Sai Silks (Kalamandir) (KALAMANDIR) Q3 24/25 earnings summary

Executive summary

• Q3FY25 saw strong recovery and growth, driven by festive and wedding season demand, especially in Tier 2 cities, with significant store footfall and traction.

• One of South India's largest ethnic apparel retailers, specializing in sarees and value fashion, with a presence across Telangana, Karnataka, Andhra Pradesh, and Tamil Nadu.

• Operates 67 stores in 18 cities, with a combined area of ~685,611 sq. ft and an average revenue per store of ₹229 million in FY24.

• Diverse brand portfolio includes Kalamandir, Kanchipuram Varamahalakshmi Silks, Mandir, and KLM Fashion Mall, catering to various market segments.

• Focus on technology-driven operations, omnichannel presence, and a cluster-based expansion strategy.

Financial highlights

• Q3FY25 revenue was ₹448.56 crore, up 17.5% year-over-year, with gross margin at 41.86% and EBITDA margin at 17.59%.

• Net profit for Q3FY25 stood at ₹46.02 crore, up from ₹31.98 crore in Q3FY24; PAT margin rose to 10.26%.

• Nine-month revenue reached ₹1,063.17 crore, a 4.86% increase year-over-year, with gross margin at 41.81% and EBITDA margin at 14.41%.

• Operating cash flow for Q3 was approximately ₹45 crore, and for 9M FY25 was ₹38.40 crore, a significant improvement from previous periods.

• Working capital borrowings reduced from ₹230 crore to ₹125 crore as of December 31, and total debt reduced from ₹257.75 crore to ₹159.10 crore during 2024.

Outlook and guidance

• Q4 expected to maintain strong performance due to a favorable wedding calendar and additional store openings.

• By FY26, gross margins are targeted to reach 43%, driven by premiumization and volume discounts.

• SSSG for Q3 was 6.8%, but nine-month SSSG remains at -6% due to weak H1; expected to close the year at neutral SSSG, with growth from new stores.

• Store expansion of 70,000–80,000 sq ft planned by end of FY26, focusing on South India and select new states.

• IPO proceeds are being utilized for capital expenditure, working capital, debt repayment, and general corporate purposes as per the prospectus.