Management

• Siddharth Yogesh Kusumgar – Chairman & Managing Director; associated with the company since August 2000 and leads overall business strategy, operations and long-term growth initiatives.
• Sapna Siddharth Kusumgar – Whole-time Director; oversees key business functions and contributes to the company's operational management and strategic decision-making.
• Ankur Kothari is the Executive Director and Chief Executive Officer of the Company and is responsible for growth, financial performance, governance, compliance, operations and risk management. He has over 15 years of experience in strategy and operational roles and was previously associated with Boston Consulting Group and Arvind Limited.
• Deepti Gupta – Independent Director; brings expertise in corporate governance, regulatory compliance and board oversight.
• Kaushal Jaysingh Sampat – Independent Director; provides strategic guidance with experience in finance, governance and business management.
• Nihar Ajay Parikh – Independent Director; supports the Board with independent oversight, governance and risk management expertise.
• Kinnar Dhansukhlal Mehta is the Chief Financial Officer of the Company and has been associated with the Company since November 2, 2009. He is responsible for strategic leadership, financial planning and analysis, accounting and compliance. He has 16 years of experience in accounting and compliance.
• Devanand Parshottam Mojidra is the Company Secretary and Compliance Officer of the Company and has been associated with the Company since February 18, 2025. He has over 16 years of experience in secretarial and compliance.

Use of Proceeds

The IPO is entirely an Offer for Sale (OFS) of equity shares aggregating up to Rs. 650 crore by Promoter Selling Shareholders. The primary objectives of the offer are to achieve the listing of the company's equity shares on the stock exchanges, enhance its visibility and brand recognition, and provide liquidity as well as a public market for the existing shareholders. As the issue consists solely of an OFS, the company will not receive any proceeds from the offer.

Competitive Strengths

Company operates in markets with high entry barriers Kusumgar Limited has developed a strong niche position in technical textiles by manufacturing over 1,000 engineered fabrics since 1970. The company operates in a high-entry-barrier industry where technical expertise, manufacturing know-how, long approval cycles, and infrastructure requirements make competition difficult, as products are produced using advanced processes and are not easily replicable. Strong capabilities have been built in fine denier fabrics, Nylon 6 & 66 processing, coating, lamination, and integrated manufacturing, while long qualification and approval cycles provide business stability and reduce customer switching risk. The company focuses on customised solutions, leading to strong customer retention, and serves life-preserving applications such as parachutes, bulletproof jackets, and cold-weather gear, where strict quality standards have helped build long-term trust, including continuous supply of parachute fabrics to an Indian government customer. Strategic global partnerships, including a technical collaboration with a U.S. company for patented camouflage fabrics, have enabled access to advanced technology, while specialised machinery, strong infrastructure, and strict government qualification requirements further strengthen entry barriers and reinforce its competitive position

The technical capabilities allow to develop and supply unique solutions for the customers Kusumgar Limited offers high-performance synthetic engineered fabrics and solutions for aerospace and defence, industrial, and outdoor sectors, primarily using polyamide and polyester filaments along with polyurethane chemistry. Strong technical capability is demonstrated through fine denier yarn-based lightweight fabrics, where precise warping, sizing, tension control, weaving, dyeing, heat setting, and coating processes are used to ensure consistent quality, along with controlled processing of Nylon 6 and Nylon 66 for uniform colour, improved crease resistance, and reliable performance. Complex fabric engineering is achieved through careful selection of yarns, weave structures, and finishing techniques for demanding applications across automotive, aerospace, and industrial sectors. Advanced coating and lamination using polyurethane, TPU, silicones, and PTFE enables durable, high-performance fabrics for harsh environments. An integrated value chain is maintained from yarn selection to final fabrication, ensuring consistency, traceability, cost efficiency, and reduced dependence on external suppliers. Leveraging technical strengths, the company have been able to develop and supply unique solutions such as 0.75 ounces per square yard fabrics for parachutes, infrared reflective fabrics, fabrics for extreme cold weather clothing, and fabrics for multispectral camouflage systems to its customers.

Diversified presence across multiple end-use segments, each of which has independent growth drivers Kusumgar has established a diversified presence across Aerospace & Defence, Industrial & Automotive, and Outdoor & Lifestyle markets, reducing dependence on any single industry. Each business segment is supported by independent demand drivers including defence modernization, industrial automation, automotive applications, outdoor recreation and export opportunities. The company manufactures a broad portfolio of engineered fabrics and finished solutions catering to varied customer requirements across these sectors. This diversified business mix provides resilience against cyclical demand fluctuations, enables balanced revenue generation and creates multiple avenues for long-term growth. The company's wide product portfolio and exposure to several high-growth applications also strengthen its ability to capture emerging opportunities across domestic and international markets.

Long-standing Relationships with Key Customers Kusumgar has built enduring customer relationships by consistently delivering high-quality engineered fabrics and customized solutions. Many of its products require lengthy qualification and approval cycles, particularly in defence and industrial applications, making customer relationships highly sticky. The company manufactures mission-critical products where reliability and quality are essential, resulting in repeat business and long-term customer confidence. Its expertise in meeting stringent technical specifications and providing application-specific solutions strengthens customer retention while reducing supplier switching. These long-standing relationships provide revenue visibility, support business stability and reinforce the company's competitive position in specialized engineered fabric markets.

Track Record Provides Access to Technology and Strategic Partnerships Kusumgar's long operating history and technical capabilities have enabled it to establish strategic partnerships with leading global companies, providing access to advanced technologies and new markets. The company collaborates with international partners for specialized products, including patented camouflage fabrics, while leveraging these relationships to strengthen product innovation and expand its market reach. Such partnerships are difficult to replicate because they require years of technical expertise, customer confidence and proven execution capabilities. These collaborations enhance the company's product portfolio, improve technological capabilities and support expansion into high-value applications across global markets.

Experienced Promoters and Professional Management Drive Innovation Kusumgar is led by experienced promoters with long-standing industry expertise, supported by a professional management team focused on business growth, innovation and operational excellence. The management has successfully expanded the company from engineered fabrics into value-added aerospace and defence solutions while continuously investing in product development and manufacturing capabilities. The organization's culture emphasizes innovation, quality, customer-centric product development and continuous technology improvement. This experienced leadership team has played a key role in building technical expertise, strengthening customer relationships and positioning the company for sustainable long-term growth in high-performance engineered fabric markets.

Peer Comparison

Key Risks & Concerns

Dependence on Aerospace & Defence Business A significant portion of Kusumgar's revenue is derived from the Aerospace & Defence business, making its financial performance sensitive to demand in this segment. Any slowdown in defence procurement, project delays, lower government spending or reduced demand for aerospace and defence fabrics and solutions could adversely affect revenue growth, profitability and overall business performance. Continued diversification across other end-use industries will remain important to mitigate this concentration risk.

Customer Concentration Risk The company has a relatively concentrated customer base, with its top customer contributing 11.13% of revenue and the top ten customers accounting for 59.52% of revenue from contracts with customers in FY26. Loss of any major customer, lower order volumes, delays in procurement or inability to renew long-term business relationships could adversely impact revenue, cash flows and capacity utilization. Maintaining customer relationships and expanding the customer base remains critical for sustainable growth.

Dependence on Limited Raw Material Suppliers Kusumgar procures a substantial portion of its raw materials from a limited number of suppliers to achieve better pricing benefits. During FY26, the top ten suppliers accounted for 51.42% of the company's material procurement. Any disruption in supply, increase in raw material prices, quality issues or inability to source alternative suppliers on competitive terms could impact production schedules, operating margins and profitability.

Manufacturing Concentration in Gujarat All six of Kusumgar's manufacturing facilities are located in Gujarat, exposing the company to geographic concentration risk. Any natural calamity, industrial disruption, labour issues, regulatory changes, infrastructure bottlenecks or regional economic disruptions could significantly impact manufacturing operations, supply chain continuity and product deliveries, thereby affecting financial performance and customer commitments.

Outlook and Valuation

Kusumgar Limited is well positioned to benefit from the growing demand for high-performance engineered fabrics across Aerospace & Defence, Industrial & Automotive, and Outdoor & Lifestyle segments. The company has steadily expanded its portfolio from engineered fabrics to value-added aerospace and defence solutions such as parachute systems, stealth solutions and rapid deployment systems, enabling it to move higher up the value chain. Its diversified product portfolio, technical expertise and integrated manufacturing capabilities provide a strong foundation for sustainable long-term growth. The company also believes that increasing defence indigenization, export opportunities, global supply chain diversification and continued product innovation will support future business expansion.

Kusumgar operates in niche markets characterized by high entry barriers, lengthy product qualification cycles and strong customer relationships, which support business stability and create competitive advantages. The company has developed more than 1,000 engineered fabric SKUs and serves mission-critical applications where product quality, reliability and technical capabilities are key differentiators. These factors position the company to benefit from rising demand for specialized engineered fabrics while strengthening its presence across domestic and international markets.

From a valuation perspective, Kusumgar offers investors exposure to a differentiated technical textile business with significant participation in defence and industrial applications. However, investors should also consider risks arising from customer concentration, supplier dependence and manufacturing concentration before taking an investment decision. Overall, supported by its strong technical capabilities, diversified end-market exposure, integrated manufacturing platform and expansion into higher-value aerospace and defence products, the company appears well placed to deliver sustainable long-term growth. The IPO may be suitable for investors with a medium- to long-term investment horizon, considering both its structural growth opportunities and execution-related risks. At the upper end of the price band, Kusumgar is valued at 43x PE of FY26. We recommend a SUBSCRIBE rating for the issue.