East India Securities has given Buy recommendation for Nitin Spinners with a target price of Rs. 740 in its research report issued on May 16, 2022
East India Securitie’s report on Nitin Spinners
Nitin Spinners Ltd (NSL) continued its stellar performance in Q4FY22. Sales at Rs7,691 mn – up 50.3% YoY & 9.1% QoQ, EBIDTA at Rs1,674 mn – up 60.7% YoY but down 6.0% QoQ, EBIDTA Margin 21.8% up 140bps but down 349bps QoQ PAT at Rs855mn – up 99.4% YoY but down 8.4% QoQ, The growth in the business led to near 100% capacity utilization of all products. Gross margins remain well supported, however declined QoQ due to lag in pass through of higher cotton prices. Nitin reported a cash profit of Rs1070 mn. Exports contributed ~73% of revenue for FY22 as the company was able to get higher margins.
We retain our Buy rating on the stock with a TP of Rs740 (10X FY24 EPS).