Sportking's Bold Growth: Margin Expansion and Strategic Moves

Ashwin Thakker

16 Aug 2025 — 1 min read

Sales Outlook: Strategic expansion aims to double revenue from integrated units within 2-3 years, while new Odisha capacity provides significant headroom for growth.
Margin Outlook: Anticipates a 200-300 basis point margin expansion from the new Odisha plant, contributing to a similar overall company margin growth post-capacity addition. Near-term EBITDA margins are projected at 10-12%.
Strategic Investment: Investing INR 1,000 crore to add 150,000 spindles in Odisha, a 40% increase in capacity, expected within 12-15 months.

Sportking India Limited demonstrated robust Q1 FY'26 performance with 10.5% year-on-year profit after tax growth. Looking ahead, the company outlined ambitious strategic initiatives and growth plans, signaling a confident outlook for future expansion and improved profitability despite prevailing market uncertainties.

Strategic Capacity Expansion and Diversification

Sportking India Limited unveiled a substantial INR 1,000 crore CAPEX plan to add 150,000 spindles in Odisha, marking a significant 40% capacity increase expected within 12-15 months. This new greenfield spinning unit diversifies operations outside Punjab, leveraging geographical advantages like proximity to eastern markets and ports, along with government incentives. Management projects this new capacity will yield

200 to 300 bps higher

profitability, driven by advanced technology and strategic location benefits.

Margin Growth and Market Dynamics

The company anticipates its overall margins to

expand by 200 to 300 basis points after we add this 40% capacity,

enhancing profitability. Alongside this, the integration of apparel manufacturing and dye house units within 6-8 months is set to double revenue from these segments over 2-3 years, further improving margins through efficiency. While acknowledging challenges like fluctuating cotton prices and new US tariffs on Indian goods, Sportking maintains limited direct US exposure and expects market normalcy to return in 30-45 days.

Sportking's Q1 FY'26 earnings call highlighted a clear path for future growth, anchored by significant capacity expansion in Odisha and strategic integration initiatives. These plans, coupled with a focus on margin enhancement, position the company for sustained profitability. Despite navigating global trade uncertainties, Sportking's forward-looking commentary reflects confidence in its operational strategy and market positioning.

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