Nahar Spinning Mills Soars 12% After Strong Q3 Results, Reports Profit Against Loss
Stock Price Movement
Shares of Nahar Spinning Mills Ltd., a small-cap textile company, surged 12% intraday on Monday following the release of its Q3FY25 results, showcasing a turnaround from losses to profitability.
The stock, with a market capitalization of ₹834 crore, opened at ₹221, the same as the previous close. After the market opened, it quickly climbed to an intraday high of ₹248, marking a 12% increase before stabilizing.
Q3FY25 Results: A Strong Recovery
Nahar Spinning Mills reported an impressive recovery in its financial performance for the third quarter of FY25. The company’s revenue rose 7.13% year-on-year (YoY) to ₹812 crore, compared to ₹758 crore in Q3FY24. On a quarter-on-quarter (QoQ) basis, revenue also saw a 4.64% increase, rising from ₹776 crore in Q2FY25.
The most striking turnaround was in its profitability. The company posted a net profit of ₹0.75 crore, marking a significant improvement from the ₹15.20 crore loss reported in the same quarter last year. This also reflects a recovery from the ₹17.45 crore loss recorded in Q2FY25.
Key profitability metrics also saw a notable improvement:
- Operating Profit Margin (OPM): 4.97% in Q3FY25 vs 2.51% in Q3FY24.
- Net Profit Margin (NPM): 0.09% in Q3FY25 vs -2.01% in Q3FY24.
This turnaround signals a potential revival in the textile industry, with improved demand and better cost efficiencies.
Impact of Budget 2025 on the Textile Sector
The Union Budget 2025 delivered key announcements for the textile industry, leading to a sector-wide rally of 10% in textile stocks. Some major highlights include:
- Increased Allocation: The government increased the textile sector’s budget to ₹5,272 crore, a 19% rise from the previous year.
- Cotton Productivity Mission: A five-year initiative was announced to improve cotton productivity, especially in extra-long staple (ELS) varieties, addressing one of the key challenges in the industry.
- Technical Textiles Boost: To encourage domestic production of agro-textiles, medical textiles, and geotextiles, the government added two more shuttle-less looms to the fully exempted textile machinery list, reducing costs for manufacturers.
These measures are expected to boost productivity, lower input costs, and enhance global competitiveness for Indian textile manufacturers like Nahar Spinning Mills.
Company Overview: Nahar Spinning Mills Ltd.
Nahar Spinning Mills Ltd. is a leading textile company in India, primarily engaged in manufacturing cotton and blended yarn, fabrics, and home textiles. Part of the Nahar Group, the company operates modern spinning mills and exports its products globally. It is known for its high-quality manufacturing standards and commitment to sustainable textile production.
Key Financial Metrics
Below is a snapshot of Nahar Spinning Mills’ key financial ratios:
| Metric | Value |
|---|---|
| Market Cap | ₹848 Cr. |
| Current Price | ₹233 |
| High / Low | ₹384 / 209 |
| Stock P/E | – |
| Book Value | ₹413 |
| Dividend Yield | 0.43 % |
| ROCE | 0.95 % |
| ROE | -2.41 % |
| Face Value | ₹5.00 |
| Debt to Equity | 0.49 |
| Industry P/E | 22.0 |
| Debt | ₹735 Cr. |
| PEG Ratio | – |
| Intrinsic Value | – |
| Graham Number | – |
| Piotroski Score | 1.00 |
What’s Driving the Growth?
- Improving Fundamentals: Nahar Spinning Mills’ operational improvements and cost efficiencies have helped it turn profitable.
- Government Support: The higher budget allocation and incentives for the textile industry have boosted investor sentiment.
- Rising Demand for Textiles: The company has benefited from growing domestic and international demand for quality textiles.
- Technical Textile Focus: The expansion in technical textiles presents a new growth avenue for companies like Nahar.
Market Outlook
With a resilient financial performance and government initiatives favoring the textile sector, Nahar Spinning Mills appears poised for a strong recovery. The increase in cotton productivity efforts and reduction in textile machinery costs will further enhance margins.
However, challenges such as global economic uncertainties and raw material price volatility remain. Investors should closely monitor the company’s future earnings growth and industry-wide trends.
Final Thoughts
Nahar Spinning Mills’ 12% jump following its Q3FY25 results reflects renewed investor confidence in the stock. With a turnaround from losses to profitability, improved profit margins, and sector-wide support from Budget 2025, the company has positioned itself well for future growth.
As the textile industry gains momentum, Nahar Spinning Mills could be a stock to watch for investors looking to capitalize on the sector’s recovery.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.