SP Apparels share price has gone up over 40 percent this month and has been buzzing in trade. CNBC-TV18 spoke to the company’s chairman and managing director, P Sundararajan, to know more about the business outlook.
Throwing further light on the possibility of margin expansion due to the extension of the Rebate of State and Central Levies Taxes (RoSCTL) for the textile sector, he said, “RoSCTL was kept on hold since January 2021. Therefore, now the last six months’ benefits will reflect in Q2 earnings, which would be around 4-4.5 percent. The company was actually building around 2-2.5 percent for the quarter, so additional 2-2.5 percent will be gained in the coming quarters.”
Sundarajan said the margins in FY22 would increase by nearly 2 percent and the company is eying ways to increase sales without adding any major capex.
He added since the company is not looking at major capex, it aims to reduce debt and wants to attain net-zero debt in the next 2-3 years. The company is still in debt of more than Rs 200 crore but has managed to reduce it by nearly Rs 42 crore.
He said demand for infant apparel was very strong and so in the next six months SP Apparels would look at scaling up the capacity to meet up with the demand.
The company also continues to hold on to their revenue guidance of Rs 1,000 crore for FY23, he said.For the entire interview, watch the accompanying video