K K Silk Mills IPO

K K Silk Mills has a broad product portfolio that includes various fabrics and garments catering to men, women, and children. Its offerings range across multiple fabric types, such as cotton, polyester, blended, and printed materials, allowing the company to serve diverse markets such as fashion, upholstery, and home textiles. This diversification reduces dependence on any single product segment.

The company claims to place strong emphasis on product quality and adherence to strict quality control measures. Each product reportedly undergoes checks before dispatch to ensure consistency and compliance with required standards. This focus on maintaining quality and reliable service has helped build credibility with customers, resulting in repeat business.

The company claims to maintain ongoing relationships with wholesalers and garment manufacturers, which contribute to repeat business and customer retention. These established ties are positioned as a competitive advantage for sustained operations and growth.

The company has witnessed a consistent increase in its revenue from operations and profit after tax (PAT). Revenue from operations increased from Rs 188.81 crore in FY23 to Rs 190.54 crore in FY24 and Rs 220.78 crore in FY25. PAT increased from Rs 1.06 crore in FY23 to Rs 2.26 crore in FY24 and Rs 4.68 crore in FY25.

K K Silk Mills generates a major share of its revenue from Gujarat and Maharashtra. Any adverse political, social, or economic developments, policy changes, or natural calamities in these regions can disrupt the company’s operations, financial performance, and overall business stability.

The top 10 customers accounted for 81.00 percent, 67.20 percent, 78.54 percent, and 77.08 percent of the company’s total sales for the period ended June 30, 2025, FY25, FY24, and FY23, respectively. The company has not entered into long-term agreements with these customers, making it vulnerable to changes in order volumes, pricing, or termination of relationships. Any loss of key customers or reduction in business from them can negatively impact the company’s revenue, profitability, and financial stability.

The top 10 suppliers accounted for 64.04 percent, 60.30 percent, 69.69 percent, and 62.02 percent of the company’s total purchases during the period ended June 30, 2025, FY25, FY24, and FY23, respectively. Any loss of major suppliers or delays in obtaining raw materials could adversely affect the company’s manufacturing operations, revenue, and financial performance.

K K Silk Mills Limited’s cost of production is significantly dependent on raw materials such as yarn, fabrics, and accessories. The cost of raw materials consumed accounted for 88.12 percent of the company’s revenue from manufacturing activities during the period ended June 30, 2025; 89.12 percent in FY25; 89.90 percent in FY24; and 90.7 percent in FY23. The company primarily procures these raw materials from the spot market and does not have long-term contracts that lock in prices or supply volumes. Any volatility in raw material prices can directly affect production costs and profit margins. If the company is unable to pass on such cost increases to customers, its profitability and financial performance could be adversely impacted.

The company reported negative cash flow from investing activities amounting to Rs 2.57 crore for the period ended June 30, 2025; Rs 0.23 crore in FY25; Rs 6.64 crore in FY24; and Rs 1.36 crore in FY23. Additionally, negative cash flow from financing activities amounted to Rs 1.67 crore for the period ended June 30, 2025; Rs 7.80 crore in FY25; Rs 2.45 crore in FY24; and Rs 7.11 crore in FY23. Sustained negative cash flow may impact the company’s liquidity position, operational growth, and overall financial stability.

K K Silk Mills is exposed to risks arising from fluctuations in foreign exchange rates, as a portion of its business depends on exports, involving transactions in foreign currencies, including the US dollar. Although the company follows risk management practices and uses instruments such as forward contracts to hedge currency risks, fluctuations in exchange rates between the Indian rupee and foreign currencies can still impact its revenue, profitability, and cash flows. Any significant depreciation of the rupee or volatility in currency movements may adversely affect the company’s financial performance.

The company, its promoters, directors, and group companies are involved in certain ongoing legal proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.

As of June 30, 2025, the company had outstanding financial indebtedness of Rs 66.28 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.