Q4FY21 Company Update - Siyaram Silk Mills - ICICI Direct

Q4 generally tends to be a strong quarter for Siyaram with revenue contributing ~32% to annual sales. The company was back in positive growth trajectory in Q4FY21 after five consecutive quarters of negative growth, partly supported by benign base. Revenue grew 9% YoY (33% QoQ) to Rs. 507.1 crore. Fabric division (85% of sales) had witnessed a recovery at a faster clip compared to its garmenting division. Gross margins (including processing charges) improved 167 bps YoY to 38.6% but continues to below its average of ~45% (owing higher discounting and schemes given to dealers/distributors). Cost rationalisation measures (employee & other expenses down 20% and 8% YoY, respectively) significantly boosted EBITDA margins by 690 bps YoY (220 bps QoQ) to 15.8% with EBITDA increasing 93% YoY (54% QoQ) to Rs. 80.1 crore. Lower depreciation and interest cost further boosted profitability with PAT coming in at Rs. 58.2 crore vs. Rs. 23.3 crore in Q4FY20. The company, in FY21, had significantly curtailed new inventory purchase. The same led to working capital release with debt coming in at an all-time low of Rs. 125 crore (D/E: 0.2x) as on FY21.

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Shares of SIYARAM SILK MILLS LTD. was last trading in BSE at Rs.264.3 as compared to the previous close of Rs. 283.3. The total number of shares traded during the day was 50727 in over 3503 trades.

The stock hit an intraday high of Rs. 285 and intraday low of 262.25. The net turnover during the day was Rs. 13775661.

Source : Equity Bulls

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