S.p. Apparels Ltd. · NSE:SPAL
S.p. Apparels — Q2 FY24 Earnings Presentation
46 slides from S.p. Apparels's earnings presentation, Nov 8, 2023
Slide 1: Cover letter to stock exchanges: Financial Presentation Q2 FY24
S.PAPPARELS LTD. _S6§! Regd. Office : 39-A, Extension Street, Kaikattipudur, AVINASHI - 641 654, Tamil Nadu, India. Phone : +91-4206-714000 E-mail : spindia@s-p-apparels.com Web : www.s-p-apparels.com CIN No.: L18101TZ2005PLC012295 08" November, 2023 The Listing Department The Listing Department BSE
Slide 2: Dressing the Future....
Dressing the Future....
Slide 3: Table of Content
TABLE OF CONTENT Sr No. Content 1 Quarter Highlights: Q2 & H1 FY24 2 Company Overview 3 Garment Division 4 S. P. Retail 5 S. P. Apparels (UK) 6 Growth Drivers 7 Financial Highlights 2
Slide 4: Quarter Highlights: Q2 & H1 FY24
Quarter Highlights: Q2 & H1 FY24 Dressing the Future.... 3
Slide 5: Q2 & H1 FY24: Consolidated Performance Highlights
Q2 & H1 FY24: Consolidated Performance Highlights Adj. Total Revenue (Q2FY24) Adj. EBITDA (Q2FY24) PAT (Q2FY24) Consolidated QoQ Growth % Consolidated QoQ Growth Consolidated QoQ Growth Q2FY24 ₹2,871 Mn 18% ₹453 Mn 29% ₹286 Mn 91% Adj. Total Revenue (H1FY24) Adj. EBITDA (H1FY24) PAT (H1FY24) Consoli
Slide 6: Q2 & H1 FY24: Standalone Performance Highlights
Q2 & H1 FY24: Standalone Performance Highlights Adj. Total Revenue (Q2FY24) Adj. EBITDA (Q2FY24) PAT (Q2FY24) Standalone QoQ Growth % Standalone QoQ Growth % Standalone QoQ Growth % Q2FY24 ₹2,461 Mn 16% ₹484 Mn 21% ₹329 Mn 51% Adj. Total Revenue (H1FY24) Adj. EBITDA (H1FY24) PAT (H1FY24) Standalone
Slide 7: Segmental Highlights (Consolidated)
Segmental Highlights (Consolidated) Garment Exports SPUK Retail Operational Revenue (Rs. Mn) Operational Revenue (Rs. Mn) Operational Revenue (Rs. Mn) 426.8 321.6 5,008.5 293.3 4,588.7 340.5 276.9 201.2 2,774.2 2,461.0 145.3 169.8 Q2FY23 Q2FY24 H1FY23 H1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 Q2FY23 Q2FY24
Slide 8: Garment Division – Operational Update
Garment Division – Operational Update Capacity Utilization Export Volumes & Realization Export Volumes (mn pcs) & Net Sales Realisation in INR 20.0 180.00 18.0 155.3 154.7 160.00 146.6 146.0 16.0 134.0 76% 16.4 140.00 15.4 14.0 14.4 14.4 120.00 13.4 12.0 100.00 10.0 80.00 72% 8.0 60.00 6.0 40.00 4.0
Slide 9: P&L Statement Highlights (Consolidated)
P&L Statement Highlights (Consolidated) Particulars (In Rs Mn) Q2 FY24 Q2 FY23 YoY% Q1 FY24 QoQ% H1 FY24 H1 FY23 YoY% Revenue from Operations 2,924.6 3,058.0 -4.4% 2,476.2 18.1% 5,400.9 5,515.7 -2.1% Gain on account of Foreign Currency Fluctuations -53.5 87.2 -51.7 -105.2 154.9 Total Revenues 2,871.
Slide 10: P&L Statement Highlights (Standalone)
P&L Statement Highlights (Standalone) Particulars (In Rs Mn) Q2 FY24 Q2 FY23 YoY% Q1 FY24 QoQ% H1 FY24 H1 FY23 YoY% Revenue from Operations 2,514.6 2,687.0 -6.4% 2,179.3 15.4% 4,693.9 4,853.6 -3.3% Gain on account of Foreign Currency Fluctuations -53.5 87.2 -51.6 -105.2 154.9 Total Revenues 2,461.0
Slide 11: Balance Sheet Highlights (Consolidated)
Balance Sheet Highlights (Consolidated) ASSETS (Rs. Mn) Sep’23 Mar’23 EQUITY AND LIABILITIES (Rs. Mn) Sep’23 Mar’23 Non-Current Assets Equity a. Equity Share capital 250.9 250.9 a. Property, Plant and Equipment 4,206.6 4,223.7 b. Other Equity 6948.6 6485.2 b. Right of Use Assets 284.6 304.4 Total Eq
Slide 12: Company Overview
Company Overview S. P. Apparels Limited (SPAL) founded in 1989, is India's biggest manufacturer and exporter of knitted clothes for infants and children. These are produced in integrated facilities that enable end-to-end garment manufacturing services. SPAL offers complete garment production service
Slide 13: About us – S. P. Apparels (SPAL)
About us – S. P. Apparels (SPAL) SPAL is one of the leading manufacturers and exporters of knitted garments for infants and children in India Strong promoter pedigree with more than 40 years of experience in the textile and apparel industry Provides end-to-end garment manufacturing from Yarn to fini
Slide 14: Journey So Far
Journey So Far 1989 2016 Started export operations as a partnership firm 2006 ▪ Investment by NYLIM ▪ Listed on BSE / NSE 1998 ▪ Investment in JV for manufacturing & marketing of Set-up manufacturing facility at Neelambur the “Crocodile” Brand ▪ Repayment of Loans to reduce leverage 2003 2007-08 Set
Slide 15: Effective Management Structure
Effective Management Structure Board of Directors Mr A.S. Anandkumar Mrs H .Lakshmi Priya Mr C. R. Rajagopal Mr V. Sakthivel Independent Director Independent Director Independent Director Independent Director Mr P. Sundararajan Chairman and Managing Director Garment Export Division • Founder directo
Slide 16: Integrated Facilities – Right from Yarn to Garment
Integrated Facilities – Right from Yarn to Garment SPINNING KNITTING DYEING CUTTING PRINTING AUTOMATED AUTOMATED SEWING SEMI-AUTOMATED EMBROIDERY SEWING ASSEMBLY LINE INVENTORY MANAGEMENT 15
Slide 17: Garment Division: Established Global Player
Garment Division: Established Global Player 16
Slide 18: Garment Division at Glance
Garment Division at Glance Well Established Garment Export Business (Kids & Infants) Leading Leading Kids and Infants Exporter Globally exporter +90% +90% Growth in Garment Exports Growth Revenue from FY16 to FY23 18-20% Consistently Delivered EBITDA Margins Margins between 18%-20% Global Catering t
Slide 19: Infants and Kids Segment a Critical Sector to Cater
Infants and Kids Segment a Critical Sector to Cater Key Entry Barriers • Labour intensive operations Skilled Labour • Employee training & skill development • Employee occupational health & welfare • Cater to infants and children Products • Manufacture high-fashion garments • Stringent safety and qua
Slide 20: Preferred Vendor To Reputed International Brands
Preferred Vendor To Reputed International Brands Strong Pedigree Leading children wear manufacturer under the leadership of Mr. Sundararajan, CMD with more than 40 years of experience in apparel industry SPAL is the preferred vendor for knitted garments for infants and children to reputed internatio
Slide 21: Complete Integration enables Quality Consistency and Timely Delivery
Complete Integration enables Quality Consistency and Timely Delivery Quality checks at every stage Product Order Spinning Knitting Dyeing Garmenting Export Development Packing of Design Purchase of Sewing orders as per Creation dyed yarn instructions Yarn Customer Converts Fabric dyed Final AQL Deve
Slide 22: Developed Capabilities Over the Years
Developed Capabilities Over the Years Demonstrated manufacturing excellence for over 3 Meeting stringent compliance requirements of 01 04 decades international customers Clear understanding of buyer preferences and Long-standing relationships with reputed global 02 specifications of knitted garments
Slide 23: Proficient In-House Design Team
Proficient In-House Design Team SPAL’s core competency lies in understanding the latest fashion and trends to suit the customer’s buying preferences Dedicated in-house design and merchandising team of designers located at SPUK and at our Corporate Office in India Use of latest technology for develop
Slide 24: Quality is a key essence of our success
Quality is a key essence of our success SPAL places a strong emphasis on upholding highest standards of quality, assurance, and compliance throughout the apparel manufacturing processes Stringent quality control checks at every stage, from fabric to garment, ensure top-notch product quality, free fr
Slide 25: Improving Operating leverage to thrust growth
Improving Operating leverage to thrust growth Capacity Utilization Trend EBITDA Margin (%) 72% 22% 68% 20% 60% 58% 18% 13% FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Potential to raise existing utilisation levels by 10% to 20%**, which will EBITDA Margin (%) to remain sustainable at 18% to 20%* fuel fu
Slide 26: S.P. Retail: Building a Brand for Future
S.P. Retail: Building a Brand for Future 25
Slide 27: Evolution of Retail Division
Evolution of Retail Division 2006 2008 - 2012 2013 - 2019 2020 - 2022 Acquisition of CPPL Revolutionizing Retail: Store Expansion and Acquired licensee of Angel & Rocket & exclusive Crocodile's Flagship Phase of Consolidation and HEAD brands Crocodile license Stores Unveiled ➢ SPAL acquires major st
Slide 28: Retail Division - A High Value Brand Play
Retail Division - A High Value Brand Play Fuelled by a robust distribution network, SPAL an in-house design team, and a Crocodile is an Established and a Crocodile profitable brand with Pan India Retail sustainable growth strategy, Retail is One of the fast-growing division of SPAL Presence and Good
Slide 29: S. P. Retail – The Brand Portfolio
S. P. Retail – The Brand Portfolio Leading Apparel brand Establishing New Brands Portfolio 54 49 4 In large Standalone Standalone stores format stores stores Leading Apparel brand with a Strategic acquisition of a premium kids wear brand, presence across India to establish our very own kids and infa
Slide 30: S.P. Apparels (UK) (P) Ltd: Tapping the Global Market
S.P. Apparels (UK) (P) Ltd: Tapping the Global Market 29
Slide 31: S.P. Apparels (UK) (P) Limited (SPUK)
S.P. Apparels (UK) (P) Limited (SPUK) SPUK – Need an hour to Caters to Large cater to European Clients European Brands Incorporated in 2014 to explore possible Strong consumer ties to well- marketing opportunities and engage in known businesses like Joules trading activities with new and existing 02
Slide 32: Growth Drivers
Growth Drivers 31
Slide 33: China-Plus One – To boost Indian Garment Exports
China-Plus One – To boost Indian Garment Exports Benefit for SPAL China Plus-One to Benefit the Indian Garment Industry Capacity Utilization to reach at 90% by Source: Business Standard March 2024 According to CII India’s textile exports are expected to grow by 81% to $65 billion by 2026 from the Em
Slide 34: FTA and RoDTEP – Bringing Indian Exporters at a level playing field
FTA and RoDTEP – Bringing Indian Exporters at a level playing field FTA’s, RoSCTL and RoDTEP to Push the Indian Garment Exports Benefit for SPAL • India and UAE have recently signed a Free Trade Agreement (FTA) • India is also in the process of negotiating FTAs with the EU, Australia, UK, Canada, Is
Slide 35: Garment Industry - Opportunities Ahead
Garment Industry - Opportunities Ahead Garment Market to pick up post hit from macro-headwinds Benefit for SPAL Global Apparel Market, Forecast Market Size, 2022-2027, $ Billion Men's Wear: 831 6.57% 782 737 694 653 610 S. P. Apparels – One of the leading Global Exporters of Infant Global Garment an
Slide 36: ESG
ESG Mission Statement: "To achieve carbon neutrality by the year 2030" Vision Statement: “To be a sustainable practise leader by promoting the use of renewable energy and prioritising the usage of recycled materials in order to protect our world for future generations” At SPAL we are committed to bu
Slide 37: Sustainability at SPAL
Sustainability at SPAL Our approach to sustainability is guided to create long-term value in a balanced and responsible manner while making choices that positively impact environment, people, and communities. OUR PILLARS Sustainable business Responsible production Creating social impact Commitment t
Slide 38: From Awareness to Action: Making a Difference for the Environment
From Awareness to Action: Making a Difference for the Environment Our company is committed to conducting business activities in an environmentally responsible manner. We focus on reducing our environmental footprint across the value chain and returning back to nature what we consume. Environmental S
Slide 39: Building Stronger Communities through Social Responsibility
Building Stronger Communities through Social Responsibility Our company is committed to conducting business activities in an environmentally responsible manner. We focus on reducing our environmental footprint across the value chain and returning back to nature what we consume. Building a Stronger C
Slide 40: Financial Highlights
Financial Highlights 39
Slide 41: Financial Highlights (1/2)
Financial Highlights (1/2) Consolidated Figures (in Rs. Mn) REVENUES Adj. EBITDA & EBITDA MARGIN Profit After Tax (PAT) & PAT MARGIN 9.1% 9.8% 10,984.0 6.6% 7.5% 17.6% 5.6% 16.4% 15.7% 8671.9 15.3% 8263.8 8089.7 6523 10.8% 846.9 825.1 1,728.9 733.7 1,528.2 1,238.3 1,072.0 469.2 431.7 895.3 FY19 FY20
Slide 42: Financial Highlights (2/2)
Financial Highlights (2/2) Figures (in Rs. Mn) GARMENT DIVISION 21.0% 20.2% 20.9% 18.7% 12000 17.6% 12.0% 10000 7,429.3 9,600.4 6,805.0 7,026.4 8000 6000 5,733.7 5,368.7 4000 1,553.2 1,791.0 2000 1,202.4 1,194.4 842.6 1,083.3 0 FY18 FY19 FY20 FY21 FY22 FY23 Garment Revenue Garment EBITDA th RETAIL D
Slide 43: Exports Trend
Exports Trend Capacity Utilization Export Volumes & Realization Export Volumes (mn pcs) & Net Sales Realisation in INR 70% 58% 140.2 115.3 103.3 107.3 95.7 98.6 59.9 57.6 59.0 49.2 50.2 42.1 FY22 FY23 FY18 FY19 FY20 FY21 FY22 FY23 42
Slide 44: Shareholding Structure
Shareholding Structure SHAREHOLDING PATTERN – 30th September 2023 Non-Institutions 19.3% KEY SHAREHOLDERS – 30th September 2023 Promoters 61.9% DSP Small Cap Fund 8.37% ICICI Prudential Mutual Fund 3.49% UTI Mutual Fund 2.57% Institutions 18.8% Franklin India Smaller Companies Fund 1.09% Quant Mutua
Slide 45: Disclaimer
Disclaimer This presentation has been prepared by S. P. Apparels Limited solely to provide information about the Company. No representation or warranty, express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of such information or o
Slide 46: Let's Connect!
LET'S CONNECT! SP Apparels EY LLP Mr. V. Balaji, Chief Financial Officer Mr. Vikash Verma / Mr. Abhishek Bhatt / Mr. Sumedh Desai Balaji.V@spapparels.com Vikash.verma1@in.ey.com / Abhishek.bhatt3@in.ey.com / Sumedh.desai@in.ey.com 45 Visit us at: www.s-p-apparels.com