Textiles company Sportking India announced Q1FY24 results:
- The second phase of capacity expansion i.e. 63,072 spindles will start contributing fully to the topline from Q2FY24 – added almost 35% to the existing capacity in the last 1 year
- Additional 10 MW of rooftop solar power capacity has come online taking the aggregate capacity to 20 MW. The remaining 5 MW will be operationalized by September of this financial year. This will enable cost savings in terms of power cost per unit.
- Achieved stable gross profit and EBITDA margins despite industry headwinds.
- Revenue from operation stood at Rs 539 crore for Q1FY24, up every quarter.
- EBITDA for Q1FY24 is Rs 50 crore with a margin of 9%
- Cash Profit after Tax for Q1FY24 was Rs 38 crore
Commenting on the results, Munish Avasthi, Chairman & Managing Director said, “I am pleased to announce that despite facing headwinds like volatile cotton prices as well as demand uncertainties in the recent past we have achieved steady revenue and consistent margins in the current quarter. Our revenue from operations saw a 47% share from exports, indicating our competitiveness in the international market.
Looking ahead, we are optimistic about the future as cotton prices in India seem to have stabilized, making our country's textile industry more competitive globally. Moreover, with China reopening its economy, the international scenario appears favorable for our industry.
We anticipate a positive trend in demand in the upcoming quarters as retailers complete their de-stocking phase. To capitalize on the same, we announced a phased capacity expansion of around 1,00,000 spindles (a 35% increase on our existing capacity) about a year ago. This capacity expansion combined with ensuring industry-best utilization levels will allow us to operate on a larger scale, leading to growth. This has predictably increased our depreciation and well as finance costs – affecting our bottom line in the current quarter. However, as the last phase of capacity becomes fully operational in the next quarter (Q2FY24), we are confident that it will positively impact both our top line and bottom line. We are thus optimistic not only about the sector but also about our company's prospects.
Overall, we remain positive about the future and our ability to thrive in the challenging yet promising textile industry.”