Sportking India Limited

Sportking India reported a robust Q4 FY25, with revenue from operations reaching INR 628.8 crores, a 3% increase year-over-year. Profit After Tax (PAT) saw a significant jump of 58% YoY to INR 36.1 crores, more than doubling sequentially with a 122% QoQ growth. This strong performance was underpinned by an EBITDA margin expansion of 84 basis points YoY and 247 basis points QoQ, reaching 11.8%.

For the full financial year FY25, the company achieved a revenue of INR 2,525 crores, marking a 6.2% increase YoY. Gross profit stood at INR 609 crores, up 17.7% YoY. EBITDA for FY25 was INR 262.9 crores, a 28.2% increase YoY, with the EBITDA margin improving by 179 basis points to 10.4%. PAT for the full year was INR 109.3 crores, a 55.3% increase YoY, with a PAT margin of 4.3%.

Exports continued to be a strong growth driver, contributing 58% of total sales in Q4 FY25, a notable increase from 41% in Q4 FY24. Quarterly exports grew by 43% YoY and 5% sequentially. For the full year FY25, exports grew by 15%, accounting for 52% of total financial sales. The company maintained high capacity utilization at 96% in Q4 FY25 and around 95% for the full year, indicating efficient operations.

The company demonstrated significant deleveraging, reducing its debt-to-equity ratio from 0.97x in March 2024 to 0.58x in March 2025, having paid off approximately INR 360 crores of debt in a single year. Interest costs during Q4 FY25 were down by 44%, and the pre-tax interest coverage improved to 4x in FY25 from 2.6x in FY24. Management expects to pay off an additional INR 70-80 crores of loans in FY26, with debt levels projected to be lower by March 2026.

Management noted that the textile industry is operating at a steady pace, with India's textile and apparel exports seeing a 6.32% increase, primarily driven by a 10% surge in apparel exports. Cotton prices have remained range-bound with less volatility in India, currently between INR 53,000 to INR 55,000 per candy, though internationally volatile. The company believes cotton prices will remain stable within a 2-5% range until October, supported by significant stock held by the Cotton Corporation of India.

Sportking is in the process of merging two group companies involved in dyeing and garment retailing. Management stated the process is ongoing, involves legal formalities, and is expected to be completed 'most probably within this financial year.' This strategic move aims to scale up these businesses and increase captive yarn consumption, with no cash outflow from Sportking for the transaction, and is expected to lead to much better integration.

With capacity utilization at 96% in Q4 FY25, the company is exploring various options for its next growth cycle and is 'speeding up the process' to announce capex plans soon, potentially focusing on yarn expansion or forward integration. Management highlighted that potential trade deals with the U.S., Europe, and the U.K. could be a 'watershed moment' for the textile industry. Most of Sportking's export clients are positive and are gaining business away from China, despite ongoing tariff uncertainties.