Siyaram Silk Mills Limited — Q1 FY26 earnings call

Call held 31 Jul 2025

Management summary

Siyaram Silk reported a 21% YoY increase in total income to ₹400 crores for Q1 FY26, driven by strong volume growth in Fabrics (20%) and Garments (18%). However, EBITDA declined slightly to ₹33 crores, and PAT saw a significant drop to ₹5 crores, partly due to lower government grants and aggressive promotions. The company continues its expansion in new retail brands, ZECODE and DEVO, targeting 35 new stores for FY26 and projecting ₹75-80 crores in revenue from this segment.

Highlights

  • Total Income for Q1 FY26 stood at ₹400 crores, reflecting a 21% year-on-year growth.

  • EBITDA for Q1 FY26 was ₹33 crores, a slight decline from ₹34 crores in Q1 FY25.

  • EBITDA margins for the quarter were 8%.

  • Profit After Tax (PAT) for Q1 FY26 was ₹5 crores, down significantly from ₹12 crores in Q1 FY25.

  • Fabrics segment contributed 76% to revenue, Garment 13%, and Others 11% in Q1 FY26.

  • Fabrics volume grew approximately 20% and Garment volume approximately 18% in Q1 FY26.

  • New retail businesses (ZECODE & DEVO) contributed roughly 3% to the overall turnover.

  • The company opened 7 new stores (4 ZECODE, 3 DEVO) in Q1 FY26, bringing the total to 16 ZECODE and 10 DEVO stores.

Key financials

  1. Total Income ₹400 Cr +21%YoY
  2. EBITDA ₹33 Cr -2.9%YoY
  3. EBITDA Margin 8%
  4. PAT ₹5 Cr -58.3%YoY

What they filed

Q1 FY27: revenue up 14.7%, net profit up 120.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue608 570 736 388 706 +16%623 +9%853 +16%445 +15%
EBITDA89 67 112 21 108 +21%68 +1%134 +20%18 −14%
Net profit68 46 72 5 87 +28%42 −9%95 +32%11 +120%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Fabrics
    76% Revenue Mix20% Volume Growth
  • Garment
    13% Revenue Mix18% Volume Growth
  • Others
    11% Revenue Mix
  • New Retail Business
    3% Contribution to Turnover

Guidance & targets

Capacity

  • New Stores Opened (ZECODE & DEVO) Capacity · FY26 · Medium confidence 35 stores
    We are on track to achieve our target of opening approximately 35 stores across both brands in the year FY '25-'26.

    — Gaurav Poddar, President and Executive Director

Revenue

  • Revenue from New Retail Business Revenue · FY26 · Medium confidence ₹75-80 crores
    Earlier, we had indicated a possible revenue of about INR75 crores to INR80 crores from this new retail business that will contribute towards this year.

    — Gaurav Poddar, President and Executive Director

  • Overall Revenue Growth Revenue · FY26 · Medium confidence 10-12%
    annual guidance that we always give is with the new business involved now, about 10% to 12% kind of growth.

    — Gaurav Poddar, President and Executive Director

Other

  • Preferential Issue Completion Other · FY26 · High confidence within this financial year
    We are hopeful that within this financial year, we will be able to complete the process.

    — Gaurav Poddar, President and Executive Director

Profitability

  • EBITDA Breakeven for New Stores Profitability · post-opening · Medium confidence 15-18 months
    in our initial assumption, we had estimated about 15 to 18 months of EBITDA level of a store, we would like to stick with that.

    — Gaurav Poddar, President and Executive Director

Risks & concerns

  • Slow retail demand and monsoon impact

    medium

    Demand in Fashion and Apparel segment remained largely flat in Q1 FY26 due to early onset of monsoon disrupting seasonal buying patterns, and retail demand is currently slow.

    Management acknowledged

  • Volatility in new store openings

    medium

    Store openings are gradual and subject to land possession and construction time, making it volatile to predict exact opening timelines for the 35-store target.

    Management acknowledged

  • Early stage of new retail businesses

    medium

    New retail brands (ZECODE & DEVO) are in a very early stage, with no store having completed 12 months of sale, making it premature to assess inventory turns or specific store-level profitability.

    Management acknowledged

  • Potential India-U.S. tariffs

    low

    Management is awaiting final notifications; trade with the U.S. is a very small percentage of overall export business, limiting its impact.

    Management downplayed

Areas of evasion (3)

  • Specific unit economics/profitability of new stores
  • Exact impact of potential tariffs
  • Detailed omnichannel strategy for new brands

Q&A highlights

1 direct, 1 evasive
Exports contribution and growth strategy Partial
While we strive to grow that business as well, there is a lot of headroom in the branded domestic market as well. So I cannot give you as a percentage, how much it will grow, but the business will definitely grow in volume and value as an absolute number.

Reveals that while exports are acknowledged, the primary focus remains on the domestic branded market, indicating limited immediate aggressive international expansion.

Asked by Param Vora

Profitability and inventory turn of new retail businesses Evasive
it is a little early to talk about that because not even 1 store has seen 12 months of sale. So the biggest time of sale, we assume is to come in the festive period... It is immature to give early numbers like this.

Highlights the very early stage of the new retail ventures, making it difficult for investors to assess their current financial viability and unit economics, requiring patience.

Asked by Dixit Doshi

Decline in EBITDA and PAT margins despite revenue growth Direct
I think that looking at a quarter performance in our business since it's seasonal is not very accurate. We would like to stick to our original guidance for the whole year.

Addresses investor concern about margin compression, attributing it to Q1 seasonality and reaffirming full-year guidance, suggesting the decline is not a long-term trend.

Asked by Varun Mishra

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Siyaram Silk Mills Limited reported a total income of ₹400 crores for Q1 FY26, marking a 21% year-on-year growth from ₹331 crores in Q1 FY25. Despite this revenue increase, EBITDA saw a slight dip to ₹33 crores from ₹34 crores in the prior year, resulting in an EBITDA margin of 8%. Profit After Tax (PAT) significantly decreased to ₹5 crores compared to ₹12 crores in Q1 FY25, partly influenced by a reduction in government grants from ₹13 crores in Q1 FY25 to ₹1 crore in Q1 FY26.

New Retail Brands (ZECODE & DEVO) Expansion

The company is actively expanding its direct-to-consumer brands, ZECODE (fast fashion) and DEVO (ethnic wear). In Q1 FY26, 4 new ZECODE stores and 3 new DEVO stores were opened, bringing the total to 16 ZECODE and 10 DEVO stores since inception. The target for FY26 is to open approximately 35 stores across both brands, with a regional focus on Karnataka/Bangalore for ZECODE and North India (Delhi, NCR, UP, Punjab) for DEVO. These new retail businesses currently contribute about 3% to the overall turnover.

Strategic Focus and Market Outlook

Siyaram Silk is transitioning from a fabric manufacturer to a key player in modern fashion retail. Management noted that Q1 FY26 demand in the Fashion and Apparel segment was largely flat due to the early onset of monsoon. However, they remain optimistic about a gradual recovery, anticipating strong demand during the upcoming festive season and expecting the next 6 months to be better than the previous year. The long-term outlook for the textile industry remains positive, driven by rising disposable incomes and expanding retail infrastructure.

Segmental Performance and Contribution

In Q1 FY26, the revenue mix comprised Fabrics at 76%, Garment at 13%, and Others at 11%. The Fabrics segment experienced approximately 20% volume growth, while the Garment segment saw about 18% volume growth. Management indicated that aggressive promotions and schemes contributed to this volume growth, which also impacted the bottom line. The new retail businesses, ZECODE and DEVO, are still in an early stage but are expected to increase the percentage contribution of Apparel to total revenue as they expand.

New Retail Business Unit Economics & Future Plans

The total operational square footage for the new retail segment is approximately 1.25 lakh square feet as of June end. Management stated it is too early to provide specific metrics like sales per square foot or inventory turn, as no store has completed 12 months of operation. Initial assumptions suggest an EBITDA breakeven period of 15 to 18 months per store. The company is focusing on larger store formats (6,000 to 10,000 square feet) for ZECODE, as these have shown better operational performance and consumer experience. Omnichannel and e-commerce initiatives for these new brands are not yet a current focus, with physical distribution being the priority.

Capital Allocation and Preferential Issue Update

The company plans to fund the expansion of its new retail business through internally generated free cash flow, believing it to be sufficient. Regarding the preferential issue, management confirmed receiving approvals from stock exchanges and SEBI. The next step involves filing an application with NCLT, and they are hopeful of completing the process within the current financial year (FY26).

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