SP Apparels , India's largest manufacturer and exporter of knitted garments for infants and children, has reported a robust financial performance for the first quarter, with significant revenue growth despite facing margin pressures.

Strong Revenue Growth

The company's consolidated revenue witnessed a substantial increase of 63.3% year-on-year, reaching ₹4,050.70 crore. This impressive growth was primarily driven by the garment exports segment, which saw a 35.8% rise in revenue to ₹3,729.40 crore.

Operational Performance

SP Apparels demonstrated strong operational metrics in its core garment export business:

• Export volumes increased to 18.6 million pieces, up from 15.8 million pieces in the previous quarter.
• Net sales realization improved to ₹147.20 per piece.
• Capacity utilization reached a healthy 83%.

Financial Highlights

Margin Pressure

Despite the strong top-line growth, the company experienced some margin compression:

• EBITDA margin declined to 13.5% from 14.4% in the same quarter of the previous year.
• PAT margin dropped to 5.1% from 7.3% in the same period last year.

The garment exports segment, while driving growth, also saw its EBITDA margin fall to 14.6% from 15.6% in the previous year.

Segment Performance

• Garment Exports: This segment, including Young Brand Apparel, was the primary growth driver with revenue up 35.8% to ₹3,729.40 crore.
• Retail: The retail segment remained relatively flat with minimal growth.
• SPUK: SP Apparels' UK subsidiary showed revenue growth of 26.3% but continued to report losses, albeit reduced from the previous year.

Looking Ahead

SP Apparels' robust revenue growth, particularly in exports, suggests a positive outlook for the company. However, the pressure on margins indicates challenges that the company may need to address in the coming quarters. The strong capacity utilization and improved sales realization in the garment export segment point to potential for further growth, provided the company can manage its costs effectively.

As SP Apparels continues to navigate the dynamic global apparel market, investors and industry observers will be watching closely to see how the company balances its growth trajectory with profitability in the future.

SP Apparels , a prominent player in the textile industry, has reported robust financial results for the first quarter, showcasing significant growth across key metrics.

Strong Revenue Growth

The company's consolidated total revenue stood at Rs. 4,050.70 million, marking a substantial 63.3% year-over-year increase compared to Rs. 2,480.30 million in the same quarter of the previous year. This impressive growth reflects the company's strong market position and effective business strategies.

Profitability and Earnings

SP Apparels demonstrated improved profitability, with consolidated EBITDA rising by 52.8% to Rs. 545.60 million from Rs. 357.10 million in the same quarter last year. The company's profit after tax grew by 14.5% to Rs. 206.60 million, up from Rs. 180.50 million. Consequently, earnings per share improved to Rs. 8.20 from Rs. 7.20 in the corresponding quarter of the previous fiscal year.

Standalone Performance

On a standalone basis, the company's performance was equally impressive. Adjusted total revenue grew by 34.5% to Rs. 2,877.00 million, while adjusted EBITDA increased by 20.7% to Rs. 436.60 million compared to the same quarter of the previous year.

Divisional Performance

The garment division, including Young Brand Apparel, emerged as a strong contributor to the company's success. This division generated revenue of Rs. 3,729.40 million with an EBITDA of Rs. 542.70 million, maintaining a healthy EBITDA margin of 14.6%.

Export Growth

SP Apparels witnessed a significant increase in its export sales quantity, which rose to 18.6 million pieces from 13.8 million pieces in the same quarter of the previous year. This growth in export volume underscores the company's expanding global presence and market demand for its products.

Dividend Announcement

In a move that signals confidence in the company's financial health and commitment to shareholder returns, the board of directors has proposed a final dividend of Rs. 2.00 per equity share. This proposal will be subject to shareholder approval at the upcoming annual general meeting.

Conclusion

SP Apparels Limited's quarterly results demonstrate the company's resilience and growth potential in the competitive textile industry. With significant improvements in revenue, profitability, and export volumes, the company appears well-positioned for continued success in the coming quarters.

Investors and stakeholders will likely be watching closely to see if SP Apparels can maintain this growth trajectory and further strengthen its market position in the textile sector.