Management of SP Apparels Ltd sees revival in order inflow

Tamil Nadu-based knitted garment manufacturer, SP Apparels Ltd has been one of those companies, which underperformed the market since March 2020.

The shares of this textile player have appreciated just 15 per cent since the historical fall amid virus spread in India. One of the main reasons for its below-par performance can be attributed to the business mix, which has nearly 80 per cent of the sales from exports. With depreciating rupee and ports shut, its core fundamentals looked weak for any sharp revival.

However, in a recent commentary, its management highlighted that it sees a positive order book inflow status. It added that despite the uncertainty, lockdown, and supply chain disruptions, the company did not see a very large level of order cancellations from the garment division export customers. Though, as the shipments were kept on hold by these clients, it had to face a loss of Rs 25 crore in Q4FY20, making nearly 10 per cent to 15 per cent of its average quarterly revenues.

Since May 2020, it has witnessed a trend of the new order as the ports are now operational with the ease of the lockdown, worldwide. The quantity, however, still remains lower. Its order book as of the end of FY20 is at Rs 210 crore.

Going ahead, the investors would have to be watchful for more such triggers of the stock in order to get significant gains. On Tuesday, it gave up all its gains after beginning on a positive note. At 12.30 pm, it quoted at Rs 74 on BSE.