Sai Silks (Kalamandir) Ltd

Dear Shareholders,

We commenced our journey with the core belief that a saree can best showcase a woman's emotions and it will be in fashion forever. For almost two decades, we are crafting timeless value for connoisseurs of ethnic wear, supporting local weavers and artisans and also upholding the trust of our valued investors. We are now a listed entity on the stock exchanges, following our successful IPO in September 2023, and I extend my deepest gratitude and appreciation to all our investors who have placed their trust in our vision and execution model.

Catering to the large and growing organised ethnic apparel retail market in India, particularly sarees, we are gradually diversifying our portfolio to address a wider range of customers from wedding and occasion wear market. Apart from sarees, we curate an exclusive collection of ethnic wear for men, women and children, delivering value for money to each customer. Our portfolio comprises both ultra-premium as well as value fashion offerings.

India has the third largest apparel market worldwide and is experiencing a growing demand for organised/ online retail. The country's wedding and festive wear market is driven by increased demand for sarees, especially in South India. The organised saree market is poised to grow at 14.5% CAGR, led by the South Indian market. The catalysts for the increasing market size of the saree segment comprise the rising female population. Additionally, the saree's cultural significance makes it an important apparel for wearing and gifting in festivities across India, especially in South India region. We are constantly innovating our retail experience, implementing a templatised store rollout strategy that ensures a consistent brand identity across our expanding network. Leveraging the power of targeted marketing, we are implementing a blend of above-the-line (ATL) and below-the-line (BTL) activities to reach out to our target audience. Throughout the year, we have strategically expanded our retail footprint, with a focus on the organised retail market. This targeted approach, coupled with our commitment to providing exceptional customer experiences, has yielded impressive results. Our total retail area presence has grown to 647,310 sq. ft., with the addition of close to 43,900 sq. ft. this year. Notably, a significant portion of this expansion is planned for Tamil Nadu, a major ethnic wear market, under our Varamahalakshmi Silks format. This strategic expansion has translated into a strong financial performance. The revenue for the financial year reached INR 1373.55 crores, compared to INR 1351.47 crores the previous year. Profitability has also remained encouraging, with Profit After Tax (PAT) growing by 3.36% for the full year, reaching INR 100.87 crores.

We acknowledge the importance of technology in today's retail landscape and have successfully integrated Salesforce with our ERP system, enabling us to deliver targeted marketing campaigns and strengthen customer relationships. We leverage innovative design and supply chain management tools to optimize our processes and drive sales. This data-driven approach ensures personalised experiences for each customer. We have also significantly increased our digital marketing spend, particularly influencer collaborations on social media platforms such as Instagram.

Additionally, we are exploring the potential of geofencing and geotagging to personalise offerings and seamlessly transition customers from offline experiences to online engagement.

We believe that the true essence of a saree lies in its rich heritage and the skilled hands that bring these timeless garments to life. We are deeply committed to supporting our weavers and artisans, who are the backbone of our industry. We work with over 4,000 weavers and vendors across the country. Our team of dedicated designers collaborates closely with these skilled individuals, pushing the boundaries of design excellence, while staying true to our cultural roots.

We go beyond mere collaboration by actively supporting our weavers through the Kalamandir Foundation. This initiative provides financial assistance, aiming to improve their livelihoods and overall well-being. Additionally, we conduct awareness sessions and charitable programmes to uplift their communities and create a lasting positive impact.

As we move forward, we remain steadfast in our commitment to tradition while embracing the power of innovation. The design life cycle of ethnic wear does not change with every season such as autumn, winter, spring and summer, which gives us a distinct advantage. One design language is passed on from one generation to another. Our inventory also comes in specific periods of time from thousands of weavers spread across the country, and we do not have the problem of having the same saree in multiple pieces.