Siyaram Silk Mills reported a standalone net profit of ₹112 million for the quarter ended June 30, 2026, marking a 144% year-on-year increase from ₹46 million in Q1FY26. Total income grew 16.4% to ₹4,663 million, while revenue from operations stood at ₹4.4 billion compared to ₹3.88 billion in the year-ago period. However, EBITDA declined to ₹182 million from ₹207 million year-on-year, with the EBITDA margin contracting to 4.1% from 5.33%, reflecting cost pressures during the quarter.

The Board of Directors approved the unaudited financial results on July 30, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Statutory Auditors M/s. Jayantilal Thakkar & Co., Chartered Accountants, issued their review report on the financial statements. The company also confirmed that its Scheme of Arrangement, sanctioned by the National Company Law Tribunal (NCLT), Mumbai Bench, remains effective.

Financial Performance

Siyaram Silk Mills delivered a mixed set of results, with strong bottom-line growth contrasting with EBITDA pressure. Standalone total income rose to ₹4,663 million from ₹4,005 million in the corresponding period last year, while revenue from operations increased to ₹4.4 billion from ₹3.88 billion. Despite the top-line growth, EBITDA declined to ₹182 million from ₹207 million year-on-year, and the EBITDA margin narrowed by 123 basis points to 4.1% from 5.33%. Profit before tax surged 128.1% to ₹146 million from ₹64 million. The bottom-line PAT margin improved to 2.4% from 1.1%, while earnings per share (EPS) increased to ₹2.48 from ₹1.01.

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. Other income contributed ₹217 million, including interest collection from debtors of ₹79.4 million and mark-to-market gains on investments of ₹74.6 million.

Retail Expansion

The company added 3 ZECODE and 2 DEVO stores in Q1FY27, bringing the total store count to 30 ZECODE outlets and 19 DEVO outlets. Management reaffirmed its plan to reach approximately 70 stores across both brands by FY27, funded entirely through internally generated cash flows. The investor presentation highlighted active engagement on social media and digital platforms to reach a wider audience, alongside strategic placement in high-footfall areas.

Key Takeaways

The significant jump in net profit was supported by top-line growth and other income, even as EBITDA came under pressure with the margin contracting to 4.1% from 5.33% year-on-year. The doubling of the PAT margin from 1.1% to 2.4% underscores the contribution of non-operating income to the bottom line during the quarter. Executive Director Gaurav Poddar noted that consumers adopted a value-conscious approach, yet the strong brand portfolio maintained steady progress. As the festive season approaches, management anticipates an improvement in consumer demand and spending sentiment.

The National Company Law Tribunal (NCLT) Mumbai bench sanctioned a Scheme of Arrangement between Siyaram Silk Mills and its shareholders on July 21, 2026, enabling the distribution of surplus reserves through a bonus issue of preference shares. This regulatory approval marks a significant step in optimizing the company’s capital structure, allowing it to reward shareholders while preserving cash liquidity for future growth and operational liabilities. The scheme was approved under Section 230 of the Companies Act, 2013, following unanimous support from the Board of Directors and requisite majorities from equity shareholders and unsecured creditors.

The tribunal order, certified and communicated via disclosure under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirms that the scheme is fair, reasonable, and not contrary to public policy. The company had previously received observation letters from BSE Limited and the National Stock Exchange of India Limited in July 2025, which were addressed during the proceedings. No objections were raised by the Regional Director or any other stakeholder during the hearing.

Bonus Issue Structure

Under the sanctioned scheme, Siyaram Silk Mills will issue preference shares by way of bonus utilizing its general reserves. The entitlement ratio is structured across two distinct series, both carrying a dividend rate of 9% per annum. The issuance details are as follows:

Both Series I and Series II shares are cumulative, non-convertible, and redeemable. Series I shares are redeemable at par at the end of year 3 or earlier at the Board's option, while Series II shares are redeemable at the end of year 5 or earlier at the Board's option. There is no lock-in period for either series, and they will be listed on the stock exchanges where the company’s equity shares are traded.

Implementation and Compliance

The scheme becomes effective upon fulfillment of conditions precedent, including obtaining no-objection letters from stock exchanges and filing authenticated copies with the Registrar of Companies. The company must file the certified order with the RoC within 30 days of receipt. For shareholders holding physical certificates who do not provide demat account details before the Record Date, the corresponding preference shares will be 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.