Sportking Charts Future Growth and Margin Expansion

Ashwin Thakker

— 3 min read

Key Facts on Outlook:

  • Sales Outlook: Anticipates doubling revenue from integrated apparel/dyeing units within 2-3 years. Exports accounted for 58% of Q1 FY26 revenue, indicating robust international presence. Management expects market normalcy within 30-45 days regarding tariff uncertainties.
  • Margin Outlook: Projects overall company margins to expand by 200-300 basis points post new capacity addition. The new Odisha plant is specifically expected to yield 200-300 basis points higher profitability. Integrated apparel and dye house operations are forecast to improve overall margins through better utilization and efficiency.
  • Capacity Expansion: Announced an INR 1,000 crore CAPEX to increase spindle count by 150,000 (a 40% increase over existing 3.8 lakh spindles). The project has a 12-15 month timeline and will be set up in Odisha, marking the company's first diversification outside Punjab. Funding will be a mix of internal accruals and term loans, targeting a 30:70 equity-to-debt mix. Current capacity utilization is high at 95%.
  • Strategic Initiatives: Progress on solar power SPV, ensuring contracted power from March 1st. Integration of apparel manufacturing and dye house expected within 6-8 months, aiming to double their current INR 150-180 crore revenue in 2-3 years.

Sportking India Ltd. recently unveiled its forward-looking strategy during the Q1 FY26 earnings call, highlighting ambitious plans for significant expansion. With a substantial INR 1,000 crore capital expenditure, the company is poised for considerable growth, aiming to enhance capacity, improve operational efficiencies, and expand profit margins in the coming years.

Driving Growth Through Strategic Capacity Expansion

Sportking India Ltd. is embarking on a major capacity expansion program with a CAPEX of approximately INR 1,000 crores. This investment is earmarked to increase the company's spindle count by 150,000, representing a significant 40% addition to its existing 3.8 lakh spindles. This new greenfield spinning unit will be established in Odisha within 12 to 15 months, marking a strategic geographic diversification outside Punjab. This move is expected to improve market reach, particularly in eastern India, and leverage proximity to ports for international markets.

"We will be undertaking a CAPEX plan of approximately INR 1,000 crores as a part of the Greenfield Capacity Addition Program to increase our spindle count by 150,000 spindles... This is a significant capacity expansion to approximately 40% over the existing spindle count of 3.8 lakhs. The timeline for this project is 12 to 15 months."
"The proposed spinning unit will be set up in the state of Odisha... enabling a diversified presence as well as better to serve the international market given proximity to ports."

Enhancing Profitability Through Integrated Operations

Sportking anticipates substantial margin improvements from its strategic investments. Overall company margins are expected to expand by 200 to 300 basis points post new capacity addition. The new Odisha plant alone projects 200 to 300 basis points higher profitability, benefiting from new technology, government incentives, and its strategic location. Furthermore, integrating apparel manufacturing and dye house operations within 6 to 8 months will boost efficiency. These units, currently generating INR 150-180 crores, are forecast to double revenue in two to three years, enhancing overall profit margins.

"So, we expect our overall margins of our company to expand by 200 to 300 basis points after we add this 40% capacity."
"The profitability will be 200 to 300 bps higher than what we are doing it right now... it is a combination of everything... the new technology we will be putting in will also help in improving the margins. Incentives is second. And the third is the geographical advantages we get with Odisha."
"We are also committed to close our integration of our apparel manufacturing and dye house within this company in the next six to eight months... we expect in the next two to three years to double our government business within the same capacity with minimal CAPEX."

Sportking India Ltd.'s Q1 FY26 earnings call outlined a clear, actionable roadmap for future growth. Through strategic capital investments in new capacity, geographic diversification into Odisha, and the integration of value-added segments, the company is positioned to enhance its operational efficiency and expand profit margins. This forward-looking strategy aims to solidify Sportking's market position and drive sustained financial performance in the coming years.

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