Sai Silks Kalamandir Weaves a Strong Q2 FY26, Driven by Festive Cheer and Strategic Expansion

Sai Silks (Kalamandir) Limited, a prominent ethnic apparel retailer in South India, delivered a robust performance in the second quarter and first half of fiscal year 2026. The company reported a significant surge in revenue and profitability, primarily fueled by a favorable wedding calendar, early onset of festivities, and strong consumer sentiment. This period saw increased footfalls across all its stores and formats, with shoppers making bulk purchases and gifting becoming a major sales driver.

For Q2 FY26, Sai Silks' revenue from operations grew by an impressive 28% year-on-year, reaching INR 444.33 crore. This strong top-line growth translated into a healthy bottom line, with Profit After Tax (PAT) increasing to INR 40.08 crore, representing a PAT margin of 9.02% compared to 6.85% in the same quarter last year. The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) also saw an improvement, rising to 16.21% from 15.95% year-on-year. The half-year performance was equally strong, with revenue growing by 34% to INR 823.35 crore and PAT reaching INR 70.14 crore, a substantial increase from INR 25.86 crore in H1 FY25.

Strategic Expansion and Format Innovation

Sai Silks continues to execute its strategic expansion plans, adding approximately 33,000 square feet of new retail space through six new store openings in the first half of FY26. The company's retail footprint now spans 7.5 lakh square feet with 74 stores across 22 cities in four South Indian states. A key highlight of this expansion is the focus on the new 'Valli' format, which is designed for rapid penetration and caters to evolving consumer preferences for quality sarees at affordable prices. The company converted three existing stores and opened new ones, bringing the total Valli format store count to seven. These stores are relatively quicker to expand, averaging 3,000-3,500 square feet, and require 20-25% less capital expenditure with leaner inventory.

The management clarified that while the Valli format currently commands a lesser margin, the long-term objective is to achieve deeper market penetration and improve margins as the format matures. This approach allows for easy penetration into multiple markets and geographies. In addition to Valli, the company has two Varamahalakshmi stores in capital work in progress and three more planned for H2 FY26, reinforcing its commitment to the premium ethnic saree segment.

Digital Integration and Future Outlook

Sai Silks is also strengthening its omnichannel presence, with its e-commerce websites and live/video-based commerce contributing to 7,570 visits per day across its four formats. The company serves 25 states and 6 Union Territories through e-commerce, with an average order value of INR 5,924. This digital integration is crucial for product discovery and fostering stronger customer engagement. The company plans to launch its in-house label, DESI SITARA, focusing on kurtas and kurtis, which is expected to be a bigger contributor to overall margins in the coming quarters.

Looking ahead, management remains optimistic about the second half of the year, traditionally a period of healthy contribution. They anticipate an overall sales target of approximately INR 1,750 crore for FY26, surpassing their initial 15% growth target. For FY27, a PAT percentage of 8.5% to 9% is guided, with retail square feet presence expected to expand by 8% to 10%. The company is also focused on improving inventory turns, aiming to reach 2.5x (140 days) by the end of the next financial year. While acknowledging potential temporary impacts from new competition or external factors, Sai Silks is confident in its brand power, product positioning, and operational efficiencies to sustain growth.

Sai Silks Kalamandir's Q2 FY26 results demonstrate a company effectively leveraging market opportunities and executing a clear growth strategy. With a focus on strategic expansion, format innovation, and digital integration, the company is well-positioned to continue its growth trajectory in the dynamic Indian ethnic wear market.