SPORTKING - Sportking India

📊 NSE: SPORTKING 🏢 Textiles - Spinning - Synthetic / Blended 📅 Last Updated: 12/14/2025 13:39

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations for H1 FY26 was INR 1,213.2 Cr, a decrease of 5.6% YoY from INR 1,285.7 Cr. Q2 FY26 revenue was INR 627.4 Cr, down 3.7% YoY. Volume grew 32% in FY24 following a 35% capacity expansion, but realizations fell 19% due to high cotton availability.

Geographic Revenue Split

Exports contributed 56% to overall revenue in H1 FY26 (growing 15% YoY) and 53% in Q2 FY26 (growing 11% YoY). Domestic sales account for the remaining ~44-47%.

Profitability Margins

Gross Profit Margin expanded to 25.3% in H1 FY26 (+233 bps) and 24.1% in Q2 FY26 (+197 bps). Net Profit Margin (PAT) stood at 5.1% for H1 FY26 (+53 bps) and 4.5% for Q2 FY26.

EBITDA Margin

EBITDA Margin improved to 11.1% in H1 FY26 (+70 bps) and 10.4% in Q2 FY26 (+82 bps). Core profitability is supported by stable cotton spreads and cost savings from solar power projects.

Capital Expenditure

The company has announced a greenfield capacity addition program with a planned investment of approximately INR 1,000 Cr to significantly expand spindle capacity.

Credit Rating & Borrowing

Credit rating upgraded to CRISIL A+/Stable from CRISIL A/Positive. Interest coverage ratio improved to 5.76x in FY25 from 4.08x in FY24. Debt/EBITDA stood at 2.17x as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

Raw cotton (primary), synthetic fibers, and blended yarns. Cotton procurement is seasonal, leading to high inventory levels during peak seasons.

Import Sources

Primarily sourced domestically within India, particularly from cotton-growing regions to supply units in Ludhiana and Bathinda, Punjab.

Key Suppliers

Cotton Corporation of India (CCI) is a significant procurement source, which helped reduce short-term debt in FY25 by obviating the need for large private inventory holding.

Capacity Expansion

Current capacity is 3.79 lakh spindles and 20 tonnes per day dyeing capacity. Planned greenfield expansion of INR 1,000 Cr will significantly increase spindle count.

Raw Material Costs

Raw material costs are highly sensitive to cotton price cycles. In FY24, a 19% degrowth in realization occurred due to high cotton availability despite a 32% volume increase.

Manufacturing Efficiency

Capacity utilization is near full at approximately 95%. Total production volume for Q2 FY26 was 21,294 MT, up 9.5% from 19,446 MT in Q2 FY25.

Logistics & Distribution

Not specifically disclosed as a percentage of revenue.

📈 Strategic Growth

Expected Growth Rate

1-3%

Growth Strategy

Growth will be achieved through a INR 1,000 Cr greenfield spindle capacity expansion, increasing the mix of value-added yarns (compact, sustainable), and expanding the export base which currently spans 30+ countries.

Products & Services

Cotton yarn, synthetic yarn, and blended yarn (counts 20s to 46s), including value-added compact, sustainable, and contamination-free yarns.

Brand Portfolio

Sportking

New Products/Services

Focusing on multi-twist and sustainable yarns to improve realizations and de-risk from basic commodity yarn products.

Market Expansion

Expanding export presence beyond the current 30 countries; export revenue grew 15% YoY in H1 FY26.

Market Share & Ranking

One of India's leading textile conglomerates with a large capacity of 3.79 lakh spindles.

🌍 External Factors

Industry Trends

Shift toward sustainable and contamination-free yarns. The industry is cyclical with frequent demand spirals followed by rapid falls.

Competitive Landscape

Competes in the compact cotton yarn industry against other large Indian and global spinning mills.

Competitive Moat

Moat is built on scale (3.79 lakh spindles), cost leadership through solar power, and a shift toward high-margin value-added products which are harder to commoditize.

Macro Economic Sensitivity

Highly sensitive to global textile demand and domestic cotton crop yields. Industry has seen 5 demand-supply cycles in the last decade.

Consumer Behavior

Evolving trends in customer preferences toward sustainable and high-quality compact yarns.

Geopolitical Risks

Exposed to international trade dynamics and demand-supply shifts in the global cotton yarn industry.

⚖️ Regulatory & Governance

Industry Regulations

Complies with textile industry standards and SEBI listing regulations. No penalties or strictures imposed by stock exchanges or SEBI in the last three years.

Environmental Compliance

Investing in solar power projects to reduce carbon footprint and power costs.

Taxation Policy Impact

Not specifically disclosed, but the company complies with standard Indian corporate tax laws.

Legal Contingencies

A provision of INR 5 Cr was taken in Q2 FY26 for an old insurance loss. No other major pending litigation values disclosed.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (cotton) and global demand cyclicality are the primary risks. Forex fluctuations on 56% export revenue also pose a risk.