This article first appeared on GuruFocus .
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Total Income (Q2 FY27):INR827 crores vs INR719 crores in Q2 FY26, up 15.1%.
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Total Income (H1 FY27):INR1,293 crores vs INR1,118 crores in H1 FY26, up 15.6%.
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Revenue Mix (Q2 FY27):Fabrics 77%, garments 16%, yarn and others 7%.
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EBITDA (Q2 FY27):INR131 crores vs INR121 crores in Q2 FY26.
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EBITDA (H1 FY27):INR170 crores.
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Profit After Tax (Q2 FY27):INR75 crores vs INR87 crores in Q2 FY26.
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Profit After Tax (H1 FY27):INR86 crores.
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Debt-Equity Ratio:0.58 as of September 30, 2026.
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Dividend:First interim dividend of INR4 per equity share of INR2 each for FY27.
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Store Count:38 Zecode stores and 23 Devo stores, totaling 61 stores; targeting 70 stores by FY27, funded through internal accruals.
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Revenue Guidance:Revised to 14%15% for FY27.
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Release Date: October 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Total income grew 15.1% YoY to INR827 crores in Q2 FY27 and 15.6% YoY to INR1,293 crores in H1 FY27, driven by strong performance across segments.
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Revenue guidance raised to 14-15% for FY27, reflecting confidence from H1 performance and expected festive season boost in Q3.
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Retail expansion on track with 61 stores (38 Zecode, 23 Devo) and confident to reach 70 stores by FY27, funded entirely through internal accruals.
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Zecode stores have turned EBITDA positive at store level earlier than expected, with larger format stores delivering better outcomes.
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Healthy balance sheet with debt-equity ratio of 0.58 and first interim dividend of INR4 per share declared, demonstrating consistent shareholder returns.
Negative Points
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Profit after tax declined to INR75 crores in Q2 FY27 from INR87 crores in Q2 FY26, despite revenue growth.
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EBITDA margins declined YoY due to significant raw material inflation, with only partial pass-through via gradual price hikes of 4-6% over six months.
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Retail business (Zecode and Devo) contributed only INR65 crores in H1 FY27 and remains a drag on overall EBITDA margins by up to 150 basis points.
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Preference shares listing delayed by at least six months due to lack of specific regulatory precedent, creating uncertainty for investors.
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Geopolitical tensions and raw material price volatility persist, making it difficult to predict margin recovery and maintain the 14% EBITDA guidance.
Q & A Highlights
Q: What drove the upward revision in revenue guidance to 14%-15% for FY27? A: Gaurav Poddar, President & Executive Director, attributed the revision to the 14%-15% growth already achieved in H1 FY27, the shift of a large part of the festive season into Q3 (versus October last year), and growing confidence in the retail business performing in line with internal targets.
Q: What was the volume and value growth in the fabric segment this quarter? A: Gaurav Poddar, President & Executive Director, stated that fabric volume grew roughly 2.5% while value grew about 11%, though he cautioned that the company prefers to look at absolute value rather than volume-value splits given the evolving suiting/shirting mix.
Q: What price hikes has the company taken to offset raw material inflation, and what is the outlook? A: Gaurav Poddar, President & Executive Director, said the company has cumulatively taken a gradual price hike of about 4%-6% over the last six months. As a branded player it cannot mirror raw material swings exactly, and with geopolitical uncertainty still unresolved, it prefers a calibrated approach rather than overcorrecting.
Q: What caused the decline in gross margin and EBITDA year-on-year? A: Gaurav Poddar, President & Executive Director, said raw material inflation was the largest contributor to the gross margin and EBITDA decline. The retail drag from Zecode and Devo was within the guided maximum 150 basis point EBITDA drop, and the company is confident of meeting that guidance for the year.
Q: What was the revenue contribution from the Zecode and Devo retail businesses? A: Gaurav Poddar, President & Executive Director, said the two retail formats together contributed about INR65 crores to the top line in H1 FY27, with the large part coming from Zecode. He reiterated confidence in achieving approximately INR160 crores of retail revenue by the end of FY27.
Q: With 61 stores already open against a guidance of 70, could the company exceed its store target by FY27? A: Gaurav Poddar, President & Executive Director, said the company is confident of achieving 70 stores and appears on track to go past that number, but is sticking to the stated guidance because many properties are built-to-suit and are at different stages of construction, making precise timing difficult.
Q: How is the store expansion split between Zecode and Devo expected to shape up next year? A: Gaurav Poddar, President & Executive Director, indicated that most expansion next year will be Zecode, since fast fashion requires a faster pace of store additions to manage buying volumes and product turnaround. Devo will reach roughly 20-25 stores by the end of this year, concentrated in North India (Delhi, UP, Punjab, Rajasthan), which the company considers a viable cluster size.
Q: Where has Zecode expanded beyond Karnataka, and how has the response been? A: Gaurav Poddar, President & Executive Director, said about 19-20 Zecode stores are in Bangalore and suburbs, 10-12 in the rest of Karnataka, with 3-4 stores in Hyderabad and 2-3 in Chennai. Incremental openings will largely be in Hyderabad and Chennai, alongside further Bangalore additions.
Q: Are Zecode stores turning EBITDA positive, and is store-level profitability improving as stores mature? A: Gaurav Poddar, President & Executive Director, said the company tracks profitability holistically rather than store-by-store and is not sharing quantitative counts. Directionally, H1 FY27 has been much better than H1 FY26, with both older stores improving and newer stores benefiting from learnings on size and location.
Q: How does the company differentiate Zecode and Devo from established fast fashion and ethnic wear players? A: Gaurav Poddar, President & Executive Director, said the Indian apparel market is large and fragmented with no dominant branded player. Siyaram's edge is its textile heritage and deep understanding of yarn, fabric and product back-end, which it applies to its own interpretation of fast fashion and ethnic wear for Indian consumers.
Q: Why has the company not launched e-commerce or D2C channels for Zecode and Devo? A: Gaurav Poddar, President & Executive Director, said e-commerce has been consciously kept out of the plan so far to avoid diverting focus while the retail business is still under two years old. He acknowledged the omnichannel consumer and said the company will eventually do it properly, but it is not in the immediate plan.
Q: What is the timeline for listing the preference shares, and from when is interest payable? A: Surendra Shetty, Chief Financial Officer, said applications have been filed with BSE and NSE, and listing will take a minimum of about six months given the company's lack of prior history in this area. Interest is payable annually from the date of allotment.
Q: How much CapEx has been spent in H1 FY27, and is the full-year plan intact? A: Gaurav Poddar, President & Executive Director, said cumulative CapEx for H1 FY27 was about INR51 crores against a full-year guidance of approximately INR100 crores, including INR46 crores for retail expansion, and the company expects to remain in line with that plan.
Q: How is the company balancing retail growth investments, dividends and shareholder returns? A: Gaurav Poddar, President & Executive Director, noted the company has consistently paid and grown dividends. Retail CapEx is tightly controlled at about INR1-1.5 crores per store for furniture and security deposit plus INR70-80 lakhs of inventory, and internal accruals comfortably exceed retail funding needs, with dividend decisions left to the Board each quarter.
Q: How does the company view competition and profitability in retail given that some listed ethnic wear
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
