Nandan Denim Ltd. (NDL) has reported revenue growth of 22.7 per cent YoY at Rs. 1096.53 crores for the year ended March 31, 2015, and a CAGR growth of 21.2 per cent over the previous five years ending FY15. During the same period, NDL reported EBIDTA of Rs. 165.44 crores, up by 24.7 per cent as compared to FY14. Profit after tax grew by 30.7 per cent to Rs. 51.37 crores with a CAGR growth of 31.2 per cent over the previous five years ending FY15. It reported healthy EBIDTA and PAT margin in FY15 at 15.09 per cent and 4.69 per cent respectively.
The growth in revenue is on account of better scale of operations on the back of capacity expansion, penetration in the export segment and product diversification into yarn dyed shirting. Profitability improvement is on account of cost rationalization coupled with improved sales with a higher proportion of value added products.
During the year, exports constituted 13 per cent of revenue, and going forward the company intends to further increase its share in the international trade. NDL derived 11 per cent of its revenues from shirting business.
The Board of Directors has recommended a dividend of 10 per cent (Rs. 1 per equity share of face value of Rs. 10 each) for 2014-15. An interim dividend of six per cent has already been paid for the year, resulting in total dividend of 16 per cent for 2014-15.
With a long-term focus on sustainable and profitable growth, NDL has worked out a capacity expansion plan of Rs. 612 crores. As of May 2015, it has incurred expenditure of Rs. 304.91 crores. The capex is scheduled to be completed by March 2016.
This capacity expansion will enable the company to strengthen its domestic market share, expand exports business and have an increased focus on value-added segments.
Post expansion, NDL will become the largest denim manufacturer in the country and the fourth largest in the world, favorably 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 the last six years.
Mr. Deepak Chiripal, CEO, Nandan Denim Ltd., said: “Looking to the current per capita consumption of denim fabrics in India, the country needs to double up its manufacturing capacities over the next three years”.
Nandan Denim has expanded its capacity from 6 MMPA to the planned capacity of 110 MMPA over the last 10 years to emerge the front-runner in the segment.