Financial Performance Summary

For Q1 FY27 ended June 30, 2026, the company reported:

  • Revenue from operations: ₹375 crores (compared to ₹379 crores in Q1 FY26, essentially flat)
  • Same-store sales growth: -7.5% degrowth
  • Gross margins: Maintained at approximately 42%
  • EBITDA margins: Declined by about 1% due to fixed cost base spread over softer like-to-like volumes
  • Company remains debt-free

Operational Highlights

Store Expansion & Footprint:

  • Added approximately 30,000 square feet of retail space during Q1 FY27
  • Total store count reached 83 stores across 4 states
  • Total retail footprint: approximately 8,14,000 square feet
  • Target for FY27: Net retail space addition of approximately 100,000 square feet

Store Rationalization:

  • Planning to rationalize 1 KLM Fashion Mall store showing sustained degrowth
  • Store located in Telangana, inventory to be transferred to other KLM stores
  • Manpower reduction where possible, with staff moved to new stores
  • Current KLM store count: 19 reducing to 18 after closure

Capital Efficiency:

  • Company added 90,000-100,000 square feet additional retail area beyond original IPO target of 142,500 square feet using same fund allocation
  • Inventory per square foot showing consistent reduction despite absolute inventory increase
  • All stores operate under company-owned company-operated model

Management Commentary & Market Context

Market Challenges:

  • Q1 FY27 consumption impacted by Adhik Maas (inauspicious period from May 17 to June 15, 2026)
  • Weak consumption trends across markets due to reduced wedding and griha pravesham purchases
  • Customers displayed value-conscious and discretionary purchasing approach
  • Challenging retail environment with passive discretionary spending

Category Performance:

  • Innerwear category showing growth, expected 20% growth YoY
  • Fashion jewelry category recently launched in 2 new Kalamandir stores from last quarter
  • Jewelry implementation in KLM format just starting

Expansion Strategy & Guidance

Geographical Expansion:

  • Majority of FY27 expansion focused on Karnataka market
  • Formats: Primarily Kalamandir and Varamahalakshmi formats
  • New state entry planned for Q4 FY27 or early Q1 FY28:
  • Pune, Maharashtra location being finalized
  • Active exploration of opportunities in Kerala

Revenue Guidance:

  • Maintained full-year FY27 revenue growth guidance of 12-15%
  • Expectation of SSSG improvement through the year
  • EBITDA margins expected to improve in H2 FY27 supported by SSSG improvement and operating leverage from new stores

Wedding Date Outlook:

  • Q2, Q3, Q4 collectively have 5-10% additional wedding dates compared to previous year
  • Dasara festival shifted from Q2 to Q3 this fiscal year
  • Sravana Masam (starting August 15) expected to boost wedding demand

Risk Factors Discussed

Macroeconomic Concerns:

  • Poor rainfall in AP, Telangana, and Karnataka (75% of revenue markets) could impact agricultural income-dependent markets
  • Geopolitical conflicts affecting fuel prices and supply chain costs
  • Dying costs increased substantially across supply chain
  • El Nino potential impact on consumption

Warehouse Utilization

  • IPO proceeds for warehouse still unutilized
  • Due diligence underway for 1-2 identified locations
  • Target completion: End of September 2026 (Q2 FY27)
  • Entire IPO fund utilization expected by September 2026

Format Strategy

Valli Silks Format:

  • Currently at 11 stores by end of FY26
  • Operating at similar productivity range as Kalamandir format
  • Rental costs higher than company averages due to smaller store size (3,000-4,000 sq ft)
  • Next wave of Valli store additions planned for Q4 FY27 and FY28

Cluster-based Expansion:

  • Strategy to expand multiple formats within identified markets
  • Balancing Varamahalakshmi and non-Varamahalakshmi formats for margin optimization
  • Focus on Karnataka and Tamil Nadu for non-Varamahalakshmi format expansion

Employee Costs

  • Q1 FY27 employee cost: ₹52 crores
  • Q4 FY26 spike to ₹61 crores due to bonus payments and temporary staff for peak seasons
  • Seasonal temporary staff employed for valet parking and additional manpower during Q3-Q4

E-commerce Strategy

  • Fundamentally avoiding marketplace channels (Amazon, Myntra) due to high commission fees (20-45%)
  • High return rates make marketplace model unviable
  • Continuing focus on offline store expansion and strengthening
  • Minimal e-commerce presence compared to offline business