Nandan Denim Reports Mixed Q2FY26 Results
Investors are closely monitoring Nandan Denim shares following the company's quarterly results announcement after market hours on Thursday. The multibagger penny stock revealed a mixed financial performance for the September-ending quarter, showing both challenges and positive developments in its operational metrics.
Quarterly Financial Performance Analysis
The company reported revenue of ₹784.69 crore in Q2FY26, marking a 7.7% year-on-year decline from the ₹850.25 crore recorded in the same quarter last year. This contraction in top-line performance reflects the challenging market conditions facing the denim manufacturer.
More significantly, the company's operational profitability took a substantial hit. EBITDA for the quarter stood at ₹7.25 crore, representing a sharp 26.7% decrease compared to the ₹31.47 crore reported in Q2FY25. This decline in operating performance led to EBITDA margin contraction to 3.2% from 4.0% in the previous year's comparable period.
However, the bottom line told a different story. Net profit improved marginally to ₹9.44 crore, showing a 7.6% year-on-year increase from ₹8.77 crore in the year-ago period. This improvement in profitability was primarily driven by lower deferred tax expenses, which helped offset the operational challenges.
Half-Yearly Performance and Corporate History
Looking at the broader picture, the company's performance for the first half of FY26 presents a more nuanced story. For H1FY26, revenue reached ₹1,832.36 crore, demonstrating 16.5% growth compared to ₹1,571.88 crore in H1FY25.
Despite this revenue growth, EBITDA for the six-month period stood at ₹51.32 crore versus ₹62.97 crore in H1FY25, showing a 25.8% decline year-on-year. The margin slipped to 2.8% from 4.0% a year earlier, indicating persistent pressure on profitability.
On a positive note, net profit for H1FY26 rose to ₹20.64 crore, registering a 26.9% YoY increase from ₹16.27 crore in the same period last year.
The company has demonstrated shareholder-friendly initiatives in recent years. In September 2024, Nandan Denim announced a stock split in a 10:1 ratio, making the stock more accessible to retail investors. Earlier, in March 2022, it issued bonus shares in a 2:1 ratio, further rewarding its investor base.
Company Background and Stock Performance
Founded in 1994, Nandan Denim operates as part of the Ahmedabad-based Chiripal Group and has grown to become India's largest and the world's fourth-largest denim fabric manufacturer. What began as a textile trading business has transformed into a vertically integrated denim powerhouse with global operations.
Today, the company exports to over 27 countries and counts several top retailers among its clients. Domestically, Nandan Denim maintains a dominant position in the denim supply chain, leveraging its integrated manufacturing capabilities.
The penny stock has faced recent pressure, losing 18% of its value in the last four months. The recent correction has pushed the stock to trade 43% lower from its 52-week high of ₹6.1 per share.
However, long-term investors have witnessed substantial wealth creation. Over a two-year period, the stock has surged 34%, while the five-year timeframe reveals multibagger returns of 373%, highlighting the company's strong fundamental growth trajectory despite recent volatility.
