Nahar Spinning Mills Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹254.00+₹4.05 (+1.62%)

DalalBaazaar Score

45 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Thin profit margins are the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Nahar Spinning Mills Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Nahar Spinning Mills Limited manufactures and sells yarns and garments in India.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees9,863

Annual revenue₹3,129 Cr

How does it make money?

Turns over ₹3,129 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 9,863 employees supports ₹31.7 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹31.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE25.9%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +14% while net margin moved -83% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+14%

Margin effect-83%

DalalBaazaar Score

45/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 4.6% — barely ahead of inflation
✗ Profit has declined at 41.8% a year
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows

Quality vs. Valuation

Company Quality

39/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

11.6x

3Y Median

9.9x

40 monthly readings · mean 30.3x · range 6.0x–91.0x

Sector Median

69.2x

median of 4 sector peers

⚠️Current valuation is approximately 17% above its 3y median of 9.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 83% below the peer median of 69.2x.

vs. its own history

Fair

9.9x median over 40 months · +17%

vs. sector peers

Cheap

69.2x median of 4 peers · -83%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.5x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 7.1% to 1.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 9.9% to 4.4% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 1 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 35% over 3 years.
🟡Profit is decliningFinancial
Net profit is down 80% over 3 years.
🟡Margins are compressingFinancial
EBITDA margin is down 3.4 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 62% against revenue up 14% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 83% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 9.2% to 5.8%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 5.4x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 62% against revenue up 14%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 4.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 7.1% to 1.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 5.8%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 5.4x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 4.6% CAGR
Latest reported year was 17.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹119 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹916 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

11.6x

Cheap

Cheap against the generic band

P/B Ratio

0.61x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹21.87

Profitable

Profitable on a per-share basis

ROE

1.4%

Weak

Weak capital efficiency

ROCE

4.4%

Weak

Low return on total capital employed

Debt/Equity

0.65x

Moderate

Moderate leverage

Revenue Growth (YoY)

17.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

337.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.39%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹119 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

10.6%

Average

Average margins

Net Margin

2.3%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.71

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.56

Defensive

Steadier than the market

52W Range Position

52%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

260.9 / 279.6

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

35.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2,736 Cr	₹2,955 Cr	₹3,191 Cr	₹3,129 Cr	+4.6%
EBITDA	₹251 Cr	₹113 Cr	₹189 Cr	₹181 Cr	-10.4%
EBITDA Margin	9.2%	3.8%	5.9%	5.8%	—
PAT (Net Profit)	₹111 Cr	-₹51 Cr	₹12 Cr	₹22 Cr	-41.8%
EPS	₹32.24	₹-13.84	₹3.09	₹6.92	-40.1%
ROE	7.1%	-3.4%	0.8%	1.4%	—
ROCE	9.9%	0.2%	5.4%	4.4%	—
Total Debt	₹730 Cr	₹1,151 Cr	₹1,101 Cr	₹983 Cr	+10.4%
Free Cash Flow	₹338 Cr	-₹608 Cr	₹48 Cr	₹119 Cr	-29.5%

🟢 Revenue has grown at 4.6% a year over 3 years.

🔴 EBITDA has shrunk at 10.4% a year over 3 years.

🔴 EBITDA Margin has fallen from 9.2% to 5.8% over 3 years (-3.4 pts).

🔴 PAT (Net Profit) has shrunk at 41.8% a year over 3 years.

🔴 EPS has shrunk at 40.1% a year over 3 years.

🔴 ROE has fallen from 7.1% to 1.4% over 3 years (-5.7 pts).

🔴 ROCE has fallen from 9.9% to 4.4% over 3 years (-5.5 pts).

🔴 Total Debt has grown at 10.4% a year over 3 years.

🔴 Free Cash Flow has shrunk at 29.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,693 Cr

Total Liabilities

₹1,181 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

₹190 Cr

Capex

-₹71 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

77.1%

Corporate Actions

Dividend Rate

₹1

Ex-Dividend Date

04 Sept 2026

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

2 positive4 general

Nahar Spinning Mills Share Price Forecast: 3 Year Outlook to 2030

Univest, 22 Jul

Nahar Spinning Mills sets Sept 4 record date for ₹1 dividend

scanx.trade, 05 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Nahar Spinning Mills Ltd. Shareholding Pattern – Promoters, FIIs & DIIs

Value Research, 31 Aug

Nahar Spinning Mills (NSE:NAHARSPING) Could Be A Buy For Its Upcoming Dividend

Simply Wall Street, 31 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Nahar Spinning Mills Ltd

Equitypandit, 20 Feb

Nahar Spinning Standalone June 2026 Net Sales at Rs 966.10 crore, up 17.92% Y-o-Y

Moneycontrol.com, 10 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Valuation

WeakBusiness Quality · Growth · Profitability · Risk

Points for each in the Score ↑

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑