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HDFC Securities Institutional Equities
We recently interacted with Sai Silks (Kalamandir) Ltd.'s management to understand where the company is in its recovery journey. Key takes were:
Q2 growth is likely to be largely expansion-led;
Demand in core markets (Andhra Pradesh/Telangana) remains weak but management is taking initiatives for a speedy recovery; and
Tamil Nadu performance remains broadly on track.
Evidently,
the pace of recovery among organised players isn't inspiring and
cash position across key players remains anaemic, ergo, peers endowed with capital may have an edge in terms of scaling over the next two years – advantage Sai Silk (Kalamandir).
While non-Varamahalakshmi Silks formats continue to struggle; VML continues to anchor incremental sales.
We've revised our EPS estimates down by 6-7% each for FY26/27. Our DCFbased target price stands at Rs 280/share, implying 20 times Sep-26 P/E. Maintain Buy.
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