Sai Silks Kalamandir Ltd Management Discussions

1. Economic Overview

1.1 Global Economy

The global economy continues to demonstrate resilience despite successive shocks, but this resilience is being increasingly tested by rising geopolitical tensions, particularly the ongoing conflict in the Middle East, which has added humanitarian costs, disrupted key trade routes, and heightened volatility across commodity and financial markets.

Higher energy and food prices are feeding into inflationary pressures globally, while risk-off sentiment is amplifying uncertainty, all of which are unfolding alongside ongoing shifts in global trade arrangements and economic realignments. Looking ahead, global growth is expected to remain uneven and exposed to downside risks from fragmentation, structural weaknesses, and geopolitical uncertainty, even as near-term support from fiscal measures and potential productivity gains from emerging technologies may provide partial offset.

Outlook

The near-term macroeconomic outlook remains shaped by geopolitical uncertainties, supply chain volatility, and persistent inflationary pressures, which together may weigh on discretionary consumption and increase demand sensitivity. While these factors could lead to some short-term fluctuations in demand, gradual easing in supply constraints and policy efforts to stabilize prices are expected to provide partial support. Over the medium to long term, the outlook remains broadly constructive, supported by underlying structural drivers of consumption, though external risks will continue to influence the pace and trajectory of growth.

Sai Silks Positioning in the Global Landscape

Within this global backdrop, the Company remains relatively insulated as its operations are largely focused on domestic production and consumption. Limited exposure to international trade cycles provides a degree of stability, with performance being primarily driven by domestic demand conditions.

1.2 Indian Economy

Indias economy demonstrated strong resilience in FY 2025-26, with GDP growth estimated at 7.7%, reinforcing its position among the worlds fastest- growing major economies. Growth was supported by robust domestic demand, healthy investment activity, and broad-based expansion across sectors despite global trade uncertainties, geopolitical tensions, and volatile capital flows. Manufacturing benefited from policy support, rising industrial credit, and continued investments, while the services sector remained the primary engine of growth.

The macroeconomic environment remained favourable, with inflation moderating significantly during the year due to easing food prices and stable commodity costs. Lower inflation enabled monetary easing, supporting liquidity and credit growth. At the same time, fiscal consolidation progressed alongside sustained investments in infrastructure and capital expenditure, strengthening economic stability and investor confidence.

Indian Economy GDP Growth Rate

Outlook

Indias long-term growth prospects remain strong, driven by continued progress in infrastructure development, digitalisation, clean energy adoption, and financial inclusion. Expanding digital ecosystems, increasing renewable energy capacity, rising electric vehicle penetration, and ongoing financial sector reforms are reshaping the economy. While evolving geopolitical developments, global trade uncertainties, and disruptions arising from conflicts in certain regions may contribute to cautious consumer sentiment and a preference for higher liquidity, potentially resulting in a temporary moderation in discretionary spending. Supported by a resilient banking system, healthy credit growth, and strong foreign exchange reserves, India remains well-positioned to sustain its growth momentum and navigate evolving global challenges over the medium to long term.

2. Industry Review

2.1 Consumption-Driven Economy

Indias consumer economy maintained strong momentum during FY 2025-26, reaffirming its position as one of the worlds largest consumption- led markets. According to the Economic Survey 2025-26, Private Final Consumption Expenditure (PFCE) accounted for 61.5% of GDP, the highest level since FY 2011-12, underscoring the growing role of household spending in driving economic growth. Private consumption expenditure grew by approximately 7% during the year, supported by rising incomes, stable employment conditions, and resilient consumer confidence.

A key structural shift underpinning future consumption growth is the increasing economic prominence of Tier II and Tier III cities. While metropolitan centres continue to remain important consumption hubs, a significant share of future urban consumer growth is expected to originate from emerging cities. Improved infrastructure, rising urbanisation, enhanced connectivity, and expanding access to organised retail are enabling higher discretionary spending across a broader geographic landscape, creating new opportunities for businesses to expand their reach and customer base.

Indias urbanisation journey is expected to further accelerate this trend. By 2035, the country is projected to have nearly 500 consumer cities, more than double the current number, with an expanding middle-income population driving demand across categories. As aspirations rise and consumption patterns evolve, discretionary spending is expected to become an increasingly important contributor to economic activity.

Outlook

Indias consumption story remains underpinned by favourable demographic trends, rising urbanisation, growing disposable incomes, and the continued expansion of the middle-income population. As emerging cities gain economic significance and consumer aspirations continue to evolve, businesses that successfully cater to changing preferences, strengthen brand engagement, and expand their presence across high-growth markets are expected to be well positioned to benefit from the next phase of Indias consumption-led growth.

Source:

https://www.downtoearth.org.in/economy/economic-

survey-2026-consumption-growth-to-slow-down-slightly-despite-rise-in-domestic-demand

https://www. weforum.org/stories/2026/02/massive-urban- shift-in-india-consumer- growth-decentralizing

2.2 Indian Retail Industry

Indias retail sector is undergoing a significant transformation, driven by rising disposable incomes, favourable demographics, rapid urbanisation, and accelerating digital adoption. As one of the fastest- growing consumer markets globally, the country is witnessing a growing convergence between traditional retail formats and technology-enabled commerce, creating a more connected, convenient, and customer-centric retail ecosystem. Increasing consumer aspirations, expanding middle-class households, and improving infrastructure continue to support demand across both essential and discretionary consumption categories.

The industry is also benefiting from the continued formalisation of retail and the rapid growth of organised players. Modern retail formats are gaining market share as consumers increasingly seek wider product assortments, superior shopping experiences, transparent pricing, and trusted brands. This shift is creating significant opportunities for organised retailers to strengthen customer engagement and expand their footprint across emerging markets.

Digital commerce is emerging as a key growth catalyst. E-commerce penetration continues to deepen, particularly across Tier II and smaller cities, which are expected to account for nearly 88% of new online shoppers between CY20 and CY30. Rising smartphone penetration, widespread adoption of digital payments, and the increasing use of omnichannel retail strategies are enabling businesses to serve customers across multiple touchpoints while enhancing convenience and accessibility. Furthermore, Indias digital economy is projected to reach approximately Rs.68.6 trillion by 2030, providing a strong foundation for the next phase of retail growth.

Key Supporting Facts

UPI transactions are likely to scale-up 1 bn daily FY 2026-27

Driven by rising UPI adoption, dominating retail digital payments

Annual Transaction Volume Growth (2016-25)

Organised retail formalisation

Over 35% by 2030

Driven by store rollout and faster shift to organised formats

Indias urban population expansion 555 million by 2031

Driven by India shifting from rural to urban, broadening consumption beyond metros

Year	Urban Population Growth (In million)
2031	555
2021	469
2011	377
2001	286

Source: KPMG Report on Retail Industry, March 2026; https://www.orfonline.org/expert-speak/sustainability-measures-for-india-s- urban-transition; https://www.marklines.com/en/news/333843

Key Trends Shaping Indias Retail Industry

Premiumisation Driving Consumer Spending

Rising incomes, increasing affordability, and evolving consumer preferences are accelerating premiumisation across retail categories. Consumers are increasingly gravitating towards branded, higher-value products across apparel, beauty, electronics, and lifestyle segments, reflecting growing aspirations and stronger purchasing power among middle- and upper-income households.

Technology and Personalisation Enhancing Retail Experiences

Artificial intelligence, advanced analytics, and customer data platforms are transforming retail operations and customer engagement. Retailers are leveraging data-driven insights to optimise merchandising, inventory planning, pricing, and marketing, while delivering more personalised and seamless shopping experiences.

Tier II and Tier III Cities Emerging as Growth Engines

Retail expansion is increasingly extending beyond metropolitan centres. Rising urbanisation, improved infrastructure, growing digital connectivity, and higher disposable incomes are unlocking significant demand across Tier II and Tier III cities, making them important drivers of future retail growth.

Omnichannel Retail Becoming the New Standard

Consumers today expect a seamless shopping journey across physical stores, websites, and mobile platforms. Retailers are integrating online and offline channels to offer greater convenience through personalised engagement, flexible fulfilment options, and enhanced customer experiences.

Quick Commerce Reshaping Urban Consumption

The rapid growth of quick-commerce platforms is redefining convenience-driven consumption, particularly in urban markets. Investments in technology, fulfilment infrastructure, and last- mile delivery networks are enabling faster order fulfilment and creating new opportunities across retail categories.

Outlook

Indias retail sector is expected to witness sustained long-term growth, supported by favourable demographics, rising disposable incomes, increasing urbanisation, and continued digital adoption. While e-commerce and omnichannel platforms continue to expand market reach and influence consumer discovery, there is a gradual rebalancing towards physical retail, with brick-and- mortar formats regaining relevance in categories such as ethnic wear where in-store experience, product interaction, and personalised engagement remain integral to purchase decisions.

The competitive landscape is also becoming increasingly dynamic, with frequent entry of new brands, particularly through digital-first channels, leading to shorter brand life cycles and higher churn in consumer attention. In this environment, retailers with strong brand recall, consistent customer trust, and well-established retail presence are better positioned to sustain market share, as consumers increasingly prefer reliable and experience- driven formats over transient offerings. Over time, sustained performance in the sector is likely to be driven by the ability to build enduring customer relationships while continuously adapting to shifting consumption patterns.

(Source: https://www.openpr.com/news/4506253/india-retail-market-to-reach-usd-3-505-4-billion-by-2034- growing; KPMG Report on Retail Industry, March 2026)

2.3 Indias Textile Industry

Indias textile industry represents one of the worlds largest and most diversified textile ecosystems, spanning the entire value chain from fibre and yarn to apparel and value-added products, while serving both domestic and global markets. The Indian textile industry recorded a CAGR of approximately 6% during FY 2022-2026, driven by strong growth in apparel at ~8% and home textiles at ~5%. The domestic market, contributing nearly 80% of the industry, expanded by around 9% on the back of healthy consumer demand. Looking ahead, the Government of India has set an ambitious target to expand the textile market from USD 194 billion in FY 2025-26 to USD 350 billion by 2030, supported by robust export growth, steady domestic consumption, and Indias relatively low share of global apparel trade, presenting significant opportunities as global sourcing diversifies beyond China.

Total textile and apparel exports, including handicrafts, increased from over Rs.3.09 lakh crore in FY 2024-25 to more than Rs.3.16 lakh crore in FY 2025-26, reflecting steady global demand for Indian textile products and the sectors competitiveness across key export markets. Ready-made garments remained the largest contributor to textile exports during the year, while cotton yarn, fabrics, made-ups, and handloom products also recorded stable growth, highlighting the breadth and diversity of Indias textile ecosystem.

The Government continued to support the industry through export facilitation and incentive measures, including the extension of the Rebate of State and Central Taxes and Levies (RoSCTL) Scheme and the Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme. These initiatives are enhancing export competitiveness, encouraging manufacturing activity, and strengthening Indias position in global textile trade.

In parallel, India made significant progress on its FTA agenda during FY2025-26, with expanded preferential trade arrangements expected to improve market access, reduce tariff barriers, strengthen supply chain integration, and create new opportunities for textile and apparel exporters across key international markets.

Key drivers supporting textile market growth

Global Supply Chain Realignment Favouring India

Global brands are increasingly diversifying sourcing beyond traditional manufacturing hubs, positioning India as a preferred destination supported by its integrated textile value chain, manufacturing capabilities, and skilled workforce.

Expanding Market Access Through FTAs and Tariff Advantages

Progress on Indias Free Trade Agreements (FTAs) and an improving tariff landscape are enhancing export competitiveness, expanding market access, and creating new opportunities across key global markets.

Capacity Expansion Supported by Government Initiatives

Leading textile manufacturers are expanding capacities across value-added and premium segments, supported by government initiatives such as PM MITRA, PLI, ATUFS, and export promotion schemes, strengthening Indias manufacturing ecosystem and long-term growth potential.

Improving Global Demand Outlook

Normalising retail inventory levels and improving demand sentiment among global retailers are expected to support a gradual recovery in textile and apparel exports.

Retailer Consolidation Creating Opportunities

Consolidation among global retailers is increasing sourcing from large, reliable, and compliant suppliers, creating opportunities for established Indian textile manufacturers with integrated operations and scalable production capabilities.

Technology-Led Manufacturing

Advancements

The adoption of automation, digital technologies, and advanced manufacturing processes is improving productivity, product quality, operational efficiency, and responsiveness across the textile value chain.

Growing Focus on Sustainability

Sustainability continues to influence global sourcing decisions, encouraging manufacturers to adopt environmentally responsible production practices, resource-efficient processes, and sustainable raw materials.

Outlook

The Indian textile industry is entering a favourable phase where multiple structural drivers are converging. While global demand is expected to recover gradually, Indias competitive position has strengthened as international brands increasingly diversify sourcing, rationalise supplier bases, and seek reliable manufacturing partners. At the same time, supportive trade agreements, improving tariff competitiveness, policy initiatives, and continued investments in value-added manufacturing are creating a stronger foundation for long-term growth.

Source: https://newsonair.gov.in/indias-textile-sector-

grows-2-1-in-fy-2025-26/

https://inductusglobal.com/indias-textile-export-growth-in-

2026-what-it-means-for-global-apparel-buyers/

2.4 Apparel Industry

Indias apparel industry continues to be one of the fastest-growing segments of the retail sector, supported by rising disposable incomes, rapid urbanisation, favourable demographics, and increasing fashion consciousness. Changing consumer lifestyles, greater brand awareness, and expanding digital connectivity are accelerating the shift from unorganised markets to branded and organised retail formats, creating significant opportunities for established apparel retailers.

The industry is also benefiting from the growing influence of e-commerce and omnichannel retailing, which are expanding market reach and improving accessibility across geographies. Online channels are increasingly driving apparel purchases, particularly in Tier II and Tier III cities, where rising internet penetration, digital payment adoption, and improving logistics infrastructure are enabling wider consumer participation.

The Indian apparel market was valued at approximately Rs. 6,903 billion in FY 2025 and is projected to reach Rs.12,100 billion by FY 2030, reflecting a CAGR of roughly 12%. Growth is being supported by rising disposable incomes, increasing fashion consciousness, growing demand across value and premium segments, and the influence of digital and social media platforms. Simultaneously organised retail is estimated to increase its share from approximately 44.3% in FY 2025 to 51.0% by FY 2030, driven by greater brand penetration, improved customer experiences, and the expanding reach of organised retailers across the country.

(Source: Secondary Research, The Knowledge Company Analysis)

Regional Split

The Indian apparel market is well-distributed across regions. This distribution is influenced by population trends, levels of urbanization, and how people consume in various areas.

Key Industry Trends

Shift Towards Branded Apparel

Consumers are increasingly gravitating towards branded apparel, driven by greater emphasis on quality, consistency, design, and shopping experience. This shift is accelerating the formalisation of the apparel market and supporting the growth of organised retail players.

Growing Importance of Value Retail

Value-led retail formats are gaining traction as consumers become increasingly price conscious and seek affordable fashion options. This trend is driving retailers to expand their value offerings and strengthen their presence across emerging and non-metro markets.

Organised Retail Gaining Market Share

Organised retail formats continue to expand their presence through exclusive brand outlets, large-format stores, and omnichannel platforms. Wider product assortments, enhanced customer experiences, and transparent pricing are driving higher consumer preference for organised retailers.

Regional Brands Expanding Their Reach

Regional apparel brands are leveraging strong local market understanding, established sourcing networks, and customer loyalty to expand beyond their core geographies. Their ability to offer differentiated products at competitive price points is supporting growth across new markets.

Increasing Focus on Private Labels

Private labels are emerging as an important growth driver for organised retailers. By offering differentiated merchandise, greater control over product development, and improved margins, private labels are helping retailers strengthen customer loyalty and profitability.

Womens Wear Driving Market Growth

Womens wear remains the largest segment of the Indian apparel market, supported by rising workforce participation, evolving fashion preferences, increasing disposable incomes, and growing demand across ethnic, western, and occasion- wear categories.

Sustainability Becoming a Key Differentiator

Consumers and retailers are placing greater emphasis on responsible sourcing, sustainable materials, and environmentally conscious manufacturing practices. Sustainability credentials are increasingly influencing purchasing decisions and brand perception.

Rapid Expansion of E-commerce

Digital channels continue to transform apparel retail through improved accessibility, convenience, and product discovery. Growing internet penetration, smartphone adoption, and digital payments are accelerating online apparel purchases across urban and emerging markets.

Supportive GST Structure for Value Apparel

Recent GST revisions have improved affordability within the value apparel segment, supporting demand among price-conscious consumers and creating favourable conditions for value- focused retailers.

Rising Demand from Tier II and Tier III Cities

Tier II and Tier III cities are emerging as key growth engines for the apparel industry. Rising incomes, increasing brand awareness, improving retail infrastructure, and expanding digital connectivity are driving apparel consumption across these high- potential markets.

Outlook

The outlook for Indias apparel industry remains highly favourable, supported by strong consumption fundamentals, increasing retail formalisation, rising fashion awareness, and continued digital adoption. As organised retail gains market share and consumer demand expands across geographies and categories, growth opportunities are expected to emerge for established players. At the same time, the industry continues to witness intense competition across segments, particularly within value fashion, requiring retailers to remain agile in merchandising, pricing, and customer engagement. Companies with strong brands, differentiated product offerings, efficient sourcing capabilities, and omnichannel presence are expected to be better positioned to navigate the evolving market environment and capitalise on long-term growth opportunities.

2.5 Festive and Wedding Wear Market

The Indian festive and ethnic wear market remains one of the largest and most culturally significant segments of the apparel industry. Supported by Indias rich textile heritage, skilled artisan ecosystem, and growing preference for branded apparel, the category is expanding beyond traditional occasions into contemporary and everyday fashion. Fusion wear, modern silhouettes, and premium handcrafted products are further broadening its appeal, particularly among younger consumers.

The market stood at Rs. 1,033 billion in FY 2025 and is projected to reach Rs.1,767 billion by FY 2030, reflecting a CAGR of approximately 11.3% during the forecast period. Growth is being supported by increasing expenditure on weddings, the rising popularity of multi-event celebrations, coordinated family dressing, greater influence of social media trends, and growing preference for premium and branded occasion wear.

Key Industry Trends

Revival of Craft-Led and Heritage Apparel

Consumers are increasingly valuing authenticity, craftsmanship, and cultural heritage, driving demand for handwoven sarees, traditional textiles, artisanal products, and region-specific weaving styles. This trend is reinforcing the relevance of Indias rich textile heritage within the modern fashion landscape.

Wedding Economy Driving Sustained Demand

Indias wedding market continues to be a major growth driver for ethnic wear. Rising expenditure on weddings, destination celebrations, and occasion- led purchases is supporting strong demand for sarees, lehengas, and premium ethnic apparel across consumer segments.

Ethnic Wear Expanding Beyond Festive Occasions

Ethnic apparel is increasingly being adopted for workwear, social gatherings, and everyday fashion. Contemporary designs, fusion wear, lightweight fabrics, and modern silhouettes are broadening the categorys appeal, particularly among younger consumers.

Growing Global Recognition of Indian Fashion

Indian textiles, embroidery techniques, and traditional silhouettes are gaining visibility across international fashion platforms. The growing appreciation for heritage-inspired fashion is creating new opportunities for Indian ethnic wear brands in global markets.

Sustainability Influencing Purchase Decisions

Consumers are showing greater preference for products made using natural fabrics, traditional weaving techniques, and responsible production practices. Sustainability is increasingly becoming a differentiator for ethnic wear brands and retailers.

Rising Adoption of Online Ethnic Wear Shopping

Improved product visualisation, virtual try-ons, Al-driven recommendations, and seamless digital experiences are encouraging consumers to purchase ethnic wear online, supporting the growth of omnichannel retail models.

Premiumisation of Ethnic Wear

Rising disposable incomes and aspirational consumption are driving demand for premium ethnic apparel featuring superior fabrics, craftsmanship, exclusivity, and personalised designs, particularly within wedding and occasion-wear categories.

Longer Fashion Cycles Supporting Category Resilience

Ethnic wear trends evolve more gradually than western fashion, allowing traditional designs and classic styles to remain relevant for longer periods and supporting sustained consumer demand.

Outlook

The festive and wedding wear market is expected to benefit from strong demand, growing preference for branded products, increasing premiumisation, and expanding omnichannel adoption. Supported by Indias cultural heritage and evolving fashion preferences, the segment remains well positioned for sustained long-term growth.

Source: https://www.vyansaintelligence.com/industry-

report/india-ethnic-wear-market- analysis

2.6 Silk Sector in India

Indias association with silk dates back over 5,000 years, with mentions in ancient scriptures such as the Atharva Veda and the Mahabharata. As a key hub along the historic Silk Route, the country developed a rich legacy of silk craftsmanship and trade. Renowned varieties such as Kanchipuram, Banarasi, Patola, Muga, and Eri silk continue to hold a prominent place in Indias wedding, festive, and ceremonial wear traditions.

Today, India is the worlds second-largest silk producer, contributing nearly 25% of global silk output. Once largely a labour-intensive cottage industry, the sector is evolving into a modern agro-textile ecosystem driven by technological advancements, productivity improvements, value addition, and premiumisation. Reflecting its growth potential, the Central Silk Board aims to double the value of Indias silk value chain from around Rs.55,000 crore to over Rs.1.1 lakh crore by 2030.

Growing consumer preference for handcrafted, heritage-rich products, coupled with a stronger focus on domestic production and quality enhancement, is reinforcing silks importance within Indias textile and ethnic wear landscape. The sector has also expanded its geographical footprint, with silk cultivation now spanning nearly all states and around 476 silk-producing districts. Indias silk exports reached approximately Rs.2,300 crore in FY 2024-25 and are expected to exceed Rs.2,500 crore in FY 2025-26, reflecting rising global demand for natural and premium silk products.

Key growth drivers

Import Substitution Boosting Self-Reliance

Rising domestic production of high-quality Bivoltine silk is reducing dependence on imports, improving supply-chain resilience, and lowering sourcing costs. Adoption of Automatic Reeling Machines (ARM) is further enhancing yarn quality and productivity.

Digitalisation Improving Efficiency

Platforms such as the SILKS Portal are enabling scientific cultivation planning, better resource utilisation, and greater climate resilience. Real-time price information is also improving transparency and farmer participation.

Export Premiumisation Creating Value

Growing global demand for traceable, sustainable, and ethically sourced textiles is increasing opportunities for Indian silk producers to access premium markets and realise higher value.

Cultural Significance Sustaining Demand

Silk continues to hold a central place in Indian weddings, festivals, and cultural celebrations, ensuring steady demand across sarees, ethnic wear, and occasion-based apparel. Its strong association with tradition, heritage, and social customs supports long-term consumption across regions and generations.

Product Diversification Expanding Market Opportunities

Growing consumer interest in diverse silk varieties such as Mulberry, Muga, Eri, Tasar, and blended silks is broadening the market landscape. Continuous innovation in textures, designs, and applications is enabling the industry to cater to evolving consumer preferences and new usage occasions.

India Saree Market

The saree remains one of Indias most iconic and enduring apparel categories, deeply embedded in the countrys cultural, social, and ceremonial traditions. Backed by a rich legacy of weaving and textile craftsmanship, the category continues to evolve by blending heritage aesthetics with contemporary fashion preferences.

Today, the market is witnessing a convergence of traditional artistry and modern design, offering consumers a wide range of fabrics, styles, and price points. Growing appreciation for handcrafted textiles, premiumisation, and changing fashion trends are further strengthening the categorys appeal across generations and regions.

The Indian saree market was valued at approximately Rs. 608 billion in FY 2025, making it one of the largest segments within the womens apparel industry. The category continues to benefit from its versatility across festive, wedding, occasion, and everyday wear, enabling sustained demand across consumer segments. Supported by rising disposable incomes, increasing expenditure on celebrations, growing preference for branded products, and expanding retail accessibility, the market is projected to grow at a CAGR of approximately 9.9% to reach Rs. 920 billion by FY 2030.

Sourcing Network for Saree Market Across India

Region	Key Fabric / Saree Types Sourced	Major Centres	Key Characteristics
South India	Pure Mulberry Silk, Kanchipuram Pattu, Mysore Crepe Silk, Uppada Jamdani Silk, Silk-Cotton Blends, Fine Cotton	Kanchipuram, Arni, Kumbakonam, Thanjavur, Salem, Coimbatore (Tamil Nadu); Dharmavaram, Madanapalle, Uppada, Venkatagiri, Mangalagiri, Ponduru, Chirala (Andhra Pradesh); Mysore, Ilkal (Karnataka); Gadwal, Narayanpet, Pochampally (Telangana)	The largest sourcing region, renowned for premium silk sarees, traditional handlooms, fine cotton fabrics, and distinctive weaving clusters with strong artisanal heritage.
Western India	Paithani Silk, Art Silk, Georgette, Chiffon, Printed Cotton, Khadi Cotton	Yeola (Maharashtra); Surat, Ahmedabad (Gujarat)	Known for vibrant textile traditions, large-scale fabric processing capabilities, and speciality silk and synthetic fabric production.
Northern India	Banarasi Silk, Kota Doria, Cotton-Silk Blends	Varanasi (Uttar Pradesh); Kota, Kaithoon, Jaipur (Rajasthan)	Home to iconic weaving centres producing intricate silk brocades, lightweight woven fabrics, and traditional handcrafted textiles.
Central India	Chanderi, Maheshwari, Silk- Cotton Blends	Chanderi, Maheshwar (Madhya Pradesh)	Renowned for lightweight, elegant handwoven fabrics that combine silk and cotton, reflecting centuries-old weaving traditions.
Eastern India	Tussar Silk, Sambalpuri Ikat, Muslin / Jamdani	Bhagalpur (Bihar); Sambalpur, Chapa (Odisha); Kolkata (West Bengal)	A major centre for handloom and heritage textiles, known for natural silk varieties, intricate ikat weaving, and fine muslin craftsmanship.

Key Industry Trends

Cultural Significance Driving Sustained

Demand

Deep-rooted cultural relevance during weddings, festivals, religious ceremonies, and family celebrations continues to support consistent demand for sarees across generations.

Changing Family Structures Supporting Higher Spending

The rise of nuclear families and increasing household incomes is enhancing discretionary spending on premium, occasion-led, and branded ethnic wear.

Digital Influence and Fashion Awareness

Social media, influencers, and digital platforms are accelerating fashion awareness and encouraging more frequent apparel purchases.

Growing Preference for Branded Retail

Consumers are increasingly gravitating towards established brands that offer quality assurance, wider product selection, and superior shopping experiences.

Product Innovation Across Price Segments

Diverse fabric options, designs, and price points are enabling retailers to cater to varied consumer preferences and purchasing power.

Rising Female Workforce Participation

Increasing female labour force participation is driving demand for sarees beyond festive occasions, supporting growth in the professional and daily- wear ethnic apparel segment.

Government Support for Traditional Textiles

Initiatives promoting indigenous products, handloom development, and GI-tagged weaves are strengthening the saree ecosystem while enhancing authenticity and artisan livelihoods.

Growing Aspirational Demand in Smaller Cities

Rising incomes, greater fashion awareness, and improved retail access in Tier-II and Tier-III cities are fuelling demand for branded and premium sarees.

Expansion of Ready-to-Wear Sarees

Pre-stitched and ready-to-wear formats are improving convenience and attracting younger consumers, helping broaden the categorys appeal.

Sustainability and Traceability

Demand for eco-friendly fabrics, natural dyes, and transparent sourcing practices is creating opportunities within the premium saree segment.

Heritage Craftsmanship Driving

Premiumisation

Growing appreciation for handwoven and region- specific sarees such as Banarasi, Kanjeevaram, Patola, and Chanderi is supporting premium demand and reinforcing the value of Indias textile heritage.

Outlook

The Indian saree market is poised for steady growth, driven by its enduring cultural significance, rising disposable incomes, and evolving fashion preferences. Increasing demand for premium and handcrafted products, growing adoption of ready-to-wear formats, and expanding organised retail and e-commerce channels are expected to support market expansion. Additionally, the rising focus on sustainability, traceability, and authentic craftsmanship is creating new opportunities in the premium segment, reinforcing the long-term relevance of the category.

Source: https://www.imarcgroup.com/india-saree-market,

https://globalriskcommunity.com/notes/how-is-the-india- saree-market-changing-with-modern-fashion-trends

https://www.pib.gov.in/PressReleasePage.

aspxRs.PRID=2257197&reg=3&lang=2

https://www.wbcsmadeeasy.in/indias-silk-value-chain-to-

reach-%E2%82%B9110000-crore/

3. Company Overview

Sai Silks (Kalamandir) Limited is one of South Indias leading ethnic apparel retailers, offering a diverse portfolio of sarees, ethnic wear, and value- fashion products through a multi-format retail platform. The Company has built a strong presence across key southern markets through five distinct retail formats—Kancheepuram Varamahalakshmi, Kalamandir, Mandir, Valli Silks, and KLM Fashion Mall—each catering to specific customer segments and price points. Its product portfolio includes premium and ultra-premium silk sarees, bridal wear, lehengas, womens ethnic apparel, mens and childrens ethnic wear, as well as value-fashion offerings designed for weddings, festive occasions, celebrations, and everyday wear.

As of March 31, 2026, the Company operated 81 stores across 24 cities, spanning approximately 7.85 lakh square feet of retail space. Its presence extends across Telangana, Andhra Pradesh, Karnataka, Tamil

Nadu, and Puducherry, supported by a growing omnichannel ecosystem that combines physical retail with digital engagement and e-commerce capabilities. The Companys cluster-based expansion strategy, coupled with investments in technology, inventory management systems, and customer analytics, enables operational efficiencies while enhancing customer reach and service quality.

A key differentiator for Sai Silks lies in its deep understanding of the ethnic apparel market, particularly the saree category, which remains deeply embedded in Indias cultural and social fabric. Saree purchases are often associated with significant life events and celebrations, making them highly experiential in nature. Consumers typically evaluate factors such as fabric, craftsmanship, design, colour, weaving style, and occasion relevance, while purchasing decisions frequently involve family participation and personalised guidance. Recognising these nuances, the Company has developed immersive store environments featuring curated product assortments, spacious layouts, culturally inspired aesthetics, and knowledgeable sales personnel who enhance the overall shopping experience.

Backed by strong brand equity, an extensive sourcing network, differentiated retail formats, and a customer-centric approach, Sai Silks has established itself as a trusted destination for ethnic fashion. By serving a broad spectrum of consumer preferences across premium, mid-market, and value segments, the Company continues to strengthen its leadership position in South Indias organised ethnic apparel retail market while pursuing sustainable growth through both physical and digital channels.

Customer Value Proposition

The Companys customer engagement and sales strategy is built around its PQRS Framework, which serves as the foundation of the shopping experience across its retail formats.

Brands

Kalamandir

Launched in 2005, Kalamandir is our flagship retail format and a trusted destination for family ethnic wear. We offer a comprehensive range of sarees, womens wear, menswear, and childrens apparel across multiple price points, catering to diverse customer preferences and occasions. With 9 stores across Andhra Pradesh, Telangana, and Karnataka, Kalamandir has built strong brand recognition and continues to be a key pillar of our portfolio. We expect the format to play an important role in our future expansion, particularly across Karnataka and select urban markets.

Mandir

Mandir is our premium ethnic wear format, created for customers seeking exclusive and personalised occasion wear. The format specialises in customised sarees, lehengas, and ethnic apparel featuring intricate craftsmanship, embroidery, and handcrafted detailing. Through close collaboration between customers, designers, and artisans, we deliver bespoke creations tailored to individual preferences. With 3 stores, Mandir strengthens our presence in the premium and luxury ethnic wear segment.

Kancheepuram Varamahalakshmi

Kancheepuram Varamahalakshmi (VML) is our largest and most profitable retail format and remains the primary growth driver of our business. We offer an extensive collection of pure silk, handloom, bridal, festive, and occasion wear sarees sourced from renowned weaving centres across India. Known for its heritage-inspired shopping experience and temple-themed architecture, VML has established itself as a preferred destination for saree purchases across South India.

Currently Contributing approximately 52% of our overall revenue, VML continues to benefit from strong customer trust built around its compelling value proposition of Price, Quality, and Range (PQR). With a presence across Andhra Pradesh, Telangana, Karnataka, Tamil Nadu, and Puducherry, we expect this format to continue driving growth as we deepen our presence in existing markets and selectively expand into new geographies.

Valli Silks

Valli Silks is our newest retail format, designed to cater to younger and value-conscious women consumers. Focused on powerloom sarees, entry- level silk sarees, and fashion sarees at accessible price points, the format combines a curated product offering with efficient and compact store layouts. As of March 2026, we operated 11 Valli Silks stores.

The format provides a scalable growth platform supported by attractive store economics, efficient inventory management, and targeted customer positioning. Valli Silks complements our premium saree formats while expanding our reach within the broader ethnic wear market.

KLM Fashion Mall

KLM Fashion Mall is our value-fashion retail format, positioned as a one-stop family shopping destination. We offer an extensive range of affordable apparel across mens, womens, childrens, and youth categories, supported by a strong value proposition and wide merchandise assortment.

With 19 stores across South India, KLM provides us with exposure to the growing value-fashion segment. While market conditions in certain categories have remained challenging, we continue to focus on improving store productivity, optimising merchandise assortments, enhancing sourcing efficiencies, and strengthening profitability. KLM remains an important part of our diversified retail portfolio and long-term growth strategy.

SWOT Analysis Strengths

• Strong portfolio of established ethnic wear brands catering to premium, mid-premium, and value-conscious consumer segments.

• Extensive retail network supported by a scalable store-led business model and strong brand recognition across key markets.

• Deep sourcing ecosystem comprising weavers, artisans, manufacturers, and long-standing supplier relationships.

• Strong positioning in sarees and ethnic wear categories, supported by heritage, product depth, and customer trust.

• Growing omnichannel capabilities integrating physical stores, e-commerce platforms, digital engagement, and customer outreach initiatives.

• Experienced leadership team with a proven track record of execution, growth, and profitability.

• Strong brand recall and a loyal customer base

Weaknesses

• Revenue concentration in South India exposes the business to regional economic and consumption trends.

• Significant dependence on physical retail channels owing to the experiential nature of saree and occasion wear purchases.

• Inventory management complexity arising from a large and diverse product portfolio spanning multiple categories and price points.

• Demand remains influenced by wedding seasons, festive calendars, and changing fashion preferences.

• Expansion into new markets requires sustained investments in brand building, customer acquisition, and market development.

Opportunities

• Increasing shift towards organised and branded ethnic wear retail across India.

• Rising disposable incomes and growing consumption demand in Tier II and Tier III cities.

• Expansion into new geographies supported by a scalable retail model and established brand portfolio.

• Growing demand for wedding wear, occasion wear, premium sarees, and heritage textiles.

• Opportunities to strengthen presence across mens wear, childrens wear, and value- fashion categories.

• Leveraging technology, analytics, and customer insights to enhance merchandising, inventory planning, and customer engagement.

• Continued growth potential within core South Indian markets, which remain among the largest consumption centres for sarees and ethnic apparel in the country.

Threats

• Intensifying competition from national brands, regional retailers, online-first players, and the unorganised sector.

• Inflationary pressures and volatility in sourcing, employee, logistics, and occupancy costs.

• Changing consumer preferences and evolving fashion trends impacting purchasing behaviour.

• Supply-side challenges related to the availability of skilled artisans, weavers, and specialised craftsmanship.

• Delays in securing suitable retail locations or lower-than-expected store productivity in new markets.

• Cybersecurity, data privacy, and technology- related risks associated with increasing digital adoption.

4. Showroom Network

Our showroom network remains a key pillar of our customer engagement strategy and an important differentiator in the ethnic apparel retail market. Given the highly experiential and consultative nature of saree and ethnic wear purchases, our trained sales personnel assist customers in understanding product features, fabric characteristics, craftsmanship, weaving techniques, and styling options, enabling informed purchasing decisions.

We strategically locate our stores across key commercial and residential catchments to maximise customer accessibility and brand visibility. While maintaining a consistent brand identity across formats, our showrooms are thoughtfully designed to reflect local preferences and cultural nuances. Spacious layouts, curated product displays, effective visual merchandising, and customer-centric service standards help create an immersive and engaging shopping experience.

During the year, we continued to expand our retail footprint through the addition of new stores across existing markets and select new locations. Our expansion strategy remains focused on disciplined growth, prudent capital allocation, and enhancing store productivity while strengthening our presence across key markets. In addition to serving customers, our showroom network provides valuable consumer insights, enabling close collaboration between sales, merchandising, and procurement teams to align product offerings with evolving customer preferences.

Complementing our physical presence, we continue to strengthen our omnichannel capabilities through dedicated e-commerce platforms and digital engagement initiatives. Through detailed product presentations, curated collections, interactive content, and live showcase sessions, we extend the in-store experience to online customers. The integration of physical and digital channels enables us to engage with customers across multiple touchpoints while enhancing convenience, accessibility, and brand reach.

State	No. of stores	Aggregate Area (sq. ft.)	2025-26 Revenue (C In crore)	2024-25 Revenue (C In crore)
Telangana	29	2,81,258	500.08	490.54
Andhra Pradesh	24	2,28,477	474.46	412.86
Karnataka	13	1,49,559	286.75	224.89
Tamil Nadu	14	1,14,867	370.93	325.70
Puducherry	01	10,692	21.45	8.02
Total	81	7,84,853	1,653.67	1,462.01

5. Marketing and Customer Engagement

Our extensive retail network is supported by a comprehensive marketing strategy focused on strengthening brand visibility, enhancing customer engagement, increasing footfalls, and driving sales across our retail formats. We adopt a balanced and data-driven approach to marketing, with a growing emphasis on digital platforms while maintaining a selective presence across traditional media channels.

Our marketing initiatives include:

• Digital and social media campaigns

• Print and outdoor advertising

• ATL and BTL marketing initiatives

• In-store promotions and customer engagement programmes

• Event-based branding and activation initiatives

• Celebrity endorsements and influencer collaborations

• Participation in cultural, religious, and community events

Dedicated teams manage our digital marketing efforts using performance analytics and customer insights to optimise campaign effectiveness, improve customer acquisition, and enhance engagement. The Company also leverages CRM-enabled customer communication programmes to strengthen customer relationships, improve retention, and deliver more personalised engagement across the customer lifecycle.

We also undertake targeted hyperlocal marketing programmes and localised campaigns tailored to specific markets and customer segments. Promotional activities are aligned with key festive, wedding, and seasonal demand periods and are supported by curated product assortments designed to reflect regional preferences and consumption trends.

Through disciplined marketing investments, increasing digital adoption, and focused customer engagement initiatives, we continue to strengthen brand equity, expand our customer base, and support sustainable business growth.

6. Human Resources

Our people are at the heart of our business and play a critical role in sustaining our growth and market leadership. We are committed to fostering a safe, inclusive, and equitable workplace supported by robust policies on employee welfare, wellbeing, health and safety, professional conduct, diversity, and equal opportunity. The Company places significant emphasis on employee care, engagement, and holistic well-being, creating a supportive work environment that promotes both personal and professional growth. Through a culture built on collaboration, respect, and continuous learning, we strive to create an environment where employees can grow, contribute, and realise their full potential.

Beyond our workforce, we recognise the invaluable contribution of our weavers, artisans, and sourcing partners, whose craftsmanship and expertise are fundamental to preserving the authenticity, quality, and heritage of our product offerings. These long-standing relationships strengthen our sourcing ecosystem and enable us to deliver distinctive products that resonate with customers across markets.

Effective collaboration across procurement, merchandising, sales, and supply chain functions enables us to respond swiftly to changing consumer preferences, evolving fashion trends, and market dynamics. Insights gathered through customer interactions and frontline sales teams help inform sourcing decisions, optimise inventory planning, and strengthen engagement with weavers, fabric manufacturers, and other supply partners.

We remain focused on attracting, developing, and retaining talent through structured learning and development programmes, continuous upskilling initiatives, performance management frameworks, leadership development initiatives, and merit-based recognition systems. The Company has implemented performance-linked incentiveprogrammes designed to reward employee contribution, encourage excellence, and align individual performance with organisational objectives. By investing in our people and strengthening organisational capabilities, we continue to build a high-performance culture that supports long-term growth and value creation.

7. Financial Review

Financial Performance Indicators (KPIs):

(In Rs. Crores)

Particulars	As at March 31, 2026	As at March 31, 2025
Revenue from Operations	1,653.67	1,462.01
Gross Profit	695.66	610.88
Gross profit Margin	42.07%	41.78%
EBITDA	260.59	211.64
EBITDA Margin	15.76%	14.48%
PAT	140.92	85.39

 

Particulars	As at March 31, 2026	As at March 31, 2025
PAT Margin	8.52%	5.84%
ROE	11.78%	7.78%
ROCE	13.53%	11.85%

The Company delivered steady top-line growth in FY 2025-26, with revenue increasing by 13.10% to Rs. 1,653.37 crores compared to Rs. 1,462.01 crores in FY 2024-25, supported by a 3% same-store sales growth. Profitability metrics also showed meaningful expansion in FY 2025-26, with EBITDA margin improving by 128 basis points. Gross margins remained healthy at 42.07% in FY 2025-26, registering an improvement of 30 basis points over last year.

PAT grew significantly in FY 2025-26 to Rs. 141 crores from Rs. 85 crores in FY 2024-25, representing a year- on-year increase of nearly 65%. Return ratios also strengthened meaningfully in FY 2025-26, with ROE improved by 400 basis point and ROCE increasing 168 basis points.

Operational performance overview and the significant changes in ratio

Particulars	As at March 31, 2026	As at March 31, 2025	Variance	Remarks for variance More than 25%
a) Current Ratio:	5.18	4.48	15.78%	Not Applicable
Current Assets	1,213.72	1,125.09
Current Liabilities	234.16	251.32
b) Debt Equity:	0.29	0.36	-19.92%	Total Debt as at 31.03.26 = Lease Liabilities of C341 Cr + actual borrowings of C 20.22 Cr
Total Debt (long-term and short-term)	361.22	405.02
Shareholders Equity	1,260.47	1,131.77
c) Debt Service Coverage Ratio:	4.83	4.36	10.55%	Debt Service (Obligation) FY 25- 26= Lease liabilities with Interest is of C43.90 Cr + Repayment of actual borrowings with Interest is of C 13.77 Cr
Earnings available for Debt Service	278.24	234.69
Debt Service (Obligation)*	57.67	53.77
d) Return on Equity:	11.78%	7.78%	51.40%	Improvement in operations vis-avis PAT
Net Profits after taxes	140.92	85.39
Average Shareholders Equity	1,196.12	1,097.35
e) Inventory Turnover Ratio:	2.08	1.95	6.53%	There is an improvement in this parameter
Total Sales	1,653.67	1,462.01
Average Inventory	796.87	750.52
f) Trade Receivables Turnover:	676.19	502.37	34.60%	There is an improvement in this parameter due to increased Turnover and reduced receivables.
Total Sales	1,653.67	1,462.01
Average Accounts Receivable	2.45	2.91
g) Trade Payables Turnover:	10.43	21.11	-50.59%	Company optimised Trade Creditors levels b/w 45 to 60 days
Total Purchases	992.25	905.54
Average Trades Payable	95.16	42.90
h) Net Capital Turnover:	1.78	1.72	3.98%	There is an improvement in this parameter
Total Sales	1,653.67	1,462.01
Average Working Capital	926.66	851.90
i) Net Profit Ratio:	8.52%	5.84%	45.90%	Due to increased operations, better profitability for the current year
Net Profit	140.92	85.39
Total Sales	1,653.67	1,462.01
j) Return on Capital Employed:	13.53%	11.85%	14.19%	Not Applicable
Earning before interest and taxes	220.45	183.01
Capital Employed	1,629.12	1,544.41
k) Return on Investment*	NA	NA	NA	Not Applicable

* There are no investments made by the company, as such the ratio is not applicable.

8. Outlook

Sai Silks (Kalamandir) Limited delivered a resilient performance during the year, supported by its diversified brand portfolio, strong customer connect, and disciplined execution. Despite a dynamic retail environment characterised by evolving consumer preferences and competitive intensity, the Company continued to strengthen its market presence, expand its retail footprint, and enhance operational efficiencies.

The long-term outlook for the ethnic wear market remains favourable, driven by sustained demand from weddings, festive occasions, cultural celebrations, and rising discretionary spending. Increasing formalisation of the retail sector, growing brand consciousness, and expanding consumption across Tier II and Tier III cities are expected to create significant opportunities for organised players. South India continues to remain a key market for ethnic apparel, particularly sarees and womens ethnic wear, reinforcing the Companys strategic positioning. At the same time, the Company remains focused on strengthening its presence across existing markets while selectively expanding into newer geographies to broaden its customer base and capture emerging growth opportunities.

The Company enters FY 2026-27 with a debt- free balance sheet, strong operating cash flows, and healthy internal accruals, providing significant financial flexibility to support future growth. Backed by this strong financial position, the Company plans to add approximately 100,000 sq. ft. of retail space in the coming year, representing an increase of around 8-10% in retail area. Importantly, both the capital expenditure and incremental working capital requirements associated with this expansion are expected to be funded entirely through internal resources and ongoing cash flow generation, enabling the Company to pursue growth opportunities while maintaining financial discipline and a debt- free capital structure. The Company will continue to focus on prudent capital allocation and effective cash management to support margin improvement, operational efficiency, and sustainable growth.

Looking ahead, the Company will focus on enhancing store productivity, optimising merchandise assortments, strengthening customer engagement, and expanding its omnichannel capabilities. A key area of focus will be deepening relationships with sourcing clusters across the country to ensure timely access to differentiated products that closely align with evolving customer preferences. The Company will continue to leverage data-driven insights to better understand consumer behaviour, optimise merchandise assortments, and improve store-level performance. Investments in technology, digital platforms, and AI-enabled initiatives will further strengthen operational efficiencies, improve decision-making, and support scalable growth across formats. Backed by strong brand equity, deep sourcing relationships, and a proven retail model, the Company remains well positioned to capitalise on evolving consumer trends and drive sustainable long-term growth.

9. Governance, Integrity and Transparency

The Company remains committed to upholding the highest standards of corporate governance, ethical business conduct, financial discipline, and transparency. These principles are embedded across its operations and decision-making processes, ensuring accountability, responsible management, and long-term value creation. Through a strong governance framework, prudent financial management, robust internal controls, and transparent stakeholder communication, the Company continues to foster trust among shareholders, customers, employees, business partners, and the broader community. As the Company pursues its growth ambitions, these values will remain central to its strategy and commitment to sustainable business practices.

10. Risk and concerns

The Company operates in a dynamic retail environment where performance is influenced by changing consumer preferences, market competition, supply chain efficiency, and cost

dynamics. To sustain growth and profitability, the Company continuously strengthens its sourcing capabilities, operational efficiency, quality standards, and workforce development initiatives while maintaining a customer-centric approach.

Consumer Demand Sensitivity

• Performance is influenced by discretionary spending, wedding seasons, and festive demand.

Competitive Market Dynamics

• Intense competition necessitates strong inventory planning, product differentiation, and customer engagement.

Talent Availability

• Sustaining service excellence depends on attracting, training, and retaining skilled employees.

Supply Chain Dependence

• Timely procurement from weavers, artisans, and vendors is critical to maintaining product availability and quality.

Cost and Margin Pressures

• Fluctuations in raw material, employee, and occupancy costs may impact profitability.

• The Company mitigates these pressures through strategic pricing and operational efficiencies.

Quality Assurance

• Consistent product quality remains essential to preserving customer trust and brand reputation.

• Robust quality control processes are maintained across the sourcing and merchandising value chain.

11. Cautionary statement

Certain statements in the MDA section about future prospects may be forward-looking statements, which include a number of underlying identified and unidentified risks and uncertainties that might cause actual results to differ considerably. In addition to the aforementioned macroeconomic changes, such ongoing geopolitical developments pose unprecedented, unknown and continually shifting risk(s) to the company and the environment in which it operates. The reports facts and statistics are based on the findings of these assumptions, which are based on available internal and external information. Because the factors behind these assumptions change with time, so do the estimates upon which they are founded. These forwardlooking statements reflect only the companys current objectives, beliefs, or expectations and each forward-looking statement is only as of the date it was made. The company disclaims any duty to alter or update any forward-looking statements, whether as a result of new information, future events, or otherwise.

12. Internal financial control systems

Internal financial controls, including entity-level controls, have been introduced to ensure that business operations run smoothly and efficiently. This includes following Company policies and procedures, maintaining accounting records that are accurate and comprehensive, preparing and reporting reliable financial information on time, protecting assets and preventing and detecting fraud and errors. These internal financial controls were examined using an internal audit procedure designed by the Company and a professional firm hired to conduct systematic internal audits. Based on the evaluations, the directors confirm that the applicable Accounting Standards were followed in the preparation of the financial statements for the fiscal year ending March 31, 2026. Internal financial controls were determined to be generally adequate and effective, with no significant flaws discovered.

13. Disclosure of Accounting Treatment

The Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2026, together with the comparative period data as at and for the year ended March 31, 2025, as described in the summary of significant accounting policies. Primarily a treatment different from that prescribed in an Accounting Standard has not been followed in the preparation of financial statements. However, as regards amendments to certain accounting standards, the applicability / effect on the financial statement has been evaluated and been treated accordingly as explained in Note 1 of the Standalone Financial Statements. Further, the financial statements represent a true and fair view of the underlying business transactions.