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Nandan Denim to increase fabric production capacities

When textile veterans like Arvind are gradually focusing on brands and retail business, Ahmedabad-based Nandan Denim (NDL) continues to add denim fabric capacities to take advantage of the demand in domestic as well as overseas markets.

NDL has increased its denim capacity from 76 million metres per annum in 2014 to 99 million metres per annum by March 2015. The company now aims to further increase it to 110 million metres per day by March 2016. NDL anticipates capacity expansion to boost contribution from exports to about 30 per cent of the overall business in two years. Along with denim fabric production, the aim is also to expand it spinning and shirting segments. The company's export revenues were 13 per cent of the overall business of Rs 281 crores in the June quarter.

NDL will invest Rs 612 crores on capacity expansion through debt and fresh equity ratio of 70-30 respectively. Company's debt-to-equity ratio stands at 2:1. NDL produce different varieties of denim fabrics. Of its total denim production 50 per cent is driven by pure cotton denim and the rest 50 per cent is a blend with man-made fibre.

However, brokerage firms like Nirmal Bang are maintaining a cautious approach on the company's export ambitions. “Export incentives given by the government have declined by around two per cent from about 7-9 per cent earlier to about five to seven per cent now. Therefore, we believe this will have a negative impact on NDL’s export margin,” Nirmal Bang stated in its recent Institutional Equities report on NDL. www.nandandenim.com

 
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