Sai Silks Kalamandir: FY26 closes with stronger margins and profit growth

Sai Silks Kalamandir Limited closed FY26 with steady top-line growth and a sharper improvement in profitability. Revenue from operations rose to ₹1,653.67 crore in FY26 from ₹1,462.01 crore in FY25, a 13.11 percent year on year increase. The operating engine strengthened as EBITDA increased to ₹260.59 crore from ₹211.64 crore, lifting EBITDA margin to 15.76 percent from 14.48 percent. Profit after tax moved up to ₹140.92 crore from ₹85.39 crore, with PAT margin expanding to 8.52 percent from 5.84 percent.

The Q4 picture was quieter on revenue but still showed resilience. Revenue from operations grew 5.07 percent year on year to ₹419.06 crore. Gross margin held stable at 42.08 percent. EBITDA in Q4 increased to ₹176.33 crore from ₹166.36 crore, while EBITDA margin was broadly flat at 14.61 percent. PAT for the quarter was ₹61.22 crore versus ₹58.44 crore in the prior year quarter.

Underneath these numbers sits a large, format-led ethnic wear retailer that is scaling through a cluster-based store network and a growing omnichannel footprint. As of March 31, 2026, SSKL operated 81 stores across 24 cities with a combined retail area of 7,84,853 square feet. The company reported average revenue per store of ₹204 million for FY25-26 and average revenue per square foot of ₹21,070 for FY25-26. With presence across Telangana, Andhra Pradesh, Karnataka, Tamil Nadu, and Puducherry, the company’s strategy ties together local demand understanding, centralized procurement, and technology-led inventory control.

A portfolio built to cover the saree spectrum

SSKL’s operating model is anchored in multiple retail formats that map to distinct price points and usage occasions. The portfolio spans Kalamandir for middle-income ethnic fashion, Mandir for ultra-premium designer sarees, Vara Mahalakshmi for premium wedding and occasional wear, KLM Fashion Mall for value fashion, and Valli for everyday ethnic elegance at pocket-friendly prices. This spread allows the company to participate in both wedding-led premium demand and high-frequency everyday consumption.

By format, the company disclosed store counts as of March 31, 2026: 10 Kalamandir stores, 3 Mandir stores, 38 Vara Mahalakshmi stores, 19 KLM Fashion Mall stores, and 11 Valli stores. Sarees remain the core, with the presentation citing 71.5 percent of revenue coming from the saree segment in FY25. Product coverage extends beyond sarees into lehengas, men’s ethnic wear, children’s ethnic wear, and value fashion, supporting a broader basket during wedding, festive, and daily-wear cycles.

The market context described in the presentation supports why this category stays durable. Growth levers highlighted include a rising female population aged over 25 years, the role of weddings and festivals in driving purchasing and gifting, the evergreen appeal of sarees with many draping styles, and a continued shift from unorganized to organized retail. The company also points to new design-led subcategories such as fusion and fancy sarees, reflecting how product innovation can keep traditional categories relevant.

Cluster expansion, with state-wise revenue visibility

SSKL’s store expansion is designed around a cluster-based approach, placing stores in prime or central areas of cities and building density in states where it already has operating experience. The cluster logic is operational as well as commercial: tighter geography can improve store supervision, enable more efficient stock rotations, and create more chances to cross-sell.

The state-wise view in the presentation shows how diversified the revenue base is becoming. For the year ended March 31, 2026, Telangana contributed ₹500.08 crore or 30.24 percent of revenue with 29 stores and 2,81,258 square feet of area. Andhra Pradesh contributed ₹474.46 crore or 28.69 percent with 24 stores and 2,28,477 square feet. Karnataka contributed ₹286.75 crore or 17.34 percent with 13 stores and 1,49,559 square feet. Tamil Nadu contributed ₹370.93 crore or 22.43 percent with 14 stores and 1,14,867 square feet. Puducherry contributed ₹21.45 crore or 1.30 percent through one store.

That mix matters because it suggests growth is not dependent on a single market. It also aligns with the company’s model of building clusters in multiple states while staying within South India, where saree and ethnic wear demand has deep cultural and festive anchors.

Financial summary

Notes: Gross margin and margin percentages are as presented in the investor presentation. Total income includes other income.

Margins improved, helped by operating discipline

The headline story of FY26 is margin expansion translating into a disproportionate rise in profit. Gross margin improved modestly to 42.07 percent. The bigger movement came at the operating and net profit level, with EBITDA margin rising to 15.76 percent and PAT margin to 8.52 percent.

Some of this improvement is visible in the income statement structure. Finance costs declined to ₹30.90 crore in FY26 from ₹40.28 crore in FY25, which supported profit before tax. Depreciation and amortization increased to ₹59.00 crore from ₹52.71 crore, consistent with an expanding store base and higher right-of-use assets under leased properties. Employee benefit expense increased to ₹226.04 crore from ₹198.14 crore, also consistent with scale and the employee base of 6,311.

The balance sheet shows how growth is being carried. Total assets increased to ₹1,848.90 crore at March 31, 2026 from ₹1,640.65 crore a year earlier. Right-of-use assets rose to ₹399.87 crore from ₹212.75 crore, reflecting the lease-led store model and expansion. Inventories increased to ₹815.93 crore from ₹777.82 crore, which is typical for an apparel retailer scaling store count and managing seasonal demand.

On the funding side, total equity increased to ₹1,260.47 crore from ₹1,131.77 crore. Borrowings reduced sharply on the current side, with current borrowings at ₹7.26 crore versus ₹148.90 crore, while non-current borrowings were ₹12.96 crore versus ₹17.64 crore. Lease liabilities increased, with non-current lease liabilities at ₹323.60 crore versus ₹221.42 crore, and current lease liabilities at ₹17.40 crore versus ₹17.06 crore.

The cash flow statement adds an important layer. Net cash generated from operating activities rose to ₹322.53 crore in FY26 from ₹106.78 crore in FY25. Working capital movements were a major driver, including a large increase in trade payables. Investing cash flow was negative at ₹152.54 crore, driven largely by an increase in deposits of ₹119.63 crore and capital expenditure. Financing cash flow was also negative at ₹235.91 crore, reflecting a reduction in short-term borrowings and lease principal payments. Cash and cash equivalents ended the year at ₹19.38 crore compared with ₹85.30 crore at the start, after the combined investing and financing outflows.

Execution levers: inventory planning, procurement scale, and omnichannel reach

SSKL’s operational narrative relies heavily on planned inventory management and technology-supported processes. The company highlights that inventory planning is done well in advance based on sales forecasts, demand, and seasonal requirements. It supplements design and planning with data from analytics, market analysis, customer feedback, and inputs from artisans and vendors.

Scale in sourcing is a differentiator in ethnic wear, where variety and timely replenishment can decide conversion. The presentation states the company works with over 4,000 master weavers, weavers and vendors across India. Procurement is supported by an 80-member team that reviews vendor performance and production status and maintains regular visits to manufacturers.

Warehousing is spread across regions to support both store fulfillment and e-commerce. SSKL disclosed a warehousing capacity of 2,20,360 square feet, with one warehouse each in Karnataka, Andhra Pradesh, and Telangana, and two in Tamil Nadu. Products are barcoded for systematic inventory movement and tracking.

Technology is positioned as an enabling layer rather than a side project. The company states it has an in-house ERP system covering front-end and back-end operations, allowing granular tracking and real-time feedback on high-turnover and low-moving inventory. The presentation also mentions AI and machine learning integration for store-level insights.

On the demand side, the omnichannel footprint is visible in both owned sites and social reach. The company operates four websites across formats: kalamandir.com, brandmandir.com, kanchivlm.com, and klmfashionmall.com. It also uses e-commerce websites and live commerce through live shows and video-based commerce. Social media metrics as of March 31, 2026 were disclosed as 1.25 million followers on Facebook, 815.2k on Instagram, and 408k subscribers on YouTube.

For FY26, the company reported 7,570 visits per day across websites and service coverage across 25 states and 6 union territories through e-commerce. Average order value was ₹5,673. These figures suggest the online channel is not only a brand-building tool but also a meaningful sales contributor, particularly for a category where discovery and styling play a large role.

What investors should watch from here

SSKL’s FY26 results reflect a retailer moving from expansion to more disciplined profitability. Revenue grew at a steady double-digit rate, but profit grew faster due to a combination of stable gross margins, higher operating leverage, and lower finance costs. The store network is now large enough to generate meaningful state-level revenue diversification, and the cluster strategy offers an operating advantage in store oversight and inventory rotation.

At the same time, the business carries the typical retail trade-offs. Inventory remains a large balance sheet item. Lease liabilities have increased alongside right-of-use assets as the store base expands under a lease model. And cash and cash equivalents reduced over the year as investing and financing outflows outweighed operating cash generation.

The quarter’s theme is disciplined execution. SSKL paired expansion with better margins, demonstrated stronger operating cash flow, and continued to invest in systems that can improve inventory productivity. For investors, the key question is whether this mix can be sustained as the company scales beyond 81 stores. The building blocks described in the presentation, format segmentation, cluster-led expansion, procurement scale, and ERP-led control, are aligned to support that next phase.