Shares of Sportking India were locked within the 5 per cent upper circuit for the ninth straight day, at Rs 4,501.95 apiece -- also its new high -- on the BSE on Thursday after the corporate announced bonus issue plan. the corporate , engaged in textile business, has seen its market value more-than-double, or up127 per cent, within the past one month as compared to a 3.4 per cent rise within the S&P BSE Sensex.
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In the past six months, the stock has zoomed 465 per cent, while in one year it's skyrocketed 1,775 per cent, as against a 7.74 per cent and a forty five .12 per cent surge within the benchmark index, respectively.
Sportking India on Wednesday, August 4, 2021, announced that the board of directors of the corporate is scheduled to satisfy on Saturday, August 14 to think about and recommend issuance of bonus equity shares.
Sportking India manufactures cotton, cotton polyester blended and acrylic-blended yarn in grey and dyed forms with an installed capacity of 272,880 spindles. the clothes are retailed by Sportking Group companies under the Sportking and Mentor brands, through both exclusive and multi-brand stores.
For April-June quarter of the fiscal year 2021-22 (Q1FY22), Sportking India reported robust numbers, with net income jumping multiple-fold at Rs 78.99 crore as against Rs 0.36 crore within the year-ago quarter. It had posted profit of Rs 45.39 crore in Q4FY21. Total income, meanwhile, more-than-doubled to Rs 452 crore from Rs 223 crore in Q1FY21. Ebitda (earnings before interest, taxes, depreciation, and amortization) margin improved 1,685 basis points (bps) YoY and 265 bps sequentially at 28.29 per cent during the quarter.
“Sportking India (SIL) continues to draw benefits of being a flagship company of the vertically integrated textile group ‘Sportking’ which has its presence throughout the worth chain viz. spinning, knitting, garmenting and retailing. SIL’s large scale of operations further stabilised within the year FY21 because it commenced operations on the incremental capacity of ~68000 spindles within the end of FY19. Its diversified product portfolio, healthy capacity utilisation levels and a strong mixture of domestic and export sales continues to supply strength to the ratings,” Brickwork Ratings said on July 22, 2021.
The rating agency had upgraded the ratings for the company's loan facilities, after factoring within the improvements in its profitability margins, led by strong demand in exports and high realisations in H2FY21.
The ratings are, however, are constrained by susceptibility of the company's margins to volatility in staple prices within the medium term.
"Since the corporate generates almost 50 per cent of its revenues from exports, its profitability is additionally vulnerable to the fluctuations in forex exchange rates. Further, there are inherent risks of the spinning business being commoditized, price-sensitive, competitive and exposed to the impacts of cyclicality. the power of the corporate to enhance its revenues and maintain its profitability within the future will remain key rating monitorable," the rating agency said.
Meanwhile, currently, SIL is trading under ‘XT’ group on the BSE. XT consists of all those stocks which are only listed on BSE and are settled on a trade-to-trade basis. there's no intra-day trading allowed for shares falling under this group because the delivery of those stocks is predicated on a T+2 basis.
The company has also low equity base of three .32 million shares. Of these, promoters held 74.16 per cent stake, while the remaining 25.84 per cent holdings are with individual shareholders (22.22 per cent), non-resident Indian (2.14 per cent) and investor Amit Aggarwal (1.75 per cent), the June 30, 2021 shareholding data shows.
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