Kalyan Silks doubles its FY23 profit to Rs96.4 cr

KOCHI/September 20-2023: The Thrissur-based Kalyan Silks Trichur Pvt Ltd (KSTPL) or Kalyan Silks as is generally known, has staged a sterling performance for the financial year 2022-23 (FY23) by doubling its net profit from Rs48 crore to Rs96.4 crore.

The top-line (revenue) also witnessed good growth as the operating income grew by almost 29 per cent from Rs1000.9 crore to Rs1288.7 crore during the financial year ending March 31, 2023.

The Kerala market contributes about 90 per cent to Kalyan Silk’s revenues, with 19 out of its 23 apparel showrooms located in the state.

Further, there is significant revenue concentration from the central regions of Kerala, which contributed around 45 per cent to its total revenue in FY2023.

With the all-round improvement in revenues and profitability, the company’s interest coverage improved from 4.6 times to 5.7 times, according to ICRA, the leading rating agency.

The agency has upgraded the company’s fund-based cash credit as well as term loans that combinedly add up to Rs115 crore.

“The company is expected to report a steady growth in revenues with healthy operating margins in the current year as well. Kalyan Silks is expected to continue to register a steady growth over the medium term, given the ongoing store expansion plans,” the agency noted further.

The company is expected to incur capital expenditure to the tune of around Rs200 crore towards showroom additions during the financial years FY2024 to FY2026. Despite this substantial capital expenditure, Kalyan Silk’s dependence on external debt is estimated to remain low.

Intense competition in the apparel retail business from several large format stores and established brands could result in continued high marketing spends for Kalyan in order to support brand recall.

Going forward, revenues are expected to be supported by new showroom additions and Kalyan Silk’s healthy market position in the apparel retail market in Kerala and certain markets in Tamil Nadu and Karnataka.

Store expansion

The proposed store expansions within the Kerala market over the medium term are likely to support the company’s operating performance, despite rising competition from other market players.

Kalyan Silks, promoted by T S Pattabiraman, is a leading apparel retailer with showrooms across the key markets of Kerala.

The company has been operating in the Kerala market for over 100 years and has established a significant brand presence. At present, it operates through 23 apparel showrooms and five hypermarkets across Kerala, Karnataka and Tamil Nadu.