Company Disclosure

Kusumgar Limited (Scrip Code: 544821, Trading Symbol: KUSUMGAR) submitted a clarification to BSE Limited and National Stock Exchange of India Ltd on October 23, 2026. The company clarified that it has not issued any mandate or engagement to CRISIL Limited for credit rating and has not provided any information to CRISIL for this purpose. The company attached its valid credit rating from CARE Ratings Limited for stock exchange records.

Credit Rating Details

CARE Ratings Limited reaffirmed the company's credit ratings on April 02, 2026:

  • Long-term bank facilities: ₹18.05 crore - CARE A; Stable (reaffirmed)
  • Long-term/Short-term bank facilities: ₹23.50 crore - CARE A; Stable / CARE A1 (reaffirmed)

Total rated facilities: ₹41.55 crore

The Stable outlook reflects expectations that Kusumgar will maintain its financial risk profile supported by healthy profitability and lower reliance on external debt.

Financial Performance

Consolidated Financials (Audited):

  • FY25 Total operating income: ₹781.89 crore (65% YoY growth from FY24: ₹472.22 crore)
  • FY25 PBILDT: ₹191.54 crore
  • FY25 PAT: ₹111.99 crore
  • FY25 Overall gearing: 1.17x (increased from 0.48x in FY24)
  • FY25 Interest coverage: 13.09x (reduced from 19.78x in FY24)

9MFY26 Performance:

  • Consolidated turnover: ₹620 crore as of March 28, 2026
  • Scale expected to moderate in FY26 due to US export tariffs and deferred special projects
  • PBILDT margin expected to sustain at 20-22% in FY26

Capital Structure Developments

  • Raised fresh equity of ₹127 crore in 9MFY26 through compulsorily convertible preference shares to private equity investors
  • Net worth base expected to strengthen above ₹500 crore
  • Projected overall gearing to improve below unity levels
  • Acquisition payment of ~₹108 crore for a subsidiary in FY26 reduced free liquidity

Business Overview

  • Established market presence in value-added and specialized technical textiles
  • Product diversification: industrial textiles (30-40%), defense (30-40%), outdoor/work wear (10-15%), specialty textiles (10-15%)
  • Export contribution: 50% of total revenue (including deemed exports)
  • Integrated business model with spinning, weaving and processing capacities at Surat and Vapi
  • Return on capital employed projected above 30% per annum

Rating Strengths

  • Diversified and value-added product portfolio supporting healthy return ratios
  • Comfortable leverage and debt coverage indicators despite moderation
  • Experienced promoters with over four decades in technical textile industry
  • Professional management team supporting daily operations

Rating Weaknesses

  • Working capital intensive operations with average operating cycle of 100-120 days
  • Gross current assets at ~175 days over last three years
  • Working capital utilization at ~86% for 12 months ending December 2025
  • Susceptibility to raw material price volatility (specialty nylon/polyester yarns linked to crude oil)
  • Foreign exchange rate exposure with 40-50% raw material imports and 50% export revenue

Liquidity Position

  • Projected gross cash accruals: ₹140-150 crore per annum
  • Scheduled repayments: ~₹40 crore per annum
  • Maintenance capex: ₹10 crore per annum
  • Free cash and liquid investments: ₹37.6 crore as on March 31, 2025
  • Current ratio: 1.17x as on March 31, 2025
  • Free cash and bank balance: ₹35 crore as on March 31, 2025

Rating Sensitivity Factors

Positive factors:

  • Growth in scale above ₹1,000 crore with PBILDT margin above 25% sustained
  • Improvement in overall gearing below 0.25x sustained

Negative factors:

  • Decline in scale below ₹500 crore and PBILDT margin below 20% sustained
  • Deterioration in overall gearing above 1x sustained
  • Significant time or cost overrun in ongoing capex