SPALNSE1 November 2022

S. P. Apparels Limited has informed the Exchange about Investor Presentation

S. P. Apparels Limited

S.RAPPARELS LTD.

UKAS

S&S.

Regd Office : 39-A, Extension Street, Kaikattipudur, AVINASHI - 61 654, Tamil Nadu, India. Phone Web www.s-p-apparels.com CIN No.. L18101TZ2005PLC012295

+01-4296-715001 E-mail : spindia@s-p-apparels.com

017 November, 2022

The Listing Department National Stock Exchange of India Limited 'Exchange Plaza', Bandra-Kurla Complex, Bandra (East), Mumbai - 400 051.

Symbol: SPAL

The [isting Department BSE Limited Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai - 400 001.

Scrip Code: 540048

Dear Sirs,

Sub: Financial Presentation

Please find enclosed herewith the copy of Financial Presentation for Q 2 FY 23 results of the Company.

Kindly take the same on your records.

Thanking you,

For S.P.Apparels Limited,

K.Vinodhini Company Secretary and Compliance Officer

Encl: As above

(A GOVT. OF INDIA RECOGNISED THREE STAR EXPORT HOUSE)

Investor Presentation

H1 & Q2 FY23 Results Update November 2022

Contents

H1 & Q2 FY23 Results Update

Company Overview

Financial Overview & Shareholding Structure

Disclaimer

This presentation and the following discussion may contain “forward looking statements” by S.P. Apparels Limited (“SPAL” or the Company) that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial condition, business prospects, plans and objectives, are based on the current beliefs, assumptions, expectations, estimates, and projections of the management of SPAL about the business, industry and markets in which SPAL operates.

These statements are not guarantees of future performance, and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond SPAL’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward looking statements. Such statements are not, and should not be construed, as a representation as to future performance or achievements of SPAL.

In particular, such statements should not be regarded as a projection of future performance of SPAL. It should be noted that the actual performance or achievements of SPAL may vary significantly from such statements.

H1 & Q2 FY23 Results Update

H1 FY23 - Key Highlights

60% YoY Growth in Total Revenue1

39% YoY Growth in Gross Profit

48% YoY Growth in Adj. EBITDA

40% YoY Growth in Profit after Tax

69% Increase in Garment Revenue

PAT stands at Rs.487 mn

72% Capacity Utilisation

Stable operations in SP UK with revival in Retail

31.2 mn Pieces exported up by 43% YoY

68% increase in Cash % Cash Equivalents YoY as on H1FY23

Rs.18.96 EPS increased by 40% YoY

Notes: 1. 2.

Total revenues include realised gain on account of foreign exchange fluctuations (accounted in other income) In addition to (1), EBITDA calculation excludes unrealised MTM gain / loss on account of foreign exchange fluctuations (accounted in other expenses)

Q2 FY23 Result - Key Highlights

In Rs Mn

REVENUES 1

Adj. EBITDA & EBITDA MARGIN 2

PBT* & PBT MARGIN 3

PAT & PAT MARGIN 3

3,145.2

20.0%

14.2%

14.0%

2,226.7

444.4

445.2

41%

0.2%

9.7%

304.7

311.7

232.5

10.4%

229.2

7.3%

Q2 FY22

Q2 FY23

Q2 FY22

Q2 FY23

Q2 FY22

Q2 FY23

Q2 FY22

Q2 FY23

Notes: 1. 2. 3.

H1 FY23 Result - Key Highlights

In Rs Mn

REVENUES 1

Adj. EBITDA & EBITDA MARGIN 2

PBT* & PBT MARGIN 3

PAT & PAT MARGIN 3

5,670.6

3,545.0

60%

18.4%

653.7

964.3

17.0%

658.2

11.6%

13.5%

479.8

48%

12%

487.2

8.6%

348.1

9.8%

40%

H1 FY22

H1 FY23

H1 FY22

H1 FY23

H1 FY22

H1 FY23

H1 FY22

H1 FY23

Notes: 1. 2. 3.

Q2 FY23 – Division Wise Analysis

Q2 FY23 YoY ANALYSIS – TOTAL REVENUE BREAKUP 1

DIVISION REVENUES SHARE

Q2 FY22

Q2 FY23

In Rs Mn

17%

19%

47%

145.0

2221.4

248.9

1827.5

Q2 FY22

Garment Exports

SPUK

Garment Exports

82.1%

85.4%

3058.0

201.2

169.8

SPUK

Retail

11.2%

6.5%

6.4%

5.4%

2687.0

Adj. EBITDA MARGIN % 2

Q2 FY22

Q2 FY23

Garment Exports

21.9%

17.9%

SPUK

Retail

3.1%

2.9%

5.3%

-16.4%

Q2 FY23

Retail

Notes: 1. 2.

H1 FY23 – Division Wise Analysis

H1 FY23 YoY ANALYSIS – TOTAL REVENUE BREAKUP 1

DIVISION REVENUES SHARE

H1 FY22

H1 FY23

In Rs Mn

80%

12%

67%

190.4

3,545.0

365.7

3006.4

H1 FY22

Garment Exports

SPUK

5,670.6

321.6

341.8

Garment Exports

84.8%

88.4%

SPUK

Retail

10.3%

5.4%

5.7%

6.0%

5015.0

Adj. EBITDA MARGIN % 2

H1 FY22

H1 FY23

Garment Exports

23.5%

19.5%

SPUK

Retail

2.2%

-10.6%

2.6%

-6.7%

H1 FY23

Retail

Notes: 1. 2.

H1 FY23 - Key Analysis

H1 FY23 total revenues1 increased by 60% YoY to Rs 5,671 mn

❖ Revenues grew by 67% on a YoY basis in Garment Exports division

due to traction in demand from existing customers

❖ Realisation per piece improved by 17.4% YoY to 135.4.

H1FY23 Adj. EBITDA2 stands at Rs.964 mn. up by 37% YoY. Adj. EBITDA margins stood at 17.0% ❖ Higher EBITDA was primarily due to the benefit of operating

leverage on the back of the increase in revenue along with increased efficiency and cost control measures

Other Highlights ❖ Record date of Buy -Back of shares was 7th October 2022, at the face value of Rs. 10/- and at the price of Rs. 585/- upto 6,00,000 fully paid up equity shares, representing 2.34% of the total number of equity shares. The closing date is 17th November 2022.

Volumes (mn pcs) & NSR (INR)

103.3

59.9

98.6

57.6

95.7

49.2

115.3

107.3

42.1

50.2

135.4

31.2

FY18

FY19

FY21

FY20 Volumes

FY22

H1FY23

Notes: 1. 2.

H1 & Q2 FY23 Result - Consolidated Profit & Loss Statement

Particulars (In Rs Mn)

Revenue from Operations

Gain on account of Foreign Currency Fluctuations

Total Revenues

COGS

Gross Profit

Gross Margin

Employee Expenses

Other Expenses excl. MTM gain / loss on account of Foreign Currency Fluctuations

Adj. EBITDA

Adj. EBITDA Margin %

MTM (Gain) / Loss on account of Foreign Currency Fluctuations

Depreciation

Finance Cost

Other Income excl. Gain on account of Forex Fluctuations

PBT

Tax Expense

PAT

PAT Margin %

Earnings Per Share (EPS) In Rs.

Q2FY23

3,058.0

87.2

3,145.2

1593.4

1,551.8

49.3%

578.1

Q2FY22

2,219.7

YoY%

37.8%

7.0

1149.3%

2,226.7

847.1

1,379.6

62.0%

520.4

41.2%

88.1%

12.5%

11.1%

H1FY23

5515.7

154.9

5,670.6

2531.1

3,139.5

55.4%

1155.7

H1FY22

3550.5

-5.5

3,545.0

1278.0

2,267.1

64.0%

844.5

YoY%

55.4%

60.0%

98.1%

38.5%

36.9%

528.5

414.8

27.4%

1019.5

768.8

32.6%

445.2

14.2%

-17.3

84.4

78.3

4.92

304.7

75.5

229.2

7.3%

8.92

444.4

20.0%

34.5

86.2

13.7

1.58

311.6

79.2

232.5

10.4%

9.05

0.2%

-2.1%

473.4%

211.4%

-2.2%

-4.7%

-1.4%

964.3

17.0%

4.3

179.7

128.9

7.82

659.2

172.0

487.2

8.6%

18.96

653.7

18.4%

-24.6

170.4

45.6

17.5

479.8

131.7

348.1

9.8%

13.55

47.5%

5.4%

182.6%

37.4%

30.6%

40.0%

39.9%

Notes: 1.

H1 FY23 - Consolidated Balance Sheet

Particulars (Rs Million) Equities & Liabilities Shareholder's Funds Share Capital Other Equity Total Shareholder's Funds Minority Interest Non-Current Liabilities a. Financial Liabilities

Borrowings (please refer note below) Lease Liabilities Other Financial Liabilities

b. Deferred Tax Liabilities c. Other Non-Current Liabilities Total of Non-current liabilities Current Liabilities a. Financial Liabilities

Borrowings Lease Liabilities Trade Payables Other Financial Liabilities

b. Other Current Liabilities c. Provisions Total of Current liabilities Total Liabilities

Mar-22

Sep-22

Particulars (Rs Million)

Mar-22

Sep-22

256.9 6,120.8 6,377.7 -65.3

362.7 311.2 134.8 330.8 0.2 1,139.7

1,637.6 1.7 1,130.3 235.7 72.5 86.4 3,164.1 10,616.2

256.9 6,658.7 6,915.6 -65.5

283.4 298.2 137.1 349.9 0.3 1,068.8

1,566.3 0.7 1,088.6 231.4 102.2 85.7 3,074.9 10,993.8

Assets Non-Current Assets a. Property, Plant and Equipment b. Capital work in progress c. Intangible assets d. Financial Assets Investments Loans & Advances Others

e. Other non-current assets f. Right of use assets Total non-current assets Current Assets a. Inventories b. Financial Assets Investments

Trade Receivables Cash & Cash equivalents Others

c. Other Current Assets Total current assets Total Assets

4,105.1 77.5 58.9

4,193.2 21.2 58.8

1.8

1.9

327.9 42.0

331.9 4,945.0

205.1 10.1

326.0 4,816.4

3,320.3

3,265.4

1,157.4 595.0 97.8 500.7 5,671.2 10,616.2

210.0 1,363.0 759.2 176.6 403.2 6,177.4 10,993.8

Notes: Long term debt includes right to use property obligation close to Rs. 326 Mn

Company Overview

Brief Profile

BUSINESS OVERVIEW

KEY STRENGTHS

FINANCIAL OVERVIEW *

❖ SPAL is one of the leading manufacturers and exporters of knitted garments for infants and children in India.

❖ SPAL is a specialized player in the highly

challenging infant & children wear knitted garment industry.

❖ Reported Consolidated Revenues, EBITDA and PAT were Rs 8,672 mn, Rs 1,528 mn and Rs 847 mn in FY22.

❖ Provides end-to-end garment

manufacturing from Yarn to finished products including body suits, sleep suits, tops and bottoms.

❖ Strong promoter pedigree with more than three decades of experience in textile and apparels industry.

❖ Preferred vendor through long standing relationships with reputed international brands etc.

❖ Stringent quality compliance, superior in- house product development and certified testing laboratories.

❖ Demonstrated ability to setup integrated facilities to scale-up operations. Currently operating 18 facilities having close proximity to key raw materials & skilled labour.

❖ Advanced manufacturing machineries with

latest technology and automation.

❖ Strong balance sheet with Net Debt to Equity ratio of 0.22x as on Mar-22.

❖ Improving profitability & return ratios over

FY15 to FY22-

❑ Reported PAT Margin: 1.7% to 9.8%

❑ Cash Adjusted ROCE: 13.4% to 17.2%

❑ ROE: 9.6% to 20.2%

Notes: ROE = PAT before MI / Avg. Equity (Excl. preference shares) + MI (Cash adj. PAT) Cash Adj. ROCE = EBIT / Avg. Capital Employed (excl. cash & current investments),

Our Evolution

2004 Set-up of flagship factory at Avinashi

2005 Commissioned dying plant at Perundurai

2006 ▪ Investment by NYLIM

▪ Investment in Joint Venture

for manufacturing and marketing of “Crocodile” Brand

2007-08 Amalgamation with Sri Balaji Bakkiam Spinning Mills

2008-13 Streamlining of operations to integrate the factories, increase efficiencies and increase backward integration

2014 Incorporation of SP Apparels UK to cater to increasing integration, get a closer-to-client presence, and develop new relationships

2008-2015 Consolidation Phase

1989 Started export operations as a partnership firm

1998 Set-up manufacturing facility at Neelambur

2003 Set-up first in-house embroidery facility at Thekkalur

2004-2008 Expansion Phase

1989-2003 Bootstrap Phase

2016 ▪ Listed on BSE / NSE

▪ Repayment of Loans to reduce

leverage

2017-22 ▪ Integration / expansion of

manufacturing facilities to increase operational efficiency

▪ Expansion of Crocodile brand in

unexplored states and cities in India

2016-22 Growth Phase

Leading Exporter of Infant & Children Wear in India

SPAL IS A SPECIALIZED PLAYER IN THE HIGHLY CHALLENGING INFANT & CHILDREN WEAR KNITTED GARMENT INDUSTRY

INDUSTRY’S UNIQUE CHALLENGES

SPAL’S CORE COMPETENCIES

❖ Labour intensive operations.

❖ Demonstrated manufacturing excellence for

❖ Employee training & skill development.

❖ Employee occupational health & welfare.

❖ Demands large variety and small batch size orders.

❖ Highly complex manufacturing.

over two decades

❖ Clear understanding of buyer preferences and specifications of knitted garments and embellished garments in infants and children category

❖ Ability to consistently deliver high quality

products on timely basis

SPAL is strongly placed to capitalize on future growth opportunities

SPAL – EXPORTS VOLUMES SOLD IN MILLION

❖ Meeting stringent compliance requirements

of international customers

59.9

57.6

49.2

50.2

42.1

31.2

❖ Stringent safety and quality requirements in

❖ Long standing relationships with reputed

developed markets.

global brands

❖ Severe restrictions on the use of chemicals, dyes, accessories and other additives to prevent any side-effects on infants and children.

❖ Company is working towards sustainable growth by continuously working on improving its ESG matrix

FY18

FY19

FY20

FY21

FY22 H1FY23

Note: Lower volumes in FY21 on account of Covid-19 related disruptions

Preferred Vendor To Reputed International Brands

Strong Pedigree Leading children wear manufacturer under the leadership of Mr. Sundararajan, CMD with more than 36 years of experience in apparel industry

Brand Signatures More than 3 decades of expertise in infant and children wear. We are approved suppliers to almost all major children wear brands

Integrated Manufacturing 100% Backward integrated right from product development to garmenting helps us to give the best superior quality products to customers

Location Advantage Located near Tirupur - hub for knitted children garments, convenient access to skilled labour, raw material and proximity to international port

SPAL IS THE PREFERRED VENDOR FOR KNITTED GARMENTS FOR INFANTS AND CHILDREN TO REPUTED INTERNATIONAL BRANDS AND RETAILERS

WHY SPAL?

❖ Expertise to concurrently manage multiple large orders with a diversified product range including body suits, sleep suits, tops and bottoms.

❖ Ethically, Environmentally and Socially compliant

organization.

❖ No bulk returns from customers since inception.

❖ Ability to offer end-to-end garments manufacturing services

from the design to the manufacture of the garments.

Strategically Located & Integrated Manufacturing Facilities

SPINNING

KNITTING

DYEING

Strategically Located & Integrated Manufacturing Facilities

CUTTING

PRINTING

AUTOMATED EMBROIDERY

Strategically Located & Integrated Manufacturing Facilities

SEWING

AUTOMATED SEWING ASSEMBLY LINE

SEMI-AUTOMATED INVENTORY MANAGEMENT

Strong In-house Design Expertise

STRONG DESIGN IS SPAL’S CORE COMPETENCY

❖ SPAL’s core competency lies in understanding

latest fashion and trends to suit the customers buying preferences.

❖ Dedicated in-house design and merchandising

team of designers located at our Corporate Office in India and design consultants hired by our Subsidiary, SPUK.

❖ Use of latest technology for developing products and styles which are based on prevalent fashion trends.

❖ Design development, sampling and fitment form

an integral part of our operations and are considered as an effective tool for converting customer’s need into a finished product.

Stringent Quality Controls & Compliance

❖ Strong adherence to the highest standards of quality,

assurance and compliance.

❖ Stringent quality control checks consisting of inspection and

testing of fabric, greige and processed yarn, trims, accessories, packing materials and of each piece of garment for metal bits/needle tips/sharp edges prior to packing.

❖ Exercise stringent Quality check at every stage of

manufacturing.

❖ All individual pieces of garments are also physically

inspected to ensure that no defective/damaged pieces are delivered to our customers.

❖ Internal rejection rate is low as compared to international

standards.

ACCREDITATIONS AND AWARDS FOR OUR MANUFACTURING FACILITY/ABILITY

Received laboratory accreditation ISO/IEC 17025:2005 by the National Accreditation Board for Testing and Calibration Authorities, Department of Science and Technology, India

TESCO ‘F&F Gold Rated Supplier Award’ 2013

Marks and Spencer award 2011

Qualified Management with Deep Understanding of Apparel Sector

Mr P. Sundararajan Chairman and Managing Director

Ms S. Latha Executive Director

• Founder director of SPAL with 36 years of experience in the textile and apparel industry

Founder director of SPAL with 29 years of experience in the textile and apparel industry

• Bachelor of Science from the Bangalore

University

Mr S. Chenduran Joint Managing Director

• Six years of experience in the textile and

apparel industry

• MS in Business and Management from the

University of Strathclyde

Ms S. Shantha Joint Managing Director

• B.Tech (Textiles) graduate and MBA from PSG

Institute of Management.

• immense knowledge in marketing and textiles makes her contribution valuable to achieve the visions of the Company

Ms P.V. Jeeva, Chief Executive Officer

• 35 years of experience in the textile and apparel

industry

• Handles garments division and has been associated with SPAL since July, 1986

• Diploma in textile processing from GRG

Polytechnic College, Coimbatore

Mr V. Balaji, Chief Finance Officer

• 21 years of experience in the field of finance

and accounts

• Associated with SPAL since May 2012

• Qualified Chartered Accountant

• Plays a key role in managing banking

relationships to aid the company’s growth

Board Of Directors - Wide Spectrum of Experience

Mr A.S. Anandkumar Independent Director

Mrs H .Lakshmi Priya Independent Director

Mr C. R. Rajagopal Independent Director

Mr V. Sakthivel Independent Director

• 47 years of experience in banking

• Masters of Science from the

University of Madras

• 20+ years of experience in corporate advisory, contract documentation, private equity & venture capital

• Core areas of expertise - finance,

• 44 years of experience in the fields of

private equity, mergers, acquisitions and reorganisations

commerce and accountancy

• Qualified Chartered Accountant and

• BA, LLB (Hons) from National las

• Chartered Accountant having 35+

Certified I.S. Auditor

School of India University, Bangalore in 1996 and is a member of the Bar council of Maharashtra and Goa since 1999

years of experience

Financial Overview & Shareholding Structure

Financial Overview

REVENUES

Adj. EBITDA & EBITDA MARGIN

PAT Before MI & PAT MARGIN

8,264

8,090

6,624

6,523

8,672

18.4%

15.3%

1,238

17.6%

1,528

16.4%

1,072

10.8%

895

9.1%

734

7.2%

478

5.6%

6.6%

469

432

9.8%

847

FY18

FY19

FY20

FY21

FY22

FY18

FY19

FY20

FY21

FY22

FY18

FY19

FY20

FY21

FY22

LEVERAGE ANALYSIS

RETURN METRICS

0.37

0.31

0.26

0.20

0.22

3,972

4,839

5,232.2

5,583.9

6,377.7

18.9%

20.4%

21.9%

19.9%

15.5%

10.5%

14.1%

11.2%

20.2%

17.7%

1,463

1,477

1,381

1,136

1,415

FY18

FY19

Equity

FY20

Net Debt

FY21

FY22

Net Debt/Equity

FY18

FY19

ROE %

FY20

FY21

FY22

Cash Adjusted ROCE%

Notes: Net Debt = Total Debt – Cash & Current Investments, For FY 20 Long term debt includes right to use property obligation close to Rs. 360 Mn

Notes: ROE = PAT before MI / Avg. Equity (Excl. preference shares) + MI (based on cash adjusted PAT) Cash Adj. ROCE = EBIT / Avg. Capital Employed (excl. cash & current investments),

Division-wise EBIDA Performance

GARMENT DIVISION

21.0%

5,734

17.6%

6,805

12.0%

7,026

20.2%

20.9%

5,369

7,429

1,202

1,194

843

1,083

1,553

12,000 10,000 8,000 6,000 4,000 2,000 -

FY18

FY19

FY20

FY21

FY22

Garment Revenue

Garment EBITDA

Adj. EBITDA Margin (%)

RETAIL DIVISION

SPUK

3.6%

646

2.1%

818

4.4%

776

395

480

-52

FY18

FY19

FY20

FY21 -13.1%

FY22 -10.7%

3.5%

5.6%

3.7%

5.3%

3.5%

768

762

354

482

507

FY18

FY19

FY20

FY21

FY22

Retail Revenue

Retail EBITDA

EBITDA Margin (%)

SPUK Revenue

SPUK EBITDA

EBITDA Margin (%)

Shareholding Structure

28 28

SHAREHOLDING PATTERN – 30th September 2022

Non-Institutions 20.1%

Promoters 61.7%

KEY SHAREHOLDERS – 30th September 2022

DSP Mutual Fund

ICICI Prudential Mutual Fund

UTI Mutual Fund

Euro Asia Agencies, Hong Kong

8.41%

3.77%

3.63%

1.34%

Institutions 18.2%

Source: BSE

Q3 FY22 Results Update

Company Overview

Financial Overview & Shareholding Structure

For Further Queries: Mr. V. Balaji Chief Financial Officer Email: balaji.v@spapparels.com

www.s-p-apparels.com

Mr. Chintan Mehta/Ms. Jill Chandrani IR Consultant

Email: s.p.apparels@dickensonworld.com Contact no: +91 9892183389/7506023955

← All Transcripts SPAL Stock Page →

S. P. Apparels Limited has informed the Exchange about Investor Presentation

Market Movers