Saraswati Saree Depot FY25 results: PAT jumps 65% in Q4, first retail outlet launch announced

Saraswati Saree Depot Limited reported a sharp rise in profitability for the fourth quarter of FY25, even as full-year revenue growth remained marginal. The Kolhapur-based wholesale saree distributor posted a 65.3% year-on-year increase in net profit for Q4, buoyed by improved operational efficiencies, cost controls, and a high-impact promotional event titled “Mini Utsav.” Notably, the company also unveiled plans to diversify its business model with its first exclusive retail outlet in Kolhapur, signalling a strategic forward integration after nearly six decades in the B2B segment.

Why Did Saraswati Saree Depot’s Q4 FY25 Profits Surge?

In the quarter ending March 2025, Saraswati Saree Depot reported revenue from operations of ₹136.35 crore, an 11.1% increase compared to ₹122.73 crore in Q4 FY24. However, the standout figure was the EBITDA, which soared 48.3% to ₹9.16 crore, up from ₹6.18 crore a year earlier. The surge in operating profitability reflected the company’s efforts in optimizing inventory, reducing employee costs relative to revenue, and leveraging seasonal demand driven by its in-house promotional campaign.

The EBITDA margin expanded by 169 basis points to 6.72%, while net profit grew to ₹7.02 crore compared to ₹4.25 crore in the same quarter last year. This translated to a PAT margin of 5.15%, up sharply from 3.46% in Q4 FY24. The earnings per share (EPS) for the quarter improved to ₹1.77 from ₹1.28.

Management attributed the Q4 momentum to efficient execution and the success of Mini Utsav, a scaled-down edition of the company’s established Utsav sales initiative. This event, aimed at boosting volume during a leaner seasonal window, helped lift overall performance and brand engagement at the trade level.

How Did Saraswati Saree Depot Perform in FY25?

For the full financial year ended March 2025, Saraswati Saree Depot’s total revenue stood at ₹613.61 crore, marking a modest increase of 0.44% over FY24’s ₹610.90 crore. The lack of top-line acceleration for the year can be attributed to demand fluctuations during the first half of the fiscal year, which management described as being impacted by external market volatility.

EBITDA for the year rose 4.27% to ₹42.15 crore, compared to ₹40.43 crore in the previous year. Margins remained healthy at 6.87%, up 25 basis points from FY24, reflecting stability in input costs and continued control over working capital. Net profit (PAT) for the full year increased by 3.54% to ₹30.57 crore, up from ₹29.53 crore, even as diluted EPS for FY25 fell to ₹7.72 from ₹8.92 due to equity base expansion.

While top-line growth was flat, the bottom-line performance suggests improving resilience in the business model and prudent capital management. Approximately 16.2 million clothing units were sold during the year, and the company expanded its presence in southern India, an indication of targeted regional penetration.

What Is Driving Saraswati Saree Depot’s Expansion into Retail?

A pivotal development in FY25 is the company’s announcement of its foray into retail. Saraswati Saree Depot will be launching its first exclusive retail outlet in Kolhapur, the city where it has historically been headquartered. The retail launch is being described as a pilot initiative to test direct-to-consumer engagement models, enabling the company to capture higher margin layers by moving beyond wholesale.

This marks a significant shift for a company that, since 1966, has built a reputation as a reliable saree and women’s apparel wholesaler. The venture into the retail segment reflects a broader industry trend, where traditional B2B players are pursuing vertical integration to unlock brand visibility and pricing control at the consumer end.

Management clarified that this move is not an aggressive rollout but rather a learning-oriented initiative. Depending on the performance and feedback from the Kolhapur outlet, future decisions on expansion will be data-driven. If successful, the retail model could offer new revenue streams and margin enhancement opportunities.

What Does the Balance Sheet Reveal About Saraswati Saree Depot’s Strength?

The FY25 balance sheet numbers signal strong capital infusion and liquidity improvements. The company’s net worth jumped 174% to ₹177.91 crore from ₹64.91 crore a year earlier, primarily due to a sharp increase in other equity, which rose from ₹31.81 crore to ₹138.31 crore. This strengthening of equity reserves is indicative of improved financial flexibility and internal accruals.

Cash and cash equivalents also saw a dramatic rise to ₹46.52 crore, compared to ₹9.87 crore in FY24. The substantial increase in cash reserves suggests prudent treasury management and possibly a conservative capex cycle to preserve cash ahead of the retail launch. Return on capital employed (ROCE) improved to a healthy 28%, further validating the operational leverage and asset-light execution approach.

How Has the Stock Performed and What Is the Market Sentiment?

As of May 30, 2025, Saraswati Saree Depot’s stock closed at ₹95.00 on the NSE, down 1.90% from the previous session. The current market capitalization stands at approximately ₹376.20 crore, while the free float market cap is ₹95.01 crore. Despite a recent dip, the stock remains significantly volatile, with a 52-week high of ₹213.88 and a low of ₹80.10, reflecting a variance greater than 150% over the year.

The stock is listed on both NSE and BSE and was officially listed on August 20, 2024. With a price-to-earnings (P/E) ratio of 53.84, investor expectations are elevated, especially considering the high-growth narrative being built around its retail ambitions.

As the company prepares to evolve from a pure-play wholesaler to a hybrid model with retail elements, institutional sentiment appears to be cautiously optimistic. The stock’s recent trend suggests profit booking or a pause in speculative momentum. However, the solid Q4 results and increased liquidity could revive buying interest among mid-cap and retail investors in the near term.

What’s Next for Saraswati Saree Depot?

Analysts are expected to watch closely how Saraswati Saree Depot executes its retail entry strategy. The outcome of this pilot phase could redefine the company’s revenue composition and long-term positioning in the ethnic wear and traditional apparel market. If successful, Saraswati Saree Depot could transition into a formidable omni-channel player, blending wholesale strengths with direct retail visibility.

While challenges persist—such as scalability of operations, consumer footfall in Tier-2 retail zones, and maintaining high inventory turnover—the management’s focus on cautious experimentation over aggressive expansion bodes well for long-term shareholder value creation. With ₹46.52 crore in cash reserves and zero indication of debt strain, the company has adequate headroom to invest in new initiatives without compromising liquidity.

In the broader context of India’s apparel sector, which is seeing increased consumer demand for regional and ethnic wear driven by cultural revivals and wedding-related spending, Saraswati Saree Depot’s move into retail appears timely. The brand’s legacy, backed by operational discipline and geographic sourcing depth, could serve as an effective launchpad for deeper value-chain integration.