KUSUMGAR Q1 FY27 earnings call

Kusumgar reported robust year-on-year growth in Q1 FY27, with revenue from operations increasing by approximately 102% to ₹247.2 crores, up from ₹122.5 crores in Q1 FY26. This was primarily driven by the execution of ready parachute contracts. EBITDA for the quarter stood at ₹75.9 crores, achieving a margin of 31%, which represents a significant 900 basis point expansion compared to 22% in the same period last year. Profit after tax also saw substantial growth, reaching ₹42.6 crores with a 17% margin, compared to ₹6.6 crores and 5% in Q1 FY26. However, sequentially, revenue declined by about 21% from ₹312.8 crores in Q4 FY26, which management attributed to a concentrated push of export segments in the previous quarter.

Kusumgar, established in 1970 and formally incorporated in 1990, has evolved from a fabric supplier to a specialized engineering fabrics and aerospace and defense solutions company. The company operates across four market segments: aerospace and defense fabrics, aerospace and defense solutions, industrial and automotive fabrics, and outdoor and lifestyle fabrics. Key differentiators include over four decades of technical know-how, extensive R&D in material science, high qualification barriers for specialized products (e.g., zero-porosity fabric for parachutes, Kevlar filament fabrics), exclusive partnerships for IP and technology access, and a patient, co-development approach for long-term sticky business.

Management highlighted several mega-trends driving future growth. These include the increasing focus on aerospace and defense in India, coupled with indigenization efforts, which Kusumgar aims to leverage by developing local supply chains. The global situation, particularly increased defense spending, is also seen as a secular tailwind. Additionally, the 'China plus one' strategy and global supply chain shifts are creating new opportunities. The company aims to capitalize on these trends through its capabilities in engineered fabrics and solutions, expecting a steady year of growth for FY27 with less volatility than experienced in Q4 FY26 and Q1 FY27.

Kusumgar operates seven manufacturing facilities, six in Gujarat and one in UP, covering the full value chain from preparatory and weaving to dyeing, printing, finishing, coating, lamination, and fabrication. This vertically integrated setup ensures quality control and delivery. The company boasts a portfolio of over 1,000 unique fabric SKUs, engineered for specific applications, developed over decades of process knowledge and product development. As of March 2026, Kusumgar employs over 2,000 people across its manufacturing, engineering, product development, quality assurance, and business operations.

The company completed a 'very large capex' last year, which came fully online. For the current fiscal year (FY27), there are no large capex plans for regular business, with only maintenance capex expected, estimated at 5% to 10% of gross block. However, Kusumgar is exploring new technologies and business areas that may require future capex, though these are not yet materialized. Current capacity utilization is between 55% to 60%, and management expressed a desire for it to be 'fully utilized next quarter' as approvals and business growth materialize.

Management stated a preference against providing detailed forward guidance on revenue or profitability due to inherent structural uncertainties. These include the unpredictable timing of^📎 product approvals (affecting 90% of their business), the unpredictable nature of government tenders, and the impact of global factors like tariffs and raw material sourcing. As a newly listed public company, Kusumgar aims to 'play it safe' and avoid making promises they might not keep, committing instead to inform investors of materially significant events and to educate the investment community on their business cycle over time^⏳.