The shares of leading manufacturers and exporters of knitted garments gained up to 7 percent after the company announced the strategic acquisition of Youn Brand Apparel Pvt Ltd worth Rs. 223 crore.
With a market capitalization of Rs 1,504.80 crore, the shares of S.P. Apparels Ltd were trading at Rs 601.95 per share, increasing around 2.17 percent as compared to the previous closing price of Rs 589.15 apiece.
According to the company filing, S.P. Apparels Ltd has signed a definitive agreement to acquire a 100 percent stake in Young Brand Apparel Pvt Ltd (YBAPL) the subsidiary of Bannari Amman Spinning Mills Ltd along with the garment unit situated at Palladam and land and building situated at SIPCOT for a value of Rs. 223 crore.
Furthermore, as part of a strategic acquisition strategy, SPAL intends to buy a 51.33% ownership in Young Brand Apparel Private Limited from Bannari Amman, as well as a 49% stake from joint venture partners. To fund this transaction, SPAL will use a mix of internal accruals and borrowed funds.
Additionally, with this purchase, SPAL will be able to broaden its product offerings by utilizing each other’s capabilities while also expanding its client base and target markets. The land lot is projected to increase SPAL’s industrial capability, enabling future development.
Having a look at the company’s financials, the company’s revenue decreased 5 percent from Rs. 306 crores in Q3FY23 to Rs 292 crores in Q3FY24. Further, During the same period, Net profit increased by 26 percent from Rs 23 crore to Rs 29 crore.
The company’s revenue in India declined by 5% from Rs 204.2 crore in FY2021-22 to Rs 193.7 crore in FY2022-23, while sales from outside India climbed by 35% from Rs 655.1 crore in FY2021-22 to Rs 884.1 crore in FY2022-23.
The firm has a 30 L KCAL Thermic fluid heater firing chamber to achieve good combustion and fuel efficiency with multi-fuel possibilities, and the company has saved 25.77% on electricity by adding variable frequency drives (VFDs) in the humidification facilities.
S.P.Apparels Limited is an Indian maker and supplier of knitted clothing for newborns and children. The company offers complete garment production services, beginning with gray cloth and ending with finished goods.
Written by:- Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
