Siyaram Silk Mills Limited — Q4 FY25 earnings call

Call held 14 May 2025

Management summary

Siyaram Silk Mills delivered a strong Q4 and full year FY25 performance, driven by robust growth in its traditional business. The company is strategically expanding its direct-to-consumer presence with new brands ZECODE and DEVO, targeting significant store additions in FY26. Management provided an optimistic outlook for FY26, projecting 10-12% revenue growth and a 14% EBITDA margin, while also highlighting ongoing sustainability efforts through solar energy adoption.

Highlights

  • Q4 FY25 Total Income reached INR750 crores, marking a 14.85% year-on-year growth.

  • Q4 FY25 EBITDA stood at INR125 crores, up 11.6% YoY, with an EBITDA margin of 16.7%.

  • Full Year FY25 Total Income was INR2,296 crores, an 8.04% increase YoY.

  • Full Year FY25 EBITDA grew 9.6% YoY to INR353 crores, achieving a 15.4% margin.

  • Full Year FY25 PAT was INR199 crores, reflecting a 7.56% YoY growth, with a PAT margin of 8.67%.

  • A total dividend of INR12 per share for FY24-25 was approved, amounting to INR54.4 crores.

  • The company opened 19 new retail stores (12 ZECODE, 7 DEVO) in H2 FY25 and plans to open 35 more in FY26 with a capex of approximately INR50 crores.

  • Captive rooftop solar power was commissioned, generating ~50 lakh units of electricity in FY25, with an investment of ~INR8 crores and cost savings of INR3-3.5 per unit.

Key financials

2 periods

Q4 FY25

  • Total Income
    ₹750 Cr
    YoY +14.8%
  • EBITDA
    ₹125 Cr
    YoY +11.6%
  • EBITDA Margin
    16.7%
  • PAT
    ₹73 Cr
  • PAT Margin
    9.7%

FY25

  • Total Income
    ₹2,296 Cr
    YoY +8%
  • EBITDA
    ₹353 Cr
    YoY +9.6%
  • EBITDA Margin
    15.4%
  • PAT
    ₹199 Cr
    YoY +7.6%
  • PAT Margin
    8.7%

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

  • Revenue Mix (FY25)
    81% Fabric13% Garments6% Others

Guidance & targets

New Stores

  • New Store Openings (ZECODE & DEVO) New Stores · FY26 · High confidence 35
    During FY '26, we intend to open about 35 new stores across both brands.

    — Gaurav Poddar, President and Executive Director

Capex

  • Capex for New Retail Stores Capex · FY26 · High confidence INR50 crores
    the capex planned for these 35 stores will be approximately INR50-odd crores.

    — Gaurav Poddar, President and Executive Director

  • Core Fabric Business Capex Capex · FY26 · High confidence INR40-50 crores
    Other than that, the traditional business will have a capex of about INR40 crores to INR50 crores, which is regular maintenance capex.

    — Gaurav Poddar, President and Executive Director

Revenue

  • Top Line Growth Revenue · FY26 · High confidence 10-12%
    We are estimating a top line growth of about 10% to 12%, which is everything put together

    — Gaurav Poddar, President and Executive Director

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence 14%
    and with an EBITDA guidance of approximately 14%.

    — Gaurav Poddar, President and Executive Director

  • EBITDA Losses from New Business Profitability · FY26 · Medium confidence 100-150 basis points
    the new business is going to make losses to the tune of maybe 100 to 150 basis points.

    — Gaurav Poddar, President and Executive Director

Other Income

  • Pending Capital Subsidy Other Income · Future · Medium confidence INR6-7 crores
    around INR6 crores to INR7 crores are pending. As and when we get the grant permission, we will account it.

    — Surendra Shetty, Chief Financial Officer

Risks & concerns

  • Initial Losses from New Retail Business

    medium

    New retail businesses (ZECODE, DEVO) are expected to incur losses of ~100-150 basis points in FY26 as they are in a nascent stage of expansion.

    Management acknowledged

  • Delays in New Store Openings

    low

    Delays in FY25 store openings occurred due to 'grab issues' in North India/Delhi and construction/handover issues, though balance stores are expected to open in H1 FY26.

    Analyst acknowledged

  • Regulatory Approvals for Preference Shares

    low

    Issuance of cumulative nonconvertible redeemable preference shares is pending regulatory approvals, with an estimated timeline of 9-12 months from last year's announcement.

    Analyst acknowledged

Areas of evasion (1)

  • Specific revenue-to-rental ratio for new stores

Q&A highlights

3 direct
New Retail Store Performance & Strategy (COCO Model) Direct
The primary reason for that was to test out the market conditions and being able to control the journey from opening the store, running the operations, as well as selling these products and getting a sense of the consumer tastes and preferences. We believe that in the initial stage, COCO format is very important so that we are able to showcase and test for ourselves, operationally improve and then showcase the operational metrics for the brand.

Explains the strategic rationale behind the COCO model for new retail brands, indicating a cautious, test-and-learn approach before potential franchising.

Asked by Priti Agarwal

FY26 Revenue and Margin Guidance Direct
We are estimating a top line growth of about 10% to 12%, which is everything put together, and with an EBITDA guidance of approximately 14%.

Provides clear, consolidated financial guidance for the upcoming fiscal year, which is crucial for investor modeling.

Asked by Nirav Savai

Debt Reduction and Cash Management Direct
As a company, we've always been very prudent on the balance sheet side of things, and we've made a conscious effort in the last year to reduce our debt. Our free cash flows that we generated over the last year, we consciously and intentionally used that to overall reduce debt.

Asked by Devanshi / Hitesh Popat

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY25

Siyaram Silk Mills reported a strong Q4 FY25 with total income growing 14.85% YoY to INR750 crores and EBITDA increasing 11.6% YoY to INR125 crores, achieving a 16.7% margin. For the full year FY25, total income rose 8.04% YoY to INR2,296 crores, with EBITDA at INR353 crores (up 9.6% YoY) and a margin of 15.4%. PAT for FY25 stood at INR199 crores, marking a 7.56% YoY increase, with a PAT margin of 8.67%.

Strategic Expansion into Direct-to-Consumer Retail

The company is actively expanding its retail footprint with two new brands, ZECODE (fast fashion) and DEVO (ethnic wear). In H2 FY25, 19 stores were opened (12 ZECODE, 7 DEVO) under a company-owned, company-operated (COCO) model to test market conditions and consumer preferences. For FY26, Siyaram plans to open an additional 35 new stores across both brands, with a capex outlay of approximately INR50 crores for these new retail ventures.

FY26 Outlook and Margin Management

Management provided a positive outlook for FY26, guiding for a top-line growth of 10-12% and an EBITDA margin of approximately 14%. While the new retail businesses are expected to incur initial losses of about 100-150 basis points, the company is confident in its traditional business to maintain overall profitability. The focus remains on healthy margins despite increased spending on new store openings and marketing efforts for brand building.

Capital Allocation and Debt Management

Siyaram declared a total dividend of INR12 per share for FY24-25, amounting to INR54.4 crores, reflecting its commitment to shareholder returns. The company maintained a prudent balance sheet, utilizing free cash flows to reduce debt, reporting a net debt of approximately INR22 crores. Capex for the core fabric business is projected at INR40-50 crores for regular maintenance in FY26, alongside the retail expansion capex.

Sustainability Initiatives and Cost Savings

The company has commissioned captive rooftop solar power, generating approximately 50 lakh units of electricity across its manufacturing units in FY25. This initiative involved an investment of around INR8 crores and is yielding significant cost savings of INR3-3.5 per unit, demonstrating Siyaram's commitment to sustainability and green energy adoption while also improving operational efficiency.

New Retail Store Formats and Pricing Strategy

For its ZECODE fast fashion brand, the company is focusing on larger store formats (7,000-10,000 sq ft) after observing better performance, with all products priced under INR999 to target the value segment. DEVO stores, catering to mid-to-premium ethnic wear, are typically 2,000-4,000 sq ft, with popular items like kurta pajama priced between INR2,000 and INR12,000 MRP, reflecting a differentiated market positioning.

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