NANDAN DENIM LTD is a part of Chiripal group and currently the second largest integrated denim fabric company in India based in Ahmedabad. Chiripal group is widely recognized as the Textile House with manufacturing facilities for POY, Texturising, Cotton Spinning, Denim Weaving, Knitting and Processing, Home Furnishing. NDL manufactures and supplies quality grey cotton fabrics, khakis and denims. Denim contributes 90 % of the total revenue to the company. It has invested heavily in capacity expansion to become the largest denim company in India and fourth largest in the world by March 2016. Nandan Denim was in the business of trading of fabrics in domestic and international markets. During FY04, it commenced implementation of Weaving (Grey) project. Currently, the exports account for nearly 10 % of sales. NDL is second largest denim player in the India with 99 mn meters per annum, and also has 10 mmpa manufacturing capacity of shirting fabrics. NDL is the largest denim suppliers to global brands such as Carrefour, Ralph Lauren Corp, Polo, A/X, Tomy Hilfiger, Gini & Jony, CP Colorplus, Mufti, Killer, Spykar etc. India’s textiles sector is one of the mainstreams of the national economy. It is also one of the largest contributing sectors in India’s exports, contributing around 11 % to the country’s total exports basket. The textiles industry is labour intensive and is one of the largest employers. The industry realized export earnings worth US$ 41.57 billion in 2013-14. The textile industry has two broad segments, namely handloom, handicrafts, sericulture, power looms in the un-organised sector and spinning, apparel, garmenting, made ups in the organised sector. The Indian textiles industry is extremely varied, with a hand-spun and hand-woven sector at one end of the spectrum, and the capital intensive sophisticated mill sector at the other. The de-centralised power looms and knitting sector forms the largest in textile and within that knitting sector forms the largest section. The close linkage of the industry to agriculture and the ancient culture, the traditions of the country make the Indian textiles sector unique in comparison to the textiles industry of other countries. This also provides the industry with the capacity to produce a variety of products suitable to the different market segments, both within and outside the country. The future for the Indian textile industry looks promising, buoyed by both strong domestic consumption as well as export demand. With Consumerism and disposable income on the rise, the retail sector has experienced a rapid growth in the past decade. The organised apparel segment is expected to grow at a Compound Annual Growth Rate of more than 13 % over a 10-year period. Also Indian denim capacity is poised to reach 2 billion meters per annum (bmpa) by 2018 from 1.2 bmpa currently, signifying 18.5 % CAGR. In contrast, international market capacity is likely to grow at 3 % to 5 % CAGR. Of the current 1.2 bmpa Indian denim capacity, usable installed capacity is about half of 1 bmpa. Domestic market demand for denim is of 800 mmpa while the balance 200-300 mmpa is exported. India houses 10 % of global denim capacity and NDL manufactures 10 % of Indian denim capacity. Nandan Denim is poised to become the largest manufacturer of denim fabrics in India after its expansion of its capacity to 110 mn meters per annum (mmpa). In India, Arvind Ltd has capacity of 130 mmpa and Aarvee has capacity of 84 mmpa, Sudarshan Jeans has capacity of 70 mmpa, ETCO Denim has capacity of 50 mmpa. However NANDAN is still behind its global competitors like Vicunha Textiles which has capacity of 230 mmpa, iSKO which has the capcity of 200 mmpa and Tavex corporation which has the capacity of 160 mmpa. NDL, Arvind and Aarvee, (together) would constitute one-third of the Indian denim industry. Consumption in India is skewed with 7 % of population consuming 49 % of denim. Male segment contributes 85 % to the total consumption while balance 15 % is consumed by female and kids segment. The overall denim market is expected to witness higher growth rates due to their lower base and increasing focus of brands and retailers on those segments. Denim is of the most promising category in India’s apparel market. In 2013, the denim market of India was worth Rs. 13,500 Cr (NDL having 10 % share with Mcap of Rs. 689 Cr) which accounts for 5 % of the total apparel market of the country. As per a report, the world trade in denim fabric averaged 670,000 tonnes over the past one decade, while in value terms; it fluctuated between $3 billion and $3.5 billion. India accounts for 5 % of this trade. Going forward, a large part of the growth of denim apparel shall be driven by deeper penetration in the smaller cities with increasing acceptance of denim within India. The Indian denim market is projected to grow at 15 % CAGR to become Rs. 27,200 Cr market in 2018 owing primarily to youngster’s obsession for cult fabric. This boom will be fuelled by not only due to an increasing demand from small cities and rural areas, but also because of acceptance of the fabric at workplaces etc. In terms of volumes, the denim market is estimated at 300 mn pairs of jeans, which is projected to grow to 550 mn-600 mn by 2016. India is the second largest denim manufacturer in the world with 1200 MMPA capacity, second to China, which has a capacity of 3497 MMPA. Asia accounts for about 70 % of the global denim fabric production, while the global denim fabric market is $17bn, growing at a modest rate of 3 % to 5 %. The western lifestyle and western fashion has boosted the consumption of casual fashion apparel like denims, dress, shirts, tees, casual shirts among both men and women consumers in all developing countries including India. The average number of denim items owned by Indian consumer is much lower in comparison to consuming market of the United States, Europe etc. The number is even lower than countries like Brazil and China. This difference in the number demonstrates the huge potential that exists for denim in the domestic market. Per capita denim jeans consumption in India is only 0.3 compared to USA’s 9, UK’s 8, Brazil 7, Thailand 7, Japan 6 and China’s 2. The 78 % of Indian population is less than 45 years of age. While denim story started elsewhere in the world as work-wear, it started as a fashion statement of youth in India. It reflected the fashion statement, style quotient and comfort wear anywhere for the youth. With more than 70% of Indian population aging around 26 years and the median age remaining under 30 years even after 10 years, huge potential exist for denim, a fabric with the target Indian age bracket of 14-40 years. Current share of male segment within denim wear is almost 75-80 % with the female gender catching up faster than the growth registered in the male segment. The young generation, either gender, has accepted denim as “normal” wear rather than a “functional” wear. Current domestic market is dominated by metro cities that account for almost two-third of consumption while having got less than 10% of national population. With rising disposable incomes and fashion consciousness, increasing demand from women’s wear segment and the growing acceptance of denim jeans as an office wear coupled with the expanding demand from Tier II & III cities driven by expanding organised retail industry will lead the growth of denim in India. Also NDL has strategic tie-ups with 10 firms for exclusively selling Nandan products around the country and 2/3rd of the orders are confirmed through long term agreements involving minimum yearly quantity commitment. NDL has strong global network of around 15 distributors spread across 8 countries – Peru, Mauritius, Hong Kong, Dubai, Thailand, Bangladesh, New York, Columbia. NDL exports its denim fabric to over 22 countries across the globe through its strong global dealer-distribution network. Merchant exports through various star export houses give an additional boost to exports. Currently, exports constitute over 10 % of total turnover in next three to four years taking benefit from decreasing competitiveness from its Chinese players. As the penetration of denim category and the awareness of denim quality increases in those cities and rural India, their share in market value will start increasing with more number of consumers willing to pay premium for the quality, design and fit. The latest trend in the denim fashion augurs well for the denim companies in India and the Nandan Denim (NDL), which is the second largest manufacturer of denim in India and the 5th largest in the global arena will definitely be the winner in this sector.
|SALES (₹ Crs)||904.10||1,096.50||1,241.40||1,426.30|
|NET PROFIT (₹ Cr)||39.10||51.40||54.50||64.40|