Sai Silks Kalamandir Limited Q4 FY 2023-24 Earnings Conference Call Summary
Key Financial Highlights
• Revenue: Increased to INR 359.6 crores for the quarter.
• Gross Margin: Rose to 40.97%.
• PAT Growth: Achieved 41.95% year-over-year.
Expansion Plans
• New Stores: Added three new stores, with plans for further expansion, especially in Tamil Nadu.
• Store Area: Targeting an increase of approximately 50,000 square feet, expected to generate an additional INR 300-350 crores in turnover.
• Varamahalakshmi Focus: Emphasis on saree consumption, particularly for weddings.
Guidance for FY25
• Same-Store Sales Growth (SSSG): Targeting 2% to 3%.
• EBITDA Margin Improvement: Aiming for around 17%.
Customer Insights
• Saree Purchases: 60-65% of customers buy sarees for weddings, indicating strong demand among younger consumers.
• Store Performance: Varamahalakshmi stores average revenue of INR 45,000-46,000 per store.
Inventory Management
• Current Inventory Levels: Similar to 2018-2019; managing inventory independently after ending partnership with Sai Retail India Limited.
• Inventory Strategy: Focus on larger silk saree procurements and early vendor payments to improve turnover.
Product Mix
• Saree Categories: Majority are pure silk, with prices ranging from INR 25,000 to INR 5 lakhs.
• Revenue Contribution:
• Varamahalakshmi: 42%
• KLM: 38%
• Kalamandir: 16%
• Mandir: 4%
Store Format Margins
• Varamahalakshmi: Margins of 33-34%.
• KLM: Margins around 24-25%.
• Mandir: Similar margins to Varamahalakshmi due to premium positioning.
Consumer Behavior and Market Strategy
• Inflation Impact: Varamahalakshmi caters to wedding purchases across various price points.
• Market Analysis: Thorough reviews post-launch to adjust inventory based on sales performance.
Ethnic Wear Longevity
• Design Life Cycle: Sarees have a longer design life cycle compared to western wear.
• Inventory Management: Collaborating with over 4,000 weavers to minimize excess stock.
Conclusion
• Future Engagements: Management expressed optimism for future growth and customer engagement strategies.

Conference Call Overview
• Date: February 10, 2024
• Participants:
• Vice President: Bharadwaj Rachamadugu
• CFO: KVLN Sharma
• Moderator: Jay Gandhi (HDFC Securities)
Market Challenges
• Seasonal fluctuations and economic slowdowns impacting consumer purchasing power.
• Recent cyclones have affected sales.
Financial Performance
• Revenue: INR 382.5 crores (slight increase from previous year).
• Gross Margin: 39.96%.
• Profit After Tax (PAT): INR 31.98 crores.
Expansion Plans
• Targeting an additional 50,000 square feet of retail space by fiscal year-end.
• Focus on understanding customer preferences to enhance store offerings.
Pricing Strategy
• Competitive pricing for lower-margin gifting sarees to boost volume and retention.
• Aim for a blended gross margin of approximately 40%.
Sales Growth and Customer Engagement
• Like-for-like sales growth lower than expected; suggestions for improvement include loyalty programs and branding.
• Focus on customer relationship management and word-of-mouth marketing.
Store Expansion Strategy
• Emphasis on Tamil Nadu for new Varamahalakshmi format stores due to market potential.
• Plans to increase store count from 2 to 20-25 in Tamil Nadu.
Performance of New Stores
• Newly opened stores in Tamil Nadu tailored based on 15 years of experience.
• Analyzing sales patterns for optimization post-opening.
Outlook and Projections
• Store expansion plans remain unchanged despite demand slowdown.
• Estimated loss of 10-12 days of sales in Chennai due to weather.
• Projected improvements in gross margins by FY26.
Same-Store Sales Growth (SSG)
• SSG for value fashion formats down approximately 10%.
• Minimal decline in VML formats; blended SSG decline of about 7-8% for nine-month period.
• Optimism for Q4 with a target of neutral SSGs and 2-3% improvement for FY25.
Conclusion
• Management expressed confidence in market resilience and business model.
• Call concluded with thanks and anticipation for the next quarter's results.

Conference Call Overview
• Date: November 8, 2023
• Participants: Senior Vice President Bharadwaj R, CFO KVLN Sharma, Moderator Jay Gandhi
• Transcript available on the company's website
Financial Performance
• Q2 Revenue: INR 327 crores, up 5.86% YoY
• Profit Metrics: Improvements in gross profit, EBITDA, and profit after tax
• Half-Year Revenue: Slight dip due to external factors affecting a flagship store
Growth Outlook
• Store Expansion:
• Total stores increased to 57
• Plans to open 30 new stores in 18 months, primarily in Varamahalakshmi format
• Market Potential:
• Target of 200-250 stores in southern India
• Average revenue per store: INR 24-25 crores
Market Insights
• Saree Market Growth: 8% CAGR
• Same-Store Growth (SSG): Decline of ~5% in Q2; optimism for recovery in H2
• Competition: Diverse market with organized and unorganized players
Revenue and Margin Targets
• Growth Expectations:
• 5-10% growth this year, 15-20% next year
• Improved margins of 4-5% by 2026
• Retail Space Expansion:
• 50,000 sq. ft. this year, 80,000-100,000 sq. ft. next year
Operational Insights
• Impact of Wedding Dates: Shift from H1 to H2 increased foot traffic and sales
• Working Capital Management:
• Inventory reduced from INR 780 crores to INR 719 crores
• Creditors decreased from INR 310 crores to INR 229 crores
Financial Projections
• H2 Expectations:
• Improved EBITDA margins (17-18%)
• Interest income projected at INR 15 crores
• Revenue Distribution: Highest expected in Q3, followed by Q4, Q2, and Q1
Inventory Management
• Saree Focus: 67% of revenue; effective inventory management due to long shelf life
• Sales Strategy: Over 90% of sales at full price, minimal reliance on discounts
Conclusion
• Future Outlook: Confidence in improving EBITDA margins and store network expansion
• Closing Remarks: Wishing participants a happy Diwali and anticipation for future updates.