Nitin Spinners Q4 FY26: Record Quarter, Bigger Bets on Fabrics and Renewable Power

Nitin Spinners ended FY26 with its strongest quarter on record. In Q4 FY26, revenue rose to INR 859.8 crore, up 7.4% sequentially and 2.2% year on year. Profitability improved faster than revenue. EBITDA increased to INR 130.4 crore and the EBITDA margin expanded to 15.17%, up 124 basis points quarter on quarter. PAT came in at INR 57.4 crore, up 29.2% sequentially.

The full year was more muted. FY26 revenue was INR 3,213.9 crore, down 2.8% from FY25, and EBITDA declined 4.0% to INR 452.8 crore. Still, PAT edged up to INR 177.6 crore. Management described FY26 as a challenging year for the textile industry, with a difficult first half, but said demand and yarn prices improved meaningfully in Q4 due to better channel restocking and improved utilization.

Q4 strength built on realizations and utilization

The company attributed the record quarter to improved yarn prices and optimum capacity utilization. In the earnings call, management said spinning capacity was running at over 98% utilization and woven fabric capacity at over 90% utilization in Q4. That operating leverage mattered. Even with only modest year-on-year revenue growth in Q4, margins expanded as realizations improved and internal efficiency initiatives kicked in.

The profit and loss statement for Q4 FY26 showed finance costs of INR 16.8 crore, lower than the INR 21.4 crore reported in Q4 FY25. For the full year, finance cost was INR 70.9 crore versus INR 90.4 crore in FY25, supporting bottom line stability.

Mix remains yarn-led, but fabrics are the margin lever

Nitin Spinners remains predominantly a yarn business, with yarn contributing 73.8% of FY26 revenue. Fabrics contributed 21.0% and others 5.1%. Management repeatedly emphasized that finished fabric margins are structurally superior to yarn margins, and this is the logic behind its next leg of capex.

The company’s revenue mix has been stable across FY25 and FY26. In FY26, yarn revenue was INR 2,373.1 crore while fabrics revenue was INR 676.5 crore. Exports remain a significant contributor. The presentation shows exports at 61.9% of FY26 revenue and domestic at 38.1%.

Management also explained why fabrics can show pricing changes with a lag versus yarn. On the call, they said knitted fabric realizations improved about 5% sequentially while woven fabric realizations improved about 2% to 2.5%, and that the pass-through typically takes time.

One area that saw weakness was knitted fabric volumes. Management attributed this to high US tariffs on low-value knitted products, which reduced viability and led to lower production and some customer losses during the period of tariff disruption. They said demand is now returning as tariffs were reduced, though rebuilding customer relationships will take time.

Capex and renewables: the two large FY27 execution themes

The centrepiece of the company’s forward strategy is a large expansion program. The investor presentation outlines an addition of 22,400 MTPA of spinning capacity and 35 million metres per annum of weaving and finishing capacity. Total project cost is stated at approximately INR 1,120 crore, planned to be funded through internal accruals and term debt.

A key design feature is integration. Management said around 60% of the incremental spinning capacity would be used in-house for fabric manufacturing. The objective is to expand into premium and value-added products, widen the product portfolio, enter new markets and improve margins.

The timeline is also fairly specific. In the call, management said the project is expected to commercialize in the second half of FY27. They added that some fabric capacity could start in the October to December period, while the spinning capacity may start later, around December-January to January-February.

Alongside manufacturing capex, the company is executing a large renewable power program. The presentation details a build-out across solar and hybrid power purchase agreements, with total capacity shown at 97.1 MW. The company also stated that this could cover about 50% to 55% of annual power consumption.

Management quantified expected benefits. They said the renewable initiatives could lead to savings of around INR 50 crore per annum once fully implemented. For FY27 itself, they guided to savings of around INR 30 crore to INR 35 crore as projects get commissioned through the year.

The company also highlighted policy support. The expansion project is expected to be eligible for benefits under the Rajasthan Investment Promotion Scheme 2024, including interest subsidy, capital subsidy and electricity duty benefits.

Guidance and what investors should track

While the company did not provide product-level margin targets, management offered a clear view on normalized profitability. On the call, they stated that given the product profile, the normal EBITDA margin should be in the range of 16% to 20%, and that they expect to fall into this range during FY27.

They also provided an indication of leverage levels post capex. Management said total debt including working capital exposure could be in the range of INR 1,900 crore to INR 2,000 crore after the expansion.

From a risk lens, management discussed external uncertainty. They cited West Asia conflict-driven supply chain disruptions, higher freight costs and longer transit times, and said transit time increased by around two weeks for certain destinations. They also highlighted cotton pricing dynamics and policy uncertainty, including the industry’s request for the government to remove cotton import duty to ensure availability of quality cotton at reasonable prices.

The FY26 cash flow statement showed net cash from operating activities of INR 410.5 crore, supporting the internal funding leg of capex. Net debt to equity stood at 0.76x as of March 2026, down from 0.89x in March 2025.

Takeaways

Nitin Spinners delivered a strong Q4 with record revenue and improving profitability, supported by better yarn prices, high utilization and internal efficiency measures. FY26 was steady rather than spectacular, but the company’s focus is clearly shifting toward the next capacity cycle.

Execution in FY27 will revolve around two measurable outcomes: commissioning and ramp-up of the spinning and fabric expansion in the second half, and visible power cost benefits as renewable capacity gets added. If the company delivers on timelines and the value-added fabric mix rises as intended, management believes margins can normalize into the 16% to 20% range over FY27.