Siyaram Silk Mills reported a standalone net profit of ₹11 crore for the quarter ended June 30, 2026, marking a 144% year-on-year increase from ₹5 crore in Q1FY26. During its earnings conference call held on July 31, 2026, management reaffirmed its full-year guidance for approximately 12% revenue growth and an EBITDA margin of around 14%, adjusted for a 150 basis point impact from new retail initiatives. The Board also approved the implementation of a Scheme of Arrangement sanctioned by the National Company Law Tribunal (NCLT), involving the allotment of cumulative non-convertible redeemable preference shares to equity shareholders.

The Board approved the unaudited standalone financial results pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory Auditors M/s. Jayantilal Thakkar & Co., Chartered Accountants (Firm Reg No. 104133W), issued their review report on the financial statements. The Scheme became effective on July 30, 2026, with August 22, 2026, fixed as the record date for determining eligible shareholders. The company filed Form INC 28 with the Registrar of Companies, Mumbai, reflecting the amended Memorandum of Association following the NCLT order dated July 21, 2026.

Financial Performance

Siyaram Silk Mills delivered strong bottom-line growth driven by increased total income and improved operational efficiency. Standalone total income rose 16.4% to ₹466 crore from ₹400 crore in the corresponding period last year. EBITDA increased by 22.3% to ₹40 crore from ₹33 crore, causing the EBITDA margin to expand by 40 basis points to 8.6% from 8.2%. This improvement reflects better cost management despite inflationary pressures on input costs.

Profit before tax surged significantly, supported by operational gains. Consequently, the PAT margin improved to 2.4% from 1.1%, while earnings per share (EPS) increased to ₹2.5 from ₹1.0. The revenue mix was led by Fabric at 71%, followed by Garments at 19% and Yarn & Others at 10%. This diversification helped cushion the impact of moderation in wedding and occasion-led consumption due to the Adhik Maas period.

Retail Expansion and Guidance

The company added three ZECODE and two DEVO stores in Q1FY27, bringing the total store count to 30 ZECODE outlets and 19 DEVO outlets. Management reiterated its plan to reach approximately 70 stores across both brands by FY27, funded entirely through internally generated cash flows. Executive Director Gaurav Poddar noted that consumers adopted a value-conscious approach, yet the strong brand portfolio maintained steady progress.

Regarding profitability, management indicated that some ZECODE stores have already turned EBITDA positive, though the business is still in its early stages with a maturity timeline of 1.5 to 2 years. The company expects retail revenue to reach approximately ₹160 crore in FY27, up from ₹80 crore in the previous year. This expansion is expected to result in a 150 basis point drop in overall EBITDA margin on an annualized basis, including all store operations costs.

Scheme of Arrangement Details

Under the approved Scheme, the company will allot 9% cumulative non-convertible redeemable preference shares of face value ₹10 each fully paid up to equity shareholders holding shares on the record date. The allotment is structured in two series:

• Series I: Four preference shares for every one equity share held, redeemable on or before the expiry of three years from the date of allotment.
• Series II: Three preference shares for every one equity share held, redeemable on or before the expiry of five years from the date of allotment.

Consequent to the Scheme’s effectiveness, the authorized share capital automatically increased from ₹120 million to ₹32,884 million. The new capital structure comprises 55 million equity shares of ₹2 each, 25,000 11% redeemable cumulative preference shares of ₹100 each, and approximately 317.6 million redeemable preference shares of ₹10 each. Chief Financial Officer Surendra Shetty clarified that the redemption amount will be treated as dividend income for investors, subject to tax implications.

What the Numbers Show

The simultaneous growth in both EBITDA and PAT highlights improved operational profitability in Q1FY27. Unlike previous quarters where non-operating income drove profit surges, this quarter saw a 22.3% rise in EBITDA alongside a 16.4% increase in total income. The expansion in EBITDA margin from 8.2% to 8.6% indicates effective cost control measures despite persistent inflationary pressures. This operational strength, combined with stable demand across fabric and garment segments, suggests resilient business fundamentals heading into the festive season. Additionally, the debt-to-equity ratio stood at a healthy 0.24 as of June 30, 2026, providing financial flexibility for ongoing capital expenditures estimated at ₹100 crore for FY27.

Siyaram Silk Mills Limited has fixed August 22, 2026, as the record date to determine eligible shareholders for its bonus preference share issue, following the National Company Law Tribunal (NCLT) Mumbai bench’s sanction of the Scheme of Arrangement on July 21, 2026. The scheme, which became effective on July 30, 2026, allows the company to distribute surplus reserves through a bonus issue of preference shares, rewarding shareholders while preserving cash liquidity for operational needs and future growth.

The disclosure was made under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The NCLT order confirmed that the scheme is fair, reasonable, and not contrary to public policy, having received unanimous support from the Board of Directors and requisite majorities from equity shareholders and unsecured creditors. No objections were raised by the Regional Director or other stakeholders during the hearing, and previous observation letters from BSE Limited and the National Stock Exchange of India Limited were addressed during the proceedings.

Bonus Issue Structure

Under the sanctioned scheme, Siyaram Silk Mills will issue preference shares by way of bonus utilizing its general reserves. Both series carry a dividend rate of 9% per annum and are cumulative, non-convertible, and redeemable. There is no lock-in period, and the shares will be listed on stock exchanges where the company’s equity shares are traded.

Series I shares are redeemable at par at the end of year 3 or earlier at the Board’s option. Series II shares are redeemable at the end of year 5 or earlier at the Board’s option. Shareholders holding physical certificates who do not provide demat account details before the Record Date will have their corresponding preference shares held in trust by a nominee trustee until demat details are provided.

What the Numbers Show

The rationale behind the scheme highlights that Siyaram Silk Mills has accumulated substantial surplus reserves well above its current and likely future business needs. By converting these reserves into listed preference shares, the company aims to enhance corporate governance and transparency. Notably, the tribunal noted that even after this issuance, the company will retain sufficient cash resources to discharge liabilities towards lenders and stakeholders in the ordinary course of business, indicating a strong underlying liquidity position despite the capital restructuring.