/** Title: Sai Silks (Kalamandir) Limited: FY26 profit surge, steady margins, and a bigger expansion plan */

Sai Silks (Kalamandir) Limited: FY26 profit surge, steady margins, and a bigger expansion plan

Sai Silks (Kalamandir) Limited (SSKL), one of South India’s larger ethnic wear retailers, closed FY26 with steady growth in sales and a sharp jump in profitability. The company reported revenue from operations of INR 1,653.67 crore for the year ended March 31, 2026, up from INR 1,462.01 crore in FY25. EBITDA margin expanded to 15.76% from 14.48%, while PAT rose to INR 140.92 crore from INR 85.39 crore.

The company’s investor presentation positions SSKL as a multi-format ethnic wear retailer with a heavy tilt towards sarees. It operates formats across price points including Kalamandir, Kancheepuram Varamahalakshmi Silks, Mandir, KLM Fashion Mall, and Valli Silks. Management described FY26 as a year of expansion and operational strengthening, with improvements in profitability also reflected in higher ROE and ROCE.

FY26 performance: growth with margin expansion

SSKL’s FY26 growth came despite management commentary about a mixed consumption environment in certain mature markets. In Q4 FY26, revenue from operations grew 5.1% year-on-year to INR 419.06 crore. Gross margin for the quarter improved modestly to 42.08% from 41.71%. PAT for Q4 was INR 32.65 crore versus INR 13.51 crore in the same quarter last year.

The full-year picture was stronger. Gross margin for FY26 held at 42.07% (up 30 basis points versus FY25), suggesting stable pricing and sourcing discipline. EBITDA grew to INR 260.59 crore, while PAT increased by about 65% to INR 140.92 crore. Management also noted that FY25 carried a one-time tax impact, and framed FY26 profitability as a reflection of operational efficiency and disciplined cost management.

Financial summary

Network scale and cluster strategy remain core

SSKL ended FY26 with 81 stores across 24 cities and a combined store area of 7,84,853 square feet, as presented in the investor deck. The company operates a cluster-based expansion model across Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and Puducherry.

The investor presentation provides a state-wise view of the retail footprint and revenue contribution for FY26. Telangana contributed 30.24% of revenue (INR 500.08 crore) with 29 stores. Andhra Pradesh contributed 28.69% (INR 474.46 crore) with 24 stores. Karnataka contributed 17.34% (INR 286.75 crore) with 13 stores. Tamil Nadu contributed 22.43% (INR 370.93 crore) with 14 stores. Puducherry contributed 1.30% (INR 21.45 crore) with one store.

Management explained on the earnings call that FY26 included 13 new stores and one extension store, taking the network from 68 stores to 81 stores. Retail area additions were described as about 78,600 square feet for the year, with a net addition of about 69,000 square feet because the company reduced area in one store.

The company highlighted the benefits of clustering as tighter operational oversight, more effective stock rotation, and cross-selling opportunities. This approach also supports their supply chain model, which includes multiple warehouses across states and barcode-based inventory tracking.

The KLM format challenge and the mix shift to saree-led formats

A key discussion point in the concall was performance divergence between formats. Management said the KLM format declined by low single digit, around 3%, in FY26. They also said that one of the net area reductions, about 9,000 square feet, was a KLM store resize aimed at improving margins and profitability.

This matters because KLM stores are concentrated in Telangana, and management acknowledged that this skew affected the state’s growth profile. In contrast, management commentary indicated that Varamahalakshmi and Valli formats led growth during FY26. When asked for format-wise revenue split, management did not provide a complete breakdown, but stated that Varamahalakshmi did around 52% of overall sales.

The company also disclosed in its investor deck that 71.5% of FY25 revenue came from the saree segment. While a similar percentage for FY26 was not explicitly provided, the company’s product positioning and continued focus on sarees and wedding wear suggests the saree franchise remains the anchor.

FY27 outlook: store additions, steady SSSG, and margin ambition

Management avoided issuing a precise revenue guidance for FY27. However, the call offered clear directional guidance on the key drivers.

First, store expansion is expected to accelerate. Management said the company is planning a more aggressive expansion and has identified locations, with visibility of about 1,00,000 square feet addition for the year. They also suggested they could open more than this depending on execution and pipeline strength.

Second, same-store sales growth (SSSG) in FY26 was stated to be about 3%. For FY27, management expects SSSG to be similar to slightly better, supported by a healthier wedding calendar. They also noted that the number of wedding dates is expected to be 5% to 10% higher than last year, although the timing could shift between quarters.

Third, the company is prioritizing expansion in Kalamandir, Varamahalakshmi, and Valli, with no new KLM stores planned. Management also indicated intent to enter at least one new state during FY27.

On margins, the CFO provided a numeric ambition: EBITDA margin could improve to around 17.5% to 18% in FY27, compared to 15.76% in FY26. The rationale included a rising contribution of Varamahalakshmi and productivity improvement potential in Tamil Nadu stores.

Advertising and marketing costs were discussed as well. Management stated that despite potential new state entry, the company expects to keep advertisement spend around 4% as a percentage of revenue, similar to FY26. Management also stated advertisement cost fell by about INR 10 crore year-on-year in FY26.

Balance sheet and cash flow signals

SSKL’s balance sheet as of March 31, 2026 showed total assets of INR 1,848.90 crore and total equity of INR 1,260.47 crore. Inventories were INR 815.93 crore, while cash and cash equivalents were INR 19.38 crore at year-end.

In cash flow, operating cash flow was INR 322.53 crore in FY26 versus INR 106.78 crore in FY25. Investing cash flow was negative at INR 152.54 crore, driven by deposits and capex, while financing cash flow was negative at INR 235.91 crore, including repayment of short-term borrowings and lease liabilities.

Management stated on the call that the company is effectively debt-free and expects no further borrowings for the next 2 to 3 years, suggesting expansion will be funded primarily through internal accruals.

Takeaways

SSKL’s FY26 narrative is built on three pillars: steady revenue growth, stable gross margins, and a step-up in profitability. The company continues to scale its store network using a cluster-based model and is leaning into saree-led formats like Varamahalakshmi and Kalamandir for future expansion.

FY27 will likely be shaped by execution on store openings, the trajectory of same-store sales, and the company’s ability to lift margins towards the 17.5% to 18% range discussed by management. At the same time, the KLM format slowdown and competitive intensity in ethnic retail remain key monitoring points for investors.