How has been the historical performance of Nahar Spinning?

Revenue and Profitability Trends

Net sales for Nahar Spinning have demonstrated a generally upward trajectory, rising from ₹2,305.20 crores in March 2019 to ₹3,284.56 crores in March 2025. Despite a peak in March 2022 at ₹3,593.86 crores, the company experienced a dip in the subsequent year before rebounding. Operating profit margins, excluding other income, have been notably volatile, reaching a high of 22.37% in March 2022 but falling sharply to 4.92% by March 2025. This fluctuation reflects varying operational efficiencies and cost pressures over the years.

Profit after tax (PAT) margins have mirrored this variability, peaking at 13.97% in March 2022 but declining to a marginal 0.38% in March 2025. The company recorded losses in fiscal years ending March 2020 and March 2024, indicating periods of financial strain. Earnings per share (EPS) have similarly oscillated, with a high of 139.27 in March 2022 and a low negative EPS in March 2024, underscoring the impact of profit volatility on shareholder returns.

Cost Structure and Expenditure

The company's raw material costs have consistently represented a significant portion of total operating income, increasing from ₹1,422.03 crores in March 2019 to ₹2,222.28 crores in March 2025. Employee and power costs have also risen steadily, reflecting expansion and inflationary pressures. Total expenditure excluding depreciation rose from ₹2,075.09 crores in March 2019 to ₹3,123.11 crores in March 2025, indicating increased operational scale but also tighter margins.

Interest expenses have escalated over the years, reaching ₹74.20 crores in March 2025, which, combined with depreciation charges, has compressed profit before tax. Exceptional items have slightly impacted recent years, with negative adjustments recorded in fiscal years 2023 to 2025.

Balance Sheet and Asset Management

Nahar Spinning's shareholder funds have grown substantially from ₹897.91 crores in March 2021 to ₹1,489.36 crores in March 2025, supported by reserves that nearly doubled over the same period. The company's total liabilities have also increased, reaching ₹2,749.77 crores in March 2025, with total debt rising to ₹1,100.88 crores, reflecting higher leverage to support growth.

On the asset side, net block values have increased steadily, indicating ongoing capital investment, while current assets have remained robust, supported by inventories and sundry debtors. Cash and bank balances have fluctuated but showed a notable increase to ₹33.16 crores in March 2025, signalling improved liquidity.

Cash Flow and Financial Health

Cash flow from operating activities has been inconsistent, with a significant negative outflow in March 2024 but a recovery to ₹93 crores in March 2025. Investing activities have generally involved cash outflows, reflecting capital expenditure and investments, while financing activities have fluctuated between inflows and outflows, indicating active management of debt and equity financing.

Net cash inflow was ₹31 crores in March 2025, a positive sign after previous years of volatility. The company’s book value per share has increased from ₹248.69 in March 2021 to ₹412.5 in March 2025, highlighting growth in net asset value per shareholder.

Conclusion

Overall, Nahar Spinning's historical performance reveals a company that has expanded its revenue base and asset footprint significantly over the past six years, albeit with notable fluctuations in profitability and cash flow. The firm’s ability to manage rising costs and leverage will be critical going forward, as it navigates market challenges and seeks to stabilise earnings. Investors should weigh these factors carefully when considering the company’s stock for long-term holdings.

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