Small cap textile stock sets record date for share buyback, premium is up 33%


With a market valuation of 941.53 Cr, Sportking India Ltd. is a small-cap company that operates in the consumer discretionary industry. The business is a top highly integrated textile conglomerate in India, with operations in retail, yarn, fabric, garment, and having an export footprint to more than 30 other countries.

The company has said today in a stock exchange filing that “This is to inform you that pursuant to the provisions of Regulation 42 of the of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 and Regulation 9(i) of the SEBI (Buy-Back of Securities) Regulations, 2018, the Board of Directors of the Company at their meeting held on 28th January, 2023 fixed Friday, 10th February, 2023 as the record date for the purpose of determining the entitlement and names of Equity Shareholders, who shall be entitled to participate in the proposed offer for Buyback of 5,80,000 fully paid up Equity Shares of 10 each of the Company at the price of 950/- per Equity share.”

Sportking India Ltd also announced today that its revenue reached 513 Cr in Q3FY23 against 587 Cr in Q3FY22 and 552 Cr in Q2FY23. The company’s EBITDA stood at 40 Cr in Q3FY23 as compared to 163 Cr in Q3FY22 and 49 Cr in Q2FY23. EBITDA Margin reached 8% in Q3FY23 against 28% in Q3FY22 and 9% in Q2FY23. The company posted a net profit of 18 Cr in the quarter ended December 2022 or Q3FY23 as against 116 Cr in the quarter ended December 2021 or Q3FY22 and 0.01 Cr in the quarter ended September 2022 or Q2FY23.

The company said “The Board has considered and approved the installation of additional Rooftop Solar PowerProject of about 15 MW Capacity at their Existing Factory Unit for captive consumption andsame is likely to commissioned by September 2023. 2nd phase capacity addition of 63,072 spindles for manufacturing of cotton compact yarn isgoing as per schedule and will be commissioned by Q4 of FY23.”

Commenting on the Results, Mr. Munish Avasthi, Chairman & Managing Director said, “ As theindustry faced multiple headwinds, our strategic efforts were focused on improving operationalefficiency and we have made substantial progress. In addition to successful Phase 1 capacityaddition in Q2, our board has approved installation of another Rooftop solar power project of 15MW plant for captive consumption which will help us reduce our power costs. While raw materialcosts softened this quarter and other input costs also corrected from high levels, we are yet to seesufficient rationalization. We are monitoring these pressures closely. Overall, the textiles mills in thecountry are functioning at increased capacity compared to the last quarter and we expect them tofunction at higher capacities going forward. Some softening in domestic cotton prices and reducedinventories with retailers in western countries will bring stability to the demand in textile andapparel industry.”

“I am pleased to report that despite the challenges, our team at Sportking has delivered 7.1%revenue growth on a 9M y-o-y basis. The improving macro environment will be more favorable aswe progress through the year. Textile sector is going to see a lot of positive developments in thecoming quarters and years with support from the government in form of various schemes and FTAs;and with the need of the western countries to reduce dependency on China. We continue to befocused on our growth objectives and to capture the immense opportunity that the sector providesboth in India and abroad,” said Mr. Munish Avasthi.

The shares of Sportking India closed on the NSE on Friday at 709.45 apiece level, down by 0.11% from the previous close of 710.20. At the current market price, the buyback per share of 950 of the company reflects an upside premium of 33.90%.

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Article Source:Money Control

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