Capital market rating of 25/100 for SP Apparel implies a Do not Subscribe rating

Exports knitted garments for infants to UK

After a huge jump in net profit in FY 2016, the shares are being offered at 20 times EPS

Valuation

The company's financials show huge jump in FY 2016. For FY 2016, the consolidated net sales stood at Rs 532.83 crore, up by 13% YoY. The OPM stood at 16.7% resulting in OP growth of 19% to Rs 89.22 crore. PBT was up by 83% to Rs 44.86 crore. With total tax being lower by 27% to Rs 10.73 crore, due to MAT credit benefits, consolidated PAT for the year ended FY 2016 stood at Rs 34.71 crore, up by 245%. On a diluted equity share capital of the company of Rs 25.15 crore of face value of Rs 10 each, the EPS for FY 2016 works out to Rs 13.8.

At higher price band of Rs 268, SPAL is being offered at a P/E of around 19.4 times its FY 2016 earnings.

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