Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Nitin Spinners Limited (NSE: NITINSPIN) Q4 2026 Earnings Call dated May. 11, 2026
Corporate Participants:
Purushottam Maheshwari — Chief Financial Officer
Dinesh Nolkha — Chairman and Managing Director
Analysts:
Awanish Chandra — Analyst
Prerna Jhunjhunwala — Analyst
Ritesh Gandhi — Analyst
Unidentified Participant
Unidentified Participant
Lakshmi Narayan — Analyst
Unidentified Participant
Aditya Kumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Nitin Spinners Limited Q4FY26 earning conference call hosted by Smith Limited. As a reminder, all participant lines will be the listen only mode. And there will be an opportunity for you to ask question 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.
Vinay Chandra from Smith Limited. Thank you. And over to you sir. Avina. Sir, could you please go ahead?
Awanish Chandra — Analyst
Yeah. Thanks a lot Julius. And thank you very much everyone for joining this call. On behalf of Smith Limited, I welcome you all to fourth quarter and full financial year FY26 earning conference call of Nitin Spinners Limited. We are pleased to host the top management of the company. Today we have with us Mr. Dinesh Nolka, Chairman and Managing Director of the company. Mr. Nitin Nolka, Managing Director of the company and Mr. P. Mahaswari, Chief Financial Officer. We will start the call with initial commentary on the results.
And then we will open the floor for questions and answers. Now I will hand over the call to Mr. P. Mahaswari, CFO of the company. Over to you Maheswari sir.
Purushottam Maheshwari — Chief Financial Officer
Thank you, Avniji. Good afternoon and a warm welcome to all the participants to this Q4 and FY26 earning call of Nathan Espinhas Limited. I hope you have had a chance to go through the financial results and investor presentation available on company’s website as well as on stock exchange websites. I will start with a brief overview on the operational and financial performance for the quarter. Post that our CMD Mr. Dinesh Nanika will give you an overview of industry and business scenario. Coming to our financial and operational performance for Q4.
Revenue for Q4FY26 stood at 59.8 crores. That is higher by 7.4% on quarter on quarter basis and 2.2% on year on year basis. This is our highest ever quarterly revenue driven by improvement in demand and yarn prices. EBITDA for the quarter stood at rupees 130.4 crores. That is a growth of 16.9% on quarter on quarter basis and 8.4% on year on year basis. EBITDA margin for the quarter stood at 15.17% against previous quarter margin of 13.93% and Q4.25 margins of 14.30%. That is an expansion of 124 basis points on Q on Q basis due to improved realization, operational efficiency and cost saving initiatives.
Profit after tax for the quarter stood at 57.4 crores. That is higher by 29.2% on quarter on quarter basis and 23.7% on year. On year basis, EPS and KCPs for the quarter stood at rupees 10.20 and rupees 16.74 per share respectively. In terms of geographical split in Q4, FY26 exports contributed nearly 63% and domestic market contributed 37% of total revenue and coming to yearly performance. Revenue for FY26 stood at rupees 3213.9. Year on year basis mainly due to lower yard and raw material prices, particularly in first half.
EBITDA for the year stood at rupees 452.8 crores. That is the growth of 4% on year on year basis and EBITDA margin for the year stood at 14.09% against 14.26% last year. Profit after tax for the year stood at rupees 177.6 crores. That is higher by 1.2% on year. On year basis, EPS and case EPS for the year stood at rupees 31.58 and rupees 57.93 per share respectively. In terms of geographical split, exports contributed 61.9% and domestic 31.8% of total revenue. In terms of revenue mix in FY26, contribution to total revenue from yarn fabric and Others stood at 74%, 21% and 5% respectively.
On the operational front in Q4FY26, spinning capacity was operating at over 98% utilization and woven fabric capacity was operating at over 90% utilization. The Board of Directors have recommended a dividend of 30% on equity share capital that is 3 per equity share of Rupees 10 each for the financial year ended 31st March 2023. Our balance sheet continues to remain strong in FY26 and our net debt to equity has come down to 0.76 times as of 31st March 26th as compared to 0.89 times in 31st March 2025.
That is all from my side. I request Sri Dinesh Ji to share his insights about industry and business engineering. Thank you. And over to Sri Dinesh.
Dinesh Nolkha — Chairman and Managing Director
Thank you. Myshwari Ji. Good afternoon and warm welcome to all the participants FY26 was a very challenging year for the textile industry. However, it ended on a positive note for the upstream textile players in view of uptick in demand and improvement in yarn prices with US tariff uncertainties which had affected the textile value chain particularly in first half of the year resulting in demand destruction and underutilization of capacities. The second half was again full of uncertainties due to ongoing West Asia conflict which has disrupted supply chain, increased the freight costs as well as transit time and increase in the raw material and other input prices.
The industry observed improvement in demand in Q4FY26 due to removal of tariffs by USA, restocking across downstream channels and increase in transit times. This has resulted in improved utilization and increase in utilization as well as margins. As far as cotton was concerned. The last year till the December 25th the international prices were lower at about 63 to 64 cents and similarly domestic prices were also lower ranging from 52,000 to 55,000 rupees per candy. This was the lowest level in last 34 years.
Moreover, domestic prices were in parity with the international cotton prices. Government of India also helped by removing duty on imported cotton between August to December 25th. Since last few weeks international and domestic prices are showing upward trend. However parity between two still remains. The industry is requesting Government of India to again remove the cotton import duty to ensure availability of good quality cotton at reasonable prices. While the ongoing tensions in the Middle east remain key monitorable, the long term demand of Indian textile industry remains intact driven by India’s long standing advantage in cotton products and an addition to market depth to the sector.
In view of the implementation of various free trade agreements, the Indian UK FTA is expected to fructify soon and benefit Indian textile industry with elimination of long standing duty disadvantage as compared to the competing nations. The India EU FTA which is another big boost to the Indian textile industry will take another couple of quarters for implementations. After gaining duty free access in these markets, Indian exporters expect strong order inflows and improved competitiveness. Already various customers from Europe have started inquiring and planning to diversify their sourcing from India looking into these FTAs and other benefits which they are going to get coming onto.
The company’s performance within spinners has delivered its highest ever quarterly revenue of 859.8 crores in Q4FY26 due to optimum utilization of capacities and improvement in yarn prices. This has resulted in improved margins. Also during the quarter our existing capacities are spinning and woven fabric are running at optimum capacity utilization we are continuously expanding our geographical reach in all business segments to offset the demand utility from a particular geography. Here I’d like to highlight that over the last decade we have grown our revenue, EBITDA and PAT by nearly three to four times, also increased our gross fixed assets and cash flow from operations by more than four times.
Also over the last decade we have generated more than 2000 crores of cash flow from operations. We are hopeful of keeping up the pace in future as well. As regards the present ongoing capex, the plan is progressing very well. It is expected to commercialize in second half of FY27 post. Expanding our subject capacity will add another 35 million meters to 17 million meters annually and spinning capacity by another 22,000 tons to about 130,000 tons. We’ll be able to supply a wider range of products to our existing domestic and international customers and also serve the newer geographies.
This CAPEX will enable us to increase the share of value added products in our total revenue resulting in improved margin profile. The renewable power CAPEX is also progressing as per schedule and expected to be operational in the second half. External environment like normalization of US tariff scenario, most probably settlement of the US West Asia War and signing of multiple FTA give us confidence of faster ramping of the new capacities once they get operational. In the renewable power sector, we continue to expand our renewable power footprint to reduce our per unit power cost and marginally mitigate the impact of rising power costs.
So in Q4 25 FY27 we announced an additional investment of 9.5 crores for a hybrid power purchase agreement of 10 megawatt which will be operational by Q3.27. With this, the total renewable capacity addition during including PPEs during the year will be about 75 megawatts and with the already installed capacity we would be very near 200 megawatt of power capacity. After these capacity additions, nearly 50 to 55% of our present and future power requirements will be catered by the renewable energy.
Looking ahead, we are confident of improved overall performance with better demand visibility, increased realizations and supported by capacity expansion. Renewable power initiatives and addition of value added products to the portfolio should further enhance their competitiveness. With this, I’d like to open the floor for the question and answers. Thank you,
Questions and Answers:
Operator
Thank you will now begin the question and answer session. Anyone who wishes to ask question may press Star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset While asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Rahan Sayed from T Asset manager. Please go ahead.
Purushottam Maheshwari
Hello, Good afternoon and so I have a couple of questions. Am I audible right?
Operator
Yes, I aud
Purushottam Maheshwari
Your, your
Dinesh Nolkha
Voice is not very clear. Can you please increase your voice level? Now
Purushottam Maheshwari
It’s clear. Hello.
Dinesh Nolkha
Yes,
Purushottam Maheshwari
So yeah, I have a couple of questions first on your Rajasthan investment like you have done capex. So what with Rajasthan investment promotion scheme benefits applicable on the new capex. So can management help us understand the total incentives likely to be accrued over the project life and how much this could improve our project irr?
Dinesh Nolkha
Basically Raza investment promotion scheme has two parts, I would rather say three parts to its whole scheme. First is the capital subsidy which is ranging depend. Am I audible?
Purushottam Maheshwari
Yeah, you are audible,
Dinesh Nolkha
Yeah. So the capital subsidy part is ranging depending on the capital allocation which you are doing plus the employment generation you are doing from 20% to 20, 25, 27% so that is, that will be, that will be of the total project and eligible assets. So for our new capacity expansion also this will be allowed, allowed to us. So that is one part. Second part is the interest subsidy which is about 5% of the eligible fixed investment which is again allowed for five years. So that is again we are eligible and apart from this there are various electricity duty benefits plus we have certain land and other rebates which is Monday tax rebates and other rebates are also applicable which is also as the case with the last last project.
Also as far as IRRs are concerned I think that is capital subsidy is a part which we get over a period of 10 years so that is rectifying accordingly. So and interest cost you are already seeing in the numbers which is accrued to us every year.
Purushottam Maheshwari
Okay, okay, fair enough. And my second question is around your some of the renewable energy side. So the company has announced significant renewable energy investments through solar and hybrid power projects by FY28. What percentage reduction in overall power cost per unit does management expecting for this current levels?
Dinesh Nolkha
So instead of per unit capex we need to look at what is the total saving which we can generate out of this in the on an annual basis we are expecting that total saving will be around 50 crores per annum. Once this complete thing is rectified and during, during this year itself we expect that we will have a saving of around 3:30 to 35 crores.
Purushottam Maheshwari
Okay and my last question is around your ebitda margin. So in the upcoming fabric expansion project what kind of asset turns and EBITDA margins are management targeting once the new 35 million meters capacity stabilized. And would fabric margin structurally remain superior to yarn margins over the cycle? Just to be understanding here,
Dinesh Nolkha
Yes. First of all there is no. We are not targeting any margins. And specifically we do not give any numbers for the fabric margins. But for sure the fabric margins, finished fabric margins are superior to the yarn margins. That is one thing. And secondly assert as far as asset turn is concerned, normally for the new capex the total asset turn is 1 is to 1. If you remove the energy renewable energy capex which is there on a company basis our asset turn is around the ranging between 1.2 to 1.3.
Purushottam Maheshwari
Like don’t want to want to give any idea about EBITDA margin, any range
Dinesh Nolkha
As such. I can say that we have been stating this for last four, five years that our with the kind of product profile which we have our normal margin should be in the range of 16 to 2 years 20%. We expect that we should be able to maintain. We should be able to fall into this level during this current year in the financial year 27.
Purushottam Maheshwari
Okay. Okay. Thank you. And that’s it from my side and good luck for your coming quarter.
Dinesh Nolkha
Thank you.
Operator
Thank you. The next question is from the line of Kishore Kumar from Unifi Capital. Please go ahead.
Purushottam Maheshwari
Yes sir. Thanks for the opportunity. Sir, I just have a follow up on the timeline for the new capacity you mentioned H2. So the commercial production for both fabrics and yarn incremental capacity will start from October types. Correct sir,
Dinesh Nolkha
Not October exactly. H2 means the second half of this financial year. So at this moment as it looks that we may start some of our capacity for the fabric in the from in the quarter starting from October to December and the spinning capacity by December by January of January to February of next year.
Purushottam Maheshwari
Got it. Sir, just a follow up on this. See when I look at the capital work in progress It’s. It’s around 100 crores. So our capex plan was about thousand or actually thousand crores. So the remaining will be spent in the current financial year, the six to eight months time. Correct is my understanding
Dinesh Nolkha
Here. We have three parts to the CapEx in this number which you are seeing. First is the capital wid. Which is which you are seeing in the balance sheet there are certain advances to the tune of about 140 crores which has already been given to various machinery and other assets. So that is again in the capital advances segment Other assets it is already showing there. So that is second part and third part is certain assets which has been of modernization and balancing which has been already received and have become operational.
They have already been capitalized, that is to the tune of about 55 to 60 crores. So in all, if you look at that, we have already spent more than 300 crore rupees already on the project at the moment. And balance will be spend during this current year.
Purushottam Maheshwari
Got it. And on the balance, most likely it will be funded to internal accruals and the remaining to be to through debt.
Dinesh Nolkha
Yes, of course.
Purushottam Maheshwari
Got it, sir. And one more thing on the realization trend, if I look at the sequential improvement in the realization, yarn realization went up by 5,6 percentage. But the fabrics realization for both nets as well as one was flat. So is it because of lag in the pass through of the price hikes to the customers? Is my understanding correct There?
Dinesh Nolkha
If you see quarter on quarter, our knit fabric realization has also improved by about 5%. They are more or less in line with what is the yarn realization has been there and the woven fabric realization has increased by about two, two and a half percent. So yes, fabric generally falls with the lag. So it takes more time to pass on the increases as well as when the prices goes down, it is slow to reduce as well. So these are the exact numbers, I would say.
Purushottam Maheshwari
Got it, sir, Got it, got it. The second question is on the US inflation off. Late in the past couple of months the apparel inflation in the US has started. Guess most probably the tariffs has started being passed on to the customers. What is your view on that? Will it have an impact on the demand trend if the inflation starts to go up further?
Dinesh Nolkha
It is quite a macro question, very difficult to predict that. But what we are seeing is that the prices of the products have come down significantly. If you see the year 2122 and since then the retail prices as well as the wholesale prices of textiles have gone down only. So this is just a course correction. So we feel that we are in the middle of the course correction. And these kind of prices which are prevailing at this point of time is expected to be passed on without affecting the demand. Yes.
If they are further significantly increased by another 5 to 10%, then it may have an impact.
Purushottam Maheshwari
Got it, got it. So whatever you are hearing from your customers is on in the positive side.
Dinesh Nolkha
Yes, because on the demanding for they had been planning for a duty of about 20% and against that they are getting only a duty of 10%. So they have only already planned for that increase in the prices. So that is benefiting them at the moment.
Purushottam Maheshwari
Got it. I have one more question if I may, sir. The Indian spinners are actually exporting a lot to China, Bangladesh and other South Asian countries. The yarns. If FDA gets ratified and the demand moves from those countries to Europe, the Indian spinners demand which is actually going from India to the other countries will be sold domestically. In that case, do you see net positive impact for companies like Nitin after the FDA gets ratified?
Dinesh Nolkha
Of course, near shoring definitely helps. Reduces the logistic costs, transit times and overall demand scenario from the domestic market. If it improves, it has a positive impact on companies like us. So further, our fabrics which is being directly supplied to various garmenters, that proportion also increases domestically. So again that is of a help to in our competitiveness, I must say.
Purushottam Maheshwari
Understood sir. Thank you. Thank you so much, sir. Thanks a lot.
Operator
Thank you. The next question is from the line of Chatin the mania on Swan Investment. Please go ahead
Purushottam Maheshwari
And thank you for the opportunity. Am I audible?
Dinesh Nolkha
There is some background noise if you can see. Too bad
Purushottam Maheshwari
Sir, now it’s. Now am I audible? It’s clear.
Dinesh Nolkha
Yeah, yeah.
Purushottam Maheshwari
So sir, first of all, congratulation on the good set of numbers. So just wanted to understand that over the last couple of quarters we have seen the yarn prices have been moving up and that has been translated into our numbers. But when you look at the fabric, definitely you indicate that it comes with a lag effect. So is it fair to assume that in the coming 2/4 or the FY27 along with the improvement in the yarn spreads, we’ll get a benefit of the uptick in the fabric prices also?
Dinesh Nolkha
Yes, of course. They’ve already started to improve.
Purushottam Maheshwari
Okay, and to what extent sir, the fabric prices improved?
Dinesh Nolkha
Fabric prices? They are as they move with the lag. The prices which were in the March of March numbers are getting translated. March increases are getting translated into the fabric prices now. And going forward we expect that these prices will be improving further as well.
Purushottam Maheshwari
Okay, and in terms of the yarn spread, so what was the spreads last quarter and what are the spread as of today compared to the last quarter? Yan Smash.
Dinesh Nolkha
The last quarter spreads were about 110 rupees a kilogram. And now it is about 125, around 125 rupees 120 to 125 depending on different comps and other things.
Purushottam Maheshwari
So sir, taking our Q4 number as a base and assuming that current scenario the 120 or 115 as a spreads and the improvement of fabric prices and 3035 crores of the incremental benefit one should get from the power which is almost 1% of the current margin. Is it safe to assume that this margin for this year could be around somewhere around 17 18%. It is safe to work on that number for the community.
Dinesh Nolkha
I have already indicated in to the answer in my last question. Last respondent who asked me question that the normalized range is about 16 to 20% and we expect that in this year we’ll fall in that range.
Purushottam Maheshwari
Sure. That’s all from my side. Thank you and all the best.
Operator
Thank you. The next line is from Perna Junjunwala from Elara Capital. Please go ahead.
Prerna Jhunjhunwala
Thank you for the opportunity sir and congratulations on recent set of numbers. Just wanted to understand what would be our normalized spread to earn normalized margin for the yarn business not as a food but for the yard business we earn 1415 margin. So what should be the spread given the cost of cotton has also increased currently
Dinesh Nolkha
Basically yarn margins are at the moment. If you see it depends on the base price. This per kg which we are giving is a differential between the yarn prices and the cotton cost. And this may vary depending on the yarn prices. If it is the percentages changes as you know, if the base increases the percentages may look lesser. But the numbers overall in absolute numbers they improve. But with these kind of margins, these are the. I just speak about what was last year. It was about in the range of about 12%.
These margins were in the range of about. If you see 110 rupees was reflecting at about 11.5 to 12% kind of margins.
Prerna Jhunjhunwala
Okay, so which means if we have to go back to 15, 15% margin the sled should improve further to get back to normalized margins. I’m not including inventory gains over here. That is fake.
Dinesh Nolkha
So already I’m saying that it is about 10 to 15 rupees already has increased from the last year last margins, last quarter margins. So further that that will add to the margins.
Prerna Jhunjhunwala
Okay, understood. I from normalized margins. Will this be enough for us to have normalized margins excluding inventory gains?
Dinesh Nolkha
Yeah, I’m also talking about normalized margins without inventory gains. That is I’m also talking about the same.
Prerna Jhunjhunwala
Understood. And so on commissioning of this project, what would be our peak debt that we will be having?
Dinesh Nolkha
Our peak debt means our peak debt depends upon our working capital. But our normal total debt we are expecting to be less than in the range of about 1,900 to 2,000 crores after this including the Working capital exposures.
Prerna Jhunjhunwala
Okay, Understood sir. Thank you sir. And all the best.
Dinesh Nolkha
Thank you.
Operator
The next line, the next question is from the line of Ritesh Gandhi from Discord Capital. Please go ahead.
Ritesh Gandhi
Hi sir. So you know, just wanted to understand your own perception on whether these spreads of 125 are, you know, sustainable and how much they’ve historically been over the let’s say in the last five years and how you see this over the next few years.
Dinesh Nolkha
So first of all, if you see our margin, if you see the yarn margins, the differential has ranged from popis on the minimum side it has been about 90 rupees and it has gone up to 140 to 150 rupees. If you see the post Covid it has gone up 240 rupees also. But we must also consider the fact that over a period of time there has been an inflation. So in this differential we have to also reduce the cost of power, the cost of labor and other component costs which is also marginally increased over a period of time.
So considering that factor also this normally the 90 rupees should a minimum margin should now be minimum at least 100 rupees that is now become a minimum side. So as far as this 125 rupees is concerned, I think this is the median of the margins. And I feel that looking to the capacities which has gone down in the country demand which is coming up going forward with the kind of various measures which has been taken, I feel that this 120 to 125 rupees margin should be sustainable going forward as well.
Ritesh Gandhi
So and the question is with regards to the capacity reduced in the country, is it possible that this supply will potentially come back given spreads are now higher or do you expect it to stay offline? There’s no way back.
Dinesh Nolkha
Some of these capacities have gone out because of obsolete because of lack of working capital also for various other reasons. So I don’t expect that majority of the capacity which had very small economic sense will come back. But yes, of course the new capacities can come up. Some, some companies which is in the middle of that can modernize and improve their increase their capacities. Yes, of course that is always possible.
Ritesh Gandhi
All right, that’s all for me. Thank you.
Operator
Thank you. The next question is from the line of Rahul Jain from Credence Wealth. Please go ahead
Purushottam Maheshwari
For the opportunity. First of all, how about the synthetic yarn prices moved in last three months or specifically post war the polyester prices we understand have moved up. So how have they shaped up. And how do you look at in terms of the spread between your final product and the raw material prices?
Dinesh Nolkha
Yes, that is significantly. If you see the polyester prices have moved up by about 20% plus think this is increase of more than 20% highest than any other raw material. And consequently the yarn prices have also moved in tandem. Of course, their margins have not increased substantially. The margins still remain at the levels which were there in the month of March. The spread has not been increasing to the extent which people would like. Yes, in the blended yarns this has improved marginally. The where the polyester cotton is concerned or that kind of yarn where the cotton is involved or the cotton another cotton blended with other synthetic fibers, their margins have improved.
But in in purely in synthetics, the margin has still remained static.
Purushottam Maheshwari
So is it difficult to pass on the synthetic raw material push? Given China could also be a competitor in it. Specifically in terms of the exports?
Dinesh Nolkha
No, it is not so. Actually that is not the case. The major. If you see our synthetic exports majorly, especially on the blended sides, the polyester viscose and others have been to the Asian Middle east and Middle east and the African continent. So there because of this logistics issues and the problems which is still still persisting, the goods not getting transited over there. So that is why we are not able to export only that is creating slightly more available capacity in the domestic market.
And that is hitting. Once this gets over, we expect that all this the increase will also happen in the synthetic market. Also,
Purushottam Maheshwari
With regards to the cotton which you mentioned, I understand that last year, on an average till the war started, the spreads were around 110 plus or minus 2. And then in last post the war, the spreads have moved up to almost 125 is what you stated. So what are the primary reasons for this going up?
Dinesh Nolkha
There are a couple of reasons I have highlighted in my speeches. Right. First of all, the prime reason is there is a one. One which is there is there was a lot of destocking happening. When the prices went down, a lot of destocking happened. And because of lesser operational capacities also the prices were once they are going down tendency to buy less. So that is so that restocking things started from January of this year. So that is one of the reason. Second reason is the transit times across the globe has increased.
That created a fear among the customers that they may be out of the stock. So they wanted to buy more. Or you can say there were more goods on the sea. So that also helped in increasing the demand to A certain extent. And plus the prices, the raw material prices which were at the all time low levels, they cannot remain at that level forever looking to the cost of the raw material production. So that has also helped increasing the raw material cost and consequently the prices.
Purushottam Maheshwari
So sir, we understand also that, you know, the yarn availability from China somewhere or specifically on the cotton side. So there have been issues on the cotton and cotton yarn from China and the shift from polyester to cotton, given the polyester prices in domestic have gone up substantially post the war started. How much of these two reasons could be, you know, the reasons for the spread increase on the cotton side?
Dinesh Nolkha
I don’t think so that still the effect of polyester shift has happened means whatever polyester shift was to happen has started to happen only in April, May. But that is also not very major. China has a very good capacity of polyester manufacturing and rather they decide the prices at which the polyester is sold all over the world. So I don’t see any major dent happening in the demand side of the polyester. And still polyester is quite cheaper than the rock cotton. If you see in last three months time the polyester prices per kg have increased by about 25 to 27 rupees a kilogram.
And cotton price have increased in per kg terms in rupees is about 30 to 35 rupees. So it does not. There is no advantage as such going in for replacement of polyester at this point of time.
Purushottam Maheshwari
Okay. And with regards to cotton availability and cotton young prices moving because of the China factor,
Dinesh Nolkha
China was contributing to this because they were buying more of the raw cotton as well as cotton yarn. But that has not been very substantial. I would say still if you see the numbers in the month of March, the shipments which were going to China have just increased marginally from 10 11% to 15, 16%. It has not gone up quite substantially. This used to be in the range of 30% plus four years back. So I would not attribute all the increase in the margins to China alone.
Purushottam Maheshwari
Thank you sir. Thank you. All the best.
Dinesh Nolkha
Thank
Operator
You. A reminder to all participants that you may press star and want to ask question. The next question is from the line of Saranj Gupta Foundsuan Investment. Please go ahead.
Purushottam Maheshwari
Hello. Am I audible?
Operator
Yes sir, you are.
Purushottam Maheshwari
Hi. So thank you for the opportunity and congratulations on the great setup. I just wanted to understand like how the fabric, fabric segment is spanning up. Like you did mention quite a few times that the yarn prices have increased followed by due to the ball uncertainty. So has that Been flowing in the fabric prices also. And are we able to pass it on to the customer?
Dinesh Nolkha
Yes, that is happening on the fabric side also. But that is. That happens with a slightly lag and we have all. We have also increased our prices in the fabric side and expect it to increase. So this takes a bit more time than the yarn price. Like cotton to yarn it is faster. But in case of yarn to fabric it takes more time. So that will happen over a course of period. We have already started to increase the prices.
Purushottam Maheshwari
And just one more question that what would be the total contribution of our knitted fabric and woven. If you can quantify in Q4 and FY22
Dinesh Nolkha
We’ve already given in our investment presentation. But for your. Just for your. This thing 22% is our total fabric sales from revenue from the fabric sales all put together.
Purushottam Maheshwari
Yeah, yeah, that I know. But I just wanted. If you can. If you can help us with the number of how much revenue was contributed to knitted fabric.
Dinesh Nolkha
Knitted fabric contribution was. I think the woven fabric is around 20% and knitted fabric is another 2, 3%.
Operator
Thank you. The next question is from the line of Saloni Munshi from Brisil. Please go ahead.
Unidentified Participant
Yeah, hi. Am I audible?
Operator
Yes, ma’. Am.
Unidentified Participant
Yeah, so I just wanted to understand. In Q4 you mentioned that the demand had improved. So are the domestic demand you are talking about or the export demand?
Dinesh Nolkha
Both sides. In the domestic market also the demand has improved as well as in the international market.
Unidentified Participant
Okay. And do you have any outlook regarding the export? So export demand has been little for the yarn specific, the export to China has increased but the export to Bangladesh has decreased as well. So do you have any outlook on how it will pan out like
Dinesh Nolkha
Demand? I think we have seen that there is a steady demand of exports. If you see the total number of exports, about 100 million kgs of yarn has been exporting out on an average basis from our country to various markets. I think this 100 million kgs will be still maintained and we can do. We can think about slight increase, maybe about 5 to 10% going more towards because of the increase in demand coming in from China. So that is. So we expect that incremental demand internationally will be about 10%.
Unidentified Participant
Okay, that’s it from my side. Thank you so much.
Operator
Thank you. The next question is from the line of Anil Kumar, an individual investor. Please go ahead.
Unidentified Participant
Yes, thank you for the opportunity. First of all, congrats for the good set of numbers. So my question is regarding inventory. How much inventory we are having on the cotton side and finished good sides and how much month inventory we are having and what is the status of number. Second question is regarding fda. How how much how do you think that how much we can increase total demand can increase when the FDA is materialized. So focus
Dinesh Nolkha
Of all. I’m sorry that I couldn’t cannot share the numbers on the inventory site. So you can extrapolate on your own since the balance sheet and other numbers are available to you. So you can see that on your own as well. Secondly, as far as FTEs are concerned, I think we should be expecting very good demand coming in especially from the Europe fta. Most of the international bigger brands are there in Europe as well as in the uk. So this demand should. This should increase our garment demand as well as the fabric demand which is.
Which is there which they are sourcing at the at this point of time from our competitors like Bangladesh, Vietnam and China. So there there is a significant demand increase expectation China. Plus also we are seeing that a lot of the inquiries are coming in from all these brands and they want to diversify their sourcing instead of all these countries towards India. Looking into the stability that I must say the geopolitical stability which we are having and also an availability of the complete chain of textiles in our country.
So we should be able to structify this pretty well. But the only thing is that we need to be sure that we are able to cater to the increased demand in a swift and fast manner.
Unidentified Participant
Okay sir, then my second last question will be. Sir, what do you think when is it possible for the government can go for this duty assumption that is our main demand of the industry. What is your views on that? Is any progress? Is there anything any comments on that?
Dinesh Nolkha
We have as an industry, we have always all been vociferating about this removal of duty. We in fact we want that they should they should be permanently removed. We have a mechanism in India by which is a minimum support price. So there is a complete protection of the farmer. And also any increase in the input cost will automatically be increased in the minimum support price. So there is no threat to the farmer because of any removal of duty or anything which we have also seen when the last time the duty was removed for four, five months.
So we have been requesting the Finance ministry as well as Textile Ministry and Agriculture Ministry to remove the duty for complete forever like it was possible in 2000 from the year 2010 to 2021. However, we have been also requesting that for immediate relief this should be removed for first six Months and we can have a debate on this for a permanent removal. So there is a progress on this subject. But it only depends on the government how they move about it and what how do they think about growing the textile industry?
Operator
Thank you. The next question is from the line of Lakshmi Narayan from Kashma well private limited. Please go ahead
Lakshmi Narayan
Sir. Am I audible?
Operator
Yes sir, you are.
Lakshmi Narayan
Sir. I want to. Could you throw some light on whether the forecasted weather conditions on end would have impact on an inventory level going forward?
Dinesh Nolkha
As far as the cotton is concerned in India we have since last year there was good rains. We have good reserve water reservoir available. And many of the areas especially in the northern part and western part is based on the irrigated basically on the water which goes from the all these reservoirs. So as of now till now we are not expecting. Already the crop was lower last year. And we are not expecting the crop to go down from this level even if there is lesser rains. And also if you see the geographical distribution of the rains also we find that in most of the cotton growing areas we are not going much below the normal.
Purushottam Maheshwari
Okay, that’s all from message.
Dinesh Nolkha
Thank
Operator
You. The next question is from the line of Reena Kaisha from an individual investor. Please go ahead.
Unidentified Participant
Yeah. Hi. Thank you for the opportunity. I have a few questions. One is on the the your replies on. On the import duty on cotton. Can you elaborate? Is there any communication from the side of the government post December when media articles do state that the industry has asked for a removal Again. But I was just wondering is there any communication the industry has received from the government? That’s my first question. My second question is on you gave guidance for the margins being around 16 to 20%.
Anything on the top line front if not quantitatively. Could you. Could you comment on what is the focus or how does Nitin Spinoz expect to grow its top line in the next couple of years. And my third question was on the knitted fabric production which was down. Can you comment on the reason for this and how do we see this going forward?
Dinesh Nolkha
Yeah. So first of all your first question. Communication with the government by the government. Normally government does not communicate to the industry. It is the industry which communicates continuous continuously with the government. And we have been putting our request and demand to various industrial, various government officials and the ministers who are concerned with this. That is Finance Minister, Textile Minister, Commerce Minister and the Agriculture Minister. And there has been a lot of discussions on this of late.
Our parent organization Citi Confederation of Indian Textile Industries have also released a White paper on the need of the. To remove the duty permanently. Because if you want to grow the industry we need to have a more pragmatic approach and need more raw material. So that is already been there and all the ministry officials, all the concerned people are aware of these facts. So there has been a continuous dialogue which is happening. Various representations have been made and also we are receiving various, I must say concerns of the various ministries also in this.
So there is an ongoing process. We expect to have a fruitful result out of this. So that is one part,
Unidentified Participant
Second part. Sorry to interrupt. Just on the timeline of that, how soon do you expect any. Madam, we cannot, we
Dinesh Nolkha
Can, we cannot put the timelines to the government. Unfortunately this is something.
Unidentified Participant
Yeah. It’s just your sense of it. Do you see that happening in the next six months, one year?
Dinesh Nolkha
We are of course it should happen. Six months is a long period. We should. We should be able to see this before that. But a long term solution. I still feel there will be. They will need another five to six months. If they formulate a new textile policy which covers all that, all the raw materials are reasonably available then they should happen earlier as well. So that is something which we are pushing on from the industry side. Yeah. And secondly, as you were asking about the increase in the top line as well as the revenues going forward, as you know we have embarked upon a capacity expansion of more than 1000 crores.
Nearly 1100 crores. So this should yield us another more than thousand crores in our top line going forward. So that is one part apart from this. The normalization of the yarn prices should also contribute to about 5 to 7% of our existing turnover. We have degrown last year. We expect to recoup that plus some certain additional gain out of the present prevailing prices. So in all put together we expect that we should be. From here onwards we should be easily able to add 30 to 35% to our existing revenue numbers.
Third question was regarding FY28. Of course. That’s right.
Unidentified Participant
Okay. And
Dinesh Nolkha
As far as knitting is concerned, as a knitting business we have the major exposure on the knitting side. As you know from India as well as from our company also was through the various brands across the in US and that was one of the prime when the tariff was imposed. This being a low value item. This was the 50% tariff. It could not handle the 50% tariffs. So that’s why we had to reduce our productions on this side. Now as the tariff is reduced, it is now coming back to the normalcy level and we should be expecting the knitting fabric, knitted fabric production to be better than what it was.
But in this process, in last one year, we also lost some of the customers to other competing countries which we are trying to make up. And hopefully with the domestic demand of knitted fabric going up, since the garmenting locally also will improve, given the FTA with UK as well as FT with Europe, we expect that the normal utilization level of 65 to 70% will come back to the knitted fabric in another one to one and a half year.
Unidentified Participant
Understood? Understood. Thank you so much.
Operator
Thank you. The next question is from the line of Harish Mittal from MK Global Financial Service. Please go ahead.
Purushottam Maheshwari
Yeah, thank you. Good evening to the team. Sir, I have two very small questions. First question being that we manufacture gas based yarns. So have we seen any disruption in the manufacturing of the same? Given that the gas prices have doubled or rather 3x in the past two months after the outbreak of the war and has that been accounted in the quarter 4 margins? That is my first question.
Dinesh Nolkha
First of all, in the yarn business, gas based yarn is very, very small number and the requirement of gas was also very small. For us. We had a very small deception of less than a day since we were having the stocks of gas. But of course the cost has increased and it is nearly at this point of time when it has gone up 1.7 times from what it was in the third. So in view of the overall cost, that is not significant at this point of time and that is easily passed on also because this is a global phenomena and not only a phenomena which is there only in one of the top.
Purushottam Maheshwari
Understood. The second question is that when we say the spreads are currently at 120, 125, how should we look at in terms of count? Is it 30 count, 60 count? What is the exact count specification we should look at?
Dinesh Nolkha
Basically this is on an average of about 33, 34 count,
Purushottam Maheshwari
33 and 34
Dinesh Nolkha
On 13th count. If you go by the average spread today, the average spend would be about 120.
Ritesh Gandhi
Got.
Purushottam Maheshwari
Thank you sir. These are my questions. Thank you.
Operator
Thank you. The next question is from the line of Varun Poduwal from Smith limited. Please go ahead.
Purushottam Maheshwari
Good evening team. Thank you so much for the opportunity. I have just a few questions and I think most of them were answered before this. My first question is on the lines of the utilization. The Yarn utilization is approximately 99 and the fabrics are about 90% and above. So how do you see the next two quarters spanning out? Considering the incremental demand for the fabrics and the yarn, how do you plan on that before the cliffs gets executed? That is the first question. You can answer that.
Dinesh Nolkha
So basically the utilization, these are the peak level utilizations. Given the complexity of the business, I think this is the kind of utilization will continue slightly in the summer period. Some slight utilization comes down because of extraordinary heat. That is a normal process. So we expect that the utilization to be in the range of 97 to 98 for the yarn business and for the fabric business it will also be 90 plus only. So this will continue for next two quarters before the new capex comes on board.
Purushottam Maheshwari
Okay, so are we focusing more on the woven fabric right now? If we look at the fabric segment or the finished fabrics more.
Dinesh Nolkha
So the new expansion is completely integrated and whatever capacity we are putting on the woven side is also for the finished fabrics. So it will be a complete, end to end, finished fabrics only.
Purushottam Maheshwari
Okay. And my second question was on the side of the debt that you would be utilizing for the Capex, you mentioned your total debt would be maxed out at 1900 crores. Or can I just understand what would be the approximate average cost of borrowing for the same?
Dinesh Nolkha
Average cost of borrowing for us is about 5.6%. Average is 5.6% at this point of time and the working capital which is less than 7%. So that is a blended. If we blend it out, it should be in the range of 6.5%.
Purushottam Maheshwari
Okay. And one more small question was on the lines of the geographies that you’ve added recently. So is there any major geographies that you’ve added and that you look into as a very big scope for improving your export business?
Dinesh Nolkha
As such, if we geographies, we have just increased our reach in the geographies, we are present in most of the continents at this point of time. Now, since we are seeing FDA happening with New Zealand already, we were present in Australia. So that is an area where we are focusing and that could be one of the areas where we can increase our footsteps going forward.
Purushottam Maheshwari
Okay. Yeah, that would be it. Thank you so much.
Operator
Thank you. Due to time considerate, we take one last question from the line of Uday Kumar from UK Capital Three Square.
Aditya Kumar
Hi sir, I’m audible.
Operator
Yes sir,
Aditya Kumar
Just one last question. On the war front, you already mentioned the earlier, earlier that you have some delays pertaining to the to what extent it has impacted your logistic cost or revenue. In that sense, do you see still some impact going forward?
Dinesh Nolkha
First of all, as far as our revenues are concerned, we have no impact as our exposure to that particular area is very minuscule. So. So that is on the revenues there is no impact. Yes, there is transit time increases for most of the destinations especially going towards Europe and others. So there is an increase of about two weeks time. The transit has increased. Plus there is a sea freight cost increase also sea freight cost there is an increase especially for the Europe there is an increase of about 75 to 80% increase in comparison to what was there in the month of February.
And rest of the world also there is an increase of both 15 to 20% given the increase in the crude prices.
Aditya Kumar
So this will be impacted in the margins, right? Or are you passing on this?
Dinesh Nolkha
Most of the trade costs are normally passed on because most of the sales happen on the FOB basis. Maybe some small impact comes in which is already factored in. Already in our. In the numbers like in March. In fact since March the price the sea freights have normalized what it was there in the March. So it is already factored in the numbers.
Aditya Kumar
Thank you sir. Thank you for answering my question.
Operator
Thank you. I now hand the conference over to Mr. Avnesh Chandra for closing comments. Please go ahead
Awanish Chandra
Sir. Before taking your closing comment, one quick question. Our new CapEx is anyway getting commissioned in the second half and we understand that you will not have concrete number for future capex. But sir, any indicative thought related to future plan from you will be helpful
Dinesh Nolkha
At this point of time I would not be able to comment on the future CapEx as we have already. As you see, apart from the capex which we had done, we have already done additional capex of over 23040 crore on the energy side. So that is again out of the which was not originally planned before last year. Further, we keep on looking at various avenues available at the moment. I cannot give any number but definitely there are many things on the drawing board. As soon as it comes up we will definitely share with you.
Awanish Chandra
Sure.
Dinesh Nolkha
And
Awanish Chandra
Continue. Sir.
Dinesh Nolkha
Yeah. I would like to thank everyone for taking out the time to joining the call and I hope we have been able to address all your queries. I also thank Smith’s team and Avniji for hosting the call. For any further information, kindly get in touch with our finance team or our investor relations advisors and thank you once again. See you all over again in the next running. Thank you
Operator
On behalf of Smiths Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.