Sai Silks (Kalamandir) (KALAMANDIR) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 was impacted by a 70% reduction in wedding dates, extreme heatwave, and national elections, leading to weak consumer walk-ins and a 20% decline in footfalls year-over-year.

• Operates 61 stores in 15 cities under four brands, serving 6.77 million customers and generating an average revenue per store of ₹229 million in FY24.

• Focuses on innovative designs, technology-driven supply chain, and a cluster-based expansion model for targeted growth.

• Unaudited financial results for Q1 FY25 were reviewed and approved by the Board on August 14, 2024, with an unmodified review report from statutory auditors.

• Digital marketing spend increased, leveraging Salesforce for customer engagement and automation.

Financial highlights

• Q1 FY25 revenue was ₹267.29 crore, down 12.25% year-over-year, with gross margin at 41.26%, up from 40.29% in Q1 FY24.

• EBITDA margin for Q1 FY25 was 7.08%, down from 14.65% in Q1 FY24; PAT was ₹2.09 crore, down from ₹16.79 crore.

• Working capital debt reduced to INR 150 crore and total debt to INR 180 crore as of June end.

• Interest cost expected to halve to INR 18-19 crore for the year.

• Total expenses for Q1 FY25 were ₹271.23 crore, down from Q1 FY24.

Outlook and guidance

• Q2 is expected to rebound with higher wedding dates and improved footfalls, with SSG turning positive.

• H2 FY25 anticipated to be stronger than H2 FY24, with 46 wedding Muhurtham days versus 42 last year.

• Full-year net profit guidance of INR 150 crore to be reassessed after Q2, with management optimistic about recovery.

• Store expansion target of 90,000 sq ft for FY25 remains, with most openings shifted to Q2/Q3.

• Long-term plan: 10-15% annual retail sq ft addition, targeting 100 stores and INR 28,000-28,500 per sq ft revenue by FY26.