S.P. Apparels H1 profit rises 11.9% as margins expand

S.P. Apparels reported consolidated profit after tax of Rs 61.93 crore in the first half of FY27 (H1FY27), up 11.9% year on year, as earnings before interest, tax, depreciation and amortisation (EBITDA) rose 9.8% to Rs 128.01 crore and margin reached 15.0%, despite a 3.4% fall in garmenting adjusted operational revenue.

How did S.P. Apparels perform in H1FY27?

S.P. Apparels increased H1FY27 consolidated revenue from operations by 2.7% to Rs 853.29 crore, while EBITDA rose faster, by 9.8%, to Rs 128.01 crore. EBITDA margin increased to 15.0% from 14.0% in H1FY26, with gross margin at 57.1% compared with 57.5% a year earlier.

Profit before tax increased 9.3% to Rs 87.29 crore from Rs 79.87 crore, while profit after tax (PAT) rose to Rs 61.93 crore from Rs 55.36 crore. PAT margin rose to 7.3% from 6.7%, and earnings per share increased to Rs 24.7 from Rs 22.1. Other income declined to Rs 7.24 crore from Rs 8.43 crore during the half year.

S.P. Apparels’ second quarter produced a larger share of the half-year improvement. Q2FY27 revenue from operations was Rs 452.22 crore, up 5.8% year on year and 12.8% from Rs 401.08 crore in Q1FY27. Q2FY27 PAT rose 6.8% year on year to Rs 37.06 crore and 49.0% sequentially from Rs 24.84 crore, while EBITDA increased 8.6% quarter on quarter to Rs 66.65 crore.

What changed in S.P. Apparels’ garmenting division?

S.P. Apparels’ garmenting division reported H1FY27 adjusted operational revenue of Rs 736.59 crore, down from Rs 762.14 crore in H1FY26. Adjusted EBITDA nevertheless increased to Rs 123.62 crore from Rs 120.82 crore, and adjusted EBITDA margin rose to 16.8% from 15.9%. The division includes the S.P. Apparels garment division, Sri Lanka operations and Young Brand Apparel.

The quarterly comparison showed a different margin outcome. Q2FY27 garmenting adjusted operational revenue increased to Rs 399.26 crore from Rs 389.21 crore in Q2FY26, but adjusted EBITDA declined to Rs 64.39 crore from Rs 66.55 crore. The quarterly adjusted EBITDA margin consequently fell to 16.1% from 17.1%, contrasting with the half-year margin expansion.

Export volume was 14.1 million pieces in Q2FY27, down from 18.9 million pieces in Q2FY26, while net sales realisation increased to Rs 162.9 per piece from Rs 142.3 per piece. Capacity utilisation fell to 74.0% from 83.0%; the calculation was based on 5,700 machines in Q2FY27, compared with 4,950 machines a year earlier.

S.P. Apparels’ standalone Avinashi operation also recorded lower H1FY27 adjusted operational revenue, at Rs 556.07 crore versus Rs 592.57 crore. Its adjusted EBITDA declined to Rs 92.87 crore from Rs 98.00 crore, though margin increased to 16.7% from 16.5%. Standalone PAT rose to Rs 51.48 crore from Rs 47.19 crore as finance cost fell to Rs 6.74 crore from Rs 15.29 crore.

How did Young Brand Apparel support S.P. Apparels’ earnings?

Young Brand Apparel increased H1FY27 adjusted operational revenue by 6.5% to Rs 180.53 crore and adjusted EBITDA by 34.7% to Rs 30.74 crore. Its adjusted EBITDA margin rose to 17.0% from 13.5% in H1FY26, while PAT increased 29.0% to Rs 19.10 crore. S.P. Apparels said Young Brand Apparel will be considered part of the Garment Export Division going forward.

Young Brand Apparel’s momentum accelerated in Q2FY27, when adjusted operational revenue reached a highest-ever quarterly Rs 109.13 crore. That was 29.4% above Rs 84.34 crore in Q2FY26 and 52.8% above Rs 71.40 crore in Q1FY27. Sales volume rose to 7.6 million pieces from 6.0 million pieces a year earlier.

Q2FY27 adjusted EBITDA at Young Brand Apparel rose 48.3% to Rs 18.10 crore from Rs 12.20 crore, lifting adjusted EBITDA margin to 16.6% from 14.5%. Q2 PAT rose 38.4% to Rs 12.81 crore from Rs 9.26 crore. The higher earnings from Young Brand Apparel coincided with lower H1 revenue at the standalone Avinashi operation.

What did S.P. Apparels’ other divisions and balance sheet show?

S.P. Apparels’ UK business, identified as SPUK in the presentation, reported H1FY27 operational revenue of Rs 71.38 crore, more than double Rs 32.77 crore in H1FY26. However, EBITDA moved to a loss of Rs 2.03 crore from a profit of Rs 1.10 crore. Q2FY27 revenue was Rs 38.09 crore and EBITDA was a loss of Rs 0.99 crore.

S.P. Apparels’ retail division generated H1FY27 operational revenue of Rs 38.55 crore, compared with Rs 36.54 crore a year earlier, and reported positive EBITDA of Rs 0.50 crore against a loss of Rs 1.54 crore. Q2FY27 operational revenue declined to Rs 19.72 crore from Rs 21.68 crore, while EBITDA remained positive at Rs 0.22 crore. Management said retail had maintained positive EBITDA for five consecutive quarters.

Management also reported 16.8% like-for-like sales growth across 45 exclusive retail stores for April to August in both years. It said direct-to-consumer and online business grew threefold, but the presentation gave no rupee revenue figure for those channels or target for store additions.

Consolidated current assets rose to Rs 893.35 crore at September 2026 from Rs 728.40 crore at March 2026. Inventories increased to Rs 371.10 crore from Rs 310.33 crore and trade receivables rose to Rs 321.55 crore from Rs 253.14 crore. Total assets increased to Rs 1,762.48 crore from Rs 1,590.70 crore, while current liabilities rose to Rs 624.41 crore from Rs 550.96 crore.

Non-current borrowings increased to Rs 77.81 crore at September 2026 from Rs 49.29 crore in March 2026, and current borrowings rose to Rs 355.12 crore from Rs 350.93 crore. Total equity increased to Rs 1,010.99 crore from Rs 946.13 crore. The presentation does not explain the reasons for the increases in inventory, receivables or borrowings.

Conclusion

S.P. Apparels delivered H1FY27 profit growth ahead of revenue growth, with PAT rising 11.9% and EBITDA rising 9.8% as consolidated margins improved. Young Brand Apparel contributed higher revenue and earnings, offsetting a decline in the garmenting division’s half-year adjusted operational revenue and lower quarterly export volume. Retail returned to positive H1 EBITDA, while SPUK recorded an EBITDA loss despite higher revenue.

The next disclosures to watch are whether export volumes recover from 14.1 million pieces and capacity utilisation improves from 74.0% in Q2FY27, alongside movements in the Rs 371.10 crore inventory and Rs 321.55 crore receivables balances. Management’s stated growth plans cover existing verticals, geographic expansion and the acquired business, but the presentation does not give numerical targets or a timetable for those initiatives.