Nitin Spinner - textile yarn story


(Vivek Gautam) #104

Seems some operators hv entered the stock. Spoke to someone in company.They too are perplexed with volatility in share price but says their focus is on business only.

Sale is still happening at a brisk pace with inventory of only 1 week.Management has not sold a single share and their stake is a healthy 64%.Yuan depreciation may impact them a little but not to the extent market is behaving.Rupee is also depreciating.

Sale within India is specially good.Sales are happening to EU,US,Bangladesh and ROW.Latest automatic machinery has been installed.after taking into account the state govt incentive n TUFS effective rate of intt is only 3-4% .Expansion is happening as company is seeing huge demand for its products world over.

Management focus is on quality .They are workaholics yet they lead a very frugal lifestyle.

Discl- Invested since last few months.


(Aksh) #105

In the last quarter, every T, D and H of textiles companies has moved up crazily, Let’s wait and watch as some horror stories may continue in the weeks ahead :smiley:


(Vivek Gautam) #106

Nitin spinners has now moved to UC today.WE need to be endowed with equanimity in order to gain in stock mkt.Offcourse rupee depreciation has also helped but we need to learn to ignore the noise in market.


(Gaurav Agarwal) #107

@Vivek_6954 I have few doubt hence the question, I hope I am not bombarding you with question and my intention is to gain more clarity about company good of all.

Whom did you talk to in the company? Are you sure that the information you got was credible?

Have they started recently announced expansion? Have they tied up for loan?


(Vivek Gautam) #108

I spoke to somebody senior and responsible so no reason to doubt the info.


(Varadharajan Ragunathan) #109

Went through AR 15 -my big worry was that OCF has plummeted from Rs 86 Cr in FY 14 to Rs. 40 Cr. odd in FY 15 primarily on the back of increasing debtors, inventory. On top of it, there is a Rs. 196 Cr. loan taken to build out capacity.

Normally a company that takes such a huge loan ought to be more prudent on debtor management and not let cash flows slip - I hope it was a “Snapshot” issue and will wait to see BS in sept.

When I look at cash flows to debt ratio, it looks quite worrisome - I can only hope it’s a temporary issue and the mgmt is cognizant of the same.

Yet another thing I observed was how soon the law of diminishing returns catches up in a commodity business - more and more capital goes in and lesser and lesser profit comes out.

I am invested in it as a cigar butt and watching it closely.


(abhishek dey) #110

Hi,
Interesting POV. Calling it a cigar butt. Graham felt that a cigar butt was something worth a puff or two. And his idea was to sell it either in 3 years or with 50% profit. Wondering whats your cigar butt strategy, considering 50% profits from the stock must’ve come long ago. Curious. I’ve tried cigar butts, but in india they are mostly manipulated stocks in my opinion, so 50% profit is a good time to say goodbye to them.


(Varadharajan Ragunathan) #111

I cant understand what else this could be called - it was an inexpensive commodity producer when I bought it at 32-33 coming out of a CDR. nothing more - there are 200 mills doing the same stuff in india itself and like buffet says even if the management is extra ordinary, they are only gooing to be fighting to keep plugging new holes that emerge in the boat.

As for target price, I follow einhorn’s philosophy to take it as you go along - why should one commit to an exit at the time of entry - that’s like entering into a marriage thinking if I have two fights, i will file for divorce. I personally don’t do it that way. Re-assess facts and the risk-reward ratio - said all of this, i am sure that Q2 results will be optically very good and I will take a call based on the price then.

At this point of time, I am worried about the cash flow discipline in the business - nothing more, nothing less. I will watch the BS in sept to see how it goes and take a call - No pre conceived notions, no commitments - flow with the facts.


(Rohit Ojha) #112

Did anyone attend the AGM?


(Ashish Goyal) #113

Note that in towels India gained but not at the expense of China, whose share has also jumped from 23% to 26%. In sheets though the dominance is clearly visible.


#114

Did any one attend the AGM? Would be great if someone could share AGM notes here.
Results are due by tomorrow.


(JKS) #115

http://corporates.bseindia.com/xml-data/corpfiling/AttachLive/2641D161_381D_41EF_8125_8A00AF9F3C09_134315.pdf
results just came out
Not as stellar as last qtr but still decent


(Duby) #116

Decent debt reduction both LT and ST


(Akshay Kumar) #117

Nitin Spinners Ltd has informed BSE regarding a Press Release titled “Award for Energy Conservation”.

http://www.bseindia.com/corporates/ann.aspx?scrip=532698&dur=A&expandable=0


(JKS) #118

http://www.indianivesh.in/Downloads/635858597054986250_Nitin_Spinners_Ltd._Initiating_Coverage_Dec_2015.pdf
Target - 112
Initiating coverage by Indian Nivesh. I used to be a big Daljeet Kohli fan in the past but went away from his path, after a few things did not play out but off late, I am back to liking him and his team !! if someone can digest this D/E, the rest looks stellar, as ever in Nitin…off late, Mr.Market seems to like it too
PS - Invested but no transactions in the last few weeks…I am at breakeven @CMP


(Varadharajan Ragunathan) #119

I am not sure if this report factors in the falling prices of texxtile yarns because of over capacity which is a clear trend over the last few months. I would be cautious about extrapolating the last few quarters ahead even if volumes hold up.


(Varun) #120

The debt / equity is just too high, cotton prices have been fluctuating over the past year between 5- 10%, globally exports seem uncertain, so not sure why is the business adding more capacity and more debt. Its not like this is a now or never moment for the business. Wouldnt a more prudent management try to ease off the debt before adding more.

Also management salaries are too high at 7% of net profit. This compared with the 10% they give as dividend payout, shows an unfriendly management.

Overall was interested seeing the growth and low valuations, but will give it a skip.


(Anoop) #121

New capacities to boost revenue growth in FY18: Nitin Spinners


#122

Q1 results are out. Top line growth is flat QOQ and negative YOY. Looks like there is no volume growth. Bottom line has gone up by 8% QOQ primarily due to lower raw material cost and lower tax outgo.

http://www.bseindia.com/corporates/ann.aspx?scrip=532698&dur=A&expandable=3


(Roopesh Kohad) #123

Q2 results out on 8th Nov. Results seem to be decent and expansion is going well. There is one statement in the results “Expansion project for installation of 72960 Compact Spindles is progressing ahead of schedule and test runs have been commenced.”

http://corporates.bseindia.com/xml-data/corpfiling/AttachHis/F2AB6E07_9C24_4302_9D1D_D664216B53FE_132849.pdf