2024-07-25 23:00:04
New Delhi: Shares of smallcap company Nitin Spinners Limited have seen a huge jump. Brokerage firms are very excited about the company after the good results for the first quarter ended June 30, 2024. Analysts believe that on the basis of strong financial performance and increase in margins, the company’s shares can touch the level of Rs 530 in the coming time. Nitin Spinners has reported a net profit of Rs 42.1 crore in the June quarter. This is 47.5 percent more than the same quarter last year. The company’s revenue in the first quarter of the current financial year was Rs 803 crore, which is 30.1 percent more than the same period last year. EBITDA for the quarter is Rs 118.8 crore. This is 56.1 percent more than the same quarter last year. EBITDA margin has increased by 246 basis points (bps) for the period April-June 2024. It has become 14.8 percent. The company’s gross margin increased by 2.52 per cent to 37.2 per cent, while its cash profit for the quarter stood at Rs 7.8 crore. Exports contributed 64 per cent to the company’s total revenue in the first quarter.
BUY rating for the stock
SMIFS said in its report, “Nitin Spinners continued its good performance in the quarter despite low demand. Recent capacity expansion has led to an increase in sales, EBITDA and PAT on a year-on-year basis.” With a BUY rating, SMIFS said, “Margins continue to improve due to lower cotton prices, but profitability is still below normal levels.”
The report further said, “All new capacity except knitwear is now at almost full utilisation. With cotton prices remaining stable at current levels, expectations of further improvement in demand and approval of RIPS incentives, we believe QoQ performance should continue to improve from here.” SMIFS has a target price of Rs 532 for the stock, which indicates an upside of 23 per cent.
More than 1,100% increase in four years
Shares of Nitin Spinners hit their 52-week high of Rs 447.05 on Thursday. This took its total market capitalisation to Rs 2,500 crore. The stock closed at Rs 432.10 in the previous trading session. The stock has gained nearly 25 per cent in the last two weeks.
Nitin Spinners shares have gained over 1,100 per cent in the last four years. From a level of Rs 37 in July 2020, the stock has risen to a level of Rs 447. It has almost doubled investors’ wealth from its 52-week low of Rs 225. The stock has gained 35 per cent so far in the year 2024.
East India Securities said, “Though the first quarter was challenging, Nitin is optimistic about the company’s long-term growth prospects. The completed capacity expansion in knitting and weaving capacity will boost its sales volumes.”
Disclaimer: The suggestions given in this analysis are those of the individual analysts or broking companies, not of NBT. We advise investors to consult certified experts before making any investment decision as stock market conditions can change rapidly.