Nitin Spinners Limited (NSE: NITINSPIN) Q4 2025 Earnings Call dated May. 14, 2025
Corporate Participants:
Unidentified Speaker
Dinesh Nolkha — Chairman and Managing Director
Purushottam Maheshwari — Chief Financial Officer
Awanish Chandra — Moderator
Analysts:
Unidentified Participant
Manish Ostwal — Analyst
Raman Kerti Venkata — Analyst
Lakshmi Narayanan — Analyst
Pratik Tolia — Analyst
Niraj Mansingka — Analyst
Sandeep Bhaiya — Analyst
Aditya Kumar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Nitin Spinners Limited Q4FY25 earnings conference call hosted by Smith Limited. As a reminder, all participant lines will be in the listen only mode and. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Avnish Chandra. Thank you. And over to you sir.
Awanish Chandra — Moderator
Thank you very much Anushka. And thank you very much everyone for joining the call. On behalf of I welcome you all to quarter four and full year FY25 earnings conference call of Nippiness Venus Linted. We are pleased to host the top management of the company. Today we have with us Mr. Dinesh Nolka, promoter and Chairman and Managing Director of the company and Mr. P. Maheshwari, CFO of the company. We will start the call with initial commentary of on results and then we will open the floor for question and answer. Now I will hand over the call to Mr.
T. Maheshbury, CFO of the company. Over to you, Maheshwari sir.
Purushottam Maheshwari — Chief Financial Officer
Thank you Avnir Ji. Good evening and a warm welcome to all the participants to this Q4 and FY25 earning call of Nathan Stevens. I hope all of you have had a chance to look at our next presentation that is uploaded on the company’s website as well as stock exchange before CMD elaborate on present industry scenario. I am giving the financial highlights for the quarter and year ended 31st March 2025. The company registered an increase of 14% in revenue on annual basis and achieved revenue of 3305.65 crores in FY25 against 2905.65 crores in FY24. This is the highest ever revenue achieved by the company in spite of lower yam prices on export front.
Also, company achieved Highest exports of rupees 2111 crores during the year which is higher by 24% against last year. EBITDA for the year stood at rupees 471.43 crores as compared to rupees 377.05 crores in FY24. There is an increase of 25%. EBITDA margin for year improved from 12.98% in last year to 14.26% during the current year. PAT for the year is rupees 175.43 crores as against rupees 131.52 crores in last year. That’s an increase of 33% EPS and cash EPS for the year is 31.20 and 57.4 rate per share respectively against last year EPS of 23.29 and cash EPS of 44.47 per share.
As regards quarterly performance, the revenue for Q4.25 is rupees 841.29 crores against Q4.24 revenue of rupees 800.71 crores and Q3.25 revenues of 838.87 crores. Thus it has grown 5% YoY power flat against the immediate previous quarter. EBITDA for the quarter is rupees 120.32 crores against rupees 116.24 crores in Q4FY24 and 117.16 crores in Q3FY25. PAT for the current quarter is rupees 46.37 crores A that gives rupees 39.17 crores in Q4FY24 & rupees 44.78 crores in Q3FY25. The board of directors have recommended a dividend of 30% on equity share capital against 25% last year coming to the company’s operational performance.
Overall, the company has delivered reasonable performance during the year in the challenging times with 13% increase in top line increase in operating margin and 33% increase in PAT. This was achieved due to optimum utilization of enhanced capacities, focus on value grade products and favorable geometry. Prices on the operations front for spinning capacity is currently running at over 96% utilization while weaving and finishing divisions are operating at more than 90%. As announced in last board meeting, the Board of Directors has approved a significant Capex plan of approximately rupees 1100 crores across the existing verticals I.e. yarn and fabrics, mainly focusing on value addition and cost efficiencies to maintain our growth momentum.
That is all from my side. I now request Singh Dinesh Ji to appraise about the industry and current business scenario.
Dinesh Nolkha — Chairman and Managing Director
Good afternoon everyone. Thank you Mahsviji. The Textile industry is showing promising signs of steady demand and moderate growth even in the face of global challenges which we are seeing all around sectors like geopolitical tensions. Regulatory challenges like tariff and non tariff barriers have created a complex environment. Yet the industry continues to move forward by staying flexible and finding ways to overcome these hurdles. On the domestic front, the demand has been good and the cotton prices have remained supportive leading to moderate improvement in the performance. Export volumes have also increased despite global pressures. Still here it is to note that the domestic cottons have slightly been more expensive than the international cottons which continues to affect the margin.
India’s role in the global textile trade is improving steadily and export recovery is gaining momentum. Our competitive edge in key markets like the US will drive stronger order flows in both home textile and garments in the long term. However, we have a short term uncertainty due to non clarity on the final tariffs by the United States. Recent tariff announcements as of now by the US Administration are expected to benefit the Indian apparel sector. A new tariff structure appears to be more favorable for India compared to the competing countries likes of China, Vietnam and Bangladesh. This will likely result in higher demand for Indian garments and home textiles and that will in turn boost the domestic consumption of yarns and fabrics.
Similarly, the free Trade agreement which has been recently done with UK is a positive step that will strengthen India’s textile exports in the long term. At metal spinners, our well diversified product portfolio and focus on value added products allow us to benefit from the rising export momentum and India’s improved position in the global trade. We also have a well diversified export base across Asia, Europe and Latin America which helps us to take the advantage of global demand while reducing the risks of being tied to any single region. To maintain our growth momentum, we are steadily progressing on the capital investment plans that were announced in our earlier board meeting detailed in the investor presentation as well, these initiatives are aimed at strengthening our market position, expanding our product portfolio and introducing high value specialized products and to meet the rising demand for quality fashion fabrics from domestic and international brands, backbed disciplined capital deployment and prudent working capital management.
We remain financially strong and well positioned for a sustained growth going forward. Now I would like to request Niji to open the floor for the question and answers so that we can take the matter forward.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star n1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press Star and participants are requested to use handsets while Asking a question Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Manish Oswal from Nirmal Bank Securities Private Limited Please proceed.
Manish Ostwal
Yes sir. Thank you for the opportunity and good set of numbers on a yearly performance basis. My first question on your comment on the export demand recovery and the margin further expand in F26 in the presentation so could you elaborate further in terms of how the channel inventory at a customer level stocking position and and how do you see the volume growth panic out in F26 beyond our capacity currently?
Dinesh Nolkha
I’ll first address your second part second part of the question. I think as far as volume growth is concerned we do not we are doing some small modernizations and other things in our existing plants so that will very small volumes of small very small growth in terms of volume. So that is. And our CapEx which we have already planned is going to rectify in the FY27 so we do not see any major volume growth coming in this running financial year. As far as the demand is concerned globally and how the stocking is there. As you all know that we have seen cotton prices as well as the finished goods prices all falling across in last two two and a half years.
So this is. And in such times normally most of the stockists as well as retailers tend to reduce their inventory levels and the same is happening at this point of time and we seen that the inventories at the various levels is quite reasonable and in some cases at some places even below the desired level.
Purushottam Maheshwari
And margin comments are f26 we do not give. Any future projections for the margins assets. So at the moment if you see our margins have been I would say better than the industry margins which is there we have been like in short term. We do not see any major driver today to improve the margins. However, we try to achieve the better margins through our cost efficiency measures product mix optimization and value addition and we continue to focus on that particular part.
Manish Ostwal
Okay. On the CAPEX plan which we have indicated once it completes what will the peak revenue potential of the company. And since we are adding capacity in a value added segment so it must increase our operating margins because of that because mix is further increase in the share of the value added product. Yep.
Dinesh Nolkha
On the present prices at this point of time we should be adding another thousand crores of revenues to our top line. So and definitely margins since we are adding more towards value addition in the fabric side. So we expect that margin should improve by about 100250 basis points.
Manish Ostwal
And lastly sir, your comment on this China plus this China, Vietnam, Bangladesh will get opportunity plus this UK FDA sign. So can you quantify the size of opportunity which is emerging for Indian government space which the Indian players will, you know, targeting towards participate that opportunity? Can you give some perspective over there. And what is the nitty spinner will play in the role to, you know. Participate that opportunity in a material way and show better growth in coming period and years?
Dinesh Nolkha
Sure. First of all, UK as a market has total textile imports of about 17, $18 billion of the market size. Then majorly the different kinds including the fabrics, including the yarns as well as garments and also home textiles out of this. At this point of time, India’s export to UK is only about 1.5 to 1 point. I think it was $1.6 billion last year and this year it could be around 1.7 to $1.8 billion. Traditionally if you see in various segments we have different competitors over there. In the segment of garments. If you see the total exports, the biggest exporter over there is China with 22% market share.
Second is Turkey with again with 20% market share. And then Bangladesh with about 16% market 15, 16% market share. Whereas India has a market share of less than 10% 8, 9%. With this duty free trade agreement happening, definitely our competitive advantage over the various other competitors will increase by about 7 to 8 percentages. Today UK as well as Vietnam has used LDC so have half of the normal duties, whereas we are paying full duties about 8 to 12%. So we will have an advantage of 6 to 7%. So that should increase the market. We expect that in the short run, given the circumstances remaining as it is what has been declared, we should be able to at least double the market there since we have an opportunity of about 1.5 to $2 billion of increasing market share.
As far as business spinners is concerned, we have already some presence in form of fabrics as well as in some yarns. We are already selling in that particular market and we have quite bigger brands which are available in that market to whom we have been already selling in their to their other countries. We have not been able to sell them to UK because of this duty factor and this was routed through various other channels. So now with this FBA happening, we will have good presence in the UK market also for our finished fabrics as well as also for our yarns also.
Manish Ostwal
Thank you for answering all my questions, sir. We wish you all the best for the next.
Dinesh Nolkha
Thank you.
operator
Thank you. The next question is from the line of Raman kv Some sequent investments. Please proceed.
Raman Kerti Venkata
Hi sir, can you hear me?
Dinesh Nolkha
Yes, we can.
Raman Kerti Venkata
So I just wanted to ask at the export side as well. So what percentage the revenue is from Turkey and going forward, how would the Turkey business be impacted if India decides if the Indian government affects to do trade with Turkey. Total exports is.
Dinesh Nolkha
First of all, total Exports is about 63% of our revenues. And our business to Turkey of our total revenues is less than 1%.
Raman Kerti Venkata
Okay. There won’t be any drastic.
Dinesh Nolkha
No, no. Already they are our competitors rather in the. In this business, in the yarn business as well as in the fabric business. Practically in the international market. As I elaborated in my last answer also that they are competing with us in various markets.
Raman Kerti Venkata
Okay sir, with respect to uk, what’s the market share out there like? Market share as in like what percentage revenue this from?
Dinesh Nolkha
I think at the moment it is minuscule. Should be around 1 to 1.5 percentage. Not more so going forward we can.
Raman Kerti Venkata
Expect it to be around 4.5percentage.
Dinesh Nolkha
We will try to increase to maximum possible with this. Actually this FDA also is going to rectify another nearly 1.5 to 2 years. It is going to be a graded approach. So in the meantime we can also that the market had to build upon. Build upon our things.
Raman Kerti Venkata
Okay sir, so my second question is with respect to the cotton yarn spread. Can you give us what was the cotton yarn spread for this quarter?
Dinesh Nolkha
I think this was around the raw material cost my shirji. Exactly. It is 100 rupees. 105 rupees, right? Yeah. 105 rupees per kilogram.
Raman Kerti Venkata
Good. One final last question. So you said there won’t be a huge volume growth in the coming year. So can you just give us the guidance with respect to how much volume growth for FY26 and can you just give ballpark number of numbers in terms of capacity by the end of FY26? Like the capex will not be incremental. Capex like as in some part of it will be coming in 26 and other part will be coming in 27. Or will it be fully operational in 27 itself?
Dinesh Nolkha
All our capex which is going to come except some modernization plan is going to be there in FY27 only. So there is no incremental capacity being added in FY26. As far as increase in capacity is very small. It is minuscule. Modernization and other things does not normally result in a major increase in capacities. So you can consider the present capacity as going forward for this Particular year maybe we may try to improve upon the utilization and slightly which may add very minuscule.
Raman Kerti Venkata
Okay, sir. Thank you sir.
operator
Thank you. The next question is from the line of Sudhir Bheda from Veda family office, please.
Unidentified Participant
Yeah. Good afternoon sir and congratulations for good set of numbers. Sir, I just understood that there is. Lot of Chinese dumping was going on. As far as fabric is concerned. Now there is a restriction on the Chinese imports and in turn I think prices of fabrics have gone up and also yarn prices have also popped up. So what’s your view on that? I think 7,000 ton per day was. The import of China fabric. So can you throw some bike on this?
Dinesh Nolkha
There was actually import of in India we are importing Chinese fabric which is 100% polyester or also viscose fabric. Normally this is knitted fabric which is being imported. So primarily metric. Yes, of course. Some woven fabric also used to come in very small portion and these were all at very, very low prices. So the government has put a minimum import price restriction of 3.$5. So accordingly, whatever has to come can come above that level only. And as far as quantity is concerned, I’m not sure about the exact quantity. What you have mentioned, 7000 tons looks to be on the higher side to me because 7,000 tons means about 2,10,000 tons of fabric being imported which is more than India’s yarn exports.
So I have some doubt about it, but I cannot confirm about the number. Yes, definitely this will have impact. Once this is out. We can see that there is an improvement in still we are seeing that lot of stockists are still holding some of the goods and that that is coming to the market. So once this fades out we may have a better definitely domestic demand and maybe better for the yan also. But it is primarily on the synthetic side, not on the cotton side. Lately have you seen some increase in.
Unidentified Participant
The yarn prices because of this Chinese dumping coming down and also because of UK treaty? I believe that there is some increase in the yarn prices. So what’s your view on that?
Dinesh Nolkha
Nothing major to speak about parallel. We had some increase in the cotton prices in last one month. So and also these kind of measures were there. So they were both, I would say interrelated. Maybe they so cannot comment that this is because of the dumping or any other thing. It is also because of yarn cotton. Raw cotton prices also went up slightly. So both have both worked in tandem. So maybe both of them helped to improve upon slightly the prices.
Unidentified Participant
So right now.
Dinesh Nolkha
Nothing major to speak of to be very honest. In last one And a half two months of this financial. Nothing major, major increases. Nothing major has happened.
Unidentified Participant
Thank you sir for the opportunity and all the best.
Dinesh Nolkha
Thank you.
operator
Thank you. The next question is from the line of Dhruv Storm Mavera. Please proceed.
Unidentified Participant
So what was the realization for woven. And knitted fabrics in the quarter? Yes, hello. What was the realization for movement in different fabrics in the quarter?
Dinesh Nolkha
For the quarter?
Unidentified Participant
Yes
Dinesh Nolkha
I think woven fabrics per meter realization was about 163 rupees and knit fabrics was about 283 rupees a kg.
Unidentified Participant
Okay. Thank you sir.
operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please.
Lakshmi Narayanan
Two questions I have. One is I just wanted to understand out of your cotton procurement what percentage of your cotton procurement is is local and what is imported and whether there is any positive impact on import in case any changes in the import duty.
Dinesh Nolkha
This is this you’re talking for the last financial year.
Lakshmi Narayanan
Yeah, yeah.
Dinesh Nolkha
I think nearly our total procurement from the. In terms of quantity it should. It is about 15 to 16% is imported cotton and 85, 84, 85% is the domestic cottons. And definitely if there is a change in the import duty we have an advantage wherein we are able to reduce the cost.
Lakshmi Narayanan
Okay. And in terms of your yarn exports, what percentage of your finished yarn is exported?
Dinesh Nolkha
The our total if you see the total exports of the company is about 63%. And if you see only the yan part it is about 70%.
Lakshmi Narayanan
Okay. 70% of your Yan is exported.
Dinesh Nolkha
Yes. Yes.
Lakshmi Narayanan
Okay. Okay. First question is that you talked about the cotton threads for. For the large cracker. What has been the trend for the last 3/4? Q1, Q2 to 3Q4.
Dinesh Nolkha
I think in if you see for the whole year also particularly if you see for the full year the trend is like it was about 102,203 rupees for the full year and on a quarter to quarter basis I think it has slightly moved up only in the last 34 months quarter from 100 rupees 145. It has moved like this.
Lakshmi Narayanan
In terms of your demand and price outlook for the next year. How do you think about it? Because I’m told that the cotton prices have become pretty fadal across the globe. So just wanted to understand how I thinking about the next one years both in terms of you know, growth as well in terms of first of all demand is.
Dinesh Nolkha
You’re very right that since the cotton prices have become very stable in last six months time in India as well as internationally, there has not been major volatility on that side. So the demand is definitely picking up and demand is quite stable at this moment and we expect the demand to improve going forward, especially in the second half. Whatever disruption in the demand we had was due to this. Tariffs, announcements and other things which have other geopolitical issues which happened in the initial part of the March and April of this year. Otherwise the demand has been very stable and looking upward only as far as prices are concerned.
We are seeing that. Utilization level across the globe is still on the lower side. So this increase in demand has still not affected the utilization percentage of the spinning equipment and the other textile things. So as soon as this picks up we can see the improvement in margins also going forward.
Lakshmi Narayanan
I’m told that global brands are developing the supply chain and for example, people like La Coste they want to go get out of dependent from China and move to other geographies in terms of governmenting, etc. And that I am told is certain trend that is getting more structural. So your thoughts on that whether India would become a good hub for sourcing of badminton and how we are positioned to address that? Yes.
Dinesh Nolkha
So basically what we are seeing is you’re very right on that side that definitely there is a improvement on various brands in looking at improving on sourcing from India and moving out of China because of various other concerns including the duty concerns which has recently emerged. So we stand a very good chance and now it is up to us how we improve upon the capacities at this point of time. As I understand the garmenting capacities are running full stream in India. Garmenting utilization is more than 90% in our country. Governmenting equipment utilization. So we stand a good chance provided we increase our capacities accordingly.
Then what we are lacking today is global size, economic size and accordingly also the. Can you hear me?
Lakshmi Narayanan
Yeah, yeah, I can hear you.
Dinesh Nolkha
We need to have a better sizes. Once we have better size and the economies of scale we can definitely have much better advantages going forward.
Lakshmi Narayanan
One last thing, if I just hear from the other spending companies which have reported numbers, everybody talking about high utilization, including yours. So are we also seeing a higher utilization of yarn capacity across the country? Is it something which is episodic or is it like you are seeing it very clearly and everybody’s adding capacity?
Dinesh Nolkha
First of all, there is no capacity addition in last one year, last financial year. It is one of the lowest cap capacity addition in our country in last 10 years in absolute numbers. I will not talk of percentage, but absolute numbers. Additional capacity in spinning is one of the lowest in last 10, 15 years, 10, 12 years since 2009 onwards. So that is itself signaling that the existing capacity utilization is not reached to the level where people are induced to put more capex. Secondly, capacity utilization in reasonable size and efficient mills is definitely has always been there in this range of about 94, 95% to 97%.
It is the smaller units and also the older units. Older companies which has older machines has the issues of lower utilization. And still I feel that is not being done. Whatever the numbers are coming out, we see that the utilization level in spinning is in the range of 80, 80 to 82% only.
Lakshmi Narayanan
Okay, thank you sir for patiently answering questions. Thank you.
operator
Thank you. Before I take the next question, I would like to remind participants that you may press STAR in one to ask a question. The next question is from the line of Pratik Tolia from Systematics. Please proceed.
Pratik Tolia
Hi, thanks for the opportunity. Sir, can you just help me with the fabric realization numbers for fourth quarter of last year and third quarter of this year? I think you’ve given woven fabric 163. That is for this fourth quarter, right? What was this for last year? Q of you and yoy.
Dinesh Nolkha
Yearly average has increased by about 3%. It was last year it was 160 rupees. It is now gone up to 164 rupees. And last year same quarter. I do not have the numbers with me.
Pratik Tolia
Q3. FY25.
Dinesh Nolkha
23 FY25 was about 161. 161
Pratik Tolia
61. Answer for knit.
Dinesh Nolkha
Pardon?
Pratik Tolia
For knit. Knitting. Knitted fabric.
Dinesh Nolkha
Knitted fabrics is about 283 rupees. Is the realization for this particular quarter. And last quarter it was about 297 rupees. Average for the year is about 291.
Pratik Tolia
Nets have actually come down sequentially.
Dinesh Nolkha
Yes, nets have come down sequentially.
Pratik Tolia
What was this fourth quarter of last year?
Dinesh Nolkha
Fourth quarter. I do not have the numbers of the fourth quarter of last year.
Pratik Tolia
So can you. Secondly, on how much is our exports to Bangladesh and how is it, you know, shaping up with this current situation in Bangladesh, especially with the ports and all having been shut?
Dinesh Nolkha
First of all, there is no port sh in Bangladesh. No, no, no. Here I would like to just tell you that we were for exporting to Bangladesh. We had two or three modes. One mode is rail mode, which is partially used for cotton plants. It is being used for different commodities like coal and iron and steel and other things. And second was road, which is by the Bena Pool and Petrapur. Borders and third is by the sea. So government of Bangladesh has stopped the imports of cotton yam through the land route. Earlier also about one year back also also there was quite a lot of restrictions on this.
They like whatever the kind of yarns you can send from this particular land route. So there was. So they had some restriction and also quota for their internal. Internal let’s say for the government in the Bangladesh. So now they have put a complete slide on export through the port sea route. So for us there is no change as far as that is concerned. Only. Only changes. Earlier the gar, the companies in Bangladesh used to receive it faster in 10 days from our X mill to there to then. And now it is taking about 24, 25 days. So it’s a lead time increase. Cost wise there is no increase. Other cost is slightly lower.
Only spicy for us.
Pratik Tolia
Okay. And so what is the percentage of our total exports that is going to Bangladesh?
Dinesh Nolkha
So totally if you see from the company’S revenue point of view it is about 27, 28% is going to Bangladesh.
Pratik Tolia
Thank you so much.
Dinesh Nolkha
Thank you.
operator
Thank you. The next question is from the line of Manish Oswal from Nirmal Bank Securities Private limited. Please.
Manish Ostwal
Yes sir, very quickly, small data set. What is our interest cost for this projector and the Rastan government benefits? Can you elaborate on that? That will be great.
Dinesh Nolkha
Can you please elaborate on that side?
Manish Ostwal
What is that
Purushottam Maheshwari
on the term loan you are asking?
Manish Ostwal
Yes, it was a financing for the Capex.
Purushottam Maheshwari
The current cost is about 8.5 to 8.75% and we are getting about 3% subsidies on that 5.3, 5.5% kind of effectively 5.5 to 5.75%.
Manish Ostwal
Okay sir. Great. Thank you.
operator
Thank you. The next question is from the line of Reena Kashyap, an individual investor. Please proceed.
Unidentified Participant
Hi. Am I audible?
Dinesh Nolkha
Yes.
Unidentified Participant
Yeah. Thank you for the opportunity. I have had a few questions. The first one is cash flow from operations almost doubled year over year. I just wanted to understand how do. We see this going forward. The second question is on the planned capex. How do we see maximum debt to be like post this capex. The third question is on the status of a cotton inventory at the moment. And lastly I just wanted to get. Your view on the price expectation of. India cotton and international cotton. Thank you.
Dinesh Nolkha
So first of all on the debt side, once this expansion is completed we would have a peak debt of about 1800 crores. Around 1800 crores including our working capital and everything. So. And at that point of time our Debt to equity should be around one is to one. So that is the peak debt which we have asked. Secondly, you have asked about the forecasting on cotton side. Sorry, before that you asked about the inventory. Normally we do not share the inventory levels. You can extrapolate it with the numbers which we, which we have already given in our presentation as well as other things.
And thirdly, about the cotton price expectations at this point of time. Internationally we are seeing reasonably good crops coming in from Brazil, Australia and also from the United States at the moment. And that is putting up the pressure on the cotton, keeping the pressure on the cotton prices. And accordingly, we do not expect a major increase in the cotton prices going forward in at least till December of this calendar year. As far as Indian cotton prices are concerned, we are driven primarily by minimum support prices operations. So we are here. The prices are today driven by the prices which the Cotton Corporation of India is keeping, which is also at the minimum support price level only.
And we do not expect a major increase there also. Maybe small at the end of the season. We may see some small prices going up and again coming back to the normal levels once the season starts.
Unidentified Participant
Okay, thank you. Just on the cash flow from operations bit. And just one more additional question if I may. From our total exports, how much is the uk? You said it’s a very small percentage. Could I get a number for that?
Dinesh Nolkha
I think it is less than it is about 1%. Should be around 1% level. Nothing major. I have violated them in first answer also. Okay.
Unidentified Participant
Okay, thank you.
Dinesh Nolkha
And on the cash flow side, I think the cash flow, whatever cash flow increase is there. We expect to maintain the similar kind of cash flow going forward and that will be utilized for our capital expansion which we are already, which is underway.
Unidentified Participant
Okay. Okay, understood. This is Thank you.
operator
Thank you. The next question is from the line of Neeraj Masinka from White Pine Investment Management. Please proceed.
Niraj Mansingka
Thank you. Three questions for you. How are you thinking on this fabric? So you said there was a slightly destocking. After that there can be some pressure because the lower import is it only to the cotton or is it the polyester side?
Dinesh Nolkha
First of all, this is more on the polyester side. What we are seeing is that major imports which is coming from China, which has been dumped from China was in fabrics and as was also in the polyester side. So it is majorly on that side.
Niraj Mansingka
Okay, so another question. I just wanted to know how you’re thinking if the export to the UK and Europe picks up and the US Trade Treaty plays out a Lot of demand should come from the non cotton side compared to the cotton. And how in place to play that opportunity on the non cotton side. Last time you had expanded yourself to a PC side. So can you give your thoughts on this like how you are thinking resolution and how to play this opportunity.
Dinesh Nolkha
Here? First of all we have a reasonable exposure on the synthetic means. On the man made cyber side also. And the capacity addition which we are going forward in our in all the segments in yarn as well as in the weaving and processing will take care of the synthetic fibers. Also we are considering that we will have to process some of the synthetic fibers as that. So that is taken care. So first of all on the capability side, we will have the capabilities to increase our production on that particular side. If you see that better margins are coming in those products, definitely we can move towards that aspect now coming to how we see the opportunities.
Like if everything falls well, we have a huge opportunity coming our way here only means we can from here India can easily increase. We can double our exports. We are in the range of about $45 billion for last four, five years. We are in the range of 40 to $45 billion. And with this opportunity coming up, we can easily increase it to 80 to 90 billion dollars in next two to three years time. Now how we are able to take it by adding our capacity is something that is to be seen for Nitin Synergs. We are adding up in spite of the challenges which is there in the industry today.
We are increasing our capacity. So that shows our results that we are there for this opportunity.
Niraj Mansingka
Last question on this of the implementing whatever export we do globally, where do you see the most growth coming in the cotton or the non cotton side?
Dinesh Nolkha
We have our majority of the share is in the cotton. So we see opportunity on that side also. But yes, synthetic exports. Because we are actually. If you see on non cotton side, we are at a disadvantage of this is raw today. If you see the disadvantage of core cotton which is sustained for one and a half two years and we are feeling the pain. But if you see on the other side on this man made fiber side, there is a consistent disadvantage that our prices, our raw material prices are higher than the international prices by about 15 to 20%, not less than 15%.
So that is a major disadvantage. If this disadvantage is removed then we can see a major growth coming on that side. That is why on the synthetic side major focus has always remained on the domestic market. And in India means Indian manufacturers are catering primarily in the domestic market and their exports Is very less so once we have some advantage in terms of duties or others in the market like uk, US and Europe and maybe we will be able to increase our production capabilities also on that side.
Niraj Mansingka
Thank you. Thank you very much.
operator
Thank you. The next question is from the line of Vinayat Mohatta from Axia India. Please proceed.
Unidentified Participant
Hi, good evening. Am I audible?
Dinesh Nolkha
Yes, you are audible.
Unidentified Participant
Congratulations on a great set of numbers. I just had two questions. So first is just to understand you said that the opportunity that is coming your way super large going forward in the midst of that. What I’m trying to understand is that why are we being, are we being a little conservative in putting up capex? Because ultimately the peak revenue that this Capex can give us is only 30% of the total revenue that we are doing today. So just trying to understand as to. I mean is this just a phase one that you’re putting and incrementally if the opportunity comes, can you scale this capex up within a shorter period of time? How are you thinking about not missing out on the larger opportunity just because of not having enough capacity?
Dinesh Nolkha
Like if you see our trajectory in last 15, 10, 15 years, I think even in 10 years we have grown 5x. So it’s a CAGR of about 18%, 18, 19% on a consistent basis. We feel that consistent growth is better than an immediate bigger jump. So that has been the strategy of the company and we are following the same. So we are adding a 30% capacity or 30% in revenues which will rectify over a period of next two years time. So then again, if everything goes well, we have the opportunities, we can see what kind of opportunity is coming.
What is our area of operations that we can improve upon or increase the capacity we will again go for going forward as well. So it’s a consistent kind of thing. It is not a one time kind of opportunity which we need to encatch. We always have a slightly conservative approach on that side in growing. But still if you see this growth percentage, we are, we have grown reasonably well.
Unidentified Participant
Understood. So it is fair to assume that if opportunities come down, you have enough area, land wise and strength wise within the firm to expand capacity that you need to. Will that be a fair assumption? Yeah, yeah.
Dinesh Nolkha
If, if you see you need to have that capital in hand first of all, which is if you are generating enough money on that side, then you can definitely go ahead and increase on that side. As far as land is concerned, we have still after this expansion also will be left with some areas of land available. With us and otherwise also we have enough land available around our both the sites where we can still procure acquire more land as well.
Unidentified Participant
Understood. Just one last question. Now when you said that you you are looking with this growth plan for the next two years. So is it fair to assume that by FY27 you will more or less be able to utilize majority of the planned expenditure that you are doing? So FY26 would be relatively flat here supported by some price increase increases, if any. And FY27 would be a year where you’ll have support of the extra 30% of the volume that is coming in and that will be utilized more or less to the peak capacity. Will that be a fair assumption?
Dinesh Nolkha
You’re very right on FY26 for FY27 it will be over the over the year. So FY28 could be the peak and FY27 will be a part of it.
Unidentified Participant
Understood. One last thing. How far low are we on the prices front? So for example, from what average prices we have seen historically, how low are we? So that we could get an idea as to what kind of pricing benefit could come in if the prices start to increase. So how far off are we from the mean?
Dinesh Nolkha
Let’s say if you see the peak prices, peak prices, we are down from the peak prices about 35% in on the. On the finished product side. So the peak price, if you see the average 10 year prices, we are still lower than that at the moment.
Unidentified Participant
Okay, understood. So. So then once the prices increase then we could also see a lot of it flowing down directly into profits as well. Because your cost is more or less factored in with the current cost structure. That you have in place. Right?
Dinesh Nolkha
That depends on the raw cotton prices as well. So cost apart from cotton, rest of them affected.
Unidentified Participant
Okay, perfect. Great. Great. Thank you so much.
operator
Thank you. The next question is from the line of Sandeep Bhai from an individual investor.
Sandeep Bhaiya
Yeah, good evening. My question is also on the capex side. You mentioned that the domestic demand is improving and export is also looking up. You also mentioned that last year India hardly added any capacity. Which would mean that the equipment suppliers or the spindle suppliers and all will have should be able to supply fairly quickly. So are you looking at expediting the capex that you have already announced or you think it may not be possible for you to do it in a shorter period than what you had earlier?
Dinesh Nolkha
What we have envisaged is a period of about 15 to 18 months for the project of this size. We need to Do a lot of planning as well as also the civil construction. So that needs this much of time. Equipment supply is not at all a problem. Even in India as well as globally, all the machine manufacturers has shorter lead times. So that is not the challenge today. The challenge is to have all the regulatory approvals, plus also on the civil construction side. So that takes majority of the time actually. And then you have to set it up and you have to bring it to the reasonable capacity level.
That also takes nearly 2, 3 months time. So all this put together, I think this is quite a minimum time for in textile for have to for a project of this size.
Sandeep Bhaiya
Okay. And secondly, you know, given that Indian cotton prices have been on the higher side as compared to international cotton prices for the last maybe six, eight months at least, I guess the margins, especially the Yan margins have been on the lower side. Your margins, you know, in the last couple of quarters have been around 14, 14 and a half percent. Would you say that this is lower than the normal margins that you would aspire to achieve? And what would be your normal margins? Would it be closer to 16, 17%?
Dinesh Nolkha
With the kind of product mix which we have, including yarns and fabrics, we have consistently said that our margins should be in the range of 16 to 20% depending on the cycle time. And these margins are definitely lower than what we aspire for.
Sandeep Bhaiya
So if we take an average of 18%, you say that your current margins are lower by about 3.54% as compared to normal margins.
Dinesh Nolkha
It is about 300 basis points less than normal margins.
Sandeep Bhaiya
Okay. And do you think that by the second half of this year the margins with the demand improving should head towards normal margins by the second half of this year? Financially?
Dinesh Nolkha
Normally second half is a better year. The better better than the first half. And we expect improvement subject to various geopolitical things which is happening. That is the only subject to which is which is there at this moment.
Sandeep Bhaiya
Okay, thank you. All the best.
Dinesh Nolkha
Thank you.
operator
Thank you. Before I take the next question, I would like to remind participants that you may press Star in one to ask a question. The next question is from the line of Aditya Kumar from UK Capital. Please proceed.
Aditya Kumar
Hi sir. Thank you for taking my question. I have a couple of questions. Can you throw some light on the crop size of India and the international cotton price parity right now? And how do you expect that the premium cotton base in India should come down so going forward?
Dinesh Nolkha
First of all, the crop size this year is expected to be in the range of about 315 lakh days, 315, around 350 to 320 lakh days. So this is our expectation of cotton as of now already more than 80% has already come. So it is about 275 to 280 lakh bales have already arrived. And in next three, four months we are expecting another 45 to 50 lakh bills coming in. As far as parity is concerned today, normally we look at ICE here in India but we should look at Potlook index. Kotlook index is an average of the six different roads landed cost various around the world.
So if you compare with that I think we have a disadvantage that is around 80, 80 cents per pound. And our cotton in India is about 83 cents per pound. So we have a disadvantage about 4 to 5% on that side. So that is the disadvantage which India is having going forward. One of the major questions which we have or major problem which we have is government of India is consistently increasing the minimum support price year on year. So we should be expecting another 4 to 5% increase. And if the world crop, cotton crop, which seems to be okay at this moment is going to remain at the similar levels then we will not be expecting a major increase in price internationally and which could cause furthermore disparity going forward as well.
Of course all these factors depend on the currency of our country increasing minimum support prices and the international cotton forecasting. So all this put together we need to look at in the long term.
Aditya Kumar
And so the last question for the day is, so we have been hearing this, China plus one, Bangladesh plus one for India exports. So and some management also added that being this opportunity, being this, given this opportunity, India doesn’t have that capacity to take this forward. Like what is the current stand, where does India currently stand to take this opportunity?
Dinesh Nolkha
Right now first of all, we have a very good robust capacity for raw materials, spinning and for that matter even the weaving and knitting side. Also major capacity which we are lacking is on the finishing side and also on the garmenting. So garmenting capacity has not been going to the pace what we would expect it. And I think everybody in the industry as well as the government is very well aware and time and again there has been demand from the industry to bring in some pli or some kind of incentive scheme to ramp up this capacity.
You are very right that if we have to grab this opportunity we need to ramp up our capacity in our finished production capabilities like garmenting and stitching and also on the dyeing and finishing side. So if you are able to ramp up these capacities Definitely we have this stand a very good chance of grabbing the opportunity which is coming our way.
Aditya Kumar
Thank you sir. Thank you for answering my question.
operator
Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Avnish Chandra for closing comments. Over to you sir.
Awanish Chandra
Before taking management final commentary. Sir. Dinesh sir, one question and of people asking now we are generating good cash flow from operations. So after debt repayment and interest payment, whatever left can we return to shareholder. Because cost of equity is anyway way higher than cost of debt and we have low cost debt available for our capex.
Dinesh Nolkha
I think Swamiji, you need to understand that we are not funding the debts, we are not funding the growth only with the debt. It is a mix of debt and the cash approvals. So while considering this, we have to definitely consider the part of it towards we use it for growth capital.
We would wish to see that the company consistently grows with a good annual compounded rate which we have been doing in the past. And of course we have evaluated for this kind of corporate action instead of paying dividends and going for buybacks and other things. But still we feel that the amount was not that large enough to offer this kind of corporate action. So definitely we’ll keep in mind we are already distributing about 10% of our profits to our shareholders and we’ll keep in mind to see if we can improve upon that and anything we can think of increasing liquidity like non cash corporate action split or bonus, something like that.
At this point of time it would not be prudent on for me to comment on this. I would not like to offer any comments for this. This is something which will have to deliberate in a on another forum, I think.
Awanish Chandra
Okay sir. Thank you very much Vinay sir and nice for giving us the opportunity to hold the call. Anything for closing comments, sir.
Dinesh Nolkha
Yeah, first of all I think we have been able to address all the queries and if something is left, I would request all of you to maybe send it to our investor relationship department.
And here I would also like to thank Smith and Avnish JI for hosting these calls. And if any other questions and other things are left, you can always contact our investor relationship department or our investor advisors. And thanking you once again for taking the time to join for the call. Thank you so much.
operator
On behalf of SMIBS limited That concludes this conference. Thank you for joining us and you may now disconnect your lines.