Siyaram Silk Mills Limited

Siyaram Silk reported a strong Q3 FY25, with total income rising 14.23% YoY to INR586 crores, up from INR513 crores in Q3 FY24. The 9-month FY25 total income also grew by 5.02% YoY to INR1,546 crores. EBITDA for Q3 stood at INR83 crores (up 3.75% YoY) with a margin of 14.1%, while PAT reached INR46 crores (up 4.54% YoY) with a margin of 7.8%.

The company is actively expanding its new fast fashion (ZECODE) and ethnic wear (DEVO) brands. By December 2024, 11 stores (8 ZECODE, 3 DEVO) were successfully launched, and approximately 10 more are expected by March 2025. A total of 30 stores have been signed for launch by March 2025, with an estimated investment of INR50 crores, though some openings may spill into Q1 FY26 due to construction delays.

Siyaram Silk significantly increased its marketing spend in Q3 FY25, allocating INR33 crores towards advertising and marketing, which is almost double the expenditure from the previous year. This investment aims to build brand awareness for new initiatives and maintain existing brand strength. The Board also approved a dividend of INR3 per share, reflecting confidence in the company's financial position and growth prospects.

For the 9-month FY25 period, the fabric business experienced a volume growth of approximately 6% plus, while the garment business saw a negative volume growth of about 2.5%. Realizations across both segments remained largely in line with the previous year. Management noted that the first six months of the year were challenging, but the last quarter showed recovery, with fabric volumes growing over last year's numbers.

The company launched Cadini Italy Perfumes, aiming to uplift the Cadini brand's premium image and diversify its product portfolio. While this venture is not expected to significantly contribute to revenue, it is strategically important for enhancing brand value and creating a lifestyle image for consumers. The perfumes are available online via cadiniitaly.in.

Management acknowledged a 'dynamic consumer landscape' with persistent inflationary pressures impacting discretionary spending, particularly after the festive season. Despite these challenges, they remain hopeful for a gradual improvement in consumer sentiment and maintain a long-term optimistic view of India's growth trajectory, projecting a single-digit growth for the overall business in FY25.

While specific quantitative details like gross margins and operating costs for the new ZECODE and DEVO stores were deemed 'too early to talk about,' management estimated a breakeven period of approximately 12 to 15 months per store. The company plans a 'calibrated approach' to expansion and is open to franchising options in the future after gaining more operational understanding.