Siyaram Silk Mills Limited — Q2 FY26 earnings call

Call held 6 Nov 2025

Management summary

Siyaram Silk Mills reported strong Q2 and H1 FY26 results, driven by improved consumer confidence, the festive season, and market share gains. The company saw robust growth in total income and profitability, with new retail brands ZECODE and DEVO expanding their footprint. Management revised its full-year revenue guidance upwards, while also clarifying its EBITDA margin calculation and outlining its strategy for the nascent retail business.

Highlights

  • Total Income for Q2 FY26 stood at INR 743 crores, marking an 18.1% year-on-year growth.

  • Total Income for H1 FY26 reached INR 1,143 crores, reflecting a 19.1% increase over H1 FY25.

  • EBITDA for Q2 FY26 was INR 145 crores, with an EBITDA margin of 19.5%.

  • PAT for Q2 FY26 was INR 87 crores, a 27.2% year-on-year increase, with a PAT margin of 11.7%.

  • The company opened 7 new ZECODE stores and 2 new DEVO stores in Q2 FY26, bringing total to 23 ZECODE and 12 DEVO stores.

  • H1 FY26 revenue from new retail brands (ZECODE and DEVO) was approximately under INR 30 crores.

  • The Board approved an interim dividend of INR 4 per share for a face value of INR 2 each.

  • FY26 revenue growth guidance was revised upwards from 10-12% to 12-14%.

Key financials

2 periods

Q2 FY26

  • Total Income
    ₹743 Cr
    YoY +18.1%
  • EBITDA
    ₹145 Cr
  • EBITDA Margin
    19.5%
  • PAT
    ₹87 Cr
    YoY +27.2%
  • PAT Margin
    11.7%

H1 FY26

  • Total Income
    ₹1,143 Cr
    YoY +19.1%
  • EBITDA
    ₹177 Cr
  • EBITDA Margin
    15.5%
  • PAT
    ₹92 Cr
  • PAT Margin
    8%

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

  • Fabric
    77% Revenue Contribution
  • Garments
    15% Revenue Contribution
  • Yarn and Other
    8% Revenue Contribution

Guidance & targets

Store Expansion

  • Total Stores (ZECODE & DEVO) Store Expansion · this fiscal year · High confidence approximately 35 stores
    As discussed in the last quarter, we are working towards opening approximately 35 stores this fiscal year.

    — Gaurav Poddar, President and Executive Director

Revenue

  • Revenue Growth Revenue · this fiscal year · High confidence 12-14%

    Previously 10-12% → 12-14%

    So we indicate a long-term growth average of about 10% to 12% now with this new retail business as well. Of course, the first half of the year, we have seen much better growth. And therefore, I think that for this year, we would like to revise the guidance to maybe 12% to 14%.

    — Gaurav Poddar, President and Executive Director

Profitability

  • EBITDA Margin (Legacy Business) Profitability · coming financial · High confidence approximately 14%
    So we will stick to our original guidance of approximately 14% of EBITDA margin without this retail business, which we have indicated earlier, which will have a hit on EBITDA by about 150 basis points.

    — Gaurav Poddar, President and Executive Director

  • EBITDA Margin Impact (Retail Business) Profitability · coming financial · High confidence 150 bps hit

    — Gaurav Poddar, President and Executive Director

Retail Business

  • Retail Business Contribution to Revenue Retail Business · 2, 3 years down the line · Medium confidence much larger share
    But we expect that this business will contribute to a much larger share of the revenue in maybe 2, 3 years down the line.

    — Gaurav Poddar, President and Executive Director

Capex

  • Capex per Retail Store Capex · per store · High confidence INR 1-1.5 crores
    And the capex that we identified was anywhere between INR1 crores to INR1.5 crores per store, which included capex for furniture fixtures as well as the security deposits.

    — Gaurav Poddar, President and Executive Director

Risks & concerns

  • Tariff Changes and Logistic Challenges in Exports

    medium

    Management acknowledged the dynamic situation and tentative buyers but stated no direct exposure to the U.S. market as they export to garment converters outside the U.S.

    Analyst acknowledged

  • Dilutive Impact of New Retail Business on Margins

    medium

    The new retail business (ZECODE/DEVO) is expected to hit overall EBITDA by ~150 bps, indicating it is currently margin-dilutive as the company focuses on getting operational metrics right and achieving scale.

    Management acknowledged

  • Consumer Sentiment and Discretionary Spending Volatility

    low

    While currently positive due to festive season and GST cuts, consumer sentiment and discretionary spending are external factors that can fluctuate, though management expressed optimism for H2 FY26.

    Management acknowledged

Areas of evasion (2)

  • Specific long-term store count targets for ZECODE/DEVO
  • Separate revenue figures for new brands (ZECODE/DEVO) beyond cumulative H1 total

Q&A highlights

2 direct
Retail Store Economics and Future Expansion Partial
So I cannot give you a hard number as to what we expect for the coming years or where we see ourselves after 2 years. But we expect that this business will contribute to a much larger share of the revenue in maybe 2, 3 years down the line.

Analyst sought specific long-term store count and unit economics, but management provided qualitative future outlook, indicating caution in committing to specific numbers for the nascent retail business.

Asked by Naitik from NV Alpha Fund

EBITDA Margin Calculation and Other Income Direct
Yes, the other income is added in the EBITDA. That is a practice. ... Yes, it's around 15%. Correct.

This question clarified that the reported 19.5% EBITDA margin includes other income, and the operational margin (excluding other income) was closer to 15%, providing a clearer picture of core business profitability.

Asked by Nilesh from Anantnath Skycon Private Limited

Brand Protection from Discounting by Channel Partners Direct
So in the fabric business, it's not an MRP-driven business. Every retailer has the freedom to have his own MRP. But there are certain margin structures that we have in place through the distribution channel, which controls his purchase price. ... In the apparel business, which is an MRP-run business, we are in the mid segment, so we don't have such high discounting.

This addressed concerns about brand equity dilution due to discounting, explaining the different strategies for fabric (non-MRP) and apparel (MRP-run, mid-segment) businesses, and the company's monitoring efforts.

Asked by Resha Mehta from Green Edge Wealth

3 min read 6 chapters

Detailed narrative

Robust Q2 and H1 FY26 Financial Performance

Siyaram Silk Mills delivered a strong financial performance in Q2 FY26, with total income growing by 18.1% year-on-year to INR 743 crores. Profitability also saw significant improvement, with EBITDA reaching INR 145 crores (19.5% margin) and PAT increasing by 27.2% YoY to INR 87 crores (11.7% margin). For the first half of FY26, total income stood at INR 1,143 crores, a 19.1% increase, with EBITDA at INR 177 crores (15.5% margin) and PAT at INR 92 crores (8% margin). This growth was attributed to improved consumer confidence and the early arrival of the festive season.

Strategic Expansion of New Retail Brands (ZECODE & DEVO)

The company continued its aggressive retail expansion strategy for its new brands, ZECODE (fast fashion) and DEVO (modern ethnic wear). In Q2 FY26, 7 new ZECODE stores and 2 new DEVO stores were opened, bringing the cumulative count to 23 ZECODE and 12 DEVO stores since their launch. The company aims to open approximately 35 stores in total for the current fiscal year. While the new retail business contributed 'just under INR 30 crores' to H1 FY26 revenue, management is focused on scaling these ventures, particularly the larger format ZECODE stores (5,000-10,000 sq ft) which are showing better results.

Upward Revision of FY26 Revenue Guidance and Margin Outlook

Buoyed by the strong performance in the first half, Siyaram Silk Mills revised its full-year FY26 revenue growth guidance upwards from the previous 10-12% to 12-14%. For the legacy business, the EBITDA margin is expected to be around 14% (including other income). However, the new retail business is projected to have a dilutive impact of approximately 150 basis points on the overall EBITDA margin, as the company prioritizes establishing operational efficiencies and scale in these nascent segments.

Asset-Light Model and Outsourcing Strategy

Siyaram is strategically moving towards an asset-light business model, with approximately 50% of its fabric production and an even higher percentage of its garment business being outsourced. This approach allows the company to focus on branding and marketing while quickly adapting to evolving consumer preferences and market trends. The ZECODE brand, in particular, is entirely outsourced, leveraging the company's 50 years of textile industry knowledge for sourcing and quality control.

Focus on Men's Ethnic Wear and Market Share Gains

The company is actively growing its presence in the men's ethnic wear segment through its DEVO brand, which offers a mid-premium range of products from INR 1,700 to INR 12,000. Management believes Siyaram has a strong 'right to win' in this segment, leveraging its brand recognition and industry expertise. The company also reported gaining market share in its traditional fabric and apparel businesses, benefiting from improving consumer sentiment and the ongoing formalization of the Indian economy.

Capital Allocation and Other Income Contributions

The Board of Directors approved an interim dividend of INR 4 per share, reflecting confidence in the company's financial health. Other income in Q2 FY26 included a capital subsidy grant of INR 2.61 crores and a significant INR 21.22 crores from the sale of a surplus land and building. The capital expenditure for new retail stores is estimated at INR 1-1.5 crores per store, covering furniture, fixtures, and security deposits, with all initial stores being company-owned and operated under a 9-12 year lease model.

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