Textile giant Sportking India soars in profits in Q2 FY25 and expands empire with big merger

In a robust performance, Sportking India Limited has reported significant growth in its Q2 financials for FY25, buoyed by strategic decisions including major mergers and a focus on sustainable operations. The company, renowned for its strong presence in the textile industry, achieved a revenue of Rs. 651.6 crore for the quarter ending September 30, marking a year-over-year increase of 4%. This growth comes amid an EBITDA rise of 45.8%, reaching Rs. 57.7 crore, and a substantial jump in its Profit After Tax (PAT), which surged by 61.4% to Rs. 25 crore.

This quarter’s highlights reveal the company’s targeted efforts in both domestic and export markets, with exports contributing nearly 46% to its total revenue. Sportking India’s Chairman, Munish Avasthi, attributed the steady export growth to strong demand from key markets despite recent disruptions in Bangladesh, a critical export destination. Avasthi noted that while the company experienced some volatility, export orders remained resilient, avoiding significant structural challenges.

Strategic Mergers and Sustainable Initiatives

In a bid for forward integration, Sportking India has approved the merger of Marvel Dyers and Processors Pvt Ltd and Sobhagia Sales Pvt Ltd into its operations. Marvel Dyers specializes in fabric dyeing, printing, and finishing, while Sobhagia Sales focuses on ready-made garment manufacturing and retail. By incorporating these entities, Sportking aims to add value through processed, dyed knitted fabrics and broaden its garment offerings, positioning itself further along the textile production chain.

Furthermore, the company has made strides in its commitment to sustainable energy. With an investment of Rs. 12.09 crore, Sportking has acquired a 26% stake in Evincea Renewable Two Pvt Ltd, a special-purpose vehicle that will establish a 40.3 MW solar power plant dedicated to powering Sportking’s facilities in Bathinda and Ludhiana. Expected to be operational within 15 months, this solar initiative is projected to reduce power costs by 10-12%.

Expert Opinions on Market Impact and Future Outlook

Industry analysts view Sportking India’s dual approach—enhancing operational efficiency through mergers and committing to renewable energy—as critical to its long-term competitiveness in the textile sector. Experts note that the mergers will streamline the company’s supply chain, enhancing production capabilities and creating opportunities for product expansion. The emphasis on sustainable energy is also expected to appeal to international buyers increasingly inclined toward eco-conscious suppliers.

Financial Stability Amid Market Volatility

Despite a slight dip in production volumes, Sportking achieved a high capacity utilization rate of 94% for Q2. This, along with successful de-bottlenecking initiatives, is expected to further improve performance. According to Avasthi, the upcoming festive and wedding season is anticipated to boost domestic demand, while export markets could see a resurgence as global inventory levels normalize.

With a strategic focus on mergers, renewable energy, and increased operational efficiency, Sportking India appears poised for sustained growth. Investors and analysts will be watching closely as the company leverages its expanded capabilities to navigate the ever-evolving textile market landscape.