House has today emerged as one of India's leading textile company.

Starting with a small open-end facility, the company has grown into one of the largest producers of 100% cotton yarn and fabrics in India. We possess one of the best pool of skilled workforce in the textile Industry.


Products:

Maintaining a broad and extensive range of products, we ensure that each product coming out of our unit is widely accepted by the textile industry of the world to manufacture multitude of products like: Apparels & Garments, Under Garments, Terry Towels, Woven fabrics, Home Furnishings, Carpets, Denim, Industrial textiles, Medical Textiles, Mattresses Stickings, Socks and many more.



Company invested 286 Cr on expansion. After completion of expansion, the total installed capacity of spindles. will increase from 77616 to 150096 and knitting capacity from 31 machines to 49 machines.


Nitin Spinners supplies its products to top Textile Companies particularly of Western and Northern India like Arvind, Raymonds, Decor, Alok, Ashima, Bhaskar, Nandan Exim, Creative Textiles, Shri Lakshmi Cotsyn, VHM, Pratibha, Maral, RSWM and many more.


Shareholding:
Promoters: 63.78%
Others: 36.19%

Nitin Spinners was into big debt but recently it came out of debt problem. Debt/Equity is at 1.1 which is not high. Recent capacity enhancement will add to more profit. Already growth is visible both in Revenue and Profit.

Stock P/E: 3.67
Price to Sales: 0.25
Price to book value: 0.85
Return on capital employed: 25.84%
Debt to equity: 1.10


NPM latest quarter: 6.56%

Margin, Asset utilization and every other parameters are in place now. It is available very cheap now.

Recent run-up may cause little correction but chance are very bleak. Start buying from today and add more in few days.

Update (Apr 11, 2015):
I forgot to check Contingent liabilities. It is little high. This comes under a risk.

Update (Apr 16, 2015):

News about the project completion before schedule is correct. I read this but did not verified it. Capex is mentioned above with info that this is going to end this year.

You can read the project completion news in Dec financial result -

Notes.

1) Commercial production from new plant started from 9th Feb, 2015.
2) Against 286 Cr, only 281 cr spent in the completion of project.
3) Planned date of completion was Mar 31, 2015 but it can start production very earlier. Good execution.
Apr 6, 2015

Free Cash Flow Vs Net Income

What is the difference between Free Cash Flow and Net Income? Did you ever bothered to ask yourself! If not, then ask first. Try to understand with me. :)

Here is explanation. I cannot tell you in my own word as those lines are not mine yet. It takes time.