S.P. Apparels Ltd

Financial Performance

• Q1 FY27 consolidated revenue INR 401 crores; vs INR 403 crores prior year
• Consolidated EBITDA INR 61.4 crores; margin 15.3%
• PAT INR 24.9 crores; EPS INR 9.9
• Standalone revenue INR 265.9 crores; standalone EBITDA INR 46.6 crores; PAT INR 26.5 crores
• Standalone EPS INR 10.5; standalone EBITDA margin 17.5%
• Garment division adjusted revenue INR 337.3 crores; EBITDA INR 59.2 crores; margin 17.6%
• Young Brand Apparels revenue INR 72.7 crores; EBITDA INR 12.6 crores; margin 17.7%; PAT INR 6.3 crores; export 5 million
• SPUK revenue INR 33.3 crores; EBITDA -INR 1.04 crores; YoY growth 125.2%
• SP Retail Ventures revenue INR 18.8 crores; EBITDA INR 0.41 crores
• Export quantities: SP Apparels 15.7 million; Young Brand Apparels 5 million
• Order book: SPAL INR 430 crores; Young Brand INR 100 crores; SPUK INR 70 crores; total around INR 600 crores
• Balance sheet: gross debt INR 258 crores; cash INR 46.6 crores; net debt INR 211 crores (as of 30 Jun 2026)
• Dividend INR 3 per share; stock split proposed from INR 10 to INR 2 per share (subject to approvals)

Operating Update

• Sri Lanka capacity 1,650 machines; 1,300 for exports; one factory 85–90% capacity
• Sri Lanka revenue targeted INR 150–200 crores by March
• Palladum facility production started; commercial production from another approved facility expected soon; October target for all Young Brand units
• New product line for Young Brand: luxury lingerie bras; investment up to ~INR 10 crores

Capex & Capacity

• India adds 750 machines; Sri Lanka capacity up to 2,000 machines
• Salem facility restarted; trial production; full capacity planned within ~3 months post-Diwali
• SPAL Sivakasi factory started; plan to add ~400 machines over 2 years

Balance Sheet & Cash Flow

• Gross debt INR 258 crores; cash INR 46.6 crores; net debt INR 211 crores
• Disciplined liquidity management; ongoing working-capital focus

Guidance & Outlook

• FY27 consolidated revenue guidance: INR 2,000 crores
• 1H moderate, 2H stronger revenue trajectory expected
• Garment division margin above 15%; consolidated EBITDA margin around 15% for FY27

Q&A Highlights

• Q2 topline expected to be better than Q1; margins above 15%
• Tariff reversal expected to lift momentum in H2; order visibility ~INR 550 crores
• SPUK roadmap: GBP 13 million in 3 years; GBP 50 million in 5 years; M&S orders aiding growth
• Sri Lanka revenue target INR 150–200 crores by year-end; capacity near full utilization
• Total order book ~INR 600 crores: SPAL ~INR 430 crores; Young Brand ~INR 100 crores; SPUK ~INR 70 crores
• U.S. tariff uncertainty discussed; customers cautious but order book remains safe

Meeting Details

• Date/time: 13 Aug 2026, 12:00–12:50 IST.
• Type: group investor conference call; Mode: virtual.

Participants

• Key participants: Company Management.

Purpose

• Discuss unaudited quarterly results for quarter ended 30 June 2026.

Additional Notes

• Audio recording of the call is available.

Business Overview

• SPAL is India's largest knitted infant/childrenwear manufacturer and exporter with end-to-end fiber-to-garment facilities.
• Core segments: Garment Division (incl. Young Brand Apparel), Retail (Crocodile, Angel & Rocket, SPUK), and Sri Lanka expansion.
• Strategic initiatives include capacity expansion, diversified product mix, and international growth.

Operational Highlights

• Q1FY27 consolidated revenue 4,010.8 Mn; YoY -0.6%, QoQ +9.9%.
• Consolidated EBITDA 613.6 Mn; margin 15.3%.
• PAT 248.7 Mn; PAT margin 6.2%; EPS 9.9.
• SPAL Avinashi standalone revenue 2,751.2 Mn; Adj Revenue 2,659.4 Mn.
• Standalone Adj EBITDA 465.8 Mn; PAT 265.4 Mn.
• Young Brand Apparel standalone revenue 727.2 Mn; Adj EBITDA 126.5 Mn; PAT 63.0 Mn.
• YBAL EBITDA margin 17.7%.

Financial Performance

• Consolidated revenue Rs 4,010.8 Mn; YoY -0.6%; QoQ +9.9%.
• Consolidated EBITDA Rs 613.6 Mn; margin 15.3%; PAT Rs 248.7 Mn; margin 6.2%.
• EPS Rs 9.9; Gross Profit Rs 2,310.2 Mn; Gross Margin 57.6%.
• SPAL Avinashi standalone revenue Rs 2,751.2 Mn; Adj Revenue Rs 2,659.4 Mn; Adj EBITDA Rs 465.8 Mn.
• Young Brand Apparel revenue Rs 727.2 Mn; Adj EBITDA Rs 126.5 Mn; PAT Rs 63.0 Mn.

Capital & Liquidity

• Finance cost rose to Rs 148.6 Mn; no debt raise disclosed.
• Shareholding (as of 30 Jun 2026): DSP Mutual Fund 7.6%, Quant 3.2%, UTI 2.0%, Mahindra Manulife 1.4%, LIC 0.4%.
• SP Retail planning strategic partner and capital-market fundraising.

Strategic Outlook

• Growth focus on existing verticals, geographic expansion, and acquisition of Young Brand Apparel.
• SPUK to benefit from India-UK FTA; sourcing flexibility across India and Sri Lanka.
• All Young Brand units to start commercial production by H2 FY27.

Risks & Mitigation

• FX fluctuations; gains/losses reflected in other income, impacting margins.
• SPUK faced Brexit/Covid-19 headwinds; India-UK FTA and RoSCTL/RoDTEP support exports.
• Export-support schemes (EPM, RoSCTL/RoDTEP) provide tailwinds to growth.

Governance

• Key shareholders as of 30 Jun 2026 disclosed; no governance changes highlighted.

Split details

• 1:5 split; one Rs10 share subdivided into five Rs2 shares.
• Pre-split issued capital: 25,138,883 shares; post-split: 125,694,415 shares.

Capital structure changes

• Pre-split authorized: 4,72,50,000 shares of Rs10.
• Post-split authorized: 23,62,50,000 shares of Rs2.
• MOA updated to reflect post-split capital of Rs47.25 crore.

Rationale and class

• Rationale: improve liquidity and retail participation.
• Class affected: Equity shares; face value Rs10 pre-split, Rs2 post-split.

Timeline and key dates

• Completion expected within 2 months after shareholder approval.
• Record date to be announced.
• AGM on 21 Sep 2026; book closure 15–21 Sep 2026.
• EVoting cut-off date: 14 Sep 2026.

Meeting Details

• Date and time: 13 August 2026, 12:00 Noon IST.
• Type and mode: Earnings conference call (virtual).
• Organizer: Elara Securities (India) Private Limited.
• Key company participants: Chairman & MD; Executive Director; Joint Managing Directors; CEO; CFO.
• Purpose: Discuss Q1 FY27 earnings for the quarter ended June 30, 2026.

Disclosure and price movement

• Intimates exchanges of all events and price-sensitive information per SEBI LODR requirements.
• Share price movement is market-driven; company has no control or knowledge of reasons.
• Affirms no information or announcement has been withheld that could affect price.

Guarantee to HSBC UK Bank for SP Apparels UK loan

• SP Apparels Limited issued a corporate guarantee to HSBC UK Bank PLC for Rs 12.51 crore.
• Guarantee secures the term loan facility availed by SP Apparels (UK) P Limited, the wholly owned subsidiary.
• Promoter group interest involved: Mr. P. Sundararajan (CMD) is a director of SP Apparels UK.
• Guarantor: SP Apparels Limited; Counterparty: HSBC UK Bank PLC.
• Impact: Contingent liability disclosed; no direct impact on the company.
• Amount: Rs 12.51 crore (Rs 12,51,33,300) guaranteed.

Dematerialisation processing and listing confirmation

• Dematerialisation requests in the quarter were confirmed to depositories as accepted or rejected.
• Dematerialised securities have been listed on the exchanges where existing securities are listed.
• Security certificates for dematerialisation were mutilated and cancelled after verification.
• Depository name substituted as registered owner within prescribed timelines.