Chiripal Group company and India’s second biggest denim fabric producer, Nandan Denim Limited posted revenue growth of 22.7 per cent year over year in the fourth fiscal quarter ended March 31, 2015.
In a press release, Nandan Denim said its revenue for the fourth quarter of fiscal 2015 climbed 22.7 per cent over the quarter ended March 31, 2014 to Rs 1096.53 crore.
“The growth in revenue is on account of better scale of operations on the back of capacity expansion, penetration in export segment and product diversification into yarn dyed shirting segment,” it informed.
Nandan also added that it achieved a CAGR growth of 21.2 per cent over the previous five years ending fiscal 2015.
During the reporting quarter, EBIDTA rose to Rs 165.44 crore, up 24.7 per cent over the fourth quarter of fiscal 2014.
Profit after tax grew by 30.7 per cent year on year to Rs 51.37 crore in the quarter under review and in process also achieved a CAGR growth of 31.2 per cent in profit after tax in the previous five fiscals.
During the fourth quarter of fiscal 2015, Nandan also recorded healthy EBIDTA and PAT margin at 15.09 per cent and 4.69 per cent, respectively.
“Profitability improvement is on account of cost rationalisation coupled with improved sale realisations with higher proportion of value added products,” the denim producer explained.
During fiscal 2015, export constituted 13 per cent of its revenue and going forward the company intends to further increase its share in the international trade.
With a long-term focus on sustainable and profitable growth, Nandan has earmarked a capacity expansion plan at a cost of Rs 612 crore.
As on May 2015, it has incurred capital expenditure of Rs 304.91 crore, with the remaining amount to be utilised by March 2016.
This capacity expansion will enable the company to strengthen its domestic market share, expand its exports business and have an increased focus on value-added segments.
Post expansion, NDL will become the largest denim manufacturer in Indian and the fourth largest in the world, favourably placed to tap the growing domestic and international denim demand.
Further, the backward integration process is expected to be margin accretive while improving operational flexibility, execution consistency and quality standards.
With the full capacity in place, the future stream of cash flows is expected to better the return ratios of the company that has been outscoring industry averages for last 6 years.
Deepak Chiripal, CEO, Nandan Denim said, "Looking to the current per capita consumption of denim fabrics in India, the country needs to double up its manufacturing capacities over the period of next three years."
Nandan Denim has expanded its capacity from 6 MMPA to the intended capacity of 110 MMPA over the period of last 10 years to be the front runner in the segment.
