Any current/future new fundraising through debt or equity?

For the acquisition, financing is planned as follows: - Rs. 165 Crores for buyout of shares will be funded through internal accruals. - Rs. 58 Crores for the garment unit will be supported by bank debt. Currently, about Rs. 125 Crores of investments are available, which will be leveraged for the buyout. An additional Rs. 70 Crores of incremental debt is expected to be borrowed for the acquisition. No explicit mention of fresh equity fundraising in the disclosed pages. Overall, fundraise for acquisition is a mix of internal accruals and debt borrowing, with no new equity issuance announced.

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

No immediate modernization planned for Young Brand Apparel's existing facility; will continue with current 330 Crores business. Plans to improve utilization at Young Brand from current 70% capacity. No expansion planned for Young Brand facility; potential modernization only. Acquisition includes garment unit at Palladam and leasehold land for future expansions. Sivakasi factory plans around 400 machines in the first phase, targeting 60-80 Crores revenue by FY2026. Additional factory from acquisition expected to add 80-100 Crores in top line. Possibility of increasing capacity on 26 acres of la

Future growth expectations in sales/revenue/volumes?

SP Apparels aims to increase garment division business by 10-15% in FY2025. Young Brand, currently at ₹330 Crores revenue, is expected to maintain and grow by additional ₹20-30 Crores within 12 months post-acquisition. The new Sivakasi factory (400 machines) is expected to generate ₹60-80 Crores revenue by FY2026 at full capacity. Capacity utilization from the newly acquired Tripur factory is targeted to increase from 1,200 to 1,500 machines in 12 months, potentially adding ₹50-60 Crores revenue. Overall, post-acquisition combined revenues are expected to reach approximately ₹460 Crores over 2

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

SP Apparels aims to increase business by 10-15% in FY2025, driven by expansion in existing and new factories including the Sivakasi unit and Young Brand acquisition. The newly acquired Young Brand, with current revenues around Rs. 330 Crores, is targeted to grow by Rs. 20-30 Crores over the next 12 months, with EBITDA margins expected to improve from 11% to 15% initially, and potentially up to 18% long-term. The addition of the new factory (about 1,500 machines from 1,200) is expected to add Rs. 50-60 Crores in business, leading to a total revenue target near Rs. 400 Crores in the next financi

Current/ Expected Orderbook/ Pending Orders?

As of Q3 FY2024, the order book was roughly ₹400 Crores. The order book is described as "wavering" and fluctuates depending on delivery timelines (3 to 12 months). Expected revenue range based on current order book and business conditions is ₹370 Crores to ₹410 Crores. Execution challenges have prevented full realization of the order book in Q3 revenue (₹257 Crores). Post-acquisition, the newly acquired factory and Sivakasi facility are expected to add ₹80-100 Crores in revenue. For FY2025, combined revenues (including new assets) could reach around ₹460 Crores over two years. The company expe

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S P Apparels LtdQ4 FY25Textiles & Apparels

S P Apparels Ltd Q4 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 3

Margin

Category 3

Fundraise

Yes

Order

Capex

Yes

2 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→SP Apparels aims to increase garment division business by 10-15% in FY2025.
→Young Brand, currently at ₹330 Crores revenue, is expected to maintain and grow by additional ₹20-30 Crores within 12 months post-acquisition.
→The new Sivakasi factory (400 machines) is expected to generate ₹60-80 Crores revenue by FY2026 at full capacity.
→Capacity utilization from the newly acquired Tripur factory is targeted to increase from 1,200 to 1,500 machines in 12 months, potentially adding ₹50-60 Crores revenue.
→Overall, post-acquisition combined revenues are expected to reach approximately ₹460 Crores over 2-2.5 years.
→Volume growth anticipated at 10-15% for FY2025.
→Unit realizations to improve with diversification into ladies, men’s, and intimate wear products.
→FY2024 revenue expected around ₹370-400 Crores for Young Brand; further growth expected in FY2025.

Margin guidance

Category 3

→SP Apparels aims to increase business by 10-15% in FY2025, driven by expansion in existing and new factories including the Sivakasi unit and Young Brand acquisition.
→The newly acquired Young Brand, with current revenues around Rs. 330 Crores, is targeted to grow by Rs. 20-30 Crores over the next 12 months, with EBITDA margins expected to improve from 11% to 15% initially, and potentially up to 18% long-term.
→The addition of the new factory (about 1,500 machines from 1,200) is expected to add Rs. 50-60 Crores in business, leading to a total revenue target near Rs. 400 Crores in the next financial year.
→Overall EBITDA margins for SP Apparels and Young Brand are targeted to move toward 18-20% in the long run.
→EPS growth reflects PAT growth, with standalone PAT up 12.2% YoY and quarterly PAT growth at 37.5%, indicating improving profitability trends.
→New factory capacity utilization (Sivakasi) expected to contribute meaningfully in FY2026 with Rs. 60-80 Crores revenue potential.

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Fundraise plans

Yes

→For the acquisition, financing is planned as follows:
→ - Rs. 165 Crores for buyout of shares will be funded through internal accruals.
→ - Rs. 58 Crores for the garment unit will be supported by bank debt.
→Currently, about Rs. 125 Crores of investments are available, which will be leveraged for the buyout.
→An additional Rs. 70 Crores of incremental debt is expected to be borrowed for the acquisition.
→No explicit mention of fresh equity fundraising in the disclosed pages.
→Overall, fundraise for acquisition is a mix of internal accruals and debt borrowing, with no new equity issuance announced.

Order book

→As of Q3 FY2024, the order book was roughly ₹400 Crores.
→The order book is described as "wavering" and fluctuates depending on delivery timelines (3 to 12 months).
→Expected revenue range based on current order book and business conditions is ₹370 Crores to ₹410 Crores.
→Execution challenges have prevented full realization of the order book in Q3 revenue (₹257 Crores).
→Post-acquisition, the newly acquired factory and Sivakasi facility are expected to add ₹80-100 Crores in revenue.
→For FY2025, combined revenues (including new assets) could reach around ₹460 Crores over two years.
→The company expects to increase capacity utilization and order inflow, particularly with expanded product lines (men’s, ladies, intimate wear).
→No major execution issues indicated, and growth plans are ongoing.

Capex plans

Yes

→No immediate modernization planned for Young Brand Apparel's existing facility; will continue with current 330 Crores business.
→Plans to improve utilization at Young Brand from current 70% capacity.
→No expansion planned for Young Brand facility; potential modernization only.
→Acquisition includes garment unit at Palladam and leasehold land for future expansions.
→Sivakasi factory plans around 400 machines in the first phase, targeting 60-80 Crores revenue by FY2026.
→Additional factory from acquisition expected to add 80-100 Crores in top line.
→Possibility of increasing capacity on 26 acres of land owned by Young Brand.
→Funding for acquisitions through mix of internal accruals and bank borrowings (~70 Crores debt).
→Overall strategy includes expanding product portfolio into intimate wear, lingerie, and diversified garment segments leveraging new assets and facilities.

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