Why Is This Vijay Kedia Portfolio Stock Expanding Aggressively Despite 50% Share Price Correction?

Synopsis:The textiles portfolio of this closely followed stock has lost almost half of its peak value, while at the same time the company continues to make an aggressive retail expansion. Given the solid beginning to this year’s fiscal year and new growth strategy in place, the key question remains if this correction has gone too far?

The stock has fallen sharply from its record highs, and that kind of drawdown usually invites pessimism. But look past the price chart, and there’s a company mid-transformation moving from a traditional fabric manufacturer toward a branded fashion retailer, which is why the size of the correction is now being questioned rather than simply accepted.

With a market capitalization of around ₹2,837 crore, shares of Siyaram Silk Mills Limited were trading near ₹625 apiece, within a 52-week range of ₹433 to ₹850 and a P/E of approximately 12x.t The stock is down nearly 50 % from it all time high of Rs.1,177 december 2024. 

A Correction That Looks Overdone Against the Fundamentals 

The stock has corrected close to 50% from its all-time high, driven largely by broader small-cap weakness and profit-booking after a sharp prior rally. Yet the underlying business has continued to grow through that period. 

On a consolidated basis, revenue for FY26 stood at ₹2,573 crore, while net profit increased to ₹231 crore. The momentum carried into the new fiscal year as well. In Q1 FY27, total income rose 16% year-over-year to ₹467 crore, and EBITDA increased 22% to ₹40 crore, with the EBITDA margin improving from 8.2% to 8.6%. 

Profit before tax surged to ₹14.4 crore from ₹6.4 crore, while profit after tax jumped 137% to ₹11.0 crore, with EPS rising to ₹2.43 from ₹1.02 a year earlier. That combination of a sharply falling stock price alongside a business delivering strong earnings growth is often what attracts value-conscious investors back to a stock 

Betting Big on Retail: 70 Stores by FY27

The clearest sign of management’s confidence is the pace of retail expansion. The company has built two new store-led brands from scratch: ZECODE, a fast-fashion label aimed at Gen Z shoppers in South India, and DEVO, an ethnic-wear brand targeting North India’s mid-to-premium menswear buyer. As of the June 2026 quarter, ZECODE runs 30 company-owned stores, and DEVO runs 19, and the plan is to scale that combined count to around 70 stores by FY ’27. Each store carries an investment of roughly ₹1-1.5 crore, and both formats are structured to be company-owned and company-operated rather than franchised, giving the company tighter control over how the brands are presented and priced.

Diversifying Beyond the Legacy Fabric Business 

For decades, the company’s identity was built almost entirely around fabric suiting and shirting sold through distributors and multi-brand outlets under names like Siyaram’s, J. Hampstead, Oxemberg, and Cadini. 

That business remains the core, but the newer push into fast fashion, ethnic wear, knitwear, and even perfumes under the Cadini brand signals an attempt to build revenue streams that aren’t tied purely to fabric-price cycles or wedding-season demand. If the retail brands scale as planned, they could also carry structurally better margins than the legacy wholesale fabric business, though that’s still to be proven out over a full retail cycle.

Management Stays the Course Despite Soft Demand Signals

Q1 FY27 wasn’t without headwinds. The management pointed out that wedding and occasion-based demand slowed down in the quarter owing to the Adhik Maas month, despite consumers continuing to be prudent in their purchase decisions due to the persisting cost inflation in inputs. However, despite the above headwinds, the firm showed resilient results, with consolidated total income growing 16% year-over-year to ₹467 crore, while EBITDA grew 22% to ₹40 crore and the EBITDA margin expanded to 8.6%. Pre-tax profit nearly tripled to ₹14.4 crore, while post-tax profit increased 137% to ₹11.0 crore.

The management reiterated that despite the prudent consumer expenditure pattern, the future outlook for the next few quarters is positive, backed by the brand portfolio and diversification strategy of the firm.

A Portfolio Stock for a Closely Watched Investor

The company has been featured in ace investor Vijay Kedia’s publicly disclosed portfolio since early 2023, and it remains one of his tracked holdings through the June 2026 quarter, holding steady at 1.00% (455,000 shares). That steady posture through a ~50% price drawdown signals ongoing conviction, keeping the stock on value investors’ radar while management executes its transformation. 

Conclusion 

Put together, the picture is of a company using a weak stock price as a backdrop rather than a warning sign. Consolidated profit growing well into double digits, a quarter where PAT more than doubled despite a soft wedding season, and a retail buildout that’s more than doubling store count within a year all point to a business that’s executing rather than retreating. 

The bigger test is still ahead: turning ZECODE and DEVO from a 49-store network into a profitable, scaled retail arm alongside the legacy fabric business. Whether the market rewards that transition or waits for more proof first will likely decide if this correction turns out to have been the entry point Kedia and other long-term holders were watching for.

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