- 17 May 2023
- ICICI Securities
SIYARAM SILK REPORTS STEADY OPERATIONAL PERFORMANCE AMID CHALLENGING BUSINESS SCENARIO
SIYSIL - 701 Change: -7.10 (-1.00 %)News: SSML reported improved revenue performance in Q4FY23 with consolidated revenues increasing by 11% YoY to Rs 695 crore (3 year CAGR 14% on favourable base due to impact of covid in March 2020). Gross margin declined by 70 bps YoY to 39.1% (Q3FY23: 42.3%) probably due to increased cost of raw material.
Views: Q4 is usually the best quarter for the company in terms of revenues and the sales performance in the quarter was steady in a challenging business environment. The EBITDA margin performance is decent considering the tough current operating scenario and a high base of 18.7%. On the competitive positioning front, the company is expected to benefit from unorganized to organized shift as many smaller unorganised players are facing financial stress. Siyaram owing to its strong balance sheet appears to be well placed to benefit from the current volatile market scenario and garner increased market share. The company’s focus on strengthening balance sheet is visible with significant decline in debt over the years from | 590.0 crore in FY18 (D/E: 0.9x) to ~ | 150 crore in FY23 (D/E: ~0.2x). SSML strong product portfolio and Pan India network is likely to aid the company to grow at healthy pace in a normalised demand scenario.
Impact: Neutral