Systematix's research report on S P Apparels
S P Apparels (SPAL) is one of India’s largest manufacturer/exporter of knitted garments for infants and children; exported 36mn pieces to European clients in FY16 (87% share in revenue). Its current exports are limited to just five European customers and are expected to grow while also diversifying to other geographies like the US. This will be backed by its strong balance sheet post IPO.
Outlook
Its retail business under the ‘Crocodile’ brand is expected to grow 2x, backed by an increased focus on the retail segment and aggressive stores expansion across India. We initiate coverage with a Buy rating and a target price of Rs 545, based on 16x Sept’18e.
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