Sangam (India) Ltd Reports Very Positive Quarterly Financial Performance Amid Mixed Market Returns

Quarterly Financial Highlights Demonstrate Significant Growth

The December 2025 quarter saw Sangam India’s Profit Before Tax excluding Other Income (PBT LESS OI) surge to ₹32.47 crores, reflecting an extraordinary growth rate of 190.9% compared to the average of the previous four quarters. This sharp increase underscores the company’s ability to scale profitability amid challenging market conditions.

Operating profit before depreciation, interest, and taxes (PBDIT) also hit a record ₹84.38 crores, while the operating profit to net sales ratio climbed to an all-time high of 10.89%. These figures highlight a significant expansion in operating margins, a critical factor for sustained earnings growth in the garments and apparels sector.

Net profit after tax (PAT) reached ₹25.77 crores, the highest quarterly figure recorded by the company, with earnings per share (EPS) correspondingly rising to ₹4.87. This EPS level marks a substantial improvement over prior quarters, signalling enhanced shareholder value creation.

Financial Trend Score Upgraded to Very Positive

Reflecting these strong results, Sangam India’s financial trend score has improved markedly from 11 to 20 over the last three months, shifting the company’s outlook from positive to very positive. This upgrade is supported by the highest operating profit to interest coverage ratio of 3.08 times, indicating improved debt servicing capacity and operational efficiency.

Balance Sheet and Working Capital Challenges

Despite the encouraging profitability trends, certain financial metrics warrant cautious monitoring. The company’s interest expense for the nine months ended December 2025 increased by 21.64% to ₹87.03 crores, reflecting higher borrowing costs or increased debt levels. Correspondingly, the debt-to-equity ratio at the half-year mark rose to 1.27 times, the highest recorded in recent periods, signalling elevated leverage.

Additionally, the debtors turnover ratio declined to 4.80 times, the lowest in the half-year period, suggesting a slower collection cycle and potential working capital strain. These factors could impact liquidity and operational flexibility if not addressed prudently.

Stock Price Movement and Market Comparison

Sangam India’s stock price closed at ₹421.50 on 22 January 2026, down 5.28% from the previous close of ₹445.00. The day’s trading range was between ₹418.80 and ₹455.00, with the 52-week high and low at ₹512.45 and ₹295.25 respectively. The recent price dip contrasts with the company’s strong quarterly results, possibly reflecting broader market volatility or sector-specific pressures.

When compared with the benchmark Sensex, Sangam India’s stock has underperformed in the short term, with a one-week return of -7.12% versus Sensex’s -1.77%, and a year-to-date return of -14.91% against Sensex’s -3.89%. However, the company’s long-term performance remains impressive, with a three-year return of 91.29% compared to Sensex’s 35.12%, and a five-year return of 357.41% versus Sensex’s 65.06%. This long-term outperformance underscores Sangam India’s growth potential and resilience within the garments and apparels sector.

Mojo Score Upgrade Reflects Improved Investment Appeal

MarketsMOJO has upgraded Sangam India’s Mojo Grade from Hold to Buy as of 19 January 2026, reflecting the company’s enhanced financial health and growth prospects. The current Mojo Score stands at 70.0, signalling a favourable risk-reward profile for investors. The market capitalisation grade remains at 3, indicating a mid-cap status within the sector.

This upgrade aligns with the company’s very positive financial trend and record quarterly profitability, suggesting that Sangam India is well-positioned to capitalise on favourable industry dynamics and operational efficiencies going forward.

Outlook and Investor Considerations

Sangam India’s recent quarterly results mark a significant inflection point in its financial trajectory, with operating margins expanding to nearly 11% and profitability metrics reaching historic highs. This improvement is particularly noteworthy given the garment and apparel sector’s competitive pressures and fluctuating raw material costs.

However, investors should remain mindful of the company’s rising leverage and interest expenses, which could constrain future cash flows if not managed effectively. The decline in debtor turnover ratio also suggests a need for tighter working capital management to sustain liquidity.

Long-term investors may find Sangam India’s strong track record of returns and recent upgrade in investment grade compelling, especially as the company leverages operational efficiencies and market opportunities. Short-term volatility, as reflected in recent stock price movements, may present entry points for value-oriented investors.

Overall, Sangam India’s very positive financial trend and upgraded Mojo Grade to Buy underscore its potential as a growth-oriented stock within the garments and apparels sector, supported by robust quarterly earnings and improving margin dynamics.

Sector Context and Competitive Positioning

The garments and apparels industry continues to evolve with shifting consumer preferences and supply chain realignments. Sangam India’s ability to deliver margin expansion and strong profit growth in this environment highlights its operational resilience and strategic positioning.

Compared to sector peers, Sangam India’s operating profit to net sales ratio of 10.89% places it favourably, reflecting efficient cost management and pricing power. The company’s focus on enhancing profitability while managing debt levels will be critical to maintaining its competitive edge.

Investors should monitor upcoming quarterly results and management commentary for indications of sustained margin improvement and working capital optimisation, which will be key drivers of future stock performance.

Conclusion

Sangam (India) Ltd’s December 2025 quarter results demonstrate a marked improvement in financial performance, with record profitability and margin expansion driving an upgrade in its financial trend score and Mojo Grade. While challenges remain in managing leverage and working capital, the company’s strong operational metrics and long-term return profile make it an attractive proposition for investors seeking exposure to the garments and apparels sector.

As the company navigates evolving market conditions, its ability to sustain growth and profitability will be closely watched by market participants. The recent upgrade to a Buy rating by MarketsMOJO further reinforces the positive outlook for Sangam India as it seeks to capitalise on its momentum and deliver shareholder value.

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