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Siyaram Silk Mills Limited Q1 FY25 Earnings Conference Call Summary
Compliance and Overview • Date of Call: August 7, 2024 • Submission: Transcript submitted to BSE and NSE on August 12, 2024 • Key Management Present: Chairman Ramesh Poddar and other executives • Context: Discussed performance amid sluggish consumer demand due to external factors (heat wave, election disruptions)
Strategic Plans • New Retail Outlets: • Approximately 30 new outlets planned in tier 1, 2, and 3 cities • Investment of around INR 50 crores funded through internal accruals • Aimed at enhancing customer engagement and market recovery during upcoming festivities
Financial Performance • Total Income: Declined by 9% year-on-year to INR 331 crores • EBITDA: Increased by 11% to INR 34 crores (margin of 10.3%) • Profit After Tax (PAT): Rose by 20% to INR 12 crores • Revenue Breakdown: • Fabric: 77% • Garments: 13% • Yarn and others: 10%
New Retail Projects • Types of Stores: • Fast fashion store • Ethnic wear store • Capital Expenditure: INR 1.25 to 1.5 crores per store • Target Locations: Karnataka for fast fashion, Delhi for ethnic wear • Opening Timeline: Several stores before Diwali, aiming for 30 by year-end
Digital Strategy and Revenue Growth • Online Sales: Cautious approach due to potential conflicts with existing distribution channels • Revenue Growth Estimate: Approximately INR 100 crores from new stores in the next year • Concerns Addressed: • Potential revenue cannibalization from existing stores • Market diversity and organized retail segment opportunities
Market Outlook and Challenges • Revenue Decline: Attributed to sluggish demand, with optimism for recovery in the second half of the year • Other Income Increase: Primarily due to government capital subsidies • Growth Expectations: Estimated growth of around 10% for the current financial year despite margin pressures
Brand Strategy and Market Position • Brand Ownership: Clarified ownership of brands like Cadini and J. Hampstead • Market Share: Belief in stable or increasing market share despite recent sales declines • Competitor Comparison: Acknowledged slower growth in the fabric market but emphasized the unorganized nature of the market
Conclusion • Positive Outlook: Anticipation of a market revival during the wedding season based on distributor and retailer feedback • Future Plans: Continued focus on launching new sub-brands and expanding distribution networks.
Siyaram Silk Mills Limited Analyst/Investor Meet Summary
Meeting Overview • Date: May 14, 2024 • Submission to: BSE and NSE on May 21, 2024 • Key Personnel: Chairman Ramesh Poddar, President Gaurav Poddar, CFO Surendra Shetty
Financial Performance • Q4 FY24 Results: • Revenue: INR 646 crores (down from INR 695 crores in Q4 FY23) • EBITDA: INR 106 crores (16.4% margin) • Profit After Tax (PAT): INR 69 crores (10.7% margin)
• Full FY24 Results: • Total Revenue: INR 2,087 crores (down from INR 2,229 crores in FY23) • EBITDA: INR 285 crores • PAT: INR 185 crores
Future Outlook • Challenges: • Anticipated decline in demand in H1 FY25 due to fewer wedding dates and heat waves.
• Growth Projections: • Expected revenue growth of 10-12% for FY25. • Plans to open 40 new stores in FY25.
Strategic Initiatives • Focus on asset-light model and outsourcing production. • New retail project aimed at enhancing consumer engagement. • Maintaining advertising expenditure at approximately 4% of revenue.
Market Conditions • Yarn business faced a 30% decline due to falling cotton prices. • Stable raw material prices expected to support EBITDA margins.
Store Distribution • Total Stores: 247 (as of March 31, 2024) • Estimated 75-80% of stores located in Tier 2 and below areas.
Shareholder Returns • Final dividend of INR 4 per share, totaling INR 11 for the year. • Buyback of INR 108 crores announced.
Management Responses • Addressed inquiries on capital expenditures, advertising strategies, and garment sales. • Emphasized the importance of brand presence and competitive strategies in retail.
Conclusion • Management expressed optimism for growth in the second half of FY25, despite current market challenges.
Siyaram Silk Mills Limited Analyst/Investor Meet Summary
Meeting Overview • Date: February 9, 2024 • Submission to: BSE and NSE on February 15, 2024 • Compliance: SEBI regulations • Key Personnel: Chairman Ramesh Poddar, CFO Surendra Shetty
Financial Performance • Q3 and nine-month FY24 results discussed • Sales: INR 502 crores (slight increase) • EBITDA Margin: 13.6% • Dividend: INR 3 per share approved by the Board • Revenue decline noted in nine-month comparison to previous year
Market Conditions • Industry demand subdued due to inflation and lack of festive sales • Optimism for future recovery expressed by management • Plans to increase advertising budget and expand retail presence to 239 stores
Store Expansion and Strategy • New stores opened: 14-15 (target of 30-40 not met) • Fabric segment strong (83% of sales); garment business contracted • Long-term EBITDA margin expected between 14%-16%
Capital Expenditures and Initiatives • Planned investment: INR 75 crores for solar power and machinery upgrades • Den-Knit e-commerce initiative gaining traction
Demand and Revenue Insights • No significant revival in garment demand observed • Exports contributed 11% to sales (decrease from previous year) • Fabric volumes down 1%, garment volumes down 23%, yarn segment down 12%
Future Outlook • Management optimistic about long-term recovery in demand • Strategic plans for garment business include design investments and distribution network expansion • Target to open 50 new retail shops in the upcoming fiscal year
Participant Inquiries • Questions on store targets, revenue breakdown, and distribution strategies • Positive responses reported for Men's Bazaar initiative in smaller towns • Challenges in obtaining verified market share data noted
Conclusion • Management expressed anticipation for future interactions and continued engagement with investors.
Siyaram Silk Mills Limited Analyst/Investor Meet Summary
Meeting Details • Date: November 2, 2023 • Submission: Transcript submitted to BSE and NSE on November 7, 2023 • Compliance: In accordance with SEBI regulations
Key Highlights • Chairman Ramesh Poddar: • Company evolving into a lifestyle brand • Announced dividend of INR 4 per share • Completed equity buyback program worth INR 108 crores
• Financial Performance: • Q2 FY24 sales: INR 585 crores (down from INR 635 crores) • Decline attributed to one-off export order and delayed festive demand • CFO Surendra Shetty reported decreased revenue and profits
Business Segment Performance • Fabric Business: • Volume growth of approximately 5%
• Garment Business: • Significant decline of around 36% due to one-off export order (INR 85 crores)
Advertising and Growth Strategy • Increased advertising expenditure to 6% of sales (up from 3%) • Optimism for second half of FY24 with approaching festive season • Added 10-12 franchise stores; target of 40 for the year • Revised overall growth guidance for FY '24 to 3% to 5%
Revenue Breakdown • Q2 Revenue Composition: • 77% from fabrics • 6% from yarn • 17% from garments • Projected EBITDA Margins: 14% to 16% for the second half
Future Outlook • Exports expected to contribute 12-15% to business • Revenue growth guidance of 12-15% for FY '25 and FY '26 • Focus on sustainable fashion and innovation in design
Investor Inquiries • Garment Export Strategy: • Discussion on leveraging manufacturing for Gulf market uniform orders • Acknowledgment of low garment production percentage (17%) and high processing fees (INR 50 crores)
• Net Debt Concerns: • Increase in net debt due to working capital (INR 40 crores) • Current working capital cycle of 144 days; expected improvement by March
Conclusion • Call concluded with thanks and well wishes for Diwali and the new year.
Siyaram Silk Mills Limited Analyst/Investor Meet Summary
Meeting Overview • Date: August 16, 2023 • Submission to: BSE Limited and National Stock Exchange of India • Key Personnel: Chairman Ramesh Poddar and management team • Focus: Q1 FY24 financial performance and company strategies
Financial Highlights • Buyback Announcement: • Equity shares worth INR 108 crores (3.54% of total shares) • Commitment to stakeholder value and consistent dividends • Revenue Decline: • 11% year-on-year decrease to INR 3,538 million • EBITDA of INR 225 million (6.4% margin) • Debt Reduction: • Significant reduction in net debt, improving financial position
Market Trends and Consumer Demand • Q1 Demand: • Weaker consumer demand due to fewer festive occasions and adverse weather • Slight uptick from summer weddings, but overall subdued demand • Product Innovation: • Launch of new products: Den-Knit and Bamboo Blended Shirting Fabric • Expansion Strategy: • Asset-light model focusing on advertising and local entrepreneurship through Siyaram Men's Bazaar
Management Insights • Long-term Growth Strategy: • Revenue growth guidance of 12-13% despite current challenges • Exit from less profitable sales channels to improve operational metrics • Product Mix Discussion: • Fabric business currently larger and more established than garments • Challenges in garment market due to fragmentation
Subsidiary and Export Insights • Cadini Apparel: • Focus on premium Italian garments, slow growth anticipated • Export Revenue: • Confidence in maintaining overall export revenue despite previous large orders not recurring
Future Outlook • Siyaram Men's Bazaar Expansion: • Plan to open around 50 new stores annually in rural markets • Revenue Breakdown: • 78% from fabric, 14% from garments, 7% from yarn and other products • EBITDA Guidance: • Target of 14-16% for the year, despite current demand challenges
Advertising and Demand Strategy • Increased Advertising Spend: • Viewed as a long-term investment for brand awareness • Volume Declines: • Noted declines in volumes across fabrics (12-13%), yarn (18%), and garments (6%) in Q1
Conclusion • Management remains optimistic about future demand, particularly with the upcoming festive season, and encourages ongoing communication for further inquiries.
Siyaram Silk Mills Limited Analyst/Investor Meet Summary
Meeting Overview • Date: May 23, 2023 • Submitted transcript to BSE and NSE on May 29, 2023 • Key personnel: Chairman Ramesh Poddar and Gaurav Poddar • Focus: Q4 and FY23 financial performance
Financial Highlights • Final dividend announced: Rs. 4 per share, totaling Rs. 11 for the year • Net debt: Approximately 20 crores • Marketing budget to increase to 4-5% of sales • Maintenance CAPEX projected at 30-40 crores
Company Growth and Strategy • Established in 1980, with significant growth and brand expansion since 1991 • Focus on innovation through in-house R&D and new product launches (e.g., DEN-KNIT, bamboo fabrics) • Asset-light model: 45-50% of fabric business outsourced • Plans to expand retail presence through franchising (targeting 50 new stores)
Market Focus • Targeting sales growth of 12-15% annually • Emphasis on rural markets (Tier-2 to Tier-4 cities) for sales • Majority of business is B2C, with branded products making up over 75% of sales
Competitive Landscape • Unique positioning in the Indian market with a focus on innovation • Increased advertising expenses anticipated to impact EBITDA margins • Strategy to maintain operating margins despite higher marketing spend
Product Segments • Growth potential in garment and Indigo Knit yarn segments • Indigo Knit fabrics projected to have good margins, currently at 50-60% utilization • Ethnic wear operates as a B2C branded fabric business
Customer Engagement • Loyalty program with 2.17 lakh members to enhance customer engagement • Franchise model requires investment from franchisees with a payback period of 3-4 years
Future Outlook • Consistent growth rate projected at 12-15% over the next five years • Focus on tailoring services to enhance fabric sales • Plans to increase advertising expenses from 2% to 4% to strengthen brand presence