Any current/future new fundraising through debt or equity?

SP Apparels is planning to raise funds specifically for the retail division to reduce debt and improve margins. The company aims to raise money from external sources, not through additional funding from SP Apparel itself. Discussions are ongoing regarding raising equity in the retail business to support turnaround efforts. No finalized decisions yet, but management is positive about progress and expects improvement in EBITDA levels for retail within the next quarters. The parent company's numbers are intended to remain unaffected by retail fundraising since funds will be raised outside

Any current/future capex/capital investment/strategic investment?

SP Apparels is increasing garmenting machine capacity from 3,600 machines in FY24 to 4,600 by March 2025, with plans for approx. 7,000-8,000 machines in 2 years, including Young Brands. Young Brand capacity to expand by adding 300 machines over the next two years; utilization expected to increase from 74% to 92.5% by March 2025. Investment in Sivakasi unit underway; training started with production expected in early January next year. Expansion is focused on increasing capacity to onboard more customers, especially in the U.S. market. Recent acquisition of Young Brand Apparel is a strategic in

Future growth expectations in sales/revenue/volumes?

The company targets garment revenue growth to about INR1,300 crores for FY25, reflecting a 10%-15% increase over previous years. Volume growth guidance is around 7%-8% annually, with second-half performance expected to be stronger to meet full-year targets. Capacity expansion is central to growth: machines will increase from 3,600 to approximately 4,200 by March 2025, enabling higher production. Inorganic growth through acquisitions like Young Brands added about INR300 crores in revenue swiftly, expected to grow further. The US market offers expansion opportunities with plans to increase custo

Future growth expectations in earnings/operating earnings/profits/EPS?

The company targets 10%-15% revenue growth in garmenting business for FY25, with expectant acceleration in H2FY25. Consolidated top-line guidance for FY25 is around INR 1,300 crores, incorporating growth from SPAL and Young Brand acquisitions. Young Brands acquisition adds approximately INR 300 crores in revenue with expected margin improvements; EBITDA margins in Young Brands are expected to improve by up to 4% over 4-8 quarters. Capacity expansion to 7,000-8,000 machines over 2 years will support growth and enable onboarding new customers, especially in the US market. Margin pressure

Current/ Expected Orderbook/ Pending Orders?

Current machine capacity is expected to grow from 3,600 in FY24 to about 4,200 by March 2025 (18% growth in capacity utilization). Plans to increase total machines to 7,000 to 8,000 over the next 2 years combining SPAL and Young Brands capacities. With increased capacity, expecting to onboard more customers, including 10-15 American customers in the next 2 years. Secured two new customers in H1FY25 and anticipating two additional customers within the current financial year. Current utilization is near full for the spinning division, with significant production ramps expected from new units (e.

S P ApparelsQ2 FY25Textiles & Apparels

S P Apparels Q2 FY25 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹936P/E: 23.1Market Cap: ₹2.4K CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

The company targets garment revenue growth to about INR1,300 crores for FY25, reflecting a 10%-15% increase over previous years.
Volume growth guidance is around 7%-8% annually, with second-half performance expected to be stronger to meet full-year targets.
Capacity expansion is central to growth: machines will increase from 3,600 to approximately 4,200 by March 2025, enabling higher production.
Inorganic growth through acquisitions like Young Brands added about INR300 crores in revenue swiftly, expected to grow further.
The US market offers expansion opportunities with plans to increase customers from 6 to 10-15 in 2 years, driving increased sales.
Long-term plans include scaling to 7,000-8,000 machines over two years, aiming for a top-line of INR2,000-2,500 crores from garmenting.
Margins and profitability are expected to improve alongside volume and revenue growth through better mix and capacity utilization.

Margin guidance

Category 3

The company targets 10%-15% revenue growth in garmenting business for FY25, with expectant acceleration in H2FY25.
Consolidated top-line guidance for FY25 is around INR 1,300 crores, incorporating growth from SPAL and Young Brand acquisitions.
Young Brands acquisition adds approximately INR 300 crores in revenue with expected margin improvements; EBITDA margins in Young Brands are expected to improve by up to 4% over 4-8 quarters.
Capacity expansion to 7,000-8,000 machines over 2 years will support growth and enable onboarding new customers, especially in the US market.
Margin pressure due to competition is expected but mitigated through scale and retrategization aimed at sustaining 18% EBITDA margins in Garment Division.
Retail business shows progress toward EBITDA breakeven, with efforts to raise external funding minimizing its impact on parent company's ROCE.
Company confident of long-term earnings growth despite industry challenges and intends consistent improvement in bottom line and EPS.

See what S P Apparels management said on margin guidance — free account, 30 seconds.

Fundraise plans

Yes

SP Apparels is planning to raise funds specifically for the retail division to reduce debt and improve margins.
The company aims to raise money from external sources, not through additional funding from SP Apparel itself.
Discussions are ongoing regarding raising equity in the retail business to support turnaround efforts.
No finalized decisions yet, but management is positive about progress and expects improvement in EBITDA levels for retail within the next quarters.
The parent company's numbers are intended to remain unaffected by retail fundraising since funds will be raised outside.
No explicit mention of new debt or equity raising for other divisions or at the consolidated level at this point.

Order book

Current machine capacity is expected to grow from 3,600 in FY24 to about 4,200 by March 2025 (18% growth in capacity utilization).
Plans to increase total machines to 7,000 to 8,000 over the next 2 years combining SPAL and Young Brands capacities.
With increased capacity, expecting to onboard more customers, including 10-15 American customers in the next 2 years.
Secured two new customers in H1FY25 and anticipating two additional customers within the current financial year.
Current utilization is near full for the spinning division, with significant production ramps expected from new units (e.g., Sivakasi unit starting production early 2025).
Sales/orders in Q1 and Q2 were pushed to Q3 and Q4, indicating a strong order book build-up in the latter half of the year.
The company targets top-line growth by leveraging increased capacity and expanding its customer base, especially in the U.S. and international markets.

See what S P Apparels management said on order book — free account, 30 seconds.

Capex plans

Yes

SP Apparels is increasing garmenting machine capacity from 3,600 machines in FY24 to 4,600 by March 2025, with plans for approx. 7,000-8,000 machines in 2 years, including Young Brands.
Young Brand capacity to expand by adding 300 machines over the next two years; utilization expected to increase from 74% to 92.5% by March 2025.
Investment in Sivakasi unit underway; training started with production expected in early January next year.
Expansion is focused on increasing capacity to onboard more customers, especially in the U.S. market.
Recent acquisition of Young Brand Apparel is a strategic inorganic growth move adding ~INR 300 crores revenues.
No specific mention of major new asset-heavy capex apart from machine additions and capacity expansions in existing units.
Emphasis on asset-lite growth models (e.g., subsidiary in Sri Lanka) enhancing capacity without heavy investments.

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S P Apparels Q2 FY25 Earnings Call Analysis

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