Valuation Metrics and Recent Changes
As of 13 Feb 2026, SP Apparels trades at a price of ₹706.60, down 2.98% from the previous close of ₹728.30. The stock’s 52-week range spans from ₹585.00 to ₹990.00, indicating a significant volatility band over the past year. The company’s price-to-earnings (P/E) ratio currently stands at 15.62, a figure that has contributed to the recent downgrade in its valuation grade from very attractive to attractive. This P/E multiple is below the sector heavyweights such as Trident (33.23) and Welspun Living (38.51), but higher than some peers like Arvind Ltd. (22.72) and Vardhman Textile (17.46), suggesting a relatively moderate valuation.
Price-to-book value (P/BV) is another critical metric where SP Apparels registers 1.97, reflecting a valuation close to its net asset base. This is consistent with an attractive valuation stance, especially when compared to riskier peers like Swan Corp and Alok Industries, which are either loss-making or trading at elevated multiples. The enterprise value to EBITDA (EV/EBITDA) ratio of 9.36 further supports the stock’s reasonable valuation, being lower than several competitors such as Pearl Global Industries (16.66) and Indo Count Industries (15.76).
Financial Performance and Returns Context
SP Apparels’ return on capital employed (ROCE) and return on equity (ROE) stand at 14.00% and 12.32% respectively, indicating efficient utilisation of capital and shareholder funds. However, the dividend yield remains modest at 0.28%, which may limit income-focused investor interest.
Examining stock returns relative to the benchmark Sensex reveals a mixed performance. Over the past week, SP Apparels declined by 2.95%, contrasting with the Sensex’s 0.43% gain. Yet, over longer horizons, the stock has outperformed significantly, delivering a 138.6% return over three years and an impressive 355.87% over five years, dwarfing the Sensex’s 37.89% and 62.34% returns respectively. This long-term outperformance underscores the company’s growth credentials despite recent short-term volatility.
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Peer Comparison Highlights
When benchmarked against its peers in the Garments & Apparels sector, SP Apparels’ valuation metrics present a nuanced picture. While its P/E ratio of 15.62 is lower than Trident’s 33.23 and Welspun Living’s 38.51, it is higher than Vardhman Textile’s 17.46 and Arvind Ltd.’s 22.72. Notably, Arvind Ltd. holds a very attractive valuation grade despite a higher P/E, likely due to its superior PEG ratio of 0.57 compared to SP Apparels’ 0.70, signalling better growth-adjusted earnings potential.
Enterprise value multiples also reveal SP Apparels as relatively attractively priced. Its EV/EBITDA of 9.36 is significantly lower than Garware Technologies’ 23.52 and Pearl Global Industries’ 16.66, suggesting a more reasonable enterprise valuation relative to earnings before interest, tax, depreciation and amortisation. However, some peers like Raymond Lifestyle, despite a very high P/E of 60.83, maintain a very attractive valuation grade, reflecting market expectations of robust growth or superior quality metrics.
Valuation Grade Downgrade and Market Implications
The downgrade in SP Apparels’ Mojo Grade from Buy to Hold on 24 Nov 2025, accompanied by a valuation grade shift from very attractive to attractive, signals a recalibration of investor expectations. This adjustment may be attributed to the stock’s recent price appreciation from its 52-week low of ₹585.00 to current levels near ₹706.60, compressing valuation multiples. Additionally, the modest dividend yield and recent short-term underperformance relative to the Sensex (-2.95% vs +0.43% over one week) may have contributed to a more cautious stance.
Despite this, the company’s solid fundamentals, including a ROCE of 14.00% and ROE of 12.32%, alongside a PEG ratio below 1, indicate sustainable earnings growth potential. Investors should weigh these factors against the backdrop of sector volatility and peer valuations before making allocation decisions.
Market Sentiment and Price Dynamics
SP Apparels’ price volatility within the ₹673.00 to ₹736.70 intraday range on 13 Feb 2026 reflects ongoing market uncertainty. The stock’s 52-week high of ₹990.00 remains a distant target, suggesting room for upside if earnings growth and sector conditions improve. However, the recent downward pressure and valuation grade downgrade caution investors to monitor developments closely.
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Investment Outlook and Strategic Considerations
For investors evaluating SP Apparels, the current attractive valuation grade suggests the stock remains reasonably priced relative to earnings and book value, especially when contrasted with riskier or overvalued peers. The PEG ratio of 0.70 indicates that earnings growth is adequately priced in, offering a balanced risk-reward profile.
However, the downgrade from Buy to Hold by MarketsMOJO, reflected in the Mojo Score of 55.0, advises caution. This rating change underscores the need to monitor earnings momentum, sector trends, and broader market conditions before committing additional capital. The company’s moderate dividend yield and recent price softness may deter income-focused or momentum investors in the near term.
Long-term investors may find value in SP Apparels’ demonstrated ability to outperform the Sensex over three- and five-year periods, with returns of 138.6% and 355.87% respectively. This track record highlights the company’s growth potential and resilience within the Garments & Apparels sector.
Conclusion
SP Apparels Ltd.’s shift in valuation grade from very attractive to attractive reflects a nuanced change in market sentiment driven by price appreciation and relative peer valuations. While the stock remains reasonably priced with solid fundamentals, the recent downgrade to a Hold rating signals a more cautious investment stance. Investors should consider the company’s competitive positioning, financial metrics, and sector outlook alongside peer comparisons to make informed decisions. The stock’s long-term outperformance versus the Sensex offers encouragement, but near-term volatility and valuation compression warrant careful monitoring.
Overall, SP Apparels presents a balanced proposition for investors seeking exposure to the Garments & Apparels sector, with valuation metrics that suggest fair price attractiveness amid evolving market conditions.
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