Buy Sai Silks (Kalamandir), target price Rs 270: HDFC Securities

HDFC Securities has a buy call on Sai Silks (Kalamandir) with a target price of Rs 270.0. The current market price of Sai Silks (Kalamandir) Ltd. is Rs 128.55. Sai Silks, incorporated in 2008, is a Mid Cap company with a market cap of Rs 1963.39 crore, operating in the Apparels sector.

Sai Silks' key products/revenue segments include Textiles for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Standalone Total Income of Rs 454.20 crore, up 28.46% from last quarter Total Income of Rs 353.57 crore and up 15.72% from last year same quarter Total Income of Rs 392.51 crore. The company has reported net profit after tax of Rs 46.02 crore in the latest quarter.

The company's top management includes Mr.Ravindra Vikram Mamidipudi, Mr.Nagakanaka Durga Prasad Chalavadi, Mr.Kalyan Srinivas Annam, Mr.Doodeswara Kanaka Durgarao Chalavadi, Mr.Pramod Kasat, Ms.Sirisha Chintapalli, Mr.Venkata Ramakrishna Kunisetty. Company has Sagar & Associates as its auditors. As on 31-12-2024, the company has a total of 15 crore shares outstanding.

Investment Rationale
Recovery in core markets remains weak. VML?s Tamil Nadu execution is key. However, the anemic cash position of TN-focused peers could offer a benign competitive environment for Sai Silks (Kalamandir) to gain share in Tamil Nadu. The ask from valuations remains cheap (<9x FY27 P/E). Their FY26/27 EPS estimates largely remain unchanged. HDFC Securities maintains its BUY rating with a DCF-based target price of Rs 270/share, implying 17x FY27 P/E.

Promoter/FII Holdings
Promoters held 60.8 per cent stake in the company as of 31-Dec-2024, while FIIs owned 3.26 per cent, DIIs 15.41 per cent.