Siyaram Silk Mills: Weaving a Strong Q2 FY26 Performance with Strategic Retail Expansion

Siyaram Silk Mills Limited, a venerable name in India's textile and apparel industry, has reported a robust financial performance for the second quarter and first half of Fiscal Year 2026. The company's Q2 FY26 results showcase healthy growth, driven by favorable consumer demand and strategic initiatives. Total income for the quarter surged by 18.1% year-on-year to ₹743 crore, compared to ₹629 crore in Q2 FY25. This impressive top-line growth was accompanied by a significant improvement in profitability, with EBITDA rising by 31.1% to ₹145 crore from ₹110 crore in the prior year. The EBITDA margin expanded to 19.5%, up from 17.5%, reflecting improved product mix and cost efficiencies. Profit After Tax (PAT) also saw a substantial increase of 27.2% year-on-year, reaching ₹87 crore, with a PAT margin of 11.7%.

For the first half of FY26, Siyaram's total income stood at ₹1,143 crore, marking a 19.1% year-on-year growth. EBITDA for H1 FY26 was ₹177 crore, with a margin of 15.5%, and PAT reached ₹92 crore, at an 8.0% margin. The company's revenue mix for Q2 FY26 was predominantly Fabric at 77%, followed by Garments at 15%, and Yarn & Others at 8%. This performance underscores Siyaram's ability to capitalize on market opportunities and execute its operational strategies effectively.

Strategic Retail Foray and Product Diversification

Siyaram is not resting on its legacy laurels; it is actively expanding its retail footprint with new brands, ZECODE and DEVO. ZECODE, targeting urban shoppers, offers trendy and affordable fast fashion apparel, while DEVO caters to the burgeoning ethnic wear segment, celebrating India's rich cultural heritage. In Q2 FY26, the company added 7 new ZECODE and 2 new DEVO stores, bringing the total count to 23 ZECODE and 12 DEVO outlets. The company aims to open approximately 35 stores across both brands by the end of FY26, funded entirely through internal accruals. This expansion is crucial for deepening its retail presence and connecting with a wider customer base, particularly the youth and Gen-Z consumers.

The management notes that the larger-sized stores, opened after January this year, are yielding better results by offering an enhanced consumer experience with a broader display of product categories. While ZECODE's operations are entirely outsourced, leveraging the company's nearly 50 years in the textile industry for quality influence, DEVO is positioned as a mid-premium ethnic wear brand, with starting prices for Kurta Pyjamas ranging from ₹1,700 to ₹2,000 and going up to ₹10,000-₹12,000. The company has also diversified its product offerings within these brands, introducing footwear for ZECODE and a complete men's wedding wardrobe for DEVO, including Sherwanis, Jodhpuri, and various accessories.

Financial Highlights and Shareholder Value Creation

Siyaram's commitment to shareholder value is evident in its consistent dividend payouts and a recently announced special reward. The Board approved an interim dividend of ₹4 per equity share (face value ₹2) for Q2 FY26. Furthermore, in anticipation of its 50th anniversary, the company proposed the issuance of cumulative non-convertible redeemable preference shares (CNCRPS) by way of a bonus to all shareholders. This involves issuing 4 CNCRPS of ₹10 each for every 1 equity share of ₹2 (Series I) and 3 CNCRPS of ₹10 each for every 1 equity share of ₹2 (Series II), totaling ₹318 crore, to be redeemed at the end of the 3rd and 5th year respectively. This initiative, funded from general reserves, underscores the company's appreciation for its investors' steadfast support.

Here is a summary of the company's financial performance:

Outlook and Management Vision

Looking ahead, Siyaram's management anticipates sustained consumer momentum, stable macroeconomic tailwinds, and rising disposable income. The recent GST rate cut on selected apparel categories is also expected to further boost consumer sentiment and discretionary spending. The company has revised its FY26 revenue growth guidance to 12-14% from the earlier 10-12%, reflecting confidence in its performance. They aim to maintain an EBITDA margin of approximately 14% for the traditional business, acknowledging a 150 basis point impact from the new retail ventures.

Siyaram's strategic focus remains on enhancing productivity, efficiency, and profitability, while continuously investing in product improvement, customer service, and technology upgrades. The company's disciplined capital allocation and proactive approach to market trends position it well for continued growth and value creation for its stakeholders.