After 1:10 Stock Split, This Penny Stock Under Rs 5 Records Strong FY25 Results; Stock Surpasses 50-DMA

Nandan Denim Ltd. (NDL), India's largest and the world's fourth-largest denim fabric manufacturer, has reported a commendable financial performance in the fourth quarter and full fiscal year 2024-25, marking a significant recovery in revenues and profits. Last traded figures for the company were at Rs 4.02 per share, which is a marginal decrease from Rs 4.09. Nevertheless, the stock is still well above the 52-week low of Rs 2.96 and has increased by over 36% from that point. Additionally, the stock is above its 50-day moving average (50-DMA).

The company's March 2025 quarter net sales of Rs 1,048.65 crore represented an 81.08% growth over the March 2024 quarter's Rs 579.12 crore. In Q4FY25, its net profit was Rs. 10.63 crore, a 60.78% decrease from Q4FY24's Rs. 27.11 crore. EBITDA dropped 44.41% from Rs. 64.79 crore in the year-ago quarter to Rs. 36.02 crore in the quarter under review.

The company's performance for FY25 was nothing short of remarkable. Marking a 76% increase, net sales also rose sharply to Rs 3,546.68 crore, compared to Rs 2,010.09 crore in FY24. With stronger volumes, higher exports, and increased demand in domestic retail markets, the net profit for the year came to Rs 33.48 crore. This also comes after a dramatic improvement in FY24, where profit had dramatically increased from Rs 0.53 crore in FY23 to Rs 45 crore in FY24. This was almost an 8,385% increase.

According to some estimations, as of March 2025 the promoter group's stake held in the company was 51.01%, showcasing a strong promoter confidence towards the growth potential in NDL. Currently, NDL is valued in the range of Rs 570 crore. NDL seems to pose a good investment opportunity for investors considering the current price-to-earnings ratios of 11 and 22 for the industry average. This is NDL's PE ratio, meaning they are, in fact undervalued.

Revenue posted NDL to earn Rs 2,498.03 crore in 9MFY25, marking a 75% increase year-on-year. Net profit also increased 28%, coming to Rs 22.85 crore. Quarter 3 of FY25 showed revenue growth had doubled from a year prior to Rs 926.15 crore, with net profit being recorded at Rs 8.63 crore. This depicts NDL has been and is sustaining good business momentum leading into the final quarter.

Nandan Denim, initiated in 1994 as a segment of Nandan Denim, is part of the reputed Chiripal Group. It derives its origins from a textile trading company. Today, it stands as one of the largest manufacturers of denim textiles on a national and international level. Sourcing denim and other textile materials needed from over 2 dozen countries, NDL manages to supply a whopping 2000 denim and assorted fabrics annually. The company also boasts of having a fully vertical setup, which enables them to innovate denim products along with having control over its research and development, giving them a competitive advantage in the market as a whole.

The stock of Nandan Denim (NDL) has split in the past. A significant split of 10:1 took place on September 18, 2024. Accordingly, ten shares having a face value of Re 1 were generated from each share with a face value of Rs 10.