Infomerics Reaffirms ‘IVR BBB/Stable’ Rating for Nandan Denim; Outlook Remains Stable

Mumbai (Maharashtra) [India], January 7: Infomerics Valuation and Rating Ltd has reaffirmed its credit ratings of ‘IVR BBB/Stable' for the long-term bank facilities and ‘IVR A3+' for the short-term facilities of Nandan Denim Limited (NDL). The total rated facilities amount to ₹339.74 crore. The outlook on the long-term rating continues to remain Stable.

The rating reaffirmation reflects Nandan Denim's significant improvement in operating performance, strengthening financial risk profile, and its established position as one of India's leading denim manufacturers. The agency noted that the company's scale of operations, integrated manufacturing capabilities, and experienced management continue to support its credit profile, despite inherent cyclicality in the denim and broader textile industry.

During FY25, Nandan Denim reported a sharp growth in revenues, with total operating income rising by over 76% to ₹3,546.68 crore, compared to ₹2,010.09 crore in the previous fiscal year. The growth was primarily driven by higher domestic sales volumes. EBITDA increased to ₹128.21 crore, although margins moderated to 3.61% due to cost pressures. Profit after tax stood at ₹33.48 crore. The company also benefited from captive power generation, with more than 36% sourced from renewable energy, providing insulation against volatile grid power costs.

Infomerics highlighted a marked improvement in NDL's capital structure, with adjusted net worth increasing to ₹608.72 crore as of March 2025, supported by profit accretion and reduction in overall debt. Key leverage indicators strengthened, with the overall gearing ratio improving to 0.41x, reflecting a healthier balance sheet and improved financial flexibility.

Nandan Denim Limited is part of the Chiripal Group, a diversified textile conglomerate with a strong presence across the value chain. The company operates a fully integrated manufacturing facility with an annual denim production capacity of 110 million meters, making it one of the largest players in the domestic market. Long-standing customer relationships and experienced leadership have helped the company maintain a steady order book and strong market presence.

The stable outlook factors in Infomerics' expectation that Nandan Denim will continue to benefit from its scale, operational efficiencies, and prudent financial management, while maintaining adequate liquidity and manageable leverage levels.

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