Sportking India reported a sharp jump in Q2 FY27 EBITDA margins to 19.8%, up from 10.4% year-on-year. The company is set to launch its Odisha Greenfield expansion, projecting significant revenue growth, while maintaining disciplined debt management.
Sportking India Q2 Performance and Growth Outlook
EBITDA margins climbed to 19.8% in Q2 FY27, compared to 10.4% in the same period last year.
Management projects the new Odisha project to generate INR 1,200-1,300 crore in annual revenue from the next financial year.
Reader Takeaway: Strong margin expansion and new production capacity drive growth, though debt and regulatory compliance remain key.
What just happened
Sportking India has posted a robust performance for Q2 FY27, fueled by stable raw material costs and high demand, particularly in export markets which accounted for 52% of total revenue. The company’s yarn-cotton spread improved to INR 141, up from INR 133 in the previous quarter. The upcoming Odisha Greenfield project, featuring 1.5 lakh spindles, is entering its final stages, with commercial production slated to commence within 30 to 40 days.
Why this matters
The Odisha project is a significant growth lever. It benefits from a 30% capital subsidy and favorable power costs capped at INR 4 per unit, significantly lower than the INR 6 per unit cost in Punjab. This expansion is expected to contribute INR 150-200 crore to revenue in the current fiscal year, helping the company scale its operations while keeping peak debt below INR 1,000 crore by March 2027.
What changes now
Management is actively working on merging its fabric and garment entities to streamline operations. While this process is currently causing minor operational stoppages, the merged entity has an estimated revenue potential of INR 100 crore once compliance issues are fully resolved.
Risks to watch
Investors should monitor the potential impact of changes in cotton import duty policies, which remain subject to government decisions. Additionally, the company has clarified that further expansion phases are contingent upon the successful stabilization of the Odisha plant and comfort with current debt levels.
What to track next
The ramp-up of the Odisha plant and the completion of the fabric and garment entity merger are the primary milestones for the coming months.