Sai Silks Reports Q1 FY27 Results: Revenue Flat; Gross Margins Hold Near 42% Amid Market Challenges

Sai Silks Reports Q1 FY27 Results: Revenue Flat; Gross Margins Hold Near 42% Amid Market Challenges​

Sai Silks (Kalamandir) Limited reported its financial and operational performance for the first quarter of FY26-27, noting near-flat revenue from operations while maintaining strong gross margins despite challenging consumer sentiment in the retail market. The company continues disciplined expansion, adding thousands of square feet to its total footprint as it targets a net addition of 100,000 square feet for the current financial year.

The results reflected broad sector weakness and cautious consumer spending across the discretionary retail segment. For Q1 FY26-27, the company recorded revenue from operations of INR375 crores, compared to INR379 crores in Q1 of FY25-26. Same store sales saw a degrowth of up to 7.5%. Consequently, EBITDA margins declined by approximately 1%, which management attributed to fixed costs being spread over softer like-to-like volumes.

Despite the challenging environment and same-store performance, gross margins held up well, remaining close to 42%. This stability was attributed to continued pricing discipline and effective merchandise mix management. The company maintained its focus on financial discipline and remains debt-free.

Operational Footprint and Expansion Targets​

The brand continued its expansion journey during the quarter, adding approximately 30,000 square feet of retail space. As of June 30, 2026, Sai Silks had a total retail footprint of approximately 8,14,000 square feet across 83 stores operating in four states.

The company management noted that the efficient allocation of capital allowed them to add between 90,000 and 1,00,000 square feet of retail area over and above the original target set during the IPO process. This effective use of funds means that inventory per square foot continues to show consistent reduction, reflecting growing efficiencies in the cluster-based expansion strategy.

In addition to new additions, the company is working through rationalization efforts. One KLM Fashion Mall store showing sustained degrowth has been targeted for closure. Previously holding 19 stores in this segment, the count is now reduced to 18, with one store's closure finalized and another being closely monitored.

Strategic Outlook and Segment Performance​

Looking ahead at the current financial year, Sai Silks is targeting a net retail space addition of approximately 1,00,000 square feet. The company maintains that businesses like ethnic wear retail must be assessed on a yearly basis rather than strictly quarter-to-quarter, given the industry’s inherent seasonality tied to the festive and wedding calendar.

The broader revenue guidance for the current financial year remains between 12% and 15%. Management acknowledged the immediate operational challenge, noting that SSSG is currently showing a degrowth of around 7.5%, driven by KLM's decline. However, the company aims to improve operating efficiencies through SSSG improvement and operating leverage, targeting an overall business operation goal of around 15% (above the guided 12-15%) for full recovery.

In terms of segment performance within KLM Fashion Mall, which is heavily concentrated in Telangana, the new categories introduced—innerwear and fashion jewellery—are showing signs of growth. The innerwear category is expected to see a 20% year-on-year increase.

Financial Discipline and Investment Details​

The company reaffirmed its commitment to prudent capital management. While specific store mix figures are being consolidated, the current store distribution across key regions includes approximately 14 stores in Karnataka, 14 in Tamil Nadu, and between 28 and 29 in Telangana and Andhra. The firm indicated a significant opportunity to target further expansion in Karnataka.

Addressing financial inputs, management reported that employee costs for Q1 stood at INR52 crores. This is notably lower compared to the INR61 crores recorded during the peak seasons (Q3 and Q4) of the previous fiscal year, which included bonuses and increased temporary staffing requirements during busy periods. Management also confirmed that while due diligence is ongoing for potential warehouse locations, the remaining funds are being utilized efficiently, with overall utilization targeted for completion by September in Q2 of 2026.

KALAMANDIR Stock Price Movement​

Sai Silks (Kalamandir) Limited shares gained on Thursday, closing at ₹88.56 after the stock edged higher by 2.30% from its previous close of ₹86.61. The equity traded a volume of 862,126 shares during the session, which included brief swings down toward the yearly low of ₹86.20.