SP Apparels Reports Strong Sales Growth Amid Rising Interest Costs and Debt Concerns

SP Apparels, a small-cap player in the textile industry, recently announced its financial results for the quarter ending December 2024. The company reported net sales of Rs 359.32 crore, reflecting a year-on-year growth of 42.51%. This positive sales trend is complemented by a profit before tax (PBT) of Rs 31.32 crore, which has increased by 59.63% compared to the previous year. Additionally, SP Apparels achieved its highest operating profit in the last five quarters at Rs 50.89 crore, with an operating profit margin reaching 14.16%, indicating enhanced operational efficiency.
However, not all aspects of the financial results are favorable. The company experienced a significant rise in interest costs, with half-yearly interest expenses growing by 119.34%, suggesting increased borrowings. Furthermore, the debt-equity ratio has reached its highest point in five half-yearly periods at 0.41 times, indicating a potential strain on liquidity. Additionally, the debtors turnover ratio has declined to its lowest level in the same timeframe, reflecting a slower pace in settling receivables.

In light of these developments, SP Apparels has undergone an adjustment in its evaluation, with its score shifting to -1 from -18 over the past three months.

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