KALAMANDIR - Sai Silks

📊 NSE: KALAMANDIR 🏢 Trading 📅 Last Updated: 12/14/2025 12:39

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 6.44% YoY to INR 1,462.01 Cr in FY25. In H1 FY26, revenue surged 33.96% YoY to INR 823.35 Cr. The KLM segment specifically showed recovery, generating INR 125 Cr in Q2 FY26 compared to INR 100 Cr in Q2 FY25, a 25% increase.

Geographic Revenue Split

The company operates primarily in South India, with key markets in Telangana, Andhra Pradesh, and Karnataka. Recent expansion efforts are heavily focused on Tamil Nadu, where store productivity reached INR 36,000 per sq ft in Q2 FY26, aiming for an optimal INR 45,000-50,000 per sq ft.

Profitability Margins

Gross margins improved from 40.69% in FY24 to 41.78% in FY25. Net Profit (PAT) for FY25 was INR 85.39 Cr, a 15.3% decline from INR 100.87 Cr in FY24 due to higher operational investments. However, H1 FY26 PAT saw a massive 171.2% YoY increase to INR 70.14 Cr as new stores matured.

EBITDA Margin

EBITDA margin stood at 14.48% in FY25 (INR 211.64 Cr). This improved significantly to 15.68% in H1 FY26 (INR 129.14 Cr), up from 12.09% in H1 FY25, driven by the higher-margin Varamahalakshmi format and improved store productivity.

Capital Expenditure

The company utilized IPO proceeds and internal accruals to reduce debt and fund expansion. Total property, plant, and equipment purchases (including CWIP) amounted to INR 22.32 Cr for the half-year ended September 30, 2025, compared to INR 52.53 Cr in the previous year's period.

Credit Rating & Borrowing

The company maintains a 'Stable' outlook with a sensitivity threshold requiring PBILDT margins above 12%. Debt-to-Equity ratio improved by 39.32% to 0.15 in FY25 from 0.24 in FY24 following the repayment of term loans using IPO funds.

⚙️ Operational Drivers

Raw Materials

Finished textile goods and sarees (Kanchipuram, silk, and ethnic wear) represent the primary cost of goods sold, with gross margins maintained at approximately 42%.

Import Sources

Sourcing is conducted domestically across India, specifically from reputed textile hubs and weaver clusters to ensure an uninterrupted supply of ethnic wear.

Key Suppliers

The company procures directly from a vast network of independent weavers and manufacturers across India, bypassing intermediaries to maintain a 42% gross margin profile.

Capacity Expansion

Expanded retail capacity reached 125,000 sq ft. Current productivity is INR 36,000 per sq ft as of Q2 FY26, with a target to reach optimal levels of INR 50,000 per sq ft by the end of FY26.

Raw Material Costs

Total purchases for FY25 were INR 905.54 Cr, up 6.7% from INR 848.56 Cr in FY24. Procurement strategies focus on direct weaver relationships to manage costs amidst a 42% gross margin target.

Manufacturing Efficiency

As a retailer, efficiency is measured by sales per square foot; productivity improved from INR 29,000 in Q1 FY26 to INR 35,000-36,000 in Q2 FY26, a 24% improvement.

Logistics & Distribution

Distribution is managed through a standalone retail model; the company is currently exploring an 'asset-light' Valli format but remains focused on company-owned stores for now.

📈 Strategic Growth

Expected Growth Rate

18-20%

Growth Strategy

Growth will be driven by the maturation of the Varamahalakshmi format, which offers higher margins, and increasing store productivity from INR 36,000 to INR 50,000 per sq ft. The company plans to reach INR 1,750 Cr in total revenue for FY26 by leveraging the festive/wedding season and expanding in the Tamil Nadu market.

Products & Services

Sarees (Silk, Kanchipuram, Handloom), women's ethnic wear, and readymade garments.

Brand Portfolio

Kalamandir, Varamahalakshmi (VML), KLM Fashion Mall, Valli Silks.

New Products/Services

The 'Valli' format is in an infant stage and is being tested for future asset-light expansion, though no franchisee model is currently active.

Market Expansion

Aggressive expansion in Tamil Nadu with 125,000 sq ft of new capacity currently in the maturity phase (70-75% productivity reached).

Market Share & Ranking

Leading ethnic retailer in South India; faces competition from RS Brothers, Chandana Group, and Nalli Silks.

Strategic Alliances

The company maintains strong relationships with SRIL for supplier bargaining power but operates primarily on a standalone basis.

🌍 External Factors

Industry Trends

The industry is shifting from unorganized to organized retail. The wedding and festive ethnic sector is growing, with SSKL positioning itself through large-format stores (Varamahalakshmi) to capture higher-value transactions.

Competitive Landscape

Intense competition in Telangana, Andhra Pradesh, and Karnataka from RS Brothers Group, J.C. Brothers, and Kalanikethan Silks.

Competitive Moat

Moat is built on a strong brand image in the saree sector and a deep-rooted vendor network of weavers. This is sustainable due to the specialized nature of silk saree sourcing which is difficult for new entrants to replicate at scale.

Macro Economic Sensitivity

Highly sensitive to discretionary spending and rising per capita GDP in India, which drives the shift from unorganized to organized retail in the wedding/festive sector.

Consumer Behavior

Shift toward organized retail and premiumization in wedding attire, supporting the growth of the Varamahalakshmi format.

Geopolitical Risks

Minimal direct impact as operations and sourcing are domestic; however, broader economic slowdowns could affect the wedding industry spend.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with SEBI Listing Regulations (Regulation 17 to 27) and applicable Accounting Standards for financial reporting.

Environmental Compliance

The Risk Management Committee monitors sustainability and environmental risks; the company is not a manufacturer, reducing its direct environmental footprint.

Taxation Policy Impact

Effective tax rate is standard corporate rate; income tax paid was INR 37.76 Cr in FY25.

Legal Contingencies

The company confirms internal financial controls are adequate with no significant flaws; no specific pending litigation values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Vulnerability to intense competition in the fragmented readymade garment industry and potential margin compression if productivity targets (INR 50k/sq ft) are not met.