S P Apparels LtdQ2 FY25
S P Apparels Ltd Q2 FY25 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹1,038P/E: 17.3Market Cap: ₹2.0K CrSector: Textiles & Apparels
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
Yes
Order
Yes
Capex
Yes
3 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 2- →Sri Lanka operations target scaling from 650 to 2,000 machines by March 2026, potentially achieving revenue of INR 150-200 crores by FY26, with no immediate further capex planned until utilization stabilizes.
- →Total group capacity, including Young Brand, expected to reach around 7,800 machines by FY26 end and approximately 9,800-10,000 machines by FY27, supporting topline growth toward INR 2,000 crores.
- →SPUK business aims for GBP 10-12 million revenue in FY26, with shipments and customer acquisitions starting Q3 onwards.
- →Domestic standalone business added 700 machines via capex of INR 75-80 crores, enhancing production and driving 35% YoY growth in garment division in Q1 FY26.
- →Expansion focus includes onboarding new European and UK customers and moving some US business to Sri Lanka to mitigate tariff impact.
- →Retail segment (Angel & Rocket) expected to break even within FY26.
Margin guidance
Category 3- →Q1 FY26 standalone business showed strong growth: 34.5% revenue increase and 15.2% EBITDA margin.
- →Plans to increase capacity significantly: targeting close to 10,000 machines by FY27 (7,800 by FY26 end).
- →Sri Lanka operations to scale from 650 machines currently to 2,000 by March 2026, supporting export growth.
- →Expansion projects ongoing (e.g., new factory at Sivakasi starting Q3 FY26) expected to contribute to higher revenues.
- →Management confident of top-line growth driving better fixed cost absorption, supporting margin improvement.
- →Retail brands (Angel & Rocket) targeting breakeven in FY26.
- →Challenges from US tariffs causing strategic shifts, but mitigation by diversifying customers, especially in Europe and UK.
- →Capex for FY26 and FY27 expected to be moderate (INR 20-30 crores annually) focusing more on utilization.
- →Overall, cautious optimism with expected growth in earnings, profitability, and EPS supported by capacity additions and new customers.
3 more insights locked — sign up free to unlock
Fundraise plans
Yes- →There are ongoing internal conversations about raising equity, with some investor interest shown in the retail segment.
- →The company aims to avoid operational losses and allow the retail business to become self-sustained, possibly making a fundraising decision by end of Q4 FY26.
- →No specific commitments or timelines for debt or equity fundraising have been mentioned so far.
- →The company currently manages a consolidated gross debt of INR 382.4 crores and net debt of INR 327 crores as of Q1 FY26.
- →No immediate plans for new debt fundraising were highlighted in the discussion.
Order book
Yes- →As of Q1 FY26, the Garment division's order book stands at INR 404 crores.
- →SPUK business had an order book value of GBP 3.97 million as of the same period.
- →SPUK expects shipments to start from Q3 FY26, with a planned revenue target of GBP 10-12 million for the financial year.
- →The company is onboarding new customers in Sri Lanka post-acquisition of factories, expecting small quantities in Q2 FY26 and full production from Q3 FY26.
- →Young Brand is expanding its customer base to mitigate geographic risk and ensure steady order flow.
- →The focus is on building capacity and getting customer approvals for new factories, which requires history of production (6 months typically) before major orders flow in.
Capex plans
Yes- →Capex of approximately INR 75-80 crores incurred for adding around 700 machines across Palladam (new factory), SIPCOT, and Thuraiyur, mainly in India.
- →Expansion projects in India expected to be completed by FY26 end, including acquisitions in Sri Lanka.
- →FY26 and FY27 maintenance capex estimated at INR 20-30 crores per year.
- →Sri Lanka operations targeting scale-up from current 650 machines to 2,000 by March 2026 with no immediate further capex planned until utilization stabilizes.
- →Total machine capacity across India, Sri Lanka, and Young Brand expected to reach around 9,700-10,000 by FY27.
- →No backward integration capex planned currently; existing capacity fully utilized.
- →Strategic plan includes mitigating US tariff challenges via shifting SPAL's US business to Sri Lanka and acquiring new customers, especially in Europe and UK.
- →New factories and expansions underway, including a printing and knitting capacity increase.
How does S P Apparels Ltd rank vs peers in Textiles & Apparels?
Pro feature1S P Apparels Ltd
Rev 2Mar 3
See full Textiles & Apparels sector rankings
Want more stocks like S P Apparels Ltd?
Build an AI portfolio filtered by sector, market cap, and growth rank. Takes 2 minutes.
Build my portfolio