Siyaram Silk Mills Ltd (NSE: SIYSIL) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Gaurav Poddar — President & Executive Director
Surendra Shetty — Chief Financial Officer
Analysts:
Ankut Jain — Analyst
Dixit Doshi — Analyst
Shubham Kadhi — Analyst
Sunidhi Joshi — Analyst
Mayoor Agarwal — Analyst
Ashok Shah — Analyst
Hitanshi Agarwal — Analyst
Apoorva — Analyst
Naitik Mutha — Analyst
Sahil Vora — Analyst
Nilesh Sharma — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Earnings Conference Call of Siyaram Silk Mills Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ankit Jain from Orient Capital. Thank you, and over to you, sir.
Ankut Jain — Analyst
Thank you,. Good afternoon, ladies and gentlemen. I welcome you all to the earnings conference call of CRM Limited to discuss the Q3 FY ’25 business performance. To discuss this quarter’s performance, we have from the management, Mr. Gaurav Poddar, President and Executive Director; Mr. Ashok Jalan, Senior President and Director; and Mr. Surendra Shetty, Chief Financial Officer. Before we proceed with this call, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the investor presentations and other filings that can be found on the company’s website. Without further ado, I would like to hand over the call to the management for the opening comments and then we will open the floor for Q&A. Thank you, and over to you, Gaurav, sir.
Gaurav Poddar — President & Executive Director
Good afternoon, and thank you all for joining us for the earnings conference call of Siyaram Silk Mills Limited to discuss Q3 and nine months FY ’25 results. I hope you all have had the opportunity to review our financial results and investor presentation, which have been uploaded to both the stock exchange and our company website. At Siyaram, we specialize in manufacturing and marketing premium fabrics, ready-made garments and other textile products, offering a diverse and innovative portfolio. Our products are crafted using a variety of blends and sold under a range of unique brands and sub-brands. Over the years, we have built robust manufacturing capabilities, in-house design teams and established a wide-reaching distribution network across India. Today, our brands are amongst the top choices in India’s textile and apparel market, winning the trust and loyalty of our consumers. Now reflecting on the quarter three of 2025, we observed a dynamic consumer landscape. The festive season, particularly the buildup to Diwali witnessed a surge in consumer optimism resulting into increased consumer spending across various sectors. Inflationary pressures were persistent, thus reducing consumers’ discretionary spending as the quarter progressed. Moving forward, we remain hopeful that consumer sentiment will improve gradually as inflationary pressures start to ease. We hope that better days are ahead of us and are prepared to adapt to the changing market conditions. While we acknowledge the current economic challenges, we maintain a long-term optimistic view of India’s growth trajectory. Recognizing these emerging opportunities in both fast fashion and ethnic wear industries, we have launched Z, our fast fashion brand, which will cater to Gen Z with stylish and affordable apparel and, our ethnic web brand, which will showcase India’s rich heritage. As part of our expansion plan, we have signed 30 stores in Tier-1 and Tier-2 cities. Of these, we successfully launched eight reco stores and three stores, bringing the total tally to 11 stores by December ’24 and approximately 10 more stores are expected to be opened by March ’25. The remainder of the signed stores are scheduled for quarter one of FY ’26. The slight delay here is due to some stores being under — still being under-construction. However, our plans remain firmly on-track and we are confident of achieving our goals. We are continuously investing in marketing, promotions and brand-building. In Q3 FY ’25, we spent around INR33 crores towards advertising and marketing, which is almost double the expenditure during the same-period last year. We are excited to launch ETE Perfumes, bringing Italian elegance to our consumers. This launch will uplift the brand, enhance its premium image and diversify our product portfolio. We are happy to share that the Board of Directors have approved a dividend of INR3 per share with a face value of INR2 each. This decision reflects the Board’s confidence in our strong financial position and future growth prospects, highlighting our commitment to creating value for our shareholders. In conclusion, our commitment to consumer-centric growth remains the driving force behind everything we do. We are dedicated to meeting the evolving needs of our consumers through our powerful brands. We are confident in our ability to maintain our position in the market through targeted expansions, strategic brand-building initiatives and continuous enhancement of our. As always, we remain committed to creating value for our stakeholders and driving sustainable growth. Now I would like to request our CFO, Mr Shetty, to share highlights of our financial performance, following which we will be happy to respond to your queries. Thank you.
Surendra Shetty — Chief Financial Officer
Thank you, Gaurav ji. Good afternoon, everyone. For the 3rd-quarter for the financial year 2025, our total income stood at INR586 crores, marking an increase from INR513 crores in-quarter three of financial year ’24. Revenue contributions are as follows. Fabric accounted for 83%, garment for 12% and yarn and others made-up the remaining 5%. The EBITDA for the quarter was INR83 crores, up from INR80 crores in the financial — quarter three of the financial year ’24, reflecting 4.1% year-on-year growth. The EBITDA margin for the quarter stood at 14.1% or PAT for the quarter came in at INR46 crores compared to INR44 crores in-quarter three of financial year ’24, reflecting a 3.6% year-on-year growth. The PAT margin for the quarter stood at 7.8%. Talking about Nine-Month financial year 2025, our total income is INR1,546 crores as compared to INR1,472 crores in Nine-Month financial year ’24. EBITDA for Nine-Month financial year ’25 is INR227 crores and EBITDA margin stood at 14.7%. PAT for nine months financial year ’25 stood at INR126 crores and PAT margin is 8.2%. Thank you. That is all from my side. Now we can open the floor for the question-and-answer.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. To remove yourself from the question queue, you may press time to. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles the first question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited. Please go-ahead.
Dixit Doshi
Yeah, good morning, sir. Good afternoon, sir. Thank you for giving me the opportunity to ask questions. Sir, just wanted to ask, so now out of this total aid recode stores, what will be the total area of in terms of square footage, if you can tell us and also what will be the monthly operating cost for this eight stores or if you can give us an idea of monthly operating cost per store other than the rent and what kind of rent on an average we pay-per month for the stores? Yeah. A few more questions, if you can ask — tell me about this, then I’ll ask or you want me to ask other questions also.
Gaurav Poddar
So you can go-ahead with the question.
Dixit Doshi
Okay. And also broadly, what kind of gross margin we are getting in from our stores and-or at — I understand most of the stores are very new, but at the optimum level, what kind of gross margins we expect from recoat stores? And what kind of inventory do we have per store in terms of per square feet also if you can give us. Yeah. These are my few questions.
Gaurav Poddar
Thank you for your question. See, we are not — it’s too early to talk about quantitative numbers. I can give you a broad kind of overview of the two months that we’ve had so-far and we’ve been opening stores all across till the end of December as well. So I would wait for some more maturity of the stores to give you better numbers. But approximate square feet that we have across and is close to 50,000 square feet now that we have built and other numbers I think are still graduating and maturing. So I would wait and not comment. It’s too early to comment. We are still very, very focused on operational level at store and trying to get correct mistakes and understand what’s happening with consumer sentiment. The approximate inventory per store for report, for example, would be anywhere in the range of INR30 lakhs to INR50 lakhs depending on the size of stores. So they’re all based on industry standards and all the numbers are also going to correct as we move along.
Dixit Doshi
Okay. Okay. So broadly the size of the store would be for Zcode would be around 5,000 — 5,000 square feet on an average.
Gaurav Poddar
So we had broadly initiated two kind of store size models. One was a smaller size model, which was about 4,000 to 6,000, which is about — you can say approximately 5,000 square feet. And then there was a larger model, which was about 6,000 to 8,000, so say about 7,000. In the beginning, most of our stores were on the smaller size, which were maybe 4,000 to 5,000 square feet. And then we have a few stores which are on larger size and a few more coming stores that we have signed, which are coming are also some larger-sized stores. The idea is to understand different sizes and how performance is linked to different sizes, how we can fit our different collections and how consumer responds. So we want to get a taste of these business dynamics before moving ahead?
Dixit Doshi
And because I think this is a business model where I think MRP for all the product is below 1,000. So in this also we have to keep end of season sale or something or everything sells at MRP in these stores.
Gaurav Poddar
See, we are in the fashion business and in fashion, 100% sell-through is very difficult to achieve. There is always going to be leftover stock. Industry standards have — and other players in the industry also have discounting that goes on. For us, we are very new right now, so we don’t have that pressure of discounting at the moment. But we have to see as it goes how we are able to manage our efficiencies and what kind of clearances we can do with minimal discounts or no discounts. So that is yet to be seen for this?
Dixit Doshi
Okay, okay. Okay. Thank you. I’ll get back-in the queue. And if you can share any kind of quantitative details, which will help us to understand business in more detail. So yeah,
Gaurav Poddar
That’s too early. I would say, if you wait a few months, then we’ll be able to share some more numbers because we are also still exploring and learning as we move along. Store openings are also happening constantly and we are balancing between opening new stores and focusing on operations. So a lot of things are going on at the same time. So we would wait a few months before commenting on quantitative numbers on. Thank you.
Operator
Thank you. The next question is from the line of Nilesh Sharma from Anantnath Skycon Private Limited. Please go-ahead Sharma, please go-ahead with your question and kindly unmute yourself in case if you are muted Mr Nilesh Sharma, are you there? Since there is no response, we will move on to the next participant. The next question is from the line of Shubham Kadi from 3A Financial Services. Please go-ahead.
Shubham Kadhi
Hello. Am I audible?
Gaurav Poddar
Yeah. Yes, we can you.
Shubham Kadhi
Good morning, sir. I just wanted to know about the — when does the management expect to breakeven in both DevO and stores. And post breakeven what type of turnover you would expect from one store in both day-one?
Gaurav Poddar
So we have estimated a store breakeven of approximately 12 to 15 months and the breakeven that sale that is required after breakeven is difficult to estimate now because the sizes are different and the stores are located in different areas with different costs. So overall breakeven is what we expect in 12 to 15 months and we hope to do business for growth in day-one and go at a store-level, yes.
Shubham Kadhi
Okay. And you had mentioned 50 stores, you have signed 50 stores, right?
Gaurav Poddar
And we had earlier projected to have 30 stores by March. So 30, 30 stores by March, we did investment of INR50 crores. So and these 30 stores have been signed. We have a few more in signing at the moment. But unfortunately, because of schedules and constructions of sites, we’re not able to take handover, which is why we project some of them spilling over to the first-quarter of next year.
Shubham Kadhi
Right. And as I can see from the presentation, stores are targeted in North India and code are targeted in South India. So does the — do you plan on making this a pan-India thing in the future, like say three years down the line or something?
Gaurav Poddar
Yes, of course the idea is to be a pan-India brand. As a company, we have a traditional business has networks and strengths all across India with our brand being synonymous all across India. So with Devo and, of course, all-India presence is something that we aspire to do. However, in the first phase as we learn this new business, it is better to follow a clustered approach and that is why we selected small clusters to open these stores. As these stores mature and as we get more understanding of the business, for sure, we will expand to further areas and slowly make it a challenge.
Shubham Kadhi
Okay, sir. And just one last question. Right now, the store format, the company-owned and company-operated. So do you plan on inviting franchisee model using the franchising model in the future or is it going to say company on company?
Gaurav Poddar
Yes. So again, we have a very strong network in our industry with a lot of great partners and strong network in the distribution and retail channel. So franchising is a very good method to get faster execution of opening stores with capital that is being pulled in by investors. So we are open to the franchising options. For the moment, we wanted to open a few stores and get a grasp of the business and get the operations to some extent before we open this out for franchisees. However, we are not actively looking for franchisees, but we are getting a lot of contracts and we are in discussion. So we’ll see how it goes. At the moment, these 30 stores are what we have signed for running ourselves. When the time is right, we are open to franchising these stores also.
Shubham Kadhi
Okay, sir. And any guidance on revenue and profit margin?.
Gaurav Poddar
You’re talking about the whole business or
Shubham Kadhi
Yeah, entire.
Gaurav Poddar
So we’ve always been talking about an 8% to 10% kind of growth for the whole business year-on-year. This year, the first-half has been quite weak and this 3rd-quarter has helped us to get close to or just slightly above the Nine-Month total. And for the 4th-quarter also, we expect to have single-digit. So overall, we’ll have a single-digit kind of growth for the whole year.
Shubham Kadhi
Okay. And you expect this to better in the coming years?
Gaurav Poddar
Yes, hopefully, that should be better in the next year. We are seeing the first-half of the year saw very slow consumer movement and there were very few wedding days. The second-half of the year, we have seen an improvement in that. However, it’s not as per our expectation, but we still expect to recover from the slow first-half and have some single-digit growth.
Shubham Kadhi
Okay, that’s all it from my end. I wish you the very best. Thank you so much.
Operator
Thank you. The next question is from the line of Sunidhi Joshi, BA Associate. Please go-ahead.
Sunidhi Joshi
Hello. Thank you for the opportunity. So I just wanted to understand the key performance indicators that are being used to measure the success of our initial digital and local marketing efforts for the new expansion.
Gaurav Poddar
So lots of the digital efforts — marketing efforts that are happening for Zecode and are largely through the digital channels and we are using a lot of influencer marketing, a lot of local marketing to make these brands are known amongst the consumers in that area. Since they are both new brands, there is awareness that needs to-be-built, which happens over some time and we are putting all our efforts to make sure that this awareness is being built. So obviously, the number-one tracking point is the footfalls that come into the store. That is growing gradually and we expect continued growth in that as people become more aware of the stores that open up close to them.
Sunidhi Joshi
Okay, got it. Thank you.
Operator
Thank you. The next question is from the line of Mayur Agarwal from ABC Capital. Please go-ahead.
Mayoor Agarwal
Hello. Hi, am I audible?
Operator
Yes, we can hear me.
Mayoor Agarwal
Hi. Just wanted to ask, could you elaborate on the additional product categories plan for the brand? And additionally, how do these planned expansions align with Zecode’s positioning as a fast fashion brand? Are there particular segments such as accessories, footwear or lifestyle products that you are exploring to complement the core apparent range?
Gaurav Poddar
Yes. So Zcoat is a fast fashion lifestyle brand for men’s women’s and kids. And right now, there are mainly — it’s mainly focused on apparel and there are slightly some accessories that are present in the store. As we increase our store presence, then we will add-on other further accessories, which will happen probably sometime next year. And as that happens, we’ll be able to inform the progress of that. But of course, this is a category and a product range that will need to have accessories, all kinds of different things to complete the wardrobe and create a lifestyle image for that kind of consumer Gen Z consumer.
Mayoor Agarwal
Thank you so much stupid.
Operator
Thank you. A reminder to all participants you may press star and one to ask a question. The next question is from the line of Ashok Shah from Eklavya Invesco Family Office. Please go-ahead.
Ashok Shah
Sir, thanks for taking my questions. So regarding, sir, how is the yarn market, do you expect price to increase if the cotton price starts increasing due to the heavy rains or no other India?
Gaurav Poddar
So we don’t expect a drastic change in that. However, we are not selling cotton yarn. We are selling Indigo dyed yarn to some extent and then we are largely converting that to meeting fabric and selling fabric. So we are not — we are using some cotton yarn to make some shirting fabric, but that percentage is a very small percentage on our overall business.
Ashok Shah
Okay. Thank you, sir. Thank you.
Operator
Thank you. The next question is from the line of Hitanshi Agarwal from ABS Investment. Please go-ahead.
Hitanshi Agarwal
Hello, am I audible?
Operator
Yeah.
Hitanshi Agarwal
Hi, thank you for the opportunity. Sir, my question is on the stores that we opened in December. So how do you envision the growth trajectory of this ethnic brand over the next couple of years? And additionally, how do you see positioning itself in comparison to the competitive brands? Like what unique opportunity does the Indian wedding industry is present in this context?
Gaurav Poddar
Thank you for your question. So Devo, as you rightly said, we opened towards the end of last calendar year in Delhi and Devo is positioned as an ethnic wear apparel brand for all occasion wear. So wedding market is, of course the biggest market, but it is one market. As ethnic wear is getting promoted and getting accepted in the in the male wardrobe, it is becoming occasional wear where you wear someone wears ethnic wear for all kinds of different pujars and festivals even at-home or for casual occasions as well. So wedding is of course, the biggest segment, but the variability of this kind of apparel has grown significantly over the past few years. So there is tremendous growth in this segment. And in terms of positioning, this is a mid to premium brand and the biggest advantage we feel that we have is that we are traditionally a textile company and we have — we are selling fabric — ethnic wear fabric directly through our distribution channel under the CRM spend. So we have a lot of access of designs and production capabilities in terms of how we source and have a network to source these fabrics right from the vendors and manufacturers. So there is some kind of a synergy that we can build by creating a finished product and getting the retail consumer brand with this kind of integration that we have.
Hitanshi Agarwal
Okay, okay. That’s great, sir. Thank you so much. Thank you.
Operator
Thank you. The next question is from the line of Apoorva, an Individual investor. Please go-ahead.
Apoorva
Hi, sir. Thanks for the opportunity. So what is the gross margin level.
Surendra Shetty
So as I mentioned earlier, it is a little bit early to talk about this. We are still — it’s only been a month and a half or two months since we opened the stores and we are still understanding the feedback from the consumers. We have some ideas in mind, but now we are getting some feedback and assessing what’s happening on-the-ground. So it’s a little bit early, I would say, to comment on.
Apoorva
Thank you.
Operator
Thank you. Participants, you may press time one to ask a question. The next question is from the line of from Naitik from Nv Alpha Fund. Please go-ahead.
Naitik Mutha
Hi, sir. Thanks for taking my question. Sir, my question is, if you could give us some sense on how was the volumes and realization moved in both garments and fabric for the quarter and for nine months versus last year hello sir, are you there?
Gaurav Poddar
Just a session? Yes. So if you look at the nine-month period, then the volume change for the fabric business was approximately 6% plus and for the garment business was approximately 2.5% negative.
Naitik Mutha
And what about the realizations?
Surendra Shetty
Realizations are largely in-line, almost
Naitik Mutha
Flat. Okay. Okay, that’s it from my side, sir. Thank you.
Operator
Thank you. Participants, you may press time one to ask a question. The next question is from the line of Sahil Vora from M&S Associate. Please go-ahead.
Sahil Vora
Hi, good afternoon. I have a couple of questions. My first question is, could you please provide insight into the volume growth for the fabric division during the quarter on a year-over-year basis? Specifically, I would like to understand the factors driving this growth and whether there are any significant changes in-demand patterns or geographical contribution.
Gaurav Poddar
So as I mentioned earlier for the Nine-Month period, the fabric volume growth has been approximately 6% and even for the garment business where we have a negative two-odd percent growth, what we — what we really noticed is that the first-six months were really tough for us, but the last quarter has been able to — we’ve been able to catch-up and in the fabric business even grow over the last year’s numbers. So that has been real positive for us. In the fabric business, what we noticed is that we have a strong brand presence across the country and we have a very strong network of channel partners. We have a larger market-share in the business and to a large extent, we are able to push for growth that even in a tough market, we are able to do better than other competitors. So that would largely be the reason. Also, as our stated objective in the beginning of the year, we wanted to spend a lot more on advertising and restart the process that we had briefly paused during the COVID times. And because of that, we spent largely on the ATL activities like television and other channels to promote our latest campaign with Randhir Kapoor extensively over the last quarter, which we feel is an investment in creating and maintaining the brand that we have created over all these years, which will further help us to maintain volume growth even in — regardless of the scenario.
Sahil Vora
Okay, okay. Understood. Sir, my next set of questions is about our subsidiary, Cardini Italy. Could you please share how this subsidiary is currently contributing to the company’s overall revenue? Additionally, with the recent launch of Cardini Italy perfumes, could you provide details on where these products will be available both online and offline and also the strategic rationale behind venturing into the perfume segment? If you can share some insight over that, that would be great.
Gaurav Poddar
Thank you for your question. So Katini, the Italian subsidiary holds a patents for trademarks and licenses for the brand, in over 120 odd countries. And when we acquired this company, the Indian business is running within the CRM entity. Only the Italian business is part of the subsidiary, which is a very small entity and the purpose of maintaining that subsidiary is mainly to ensure that the genuine Italianness of the brand still continues to exist. Is more than a three-decade-old brand and we are making all and Italy products from the Italian office, so Italian fabric, Italian stitching and we are selling it across to multiple retailers across the country. We participate in a very prestigious exhibition called PTOMO twice a year, which is one of the most prestigious exhibitions for global apparel brands. So that is the operation that we run within, Italy. Now when we look at perfumes and the launch that we recently did in India, we wanted to — if you look at the positioning of, Italy in Italy, it is a very luxury and premium brand that is a lifestyle brand for a complete wardrobe — complete look for a man’s wardrobe. And in India, we are selling fabrics for men. We wanted to extend this positioning and create this lifestyle image that exists in Italy and extend that imagery in the Indian consumer’s mindset. So now with the launch of perfume, which is a very niche market in India because they are priced slightly more expensive than the mass-market in India. The revenue is something that is one thing, which I don’t think is going to be very significant. But more than that, it is going to add to the brand value of. It is going to add to the aspiration of the brand and create that lifestyle image in our consumer’s mind this perfume is available online now at our website Italy.in. it is more of creating imagery and being able to communicate lifestyle image rather than just talking about fabric
Sahil Vora
Understood. Thank you, sir. That helps a lot. That’s it from my side. Good luck and all the very best.
Gaurav Poddar
Thank you very much.
Operator
Thank you. Participants, if you wish to ask a question, you may press star N1 one on your phone. The next question is from the line of Nilesh Sharma from Anantnath Skycon Private Limited. Please go-ahead.
Nilesh Sharma
Good afternoon, sir profit. Sir, may I know that capex to revenue ratio related to our new brand, GCODE and, and
Gaurav Poddar
I think it is very early to talk about this ratio now because the revenue is something that is yet to be optimized and matured. We are very early in our journey and as we mature, we’ll be able to give a more stable number. Capex has indicated for these 30 stores, we indicated a capex of approximately INR50 crores and we are well within that budget when we open these stores. This kind of ratio, I would wait a few months-to comment.
Nilesh Sharma
Okay. In our whole CRM mills revenue, how much percentage we are targeting in three year down the line from this new brand to
Gaurav Poddar
It is very difficult to estimate the percentage that Zecode and are going to contribute because we are going to follow a calibrated approach in opening these stores and we are going to make sure that operationally we do better and keep correcting operations as we move along. So — but for sure, the apparel contribution in the business, which is currently at 13% 14%, 15% is going to keep increasing as this business increases. To give you an exact number is very difficult now, you know. So I would want this business to grow and then speak for itself.
Nilesh Sharma
Okay, great, sir. Sir, although all the companies have different philosophy and different model of working, are we targeting to follow the footprint of trend in UDIO?
Gaurav Poddar
So there are several players in this fast fashion business and it’s becoming a very important contribution to the overall industry is creating a space of its own. That is what prompted us to also participate in this business segment where our existing brands through our distribution network was not competing in at all. So I mean, we are trying to learn from all kinds of players out there and everyone has something unique about them. So we are — while we have something unique about ourselves as well, we want to learn from the positives and negatives of every player out there.
Nilesh Sharma
Okay. Great, sir. Thank you so much and all the best. Thank you.
Gaurav Poddar
Thank you so much. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr Ankit Jain for the closing comments.
Ankut Jain
Thank you,. I would like to thank the management for taking their time-out for the conference call today and thanks to all the participants. If you have any queries, please feel free-to contact us. We are Orient Capital Investor Relations Advisor to Siyaram Silk Mills Limited. Thank you so much.
Gaurav Poddar
Thank you for joining on the call. Stay safe.
Operator
Ladies and gentlemen, on behalf of CRM Silk Mills Limited, that concludes this conference. You may now disconnect your lines. Thank you.