Nitin Spinners faces price pressure amid cotton market volatility

Nitin Spinners is facing pricing challenges due to different trends in domestic and international cotton prices. While the company maintains its volume growth target of 12-13 per cent for the current financial year, realizations are expected to remain flat.

The disparity is due to a rise in domestic cotton prices caused by heavy rains and reduced irrigated areas, while international prices are on a downward trajectory. This situation increases production costs without allowing commensurate price increases.

Managing Director Dinesh Nolkha explained, India's Minimum Support Price (MSP) for cotton prevents domestic prices from falling, but it also keeps costs high. The influx of cheap imported cotton further limits the company's ability to raise prices.

Despite these challenges, Nitin Spinners expects a relatively stable pricing scenario in coming months, with no significant upside or downside in cotton prices. The company's export-oriented business model, with nearly 60 per cent revenue from exports, provides some resilience. The Rajasthan-based manufacturer produces cotton and blended yarn, grey knitted fabrics, and finished and printed woven fabrics. Its current market capitalization stands at Rs 2,361.24 crore.