Sportking India slumps after dismal Q2 results

Sportking India fell 15.30% to Rs 673.65 after the company's net profit slumped to Rs 0.01 crore in Q2 September 2022 as against net profit of Rs 110.17 crore in Q2 September 2021.

The company incurred an exceptional expense of Rs 30 crore due to redemption of 5% non-convertible non-cumulative redeemable preference shares.

Net sales rose 5.4% year-on-year to Rs 552.14 crore in Q2 FY23. Profit before tax (PBT) tumbled 95.5% YoY to Rs 6.62 crore in Q2 FY23.

EBITDA slumped 68% YoY to Rs 49 crore during the period under review. EBITDA margin stood at Rs 9% in Q2 FY23, lower than 30% in Q2 FY22.

During the quarter, total expense jumped 35% to Rs 513.50 crore. Cost of raw material consumed climbed 49.1% to Rs 411.23 crore while employee cost rose 5.4% to Rs 27.66 crore.

Cash & cash equivalents stood at Rs 98 crore as on 30th September 2022 compared to Rs 1.61 crore during the corresponding period previous year. Debt equity ratio improved to 0.21 from 0.77.

Net cash from operating activities stood at Rs 565.01 crore in the half year ended 30 September 2022, compared with 119.62 crore in the half year ended 30 September 2021.

Munish Avasthi, chairman & managing director said, "This quarter was challenging due to higher input costs, inflationary pressures and low demand for clothing and apparel. Textile mills were operating at less than 50% capacity because of high cotton prices and low demand.

We anticipate that the cotton prices and macroeconomic issues will ease in the upcoming quarters, which will improve the margins.

We have successfully commissioned the 1st Phase capacity addition of 40,800 spindles for manufacturing of Polyester cotton yarn at our Bathinda unit. The 2nd phase capacity addition of 63,072 spindles for manufacturing of cotton compact yarn is going as per schedule and will be commissioned by Q4 of FY23.

We are confident of achieving our strategic growth objectives by maintaining prudent financial practices, better operating leverage, revival in demand and improvement in realization going forward."

Sportking India emerged as one of India's leading textile company & owns 3 state-of-the-art manufacturing facilities in India equipped with latest machinery, producing yarns that are a benchmark in quality. The company produces well diversified range of grey and dyed textile yarns to cater to the demands of weaving and knitting industry in domestic as well as international markets. With presence in more than 30 countries, Sportking India is representing India on a world stage with a commitment to deliver superior quality products among evolving trends in customer preferences.

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