Sportking India Ltd (SPORTKING) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to Sportking India Limited Q2 and H1 FY '27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prathamesh Parab from MUFG. Thank you, and over to you, sir.
Prathamesh Parab (MUFG): Thank you. Good afternoon, everyone. Welcome to Sportking India Limited Q2 and H1 FY '27 earnings conference call. Today on the call, we have Mr. Munish Avasthi, Chairman and Director, Mr. Sandeep Sachdeva, Chief Financial Officer, and Mr. Lovlesh Verma, Company Secretary. I hope you have gone through our press release and investor deck. As a short disclaimer, before we start with this call, the call will contain some forward-looking statements which may be based upon our beliefs, opinions and expectations of the company as of today. These statements are not a guarantee of future performance and will involve unforeseen risks and uncertainties. With that, I would now like to hand over the call to the management for their remarks. Thank you, and over to you, sir.
Munish Avasthi (Sportking India Limited): Thank you, sir. Good afternoon, ladies and gentlemen. I hope all of you have had the opportunity to go through our investor presentation
Munish Avasthi (Sportking India Limited): as follows. We are pleased to report a strong performance for both the second quarter and first half of financial year '26. Our performance during the period was supported by healthy demand across key markets, improved realizations, and continued operational efficiency. We also benefit benefited from a more stable raw material environment which enabled us to manage costs effectively while continuing to focus on profitability and customer commitments. Market conditions remained encouraging during the quarter. Demand from our export markets continued to be healthy, supported by improving business conditions across the global textile value chain. On the domestic front as well, consumption trends remained supportive, providing us with good visibility across our categories. From an industry standpoint, a number of long-term trends continue to strengthen India's position within the global textile value chain. [cough] Global brands and retailers are continuing to diversify their sourcing strategies and are placing greater emphasis on supply chain resilience, reliability, and sustainability. India is well-positioned to benefit from these evolving sourcing preferences, given its integrated textile ecosystem, strong manufacturing capabilities, and growing focus on responsible production practices. Your company is most benefited by that. In addition, India's cost competitiveness has strengthened over time, supported by ongoing investments in operational efficiency and renewable energy adoption across the textile value chain. Further, the India-UK Free Trade Agreement and the ongoing momentum towards a broader India-EU trade have the potential to further strengthen India's competitiveness in important export markets. Over time, these developments could create incremental opportunities for Indian exporters, improve market access, and support the long-term growth prospects of the sector. Sustainability is also becoming an increasingly important consideration in global sourcing decisions. Over the years, we have continued to strengthen our sustainability initiatives. Excuse me. While investing in efficient, environmentally responsible operations, the successful commissioning of our solar power project is an important step in this direction. Beyond supporting our environmental goals, the project is expected to reduce annual power costs by approximately 15%, thereby enhancing our overall cost competitiveness. We believe these initiatives strengthen our positioning with customers who increasingly value sustainability, reliability, and long-term partnerships as part of their sourcing decisions. On the strategic front, our 150,000 spindle greenfield expansion project in Odisha continues to progress on schedule. Having secured all the necessary regulatory approvals, the building construction is now almost complete. The entire machinery package has been ordered and has started arriving on the site in a staggered manner. Erection of the initial machinery shipments is currently underway and we expect commissioning in the coming months. This expansion is strategically positioned to support our long-term growth and meet rising customer demand as your company is already cranking up at 99-plus percent capacity this quarter. Odisha provides compelling structural advantages, including close proximity to the eastern cotton-growing belt, robust industrial infrastructure, and a highly competitive operating ecosystem. With our existing facilities operating at near full capacity and market demand remaining strong, this new capacity will provide the necessary headroom to scale our operations, secure the company's next phase of growth, and better serve our global customer base. Looking ahead, we remain optimistic about the medium to long-term outlook for both the industry and specifically, Sportking. A more supportive cotton environment, improving global demand, evolving sourcing patterns, increasing emphasis on sustainability, favorable trade developments, and our ongoing capacity expansion initiatives together create a strong foundation for future growth. We believe Sportking is well-positioned to capitalize on the next phase of growth in the textile industry. Our continued investments in capacity, sourcing capabilities, and operational efficiencies have strengthened our ability to serve customers effectively and pursue emerging opportunities across all markets. With a scalable manufacturing platform, strengthened cost competitiveness, robust sourcing capacity, and the resources to invest in long-term opportunities, we will remain focused on creating sustain- sustainable value for all stakeholders. Thank you very much. With this, we would be happy to take your questions.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Moderator: Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Santosh Shetty from LGC Capital. Please proceed.
Santosh Shetty (LGC Capital): Hello.
Munish Avasthi (Sportking India Limited): Hello.
Santosh Shetty (LGC Capital): Yes, sir. So a couple of questions. The company reported a significant improvement in EBITDA margin to 19.8% in Q2 FY27 compared to 10.4% in Q2 FY26. So what were the key factors driving this improvement and how sustainable are these margins going forward?
Munish Avasthi (Sportking India Limited): So the key factors are of course vis-a-vis last year is the improved demand. The demand for cotton cotton and blended yarn is has been going up for last eight to, two to three quarters and another thing which has contributed to this is our operational efficiencies which have, you know, our cost the work we have we have been doing on our cost has, is paying dividends now and all the efforts we've put in last two, three years in being more cost efficient is now there to see. And thirdly, stable cotton prices which has been there for last 1 year and continuing to be so has all have also helped. Going forward we we we see the same similar kind of environment in this current quarter and going ahead. So we we are pretty bullish on the future.
Santosh Shetty (LGC Capital): Sir, the company has announced a 1,000 crore greenfield expansion in Odisha involving 1.5 lakh spindles. Could you share the current progress on the project and whether it remains on track for the planned commencement in Q3 Q3 FY27?
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