Corporate Actions

  • Board approved dividend of INR 3 per share for the year
  • Proposed stock split from face value of INR 10 to INR 2 per share, subject to necessary approvals

Financial Performance Highlights (Q1 FY27)

Consolidated Performance:

  • Revenue from operations: INR 401 crores (vs INR 403 crores YoY)
  • EBITDA: INR 61.4 crores, growth of 15.9% YoY
  • EBITDA margin: 15.3% (vs 13.1% in Q1 FY26)
  • Profit after tax: INR 24.9 crores, growth of 20.4% YoY
  • Earnings per share: INR 9.9 (vs INR 8.2 in Q1 FY26)

Standalone Performance:

  • Adjusted revenue: INR 265.9 crores (vs INR 287.7 crores YoY)
  • Adjusted EBITDA: INR 46.6 crores, growth of 6.7% YoY
  • Adjusted EBITDA margin: 17.5% (vs 15.2% in Q1 FY26)
  • PAT: INR 26.5 crores, growth of 33.4% YoY
  • EPS: INR 10.5 per share (vs INR 7.9 in Q1 FY26)

Segmental Performance

Garment Division (including Young Brand Apparel):

  • Adjusted operational revenue: INR 337.3 crores
  • Adjusted EBITDA: INR 59.2 crores
  • EBITDA margin: 17.6%

Young Brand Apparels:

  • Revenue: INR 72.7 crores
  • Adjusted EBITDA: INR 12.6 crores
  • EBITDA margin: 17.7%
  • PAT: INR 6.3 crores
  • Export sales quantity: 5 million pieces

SPUK (UK Business):

  • Revenue: INR 33.3 crores, growth of 125.2% YoY
  • EBITDA: Negative INR 1.04 crores
  • Air freight cost: 50,000 GBP during quarter

SP Retail Ventures:

  • Revenue: INR 18.83 crores, growth of 26.7% YoY
  • EBITDA: INR 0.4 crores

Operational Metrics

  • Export sales quantity for S.P. Apparels: 15.7 million pieces
  • Export sales quantity for Young Brand: 5 million pieces
  • Sri Lanka revenue contribution: INR 25 crores
  • Yarn division EBITDA: INR 7.5 crores

Liquidity and Capital Structure

  • Standalone gross debt: INR 258 crores
  • Cash and cash equivalents: INR 46.6 crores
  • Net debt: INR 211 crores as of June 30, 2026

Strategic Updates and Guidance

Market Outlook:

  • Global apparel sourcing shift continues with China Plus-One and Bangladesh Plus-One strategies
  • India-UK Free Trade Agreement showing positive impact with improved customer engagement
  • Expecting EU-India free trade agreement by end of financial year

Capacity Expansion:

  • Added 750 machines in India during current financial year
  • Sri Lanka currently has 1,650 machines (1,300 used for exports)
  • Young Brand Apparels: Palladum facility commenced production, additional facility to begin commercial production in coming months
  • All Young Brand Apparels units expected to be in commercial production by October 2026
  • Planning to add bra products to production portfolio with investment up to INR 10 crores

Customer Development:

  • Added three new UK brands to customer base (2 from UK, 1 from EU)
  • SPUK adding three more customers including Marks & Spencer
  • Current diversified customer portfolio of over 15 customers

Order Book Position:

  • Total order book: ~INR 600 crores
  • S.P. Apparels India: INR 430 crores
  • Young Brand Apparels: INR 100 crores
  • SPUK: INR 70 crores

Financial Guidance:

  • FY27 consolidated revenue guidance: INR 2,000 crores reaffirmed
  • Expect stronger H2 performance with moderate H1
  • Garment division EBITDA margin guidance: above 15% for full year
  • SPUK targets: GBP 13 million in 3 years, GBP 50 million in 5 years
  • Sri Lanka revenue target: INR 150-200 crores by March 2027
  • Young Brand Apparels revenue target: INR 340-350 crores for FY27
  • S.P. Apparels export revenue target: INR 1,300-1,400 crores for FY27

Management Commentary

Q1 was stable from revenue perspective but showed improved profitability and operating efficiency. The quarter was affected by US tariff impact from previous quarter and certain order spillovers. The company expects improved customer order inflows, UK FTA traction, and normalization of shipment schedules to drive stronger second half performance.

Sri Lanka operations are showing improving operational metrics and expected to reach comparable levels to Indian operations. The dual country manufacturing platform provides sourcing flexibility for customers.

Q&A Key Takeaways

  • Capacity utilization lower due to order slowness from US tariff issues in March-April-May
  • Air freight cost of 50,000 GBP in SPUK due to shipment timing issues
  • No expected shipment delays in Q2
  • Sri Lanka operations managed by country manager and CFO with systems implemented from India
  • Interest cost impacted by exchange volatility (INR 1.75 crores hit); expected annual interest cost INR 30-35 crores excluding exchange loss
  • Cautiously optimistic on US market despite tariff uncertainties

#S.P.Apparels #EarningsCall #SEBIDisclosure #Dividend #StockSplit #Positive