Sportking India Limited , a leading textile manufacturer, has reported a strong performance for the first quarter, with a 10% year-on-year increase in profit after tax (PAT) to ₹35.00 crores. The company also announced a significant expansion plan, demonstrating its commitment to growth and market leadership.

Financial Highlights

• Revenue from operations stood at ₹586.00 crores
• Profit After Tax (PAT) increased by 10% year-on-year to ₹35.00 crores
• Gross margin improved to 27.00%, up from 24.30% in the previous year's corresponding quarter
• EBITDA margin expanded to 12.00%, compared to 11.60% in the same quarter last year

Operational Performance

Sportking India maintained its operational excellence with a capacity utilization above 95% during the quarter. The company's export business continued to be a significant contributor, accounting for 58% of total revenue. This strong export performance underscores Sportking's competitive position in the global textile market.

Expansion Plans

In a major development, Sportking India's board has approved a greenfield expansion project worth approximately ₹1,000.00 crores. The expansion includes:

• Addition of 1.50 lakh spindles in Odisha
• 40% increase over the existing capacity of 3.79 lakh spindles
• Expected completion within 12-15 months
• Funding through a mix of term loans and internal accruals

This strategic expansion is set to enhance Sportking's production capabilities and strengthen its market position in the eastern region of India.

Strategic Initiatives

The company also received in-principle approval for the merger of Marvel Dyers and Processor Pvt Ltd and Sobhagia Sales Pvt Ltd. This move is aimed at enabling forward integration into fabrics and garments, potentially opening up new revenue streams and enhancing value addition in Sportking's product chain.

Management Commentary

Munish Avasthi, Chairman & Managing Director of Sportking India Limited, stated, "Our quarterly results reflect the strength of our business model and our ability to maintain profitability in a dynamic market environment. The approved expansion plan is a testament to our confidence in the future growth prospects of the textile industry. We believe this investment will significantly enhance our manufacturing capabilities and allow us to better serve our customers both domestically and internationally."

Outlook

With its robust financial performance, high capacity utilization, and strategic expansion plans, Sportking India Limited appears well-positioned for sustained growth. The company's focus on exports, coupled with its forward integration initiatives, is expected to drive long-term value creation for shareholders.

Investors and industry observers will be keenly watching the progress of Sportking's expansion project and its impact on the company's market share and financial performance in the coming quarters.

Sportking India Limited has announced a significant revision to its solar power investment strategy, demonstrating the company's commitment to sustainable energy solutions and regulatory compliance.

Key Changes in Investment Plan

The textile manufacturer has modified its initial plan to invest in Evincea Renewable Two Private Limited, opting instead for a 26% stake in Evincea Renewable Seven Private Limited. This strategic shift comes with an increased investment of Rs. 14.10 crores, up from the previously announced Rs. 12.09 crores.

Reasons for the Revision

According to the company's disclosure, the change in the investment entity was necessitated by legal and regulatory considerations. The revision aligns with the requirements under the Electricity Act, as Sportking will be a captive user of the solar power generated.

Project Details

The Special Purpose Vehicle (SPV) is engaged in solar power generation and supply, specifically tailored for Sportking's facilities in Punjab. The SPV represents a crucial step in Sportking's efforts to integrate renewable energy into its operations.

Investment Timeline and Method

Sportking India Limited plans to complete this investment by March 2026. The company will make the investment through cash consideration, reflecting its strong financial position and commitment to the project.

Implications for Sportking

This revised investment strategy underscores Sportking's dedication to sustainable practices and energy efficiency. By securing a significant stake in a solar power generation entity, the company is positioning itself to benefit from reduced energy costs and a smaller carbon footprint in the long term.

Broader Context

The move comes amidst a series of strategic decisions by Sportking India Limited. In its recent board meeting, the company approved several key initiatives, including:

1. A major greenfield expansion project in Odisha, with an estimated investment of Rs. 1,000.00 crores to add 1.50 lakh spindles to its production capacity.
2. Appointment and re-appointment of key directors, including Mr. Puneet Singhania as an Independent Director and Mr. Munish Avasthi as Managing Director and CEO.
3. Appointment of M/s Sunny Kakkar & Associates as the company's Secretarial Auditor for a five-year term.

Financial Performance

The company's financial results show a robust performance:

Despite a slight decrease in revenue, Sportking India Limited has managed to improve its profitability, showcasing effective cost management and operational efficiency.

The revised solar investment plan, coupled with the company's expansion initiatives and strong financial performance, indicates Sportking India Limited's proactive approach to sustainable growth and energy management in the competitive textile industry.